AUBN filing — read by section

Item 8. Financial Statements and Supplementary Data

ITEM 8. 
FINANCIAL STATEMENTS 
AND SUPPLEMENTARY 
DATA 
 
 Index 
 
 Page 
 
 Report of Independent Registered Public Accounting Firm 
 
(PCAOB ID: 
 149 
 ) 
 
84 
 Consolidated Balance Sheets 
 
86 
 Consolidated Statements of Earnings 
 
87 
 Consolidated Statements of Comprehensive Income 
 
88 
 Consolidated Statements of Stockholders’ Equity 
 
89 
 Consolidated Statements of Cash Flows 
 
90 
 Notes to Consolidated Financial Statements 
 
 91 
 
 Table of Contents 
 84 
 Report of Independent Registered Public Accounting Firm 
 
 To the Stockholders 
and Board of Directors of 

 Auburn National Bancorporation, Inc. and Subsidiary 

 Opinion on the Financial Statements 
 We 
have 
audited 
the 
accompanying 
consolidated 
balance 
sheets 
of 
Auburn 
National 
Bancorporation, 
Inc. 
and 
Subsidiary 
 (the 
“Company”) 
as 
of 
December 
31, 
2024 
and 
2023, 
the 
related 
consolidated 
statements 
of 
earnings, 
comprehensive 
 income, 
stockholders' 
equity 
and 
cash 
flows 
for 
the 
years then 
ended, 
and 
the 
related 
notes 
to 
the 
consolidated 
financial 
 statements (collectively, 
the “financial 
statements”). 
In our 
opinion, 
the financial 
statements present 
fairly, 
in all 
material 
 respects, the financial 
position of the 
Company as of 
December 31, 2024 
and 2023, and 
the results of 
its operations 
and its 
 cash 
flows 
for 
the 
years 
then 
ended, 
in 
conformity 
with 
accounting 
principles 
generally 
accepted 
in 
the 
United 
States 
of 
 America. 
 Basis for Opinion 
 These financial statements are 
the responsibility of the 
Company’s management. 
Our responsibility is to express 
an opinion 
 on 
the 
Company’s 
financial 
statements 
based 
on 
our 
audits. 
We 
are 
a 
public 
accounting 
firm 
registered 
with 
the 
Public 
 Company 
Accounting 
Oversight 
Board 
(United 
States) 
(PCAOB) 
and 
are 
required 
to 
be 
independent 
with 
respect 
to 
the 
 Company 
in 
accordance 
with 
U.S. 
federal 
securities 
laws 
and 
the 
applicable 
rules 
and 
regulations 
of 
the 
Securities 
and 
 Exchange Commission and the PCAOB. 
 We 
conducted 
our 
audits 
in 
accordance 
with 
the 
standards 
of 
the 
PCAOB. 
Those 
standards 
require 
that 
we 
plan 
and 
 perform the 
audit to 
obtain reasonable 
assurance about 
whether the 
financial statements 
are free 
of material 
misstatement, 
 whether 
due 
to 
error 
or 
fraud. 
The 
Company 
is 
not 
required 
to 
have, 
nor 
were 
we 
engaged 
to 
perform, 
an 
audit 
of 
its 
 internal control over financial reporting. As part of 
our audits, we are required to obtain an understanding of 
internal control 
 over 
financial 
reporting 
but 
not 
for 
the 
purpose 
of 
expressing 
an 
opinion 
on 
the 
effectiveness 
of 
the 
Company’s 
internal 
 control over financial reporting. Accordingly, 
we express no such opinion. 
 Our audits included 
performing procedures to 
assess the risks of 
material misstatement of 
the financial statements, 
whether 
 due to error or 
fraud, and performing 
procedures that respond 
to those risks. Such 
procedures included examining, 
on a test 
 basis, evidence 
regarding the 
amounts and 
disclosures in 
the financial 
statements. Our 
audits also 
included 
evaluating 
the 
 accounting principles used 
and significant estimates made 
by management, as well 
as evaluating the 
overall presentation of 
 the financial statements. We 
believe that our audits provide a reasonable basis for our opinion.
 Critical Audit Matters
 The critical audit 
matters communicated 
below are matters 
arising from 
the current period 
audit of the 
financial statements 
 that 
were 
communicated 
or 
required 
to 
be 
communicated 
to 
the 
audit 
committee 
and 
that: 
(1) 
relate 
to 
accounts 
or 
 disclosures that 
are material 
to the 
financial statements 
and (2) 
involved our 
especially challenging, 
subjective or 
complex 
 judgments. The 
communication of 
critical audit 
matters does 
not alter 
in any 
way our 
opinion on 
the financial 
statements, 
 taken 
as a 
whole, 
and 
we 
are not, 
by communicating 
the critical 
audit 
matters below, 
providing 
separate 
opinions 
on the 
 critical audit matters or on the accounts or disclosures to which they 
relate. 

 Table of Contents 
 85 
 Allowance for Credit Losses
 As described in Note 5 to the Company’s 
consolidated financial statements, the Company has a gross 
loan portfolio of $564 
 million and 
related allowance 
for credit 
losses of 
$6.9 million 
as of 
December 31, 
2024. As 
described by 
the Company 
in 
 Note 1, the allowance 
for credit losses is estimated 
by management using 
relevant available information, from 
both internal 
 and external 
sources, relating 
to past 
events, current 
conditions, and 
reasonable and 
supportable forecasts. 
The Company’s 
 credit loss assumptions 
are estimated using a discounted 
cash flow ("DCF") model 
for each loan segment, 
except consumer 
 loans. 
The 
weighted 
average 
remaining 
life 
method 
is 
used 
to 
estimate 
credit 
loss 
assumptions 
for 
consumer 
loans. 
The 
 DCF 
model 
calculates 
an 
expected 
life-of-loan 
loss 
percentage 
by 
considering 
the 
forecasted 
probability 
that 
a 
borrower 
 will default 
(the “PD”), 
adjusted for 
relevant forecasted 
macroeconomic factors, 
and loss 
given default 
(“LGD”), which 
is 
 the 
estimate 
of 
the 
amount 
of 
net 
loss 
in 
the 
event 
of 
default. 
This 
model 
utilizes 
historical 
correlations 
between 
default 
 experience 
and 
certain 
macroeconomic 
factors 
as 
determined 
through 
a 
statistical 
regression 
analysis. 
Projections 
of 
 macroeconomic 
factors 
are 
obtained 
from 
an independent 
third 
party 
and 
are utilized 
to predict 
quarterly 
rates 
of default 
 based on the statistical PD models. 
The weighted average remaining 
life method uses an annual charge 
-off rate over several 
 vintages to 
estimate credit 
losses. Additionally, 
the allowance 
for credit 
losses calculation 
includes subjective 
adjustments 
 for qualitative risk factors that are believed likely to cause estimated credit 
losses to differ from historical experience. 
 We 
identified the 
Company’s 
estimate of 
the allowance 
for credit 
losses (“ACL”) 
as a 
critical audit 
matter. 
The principal 
 considerations for our determination 
of the allowance for credit 
losses as a critical audit 
matter related to the high 
degree of 
 subjectivity 
in 
the 
Company’s 
judgments 
in 
determining 
the 
macroeconomic 
data 
in 
the 
reasonable 
and 
supportable 
 forecasts, as 
well as 
the qualitative 
factors. Auditing 
these complex 
judgments and 
assumptions by 
the Company 
involves 
 especially challenging 
auditor judgment 
due to 
the nature 
and extent 
of audit 
evidence and 
effort required 
to address 
these 
 matters, including the extent of specialized skill or knowledge needed. 
 The primary procedures we performed to address this critical audit matter included 
the following: 

 ●
 We 
obtained 
an 
understanding 
of 
the 
Company’s 
process 
for 
establishing 
the 
ACL, 
including 
the 
selection 
and 
 application of forecasts and the basis 
for development and related adjustments 
of the qualitative factor components 
 of the ACL. 
 ●
 We 
evaluated 
the 
reasonableness 
of 
management’s 
application 
of 
qualitative 
factor 
adjustments 
to 
the 
ACL, 
 including 
the 
comparison 
of 
factors 
considered 
by 
management 
to 
third 
party 
or 
internal 
sources 
as 
well 
as 
 evaluated the appropriateness and level of the qualitative factor adjustments. 
 ●
 We 
assessed the overall 
trends in credit 
quality, 
including adjustments for 
the qualitative factors 
by comparing the 
 overall allowance for credit losses to those recorded by the Company’s 
peer institutions. 
 ●
 We 
evaluated 
subsequent 
events 
and 
transactions 
and 
considered 
whether 
they 
corroborated 
or 
contradicted 
the 
 Company’s conclusion.  
 /s/ 
 Elliott Davis, LLC 
 We have served 
as the Company's auditor since 2015. 
 Greenville, South Carolina 
 March 11, 2025 

 Table of Contents 
 86 
 AUBURN NATIONAL 
BANCORPORATION, 
INC. AND SUBSIDIARIES 
 Consolidated Balance Sheets 
 December 31 
 (Dollars in thousands, except share data) 
 2024 
 2023 
 Assets: 
 Cash and due from banks 
 $ 
 15,142 
 $ 
 27,127 
 Federal funds sold 
 37,200 
 31,412 
 Interest bearing bank deposits 
 41,012 
 12,830 
 Cash and cash equivalents 
 93,354 
 71,369 
 Securities available-for-sale 

 243,012 
 270,910 
 Loans, net of unearned income 
 564,017 
 557,294 
 Allowance for credit losses 
 ( 6,871 )
 ( 6,863 )
 Loans, net 
 557,146 
 550,431 
 Premises and equipment, net 
 45,931 
 45,535 
 Bank-owned life insurance 
 17,513 
 17,110 
 Other assets 
 20,368 
 19,900 
 Total assets 
 $ 
 977,324 
 $ 
 975,255 
 Liabilities: 
 Deposits: 
 Noninterest-bearing 

 $ 
 260,874 
 $ 
 270,723 
 Interest-bearing 
 634,950 
 625,520 
 Total deposits 
 895,824 
 896,243 
 Federal funds purchased and securities sold under agreements to repurchase 
 — 
 1,486 
 Accrued expenses and other liabilities 
 3,208 
 1,019 
 Total liabilities 
 899,032 
 898,748 
 Stockholders' equity: 
 Preferred stock of $
 0.01 
 
par value; authorized 
 200,000 
 
shares; 
 issued shares - none 
 — 
 — 
 Common stock of $
 0.01 
 
par value; authorized 
 8,500,000 
 
shares; 
 issued 
 3,957,135 
 
shares 
 39 
 39 
 Additional paid-in capital 
 3,802 
 3,801 
 Retained earnings 
 115,759 
 113,398 
 Accumulated other comprehensive loss, net 
 ( 29,607 )
 ( 29,029 )
 Less treasury stock, at cost - 
 463,436 
 
shares and 
 463,521 
 
shares 
 at December 31, 2024 and 2023, respectively 
 ( 11,701 )
 ( 11,702 )
 Total stockholders’ 
equity 
 78,292 
 76,507 
 Total liabilities and stockholders’ 
equity 
 $ 
 977,324 
 $ 
 975,255 
 See accompanying notes to consolidated financial statements 

 Table of Contents 
 87 
 AUBURN NATIONAL 
BANCORPORATION, 
INC. AND SUBSIDIARIES 
 Consolidated Statements of Earnings 
 Year ended December 31 
 (Dollars in thousands, except share and per share data) 
 2024 
 2023 
 Interest income: 
 Loans, including fees 
 $ 
 29,735 
 $ 
 24,925 
 Securities: 
 Taxable 
 5,430 
 7,208 
 Tax-exempt 
 294 
 1,568 
 Federal funds sold and interest-bearing bank deposits 
 3,273 
 673 
 Total interest income 
 38,732 
 34,374 
 Interest expense: 
 Deposits 
 11,604 
 7,974 
 Short-term borrowings 
 3 
 72 
 Total interest expense 
 11,607 
 8,046 
 Net interest income 
 27,125 
 26,328 
 Provision for credit losses 
 36 
 135 
 Net interest income after provision for credit 
losses 
 27,089 
 26,193 
 Noninterest income: 
 Service charges on deposit accounts 
 614 
 603 
 Mortgage lending 
 608 
 430 
 Bank-owned life insurance 
 403 
 411 
 Other 
 1,849 
 1,870 
 Securities losses, net 
 — 
 ( 6,295 )
 Total noninterest income 
 3,474 
 ( 2,981 )
 Noninterest expense: 
 Salaries and benefits 
 12,534 
 12,101 
 Net occupancy and equipment 
 2,508 
 2,954 
 Professional fees 
 1,188 
 1,299 
 FDIC and other regulatory assessments 
 564 
 631 
 Other 
 5,372 
 5,609 
 Total noninterest expense 
 22,166 
 22,594 
 Earnings before income taxes 
 8,397 
 618 
 Income tax expense (benefit) 
 2,000 
 ( 777 )
 Net earnings 
 $ 
 6,397 
 $ 
 1,395 
 Net earnings per share: 
 Basic and diluted 
 $ 
 1.83 
 $ 
 0.40 
 Weighted average shares 
outstanding: 
 Basic and diluted 
 3,493,690 
 3,498,030 
 See accompanying notes to consolidated financial statements 

 Table of Contents 
 88 
 AUBURN NATIONAL 
BANCORPORATION, 
INC. AND SUBSIDIARIES 
 Consolidated Statements of Comprehensive Income 
 Year ended December 31 
 (Dollars in thousands) 
 2024 
 2023 
 Net earnings 
 $ 
 6,397 
 $ 
 1,395 
 Other comprehensive (loss) income, net of tax: 
 Unrealized net holding (loss) gain on securities, net of 

 tax benefit of $
 195 
 
and tax expense of $
 2,407 
 
for the years 
 ended December 31, 2024 and 2023, respectively 
 ( 578 )
 7,177 
 Reclassification adjustment for net loss on securities 

 recognized in net earnings, net of tax benefit of none and $
 1,581 
 for the years ended December 31, 2024 and 2023, respectively 
 — 
 4,714 
 Other comprehensive (loss) income 
 ( 578 )
 11,891 
 Comprehensive income 
 $ 
 5,819 
 $ 
 13,286 
 See accompanying notes to consolidated financial statements 

