Auburn National Bancorporation, Inc. (AUBN): Boston Consulting Group Matrix [10-2024 Updated]
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Auburn National Bancorporation, Inc. (AUBN) Bundle
In the dynamic landscape of banking, understanding where a company stands can provide critical insights for investors. Auburn National Bancorporation, Inc. (AUBN) presents a fascinating case study through the lens of the Boston Consulting Group Matrix. With strong net interest margins and impressive loan growth marking its Stars, a stable dividend and solid asset base defining its Cash Cows, challenges in profitability categorizing its Dogs, and uncertainties regarding future growth positioning it as a Question Mark, AUBN's financial health and strategic direction invite deeper exploration. Discover how these elements interact to shape the bank's future below.
Background of Auburn National Bancorporation, Inc. (AUBN)
Auburn National Bancorporation, Inc. (the 'Company') is a bank holding company incorporated in Delaware in 1990. It assumed control of AuburnBank, an Alabama state member bank, in 1994, continuing a legacy that dates back to 1907. The Company's principal office is located in Auburn, Alabama, and it primarily serves East Alabama, including Lee County and surrounding areas.
The Company is regulated by the Federal Reserve and the Alabama Superintendent of Banks, and it has been a member of the Federal Reserve System since April 1995. Additionally, AuburnBank has been a member of the Federal Home Loan Bank of Atlanta since 1991. As a bank holding company, AUBN has the flexibility to diversify into a broader range of financial services beyond those allowed for the bank itself, enhancing its operational capabilities.
As of September 30, 2024, Auburn National Bancorporation reported total assets of approximately $982.7 million and total deposits of $901.7 million. The Company has maintained a strong capital position, with a total risk-based capital ratio of 15.76% and a common equity tier 1 (CET1) ratio of 14.75%. Over the first nine months of 2024, net earnings were reported at $4.8 million, reflecting a decrease from the same period in 2023.
Auburn National Bancorporation's strategic focus includes asset-liability management to navigate interest rate fluctuations and maintaining competitive pricing for deposits and loans. The Company also actively participates in programs aimed at improving deposit insurance coverage for its clients.
Auburn National Bancorporation, Inc. (AUBN) - BCG Matrix: Stars
Strong net interest margin at 3.05% for 2024
The net interest margin (tax-equivalent) for Auburn National Bancorporation, Inc. is reported at 3.05% for the first nine months of 2024, reflecting an increase from 2.97% in the same period of 2023.
Notable increase in average loans by 11% year-over-year
Auburn National's average loans reached $568.9 million in the first nine months of 2024, marking an 11% increase compared to the previous year.
Consistent net earnings growth, with $4.8 million reported for the first nine months of 2024
Net earnings for Auburn National Bancorporation for the first nine months of 2024 stood at $4.8 million, a decrease from $5.4 million during the same period in 2023.
High CET 1 risk-based capital ratio of 14.75%, indicating robust capital strength
The common equity tier 1 (CET1) risk-based capital ratio is reported at 14.75% as of September 30, 2024, indicating strong capital adequacy.
Positive comprehensive income of $10.1 million for Q3 2024, driven by unrealized gains on securities
In the third quarter of 2024, Auburn National recorded a comprehensive income of $10.1 million, primarily attributed to unrealized gains on securities.
| Financial Metric | Value (2024) | Value (2023) |
|---|---|---|
| Net Interest Margin | 3.05% | 2.97% |
| Average Loans | $568.9 million | $513.7 million |
| Net Earnings | $4.8 million | $5.4 million |
| CET 1 Risk-Based Capital Ratio | 14.75% | 14.47% |
| Comprehensive Income (Q3) | $10.1 million | $8.3 million |
Auburn National Bancorporation, Inc. (AUBN) - BCG Matrix: Cash Cows
Stable dividend payout ratio
The company maintains a stable dividend payout ratio of 54%, reflecting reliability in income generation.
Total assets
Auburn National Bancorporation has total assets of approximately $990 million, showcasing a solid asset base.
Efficiency ratio
The efficiency ratio improved to 71.83%, demonstrating effective cost management.
Noninterest income growth
Consistent noninterest income growth was achieved, reaching $2.6 million in Q3 2024.
Return on average equity
The company reported a strong return on average equity at 9.10%, signaling effective use of equity capital.
| Financial Metric | Value |
|---|---|
| Dividend Payout Ratio | 54% |
| Total Assets | $990 million |
| Efficiency Ratio | 71.83% |
| Noninterest Income (Q3 2024) | $2.6 million |
| Return on Average Equity | 9.10% |
Auburn National Bancorporation, Inc. (AUBN) - BCG Matrix: Dogs
Decline in Net Interest Income
Net interest income for the first nine months of 2024 was $20.2 million, reflecting a 2% decrease compared to $20.6 million in the same period of 2023.
