EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

LOGO

        For additional information, contact:
       E.L. Spencer, Jr.
       President, CEO and
       Chairman of the Board
       (334) 821-9200

Press Release - October 18, 2007

AUBURN NATIONAL BANCORPORATION ANNOUNCES EARNINGS

Third Quarter 2007 Highlights – Compared to Third Quarter 2006:

 

•  

Earnings per share increases 7%

 

•  

Loan growth and net interest margin improvement generates record tax-equivalent net interest income of $4.61 million

 

•  

Total loans up 12% or $33.0 million

 

•  

Credit quality continues to be very strong, with nonperforming assets at 0.14% of total loans

 

•  

Net interest margin improves 6 basis points to 3.02%

AUBURN, Alabama – Auburn National Bancorporation (NASDAQ: AUBN) reported net earnings of $1.75 million, or $0.47 per share, for the third quarter of 2007, compared with $1.66 million, or $0.44 per share, for the third quarter of 2006. Net earnings for the first nine months of 2007 were $5.14 million, or $1.38 per share, compared to $5.04 million, or $1.33 per share, for the same period in 2006.

In the third quarter of 2007, total revenue (on a tax-equivalent basis) was $5.70 million, an increase of 4% from the third quarter of 2006. Net interest income (on a tax-equivalent basis) was $4.61 million for the third quarter of 2007, an increase of 5% from the third quarter of 2006, reflecting growth in the loan portfolio.

Credit quality continued to be very strong, with an annualized net charge-off ratio of 0.04% for the third quarter of 2007 and nonperforming assets at 0.14% of total loans. Provision for loan losses decreased $85 thousand in the third quarter of 2007 compared with the third quarter of 2006 due to continued strength in credit quality.

Commenting on the announcement, E.L. Spencer, Jr., President, CEO and Chairman of the Board, said, “Unlike some financial institutions who have been negatively affected this quarter for their role in subprime lending and other nontraditional mortgage products, our company’s asset quality remains very strong. We are not involved in subprime lending. We remain focused on traditional lending products and continue to closely monitor our asset quality.”

Noninterest expense increased 8% in the third quarter of 2007 from the third quarter of 2006, largely reflecting increases in salaries and benefits expense and other noninterest expense. Despite these increases, our efficiency ratio for the third quarter of 2007 is only 53.95%.

In the third quarter of 2007, we paid cash dividends of $646 thousand, or $0.175 per share. In the third quarter of 2007, our dividend payout ratio was 37.23%.

About Auburn National Bancorporation

Auburn National Bancorporation, Inc. (the “Company”) is the parent company of AuburnBank (the “Bank”), with total assets of approximately $662 million. The Bank is an Alabama state-chartered bank that is a member of the Federal Reserve System and has operated continuously since 1907. Both the Company and the Bank are headquartered in

 

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AUBURN NATIONAL BANCORPORATION ANNOUNCES EARNINGS/page 2

 

Auburn, Alabama. The Bank conducts its business in East Alabama, including Lee County and surrounding areas. The Bank operates full-service branches in Auburn, Opelika, Hurtsboro and Notasulga, Alabama. In-store branches are located in the Auburn and Opelika Kroger stores, as well as Wal-Mart SuperCenter stores in Auburn, Opelika, and Phenix City, Alabama. Mortgage loan offices are located in Phenix City, Valley, Mountain Brook, and Orange Beach, Alabama. Additional information about the Company and the Bank may be found by visiting www.auburnbank.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, including, without limitation, statements about future financial and operating results, costs and revenues, economic conditions in our markets, and credit quality conditions, as well as statements with respect to our objectives, expectations and intentions and other statements that are not historical facts. Actual results may differ from those set forth in the forward-looking statements.

Forward-looking statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance or achievements of the Company or the Bank to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking statements.

All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2006, and otherwise in our SEC reports and filings.

Explanation of Non-GAAP Financial Measures

In addition to results presented in accordance with U.S. generally accepted accounting principles (GAAP), this press release includes certain designated net interest income amounts presented on a tax-equivalent basis, a non-GAAP financial measure, including the presentation of total revenue and the calculation of the efficiency ratio.