 Table of Contents 
 89 
 AUBURN NATIONAL 
BANCORPORATION, 
INC. AND SUBSIDIARIES 
 Consolidated Statements of Stockholders’ Equity 
 Accumulated 
 Common 
 Additional 
 other 
 Shares 
 Common 
 paid-in 
 Retained 

 comprehensive 
 Treasury 
 
 (Dollars in thousands, except share data) 
 Outstanding 
 Stock 
 capital 
 earnings 
 (loss) income 
 stock 
 Total 
 Balance, December 31, 2022 
 3,503,452 
 $ 
 39 
 3,797 
 116,600 
 ( 40,920 )
 ( 11,475 )
 $ 
 68,041 
 Cumulative effect of change in 

 accounting standard 
 — 
 — 
 — 
 ( 821 )
 — 
 — 
 ( 821 )
 Net earnings 
 — 
 — 
 — 
 1,395 
 — 
 — 
 1,395 
 Other comprehensive income 
 — 
 — 
 — 
 — 
 11,891 
 — 
 11,891 
 Cash dividends paid ($
 1.08 
 
per share) 
 — 
 — 
 — 
 ( 3,776 )
 — 
 — 
 ( 3,776 )
 Stock repurchases 
 ( 10,108 )
 — 
 — 
 — 
 — 
 ( 229 )
 ( 229 )
 Sale of treasury stock 
 270 
 — 
 4 
 — 
 — 
 2 
 6 
 Balance, December 31, 2023 
 3,493,614 
 $ 
 39 
 $ 
 3,801 
 $ 
 113,398 
 $ 
 ( 29,029 )
 $ 
 ( 11,702 )
 $ 
 76,507 
 Cumulative effect of change in 

 accounting standard 
 — 
 — 
 — 
 ( 263 )
 — 
 — 
 ( 263 )
 Net earnings 
 — 
 — 
 — 
 6,397 
 — 
 — 
 6,397 
 Other comprehensive loss 
 — 
 — 
 — 
 — 
 ( 578 )
 — 
 ( 578 )
 Cash dividends paid ($
 1.08 
 
per share) 
 — 
 — 
 — 
 ( 3,773 )
 — 
 — 
 ( 3,773 )
 Sale of treasury stock 
 85 
 — 
 1 
 — 
 — 
 1 
 2 
 Balance, December 31, 2024 
 3,493,699 
 $ 
 39 
 $ 
 3,802 
 $ 
 115,759 
 $ 
 ( 29,607 )
 $ 
 ( 11,701 )
 $ 
 78,292 
 See accompanying notes to consolidated financial statements 

 Table of Contents 
 90 
 AUBURN NATIONAL 
BANCORPORATION, 
INC. AND SUBSIDIARIES 
 Consolidated Statements of Cash Flows 
 Year ended December 31 
 (In thousands) 
 2024 
 2023 
 Cash flows from operating activities: 
 Net earnings 
 $ 
 6,397 
 $ 
 1,395 
 Adjustments to reconcile net earnings to net cash provided by 
 operating activities: 
 Provision for credit losses 
 36 
 135 
 Depreciation and amortization 
 1,933 
 1,700 
 Premium amortization and discount accretion, net 
 1,505 
 2,380 
 Deferred tax expense (benefit) 
 438 
 ( 195 )
 Net loss on sale of securities available for sale 
 — 
 6,295 
 Net gain on sale of loans held for sale 
 ( 261 )
 ( 71 )
 Loans originated for sale 
 ( 10,439 )
 ( 4,141 )
 Proceeds from sale of loans 
 10,622 
 4,174 
 Increase in cash surrender value of bank owned life insurance 
 ( 403 )
 ( 359 )
 Income recognized from death benefit on bank-owned life insurance 
 — 
 ( 52 )
 Net (increase) decrease in other assets 
 ( 1,168 )
 2,652 
 Net increase (decrease) in accrued expenses and other liabilities 
 2,149 
 ( 2,011 )
 Net cash provided by operating activities 
 $ 
 10,809 
 $ 
 11,902 
 Cash flows from investing activities: 
 Proceeds from sales of securities available-for-sale 
 — 
 111,269 
 Proceeds from maturities, paydowns and calls of securities available-for 
-sale 
 25,620 
 30,329 
 Increase in loans, net 
 ( 6,709 )
 ( 52,892 )
 Net purchases of premises and equipment 
 ( 2,089 )
 ( 418 )
 Decrease (increase) in FHLB stock 
 32 
 ( 164 )
 Proceeds from bank-owned life insurance death benefit 
 — 
 216 
 Proceeds from surrender of bank-owned life insurance 
 — 
 3,037 
 Net cash provided by investing activities 
 $ 
 16,854 
 $ 
 91,377 
 Cash flows from financing activities: 
 Net decrease in noninterest-bearing deposits 
 ( 9,849 )
 ( 40,648 )
 Net increase (decrease) in interest-bearing deposits 
 9,430 
 ( 13,446 )
 Net decrease in federal funds purchased and securities sold 

 under agreements to repurchase 
 ( 1,486 )
 ( 1,065 )
 Stock repurchases 
 — 
 ( 229 )
 Dividends paid 
 ( 3,773 )
 ( 3,776 )
 Net cash used in financing activities 
 $ 
 ( 5,678 )
 $ 
 ( 59,164 )
 Net change in cash and cash equivalents 
 $ 
 21,985 
 $ 
 44,115 
 Cash and cash equivalents at beginning of period 
 71,369 
 27,254 
 Cash and cash equivalents at end of period 
 $ 
 93,354 
 $ 
 71,369 
 Supplemental disclosures of cash flow information: 
 Cash paid during the period for: 
 Interest 
 $ 
 11,520 
 $ 
 7,516 
 Income taxes 
 1,244 
 1,230 
 See accompanying notes to consolidated financial statements 

 Table of Contents 
 91 
 AUBURN NATIONAL 
BANCORPORATION, 
INC. AND SUBSIDIARIES 
 Notes to Consolidated Financial Statements 
 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING 
POLICIES

 Nature of Business 
 Auburn National Bancorporation, Inc. (the “Company”) is a bank holding company 
whose primary business is conducted 
 by its wholly-owned subsidiary, 
AuburnBank (the “Bank”). AuburnBank is a commercial bank located in 
Auburn, 
 Alabama. The Bank provides a full range of banking services in its primary 
market area, Lee County, 
which includes the 
 Auburn-Opelika Metropolitan Statistical Area.

 Basis of Presentation 
 The consolidated financial statements include the accounts of the Company 
and its wholly-owned subsidiaries, which are 
 managed as a single business segment. Significant intercompany 
transactions and accounts are eliminated in consolidation.

 Revenue Recognition 

 The Company’s sources of 
income that fall within the scope of ASC 606 include service charges on deposits, investment 
 services, interchange fees and gains and losses on sales of other real estate, 
all of which are presented as components of 
 noninterest income. The following is a summary of the revenue streams that 
fall within the scope of ASC 606: 

 Service charges on deposits, investment services, ATM 
and interchange fees – Fees from these services are either 
 transaction-based, for which the performance obligations are satisfied when the individual transaction 
is processed, or set 
 periodic service charges, for which the performance 
obligations are satisfied over the period the service is provided. 
 Transaction-based fees are recognized at 
the time the transaction is processed, and periodic service charges are recognized 
 over the service period. 
 Gains on sales of other real estate
 
– 
 A gain on sale should be recognized when a contract for sale exists and control of the 
 asset has been transferred to the buyer. 
ASC 606 lists several criteria required to conclude that a contract for sale exists, 
 including a determination that the institution will collect substantially all of 
the consideration to which it is entitled. In 
 addition to the loan-to-value, the analysis is based on various other factors, including the credit quality 
of the borrower, the 
 structure of the loan, and any other factors that may affect collectability.

 Use of Estimates 
 The preparation of financial statements in conformity with U.S. generally 
accepted accounting principles requires 
 management to make estimates and assumptions that affect 
the reported amounts of assets and liabilities and the disclosure 
 of contingent assets and liabilities as of the balance sheet date and the reported 
amounts of income and expense during the 
 reporting period. Actual results could differ from those estimates. Material 
estimates that are particularly susceptible to 
 significant change in the near term include the determination of 
the allowance for credit losses, fair value measurements, 
 valuation of other real estate owned, and valuation of deferred tax assets.

 Reclassifications 

 Certain amounts reported in the prior period have been reclassified to conform 
to the current-period presentation. These 
 reclassifications had no impact on the Company’s 
previously reported net earnings or total stockholders’ equity.

 Subsequent Events 

 The Company has evaluated the effects of events or transactions 
through the date of this filing that have occurred 
 subsequent to December 31, 2024. The Company does not believe there 
are any material subsequent events that would 
 require further recognition or disclosure.

 Table of Contents 
 92 
 
 Correction of Error 
 The disclosure of loans by vintage in Note 5 – Loans and Allowance for Credit 
Losses in the Company’s Annual 
Report on 
 Form 10-K for year ended December 31, 2023 contained incorrect 
information as it pertains to loans originated by vintage 
 and revolving loans. 
All current period gross charge-off data, total loans by segment 
and total loans by credit quality 
 indicator were correctly reported. 
The loans originated by vintage and revolving loans as of December 31, 2023 have been 
 corrected in the comparative presentation in Note 5 – Loans and Allowance 
for Credit Losses in the Notes herein.

 Accounting Standards Adopted in 2024 
 ASU 2023-02, 
 Investments – Equity Method and Joint Ventures 
(Topic 
323): Accounting for Investments in Tax 
Credit 
 Structures Using the Proportional 
Amortization Method
 . 
ASU 2023-02 now permits reporting entities to elect to account 
 for their equity investments made primarily to receive income tax credits 
and other income tax benefits, regardless of the 
 program from which the income tax credits or benefits are received, 
using the proportional amortization method if certain 
 conditions are met. The new standard is effective for fiscal years, and 
interim periods within those fiscal years, beginning 
 after December 15, 2023. 
The Company adopted ASU 2023-02 effective January 1, 2024 and 
recorded a cumulative effect 
 of change in accounting standard adjustment which reduced beginning 
retained earnings by $0.3 million and reduced our 
 investment in New Markets Tax 
Credits (“NMTCs”) by $0.4 million. 
The Company, beginning January 
1, 2024, accounts 
 for its investments in NMTCs using the proportional amortization method through 
charges to the provision for income 
 taxes. See Note 3, Variable 
Interest Entities. 
 ASU 2023-07, 
 Segment Reporting (Topic 
280) - Improvement to Reportable Segment 
Disclosures. 

 The amendments in 
 ASU 2023-07 improve financial reporting by requiring disclosure of incremental 
segment information on an annual basis to 
 enable investors to develop more decisions-useful financial analyses. 
ASU 2023-07 is effective for fiscal years beginning 
 after December 31, 2023. 
The Company has adopted ASU 2023-07 as of January 1, 2024 and has determined that 
its 
 banking services and branch locations meet the aggregation criteria of ASC 280, 
 Segment Reporting
 , since each of its 
 banking services and branch locations offer similar products and 
services, operate in a similar manner, have similar 
 customers and report to the same regulatory authority, 
and therefore operate one line of business located in a single 
 geographic area. 
The Company's Chief Executive Officer has been identified as the 
chief operating decision maker 
 (“CODM”). 
 The CODM regularly assesses performance of the aggregated single 
operating and reporting segment and decides how to 
 allocate resources based on the net income calculated on the same basis as the net income 
reported in the Company's 
 consolidated statements of earnings and other comprehensive earnings 
and total assets calculated on the same basis as the 
 total assets reported in the Company’s 
consolidated balance sheets. The CODM is also regularly provided with expense 
 information at a level that is consistent with that disclosed in the Company's consolidated 
statements of earnings and other 
 comprehensive earnings. 

 Issued not yet effective accounting standards
 ASU 2023-09, 
 Income Taxes 
(Topic 740): 
Improvements to Income Tax 
Disclosures.
 
The amendments in this Update 
 enhance the transparency and decision usefulness of income tax disclosures. 
For public business entities, the new standard 
 is effective for annual periods beginning after December 
15, 2024. 
The Company does not expect the new standard to have 
 a material impact on the Company’s 
consolidated financial statements.

 Table of Contents 
 93 
 
 Cash Equivalents 
 Cash equivalents include cash on hand, cash items in process of collection, 
amounts due from banks, including interest 
 bearing deposits with other banks, and federal funds sold.

 Securities 
 Securities are classified based on management’s 
intention at the date of purchase. At December 31, 2024, all of the 
 Company’s securities were classified 
as available-for-sale. Securities available-for-sale are used 
as part of the Company’s 
 interest rate risk and liquidity management strategy, 
and they may be sold in response to changes in interest rates, changes 
 in prepayment risks or other factors. All securities classified as available-for-sale are recorded 
at fair value with any 
 unrealized gains and losses reported in accumulated other comprehensive income 
(loss), net of the deferred income tax 
 effects. Interest and dividends on securities, including 
the amortization of premiums and accretion of discounts are 
 recognized in interest income using the effective interest 
method. 
Premiums are amortized to the earliest call date while 
 discounts are accreted over the estimated life of the security. 
Realized gains and losses from the sale of securities are 
 determined using the specific identification method. 

 For any securities classified as available-for-sale that are in an unrealized loss position 
at the balance sheet date, the 
 Company assesses whether or not it intends to sell the security, 
or more likely than not will be required to sell the security, 
 before recovery of its amortized cost basis. If either of these criteria are met, 
the security's amortized cost basis is written 
 down to fair value through net income. If neither criterion is met, the Company 
evaluates whether any portion of the decline 
 in fair value is the result of credit deterioration. Such evaluations consider 
the extent to which the amortized cost of the 
 security exceeds its fair value, changes in credit ratings and any other known 
adverse conditions related to the specific 
 security. If the evaluation 
indicates that a credit loss exists, an allowance for credit losses is recorded for 
the amount by 
 which the amortized cost basis of the security exceeds the present value of 
cash flows expected to be collected, limited by 
 the amount by which the amortized cost exceeds fair value. Any impairment 
not recognized in the allowance for credit 
 losses is recognized in other comprehensive income.

 Loans held for sale 
 The Company originates residential mortgage loans for sale. 
Such loans are carried at the lower of cost or estimated fair 
 value in the aggregate. 
Loan sales are recognized when the transaction closes, the proceeds are collected, 
and ownership is 
 transferred. 
Continuing involvement, through the sales agreement, consists of the right to service 
the loan for a fee for the 
 life of the loan, if applicable. 
Gains on the sale of loans held for sale are recorded net of related costs, such as 
 commissions, and reflected as a component of mortgage lending income in 
the consolidated statements of earnings. 

 The Bank makes various representations and warranties to the purchaser 
of the residential mortgage loans they originated 
 and sells, primarily to Fannie Mae. 
Every loan closed by the Bank’s mortgage 
center is run through Fannie Mae or other 
 purchasing government sponsored enterprise (“GSE”) automated 
underwriting system. 
Any exceptions noted during this 
 process are remedied prior to sale. 
These representations and warranties also apply to underwriting the real 
estate appraisal 
 opinion of value for the collateral securing these loans. 
Failure by the Company to comply with the underwriting and/or 
 appraisal standards could result in the Company being required to repurchase 
the mortgage loan or to reimburse the investor 
 for losses incurred (make whole requests) if the Company cannot cure 
such failure within the specified period following 
 discovery.

