Executive Summary

EPS of $0.52 rose 18% q/q and 4% y/y on improving net interest margin (3.27%, +7 bps q/q, +21 bps y/y) and lower noninterest expense; credit remained pristine (NPAs 0.03% of assets) .
Total revenue increased to $8.133M, up 4% q/q and 7% y/y, driven by higher tax-equivalent net interest income and slightly stronger fee income .
Management reiterated confidence that NIM will continue to improve as loans and securities re-price; loan demand has slowed, but capital and liquidity remain strong (TCE 8.36%) .
No formal guidance and no Q2 call transcript; dividend maintained at $0.27 per share, consistent with prior quarter, supporting income-oriented holders .

What Went Well and What Went Wrong

What Went Well

Margin and earnings momentum: NIM improved to 3.27% (+7 bps q/q), EPS to $0.52 (+18% q/q), and efficiency ratio improved to 69.95% from 75.30% in Q1 .
Credit strength: NPAs declined to $0.3M (0.03% of assets) from $0.5M (0.05%) in Q1; net recoveries in the quarter supported benign credit costs .
Cost control: Noninterest expense fell 3% q/q to $5.7M, with lower occupancy and other noninterest expense helping the efficiency ratio .
Management tone: “Our second quarter results reflect strong credit quality and continued improvement in our net interest margin… our capital and liquidity remain strong” — David A. Hedges, President & CEO .

What Went Wrong

Loan growth softness: Loans ended the quarter at $562.7M, down 3% y/y due largely to a prior-period $14.9M payoff; management noted “loan demand has slowed” .
Slightly higher provision: Provision of $113K vs a negative $10K in Q1, reflecting normalizing credit provisioning despite strong asset quality .
Noninterest income mixed: $0.8M vs $0.9M y/y on fluctuations in mortgage and other noninterest income streams .

Financial Results

Income Statement and EPS vs prior periods and consensus

Metric	Q2 2024	Q1 2025	Q2 2025	Q2 2025 Consensus
Total Revenue ($USD Millions)	$7.605	$7.792	$8.133	N/A*
Net Interest Income (Tax-Equivalent) ($USD Millions)	$6.728	$7.062	$7.363	N/A*
Noninterest Income ($USD Millions)	$0.896	$0.747	$0.789	N/A*
Provision for Credit Losses ($USD Millions)	($0.123)	($0.010)	$0.113	N/A*
Noninterest Expense ($USD Millions)	$5.519	$5.880	$5.702	N/A*
Net Earnings ($USD Millions)	$1.734	$1.530	$1.833	N/A*
Diluted EPS ($)	$0.50	$0.44	$0.52	N/A*

Note: N/A* indicates S&P Global consensus unavailable; Values retrieved from S&P Global.

Margins, Returns, and Efficiency

Metric	Q2 2024	Q1 2025	Q2 2025
Net Interest Margin (Tax-Equivalent)	3.06%	3.20%	3.27%
Efficiency Ratio	72.39%	75.30%	69.95%
Return on Average Assets (annualized)	0.71%	0.62%	0.74%
Return on Average Equity (annualized)	9.63%	7.83%	9.00%
Effective Tax Rate	21.50%	20.40%	20.92%

Balance Sheet and Credit KPIs (period-end unless noted)

Metric	Q2 2024	Q1 2025	Q2 2025
Total Assets ($USD Millions)	$1,025.1	$996.8	$1,029.2
Total Deposits ($USD Millions)	$946.4	$910.5	$939.9
Loans, net ($USD Millions)	$578.1	$560.7	$562.7
Book Value per Share ($)	$21.53	$23.79	$24.64
Tangible Common Equity (TCE) Ratio	7.34%	8.34%	8.36%
Nonperforming Assets ($USD Thousands)	$794	$520	$302
NPAs / Total Assets	0.08%	0.05%	0.03%
Allowance for Credit Losses ($USD Thousands)	$7,142	$6,750	$6,965
ACL / Loans	1.24%	1.20%	1.24%

