A Letter From Our Chairman

To Our Shareholders and Friends,

2022 was a record earnings year for our bank. Net earnings for 2022 were reported just over $10.3 million or $2.95 per share compared to $8.0 million or $2.27 per share for 2021. Record earnings were partly due to a couple of non-routine items; however, we also produced strong revenue growth as our net interest income and margin continued to increase.

Our loan portfolio increased just over 10% or $46 million for the year, thus providing solid growth in higher yielding assets. Asset quality remained very strong with reserve for loan and lease losses as a percentage of loans and lease receivables (net of unearned income) ending the year at 1.14%.

Dividends of $1.06 per share were paid for the year compared to $1.04 per share for 2021. Our capital position remains strong. By current regulatory standards, we exceed the requirements of a well-capitalized bank.

After relative rate stability over the past several years, 2022 provided a challenging environment with a steep rise in interest rates in response to rising inflation levels. In seeking to combat historic inflation rates, The Federal Reserve’s monetary policy included seven separate rate increases totaling 425 basis points.

While earning asset yields moved higher throughout the year, competitive pressures on the funding side also became more elevated late in the year. Successfully managing our balance sheet will be important in 2023.

I would like to congratulate our entire bank team for completing our final move into our new facility in downtown Auburn in June of 2022. In addition, I would like to thank our shareholders, customers, and entire community for your continued support during our development project.

We remain committed to serving our local communities and the entire east Alabama region with competitive products and services, top quality service, and giving back to many worthy civic and community organizations that make our local communities a special place to live, work, and raise a family.

It has been an honor and a privilege to serve as your President and Chief Executive Officer for the past 25 years. As you know, I retired December 31, 2022 as President and Chief Executive Officer of AuburnBank and Auburn National Bancorporation, Inc. I will continue to serve as Chairman of the AuburnBank and Auburn National Bancorporation, Inc. boards. Mr. David Hedges, our Executive Vice President and Chief Financial Officer, has been elected to serve as the President and Chief Executive Officer of both the bank and company and to serve as a director for both boards. He is an outstanding leader and has played a significant role in the growth, profitability, and management of our bank since 2006. I am confident he will successfully lead our financial institution in the future and continue to enhance shareholder value.

Thank you for your loyal support and as we proudly believe and say, we are "Champions of You."

Robert W. Dumas
Chairman
AuburnBank and ANBC