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Company News: Page (1) of 1 - 01/29/13 Email this story to a friend. email article Print this page (Article printing at MyDmn.com).print page

Auburn National Bancorporation, Inc. Reports Full Year Net Earnings of $6.8 Million, or $1.86 per Share; Fourth Quarter Net Earnings of $1.7 Million, or $0.46 per Share By Globenewswire


Full Year 2012 Results – Compared to Full Year 2011:




  • Net earnings increased 22%


  • 2012 EPS of $1.86 matches record total


  • Net interest margin increased by 26 basis points


  • Average loans up $17.4 million, or 5%


  • Mortgage lending income up $1.5 million, or 79%


  • Provision for loan losses increased $1.4 million, or 56%


  • NPAs declined by $2.8 million, or 15%; NPAs to total assets of 2.03% at December 31, 2012


  • Maintained strong balance sheet with a tangible common equity to total assets ratio of 8.55%



AUBURN, Ala., Jan. 29, 2013 (GLOBE NEWSWIRE) -- Auburn National Bancorporation (Nasdaq:AUBN) reported net earnings of approximately $1.7 million, or $0.46 per share, for the fourth quarter of 2012, compared to $1.2 million, or $0.32 per share, for the fourth quarter of 2011. For the full year 2012, net earnings were $6.8 million, or $1.86 per share, compared to $5.5 million, or $1.52 per share, for the full year 2011.



Fourth quarter 2012 operating net earnings, which exclude the effects of non-operating items such as securities gains and losses, expenses related to other real estate owned ("OREO") and prepayment penalties on long-term debt, were approximately $1.7 million, or $0.47 per share, compared to fourth quarter 2011 operating net earnings of approximately $1.5 million, or $0.40 per share. For the full year 2012, operating net earnings were $6.8 million, or $1.87 per share, compared to $6.2 million, or $1.72 per share, for the full year 2011.


E.L. Spencer, Jr., President, CEO and Chairman of the Board, commented: "The Company's fourth quarter and full year results reflect improvement in our net interest margin, a significant increase in mortgage lending income, and management's efforts to aggressively resolve and reduce nonperforming assets. In addition to maintaining strong capital and liquidity, the Company paid cash dividends of $0.82 per share during 2012."





Net interest income (tax-equivalent) was $5.7 million for the fourth quarter of 2012, an increase of 16% compared to the fourth quarter of 2011. The increase primarily reflected improvement in the Company's net interest margin and cost of funds, as average total interest-earning assets were mostly unchanged. Net interest income (tax-equivalent) for the fourth quarter of 2012 included a $229,000 recovery of interest related to the payoff on a nonperforming construction and land development loan. Excluding the impact of this interest recovery, net interest income (tax-equivalent) would have increased 12% in the fourth quarter of 2012 compared to the fourth quarter of 2011. Average loans were $395.5 million in the fourth quarter of 2012, an increase of $23.2 million, or 6%, from the fourth quarter of 2011. Average deposits were $630.1 million in the fourth quarter of 2012, an increase of $20.4 million, or 3%, from the fourth quarter of 2011.



Nonperforming assets decreased to 2.03% of total assets at December 31, 2012, compared to 2.46% at September 30, 2012. The Company's annualized net-charge off ratio was 0.39% in the fourth quarter of 2012, compared to 0.08% in the fourth quarter of 2011. The provision for loan losses was $1.1 million in the fourth quarter of 2012, compared to $0.7 million in the fourth quarter of 2011. The provision for loan losses increased primarily due to an increase in net charge-offs in the commercial real estate loan portfolio. Although historical loss rates have increased for commercial real estate loans, the Company's historical loss rates for all other portfolio segments were mostly flat to declining.



Total noninterest income was approximately $1.8 million in the fourth quarter of 2012, compared to $1.5 million in the fourth quarter of 2011. The increase in total noninterest income was primarily due to a $0.4 million increase in mortgage lending income, reflecting increased origination volume, and a $0.2 million decrease in affordable housing investment losses, due to the Company selling three affordable housing investments in January 2012. These increases were offset by a decrease in net securities gains of $0.2 million.