 Loans 
 Loans that management has the intent and ability to hold for the foreseeable 
future or until maturity or payoff are reported 
 at amortized cost. Amortized cost is the principal balance outstanding, 
net of purchase premiums and discounts and 
 deferred fees and costs. Accrued interest receivable related to loans 
is recorded in other assets on the consolidated balance 
 sheets. Interest income is accrued on the unpaid principal balance. 

 Loan origination fees, net of certain direct origination 
 costs, are deferred and recognized in interest income using methods that approximate 
a level yield without anticipating 
 prepayments.

 Table of Contents 
 94 
 
 The accrual of interest is generally discontinued when a loan becomes 90 days 
past due and is not well collateralized and in 
 the process of collection, or when management believes, after considering economic 
and business conditions and collection 
 efforts, that the principal or interest will not be collectible in the 
normal course of business. Past due status is based on 
 contractual terms of the loan. A loan is considered to be past due when a scheduled 
payment has not been received 30 days 
 after the contractual due date. 
 All accrued but unpaid interest is reversed against interest income when a loan is placed 
on nonaccrual status. Interest 
 received on such loans is accounted for using the cost-recovery method, 
until the loan qualifies for return to accrual. 
Loans 
 are returned to accrual status when all the principal and interest amounts contractually 
due are brought current, there is a 
 sustained period of repayment performance, and future payments are 
reasonably assured. Otherwise, under the cost 
 recovery method, interest income is not recognized until the loan balance 
is reduced to zero.

 Allowance for Credit Losses – Loans 
 The allowance for credit losses is a valuation account that is deducted from the 
loans' amortized cost basis to present the net 
 amount expected to be collected on the loans. 
Loans are charged off against the allowance 
when management confirms the 
 loan balance is uncollectible. 
Expected recoveries do not exceed the aggregate of amounts previously charged 
-off and 
 expected to be charged-off. 
Accrued interest receivable is excluded from the estimate of credit losses. 
 The allowance for credit losses represents management’s 
estimate of lifetime credit losses inherent in loans as of the 
 balance sheet date. The allowance for credit losses is estimated by management 
using relevant available information, from 
 both internal and external sources, relating to past events, current conditions, and reasonable and 
supportable forecasts. 

 The Company’s loan loss estimation 
process includes procedures to appropriately consider the unique characteristics of 
its 
 respective loan segments (commercial and industrial, construction and land development, 
commercial real estate, 
 residential real estate, and consumer loans). 
These segments are further disaggregated into loan classes, the level at which 
 credit quality is monitored. 
See Note 5, Loans and Allowance for Credit Losses, for additional information 
about our loan 
 portfolio. 
 Credit loss assumptions are estimated using a discounted cash flow ("DCF") model 
for each loan segment, except consumer 
 loans. 
The weighted average remaining life method is used to estimate credit loss assumptions 
for consumer loans. 

 The DCF model calculates an expected life-of-loan loss percentage by considering 
the forecasted probability that a 
 borrower will default (the “PD”), adjusted for relevant forecasted macroeconomic 
factors, and loss given default (“LGD”), 
 which is the estimate of the amount of net loss in the event of default. 
This model utilizes historical correlations between 
 default experience and certain macroeconomic factors as determined 
through a statistical regression analysis. 
The 
 forecasted Alabama unemployment rate is considered in the model for commercial 
and industrial, construction and land 
 development, commercial real estate, and residential real estate loans. 
In addition, forecasted changes in the Alabama 
 home price index is considered in the model for construction and land development 
and residential real estate loans. 

 Forecasted changes in the national commercial real estate (“CRE”) price index 
is considered in the model for commercial 
 real estate and multifamily loans; and forecasted changes in the Alabama 
gross state product is considered in the model for 
 multifamily loans. 
Projections of these macroeconomic factors, obtained from an independent third party, 
are utilized to 
 predict quarterly rates of default based on the statistical PD models. 

 Expected credit losses are estimated over the contractual term of the 
loan, adjusted for expected prepayments and principal 
 payments (“curtailments”) when appropriate. Management's determination 
of the contract term excludes expected 
 extensions, renewals, and modifications unless the extension or renewal 
option is included in the contract at the reporting 
 date and is not unconditionally cancellable by the Company. 
To the extent the lives of the loans 
in the portfolio extend 
 beyond the period for which a reasonable and supportable forecast can be 
made (which is 4 quarters for the Company), the 
 Company reverts, on a straight-line basis back to the historical rates over 
an 8-quarter reversion period. 
 During the first quarter of 2024, as part of the Company’s 
ongoing model monitoring procedures, the annual loss driver 
 analysis and prepayment, curtailment and funding studies were performed. 
The analysis and studies resulted in changes for 
 all DCF models. 
The changes were a result of updating the Company’s 
peer group and incorporating data through 2022. 
 The weighted average remaining life method was deemed most appropriate 
for the consumer loan segment because 
 consumer loans contain many different payment 
structures, payment streams and collateral. 
The weighted average 
 remaining life method uses an annual charge-off 
rate over several vintages to estimate credit losses. 
The average annual 
 charge-off rate is applied to the contractual 
term adjusted for prepayments. 

 Table of Contents 
 95 
 
 Additionally, the 
allowance for credit losses calculation includes subjective adjustments for qualitative 
risk factors that are 
 believed likely to cause estimated credit losses to differ from historical 
experience. These qualitative adjustments may 
 increase reserve levels and include adjustments for lending management 
experience and risk tolerance, loan review and 
 audit results, asset quality and portfolio trends, loan portfolio growth, 
industry concentrations, trends in underlying 
 collateral, 
external factors and economic conditions not already captured. 
 Loans secured by real estate with balances equal to or greater than $500 thousand and 
loans not secured by real estate with 
 balances equal to or greater than $250 thousand that do not share risk 
characteristics are evaluated on an individual basis. 
 When management determines that foreclosure is probable and the borrower 
is experiencing financial difficulty, 
the 
 expected credit losses are based on the estimated fair value of collateral held 
at the reporting date, adjusted for selling costs 
 as appropriate. 

 Allowance for Credit Losses – Unfunded Commitments 
 Financial instruments include off-balance sheet credit 
instruments, such as commitments to make loans and commercial 
 letters of credit issued to meet customer financing needs. The Company’s 
exposure to credit loss in the event of 
 nonperformance by the other party to the financial instrument for off 
-balance sheet loan commitments is represented by the 
 contractual amount of those instruments. Such financial instruments 
are recorded when they are funded. 
 The Company records an allowance for credit losses on off-balance 
sheet credit exposures, unless the commitments to 
 extend credit are unconditionally cancelable, through a charge to 
provision for credit losses in the Company’s 
consolidated 
 statements of earnings. The allowance for credit losses on off-balance 
sheet credit exposures is estimated by loan segment 
 at each balance sheet date under the current expected credit loss model using 
the same methodologies as portfolio loans, 
 taking into consideration the likelihood that funding will occur as well as any third-party 
guarantees. The allowance for 
 unfunded commitments is included in other liabilities on the Company’s 
consolidated balance sheets.

 Premises and Equipment 
 Land is carried at cost. Land improvements, buildings and improvements, 
and furniture, fixtures, and equipment are carried 
 at cost, less accumulated depreciation computed on a straight-line metho 
d 
over the estimated useful lives of the assets or the 
 expected terms of the leases, if shorter. 
Expected terms include lease option periods to the extent that the exercise of such 
 options is reasonably assured.

 Nonmarketable equity investments 
 Nonmarketable equity investments include equity securities that are not 
publicly traded and securities acquired for various 
 purposes. The Bank is required to maintain certain minimum levels of equity 
investments in (i) Federal Reserve Bank of 
 Atlanta based on the Bank’s capital stock 
and surplus, and the (ii) Federal Home Bank of Atlanta (“FHLB – Atlanta”) 
 based on various factors including, the Bank’s 
total assets, its borrowings and outstanding letters of credit from the FHLB -
 Atlanta and its “acquired member asset” sales to FHLB - Atlanta. 
These nonmarketable equity securities are accounted for 
 at cost which equals par or redemption value. These securities do not have 
a readily determinable fair value as their 
 ownership is restricted and there is no market for these securities. These securities can only 
be redeemed or sold at their par 
 value by the respective issuer bank or, 
in the case of FHLB – Atlanta stock upon FHLB – Atlanta approval sale to another 
 member of FHLB – Atlanta and law applicable to the member. 
The Company records these nonmarketable equity securities 
 as a component of other assets, which are periodically evaluated for 
impairment. Management considers these 
 nonmarketable equity securities to be long-term investments. Accordingly, 
when evaluating these securities for impairment, 
 management considers the ultimate recoverability of the par value 
rather than by recognizing temporary declines in value.

 Transfers of Financial Assets 
 Transfers of an entire financial asset (i.e. loan sales), a group 
of entire financial assets, or a participating interest in an entire 
 financial asset (i.e. loan participations sold) are accounted for as sales when control 
over the assets have been surrendered. 
 Control over transferred assets is deemed to be surrendered when (1) 
the assets have been isolated from the Company, 
 (2) the transferee obtains the right (free of conditions that constrain it from 
taking that right) to pledge or exchange the 
 transferred assets, and (3) the Company does not maintain effective 
control over the transferred assets through an 
 agreement to repurchase them before their maturity.

 Table of Contents 
 96 
 
 Mortgage Servicing Rights 
 The Company recognizes as assets the rights to service mortgage loans 
which it originates and sells to others, principally 
 Fannie Mae. 
These servicing rights are called “MSRs”. 
The Company determines the fair value of MSRs on sold loans at 
 the date the loan is transferred. 
An estimate of the Company’s MSRs is determined 
using assumptions that market 
 participants would use in estimating future net servicing income, including 
estimates of prepayment speeds, discount rate, 
 default rates, cost to service, escrow account earnings, contractual servicing 
fee income, ancillary income, and late fees. 
 Subsequent to the date of sale of the residential mortgage loans, the Company 
has elected to measure its MSRs on such sold 
 mortgage loans under the amortization method. 
Under the amortization method, MSRs are amortized in proportion to, and 
 over the period of, estimated net servicing income. 
The amortization of MSRs is analyzed monthly and is adjusted to 
 reflect changes in prepayment speeds, as well as other factors. 
MSRs are evaluated for impairment based on the fair value 
 of those assets. 
Impairment is determined by stratifying MSRs into groupings based 
on predominant risk characteristics, 
 such as interest rate and loan type. 
If, by individual stratum, the carrying amount of the MSRs exceeds fair value, a 
 valuation allowance is established through a charge to earnings. 
The valuation allowance is adjusted as the fair value 
 changes. 
MSRs are included in the other assets category in the accompanying consolidated 
balance sheets at the lower of 
 cost or fair value. 
See Note 13 “Fair Value”

 Securities sold under agreements to repurchase 

 Securities sold under agreements to repurchase generally mature less than one 
year from the transaction date. Securities 
 sold under agreements to repurchase are reflected as a secured borrowing in the accompanying 
consolidated balance sheets 
 at the amount of cash received in connection with each transaction.

 Income Taxes 

 Deferred tax assets and liabilities are the expected future tax amounts 
for the temporary differences between carrying 
 amounts and tax bases of assets and liabilities, computed using enacted tax 
rates. A valuation allowance, if needed, reduces 
 deferred tax assets to the amount expected to be realized. 
The net deferred tax asset is reflected as a component of other 
 assets in the accompanying consolidated balance sheets. 
 Income tax expense or benefit for the year is allocated among continuing operations 
and other comprehensive income 
 (loss), as applicable. The amount allocated to continuing operations is the income 
tax effect of the pretax income or loss 
 from continuing operations that occurred during the year, 
plus or minus income tax effects of (1) changes in certain 
 circumstances that cause a change in judgment about the realization of deferred 
tax assets in future years, (2) changes in 
 income tax laws or rates, and (3) changes in income tax status, subject to certain 
exceptions. 
The amount allocated to other 
 comprehensive income (loss) is related solely to changes in the valuation allowance 
on items that are normally accounted 
 for in other comprehensive income (loss) such as unrealized gains or losses on 
available-for-sale securities. 

 In accordance with ASC 740, 
 Income Taxes
 , a tax position is recognized as a benefit only if it is “more likely than not” that 
 the tax position would be sustained in a tax examination, with a tax examination being 
presumed to occur. The amount 
 recognized is the largest amount of tax benefit that is greater than 
50% likely of being realized on examination. For tax 
 positions not meeting the “more likely than not” test, no tax benefit is recorded. 
It is the Company’s policy to recognize 
 interest and penalties related to income tax matters in income tax expense. The 
Company and its wholly-owned subsidiaries 
 file consolidated Federal and State of Alabama income tax returns.

 Fair Value 
Measurements 

 ASC 820, 
 Fair Value 
Measurements, 
 which defines fair value, establishes a framework for measuring fair value 
in U.S. 
 generally accepted accounting principles and expands disclosures about 
fair value measurements. ASC 820 applies only to 
 fair-value measurements that are already required 
or permitted by other accounting standards. 
The definition of fair value 
 focuses on the exit price, i.e., the price that would be received to sell an asset or paid to transfer a 
liability in an orderly 
 transaction between market participants at the measurement date, 
not the entry price, i.e., the price that would be paid to 
 acquire the asset or received to assume the liability at the measurement date. 
The statement emphasizes that fair value is a 
 market-based measurement; not an entity-specific measurement. 
Therefore, the fair value measurement should be 
 determined based on the assumptions that market participants would 
use in pricing the asset or liability. 
For more 
 information related to fair value measurements, please refer to Note 13, Fair 
Value.

 Table of Contents 
 97 
 NOTE 2: BASIC AND DILUTED NET EARNINGS PER SHARE
 Basic net earnings per share is computed by dividing net earnings by the weighted 
average common shares outstanding for 
 the year. 
Diluted net earnings per share reflect the potential dilution that could occur upon exercise of 
securities or other 
 rights for, or convertible into, shares of 
the Company’s common stock. 
As of December 31, 2024 and 2023, respectively, 
 the Company had no such securities or other rights issued or outstanding, 
and therefore, no dilutive effect to consider for 
 the diluted net earnings per share calculation. 

 The basic and diluted net earnings per share computations for the respective 
years are presented below.

 Year ended December 31 
 (Dollars in thousands, except share and per share data) 
 2024 
 2023 
 Basic and diluted: 
 Net earnings 
 $ 
 6,397 
 $ 
 1,395 
 Weighted average 
common shares outstanding 
 3,493,690 
 3,498,030 
 Net earnings per share 
 $ 
 1.83 
 $ 
 0.40 

 NOTE 3: VARIABLE 
INTEREST ENTITIES 
 Generally, a variable interest 
entity (“VIE”) is a corporation, partnership, trust or other legal structure that does not 
have 
 equity investors with substantive or proportional voting rights or has 
equity investors that do not provide sufficient financial 
 resources for the entity to support its activities. 

