Item 1.01. Entry into a Material Definitive Agreement.
On February 15, 2022, Auburn National Bancorporation, Inc.’s (the “Company”) wholly owned subsidiary, AuburnBank (the “Bank”), entered into an Agreement of Purchase and Sale (the “Agreement”) with Ram Auburn Hospitality Four, LLC (the “Purchaser”) for the sale (the “Sale”) of approximately 0.85 acres of land located next to the Company’s headquarters in Auburn, Alabama. The Sale includes all appurtenances, privileges, development and rights (collectively with the land, the “Property”) for an aggregate purchase price of $4.26 million, net of estimated prorations and closing costs (the “Purchase Price”). The principal owner of the Purchaser and his related interests are Bank customers and are among the Bank’s largest borrowers. All such loans and deposits are in the ordinary course of the Bank’s business upon market terms and conditions not more favorable than similarly situated customers. The Bank entered into the Agreement on an arms-length basis in consultation with the Bank’s real estate developer, and the Agreement is on market terms and conditions. The Bank is not financing the purchase of the Property.
The Agreement contains various other terms, representations, warranties, covenants and closing conditions that are customary for transactions similar to the Sale. The Purchaser has 180 days (the “Inspection Period”) to complete all its due diligence, inspections and reviews, and receive its necessary approvals. The Closing is subject to the completion of such matters satisfactory to the Purchaser, the satisfaction of the Agreement’s other terms, including customary closing conditions, and the negotiation and execution of various use and other ancillary agreements. The Purchaser’s obligations to close are not contingent upon the Purchaser obtaining financing. The Sale of the Property is expected to close 30 days following the later of (a) the expiration of the Inspection Period and (b) the satisfaction of all of the closing conditions. Upon closing, the Company currently expects the Sale to be accretive to earnings by approximately $0.70 per share.
Cautionary Notice Regarding Forward-Looking Statements
The above description contains “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, including, without limitation, statements about the expected estimated Purchase Price, the satisfaction of the conditions to, and the timing of, the Sale’s closing, and the estimated earnings effects of the completed Sale. Actual results may differ from those set forth in the forward-looking statements.
Forward-looking statements, with respect to the Company’s beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, involve known and unknown risks, uncertainties and other factors, which may be beyond the Company’s control, and which may cause the actual results, performance, achievements, or financial condition of the Company or the Bank to be materially different from future results, performance, achievements, or financial condition expressed or implied by such forward-looking statements. You should not expect the Company to update any forward-looking statements.
All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by this cautionary notice, together with those risks and uncertainties described in the Company’s annual report on Form 10-K for the year ended December 31, 2020 and otherwise in the Company’s other SEC reports and filings.
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