Total noninterest expense was approximately $4.0 million in the fourth quarter of 2012 compared to $4.2 million in fourth quarter of 2011. The decrease was primarily due to a decrease in net expenses related to OREO, which was partially offset by increases in other noninterest expense. The decrease in net expenses related to OREO was primarily due to a decline in holding losses or write-downs on the valuations of certain properties included in OREO.



Income tax expense was approximately $1.4 million for the full year 2012, compared to $0.1 million for the full year 2011. The Company's annualized effective tax rate for the full year 2012 was 17.34%, compared to an annualized effective income tax rate of 1.02% for the full year 2011. The increase in the Company's effective tax rate during 2012 when compared to 2011 was due to a 46% increase in the level of earnings before taxes and a decrease in federal tax credits related to the Company's investments in affordable housing limited partnerships, which were sold in January 2012. The impact of these changes on the Company's effective tax rate for the full year 2012 was partially offset by the reversal of a previously established deferred tax valuation allowance of $0.5 million related to capital loss carryforwards.



The Company paid cash dividends of $0.205 per share in the fourth quarter of 2012. At December 31, 2012, the Bank's regulatory capital was well above the minimum amounts required to be "well capitalized" under current regulatory standards.



About Auburn National Bancorporation



Auburn National Bancorporation, Inc. (the "Company") is the parent company of AuburnBank (the "Bank"), with total assets of approximately $760 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 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, Valley, Hurtsboro and Notasulga, Alabama. In-store branches are located in the Auburn and Opelika Kroger stores, as well as in the Wal-Mart SuperCenter stores in Auburn, Opelika, and Phenix City, Alabama. The Bank also operates commercial loan production offices in Montgomery and Phenix City, Alabama. Additional information about the Company and the Bank may be found by visiting www.auburnbank.com.



The Auburn National Bancorporation, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4903



Cautionary Notice Regarding 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, loan demand, mortgage lending activity, net interest margin, yields on earning assets, securities valuations and performance, loan performance, nonperforming assets, other real estate owned, loan losses, charge-offs, other-than-temporary impairments, collateral values, credit quality, asset sales, and market trends, 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, 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, together with those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2011 and otherwise in our other SEC reports and filings.



Explanation of Certain Unaudited Non-GAAP Financial Measures



This press release contains financial information determined by methods other than U.S. Generally Accepted Accounting Principles ("GAAP"). The attached financial highlights provide reconciliations between GAAP net earnings and operating net earnings, which exclude gains or losses on items deemed not to reflect core operations, as well as tax-equivalent net interest income and net interest margin, including the presentation of total revenue and the calculation of the efficiency ratio. Management uses these non-GAAP financial measures in its analysis of the Company's performance and believes presentations of "operating" and tax-equivalent financial measures provide useful supplemental information regarding the Company's performance, and that operating net earnings better reflect the Company's core operating activities. Management utilizes these non-GAAP measures in the calculation of certain of the Company's ratios, in particular, to analyze on a consistent basis over time the performance of what it considers to be its core operations. The Company believes the non-GAAP measures enhance investors' understanding of the Company's business and performance. These measures are also useful in understanding performance trends and facilitate comparisons with the performance of other financial institutions. The limitations associated with these measures are the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might calculate these measures differently. The Company provides reconciliations between GAAP and these non-GAAP measures. These disclosures should not be considered an alternative to GAAP.















































































































































































































































































































































































































































































































































Financial Highlights (unaudited)

 

 

 

 

 

Quarter ended December 31, 

Year ended December 31,

(Dollars in thousands, except per share amounts)

2012

2011

2012

2011

Results of Operations

 

 

 

 

Net interest income (a)

 $ 5,721

  $ 4,924

  $ 22,539

  $ 20,944

Less: tax-equivalent adjustment

 396

 415

 1,642

 1,719

Net interest income (GAAP)

 5,325

 4,509

 20,897

 19,225

Noninterest income

 1,788

 1,461

 10,483

 5,177

Total revenue

 7,113

 5,970

 31,380

 24,402

Provision for loan losses

 1,065

 650

 3,815

 2,450

Noninterest expense

 4,023

 4,187

 19,383

 16,357

Income tax expense (benefit)

 365

 (32)