The Company believes the presentation of net interest income on a tax-equivalent basis provides comparability of net interest income from both taxable and tax-exempt sources and facilitates comparability within the industry. Although the Company believes this non-GAAP financial measure enhances investors’ understanding of its business and performance, this non-GAAP financial measure should not be considered an alternative to GAAP. The reconciliation of this non-GAAP financial measure from GAAP to non-GAAP is presented below.

 

     For the Three Months
Ended September 30		    For the Nine Months
Ended September 30

(In thousands)

    2007    2006    2007    2006

Net interest income (GAAP)

    $ 4,324    $ 4,126    $ 12,577    $ 12,153

Tax-equivalent adjustment

      286      248      832      782
                           

Net interest income (Tax-equivalent)

    $ 4,610    $ 4,374    $ 13,409    $ 12,935
                           

 

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AUBURN NATIONAL BANCORPORATION ANNOUNCES EARNINGS/page 3

 

Financial Highlights

 

     Three Months Ended     Nine Months Ended  

(Dollars in thousands, except per share amounts)

    September 30,
2007		     September 30,
2006		     September 30,
2007		     September 30,
2006		  

Results of Operations

         

Net interest income (GAAP)

    $ 4,324     $ 4,126     $ 12,577     $ 12,153  

Tax-equivalent adjustment

      286       248       832       782  
                                

Net interest income (a)

      4,610       4,374       13,409       12,935  

Noninterest income

      1,088       1,090       3,414       3,358  
                                

Total revenue (a)

      5,698       5,464       16,823       16,293  

Provision for loan losses

      —         85       23       295  

Noninterest expense

      3,074       2,849       9,107       8,429  

Tax-equivalent adjustment

      286       248       832       782  

Income tax expense

      589       621       1,723       1,749  
                                

Net earnings

    $ 1,749     $ 1,661     $ 5,138     $ 5,038  
                                

Per share data:

         

Basic and diluted net earnings

    $ 0.47     $ 0.44     $ 1.38     $ 1.33  

Cash dividends declared

    $ 0.175     $ 0.16     $ 0.525     $ 0.48  

Weighted average shares outstanding

         

Basic

      3,708,097       3,775,649       3,725,744       3,781,918  

Diluted

      3,708,097       3,776,023       3,725,744       3,782,363  

Shares outstanding, at period end

      3,691,260       3,771,568       3,691,260       3,771,568  

Performance ratios:

         

Return on average equity

      14.41 %     14.84 %     13.50 %     15.28 %

Return on average assets

      1.07       1.06       1.06       1.08  

Dividend payout ratio

      37.23       36.36       38.04       36.09  

Average equity to average assets

      7.43       7.14       7.89       7.05  

Asset Quality:

         

Allowance for loan losses as a % of:

         

Loans

      1.29 %     1.42 %     1.29 %     1.42 %

Nonperforming assets

      911       23,753       911       23,753  

Net charge-offs (recoveries) as a % of average loans

      0.04       0.05       (0.01 )     0.05  

Nonperforming assets as a % of loans

      0.14       0.01       0.14       0.01  

Other financial data:

         

Net interest margin

      3.02 %     2.96 %     3.00 %     2.96 %

Effective income tax rate

      25.19       27.21       25.11       25.77  

Efficiency ratio (a)

      53.95       52.14       54.13       51.73  

Selected period end balances:

         

Securities

      288,459       287,703       288,459       287,703  

Loans

      316,795       283,746       316,795       283,746  

Allowance for loan losses

      4,074       4,038       4,074       4,038  

Total assets

      661,780       635,987       661,780       635,987  

Total deposits

      510,078       479,269       510,078       479,269  

Long-term debt

      90,390       100,409       90,390       100,409  

Total stockholders’ equity

      50,503       47,025       50,503       47,025  
                                
(a) Tax-equivalent. See “Explanation of Non-GAAP Financial Measures.”