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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF
OPERATIONS
General
Auburn National Bancorporation, Inc. (the “Company”) is a bank holding company registered
with the Board of Governors
of the Federal Reserve System (the “Federal Reserve”) under the Bank Holding Company
Act of 1956, as amended (the
“BHC Act”). The Company was incorporated in Delaware in 1990, and in 1994
it succeeded its Alabama predecessor as the
bank holding company controlling AuburnBank, an Alabama state
member bank with its principal office in Auburn,
Alabama (the “Bank”). The Company and its predecessor have controlled the Bank since
1984.
As a bank holding
company, the Company
may diversify into a broader range of financial services and other business activities than currently
are permitted to the Bank under applicable laws and regulations.
The holding company structure also provides greater
financial and operating flexibility than is presently permitted to the Bank.
The Bank has operated continuously since 1907 and currently conducts its business
primarily in East Alabama, including
Lee County and surrounding areas.
The Bank has been a member of the Federal Reserve System since April 1995.
The
Bank’s primary regulators are the Federal Reserve
and the Alabama Superintendent of Banks (the “Alabama
Superintendent”).
The Bank has been a member of the FHLB of Atlanta since 1991. Certain of the statements
made in this
discussion and analysis and elsewhere, including information incorporated
herein by reference to other documents, are
“forward-looking statements” as more fully described under “Special
Cautionary Notice Regarding Forward-Looking
The following discussion and analysis is intended to provide a better
understanding of various factors related to the results
of operations and financial condition of the Company and the Bank.
This discussion is intended to supplement and
highlight information contained in the accompanying unaudited condensed consolidated
financial statements and related
notes for the quarters and nine months ended September 30, 2023 and 2022,
as well as the information contained in our
annual report on Form 10-K for the year ended December 31, 2022 and our
interim reports on Form 10-Q for the quarters
ended March 31, 2023 and June 30, 2023.
Special Cautionary Notice Regarding Forward-Looking Statements
Various
of the statements made herein under the captions “Management’s
Discussion and Analysis of Financial Condition
and Results of Operations”, “Quantitative and Qualitative Disclosures about Market
Risk”, “Risk Factors” “Description of
Property” and elsewhere, are “forward-looking statements” within the
meaning and protections of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”).
Forward-looking statements include statements with respect to our beliefs, plans, objectives,
goals, expectations,
anticipations, assumptions, estimates, intentions and future performance, and involve
known and unknown risks,
uncertainties and other factors, which may be beyond our control, and
which may cause the actual results, performance,
achievements or financial condition of the Company to be materially different
from future results, performance,
achievements or financial condition expressed or implied by such forward-looking
statements.
You
should not expect us to
update any forward-looking statements.
All statements other than statements of historical fact are statements that could be forward-looking
statements.
You
can
identify these forward-looking statements through our use of words such as
“may,” “will,” “anticipate,”
“assume,”
“should,” “indicate,” “would,” “believe,” “contemplate,” “expect,”
“estimate,” “continue,” “designed”, “plan,” “point to,”
“project,” “could,” “intend,” “seeks,” “model,” “simulations,” “target”,
“view”, and other similar words and expressions of
the future.
These forward-looking statements may not be realized due to a variety of
factors, including, without limitation:
●
the effects of future economic, business and market conditions and
changes, foreign, domestic and local, including
inflation, seasonality, natural
disasters or climate change, such as rising sea and water levels, hurricanes and
tornados, COVID-19 or other epidemics or pandemics including supply chain disruptions,
inventory volatility, and
changes in consumer behaviors;
●
the effects of war or other conflicts, acts of terrorism, trade restrictions, sanctions or other events that may affect governmental monetary and fiscal policies, including the continuing effects of fiscal and monetary stimuli in
general economic conditions;