AUBURN, Ala., March 12, 2010 (GLOBE NEWSWIRE) -- Auburn National Bancorporation (Nasdaq:AUBN) today announced revised earnings for the fourth quarter and full year ended December 31, 2009 resulting from an increase in the Company's provision for loan losses. Revised net earnings for the fourth quarter of 2009 were $0.2 million, or $0.06 per share, compared to previously reported net earnings of approximately $1.4 million, or $0.40 per share for the fourth quarter of 2009. Revised net earnings for the full year 2009 were $2.4 million, or $0.66 per share, compared to previously reported net earnings of $3.6 million, or $1.00 per share for the full year 2009.
Subsequent to the Company's earnings release on February 2, 2010 (the "February Earnings Release") and before the filing of its 2009 annual report on Form 10-K, the Company recorded an additional $2.0 million in provision for loan losses for the fourth quarter and full year ended December 31, 2009. The increase in the provision for loan losses is primarily related to the Company's consideration of new information related to, and the occurrence of events concerning, two construction and land development loans that provide additional evidence about conditions that existed at December 31, 2009, including the Company's estimated level of allowance for loan losses. Following the February Earnings Release, the Company received an updated appraisal on real estate securing a nonperforming loan reflecting additional deterioration in the fair value of the collateral. The Company wrote down this loan to reflect the updated fair value of the collateral, less estimated selling costs. In addition, subsequent to the February Earnings Release, the Company determined that another loan was impaired, which required the Company to record a valuation allowance, and place the loan on nonaccrual status.
As a result of these changes, the Company's total provision for loan losses increased from $0.9 million to $2.9 million for the fourth quarter of 2009 and increased from $3.3 million to $5.3 million for the full year 2009. The Company's allowance for loan losses at December 31, 2009 increased from $6.0 million to $6.5 million, primarily reflecting an increased provision for loan losses, offset by a write-down or partial charge-off on one loan. Net charge-offs for the fourth quarter of 2009 increased from $0.3 million to $1.9 million for the fourth quarter of 2009 and increased from $1.6 million to $3.2 million for the full year 2009. Total nonperforming assets at December 31, 2009, increased from $13.2 million, or 1.71% of total assets, to $16.6 million, or 2.15% of total assets.
The Company has included updated financial tables in this press release to reflect the revised financial information described herein.
About Auburn National Bancorporation
Auburn National Bancorporation, Inc. (the "Company") is the parent company of AuburnBank (the "Bank"), with total assets of approximately $773 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, Hurtsboro and Notasulga, Alabama. In addition, the Bank opened a new full-service branch in Auburn during the first quarter of 2009. 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. Mortgage loan offices are located in Phenix City, Valley and Mountain Brook, 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
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, net interest margin, securities valuations and performance, loan performance, nonperforming assets, charge-offs, collateral values, and credit quality conditions, 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, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2008, and otherwise in our SEC reports and filings.
Explanation of Certain Unaudited Non-GAAP Financial Measures
This press release contains financial information determined by methods other than 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. 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, a clearer understanding of the Company's performance, and that operating net earnings better reflect the Company's core operating activities. Management utilizes 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 operating 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) | 2009 | 2008 | 2009 | 2008 |
| Results of Operations | ||||
| Net interest income (a) | $5,547 | $4,837 | $20,448 | $19,231 |
| Less: tax-equivalent adjustment | 438 | 353 | 1,633 | 1,361 |
| Net interest income (GAAP) | 5,109 | 4,484 | 18,815 | 17,870 |
| Noninterest income (loss) | 799 | (224) | 3,132 | 4,202 |
| Total revenue | 5,908 | 4,260 | 21,947 | 22,072 |
| Provision for loan losses | 2,900 | 250 | 5,250 | 870 |
| Noninterest expense | 3,735 | 2,992 | 14,633 | 12,542 |
| Income tax (benefit) expense | (930) | 71 | (340) | 2,023 |
| Net earnings | $203 | $947 | $2,404 | $6,637 |
| Per share data: | ||||
| Basic and diluted net earnings: | ||||
| GAAP | $0.06 | $0.26 | $0.66 | $1.81 |
