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Variable Interest Entities | 3 Months Ended
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Mar. 31, 2018
Variable interest entities [Abstract] |
Variable interest entity [Text Block] | NOTE 3: VARIABLE INTEREST ENTITIES Generally, a variable interest entity (“VIE”) is a corporation, partnership, trust, or other legal structure that does not have equity investors with substantive or proportional voting rights or has equity investors that do not provide sufficient financial resources for the entity to support its activities. At March 31, 2018, the Company did not have any consolidated VIEs to disclose but did have one nonconsolidated VIE, discussed below. Tr ust Preferred Securities The Company owns the common stock of a subsidiary business trust, Auburn National Bancorporation Capital Trust I (the “Trust”), which issued mandatorily redeemable preferred capital securities (“trust preferred securities”) in 2 003 in the aggregate of approximately $7.0 million at the time of issuance. The Trust meets the definition of a VIE of which the Company is not the primary beneficiary; the Trust’s only assets are junior subordinated debentures issued by the Company, which were acquired by the Trust using the proceeds from the issuance of the trust preferred securities and common stock. In October 2016, the Company purchased $4.0 million par amount of outstanding trust preferred securities issued by the Trust. These securi ties were sold by the FDIC, as receiver of a failed bank that had held the trust preferred securities. The Company used dividends from the Bank to purchase these trust preferred securities and has deemed an equivalent amount of the related junior subordin ated debentures issued by the Company as no longer outstanding. The Company realized a pre-tax gain of $0.8 million on the early extinguishment of debt in this transaction. Following the transaction, the Company had outstanding $3.2 million in junior sub ordinated debentures held by the trust related to the remaining $3.0 million of trust preferred securities outstanding and not purchased by the Company. The outstanding principal amount of debentures related to those trust preferred securities remains inc luded in the Company’s Tier I capital for regulatory purposes. On April 27, 2018, the Company formally redeemed all of the issued and outstanding junior subordinated debentures and the Trust formally redeemed all of the issued and outstanding trust preferred securities and common securities at par. See NOTE 9, SUBSEQUENT EVENTS. The following table summarizes VIEs that are not consolidated by the Company as of March 31, 2018.
|  | Maximum |  |  | Liability |  |
(Dollars in thousands) |  | Loss Exposure |  |  | Recognized |  | Classification
Type: |  |  |  |  |  |  |
Trust preferred issuances |  | N/A |  |  | $3,217 |  | Long-term debt

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