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AUBURN NATIONAL BANCORPORATION, INC (AUBN)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 EPS was $0.44, up year over year from $0.39 but slightly down sequentially from $0.45; total revenue was $7.79M, modestly lower quarter over quarter but higher year over year .
  • Net interest margin expanded to 3.20% (from 3.09% in Q4 2024 and 3.04% in Q1 2024), supported by better asset mix and improving earning asset yields; asset quality remained strong with nonperforming assets at 0.05% of total assets .
  • Expenses rose: noninterest expense increased to $5.88M and the efficiency ratio worsened to 75.30% from 69.86% in Q4, partly due to routine salary/benefit increases and seasonal occupancy costs; tax rate normalized to 20.40% vs elevated Q4 due to discrete items .
  • Liquidity and capital strengthened: deposits grew to $910.5M, TCE ratio improved to 8.34%, and book value per share rose to $23.79; management reiterated optimism for continued NIM improvement as loans/securities re-price .

What Went Well and What Went Wrong

What Went Well

  • Net interest margin expanded to 3.20% (vs 3.09% in Q4 and 3.04% in Q1 2024) driven by higher yields and lower deposit costs; “our capital and liquidity remain strong” (CEO) .
  • Asset quality held: nonperforming assets were $0.5M (0.05% of total assets), stable vs Q4 and improved vs Q1 2024; allowance remained conservative at 1.20% of loans .
  • Balance sheet strength: deposits increased to $910.5M and cash/ equivalents rose to 11.90% of assets; TCE ratio improved to 8.34% .

What Went Wrong

  • Expense pressure: noninterest expense rose to $5.88M; efficiency ratio deteriorated to 75.30% from 69.86% in Q4 2024 .
  • Loan demand slowed; period-end loans declined to $560.7M from $564.0M in Q4 2024, with payoffs in C&I and CRE exceeding construction/land development growth .
  • Noninterest income softened to $0.75M due to lower mortgage lending and other income; total revenue dipped slightly quarter over quarter ($7.79M vs $7.81M) .

Financial Results

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Total revenue ($USD Thousands)$7,544 $7,636 $7,814 $7,792
Net interest income (GAAP) ($USD Thousands)$6,657 $6,790 $6,969 $7,045
Net interest income (tax-equivalent) ($USD Thousands)$6,677 $6,811 $6,988 $7,062
Noninterest income ($USD Thousands)$887 $846 $845 $747
Provision for credit losses ($USD Thousands)$334 $(127) $(48) $(10)
Noninterest expense ($USD Thousands)$5,675 $5,500 $5,472 $5,880
Income tax expense ($USD Thousands)$164 $531 $830 $392
Net earnings ($USD Thousands)$1,371 $1,732 $1,560 $1,530
EPS (Basic & Diluted) ($USD)$0.39 $0.50 $0.45 $0.44
Margins & RatiosQ1 2024Q3 2024Q4 2024Q1 2025
Net interest margin (tax-equivalent) %3.04% 3.05% 3.09% 3.20%
Efficiency ratio %75.03% 71.83% 69.86% 75.30%
Return on average assets % (annualized)0.56% 0.71% 0.63% 0.62%
Return on average equity % (annualized)7.13% 9.10% 7.49% 7.83%
Effective income tax rate %10.68% 23.46% 34.73% 20.40%
Balance Sheet KPIsQ1 2024Q3 2024Q4 2024Q1 2025
Total assets (period end, $USD Thousands)$979,039 $990,143 $977,324 $996,786
Loans net (period end, $USD Thousands)$567,520 $565,699 $564,017 $560,650
Total deposits (period end, $USD Thousands)$899,673 $901,724 $895,824 $910,503
Book value per share ($)$21.32 $24.14 $22.41 $23.79
TCE ratio %7.61% 8.52% 8.01% 8.34%
Asset Quality KPIsQ1 2024Q3 2024Q4 2024Q1 2025
Nonperforming assets / total assets %0.09% 0.08% 0.05% 0.05%
Nonperforming loans / total loans %0.15% 0.14% 0.09% 0.09%
Allowance for credit losses / loans %1.27% 1.22% 1.22% 1.20%
Annualized net charge-offs (recoveries) / avg loans %(0.05%) 0.04% (0.01%) 0.05%

