Auburn National Bancorporation, Inc.

What they do

The Company is a Delaware bank holding company that has controlled AuburnBank since 1984. The Bank operates its main office and 7 branches in Auburn, Opelika, Notasulga, and Valley, Alabama, plus a loan production office in Phenix City. It offers checking, savings, transaction deposit accounts and certificates of deposit, and is an active residential mortgage lender, along with commercial, financial, agricultural, real estate construction and consumer loans. It also operates ATMs at 8 locations and offers Visa Checkcards and online/mobile banking through www.auburnbank.com.

Revenue drivers

• Net interest income — The primary earnings source, tax-equivalent net interest income was $8.0 million in 2Q 2026 versus $7.4 million in 2Q 2025, driven by average loans of approximately $582.3 million and net interest margin of 3.33%.
• Residential mortgage lending — The Bank is described as an active residential mortgage lender in its primary service area of Auburn, Opelika and surrounding Lee County, Alabama.
• Commercial, agricultural, construction and consumer lending — The Bank offers these loan products alongside deposit services; the allowance for credit losses was $6.6 million, or 1.14% of total loans, at June 30, 2026.
• Noninterest income — Noninterest income was $0.9 million for the second quarter of 2026, largely unchanged from the first quarter of 2026.

Recent performance

Second quarter 2026 net earnings were $2.3 million, or $0.66 per share, compared to $2.2 million, or $0.63 per share, in 1Q 2026 and $1.8 million, or $0.52 per share, in 2Q 2025. Earnings per share increased 27% year over year, and tax-equivalent net interest income rose 8%. Net interest margin (tax-equivalent) was 3.33% in 2Q 2026, up 15 basis points from 3.18% in 2Q 2025. Return on assets (annualized) improved to 0.90% from 0.74% in 2Q 2025. Nonperforming assets decreased to $0.1 million, or 0.01% of total assets, at June 30, 2026.

Strategy

The Company operates through AuburnBank and has no immediate plans to conduct other business, though it may engage in activities closely related to banking permitted by the Federal Reserve. It evaluates utilization of existing facilities and customer preferences for online and mobile banking; it opened a new main office in 2022 and closed one Auburn branch at the end of 2024. In the first quarter of 2026, the Company established a new CECL loan segment for municipal loans, which reduced the allowance for credit losses due to lower expected credit costs. Management cited strong revenue growth, improved profitability and continued net interest margin expansion in the second quarter of 2026.

Risks

• Interest rate and yield curve changes — Changes in market interest rates and the shape of the yield curve may affect deposit costs, loan demand, mortgage originations and the values of interest-sensitive assets and liabilities.
• Unrealized securities losses — Increases in market interest rates may result in unrealized losses on the securities portfolio, adversely affecting stockholders' equity and tangible equity.
• Competition — The Bank competes with 20 national, regional and community banks with offices in Lee County, many of which have substantially greater financial and technological resources, as well as credit unions not subject to federal income taxation.
• Information systems and cybersecurity — The Company states its online banking, bill payment and electronic services are subject to cybersecurity risks, and its information systems may experience interruptions and security breaches.

Outlook

Management stated that second quarter results reflect strong revenue growth, improved profitability and continued expansion of net interest margin. President and CEO David A. Hedges said asset quality, capital and liquidity remain strong. The press release did not provide specific forward financial guidance beyond these statements.