Auburn National Bancorporation(AUBN) - 2024 Q2 - Quarterly Report

Total Assets and Liabilities - Total assets increased to $1,025.1 million as of June 30, 2024, compared to$975.3 million as of December 31, 2023[7] - Total deposits grew to $946.4 million as of June 30, 2024, compared to$896.2 million as of December 31, 2023[7] - Loans, net of allowance for credit losses, increased to $570.9 million as of June 30, 2024, from$550.4 million as of December 31, 2023[7] - Cash and cash equivalents increased to $114.5 million as of June 30, 2024, from$71.4 million as of December 31, 2023[7] - Total assets at fair value decreased by 6.1% from $270.91 million in December 2023 to$254.36 million in June 2024[79] - Total assets increased to $1,025,054 thousand in June 2024 from$975,255 thousand in December 2023, reflecting a growth of 5.1%[7] - Total deposits grew to $946,405 thousand in June 2024 from$896,243 thousand in December 2023, an increase of 5.6%[7] - Loans, net increased to $570,926 thousand in June 2024 from$550,431 thousand in December 2023, reflecting a growth of 3.7%[7] - Cash and cash equivalents increased to $114,499 thousand in June 2024 from$71,369 thousand in December 2023, reflecting a growth of 60.4%[7] - Total stockholders' equity decreased to $75,209 thousand in June 2024 from$76,507 thousand in December 2023, a decline of 1.7%[7] Net Interest Income and Margin - Net interest income for the six months ended June 30, 2024, was $13.4 million, a decrease from$14.0 million in the same period in 2023[9] - Net interest income (tax-equivalent) decreased by 6% to $13.4 million in the first six months of 2024, compared to$14.2 million in the same period of 2023[104] - The Company's net interest margin (tax-equivalent) was 3.05% for the first six months of 2024, down from 3.10% in the first six months of 2023[104] - Net interest income (tax-equivalent) for Q2 2024 was $6.7 million, down from$7.0 million in Q2 2023, primarily due to higher deposit costs[110] - Net interest margin (tax-equivalent) increased to 3.06% in Q2 2024 from 3.03% in Q2 2023, driven by a favorable asset mix and higher yields on interest-earning assets[110] - Net interest income (tax-equivalent) for the first six months of 2024 was $13.4 million, a 6$14.2 million in the same period of 2023[113] - The tax-equivalent yield on total interest-earning assets increased by 62 basis points to 4.29% in the first six months of 2024 compared to 3.67% in the same period of 2023[114] - The cost of total interest-bearing liabilities increased by 89 basis points to 1.71% in the first six months of 2024 compared to 0.82% in the same period of 2023[114] - Net interest income for Q2 2024 increased to $6,728 thousand, up from$6,677 thousand in Q1 2024[179] - Net interest income for Q2 2024 was $6.7 million, slightly down from$7.0 million in Q2 2023, with the net interest margin increasing from 3.03% to 3.06%[182] - Net interest income for the six months ended June 30, 2024, was $13.4 million, down from$14.2 million in 2023, with the net interest margin decreasing from 3.10% to 3.05%[183] - Net interest income for the six months ended June 30, 2024, was $13,366 thousand, a decrease of 4.5$13,997 thousand in the same period of 2023[9] Net Earnings and Comprehensive Income - Net earnings for the six months ended June 30, 2024, were $3.1 million, down from$3.9 million in the same period in 2023[9] - Comprehensive income for the six months ended June 30, 2024, was $0.9 million, compared to$5.7 million in the same period in 2023[13] - Net earnings per share (basic and diluted) for the six months ended June 30, 2024, were $0.89, down from$1.11 in the same period in 2023[9] - Net earnings for the six months ended June 30, 2024, were $3.105 million, compared to$3.892 million in the same period in 2023[16] - Net earnings for Q2 2024 were $1.734 million, a decrease from$1.928 million in Q2 2023[29] - Basic net earnings per share for Q2 2024 were $0.50, down from$0.55 in Q2 2023[29] - Net earnings for the first six months of 2024 were $3.1 million, a decrease from$3.9 million in the same period of 2023[103] - Basic and diluted earnings per share for the first six months of 2024 were $0.89, compared to$1.11 in the first six months of 2023[103] - Net earnings for Q2 2024 were $1.7 million, or$0.50 