 At December 31, 2024, the Company did not have any consolidated VIEs and 
had one nonconsolidated VIE, which is 
 discussed below. 
 New Markets Tax 
Credit Investment
 The New Markets Tax 
Credit (“NMTC”) program provides federal tax incentives to investors to make 
investments in 
 distressed communities and promotes economic improvement through 
the development of successful businesses in these 
 communities. 
The NMTCs are available to investors over seven years and is subject to recapture if 
certain events occur 
 during such period. 
The Company had one NMTC investment with a balance of $0.9 million and $
 1.7 
 
million at December 
 31, 2024 and 2023, respectively, 
which is included in other assets in the Company’s 
consolidated balance sheets as a VIE. 
 While the Company’s investment 
exceeds 50% of the outstanding equity interests in this VIE, the Company 
does not 
 consolidate the VIE because the Company lacks the power to direct the activities of 
the VIE, and therefore is not a primary 
 beneficiary of the VIE. 
 The Company adopted ASU 2023-02 as of January 1, 2024 which allows us to account 
for our NMTC investment using the 
 proportional amortization method. 
The following table presents a summary of our NMTC investment at December 
31, 
 2024, and the related tax credit and amortization expense for 2024.

 (Dollars in thousands) 
 December 31, 
 2024 
 Balance Sheet Location 
 New Markets Tax Credit 
investment 
 $ 
 898 
 Other assets 
 (Dollars in thousands) 
 Year ended 
 December 31, 
 2024 
 Income Statement Location 
 Income tax credits and other income tax benefits 
 $ 
 ( 445 )
 Income tax expense 
 Amortization expense 
 369 
 Income tax expense

 Table of Contents 
 98 
 NOTE 4: SECURITIES 
 At December 31, 2024 and 2023, respectively, 
all securities within the scope of ASC 320, 
 Investments – Debt and Equity 
 Securities 
 were classified as available-for-sale. 
The fair value and amortized cost for securities available-for-sale by 
 contractual maturity at December 31, 2024 and 2023, respectively, 
are presented below.

 1 year 
 1 to 5 
 5 to 10 
 After 10 
 Fair 
 Gross Unrealized 

 Amortized 
 (Dollars in thousands) 
 or less 
 years 
 years 
 years 
 Value 
 Gains 
 Losses 
 Cost 
 December 31, 2024 
 Agency obligations (a) 
 $ 
 — 
 26,655 
 25,756 
 — 
 52,411 
 — 
 7,734 
 $ 
 60,145 
 Agency MBS (a) 
 10 
 19,863 
 14,904 
 138,899 
 173,676 
 — 
 28,901 
 202,577 
 State and political subdivisions 
 — 
 966 
 8,244 
 7,715 
 16,925 
 — 
 2,901 
 19,826 
 Total available-for-sale 
 $ 
 10 
 47,484 
 48,904 
 146,614 
 243,012 
 — 
 39,536 
 $ 
 282,548 
 December 31, 2023 
 Agency obligations (a) 
 $ 
 331 
 10,339 
 43,209 
 — 
 53,879 
 — 
 8,195 
 $ 
 62,074 
 Agency MBS (a) 
 32 
 15,109 
 22,090 
 161,058 
 198,289 
 — 
 27,838 
 226,127 
 State and political subdivisions 
 — 
 — 
 9,691 
 9,051 
 18,742 
 1 
 2,731 
 21,472 
 Total available-for-sale 
 $ 
 363 
 25,448 
 74,990 
 170,109 
 270,910 
 1 
 38,764 
 $ 
 309,673 
 (a) Includes securities issued by U.S. government agencies or government 
sponsored entities. 
Expected lives of 
 these securities may differ from contractual maturities because (i) 
issuers may have the right to call or repay such securities 
 obligations with or without prepayment penalties and (ii) loans included in Agency 
MBS generally have the right to prepay 
 such loans in whole or in part at any time.

 Securities with aggregate fair values of $
 222.3 
 
million and $
 211.8 
 
million at December 31, 2024 and 2023, respectively, 
 were pledged to secure public deposits, securities sold under agreements 
to repurchase, FHLB advances, and for other 
 purposes required or permitted by law. 

 Included in other assets on the accompanying consolidated balance sheets are nonmarketable 
equity investments. 
The 
 carrying amounts of nonmarketable equity investments were $
 1.4 
 
million at both December 31, 2024 and 2023, 
 respectively. 
Nonmarketable equity investments include FHLB-Atlanta stock, Federal 
Reserve Bank stock, and stock in a 
 privately held financial institution.

 Fair Value 
and Gross Unrealized Losses 
 The fair values and gross unrealized losses on securities at December 
31, 2024 and 2023, respectively, 
segregated by those 
 securities that have been in an unrealized loss position for less than 12 months and 
12 months or more are presented below.

 Less than 12 Months 
 12 Months or Longer 
 Total 
 Fair 
 Unrealized 
 Fair 
 Unrealized 
 Fair 
 Unrealized 
 (Dollars in thousands) 
 Value 
 Losses 
 Value 
 Losses 
 Value 
 Losses 
 December 31, 2024: 
 Agency obligations 

 $ 
 — 
 — 
 52,411 
 7,734 
 52,411 
 $ 
 7,734 
 Agency MBS 
 7 
 — 
 173,669 
 28,901 
 173,676 
 28,901 
 State and political subdivisions 
 1,798 
 17 
 14,776 
 2,884 
 16,574 
 2,901 
 Total 

 $ 
 1,805 
 17 
 240,856 
 39,519 
 242,661 
 $ 
 39,536 

 December 31, 2023: 
 Agency obligations 

 $ 
 — 
 — 
 53,879 
 8,195 
 53,879 
 $ 
 8,195 
 Agency MBS 
 66 
 1 
 198,223 
 27,837 
 198,289 
 27,838 
 State and political subdivisions 
 793 
 2 
 14,408 
 2,729 
 15,201 
 2,731 
 Total 

 $ 
 859 
 3 
 266,510 
 38,761 
 267,369 
 $ 
 38,764 

 Table of Contents 
 99 
 For the 
securities in 
the previous 
table, the 
Company assesses 
whether or 
not it 
intends to 
sell the 
security, 
or more 
likely 
 than not 
will be 
required to 
sell the 
security, 
before recovery 
of its 
amortized cost 
basis. 
Unrealized losses 
have not 
been 
 recognized 
into 
income 
as 
the 
decline 
in 
fair 
value 
is 
largely 
due 
to 
changes 
in 
interest 
rates 
and 
other 
market 
 conditions. 
For the securities 
in the 
previous table, 
as of December 
31, 2024, 
management does 
not intend to 
sell and 
it is 
 likely that management will not be required to sell the securities prior to their anticipated 
recovery. 

 Agency Obligations 
 
 Investments 
in 
agency 
obligations 
are 
guaranteed 
of 
full 
and 
timely 
payments 
by 
the 
issuing 
agency. 
Based 
on 
 management's 
analysis 
and 
judgement, 
there 
were 
no 
credit 
losses attributable 
to 
the 
Company’s 
investments 
in 
 agency obligations at December 31, 2024. 

 Agency MBS
 Investments in 
agency MBS 
are issued 
by Ginnie 
Mae, Fannie 
Mae, and 
Freddie Mac. 
Each of 
these agencies 
provide a 
 guarantee of full and 
timely payments of principal 
and interest by the issuing 
agency. 
Based on management's analysis 
and 
 judgement, there were no credit losses attributable to the Company’s 
investments in agency MBS at December 31, 2024. 
 
 State and Political Subdivisions
 
 Investments 
in 
state 
and 
political 
subdivisions 
are 
securities 
issued 
by 
various municipalities 
in 
the 
United 
States. 
The 
 majority 
of 
the 
portfolio was 
rated 
AA 
or 
higher, 
with 
no 
securities 
rated 
below 
investment 
grade 
at 
December 
31, 
 2024. 
Based 
on 
management's 
analysis 
and 
judgement, 
there 
were 
no 
credit 
losses 
attributable 
to 
the 
Company’s 
 investments in state and political subdivisions at December 31, 2024.

 Realized Gains and Losses 
 The following table presents the gross realized gains and losses on sales related to securities.

 Year ended December 31 
 (Dollars in thousands) 
 2024 
 2023 
 Gross realized gains 
 $ 
 — 
 1 
 Gross realized losses 
 — 
 ( 6,296 )
 Realized losses, net 
 $ 
 — 
 ( 6,295 )

 NOTE 5: LOANS AND ALLOWANCE 
FOR CREDIT LOSSES

 December 31 
 (In thousands) 
 2024 
 2023 
 Commercial and industrial 
 $ 
 63,274 
 $ 
 73,374 
 Construction and land development 
 82,493 
 68,329 
 Commercial real estate: 
 Owner occupied 
 55,346 
 66,783 
 Hotel/motel 
 35,210 
 39,131 
 Multifamily 
 43,556 
 45,841 
 Other 
 155,880 
 135,552 
 Total commercial 
real estate 
 289,992 
 287,307 
 Residential real estate: 
 Consumer mortgage 
 60,399 
 60,545 
 Investment property 
 58,228 
 56,912 
 Total residential real 
estate 
 118,627 
 117,457 
 Consumer installment 
 9,631 
 10,827 
 Total loans, net of unearned 
income 
 564,017 
 557,294 

 Table of Contents 
 100 
 Loans secured by real estate were approximately 
 87.1 
 % of the total loan portfolio at December 31, 2024. 
At December 31, 
 2024, the Company’s geographic 
loan distribution was concentrated primarily in Lee County, 
Alabama and surrounding 
 areas. 
 The loan portfolio segment is defined as the level at which an entity develops 
and documents a systematic method for 
 determining its allowance for credit losses. As part of the Company’s 
quarterly assessment of the allowance, the loan 
 portfolio is disaggregated into the following portfolio segments: 
commercial and industrial, construction and land 
 development, commercial real estate, residential real estate and consumer installment. 
Where appropriate, the Company’s 
 loan portfolio segments are further disaggregated into classes. A class is generally 
determined based on the initial 
 measurement attribute, risk characteristics of the loan, and an entity’s 
method for monitoring and determining credit risk. 
 The following describe the risk characteristics relevant to each of the portfolio 
segments and classes. 
 Commercial and industrial (“C&I”) — 
 includes loans to finance business operations, equipment purchases, or 
other needs 
 for small and medium-sized commercial customers. Also 
included in this category are loans to finance agricultural 
 production. 
Generally, the primary source of repayment 
is the cash flow from business operations and activities of the 
 borrower. 
 Construction and land development (“C&D”) — 
 includes both loans and credit lines for the purpose of purchasing, 
 carrying and developing land into commercial developments or residential 
subdivisions. Also included are loans and lines 
 for construction of residential, multi-family and commercial buildings. 
Generally the primary source of repayment is 
 dependent upon the sale or refinance of the real estate collateral. 
 Commercial real estate 
(“CRE”) — 
 includes loans disaggregated in these classes: 
 
Owner occupied
 
– includes loans secured by business facilities to finance business operations, equipment 
and 
 
owner-occupied facilities primarily for small and medium-sized 
commercial customers. 
Generally the primary source 
 
of loan repayment are the cash flows from the business operations and activities of the borrower, 
who owns the 
 
property.
 
Hotel/motel 
 – includes loans for hotels and motels. 
Generally, the primary 
source of repayment is dependent upon 
 
income generated from the real estate collateral. 
The underwriting of these loans takes into consideration the 

occupancy and rental rates, as well as the financial health of the borrower. 
 
Multifamily
 
– primarily includes loans to finance income-producing multi-family 
properties. Loans in this class include 
 
loans for 5 or more unit residential property and apartments leased to residents. 
Generally, the primary source 
of 
 
repayment is dependent upon income generated from the real estate collateral. The 
underwriting of these loans takes 
 
into consideration the occupancy and rental rates, as well as the financial health of 
the borrower. 
 
Other
 
– primarily includes loans to finance income-producing commercial 
properties. Loans in this class include loans 
 
for neighborhood retail centers, 
medical and professional offices, single retail stores, industrial 
buildings, and 
 
warehouses leased generally to local businesses and residents. Generally, 
the primary source of repayment is dependent 
 
upon income generated from the real estate collateral. The underwriting of these 
loans takes into consideration the 
 
occupancy and rental rates as well as the financial health of the borrower. 

 Residential real estate (“RRE”) — 
 includes loans disaggregated into two classes: 
 
Consumer mortgage
 
– primarily includes 
first or second lien mortgages and home equity lines to consumers that are 
 
secured by a primary residence or second home. These loans are underwritten in accordance 
with the Bank’s general 
 
loan policies and procedures which require, among other things, proper documentation 
of each borrower’s financial 
 
condition, satisfactory credit history and property value. 
 
Investment property
 
– primarily includes loans to finance income-producing 1-4 family residential 
properties. 
 
Generally, the primary source of repayment 
is dependent upon income generated from leasing the property securing the 
 
loan. The underwriting of these loans takes into consideration the rental rates as well as 
the financial health of the 
 
borrower. 

 Table of Contents 
 101 
 
 Consumer installment — 
 includes loans to individuals both secured by personal property and unsecured. 
Loans include 
 personal lines of credit, automobile loans, and other retail loans. 
These loans are underwritten in accordance with the 
 Bank’s general loan policies and procedures 
which require, among other things, proper documentation of 
each borrower’s 
 financial condition, satisfactory credit history, 
and if applicable, property value. 
 The following is a summary of current, accruing past due and nonaccrual loans by portfolio 
class as of December 31, 2024 
 and 2023.

