Noninterest income was $0.9 million for the first quarter of 2022, compared to $1.2 million for the first quarter of 2021. The decrease in noninterest income was primarily due to a decrease in mortgage lending income of $0.3 million as refinance activity slowed in our primary market area, as market interest rates on mortgage loans increased.
Noninterest expense was $4.9 million for the first quarter of 2022, compared to $4.7 million for the first quarter of 2021. The increase in noninterest expense was due to increases in salaries and benefits expense and other noninterest expense.
Income tax expense was $0.3 million compared to $0.4 million for the first quarter of 2021. The Company’s effective tax rate for the first quarter of 2022 was 10.88%, compared to 17.41% in the first quarter of 2021. This decrease was primarily due to an income tax benefit related to a New Markets Tax Credit investment funded in the fourth quarter of 2021. The Company’s effective income tax rate is principally impacted by tax-exempt earnings from the Company’s investments in municipal securities, bank-owned life insurance, and New Markets Tax Credits.
At March 31, 2022, the Company’s consolidated stockholders’ equity was $86.4 million or $24.57 per share, compared to $103.7 million, or $29.46 per share, at December 31, 2021, and $103.6 million, or $29.06 per share, at March 31, 2021. The decrease from December 31, 2021 was primarily driven by an other comprehensive loss due to the change in unrealized gains/losses on securities available-for sale, net of tax, in the quarter ended March 31, 2022, of $17.3 million. The increase in the unrealized loss on securities was primarily due to an increase in long-term market interest rates. These unrealized losses do not affect the Bank’s capital for regulatory capital purposes.
The Company paid cash dividends of $0.265 per share in the first quarter of 2022, an increase of 2% from the same period in 2021. The Company’s share repurchases of $0.1 million since December 31, 2021 resulted in 3,559 fewer outstanding common shares at March 31, 2022. At March 31, 2022, the Bank’s regulatory capital ratios were well above the minimum amounts required to be “well capitalized” under current regulatory standards.
About Auburn National Bancorporation, Inc.
Auburn National Bancorporation, Inc. (the “Company”) is the parent company of AuburnBank (the “Bank”), with total assets of approximately $1.1 billion. The Bank is an Alabama state-chartered bank that is a member of the Federal Reserve System, which has operated continuously since 1907. Both the Company and the Bank are headquartered in Auburn, Alabama. The Bank conducts its business in East Alabama, including Lee County and surrounding areas. The Bank operates eight full-service branches in Auburn, Opelika, Valley, and Notasulga, Alabama. The Bank also operates loan production offices in Auburn and Phenix City, Alabama. Additional information about the Company and the Bank may be found by visiting www.auburnbank.com.
Cautionary Notice Regarding Forward-Looking Statements
This press release 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 future financial and operating results, costs and revenues, the continuing effects of the COVID-19 pandemic and related government, Federal Reserve monetary and regulatory actions, including the continuing effects of pandemic-related economic stimulus and economic conditions generally and in our markets, loan demand, mortgage lending activity, changes in the mix of our earning assets (including those generating tax exempt income) and our deposit and wholesale liabilities, net interest margin, yields on earning assets, securities valuations and performance, effects of inflation, including related tightening of monetary policies, interest rates (generally and those applicable to our assets and liabilities) and changes in asset values as a result of interest rate changes, noninterest income, loan performance, loan deferrals and modifications, nonperforming assets, other real estate owned, provision for loan losses, charge-offs, other-than-temporary impairments, collateral values, credit quality, asset sales, insurance claims, and market trends, as well as statements with respect to our objectives, expectations and intentions and other statements that are not historical facts. Actual results may differ from those set forth in the forward-looking statements.
Forward-looking statements, with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, 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 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 us to update any forward-looking statements.