 1,419

 57

Net earnings

  $ 1,660

  $ 1,165

  $ 6,763

  $ 5,538

 

 

 

 

 

Per share data:

 

 

 

 

Basic and diluted net earnings:

 

 

 

 

GAAP

  $ 0.46

  $ 0.32

  $ 1.86

  $ 1.52

Operating (b)

 0.47

 0.40

 1.87

 1.72

Cash dividends declared

  $ 0.205

  $ 0.20

  $ 0.82

  $ 0.80

Weighted average shares outstanding:

 

 

 

 

Basic and diluted

 3,642,903

 3,642,738

 3,642,831

 3,642,735

Shares outstanding, at period end

 3,642,903

 3,642,738

 3,642,903

 3,642,738

Book value

  $ 19.26

  $ 17.96

  $ 19.26

  $ 17.96

Common stock price:

 

 

 

 

High

  $ 24.87

  $ 19.65

  $ 26.65

  $ 20.37

Low

 20.85

 18.52

 18.23

 18.52

Period-end:

 20.85

 18.52

 20.85

 18.52

To earnings ratio

 11.21 x

 12.10 x

 11.21 x

 12.10 x

To book value

 108%

 103%

 108%

 103%

Performance ratios:

 

 

 

 

Return on average equity (annualized):

 

 

 

 

GAAP

 9.30%

 7.15%

 9.85%

 9.10%

Operating (b)

 9.55%

 9.03%

 9.94%

 10.27%

Return on average assets (annualized):

 

 

 

 

GAAP

 0.88%

 0.61%

 0.90%

 0.72%

Operating (b)

 0.90%

 0.77%

 0.90%

 0.81%

Dividend payout ratio

 44.57%

 62.50%

 44.09%

 52.63%

Other financial data:

 

 

 

 

Net interest margin (a)

 3.22%

 2.77%

 3.21%

 2.95%

Effective income tax rate

 18.02%

 NM 

 17.34%

 1.02%

Efficiency ratio (c)

 52.18%

 55.80%

 52.76%

 56.85%

Asset Quality:

 

 

 

 

Nonperforming assets:

 

 

 

 

Nonperforming (nonaccrual) loans

  $ 10,535

  $ 10,354

  $ 10,535

  $ 10,354

Other real estate owned

 4,919

 7,898

 4,919

 7,898

Total nonperforming assets

  $ 15,454

  $ 18,252

  $ 15,454

  $ 18,252

 

 

 

 

 

Net charge-offs

  $ 387

  $ 71

  $ 4,011

  $ 3,207

 

 

 

 

 

Allowance for loan losses as a % of:

 

 

 

 

Loans

 1.69%

 1.87%

 1.69%

 1.87%

Nonperforming loans

 64%

 67%

 64%

 67%

Nonperforming assets as a % of:

 

 

 

 

Loans and other real estate owned

 3.83%

 4.83%

 3.83%

 4.83%

Total assets

 2.03%

 2.35%

 2.03%

 2.35%

Nonperforming loans as a % of total loans

 2.65%

 2.80%

 2.65%

 2.80%

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

 0.39%

 0.08%

 1.03%

 0.86%

Selected average balances:

 

 

 

 

Securities

  $ 253,765

  $ 294,485

  $ 277,240

  $ 302,967

Loans, net of unearned income

 395,487

 372,318

 391,254

 373,866

Total assets

 755,991

 766,907

 755,305

 771,116

Total deposits

 630,950

 610,543

 631,133

 617,490

Long-term debt

 47,217

 85,314

 49,115

 86,899

Total stockholders' equity

 71,421

 65,168

 68,676

 60,842

Selected period end balances:

 

 

 

 

Securities

  $ 259,475

  $ 299,582

  $ 259,475

   $ 299,582

Loans, net of unearned income

 398,193

 370,263

 398,193

 370,263

Allowance for loan losses

 6,723

 6,919

 6,723

 6,919

Total assets

 759,833

 776,218

 759,833

 776,218

Total deposits

 636,817

 619,552

 636,817

 619,552

Long-term debt

 47,217

 85,313

 47,217

 85,313

Total stockholders' equity

 70,149

 65,416

 70,149

 65,416

 

 

 

 

 

(a)  Tax equivalent. See "Explanation of Certain Unaudited Non-GAAP Financial Measures" and "Reconciliation of GAAP to non-GAAP Measures (unaudited)."