| Operating (b) | 0.09 | 0.48 | 1.36 | 1.90 |
| Cash dividends declared | $0.190 | $0.185 | $0.76 | $0.74 |
| Weighted average shares outstanding: | ||||
| Basic and diluted | 3,643,395 | 3,658,193 | 3,644,691 | 3,674,384 |
| Shares outstanding, at period end | 3,643,117 | 3,658,193 | 3,643,117 | 3,646,947 |
| Book value | $15.42 | $15.66 | $15.42 | $15.66 |
| Common stock price: | ||||
| High | $25.98 | $23.97 | $30.00 | $25.00 |
| Low | 18.93 | 19.06 | 18.07 | 19.00 |
| Period-end: | $19.69 | $20.10 | $19.69 | $20.10 |
| To earnings ratio | 29.39x | 11.10x | 29.39x | 11.10x |
| To book value | 128% | 128% | 128% | 128% |
| Performance ratios: | ||||
| Return on average equity: | ||||
| GAAP | 1.37% | 7.25% | 4.23% | 12.18% |
| Operating (b) | 2.16% | 13.34% | 8.73% | 12.82% |
| Return on average assets: | ||||
| GAAP | 0.10% | 0.52% | 0.31% | 0.92% |
| Operating (b) | 0.17% | 0.96% | 0.63% | 0.97% |
| Dividend payout ratio | 316.67% | 71.15% | 115.15% | 40.88% |
| Asset Quality: | ||||
| Allowance for loan losses as a % of: | ||||
| Loans | 1.73% | 1.19% | 1.73% | 1.19% |
| Nonperforming loans | 69% | 99% | 69% | 99% |
| Nonperforming assets as a % of: | ||||
| Loans and foreclosed properties | 4.34% | 1.29% | 4.34% | 1.29% |
| Total assets | 2.15% | 0.64% | 2.15% | 0.64% |
| Nonperforming loans as a % of total loans | 2.49% | 1.20% | 2.49% | 1.20% |
| Net charge-offs as a % of average loans | 1.95% | 0.09% | 0.84% | 0.17% |
| Other financial data: | ||||
| Net interest margin (a) | 3.02% | 2.84% | 2.78% | 2.86% |
| Effective income tax rate | NM% | 6.97% | (16.47)% | 23.36% |
| Efficiency ratio: | ||||
| GAAP | 63.22% | 70.23% | 66.67% | 56.82% |
| Operating (b) | 53.52% | 50.92% | 53.63% | 52.30% |
| Selected average balances: | ||||
| Securities | $338,261 | $313,227 | $344,060 | $320,961 |
| Loans, net of unearned income | 381,112 | 360,822 | 376,388 | 344,604 |
| Total assets | 777,363 | 727,417 | 787,864 | 718,077 |
| Total deposits | 589,452 | 525,616 | 596,444 | 520,176 |
| Long-term debt | 118,351 | 126,499 | 120,248 | 123,108 |
| Total stockholders' equity | 59,349 | 52,250 | 56,806 | 54,474 |
| Selected period end balances: | ||||
| Securities | $334,762 | $302,656 | $334,762 | $302,656 |
| Loans, net of unearned income | 376,103 | 369,162 | 376,103 | 369,162 |
| Allowance for loan losses | 6,495 | 4,398 | 6,495 | 4,398 |
| Total assets | 773,382 | 745,970 | 773,382 | 745,970 |
| Total deposits | 579,409 | 550,843 | 579,409 | 550,843 |
| Long-term debt | 118,349 | 123,368 | 118,349 | 123,368 |
| Total stockholders' equity | 56,183 | 57,128 | 56,183 | 57,128 |
| *Certain amounts reported in prior periods have been reclassified to conform to the current-period presentation. | ||||
| (a) Tax equivalent. See "Explanation of Certain Unaudited Non-GAAP Financial Measures." | ||||
| (b) Operating measures. See "Explanation of Certain Unaudited Non-GAAP Financial Measures." | ||||
| NM - not meaningful | ||||
| Reconciliation of GAAP to non-GAAP Measures (unaudited): | ||||
| Quarter ended December 31, | Year ended December 31, | |||
| (Dollars in thousands, except per share amounts) | 2009 | 2008 | 2009 | 2008 |
| Net earnings, as reported (GAAP) | $203 | $947 | $2,404 | $6,637 |
| Non-operating items (net of 37% tax): | ||||
| Securities losses (gains), net (a) | 399 | 796 | 2,839 | 736 |
| Gain on sale of premises and equipment | — | — | — | (675) |
| Correction of prior period accounting error | (281) | — | (281) | 285 |
| Operating net earnings | $321 | $1,743 | $4,962 | $6,983 |
| Noninterest income (loss), as reported (GAAP) | $799 | $(224) | $3,132 | $4,202 |
| Non-operating items: | ||||
| Securities losses (gains), net | 633 | 1,263 | 3,703 | 1,168 |
| Gain on sale of premises and equipment | — | — | — | (1,071) |
| Correction of prior period accounting error | — | — | — | 452 |
| Operating noninterest income | $1,432 | $1,039 | $6,835 | $4,751 |
| Total Revenue, as reported (GAAP) | $5,908 | $4,260 | $21,947 | $22,072 |
| Tax-equivalent adjustment | 438 | 353 | 1,633 | 1,361 |
| Non-operating items: | ||||
| Securities losses (gains), net | 633 | 1,263 | 3,703 | 1,168 |
| Gain on sale of premises and equipment | — | — | — | (1,071) |
| Correction of prior period accounting error | — | — | — | 452 |
| Total Operating Revenue (tax-equivalent) | $6,979 | $5,876 | $27,283 | $23,982 |
| Net interest income, as reported (GAAP) | $5,109 | $4,484 | $18,815 | $17,870 |
| Tax-equivalent adjustment | 438 | 353 | 1,633 | 1,361 |
| Net interest income (tax-equivalent) | $5,547 | $4,837 | $20,448 | $19,231 |
| Total stockholders' equity (GAAP) | $56,183 | $57,128 | $56,183 | $57,128 |
| Unrealized (gains) losses on available for sale securities, net of tax | (111) | (603) | (111) | (603) |
| Tangible Common Equity | $56,072 | $56,525 | $56,072 | $56,525 |
| (a) Any securities losses for which no tax benefit is recorded are included at the gross amount. | ||||