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Auburn National Bancorporation(AUBN) - 2024 Q1 - Quarterly Report

Financial Performance - Net interest income for the quarter ended March 31, 2024, was 6,657thousand,adecreaseof6.346,657 thousand, a decrease of 6.34% from 7,109 thousand in the same quarter of 2023[9] - Net earnings for the quarter were 1,371thousand,down30.061,371 thousand, down 30.06% from 1,964 thousand year-over-year[9] - Comprehensive loss for the quarter was 813thousand,adeclinefromacomprehensiveincomeof813 thousand, a decline from a comprehensive income of 7,427 thousand in the same quarter of the previous year[13] - Net earnings for the quarter ended March 31, 2024, were 1,371,000,adecreaseof301,371,000, a decrease of 30% compared to 1,964,000 for the same period in 2023[17] - Basic and diluted earnings per share were 0.39forQ12024,downfrom0.39 for Q1 2024, down from 0.56 in Q1 2023, reflecting a 30% decline[102] - Net interest income (tax-equivalent) decreased by 7% to 6.7millioninQ12024from6.7 million in Q1 2024 from 7.2 million in Q1 2023, primarily due to a smaller balance sheet and decreased net interest margin[103] - The company's net interest margin (tax-equivalent) was 3.04% in Q1 2024, down from 3.17% in Q1 2023, attributed to increased cost of funds[103] - Total revenue for Q1 2024 was 7,544,000,upfrom7,544,000, up from 630,000 in Q4 2023, indicating a significant increase[178] Asset and Deposit Growth - Total assets increased to 979,039thousandasofMarch31,2024,comparedto979,039 thousand as of March 31, 2024, compared to 975,255 thousand at December 31, 2023, reflecting a growth of 0.08%[7] - Total deposits rose to 899,673thousandasofMarch31,2024,comparedto899,673 thousand as of March 31, 2024, compared to 896,243 thousand at the end of 2023, marking a slight increase of 0.16%[7] - Total deposits increased to 899.7millionatMarch31,2024,from899.7 million at March 31, 2024, from 896.2 million at December 31, 2023[140] - Total assets as of March 31, 2024, were 976,930,000,adecreasefrom976,930,000, a decrease from 1,022,938,000 as of December 31, 2023[180] Credit Losses and Provisions - Provision for credit losses increased to 334thousandinQ12024,comparedto334 thousand in Q1 2024, compared to 66 thousand in Q1 2023, indicating a significant rise in credit risk assessment[9] - The allowance for credit losses stood at 7,215thousandasofMarch31,2024,comparedto7,215 thousand as of March 31, 2024, compared to 6,863 thousand at December 31, 2023, indicating a proactive approach to potential loan defaults[7] - The provision for credit losses increased significantly to 334,000from334,000 from 66,000 year-over-year[17] - The total provision for credit losses for loans was 285millionforthequarterendedMarch31,2024,comparedto285 million for the quarter ended March 31, 2024, compared to 40 million for the same quarter in 2023[68] - The allowance for credit losses was 7.2million,or1.277.2 million, or 1.27% of total loans, compared to 6.8 million, or 1.35% of total loans, in Q1 2023[104] Noninterest Income and Expenses - Noninterest income for the quarter was 887thousand,up11.98887 thousand, up 11.98% from 792 thousand in the same quarter of 2023[9] - Total noninterest expense increased to 5,675thousandinQ12024,comparedto5,675 thousand in Q1 2024, compared to 5,604 thousand in Q1 2023, reflecting a rise of 1.27%[9] - Noninterest income was 0.9millioninQ12024,slightlyupfrom0.9 million in Q1 2024, slightly up from 0.8 million in Q1 2023[105] - Noninterest expense rose to 5.7millioninQ12024from5.7 million in Q1 2024 from 5.6 million in Q1 2023, primarily due to routine salary and benefits increases[106] Loan Portfolio - Total loans increased to 567.5millionasofMarch31,2024,upfrom567.5 million as of March 31, 2024, up from 557.3 million at December 31, 2023, representing a growth of approximately 2.1%[45] - Loans secured by real estate constituted approximately 84.2% of the total loan portfolio as of March 31, 2024[45] - The commercial real estate segment totaled 300,484,000asofMarch31,2024,upfrom300,484,000 as of March 31, 2024, up from 287,307,000 at December 31, 2023, reflecting an increase of approximately 4.2%[53] - The residential real estate loans reached 118,240,000asofMarch31,2024,comparedto118,240,000 as of March 31, 2024, compared to 117,457,000 at the end of 2023, showing a growth of about 0.7%[53] - The commercial and industrial loans increased to 78,920,000asofMarch31,2024,from78,920,000 as of March 31, 2024, from 73,374,000 at December 31, 2023, marking a growth of about 7.6%[53] Dividends and Stockholder Equity - The company declared cash dividends of 0.27pershare,totaling0.27 per share, totaling 943 thousand for the quarter ended March 31, 2024[14] - The Company's consolidated stockholders' equity decreased to 74.5millionasofMarch31,2024,from74.5 million as of March 31, 2024, from 76.5 million at December 31, 2023[147] - The Company paid cash dividends of $0.27 per share for both the first quarter of 2024 and the first quarter of 2023[148] Liquidity and Capital Ratios - The Company believes it has adequate sources of liquidity to meet all known contractual obligations and unfunded commitments over the next twelve months[163] - The Bank's capital conservation buffer was 7.69% at March 31, 2024, indicating a strong capital position[150] - The Company's total risk-based capital ratio was 15.69% at March 31, 2024, well above the minimum required to be "well capitalized"[107] Market Conditions and Economic Factors - The yield curve was inverted as of March 31, 2024, affecting the spread between costs of funds and interest income[172] - The Federal Reserve raised the target federal funds rate to 5.25-5.50% as of July 26, 2023, with potential further increases if inflation remains elevated[173]