Breaking Down Auburn National Bancorporation, Inc. (AUBN) Financial Health: Key Insights for Investors

You're looking at Auburn National Bancorporation, Inc. (AUBN) and wondering if this regional bank is a stable anchor in a volatile market, and the quick answer is yes, their Q3 2025 results defintely show a textbook case of profitable, disciplined banking. The direct takeaway is that their focus on core operations and credit quality is paying off, evidenced by a significant expansion in their net interest margin (NIM), which hit a strong 3.30% in the third quarter. That's a real number you can trust. This solid performance helped push net earnings for the first nine months of 2025 to $5.6 million, or $1.60 per share, and their asset quality remains exceptional with nonperforming assets at a minimal 0.01% of their roughly $1.0 billion in total assets as of September 30, 2025, which is a great sign of risk management in the current economic climate. Still, while the headline numbers are positive, we need to dig into how they plan to sustain that 3.30% margin and manage deposit fluctuations going forward, especially as the rate environment shifts.

Revenue Analysis

For Auburn National Bancorporation, Inc. (AUBN), your revenue picture is clear: it's a bank-driven model where Net Interest Income (NII) is the overwhelming primary engine. The trailing twelve months (TTM) revenue ending Q3 2025 stood at an impressive $32.34 million, representing a significant year-over-year growth rate of over 40.58%. This growth is a strong signal that the balance sheet repositioning strategy from late 2023 is paying off, but it also highlights a concentration risk you need to monitor.

When we break down the Q3 2025 total revenue of approximately $8.4 million, the segment contributions show just how dominant the lending and deposit business is. This is a pure-play regional bank structure.

Here's the quick math on the core business: Net Interest Income (NII)-which is the difference between the interest earned on loans and securities and the interest paid on deposits and borrowings-is defintely the lifeblood of Auburn National Bancorporation, Inc. This figure increased by 11% year-over-year in Q3 2025, which is a fantastic result in a challenging rate environment.

The growth in NII is tied directly to the improvement in the Net Interest Margin (NIM)-the key profitability metric for banks-which rose to 3.30% in Q3 2025. This margin expansion is driven by two factors: higher yields on interest-earning assets like loans, and a controlled decrease in the cost of interest-bearing deposits. This is smart management.

The non-interest income segment, which includes things like service charges on deposits and mortgage lending fees, is relatively small at about $0.8 million in the third quarter of 2025. What this estimate hides is the volatility here; while the total amount remained consistent quarter-over-quarter, the mix is shifting.

• Mortgage lending income decreased in Q1 2025 compared to the prior year, a direct consequence of higher interest rates slowing down refinance and purchase activity.
• The bank is growing its NII by focusing on its core lending operations, with average loans for Q4 2024 showing a 3% increase from the previous year.

So, while the overall revenue trend is sharply positive, the opportunity for Auburn National Bancorporation, Inc. to diversify its revenue away from pure interest income remains a strategic challenge. You can review the strategic direction and values that underpin these decisions in their Mission Statement, Vision, & Core Values of Auburn National Bancorporation, Inc. (AUBN).

Profitability Metrics

You want to know if Auburn National Bancorporation, Inc. (AUBN) is making money efficiently, and honestly, the Q3 2025 numbers show a solid, if slightly behind-the-curve, regional bank performance. The core profitability is strong, driven by their lending spread, but their operating efficiency is the clear area for improvement.

The headline for the third quarter of 2025 is a net profit of $2.2 million, which translates to a robust net profit margin of 26.51% when measured against total revenue of $8.401 million for the quarter. This is a clear improvement, but you need to look closer at the components to understand the true picture.

• Net Profit Margin (Q3 2025): 26.51%
• Net Earnings (Q3 2025): $2.2 million
• Total Revenue (Q3 2025): $8.401 million

Deconstructing the Margins

For a bank, the most critical profitability measure is the Net Interest Margin (NIM), which tells you how well they manage the spread between what they earn on loans and what they pay on deposits. This is your equivalent of a Gross Profit Margin for a non-financial company.

In Q3 2025, Auburn National Bancorporation, Inc.'s NIM (tax-equivalent) hit 3.30%. Now, compare this to the industry. As a community bank (assets around $1.0 billion), AUBN's NIM is a bit light; the community bank average in Q1 2025 was 3.46%, with a typical range of 3.5% to 4.5%. So, while their NIM is up sharply from 3.05% a year ago, they still have room to run against their peers. The good news is that their Net Interest Income (NII) of $7.572 million in Q3 2025 represents 90.13% of their total revenue, meaning their core business is definitely working.