 Accruing 
 Accruing 
 Total 
 30-89 Days 
 Greater than 
 Accruing 
 Non- 
 Total 

 (In thousands) 
 Current 
 Past Due 
 90 days 
 Loans 
 Accrual 
 Loans 
 December 31, 2024: 
 Commercial and industrial 
 $ 
 63,163 
 12 
 — 
 63,175 
 99 
 $ 
 63,274 
 Construction and land development 
 82,089 
 — 
 — 
 82,089 
 404 
 82,493 
 Commercial real estate: 
 Owner occupied 
 55,346 
 — 
 — 
 55,346 
 — 
 55,346 
 Hotel/motel 
 35,210 
 — 
 — 
 35,210 
 — 
 35,210 
 Multifamily 
 43,556 
 — 
 — 
 43,556 
 — 
 43,556 
 Other 
 155,880 
 — 
 — 
 155,880 
 — 
 155,880 
 Total commercial 
real estate 
 289,992 
 — 
 — 
 289,992 
 — 
 289,992 
 Residential real estate: 
 Consumer mortgage 
 59,677 
 722 
 — 
 60,399 
 — 
 60,399 
 Investment property 
 58,179 
 49 
 — 
 58,228 
 — 
 58,228 
 Total residential real 
estate 
 117,856 
 771 
 — 
 118,627 
 — 
 118,627 
 Consumer installment 
 9,579 
 52 
 — 
 9,631 
 — 
 9,631 
 Total 
 $ 
 562,679 
 835 
 — 
 563,514 
 503 
 $ 
 564,017 

 December 31, 2023: 
 Commercial and industrial 
 $ 
 73,108 
 266 
 — 
 73,374 
 — 
 $ 
 73,374 
 Construction and land development 
 68,329 
 — 
 — 
 68,329 
 — 
 68,329 
 Commercial real estate: 
 Owner occupied 
 66,000 
 — 
 — 
 66,000 
 783 
 66,783 
 Hotel/motel 
 39,131 
 — 
 — 
 39,131 
 — 
 39,131 
 Multifamily 
 45,841 
 — 
 — 
 45,841 
 — 
 45,841 
 Other 
 135,552 
 — 
 — 
 135,552 
 — 
 135,552 
 Total commercial 
real estate 
 286,524 
 — 
 — 
 286,524 
 783 
 287,307 
 Residential real estate: 
 Consumer mortgage 
 60,442 
 — 
 — 
 60,442 
 103 
 60,545 
 Investment property 
 56,597 
 290 
 — 
 56,887 
 25 
 56,912 
 Total residential real 
estate 
 117,039 
 290 
 — 
 117,329 
 128 
 117,457 
 Consumer installment 
 10,781 
 46 
 — 
 10,827 
 — 
 10,827 
 Total 
 $ 
 555,781 
 602 
 — 
 556,383 
 911 
 $ 
 557,294 

 Table of Contents 
 102 
 Credit Quality Indicators 
 The credit quality of the loan portfolio is summarized no less frequently than 
quarterly using categories similar to the 
 standard asset classification system used by the federal banking agencies. 
These categories are utilized to develop the 
 associated allowance for credit losses using historical losses adjusted for 
qualitative and environmental factors and are 
 defined as follows: 

 ●
 Pass – loans which are well protected by the current net worth and paying capacity 
of the obligor (or guarantors, if 
 any) or by the fair value, less cost to acquire and sell, of any underlying collateral. 

 ●
 Special Mention – loans with potential weakness that may, 
if not reversed or corrected, weaken the credit or 
 inadequately protect the Company’s 
position at some future date. These loans are not adversely classified and do 
 not expose an institution to sufficient risk to warrant an adverse classification. 
 ●
 Substandard Accruing – loans that exhibit a well-defined weakness which 
presently jeopardizes debt repayment, 
 even though they are currently performing. These loans are characterized 
by the distinct possibility that the 
 Company may incur a loss in the future if these weaknesses are not corrected. 
 Nonaccrual – includes loans where management has determined that full payment 
of principal and interest is not expected. 
 The following tables presents credit quality indicators for the loan portfolio 
segments and classes by year of origination as 
 of December 31, 2024 and 2023. 
The December 31, 2023 table has been revised to correct revolving loans and properly 
 allocate loans by year of origination. 
See Note 1: Summary of Significant Accounting Policies – Correction of Error.

 Table of Contents 
 103 
 
 (Dollars in thousands) 
 2024 
 2023 
 2022 
 2021 
 2020 
 Prior to 
 2020 
 Revolving 
 Loans 
 Total 

 Loans 
 December 31, 2024: 

 Commercial and industrial 
 Pass 
 $ 
 11,290 
 7,265 
 8,488 
 9,677 
 4,659 
 16,989 
 4,425 
 $ 
 62,793 
 Special mention 
 49 
 74 
 — 
 — 
 — 
 — 
 — 
 123 
 Substandard 
 50 
 21 
 181 
 7 
 — 
 — 
 — 
 259 
 Nonaccrual 
 — 
 99 
 — 
 — 
 — 
 — 
 — 
 99 
 Total commercial and industrial 
 11,389 
 7,459 
 8,669 
 9,684 
 4,659 
 16,989 
 4,425 
 63,274 
 Current period gross charge-offs 
 — 
 — 
 9 
 — 
 — 
 — 
 — 
 9 
 Construction and land development 
 Pass 
 31,144 
 29,520 
 16,504 
 1,794 
 1,434 
 104 
 1,589 
 $ 
 82,089 
 Special mention 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Substandard 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Nonaccrual 
 404 
 — 
 — 
 — 
 — 
 — 
 — 
 404 
 Total construction and land development 
 31,548 
 29,520 
 16,504 
 1,794 
 1,434 
 104 
 1,589 
 82,493 
 Current period gross charge-offs 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Commercial real estate: 
 Owner occupied 
 Pass 
 1,921 
 11,206 
 6,776 
 17,114 
 3,396 
 12,030 
 1,552 
 $ 
 53,995 
 Special mention 
 — 
 249 
 — 
 — 
 591 
 — 
 — 
 840 
 Substandard 
 511 
 — 
 — 
 — 
 — 
 — 
 — 
 511 
 Nonaccrual 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Total owner occupied 
 2,432 
 11,455 
 6,776 
 17,114 
 3,987 
 12,030 
 1,552 
 55,346 
 Current period gross charge-offs 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Hotel/motel 
 Pass 
 480 
 6,480 
 5,303 
 3,079 
 1,299 
 14,437 
 4,132 
 $ 
 35,210 
 Special mention 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Substandard 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Nonaccrual 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Total hotel/motel 
 480 
 6,480 
 5,303 
 3,079 
 1,299 
 14,437 
 4,132 
 35,210 
 Current period gross charge-offs 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 

 Table of Contents 
 104 
 
 (Dollars in thousands) 
 2024 
 2023 
 2022 
 2021 
 2020 
 Prior to 
 2020 
 Revolving 
 Loans 
 Total 

 Loans 
 December 31, 2024: 

 Multi-family 
 Pass 
 3,739 
 6,041 
 17,037 
 1,863 
 3,493 
 6,400 
 4,983 
 43,556 
 Special mention 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Substandard 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Nonaccrual 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Total multi-family 
 3,739 
 6,041 
 17,037 
 1,863 
 3,493 
 6,400 
 4,983 
 43,556 
 Current period gross charge-offs 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Other 
 Pass 
 43,753 
 21,085 
 32,521 
 21,249 
 16,743 
 16,289 
 4,120 
 155,760 
 Special mention 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Substandard 
 — 
 — 
 — 
 — 
 120 
 — 
 — 
 120 
 Nonaccrual 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Total other 
 43,753 
 21,085 
 32,521 
 21,249 
 16,863 
 16,289 
 4,120 
 155,880 
 Current period gross charge-offs 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Residential real estate: 
 Consumer mortgage 
 Pass 
 5,885 
 18,389 
 18,434 
 2,466 
 2,565 
 10,590 
 808 
 59,137 
 Special mention 
 243 
 — 
 — 
 — 
 2 
 486 
 — 
 731 
 Substandard 
 — 
 — 
 — 
 — 
 — 
 531 
 — 
 531 
 Nonaccrual 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Total consumer mortgage 
 6,128 
 18,389 
 18,434 
 2,466 
 2,567 
 11,607 
 808 
 60,399 
 Current period gross charge-offs 
 — 
 — 
 — 
 — 
 — 
 61 
 — 
 61 
 Investment property 
 Pass 
 10,339 
 10,824 
 10,651 
 8,305 
 11,435 
 4,794 
 1,317 
 57,665 
 Special mention 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Substandard 
 278 
 40 
 93 
 9 
 143 
 — 
 — 
 563 
 Nonaccrual 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Total investment property 
 10,617 
 10,864 
 10,744 
 8,314 
 11,578 
 4,794 
 1,317 
 58,228 
 Current period gross charge-offs 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Consumer installment 
 Pass 
 5,015 
 2,057 
 1,911 
 296 
 90 
 113 
 67 
 9,549 
 Special mention 
 — 
 9 
 — 
 9 
 — 
 — 
 — 
 18 
 Substandard 
 39 
 15 
 10 
 — 
 — 
 — 
 — 
 64 
 Nonaccrual 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Total consumer installment 
 5,054 
 2,081 
 1,921 
 305 
 90 
 113 
 67 
 9,631 
 Current period gross charge-offs 
 25 
 42 
 42 
 1 
 — 
 4 
 — 
 114 
 Total loans 
 Pass 
 113,566 
 112,867 
 117,625 
 65,843 
 45,114 
 81,746 
 22,993 
 559,754 
 Special mention 
 292 
 332 
 — 
 9 
 593 
 486 
 — 
 1,712 
 Substandard 
 878 
 76 
 284 
 16 
 263 
 531 
 — 
 2,048 
 Nonaccrual 
 404 
 99 
 — 
 — 
 — 
 — 
 — 
 503 
 Total loans 
 $ 
 115,140 
 113,374 
 117,909 
 65,868 
 45,970 
 82,763 
 22,993 
 $ 
 564,017 
 Total current period gross charge-offs 
 $ 
 25 
 42 
 51 
 1 
 — 
 65 
 — 
 184 

 Table of Contents 
 105 
 
 Year of Origination 
 2023 
 2022 
 2021 
 2020 
 2019 
 Prior to 
 2019 
 Revolving 
 Loans 
 Total 

 Loans 
 (Dollars in thousands) 
 December 31, 2023: 

 Commercial and industrial 
 Pass 
 $ 
 11,571 
 18,074 
 13,746 
 5,602 
 7,298 
 7,819 
 9,003 
 $ 
 73,113 
 Special mention 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Substandard 
 55 
 203 
 — 
 — 
 3 
 — 
 — 
 261 
 Nonaccrual 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Total commercial and industrial 
 11,626 
 18,277 
 13,746 
 5,602 
 7,301 
 7,819 
 9,003 
 73,374 
 Current period gross charge-offs 
 — 
 — 
 13 
 — 
 151 
 — 
 — 
 164 
 Construction and land development 
 Pass 
 38,646 
 25,382 
 1,716 
 1,526 
 120 
 157 
 782 
 68,329 
 Special mention 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Substandard 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Nonaccrual 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Total construction and land development 
 38,646 
 25,382 
 1,716 
 1,526 
 120 
 157 
 782 
 68,329 
 Current period gross charge-offs 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Commercial real estate: 
 Owner occupied 
 Pass 
 12,966 
 7,337 
 18,548 
 10,458 
 3,948 
 9,786 
 2,647 
 65,690 
 Special mention 
 260 
 — 
 — 
 — 
 — 
 — 
 — 
 260 
 Substandard 
 — 
 — 
 — 
 — 
 50 
 — 
 — 
 50 
 Nonaccrual 
 — 
 — 
 — 
 — 
 783 
 — 
 — 
 783 
 Total owner occupied 
 13,226 
 7,337 
 18,548 
 10,458 
 4,781 
 9,786 
 2,647 
 66,783 
 Current period gross charge-offs 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Hotel/motel 
 Pass 
 9,025 
 9,873 
 3,205 
 1,493 
 3,881 
 11,654 
 — 
 39,131 
 Special mention 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Substandard 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Nonaccrual 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Total hotel/motel 
 9,025 
 9,873 
 3,205 
 1,493 
 3,881 
 11,654 
 — 
 39,131 
 Current period gross charge-offs 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 

 Table of Contents 
 106 
 
 Year of Origination 
 2023 
 2022 
 2021 
 2020 
 2019 
 Prior to 
 2019 
 Revolving 
 Loans 
 Total 

 Loans 
 (Dollars in thousands) 
 December 31, 2023: 

 Multi-family 
 Pass 
 12,379 
 17,955 
 1,953 
 6,112 
 3,790 
 3,043 
 609 
 45,841 
 Special mention 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Substandard 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Nonaccrual 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Total multi-family 
 12,379 
 17,955 
 1,953 
 6,112 
 3,790 
 3,043 
 609 
 45,841 
 Current period gross charge-offs 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Other 
 Pass 
 25,810 
 36,076 
 31,687 
 14,597 
 10,736 
 15,440 
 1,052 
 135,398 
 Special mention 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Substandard 
 — 
 — 
 — 
 154 
 — 
 — 
 — 
 154 
 Nonaccrual 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Total other 
 25,810 
 36,076 
 31,687 
 14,751 
 10,736 
 15,440 
 1,052 
 135,552 
 Current period gross charge-offs 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Residential real estate: 
 Consumer mortgage 
 Pass 
 20,147 
 20,177 
 2,683 
 2,665 
 1,281 
 12,217 
 249 
 59,419 
 Special mention 
 — 
 — 
 — 
 — 
 190 
 305 
 — 
 495 
 Substandard 
 — 
 — 
 — 
 — 
 — 
 528 
 — 
 528 
 Nonaccrual 
 — 
 — 
 — 
 — 
 — 
 103 
 — 
 103 
 Total consumer mortgage 
 20,147 
 20,177 
 2,683 
 2,665 
 1,471 
 13,153 
 249 
 60,545 
 Current period gross charge-offs 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Investment property 
 Pass 
 13,398 
 12,490 
 9,397 
 12,209 
 5,485 
 1,865 
 1,478 
 56,322 
 Special mention 
 41 
 — 
 — 
 — 
 — 
 — 
 — 
 41 
 Substandard 
 43 
 248 
 — 
 233 
 — 
 — 
 — 
 524 
 Nonaccrual 
 — 
 — 
 — 
 — 
 — 
 25 
 — 
 25 
 Total investment property 
 13,482 
 12,738 
 9,397 
 12,442 
 5,485 
 1,890 
 1,478 
 56,912 
 Current period gross charge-offs 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Consumer installment 
 Pass 
 5,688 
 3,837 
 740 
 206 
 106 
 141 
 — 
 10,718 
 Special mention 
 9 
 25 
 9 
 2 
 — 
 — 
 — 
 45 
 Substandard 
 37 
 11 
 5 
 11 
 — 
 — 
 — 
 64 
 Nonaccrual 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 — 
 Total consumer installment 
 5,734 
 3,873 
 754 
 219 
 106 
 141 
 — 
 10,827 
 Current period gross charge-offs 
 34 
 57 
 13 
 1 
 — 
 — 
 — 
 105 
 Total loans 
 Pass 
 149,630 
 151,201 
 83,675 
 54,868 
 36,645 
 62,122 
 15,820 
 553,961 
 Special mention 
 310 
 25 
 9 
 2 
 190 
 305 
 — 
 841 
 Substandard 
 135 
 462 
 5 
 398 
 53 
 528 
 — 
 1,581 
 Nonaccrual 
 — 
 — 
 — 
 — 
 783 
 128 
 — 
 911 
 Total loans 
 $ 
 150,075 
 151,688 
 83,689 
 55,268 
 37,671 
 63,083 
 15,820 
 $ 
 557,294 
 Total current period gross charge-offs 
 $ 
 34 
 57 
 26 
 1 
 151 
 — 
 — 
 269 

 Table of Contents 
 107 
 Allowance for Credit Losses 
 The Company adopted ASC 326 on January 1, 2023, which introduced 
the Current Expected Credit Losses (“CECL”) 
 methodology for estimating all expected losses over the life of a financial asset. 
Under the CECL methodology, 
the 
 allowance for credit losses is measured on a collective basis for 
pools of loans with similar risk characteristics, and for 
 loans that do not share similar risk characteristics with the collectively evaluated 
pools, evaluations are performed on an 
 individual basis.