(b)  Operating measures. See "Explanation of Certain Unaudited Non-GAAP Financial Measures" and "Reconciliation of GAAP to non-GAAP Measures (unaudited)."

(c)  Efficiency ratio is the result of operating noninterest expense divided by the sum of operating noninterest income and tax-equivalent net interest income.

NM - not meaningful










































































































































































































































































































































 

 

 

Reconciliation of GAAP to non-GAAP Measures (unaudited):

 

 

 

 

 

 

Quarter ended December 31,

Years ended December 31,

(Dollars in thousands, except per share amounts)

2012

2011

2012

2011

Net earnings, as reported (GAAP)

$ 1,660

$ 1,165

$ 6,763

$ 5,538

Non-operating items (net of 37% statutory tax rate):

 

 

 

 

Securities gains, net 

 (44)

 (198)

 (428)

 (553)

Gain on sale of affordable housing investments

— 

— 

 (2,059)

— 

Other real estate owned expense, net

 89

 504

 203

 1,264

Prepayment penalty on long-term debt

— 

— 

 2,344

— 

Operating net earnings

$ 1,705

$ 1,471

$ 6,823

$ 6,249

 

 

 

 

 

Basic and diluted earnings per share, as reported (GAAP)

 $ 0.46

 $ 0.32

 $ 1.86

 $ 1.52

Non-operating items (net of 37% statutory tax rate):

 

 

 

 

Securities gains, net 

 (0.01)

 (0.05)

 (0.12)

 (0.15)

Gain on sale of affordable housing investments

— 

— 

 (0.57)

— 

Other real estate owned expense, net

 0.02

 0.13

 0.06

 0.35

Prepayment penalty on long-term debt

— 

— 

 0.64

— 

Operating net earnings per share

 $ 0.47

 $ 0.40

 $ 1.87

 $ 1.72

 

 

 

 

 

Net interest income, as reported (GAAP)

$ 5,325

$ 4,509

$ 20,897

$ 19,225

Tax-equivalent adjustment

396

415

1,642

1,719

Net interest income (tax-equivalent)

$ 5,721

$ 4,924

$ 22,539

$ 20,944

 

 

 

 

 

Noninterest income, as reported (GAAP)

$ 1,788

$ 1,461

$ 10,483

$ 5,177

Non-operating items:

 

 

 

 

Securities gains, net 

 (70)

 (315)

 (679)

 (878)

Gain on sale of affordable housing investments

— 

— 

 (3,268)

— 

Operating noninterest income

$ 1,718

$ 1,146

$ 6,536

$ 4,299

 

 

 

 

 

Total Revenue, as reported (GAAP)

$ 7,113

$ 5,970

$ 31,380

$ 24,402

Tax-equivalent adjustment

396

415

1,642

1,719

Non-operating items:

 

 

 

 

Securities gains, net 

 (70)

 (315)

 (679)

 (878)

Gain on sale of affordable housing investments

— 

— 

 (3,268)

— 

Total Operating Revenue (tax-equivalent)

$ 7,439

$ 6,070

$ 29,075

$ 25,243

 

 

 

 

 

Noninterest expense, as reported (GAAP)

$ 4,023

$ 4,187

$ 19,383

$ 16,357

Non-operating items:

 

 

 

 

Other real estate owned expense, net

 (141)

 (800)

 (323)

 (2,007)

Prepayment penalty on long-term debt

— 

— 

 (3,720)

— 

Operating noninterest expense

$ 3,882

$ 3,387

$ 15,340

$ 14,350

 

 

 

 

 

Total stockholders' equity (GAAP)

$ 70,149

$ 65,416

$ 70,149

$ 65,416

Unrealized gains on available for sale securities, net of tax

 (5,174)

 (4,222)

 (5,174)

 (4,222)

Tangible Common Equity

$ 64,975

$ 61,194

$ 64,975

$ 61,194

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



Auburn National Bancorporation, Inc. Logo


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