Operational Efficiency and Trends

Operational efficiency is where the rubber meets the road. We use the efficiency ratio (Noninterest Expense as a percentage of Net Operating Revenue) to see how much it costs to generate a dollar of revenue. For the first nine months of 2025, Auburn National Bancorporation, Inc.'s efficiency ratio improved to 71.32%. Here's the quick math: lower is better, and the industry aggregate average was a much tighter 56.2% in Q1 2025. This high ratio, which means it costs over 71 cents to earn a dollar, is a drag on their bottom line. The YTD operating profit margin (Pre-Tax, Pre-Provision Income to Total Revenue) sits around 28.52%, which is decent, but that high expense base is capping their potential.

Still, the trend is your friend. Year-to-date net earnings through Q3 2025 were $5.6 million, a 16% increase from the $4.8 million reported in the same period of 2024. This growth is fueled by that improving NIM and strong credit quality, which actually resulted in a negative provision for credit losses (a benefit) of $(255) thousand in Q3 2025.

Here is a snapshot of the key profitability ratios, showing the trade-offs:

The bottom line is that Auburn National Bancorporation, Inc. is a well-capitalized bank with a strong core lending business and a clear positive earnings trend. But for them to truly maximize returns, they defintely need to keep chipping away at that operating expense base. For more context on the drivers of their stock performance, you should be Exploring Auburn National Bancorporation, Inc. (AUBN) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

The core takeaway for Auburn National Bancorporation, Inc. (AUBN) is its extremely conservative capital structure: the company operates with virtually no traditional debt, making it a significant outlier in the financial sector. This means its growth is almost entirely funded by shareholder equity and customer deposits, not wholesale borrowings or long-term debt instruments.

For the 2025 fiscal year, the parent company's balance sheet reflects this low-leverage philosophy. While total assets stood at approximately $1.0 billion as of September 30, 2025, the total debt reported is $0.00. This is defintely a rare sight in banking. The company's consolidated stockholders' equity, which is the true source of its funding power, reached $89.6 million in the third quarter of 2025.

The company's liabilities primarily consist of customer deposits, which totaled $917.3 million as of Q3 2025, rather than interest-bearing debt.

Debt-to-Equity Ratio: A Conservative Anomaly

Because Auburn National Bancorporation, Inc. reports essentially zero total debt, its debt-to-equity (D/E) ratio is effectively 0.00x (Total Debt / Total Equity). This is a stark contrast to the industry standard for US Regional Banks, which averages around 0.5x as of November 2025. Even a massive institution like Bank of America reported a D/E ratio of 1.169x in the first quarter of 2025.

Here's the quick math on the comparison:

• Auburn National Bancorporation, Inc. D/E (2025): 0.00x
• US Regional Bank Average D/E (2025): 0.5x

What this low ratio tells you is that the company has minimal financial leverage (the use of borrowed money to boost asset returns), which dramatically lowers its risk profile against interest rate hikes or credit market stress. It's a very safe, old-school approach to banking.

Recent Refinancing and Equity Focus

The company's recent activity confirms a deliberate strategy to shed high-cost liabilities and rely on core funding. In late 2023, Auburn National Bancorporation, Inc. repositioned its balance sheet by selling low-yielding securities and repaying $48.0 million in high-cost wholesale funding. This trend continued into 2025, with the company confirming it had no FHLB advances or other wholesale funding outstanding at June 30, 2025.

The balance between debt and equity is heavily skewed toward equity funding, which is bolstered by retained earnings and strategic equity-based incentives. For instance, the company launched a 2024 Equity and Incentive Compensation Plan to align key employee and director interests with shareholders, a move that reinforces the focus on equity as a primary funding and incentive mechanism. This conservative stance is a clear signal to investors seeking stability and low leverage, even if it limits the potential for aggressive, debt-fueled growth. For a deeper dive, check out Breaking Down Auburn National Bancorporation, Inc. (AUBN) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You need to know if Auburn National Bancorporation, Inc. (AUBN) can cover its short-term obligations, and the quick answer is yes, but you have to look past the standard industrial ratios. For a bank, the traditional current ratio is almost always low, but the real test is the quality of its liquid assets versus its deposits.

As of late 2025, Auburn National Bancorporation, Inc. holds a significant cushion of highly liquid assets. Its cash and short-term investments stood at approximately $152.2 million, while total deposits-the bank's primary short-term liability-were around $939.9 million. This means the bank has about 16.2% of its deposits covered by immediate cash and equivalents, which is a very healthy liquidity profile for a regional bank. In fact, in Q1 2025, cash and cash equivalents alone had already risen to 11.90% of total assets, showing a clear focus on liquidity improvement.

Current and Quick Ratios in a Bank Context

If you were analyzing a manufacturer, you'd be worried about a low current ratio (Current Assets / Current Liabilities). For Auburn National Bancorporation, Inc., the most recently available full-year data (2024) showed a current ratio of about 0.72 ($650.50M / $899.03M). This looks low, but it's defintely normal for a bank because most of their assets (like loans) are technically non-current, even though they generate cash flow, and most of their liabilities (customer deposits) are technically current.