 The composition of the provision for (reversal of) credit losses for the respective 
periods is presented below.

 Year ended December 31, 
 (Dollars in thousands) 
 2024 
 2023 
 Provision for credit losses: 
 Loans 
 $ 
 (6) 
 $ 
 125 
 Reserve for unfunded commitments 
 42 
 10 
 Total provision for (reversal 
of) credit losses 
 $ 
 36 
 $ 
 135 

 The following table details the changes in the allowance for credit losses by portfolio 
segment for the years ended 
 December 31, 2024 and 2023.

 (in thousands) 
 Commercial 
 and industrial 
 Construction 
 and land 
 Development 
 Commercial 
 Real Estate 
 Residential 
 Real Estate 
 Consumer 
 Installment 
 Total 
 Balance, December 31, 2022 
 $ 
 747 
 949 
 3,109 
 828 
 132 
 $ 
 5,765 
 Impact of adopting ASC 326 
 532 
 ( 17 )
 873 
 ( 347 )
 ( 22 )
 1,019 
 Charge-offs 
 ( 164 )
 — 
 — 
 — 
 ( 105 )
 ( 269 )
 Recoveries 
 204 
 — 
 — 
 14 
 5 
 223 
 Net (charge-offs) recoveries 
 40 
 — 
 — 
 14 
 ( 100 )
 ( 46 )
 Provision 
 ( 31 )
 28 
 ( 61 )
 51 
 138 
 125 
 Balance, December 31, 2023 
 $ 
 1,288 
 960 
 3,921 
 546 
 148 
 $ 
 6,863 
 Charge-offs 
 ( 9 )
 — 
 — 
 ( 61 )
 ( 114 )
 ( 184 )
 Recoveries 
 144 
 — 
 — 
 9 
 45 
 198 
 Net recoveries (charge-offs) 
 135 
 — 
 — 
 ( 52 )
 ( 69 )
 14 
 Provision 
 ( 179 )
 99 
 ( 79 )
 94 
 59 
 ( 6 )
 Balance, December 31, 2024 
 $ 
 1,244 
 1,059 
 3,842 
 588 
 138 
 $ 
 6,871 

 Table of Contents 
 108 
 The Company did not recognize any interest income on nonaccrual loans 
during 2024 and 2023. 
 The Company designates individually evaluated loans on nonaccrual status as collateral 
-dependent loans, as well as other 
 loans that management of the Company designates as having higher risk. 
Collateral-dependent loans are loans for which 
 the repayment is expected to be provided substantially through the operation 
or sale of the collateral and the borrower is 
 experiencing financial difficulty. 
These loans do not share common risk characteristics and are not included within the 
 collectively evaluated loans for determining the allowance for credit losses. 
Under CECL, for collateral-dependent loans, 
 the Company has adopted the practical expedient to measure the allowance 
for credit losses based on the fair value of 
 collateral. 
The allowance for credit losses is calculated on an individual loan basis based 
on the shortfall between the fair 
 value of the loan’s collateral, which 
is adjusted for liquidation costs/discounts, and amortized costs. 
If the fair value of the 
 collateral exceeds the amortized cost, no allowance is required. 
 The following table presents the amortized cost basis of collateral dependent loans, 
which are individually evaluated to 
 determine expected credit losses for the years ended December 31, 2024 and 2023:

 (Dollars in thousands) 
 Real 
Estate 
 Business Assets 
 Total Loans 
 December 31, 2024: 
 Commercial and industrial 
 $ 
 — 
 99 
 $ 
 99 
 Construction and land development 
 404 
 — 
 404 
 Total 

 $ 
 404 
 99 
 $ 
 503 
 December 31, 2023: 
 Commercial real estate 
 $ 
 783 
 — 
 $ 
 783 
 Total 

 $ 
 783 
 — 
 $ 
 783 

 The gross interest income which would have been recorded under the original terms 
of those nonaccrual loans had they 
 been accruing interest, amounted to approximately $
 14 
 
thousand and $
 47 
 
thousand for the years ended December 31, 2024 
 and 2023, respectively. 
 The following table summarizes the Company’s 
nonaccrual loan by major categories as of December 31, 2024 and 2023.

 Nonaccrual loans 
 Nonaccrual loans 
 Total 
 (Dollars in thousands) 
 with no Allowance 
 with an Allowance 
 Nonaccrual Loans 
 December 31, 2024 
 Commercial and industrial 
 $ 
 — 
 99 
 $ 
 99 
 Construction and land development 
 404 
 — 
 404 
 Total 

 $ 
 404 
 99 
 $ 
 503 
 December 31, 2023 
 Commercial real estate 
 $ 
 783 
 — 
 $ 
 783 
 Residential real estate 
 — 
 128 
 128 
 Total 

 $ 
 783 
 128 
 $ 
 911

 The Company had no modifications to loans made to borrowers experiencing 
financial difficulty at December 31, 2024 and 
 2023.

 Table of Contents 
 109 
 NOTE 6: PREMISES AND EQUIPMENT 
 Premises and equipment at December 31, 2024 and 2023 is presented 
below.

 December 31 
 (Dollars in thousands) 
 2024 
 2023 
 Land and improvements 
 $ 
 12,800 
 12,800 
 Buildings and improvements 
 36,978 
 35,442 
 Furniture, fixtures, and equipment 
 4,335 
 3,986 
 Construction in progress 
 38 
 39 
 Total premises and 
equipment 
 54,151 
 52,267 
 Less: 
accumulated depreciation 
 ( 8,220 )
 ( 6,732 )
 Premises and equipment, net 
 $ 
 45,931 
 45,535 

 Depreciation expense was approximately $
 1.7 
 
million and $
 1.4 
 
million for the years ended December 31, 2024 and 2023, 
 respectively, and is a component 
of net occupancy and equipment expense in the consolidated statements of earnings.

 NOTE 7: MORTGAGE SERVICING 
RIGHTS, NET 

 MSRs are recognized 
based on the 
fair value of 
the servicing rights 
on the date 
the corresponding mortgage 
loans are sold. 

 An 
estimate 
of 
the 
Company’s 
MSRs 
is 
determined 
using 
assumptions 
that 
market 
participants 
would 
use 
in 
estimating 
 future net 
servicing income, 
including estimates 
of prepayment 
speeds, discount 
rate, default 
rates, cost 
to service, 
escrow 
 account earnings, 
contractual servicing 
fee income, 
ancillary income, 
and late 
fees. 
Subsequent to 
the date 
of transfer, 
the 
 Company 
has 
elected 
to 
measure 
its 
MSRs 
under 
the 
amortization 
method. 
Under 
the 
amortization 
method, 
MSRs 
are 
 amortized in proportion 
to, and over 
the period of, 
estimated net servicing 
income. Servicing 
fee income is 
recorded net 
of 
 related amortization expense and recognized in earnings as part of mortgage 
lending income. 

 The Company has recorded MSRs related to loans sold without recourse to 
Fannie Mae. 
The Company generally sells 
 conforming, fixed-rate, closed-end, residential mortgages to Fannie Mae. 
MSRs are included in other assets on the 
 accompanying consolidated balance sheets. 
 The Company evaluates MSRs for impairment on a quarterly basis. 
Impairment is determined by stratifying MSRs into 
 groupings based on predominant risk characteristics, such as interest rate and loan 
type. 
If, by individual stratum, the 
 carrying amount of the MSRs exceeds fair value, a valuation allowance is established. 
The valuation allowance is adjusted 
 as the fair value changes. 
Changes in the valuation allowance are recognized in earnings as a component 
of mortgage 
 lending income. 
 The following table details the changes in amortized MSRs and the related valuation 
allowance for the years ended 
 December 31, 2024 and 2023.

 Year ended December 31 
 (Dollars in thousands) 
 2024 
 2023 
 Beginning balance 
 $ 
 992 
 1,151 
 Additions, net 
 79 
 38 
 Amortization expense 
 ( 179 )
 ( 197 )
 Ending balance 
 $ 
 892 
 992 
 Valuation 
allowance included in MSRs, net: 
 Beginning of period 
 $ 
 — 
 — 
 End of period 
 — 
 — 
 Fair value of amortized MSRs: 
 Beginning of period 
 $ 
 2,382 
 2,369 
 End of period 
 2,204 
 2,382

 Table of Contents 
 110 
 Data and assumptions used in the fair value calculation related to MSRs at December 
31, 2024 and 2023, respectively, 
are 
 presented below.

 December 31 
 (Dollars in thousands) 
 2024 
 2023 
 Unpaid principal balance 
 $ 
 205,915 
 216,648 
 Weighted average 
prepayment speed (CPR) 
 7.3 
 % 
 6.0 
 Discount rate (annual percentage) 
 10.0 
 % 
 10.5 
 Weighted average 
coupon interest rate 
 3.6 
 % 
 3.5 
 Weighted average 
remaining maturity (months) 
 242 
 245 
 Weighted average 
servicing fee (basis points) 
 25.0 
 25.0 

 At December 31, 2024, the weighted average amortization period 
for MSRs was 
 7.1 
 
years. 
Estimated amortization expense 
 for each of the next five years is presented below.

 (Dollars in thousands) 
 December 31, 2024 
 2025 
 $ 
 118 
 2026 
 104 
 2027 
 91 
 2028 
 80 
 2029 
 71 

 NOTE 8: 
DEPOSITS 
 At December 31, 2024, the scheduled maturities of certificates of deposit 
and other time deposits are presented below.

 (Dollars in thousands) 
 December 31, 2024 
 2025 
 $ 
 174,608 
 2026 
 7,972 
 2027 
 6,267 
 2028 
 1,636 
 2029 
 764 
 Thereafter 
 — 
 Total certificates of 
deposit and other time deposits 

 $ 
 191,247 

 Additionally, at December 
31, 2024 and 2023, approximately $
 87.7 
 
million and $
 97.6 
 
million, respectively, of certificates 
 of deposit and other time deposits were issued in denominations greater 
than $250 thousand. 
 At December 31, 2024 and 2023, the amount of deposit accounts in overdraft 
status that were reclassified to loans on the 
 accompanying consolidated balance sheets was not material.

 Table of Contents 
 111 
 NOTE 9: LEASE COMMITMENTS 
 We lease certain office 
facilities and equipment under operating leases. Rent expense for all operating 
leases totaled $
 0.1 
 million and $
 0.2 
 
million for the years ended December 31, 2024 and 2023, respectively. 
Aggregate lease right of use assets 
 were $
 0.2 
 
million and $
 0.5 
 
million at December 31, 2024 and 2023, respectively. 
Aggregate lease liabilities were $0.2 
 million and $
 0.5 
 
million at December 31, 2024 and 2023, respectively. 
Rent expense includes amounts related to items that 
 are not included in the determination of lease right of use assets including expenses 
related to short-term leases totaling 
 $
 0.1 
 
million for the year ended December 31, 2024. 
 Lease payments under operating leases that were applied to our operating lease 
liability totaled $
 0.1 
 
million during the year 
 ended December 31, 2024. The following table reconciles future undiscounted 
lease payments due under non-cancelable 
 operating leases (those amounts subject to recognition) to the aggregate 
operating lease liability as of December 31, 2024.

 Future lease 
 (Dollars in thousands) 
 payments 
 2025 
 $ 
 81 
 2026 
 60 
 2027 
 60 
 2028 
 45 
 2029 
 — 
 Thereafter 
 — 
 Total undiscounted 
operating lease liabilities 
 $ 
 246 
 Imputed interest 
 15 
 Total operating lease liabilities 
included in the accompanying consolidated balance sheets 
 $ 
 231 
 Weighted-average 
lease terms in years 
 3.47 
 Weighted-average 
discount rate 
 3.20 
 %

 NOTE 10: 
INCOME TAXES 
 For the years ended December 31, 2024 and 2023 the components of 
income tax expense from continuing operations are 
 presented below.

 Year ended December 31 
 (Dollars in thousands) 
 2024 
 2023 
 Current income tax expense (benefit): 
 Federal 
 $ 
 991 
 ( 448 )
 State 
 571 
 ( 134 )
 Total current 
income tax expense (benefit) 
 1,562 
 ( 582 )
 Deferred income tax expense (benefit): 
 Federal 
 473 
 ( 293 )
 State 
 ( 35 )
 98 
 Total deferred income 
tax expense (benefit) 
 438 
 ( 195 )
 Total income 
tax expense (benefit) 
 $ 
 2,000 
 ( 777 )

 Table of Contents 
 112 
 Total income 
tax expense differs from the amounts computed by applying the 
statutory federal income tax rate of 21% to 
 earnings before income taxes. 
A reconciliation of the differences for the years ended December 
31, 2024 and 2023, is 
 presented below.

 2024 
 2023 
 Percent of 
 Percent of 
 pre-tax 
 pre-tax 
 (Dollars in thousands) 
 Amount 
 earnings 
 Amount 
 earnings 
 Earnings before income taxes 
 $ 
 8,397 
 618 
 Income taxes at statutory rate 
 1,763 
 21.0 
 % 
 130 
 21.0 
 % 
 Tax-exempt interest 
 ( 290 )
 ( 3.5 )
 ( 493 )
 ( 79.8 )
 State income taxes, net of 

 federal tax effect 
 388 
 4.6 
 ( 43 )
 ( 7.0 )
 New Markets Tax Credit 
 ( 58 )
 ( 0.7 )
 ( 356 )
 ( 57.6 )
 Bank-owned life insurance 
 ( 85 )
 ( 1.0 )
 ( 88 )
 ( 14.2 )
 Other 
 282 
 3.4 
 73 
 11.9 
 Total income 
tax expense (benefit) 
 $ 
 2,000 
 23.8 
 % 
 ( 777 )
 ( 125.7 )
 %

 At December 31, 2024 and 2023, the Company had a net deferred tax 
asset of $10.2 million and $10.3 million, respectively, 
 included in other assets on the consolidated balance sheet. 
The tax effects of temporary differences that give rise to 
 significant portions of the deferred tax assets and deferred tax liabilities at December 
31, 2024 and 2023 are presented 
 below.