Nonperforming Loans as a Percentage of Total Loans
As of September 30, 2024, nonperforming loans constituted 0.14% of total loans, indicating potential credit risk issues.
Increased Cost of Interest-Bearing Liabilities
The cost of interest-bearing liabilities increased to 1.80% in the first nine months of 2024, up from 1.02% in the same period of 2023.
Decrease in Average Interest-Bearing Deposits
Average interest-bearing deposits decreased by 1% year-over-year, from $649.6 million in the first nine months of 2023 to $640.2 million in 2024.
Unfavorable Market Conditions Impacting Stock Price Stability
The period-end stock price for Auburn National Bancorporation, Inc. was $22.90, showing instability in a challenging market environment.
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Net Interest Income | $20.2 million | $20.6 million | -2% |
| Nonperforming Loans (% of Total Loans) | 0.14% | 0.22% | -8% |
| Cost of Interest-Bearing Liabilities | 1.80% | 1.02% | +78% |
| Average Interest-Bearing Deposits | $640.2 million | $649.6 million | -1% |
| Period-End Stock Price | $22.90 | $21.50 | +6.51% |
Auburn National Bancorporation, Inc. (AUBN) - BCG Matrix: Question Marks
Uncertain future growth due to rising interest rates impacting loan demand
The Federal Reserve increased the target federal funds rate by 525 basis points since March 2022, with a current range of 4.75% - 5.00% as of September 30, 2024. This has led to a decrease in loan demand and growth potential for Auburn National Bancorporation, Inc. (AUBN), with average loans for the first nine months of 2024 at $568.9 million, an 11% increase from the previous year, but still reflecting pressures from high interest rates.
Dependence on regulatory environment which may affect operational flexibility
Auburn National Bancorporation's regulatory capital ratios remain strong, with a total risk-based capital ratio of 15.76%, a tier 1 leverage ratio of 10.43%, and a common equity tier 1 (CET1) ratio of 14.75% as of September 30, 2024. However, the company's operational flexibility is subject to changes in regulatory requirements, particularly those stemming from the Dodd-Frank Act and Basel III standards.
Emerging competition from fintech firms posing threats to traditional banking services
The emergence of fintech firms continues to disrupt traditional banking models. AUBN faces increased competition for deposits and loans, impacting its market share and profit margins. The average interest-bearing deposit cost has increased to 1.80% in 2024 from 1.02% in 2023, reflecting the competitive landscape.
Potential for further investment in technology to enhance customer experience and efficiency
Auburn National Bancorporation is exploring technology investments to improve customer experience and operational efficiency. The bank's noninterest income for the first nine months of 2024 was $2.6 million, up from $2.4 million in the previous year, indicating a focus on enhancing service offerings.
Need for strategic initiatives to convert nonperforming loans and improve asset quality
The allowance for credit losses was $6.9 million, or 1.22% of total loans as of September 30, 2024, compared to 1.24% a year prior. Nonperforming loans as a percentage of total loans remained at 0.14%, indicating a need for strategic initiatives to convert these loans and improve overall asset quality.
| Metric | 2024 | 2023 |
|---|---|---|
| Net Earnings (millions) | $4.8 | $5.4 |
| Basic Earnings Per Share | $1.38 | $1.54 |
| Net Interest Margin | 3.05% | 2.97% |
| Provision for Credit Losses (millions) | $0.1 | ($0.2) |
| Nonperforming Loans as % of Total Loans | 0.14% | 0.22% |
| Total Risk-Based Capital Ratio | 15.76% | 15.49% |
| Average Loans (millions) | $568.9 | $513.1 |
In summary, Auburn National Bancorporation, Inc. (AUBN) showcases a dynamic portfolio characterized by Stars like its strong net interest margin and consistent earnings growth, while also revealing Cash Cows such as its stable dividend payout and solid asset base. However, the company faces challenges with Dogs indicating a decline in net interest income and credit risk issues, alongside Question Marks that highlight uncertainties from rising interest rates and fintech competition. Moving forward, strategic initiatives will be crucial for AUBN to leverage its strengths and address potential weaknesses.
Article updated on 8 Nov 2024
Resources:
- Auburn National Bancorporation, Inc. (AUBN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Auburn National Bancorporation, Inc. (AUBN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Auburn National Bancorporation, Inc. (AUBN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.