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Auburn National Ban Corp. Inc. Reports Operating Results (10-Q)

November 16, 2009 | About:
10qk

10qk

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Auburn National Ban Corp. Inc. (AUBN) filed Quarterly Report for the period ended 2009-09-30.

Auburn National Bancorporation, Inc. is the bank holding company for AuburnBank. The Bank's business consists of accepting demand, savings, and time deposits; making loans to consumers, businesses, and other institutions; investments in money market instruments, U.S. government and agency obligations, and state, county, and municipal bonds; and other financial services. Auburn National Ban Corp. Inc. has a market cap of $72.11 million; its shares were traded at around $19.79 with a P/E ratio of 12.93 and P/S ratio of 3.08. The dividend yield of Auburn National Ban Corp. Inc. stocks is 3.84%. Auburn National Ban Corp. Inc. had an annual average earning growth of 7.7% over the past 5 years.

Highlight of Business Operations:

The Companys net earnings were $2.2 million for the first nine months of 2009 compared to $5.7 million for the first nine months of 2008. Basic and diluted earnings per share were $0.60 per share for the first nine months of 2009 compared to $1.55 per share for the first nine months of 2008.

Net interest income (tax-equivalent) was approximately $14.9 million for the first nine months of 2009, compared to $14.4 million from the first nine months of 2008. Average loans were $374.8 million in the first nine months of 2009, an increase of $35.6 million, or 11%, from the first nine months of 2008. Average deposits were $598.8 million in the first nine months of 2009, an increase of $80.5 million, or 16%, from the first nine months of 2008.

Noninterest income was approximately $2.3 million for the first nine months of 2009, compared to approximately $4.4 million in the first nine months of 2008. The primary reason for the decrease was a net loss on securities of $3.1 million and a decrease in other noninterest income of $0.8 million, which was offset by an increase in mortgage lending income of $2.0 million. The decrease in other noninterest income is primarily due to a non-recurring gain on the sale of real property of approximately $1.1 million during the third quarter of 2008, which was offset by a $452 thousand charge during the third quarter of 2008 related to an investment in an affordable housing limited partnership.

In the third quarter of 2009, net earnings were $1.0 million, or $0.28 per share, compared to $2.0 million, or $0.54 per share, for the third quarter of 2008. Net interest income (tax-equivalent) was $5.1 million for the third quarter of 2009, compared to $4.9 million for the third quarter of 2008. The provision for loan losses during the third quarter of 2009 was $1.1 million, compared to $0.4 million in the third quarter of 2008. The increase in provision for loan losses reflects an increase in past due and nonperforming loans and an increase in net charge-offs. Noninterest income was approximately $1.2 million in the third quarter of 2009, a decrease of 33% from the third quarter of 2008. The decrease was primarily due to the same factors described above. Noninterest expense was approximately $3.4 million in the third quarter of 2009, an increase of 4% from the third quarter of 2008.

The provision for loan losses represents a charge to earnings necessary to establish an allowance for loan losses that, in managements evaluation, should be adequate to provide coverage for the probable losses on outstanding loans. The provision for loan losses amounted to $1.1 million and $0.4 million for the quarters ended September 30, 2009 and 2008, respectively, and $2.4 million and $0.6 million for the nine months ended September 30, 2009 and 2008, respectively.

Noninterest income decreased by approximately $2.1 million in the first nine months of 2009 compared to the same period in 2008. The primary reason for the decrease was a net securities loss of $3.1 million and a decrease in other noninterest income of $0.8 million, offset by an increase in mortgage lending income of $2.0 million. The net loss on securities was primarily attributable to other-than-temporary impairment charges of $5.5 million, offset by $2.5 million of gross gains on the sale of securities. The decrease in other noninterest income is primarily due to a non-recurring gain on the sale of real property of approximately $1.1 million during the third quarter of 2008, which was offset by a $0.5 million charge during the third quarter of 2008 related to an investment in an affordable housing limited partnership. Mortgage lending income typically fluctuates as mortgage interest rates change. As mortgage interest rates have decreased in the first nine months of 2009 when compared to the first nine months of 2008, the volume of mortgage loans originated and sold has increased.

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