 December 31 
 (Dollars in thousands) 
 2024 
 2023 
 Deferred tax assets: 
 Allowance for credit losses 
 $ 
 1,726 
 1,724 
 Unrealized loss on securities 
 9,929 
 9,734 
 Net operating loss carry-forwards 
 
— 

 253 
 Tax credit carry-forwards 
 
— 

 356 
 Accrued bonus 

 207 
 185 
 Right of use liability 
 58 
 128 
 Other 
 99 
 71 
 Total deferred tax 
assets 
 12,019 
 12,451 
 Deferred tax liabilities: 
 Premises and equipment 
 1,212 
 1,315 
 Originated mortgage servicing rights 
 224 
 249 
 Right of use asset 
 58 
 122 
 New Markets Tax Credit 
investment 
 
— 

 181 
 Other 
 333 
 332 
 Total deferred tax 
liabilities 
 1,827 
 2,199 
 Net deferred tax asset 
 $ 
 10,192 
 10,252 

 A valuation allowance is recognized for a deferred tax asset if, based on the weight of 
available evidence, it is more-likely-
 than-not that some portion of the entire deferred tax asset will not be realized. 
The ultimate realization of deferred tax 
 assets is dependent upon the generation of future taxable income during 
the periods in which those temporary differences 
 become deductible. 
Management considers the scheduled reversal of deferred tax liabilities, projected 
future taxable 
 income and tax planning strategies in making this assessment. Based upon 
the level of historical taxable income and 
 projection for future taxable income over the periods which the temporary 
differences resulting in the remaining deferred 
 tax assets are deductible, management believes it is more-likely-than-not 
that the Company will realize the benefits of these 
 deductible differences at December 31, 2024. 
The amount of the deferred tax assets considered realizable, however, 
could 
 be reduced in the near term if estimates of future taxable income are reduced. 

 Table of Contents 
 113 
 
 The change in the net deferred tax asset for the years ended December 31, 2024 
and 2023, is presented

below. 
 
 Year ended December 31 
 (Dollars in thousands) 
 2024 
 2023 
 Net deferred tax asset (liability): 
 Balance, beginning of year 
 $ 
 10,252 
 13,769 
 Cumulative effect of change in accounting standard 
 183 
 276 
 Deferred tax expense (benefit) related to continuing operations 
 ( 438 )
 195 
 Stockholders' equity, 
for accumulated other comprehensive income 
 195 
 ( 3,988 )
 Balance, end of year 
 $ 
 10,192 
 10,252 

 ASC 740, 
 Income Taxes,
 
defines the threshold for recognizing the benefits of tax return positions in the financial 
statements 
 as “more-likely-than-not” to be sustained by the taxing authority. 
This section also provides guidance on the de-
 recognition, measurement, and classification of income tax uncertainties 
in interim periods. 
As of December 31, 2024, the 
 Company had no unrecognized tax benefits related to federal or state income tax matters. 
The Company does not anticipate 
 any material increase or decrease in unrecognized tax benefits during 
2025 relative to any tax positions taken prior to 
 December 31, 2024. 
As of December 31, 2024, the Company has accrued no interest and no penalties related to 
uncertain 
 tax positions. 
It is the Company’s policy to recognize 
interest and penalties related to income tax matters in income tax 
 expense. 

 The Company and its subsidiaries file consolidated U.S. federal and 
State of Alabama income tax returns. 
The Company is 
 currently open to audit under the statute of limitations by the Internal Revenue Service 
and the State of Alabama for the 
 years ended December 31, 2021 through 2024.

 NOTE 11: 
EMPLOYEE BENEFIT PLAN 
 The Company sponsors a qualified defined contribution retirement plan, 
the Auburn National Bancorporation, Inc. 401(k) 
 Plan (the "Plan"). 
Eligible employees may contribute up to 100% of eligible compensation, subject to 
statutory limits upon 
 completion of 2 months of service. 
Furthermore, the Company allows employer Safe Harbor contributions. 
Participants are 
 immediately vested in employer Safe Harbor contributions. The Company's matching 
contributions on behalf of 
 participants were equal to $1.00 for each $1.00 contributed by participants, up 
to 3% of each participant's 
eligible 
 compensation, and $0.50 for every $1.00 contributed by participants, above 
3% up to 5% of each participant's 
eligible 
 compensation, for a maximum matching contribution of 4% of the participants' eligible 
compensation. Company matching 
 contributions to the Plan were approximately $
 0.3 
 
million for both of the years ended December 31, 2024 and 2023, 
 respectively, and are 
included in salaries and benefits expense.

 NOTE 12: 
COMMITMENTS AND CONTINGENT LIABILITIES 
 Credit-Related Financial Instruments 
 The Company is party to credit related financial instruments with off 
-balance sheet risk in the normal course of business to 
 meet the financing needs of its customers. 
These financial instruments include commitments to extend credit and standby 
 letters of credit. 
Such commitments involve, to varying degrees, elements of credit and interest rate risk in 
excess of the 
 amount recognized in the consolidated balance sheets.
 The Company’s exposure 
to credit loss is represented by the contractual amount of these commitments. 
The Company 
 follows the same credit policies in making commitments as it does for on-balance 
sheet instruments. 
 At December 31, 2024 and 2023, the following financial instruments were 
outstanding whose contract amount represents 
 credit risk.

 December 31 
 (Dollars in thousands) 
 2024 
 2023 
 Commitments to extend credit 
 $ 
 84,667 
 $ 
 73,606 
 Standby letters of credit 
 738 
 629 

 Commitments to extend credit are agreements to lend to a customer provided 
there is no violation of any condition 
 established in the commitment agreement and provided the commitments 
are not otherwise cancelable by the Bank. 

 Table of Contents 
 114 
 
 Commitments generally have fixed expiration dates or other termination 
clauses and may require payment of a fee. 
The 
 commitments for lines of credit may expire without being drawn upon. 
Therefore, total commitment amounts do not 
 necessarily represent future cash requirements. 
The amount of collateral obtained, if it is deemed necessary by the 
 Company, is based on 
management’s credit evaluation of the customer. 
The Company records an allowance for credit 
 losses on off-balance sheet exposures, unless the commitments to 
extend credit are unconditionally cancelable, through a 
 charge to provision for credit losses in the Company’s 
Consolidated Statement of Earnings. 
The allowance for credit losses 
 related to unfunded commitments was $
 0.3 
 
million at both December 31, 2024 and 2023, respectively, 
and is included in 
 other liabilities on the Company’s 
Consolidated Balance Sheet. 

 See “Note 1: Summary of Significant Accounting Policies – 
 Allowance for credit losses – Unfunded 
commitments.”
 Standby letters of credit are conditional commitments issued by the 
Company to guarantee the performance of a customer 
 to a third party. 
The credit risk involved in issuing letters of credit is essentially the same as that involved 
in extending loan 
 facilities to customers. 
The Company holds various assets as collateral, including accounts receivable, 
inventory, 
 equipment, marketable securities, and property to support those commitments 
for which collateral is deemed necessary. 

 The Company has a recorded a liability for the estimated fair value of these 
standby letters of credit in the amount of $
 13 
 thousand and $
 9 
 
thousand at December 31, 2024 and 2023, respectively. 
 Contingent Liabilities 
 The Company and the Bank are involved in various legal proceedings, arising 
in connection with their business. 
In the 
 opinion of management, based upon consultation with legal counsel, the 
ultimate resolution of these proceedings will not 
 have a material adverse effect upon the consolidated 
financial condition or results of operations of the Company and the 
 Bank.

 NOTE 13: FAIR VALUE 

 Fair Value 
Hierarchy
 “Fair value” is defined by ASC 820, 
 Fair Value 
Measurements and Disclosures
 , as the price that would be received to sell 
 an asset or paid to transfer a liability in an orderly transaction occurring in the principal 
market (or most advantageous 
 market in the absence of a principal market) for an asset or liability at the measurement 
date. 
GAAP establishes a fair 
 value hierarchy for valuation inputs that gives the highest priority to 
quoted prices in active markets for identical assets or 
 liabilities and the lowest priority to unobservable inputs. 
The fair value hierarchy is as follows: 
 Level 1—inputs to the valuation methodology are quoted prices, unadjusted, 
for identical assets or liabilities in active 
 markets. 

 Level 2—inputs to the valuation methodology include quoted prices for similar assets and 
liabilities in active markets, 
 quoted prices for identical or similar assets or liabilities in markets that are not 
active, or inputs that are observable for the 
 asset or liability, either directly 
or indirectly. 

 Level 3—inputs to the valuation methodology are unobservable and reflect 
the Company’s own assumptions about 
the 
 inputs market participants would use in pricing the asset or liability. 

 Level changes in fair value measurements
 
 Transfers between levels of the fair value hierarchy 
are generally recognized at the end of the reporting period. 
The 
 Company monitors the valuation techniques utilized for each category 
of financial assets and liabilities to ascertain when 
 transfers between levels have been affected. 
The nature of the Company’s financial 
assets and liabilities generally is such 
 that transfers in and out of any level are expected to be infrequent. For the years ended 
December 31, 2024 and 2023, there 
 were no transfers between levels and no changes in valuation techniques for 
the Company’s financial assets and liabilities. 

 Table of Contents 
 115 
 
 Assets and liabilities measured at fair value on a recurring 
basis 
 Securities available-for-sale 
 Fair values of securities available for sale were primarily measured 
using Level 2 inputs. 
For these securities, the Company 
 obtains pricing from third party pricing services. 
These third-party pricing services consider observable data that may 
 include broker/dealer quotes, market spreads, cash flows, market consensus 
prepayment speeds, benchmark yields, reported 
 trades for similar securities, credit information and the securities’ terms and conditions. 
On a quarterly basis, management 
 reviews the pricing received from the third-party pricing services for 
reasonableness given current market conditions. 
As 
 part of its review, management 
may obtain non-binding third party broker quotes to validate the fair value measurements. 

 In addition, management will periodically submit pricing provided by 
the third-party pricing services to another 
 independent valuation firm on a sample basis. 
This independent valuation firm will compare the price provided by 
the 
 third-party pricing service with its own price and will review the significant assumptions 
and valuation methodologies used 
 with management. 
 The following table presents the balances of the assets and liabilities measured at fair 
value on a recurring as of December 
 31, 2024 and 2023, respectively, 
by caption, on the accompanying consolidated balance sheets by ASC 820 valuation 
 hierarchy (as described above).

 Quoted Prices in 
 Significant 
 Active Markets 
 Other 
 Significant 
 for 
 Observable 
 Unobservable 
 Identical Assets 
 Inputs 
 Inputs 
 (Dollars in thousands) 
 Amount 
 (Level 1) 
 (Level 2) 
 (Level 3) 
 December 31, 2024: 
 Securities available-for-sale: 
 Agency obligations 

 $ 
 52,411 
 — 
 52,411 
 — 
 Agency MBS 
 173,676 
 — 
 173,676 
 — 
 State and political subdivisions 
 16,925 
 — 
 16,925 
 — 
 Total securities available 
-for-sale 
 243,012 
 — 
 243,012 
 — 
 Total 
assets at fair value 
 $ 
 243,012 
 — 
 243,012 
 — 
 December 31, 2023: 
 Securities available-for-sale: 
 Agency obligations 

 $ 
 53,879 
 — 
 53,879 
 — 
 Agency MBS 
 198,289 
 — 
 198,289 
 — 
 State and political subdivisions 
 18,742 
 — 
 18,742 
 — 
 Total securities available 
-for-sale 
 270,910 
 — 
 270,910 
 — 
 Total 
assets at fair value 
 $ 
 270,910 
 — 
 270,910 
 — 

 Assets and liabilities measured at fair value on a nonrecurring 
basis 
 Collateral Dependent Loans 
 Collateral dependent loans are measured at the fair value of the collateral securing 
loan less estimated selling costs. 
The 
 fair value of real estate collateral is determined based on real estate appraisals 
which are generally based on recent sales of 
 comparable properties which are then adjusted for property specific factors. 
Non-real estate collateral is valued based on 
 various sources, including third party asset valuations and internally determined 
values based on cost adjusted for 
 depreciation and other judgmentally determined discount factors. 
Collateral dependent loans are classified within Level 3 
 of the hierarchy due to the unobservable inputs used in determining their 
fair value such as collateral values and the 
 borrower’s underlying financial condition. 

 Table of Contents 
 116 
 
 Mortgage servicing rights, net 
 Mortgage servicing rights, net, included in other assets on the accompanying consolidated 
balance sheets, are carried at the 
 lower of cost or estimated fair value. 
MSRs do not trade in an active market with readily observable prices. 
To determine 
 the fair value of MSRs, the Company engages an independent third party. 
The independent third party’s valuation 
model 
 calculates the present value of estimated future net servicing income 
using assumptions that market participants would use 
 in estimating future net servicing income, including estimates of prepayment 
speeds, discount rate, default rates, cost to 
 service, escrow account earnings, contractual servicing fee income, 
ancillary income, and late fees. 
Periodically, the 
 Company will review broker surveys and other market research to validate 
significant assumptions used in the model. 
The 
 significant unobservable inputs include prepayment speeds or the constant prepayment 
rate (“CPR”) and the weighted 
 average discount rate. 
Because the valuation of MSRs requires the use of significant unobservable inputs, all of the 
 Company’s MSRs are classified 
within Level 3 of the valuation hierarchy. 

 Table of Contents 
 117 
 
 The following table presents the balances of the assets and liabilities measured at fair 
value on a nonrecurring basis as of 
 December 31, 2024 and 2023, respectively, 
by caption, on the accompanying consolidated balance sheets and by ASC 820 
 valuation hierarchy (as described above):

 Quoted Prices in 
 Active Markets 
 Other 
 Significant 
 for 
 Observable 
 Unobservable 
 Identical Assets 
 Inputs 
 Inputs 
 (Dollars in thousands) 
 Amount 
 (Level 1) 
 (Level 2) 
 (Level 3) 
 December 31, 2024: 
 Loans, net
 (1)
 $ 
 503 
 — 
 — 
 503 
 Other assets 
 (2)
 892 
 — 
 — 
 892 
 Total assets at fair value 
 $ 
 1,395 
 — 
 — 
 1,395 
 December 31, 2023: 
 Loans, net
 (1)
 $ 
 783 
 — 
 — 
 783 
 Other assets 
 (2)
 992 
 — 
 — 
 992 
 Total assets at fair value 
 $ 
 1,775 
 — 
 — 
 1,775 
 (1)
 Loans considered collateral dependent under ASC 326. 
 (2)
 Represents MSRs, net carried at lower of cost or estimated fair value.

