Auburn National Bancorporation(AUBN) - 2024 Q3 - Quarterly Report

Financial Performance - Net interest income for the quarter ended September 30, 2024, was $6,790 thousand, an increase of 8.2% compared to$ 6,272 thousand for the same quarter in 2023[7]. - Net earnings for the quarter ended September 30, 2024, were $1,732 thousand, up 16.4% from$ 1,488 thousand in the same quarter of 2023[9]. - The company reported a comprehensive income of $10,070 thousand for the quarter ended September 30, 2024, compared to a loss of$ 8,453 thousand in the same quarter of 2023[9]. - Basic and diluted earnings per share for the quarter were $0.50, an increase from$ 0.43 in the same quarter of 2023[7]. - Net earnings for the first nine months of 2024 were $4.8 million, a decrease of 11.1% compared to$ 5.4 million for the same period in 2023[103]. - Basic and diluted earnings per share for the first nine months of 2024 were $1.38, down from$ 1.54 in the first nine months of 2023, representing a decrease of 10.4%[103]. - Total revenue for the nine months ended September 30, 2024, was $22,785,000, compared to$ 22,717,000 for the same period in 2023, reflecting a slight increase[196]. Asset and Equity Growth - Total assets increased to $990,143 thousand as of September 30, 2024, up from$ 975,255 thousand at December 31, 2023, representing a growth of 1.8%[5]. - The total stockholders' equity increased to $84,336 thousand as of September 30, 2024, up from$ 76,507 thousand at December 31, 2023, indicating a growth of 10.5%[6]. - The Company’s consolidated stockholders' equity increased to $84.3 million as of September 30, 2024, up from$ 76.5 million at December 31, 2023, driven by net earnings of $4.8 million[157]. Deposits and Loans - Total deposits reached$ 901,724 thousand as of September 30, 2024, an increase of 0.5% from $896,243 thousand at December 31, 2023[4]. - The company reported a net decrease in noninterest-bearing deposits of$ 479,000 for the nine months ended September 30, 2024, contrasting with a significant decrease of $32,717,000 in the same period of 2023[12]. - Total loans as of September 30, 2024, amounted to$ 565.699 million, with current loans at $564.816 million and non-accrual loans at$ 775 thousand[50]. - The loan portfolio composition included commercial real estate (53%), residential real estate (21%), construction and land development (14%), and commercial and industrial (11%) as of September 30, 2024[131]. Credit Quality and Provisions - The provision for credit losses for the quarter was a reversal of $127 thousand, compared to a provision of$ 105 thousand in the same quarter of 2023[7]. - The provision for credit losses was $84,000 for the nine months ended September 30, 2024, compared to a reversal of$ 191,000 in the same period of 2023, indicating a shift in credit quality assessment[12]. - The total allowance for credit losses was approximately $6.9 million at both September 30, 2024, and December 31, 2023, representing 1.22% of total loans[138]. - Nonperforming loans as a percentage of total loans remained stable at 0.14% in Q3 2024, compared to 0.14% in Q2 2024[194]. Interest Income and Expenses - Net interest income (tax-equivalent) for the first nine months of 2024 was$ 20.2 million, a 2% decrease from $20.6 million in the first nine months of 2023[104]. - The average yield on loans was 5.18% in the first nine months of 2024, up from 4.71% in the same period of 2023[133]. - The cost of total interest-bearing liabilities increased by 78 basis points to 1.80% in the first nine months of 2024, compared to 1.02% in the same period of 2023[116]. - The average rate paid on total interest-bearing deposits increased to 1.80% in the first nine months of 2024 from 1.02% in the same period of 2023[150]. Noninterest Income and Expenses - Noninterest income for the quarter was$ 846 thousand, slightly down from $865 thousand in the same quarter of 2023[7]. - Noninterest income increased to$ 2.6 million in the first nine months of 2024, compared to $2.4 million in the first nine months of 2023[107]. - Noninterest expense decreased to$ 16.7 million in the first nine months of 2024, compared to $16.8 million for the same period in 2023[108]. Regulatory and Compliance - At September 30, 2024, the Bank's total risk-based capital ratio was 15.76%, well above the minimum required to be "well capitalized" under current regulatory standards[110]. - The Bank's tier 1 leverage ratio was 10.43% and total risk-based capital ratio was 15.76% at September 30, 2024, exceeding the minimum regulatory capital requirements[160]. - The Company operates primarily in East Alabama, with a focus on maintaining strong regulatory compliance and financial stability[94]. Market and Economic Conditions - Inflation and changing interest rates have impacted the Company's deposit costs and overall financial performance, with a noted increase in noninterest expenses[184]. - The Federal Reserve increased its target federal funds rate to a range of 4.75% to 5.00% on September 18, 2024, in response to moderating inflation[186].