The quick ratio (which excludes inventory) is similarly unhelpful here. What matters is the bank's ability to meet deposit withdrawals, which is why the focus is on a strong capital base and a high-quality loan book. The tangible common equity ratio improved to 8.34% in Q1 2025, and the Common Equity Tier 1 (CET1) ratio was a strong 15.51% as of September 30, 2025, indicating robust solvency. That's the real measure of financial health for a bank.

Working Capital and Cash Flow Trends

Working capital, simply put, is the difference between current assets and current liabilities. For a bank, this is less about inventory and receivables and more about managing the size of the balance sheet. Auburn National Bancorporation, Inc.'s total assets grew from nearing $997 million in Q1 2025 to over $1.011 billion by Q3 2025. This asset growth, coupled with a growing deposit base (from $910.5 million to $917.3 million in the same period), indicates a steady expansion of the balance sheet. The bank is growing its core business, which is a positive trend, but it also means managing the liquidity for that larger balance sheet.

Here's the quick math on the cash flow from the trailing twelve months (TTM) leading into late 2025:

• Operating Cash Flow: A healthy inflow of approximately $9.44 million. This shows the core banking business is generating cash.
• Investing Cash Flow: A significant outflow of about $38.55 million. This is a good sign; it means the bank is actively deploying capital into its loan portfolio and securities, which is how a bank makes money.
• Financing Cash Flow: The primary financing activity is the payment of dividends. Auburn National Bancorporation, Inc. paid $0.81 per share in cash dividends year-to-date 2025, a consistent return to shareholders.

The cash flow picture is clear: strong cash generation from operations is being reinvested aggressively into earning assets. This is the profile of a stable, growing financial institution.

Liquidity Strengths and Risks

The main liquidity strength for Auburn National Bancorporation, Inc. is its high-quality asset base and strong capital ratios. Nonperforming assets were very low at just 0.05% of total assets in Q1 2025, meaning almost all assets are generating income. The low-risk deposit base also provides a stable source of funding.

The primary risk is the high overhead relative to net interest income, which an analyst noted in late 2025. While not a direct liquidity risk, it pressures profitability, which is the ultimate source of future liquidity. The bank needs to continue expanding its net interest income to boost earnings per share and maintain its strong capital base, as discussed in detail in Breaking Down Auburn National Bancorporation, Inc. (AUBN) Financial Health: Key Insights for Investors.

Valuation Analysis

You want to know if Auburn National Bancorporation, Inc. (AUBN) is a buy, a hold, or a sell right now. The direct takeaway is that AUBN appears to be undervalued based on its book value, but the market's current sentiment is a cautious 'Hold.' This suggests a value opportunity, but one tempered by the regional banking environment.

As of mid-November 2025, the stock closed at $25.20. Over the last 12 months, the stock has traded in a wide range, from a 52-week low of $19.00 to a high of $29.00. This volatility reflects broader market uncertainty, but the stock is currently trading closer to its low, which is a key point for value investors.

Here's the quick math on the core valuation metrics for the 2025 fiscal year, which point toward a potentially undervalued stock:

• Price-to-Earnings (P/E) Ratio: 12.49x
• Price-to-Book (P/B) Ratio: 0.98x (calculated)
• Analyst Consensus: Hold (or Neutral)

The P/E ratio of 12.49x is slightly higher than the US Banks industry average of 11.2x, suggesting it's a bit expensive relative to peers on an earnings basis. But, to be fair, the P/E is still low compared to the broader market and some peer groups (38.3x average).

The P/B ratio is the more compelling figure for a bank. Book value per share, or consolidated stockholders' equity per share, was $25.65 as of September 30, 2025. Since the stock price is $25.20, the P/B ratio is 0.98x. This means you are buying the bank for less than the value of its net assets, which is defintely a classic signal of undervaluation, with one source stating the stock is trading 'Significantly Below Fair Value'.

We don't typically use Enterprise Value-to-EBITDA (EV/EBITDA) for banks like Auburn National Bancorporation, Inc. because a financial institution's value is driven by interest income and assets, not just operating cash flow before interest, taxes, depreciation, and amortization (EBITDA). P/E and P/B are the right tools here.

The dividend profile is solid, which is a major draw for a regional bank. The annualized dividend is $1.08 per share, translating to a healthy current yield of 4.24%. The payout ratio is around 53%, meaning the company is paying out just over half of its earnings as dividends, which is a sustainable level and a good sign of management's confidence in future earnings.