Note: Non-GAAP measures include tax-equivalent net interest income and the efficiency ratio, with reconciliations provided in company materials .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net interest margin (directional)2025“Remain optimistic NIM will continue to improve in 2025” (Q4 commentary) “Remain optimistic NIM will continue to improve as loans/securities re-price” (Q1 commentary) Maintained (qualitative)
Effective tax rate (normalized)Q4 2024 vs Q1 2025Q4 ex-discrete items would have been ~21.55% Q1 actual 20.40% Normalized; slightly lower actual
Operating expenses2025Branch closure announced to drive cost savings beginning 2025 (Corner Village) Q1 reflects routine increases and seasonal occupancy costs Near-term higher; cost-savings plan maintained
DividendQ1/Q2 2025$0.27 per share declared for Q1 (Feb 11, 2025) $0.27 per share declared for Q2 (May 13, 2025) Maintained

Earnings Call Themes & Trends

No Q1 2025 earnings call transcript was available for AUBN; themes below reflect press release commentary.

TopicPrevious Mentions (Q3 & Q4)Current Period (Q1 2025)Trend
Net interest margin trajectoryNIM rose to 3.05% in Q3; management expected continued improvement in 2025 NIM reached 3.20%; management remains optimistic on further improvement Improving
Deposit costsQ4: cost of deposits decreased for first time since Q3 2022 (ex Q1 2024) Q1: deposit cost decreases contributed to NIM expansion Easing
Loan demand and payoffsQ3: $14.9M payoff (one relationship) impacted balances Q1: loan demand slowed; payoffs in C&I and CRE exceeded growth Softer demand
Asset qualityNPA 0.08–0.05% through Q3–Q4; negative provisions supported NPA 0.05%; allowance 1.20%; negative $10K provision Stable/strong
Capital/TCETCE improved to 8.52% in Q3; 8.01% in Q4 TCE 8.34%; book value rose to $23.79 Strengthening
Expense disciplineQ3: planned branch closure for 2025 savings Q1: higher expenses from routine increases/seasonal occupancy Near-term pressure; long-term savings expected

Management Commentary

  • “Our first quarter results reflect strong credit quality and continued improvement in our net interest margin… While loan demand has slowed, we remain optimistic that our net interest margin will continue to improve as loans and securities re-price. Once again, our capital and liquidity remain strong and we are well positioned to meet the needs of our customers.” — David A. Hedges, President & CEO .
  • Q4 context: “We remain optimistic that our net interest margin will continue to improve in 2025 as recent cuts in the federal funds rate should reduce our cost of deposits and still allow our earning asset yields to improve as loans and securities re-price.” — David A. Hedges .
  • Q3 context: balance sheet repositioning and loan growth improved NII and NIM; decision to close Corner Village branch by year end to drive 2025 cost savings — David A. Hedges .

Q&A Highlights

No Q1 2025 earnings call transcript was found for AUBN; therefore, Q&A themes, guidance clarifications, and tone changes cannot be assessed from a call transcript [Search attempted; no transcript found].

Estimates Context

  • S&P Global consensus estimates for Q1 2025 EPS and revenue were unavailable for AUBN; we therefore benchmark results against prior periods and qualitative management commentary. Values retrieved from S&P Global.*
  • Actuals: EPS $0.44 and total revenue $7.79M in Q1 2025 .
  • Implication: In the absence of consensus, estimate revisions will likely focus on continued NIM normalization and expense trajectory rather than headline beats/misses.

Key Takeaways for Investors

  • Margin story intact: NIM expanded to 3.20%, with management guiding to continued improvement as assets re-price and deposit costs ease — a key driver for near-term net interest income growth .
  • Quality and capital underpin resilience: NPA at 0.05%, allowance at 1.20%, deposits grew to $910.5M, and TCE improved to 8.34% — mitigating credit risk concerns .
  • Watch the cost line: Q1 efficiency ratio worsened to 75.30% due to routine increases and seasonal costs; monitor delivery of planned cost savings (e.g., branch actions cited in late 2024) .
  • Loan growth softer near term: period-end loans fell to $560.7M on payoffs and slower demand; deposit growth and liquidity strength offset revenue headwinds .
  • Tax rate normalized: Q1 effective rate was 20.40% vs Q4’s elevated 34.73% (which included discrete items); normalized Q4 would have been ~21.55% .
  • Dividend continuity: $0.27 per share declared for Q1 and Q2 2025, signaling capital confidence and shareholder return stability .
  • Trading lens: Focus on NIM trajectory and expense control as primary stock catalysts; with credit stable and capital strong, incremental margin gains versus expense discipline will drive EPS momentum .

External references to the Q1 press release:

*Values retrieved from S&P Global.