per share, compared to $1.9 million, or$0.55 per share, in Q2 2023[110] - Net earnings for Q2 2024 were $1,734 thousand, up from$1,371 thousand in Q1 2024[179] - Net earnings for the six months ended June 30, 2024, were $3,105 thousand, a decrease of 20.2$3,892 thousand in the same period of 2023[9] - Comprehensive income for the six months ended June 30, 2024, was $850 thousand, a significant decrease compared to$5,740 thousand in the same period of 2023[13] Noninterest Income and Expense - Noninterest income for the six months ended June 30, 2024, was $1.8 million, up from$1.6 million in the same period in 2023[9] - Total noninterest expense for the six months ended June 30, 2024, was $11.2 million, a slight decrease from$11.4 million in the same period in 2023[9] - Noninterest income increased to $1.8 million in the first six months of 2024, up from$1.6 million in the same period of 2023[106] - Noninterest expense decreased to $11.2 million in the first six months of 2024, compared to$11.4 million in the same period of 2023[107] - Noninterest income for Q2 2024 was $0.9 million, up from$0.8 million in Q2 2023[110] - Noninterest expense for Q2 2024 was $5.5 million, down from$5.8 million in Q2 2023[110] - Noninterest expense decreased to $5.5 million in Q2 2024 from$5.8 million in Q2 2023[125] - Total noninterest expense for the six months ended June 30, 2024, was $11,194 thousand, a decrease of 2.1$11,429 thousand in the same period of 2023[9] Loans and Credit Quality - Loans secured by real estate accounted for 84.8% of the company's total loan portfolio as of June 30, 2024[44] - Commercial real estate loans increased to $297.23 million as of June 30, 2024, compared to$287.31 million as of December 31, 2023[44] - Residential real estate loans rose to $119.43 million as of June 30, 2024, up from$117.46 million as of December 31, 2023[44] - Nonaccrual loans decreased to $794,000 as of June 30, 2024, down from$911,000 as of December 31, 2023[52] - Total accruing loans increased to $577.27 million as of June 30, 2024, compared to$556.38 million as of December 31, 2023[52] - Commercial and industrial loans grew to $77.63 million as of June 30, 2024, up from$73.37 million as of December 31, 2023[44] - Construction and land development loans increased to $73.69 million as of June 30, 2024, compared to$68.33 million as of December 31, 2023[44] - Consumer installment loans decreased to $10.09 million as of June 30, 2024, down from$10.83 million as of December 31, 2023[44] - The company's loan distribution is primarily concentrated in Lee County, Alabama, and surrounding areas[44] - Total owner occupied commercial real estate loans amounted to $63.384 million, with$1.185 million in special mention and $753,000 in nonaccrual status[57] - Hotel/motel loans totaled$38.542 million, all classified as pass with no special mention, substandard, or nonaccrual loans[57] - Multi-family loans as of June 30, 2024, were $44.135 million, all classified as pass with no special mention, substandard, or nonaccrual loans[58] - Other loans as of June 30, 2024, totaled$151.171 million, with $905,000 in special mention and$126,000 in substandard status[58] - Total consumer mortgage loans were $60.957 million, including$490,000 in special mention, $495,000 in substandard, and$41,000 in nonaccrual status[59] - Investment property loans amounted to $58.47 million, with$401,000 in substandard status[59] - Total loans as of December 31, 2023, were $578.068 million, with$3.436 million in special mention, $1.554 million in substandard, and$794,000 in nonaccrual status[59] - Commercial and industrial loans as of December 31, 2023, totaled $73.374 million, with$261,000 in substandard status[60] - Construction and land development loans as of December 31, 2023, were $68.329 million, all classified as pass with no special mention, substandard, or nonaccrual loans[60] - Multi-family loans as of December 31, 2023, were$45.841 million, all classified as pass with no special mention, substandard, or nonaccrual loans[62] - Total loans amounted to $557.294 million, with pass loans making up$553.961 million, special mention loans at $841 thousand, substandard loans at$1.581 million, and nonaccrual loans at $911 thousand[63] - The provision for credit losses in Q2 2024 