The 'Hold' analyst consensus is likely a reflection of the P/E being slightly elevated against the industry, plus the general caution around regional banks despite the strong P/B. Still, the technical signals are mixed, with one source flagging the stock as a 'Sell Candidate' based on short-term trend breaks. This is why you need to dig deeper into the company's fundamentals, which you can do by Exploring Auburn National Bancorporation, Inc. (AUBN) Investor Profile: Who's Buying and Why?

The key is the P/B below 1.0x.

Risk Factors

You need to look past the strong headline numbers-like the nine-month net earnings of $5,590 thousand for 2025-to see the real risks for Auburn National Bancorporation, Inc. (AUBN). The bank is financially sound, but it faces two clear challenges: managing its operating costs and overcoming its geographic limits.

The core issue isn't bad loans; in fact, credit quality is excellent, with nonperforming assets at only $0.1 million, or 0.01% of total assets, as of September 30, 2025. The challenge is structural: high overhead expenses relative to its primary revenue driver, net interest income (NII).

Operational and Financial Risks: The Overhead Drag

The most pressing internal risk is the bank's efficiency, or lack thereof. For a small regional bank, non-interest expenses can eat up too much revenue, and that's the case here. For the first nine months of 2025, noninterest expense totaled $17,388 thousand. This high overhead is a constant drag on the bottom line, meaning the bank has to work harder just to maintain its earnings per share of $1.60 year-to-date.

Here's the quick math: analysts have highlighted that the bank's overhead is high relative to its NII. The key opportunity, and the mitigation strategy, is to grow NII faster than non-interest expenses. The good news is that Q3 2025 net interest income was strong at $7,572 thousand, and the tax-equivalent net interest margin was 3.26% for the nine months. Still, any slip in margin or loan growth makes the overhead problem immediately worse.

• High Overhead: Noninterest expense is a major earnings headwind.
• NII Pressure: Margin sustainability is crucial for covering fixed costs.

External Risks: Concentration and Liquidity

As a small, community-focused institution, Auburn National Bancorporation, Inc. faces external risks tied to its size and location. You're defintely buying a bank with a deep local presence, but that focus creates concentration risk (when a business is too reliant on a single market or customer base).

The bank primarily operates in East Alabama, specifically leading the Lee County deposit market. While this dominance is a strength, a regional economic downturn or a natural disaster in that area would have a disproportionate impact on the bank's $1,011,184 thousand in total assets. Also, as a small-cap stock with a market capitalization around $90.18 million, its stock can suffer from limited liquidity, especially during periods of market stress or rising interest rates.

Mitigation Strategies and Clear Actions

The management team is not ignoring these risks; they are taking concrete steps to manage them. Their strategy centers on three pillars: credit quality, operational efficiency, and governance.

The most effective mitigation is the bank's prudent credit risk management, which keeps nonaccrual loans exceptionally low. On the operational side, they are focusing on digital initiatives, like the successful rollout of online account opening, to boost customer convenience and hopefully drive revenue without a proportional increase in branch-related costs.

For a deeper dive into the bank's performance metrics, you can read the full analysis here: Breaking Down Auburn National Bancorporation, Inc. (AUBN) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking for a clear path forward for Auburn National Bancorporation, Inc. (AUBN), and the 2025 numbers show a community bank successfully navigating a tough rate environment. The core takeaway is that their future growth hinges less on aggressive market expansion and more on Net Interest Margin (NIM) expansion and superior credit quality.

The company's year-to-date net earnings through the first nine months of 2025 hit $5.6 million, or $1.60 per share, a solid step up from the prior year. This positive trajectory is defintely driven by an improving NIM, which reached 3.30% in the third quarter of 2025, up from 3.27% in Q2. This is a direct result of their 2023 balance sheet repositioning, which is now paying dividends by improving their interest rate profile.

Here's the quick math on their recent performance:

The real growth drivers are internal and focused on efficiency and risk management. You can see this in their product innovations and lending strategy. They're not chasing risky, high-volume loans; they are focusing on their core strengths in the local economy.

• Product Innovations: Rolling out online account opening for deposit products shows a clear commitment to enhancing customer convenience and expanding access digitally.
• Market Focus: While overall loan balances have been flat, they are strategically prioritizing growth in construction and land development loans, which suggests confidence in their local East Alabama real estate market.

The company's competitive advantage is simple but powerful: stability and exceptional asset quality. Their nonperforming assets were just $0.1 million, or a mere 0.01% of total assets in Q3 2025. That kind of credit quality is a significant buffer against economic uncertainty. Plus, a 31-year streak of consecutive dividend payments speaks volumes about a management team that prioritizes shareholder returns and financial discipline. This is a bank that knows its market and sticks to its knitting. If you want to dive deeper into who is buying in, you should read Exploring Auburn National Bancorporation, Inc. (AUBN) Investor Profile: Who's Buying and Why?