KPIs/definitions: Management cites tax-equivalent net interest income and efficiency ratio as non-GAAP; reconciliations are provided in the releases .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Q2 2025	$0.27 (Q1 2025)	$0.27 (declared May 13, 2025)	Maintained
Net Interest Margin	2H 2025 (qualitative)	Optimistic NIM improvement as rates ease (Q4 2024 commentary)	“Remain optimistic NIM will continue to improve as loans and securities re-price”	Maintained (qualitative)
Loan Demand	Near-term	Not specified	“Loan demand has slowed” (commentary, not guidance)	New qualitative datapoint
Tax Rate	Ongoing	No formal guidance	Effective rate driven by tax-exempt items; not guided	No guidance

No formal revenue, expense, margin, or credit guidance ranges were provided in Q2. Management’s commentary remains directional.

Earnings Call Themes & Trends

Note: No Q2 earnings call transcript was available; themes reflect management remarks in press releases.

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Net interest margin trajectory	NIM improved to 3.09% in Q4; management expected continued improvement in 2025 as deposit costs fall and asset yields re-price . NIM 3.20% in Q1, aided by lower deposit costs and better asset yields .	NIM rose to 3.27%; management “remain[s] optimistic” on further improvement as assets re-price .	Improving
Loan demand	Q4 not emphasized; Q1 noted stable to modest activity .	“Loan demand has slowed” .	Softening
Deposit costs/liquidity	Q4/Q1 noted easing deposit costs and strong liquidity; no wholesale funding .	Deposit balances up q/q; no FHLB or wholesale funding; Intrafi recip. deposits fell from $64.7M sold to none at quarter-end .	Positive for margin/liquidity
Credit quality	Strong in Q4/Q1; NPAs ~0.05% at 12/31 and 3/31 .	NPAs fell to 0.03% of assets; net recoveries .	Very strong
Capital	TCE improved to 8.01% in Q4; 8.34% in Q1 .	TCE 8.36%; book value up to $24.64/share .	Strengthening

Management Commentary

“Our second 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 .

Strategic messages:

Focus on NIM expansion as re-pricing tailwinds persist; disciplined funding strategy with no wholesale borrowings outstanding .
Maintain strong capital (TCE 8.36%) and liquidity; steady dividend signals confidence .

Q&A Highlights

No earnings call transcript for Q2 2025 was available; no Q&A to report [ListDocuments showed none for July–August 2025].

Estimates Context

Wall Street consensus (S&P Global) for Q2 2025 EPS and revenue was unavailable for AUBN, reflecting limited analyst coverage of the company. Values retrieved from S&P Global.*

Key Takeaways for Investors

Earnings momentum is building on margin expansion and cost control: EPS up 18% q/q; efficiency ratio improved to ~70% .
Rate path and asset re-pricing remain key tailwinds: management expects continued NIM improvement, which can drive further EPS upside absent credit shocks .
Credit quality and reserves are robust, supporting benign credit costs (NPAs 0.03% of assets; ACL/loans 1.24%) .
Funding remains conservative with no FHLB/wholesale borrowings; Intrafi reciprocal deposits normalized to zero at quarter-end, aiding reported deposit costs .
Loan growth softness is the main watch item; a pickup in demand or stabilization would reinforce the earnings trajectory .
Capital accretion continues (book value per share $24.64; TCE 8.36%), supporting dividend sustainability and optionality .
Near-term trading: positive skew on ongoing NIM gains and pristine credit; medium-term thesis hinges on deposit cost stabilization and re-acceleration of loan growth.

Appendix: Additional Disclosures

Non-GAAP: Company presents tax-equivalent net interest income and efficiency ratio; reconciliations provided in the press releases .
Dividend: $0.27 per share declared for Q2 2025, in line with Q1 2025 .
Balance sheet mix and one-time: Year-ago loan base reduced by one $14.9M payoff; proceeds used to repay $15.0M high-cost non-core funding, benefiting funding costs .

Sources: Q2 2025 8-K and attached press release ; Q2 2025 press release wire copy ; Q1 2025 press release ; Q4 2024 press release ; Dividend declaration (May 13, 2025) .

AUBURN NATIONAL BANCORPORATION, INC (AUBN)·Q2 2025 Earnings Summary