was a reversal of$123 thousand, compared to a reversal of $362 thousand in Q2 2023[65] - The allowance for credit losses for loans ended at$7.142 million in Q2 2024, down from $7.215 million at the beginning of the quarter[66] - Nonaccrual loans totaled$794 thousand as of June 30, 2024, with $753 thousand in commercial real estate and$41 thousand in residential real estate[69] - The company adopted ASC 326 on January 1, 2023, introducing the CECL methodology for estimating expected credit losses[64] - Mortgage servicing rights (MSRs) are measured under the amortization method, with impairment evaluated quarterly based on fair value[70][71] - MSRs, net ending balance for Q2 2024 was $942 thousand, compared to$1,050 thousand in Q2 2023, reflecting a decrease of 10.3%[72] - Loans, net fair value decreased by 2.0% from $526.37 million in December 2023 to$536.97 million in June 2024[91] - Collateral dependent loans fair value decreased by 3.8% from $783 thousand in December 2023 to$753 thousand in June 2024[83] - Mortgage servicing rights, net fair value decreased by 5.0% from $992 thousand in December 2023 to$942 thousand in June 2024[83] - Loans held for sale remained stable at $30 thousand from December 2023 to June 2024[83] - The allowance for credit losses was$7.1 million, or 1.24% of total loans, at June 30, 2024, compared to $6.9 million, or 1.23$578.1 million at June 30, 2024, a 4% increase compared to $557.3 million at December 31, 2023[126] - Commercial real estate loans accounted for 51$7.1 million at June 30, 2024, representing 1.24% of total loans, compared to $6.9 million (1.23$0.8 million at June 30, 2024 from $0.9 million at December 31, 2023[135] - Net recoveries (charge-offs) were$(9) thousand in Q2 2024, compared to $67 thousand in Q1 2024[134] - Nonperforming loans as a percentage of total loans decreased to 0.14$946.4 million at June 30, 2024, up from $896.2 million at December 31, 2023[139] - Money market deposits increased significantly to$205.7 million at June 30, 2024 from $148.0 million at December 31, 2023[139] - Total deposits increased to$946.4 million at June 30, 2024, compared to $896.2 million at December 31, 2023, primarily due to a decrease in reciprocal customer deposits[140] - Noninterest-bearing deposits were$263.1 million, or 28% of total deposits, at June 30, 2024, down from $270.7 million, or 30$364.9 million, or 39% of total deposits, at June 30, 2024, compared to $356.3 million, or 40$293.7 million of available credit from the FHLB and $61.0 million of available federal funds lines with no borrowings outstanding as of June 30, 2024[162] - The Bank had outstanding standby letters of credit of$0.5 million and unfunded loan commitments of $63.8 million as of June 30, 2024[164] - The aggregate unpaid principal balance of residential mortgage loans originated and sold, but with retained servicing rights, was$212.1 million as of June 30, 2024[166] - 99% of the residential mortgage loans serviced for Fannie Mae were current as of June 30, 2024[169] - Net increase in interest-bearing deposits for the six months ended June 30, 2024, was $57.780 million, compared to$13.297 million in 2023[16] Capital and Regulatory Ratios - The Bank's total risk-based capital ratio was 15.49%, tier 1 leverage ratio was 10.39%, and CET1 ratio was 14.47% at June 30, 2024[109] - The Bank's tier 1 leverage ratio was 10.39%, CET1 risk-based capital ratio was 14.47%, tier 1 risk-based capital ratio was 14.47%, and total risk-based capital ratio was 15.49% at June 30, 2024, all exceeding regulatory minimums[150] - The Bank's capital conservation buffer was 7.49% at June 30, 2024, sufficient to meet the fully phased-in conservation buffer[150] - CET1 risk-based capital ratio stood at 14.47% in Q2 2024, slightly down from 14.62% in Q1 2024[179] Cash Flows and Financing Activities - Cash flows from operating activities for the six months ended June 30, 2024, were $6.126 million, down from$7.375 million in 2023[16] - Net cash used in investing activities for the six months ended June 30, 2024, was $9.785 million, compared to$3.125 million in 2023[16] - Net cash provided by financing activities for the six months ended June 30, 2024, was $46.789 million, a significant increase from a net cash used of$1.968 million in 2023[16] - Cash and