 Quantitative Disclosures for Level 3 Fair Value 
Measurements 
 At December 31, 2024 and 2023, the Company had no Level 3 assets measured at fair value 
on a recurring basis. 
For Level 
 3 assets measured at fair value on a non-recurring basis as of December 31, 2024 
and 2023, the significant unobservable 
 inputs used in the fair value measurements are presented below.

 Weighted 
 Carrying 
 Significant 
 Average 
 (Dollars in thousands) 
 Amount 
 Valuation Technique 
 
Unobservable Input 
 Range 
 of Input 
 December 31, 2024: 
 Collateral dependent loans 
 $ 
 503 
 Appraisal 
 Appraisal discounts 
 10.0 
 - 
 10.0 
 % 
 10.0 
 % 
 Mortgage servicing rights, net 
 892 
 Discounted cash flow 
 Prepayment speed or CPR 
 6.7 
 - 
 11.2 
 % 
 7.3 
 % 
 
 Discount rate 
 10.0 
 - 
 12.0 
 % 
 10.0 
 % 
 December 31, 2023: 
 Collateral dependent loans 
 $ 
 783 
 Appraisal 
 Appraisal discounts 
 10.0 
 - 
 10.0 
 % 
 10.0 
 % 
 Mortgage servicing rights, net 
 992 
 Discounted cash flow 
 Prepayment speed or CPR 
 5.9 
 - 
 10.6 
 % 
 6.0 
 % 
 
 Discount rate 
 10.5 
 - 
 12.5 
 % 
 10.5 
 %

 Fair Value 
of Financial Instruments
 ASC 825, 
 Financial Instruments
 , requires disclosure of fair value information about financial instruments, 
whether or not 
 recognized on the face of the balance sheet, for which it is practicable to estimate 
that value. The assumptions used in the 
 estimation of the fair value of the Company’s 
financial instruments are explained below. 
Where quoted market prices are 
 not available, fair values are based on estimates using discounted cash flow 
analyses. Discounted cash flows can be 
 significantly affected by the assumptions used, including 
the discount rate and estimates of future cash flows. The 
 following fair value estimates cannot be substantiated by comparison 
to independent markets and should not be considered 
 representative of the liquidation value of the Company’s 
financial instruments, but rather are good faith estimates of the fair 
 value of financial instruments held by the Company. 
ASC 825 excludes certain financial instruments and all nonfinancial 
 instruments from its disclosure requirements. 

 Table of Contents 
 118 
 
 The following methods and assumptions were used by the Company in estimating 
the fair value of its financial instruments: 

 Loans, net 
 Fair values for loans were calculated using discounted cash flows. The discount 
rates reflected current rates at which similar 
 loans would be made for the same remaining maturities. 
Expected future cash flows were projected based on contractual 
 cash flows, adjusted for estimated prepayments. 
The fair value of loans was measured using an exit price notion. 
 Time Deposits 
 Fair values for time deposits were estimated using discounted cash 
flows. The discount rates were based on rates currently 
 offered for deposits with similar remaining maturities. 
 The carrying value, related estimated fair value, and placement in the fair value hierarchy 
of the Company’s financial 
 instruments at December 31, 2024 and 2023 are presented below. 
This table excludes financial instruments for which the 
 carrying amount approximates fair value. 
Financial assets for which fair value approximates carrying value included 
cash 
 and cash equivalents. 
Financial liabilities for which fair value approximates carrying value included 
noninterest-bearing 
 demand deposits, interest-bearing demand deposits, and savings deposits. 
Fair value approximates carrying value in these 
 financial liabilities due to these products having no stated maturity. 
Additionally, financial liabilities for which 
fair value 
 approximates carrying value included overnight borrowings such 
as federal funds purchased and securities sold under 
 agreements to repurchase. 
 The following table summarizes our fair value estimates:

 Fair Value Hierarchy 
 Carrying 

 Estimated 
 Level 1 
 Level 2 
 Level 3 
 (Dollars in thousands) 
 amount 
 fair value 
 inputs 
 inputs 
 Inputs 
 December 31, 2024: 
 Financial Assets: 
 Loans, net (1) 
 $ 
 557,146 
 $ 
 532,344 
 $ 
 — 
 $ 
 — 
 $ 
 532,344 
 Financial Liabilities: 
 Time Deposits 
 $ 
 191,247 
 $ 
 190,363 
 $ 
 — 
 $ 
 190,363 
 $ 
 — 
 December 31, 2023: 
 Financial Assets: 
 Loans, net (1) 
 $ 
 550,431 
 $ 
 526,372 
 $ 
 — 
 $ 
 — 
 $ 
 526,372 
 Financial Liabilities: 
 Time Deposits 
 $ 
 198,215 
 $ 
 195,171 
 $ 
 — 
 $ 
 195,171 
 $ 
 — 
 (1) Represents loans, net and the allowance for credit losses. 
The fair value of loans was measured using an 
exit price notion.

 NOTE 14: RELATED PARTY 
TRANSACTIONS 
 The Bank has made, and expects in the future to continue to make in the 
ordinary course of business, loans to directors and 
 executive officers of the Company, 
the Bank, and their immediate families and affiliates. 
These persons, corporations, and 
 firms have had transactions in the ordinary course of business with the Company 
and Bank, including borrowings, all of 
 which management believes were on substantially the same terms, including 
interest rates and collateral, as those prevailing 
 at the time of comparable transactions with unaffiliated persons and 
did not involve more than the normal risk of 
 collectability or present other unfavorable features. 
A summary of such outstanding loans is presented below:

 (Dollars in thousands) 
 Amount 
 Loans outstanding at December 31, 2023 
 $ 
 1,897 
 New loans/advances 
 442 
 Repayments 
 ( 578 )
 Loans outstanding at December 31, 2024 
 $ 
 1,761 

 Table of Contents 
 119 
 During 2024 and 2023, certain executive officers 
, 
directors and principal shareholders of the Company and the Bank, 
 including companies and related parties with which they are affiliated, 
were deposit customers of the bank. 
Total deposits 
 for these persons at December 31, 2024 and 2023 amounted to $
 9.9 
 
million and $
 21.1 
 
million, respectively.

 NOTE 15: REGULATORY 
RESTRICTIONS AND CAPITAL 
RATIOS 
 As required by the Economic Growth, Regulatory Relief, and Consumer Protection 
Act of 2018, the Federal Reserve Board 
 issued rule that expanded applicability of the Board’s 
small bank holding company policy statement (the “Small BHC 
 Policy Statement”) and has been added as Appendix C to Federal Reserve Regulation 
Y. 
These increased the Small BHC 
 Policy Statement’s asset limit from 
$1 billion to $3 billion in total consolidated assets for a bank holding company or 
 savings and loan holding company that: (1) is not engaged in significant nonbanking activities; (2) 
does not conduct 
 significant off-balance sheet activities; and (3) does not have a materi 
al amount of debt or equity securities, other than trust-
 preferred securities, outstanding that are registered with the SEC. The interim 
final rule provides that, if warranted for 
 supervisory purposes, the Federal Reserve may exclude a company from 
this asset level increase. The Federal Reserve has 
 treated the Company as a small bank holding company for purposes of 
the Small BHC Policy Statement and therefore has 
 considered only the Bank’s capital and 
not the Company’s consolidated capital. 
 
 The Bank remains subject to regulatory capital requirements of 
the Alabama Banking Department and the Federal Reserve. 
 Failure to meet minimum capital requirements can initiate certain mandatory 
- and possibly additional discretionary - 
 actions by regulators that, if undertaken, could have a direct material effect 
on the Company’s financial statements. 
Under 
 capital adequacy guidelines and the regulatory framework for prompt corrective 
action, the Bank must meet specific capital 
 guidelines that involve quantitative measures of their assets, liabilities and certain 
off-balance sheet items as calculated 
 under regulatory accounting practices. The capital amounts and classification 
are also subject to qualitative judgments by 
 the regulators about components, risk weightings, necessary capital to support 
risks and other factors. 
Notwithstanding the 
 minimum capital requirements, Federal Reserve Regulation Q states that a Federal Reserve 
-regulated institution must 
 maintain capital commensurate with the level and nature of all risks to which such 
institution is exposed. 
 Federal Reserve Regulation Q limits “distributions” and discretionary 
bonus payments from eligible retained income” by 
 sate member banks, such as the Bank, unless its capital conservation 
buffer of common equity Tier 1 capital (“CET1”) 
 exceeds 2.5%. “Distributions” include dividends declared or paid on common 
stock, and stock repurchases, redemptions or 
 repurchases of Tier 2 capital instruments (unless 
replaced by a capital instrument in the same quarter). “Eligible retained 
 income” for the Bank and other Federal Reserve regulated institutions is the greater 
of: 
 (A) The Board-regulated institution's net income, calculated in accordance 
with the instructions to the institution’s 
FR Y–
 9C or Call Report, for the four calendar quarters preceding the current calendar 
quarter, net of any distributions and 
 associated tax effects not already reflected in net income; and 

 (B) The average of the Board-regulated institution’s 
net income, calculated in accordance with the instructions to the 
 institutions’ FR Y–9C or Call Report, as applicable, for the four calendar 
quarters preceding the current calendar quarter. 

 The Bank’s Call Report is used for 
its calculation of “eligible retained income”. 
 As of December 31, 2024, the Bank is “well capitalized” under the regulatory framework 
for prompt corrective action. To 
 be categorized as “well capitalized,” the Bank must maintain minimum common 
equity Tier 1, total risk-based, Tier 
1 risk-
 based, and Tier 1 leverage ratios as set forth in the 
following table. Management has not received any notification from the 
 Bank's regulators that changes the Bank’s 
regulatory capital status. 

 Table of Contents 
 120 
 
 The actual capital amounts and ratios for the Bank and the aforementioned 
minimums as of December 31, 2024 and 2023 
 are presented below.

 Minimum for capital 
 Minimum to be 

 Actual 
 adequacy purposes 
 well capitalized 
 (Dollars in thousands) 
 Amount 
 Ratio 
 Amount 
 Ratio 
 Amount 
 Ratio 
 At December 31, 2024: 
 Tier 1 Leverage Capital 
 $ 
 106,288 
 10.49 
 % 
 $ 
 40,543 
 4.00 
 % 
 $ 
 50,679 
 5.00 
 % 
 CET1 Risk-Based Capital 
 106,288 
 14.80 
 32,307 
 4.50 
 46,665 
 6.50 
 Tier 1 Risk-Based Capital 
 106,288 
 14.80 
 43,075 
 6.00 
 57,434 
 8.00 
 Total Risk-Based Capital 
 113,487 
 15.81 
 57,434 
 8.00 
 71,792 
 10.00 
 At December 31, 2023: 
 Tier 1 Leverage Capital 
 $ 
 103,886 
 9.72 
 % 
 $ 
 42,732 
 4.00 
 % 
 $ 
 53,415 
 5.00 
 % 
 CET1 Risk-Based Capital 
 103,886 
 14.52 
 32,194 
 4.50 
 46,503 
 6.50 
 Tier 1 Risk-Based Capital 
 103,886 
 14.52 
 42,926 
 6.00 
 57,234 
 8.00 
 Total Risk-Based Capital 
 111,035 
 15.52 
 57,234 
 8.00 
 71,543 
 10.00 

 Dividends paid by the Bank are a principal source of funds available to the Company 
for payment of dividends to its 
 stockholders and for other needs which are restricted by Alabama and Federal law and 
regulations as described above. 
 Capital adequacy considerations could further limit the availability of dividends 
from the Bank. At December 31, 2024, the 
 Bank could have declared additional dividends of approximately $
 9.7 
 
million without prior approval of regulatory 
 authorities. 
As a result of this limitation, approximately $
 67.2 
 
million of the Company’s investment in 
the Bank was 
 restricted from transfer in the form of dividends.

 NOTE 16: AUBURN NATIONAL 
BANCORPORATION 
(PARENT COMPANY) 
 The Parent Company’s condensed 
balance sheets and related condensed statements of earnings and 
cash flows are as 
 follows.

 CONDENSED BALANCE SHEETS 
 December 31 
 (Dollars in thousands) 
 2024 
 2023 
 Assets: 
 Cash and due from banks 
 $ 
 1,001 
 1,277 
 Investment in bank subsidiary 
 76,852 
 74,857 
 Other assets 
 532 
 523 
 Total assets 
 $ 
 78,385 
 76,657 
 Liabilities: 
 Accrued expenses and other liabilities 
 $ 
 93 
 150 
 Total liabilities 
 93 
 150 
 Stockholders' equity 
 78,292 
 76,507 
 Total liabilities and stockholders' 
equity 
 $ 
 78,385 
 76,657 

 Table of Contents 
 121 
 
 CONDENSED STATEMENTS 
OF EARNINGS 
 Year ended December 31 
 (Dollars in thousands) 
 2024 
 2023 
 Income: 
 Dividends from bank subsidiary 
 $ 
 3,773 
 3,776 
 Noninterest income 
 1 
 8 
 Total income 
 3,774 
 3,784 
 Expense: 
 Noninterest expense 
 258 
 239 
 Total expense 
 258 
 239 
 Earnings before income tax expense and equity 
 in undistributed (distributed) earnings of bank subsidiary 
 3,516 
 3,545 
 Income tax benefit 
 ( 46 )
 ( 30 )
 Earnings before equity in undistributed (distributed) earnings 
 of bank subsidiary 
 3,562 
 3,575 
 Equity in undistributed (distributed) earnings of bank subsidiary 
 2,835 
 ( 2,180 )
 Net earnings 
 $ 
 6,397 
 1,395 

 CONDENSED STATEMENTS 
OF CASH FLOWS 
 Year ended December 31 
 (Dollars in thousands) 
 2024 
 2023 
 Cash flows from operating activities: 
 Net earnings 
 $ 
 6,397 
 1,395 
 Adjustments to reconcile net earnings to net cash 
 provided by operating activities: 
 Net increase in other assets 
 ( 9 )
 ( 1 )
 Net (decrease) increase in other liabilities 
 ( 56 )
 8 
 Equity in (undistributed) distributed earnings of bank subsidiary 
 ( 2,835 )
 2,180 
 Net cash provided by operating activities 
 3,497 
 3,582 
 Cash flows from financing activities: 
 Dividends paid 
 ( 3,773 )
 ( 3,776 )
 Stock repurchases 
 — 
 ( 229 )
 Net cash used in financing activities 
 ( 3,773 )
 ( 4,005 )
 Net change in cash and cash equivalents 
 ( 276 )
 ( 423 )
 Cash and cash equivalents at beginning of period 
 1,277 
 1,700 
 Cash and cash equivalents at end of period 
 $ 
 1,001 
 1,277 

 Table of Contents 
 122 
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS 
ON ACCOUNTING AND 
 FINANCIAL DISCLOSURE 
 Not applicable.
AUBURN NATIONAL BANCORPORATION, INC 10-K

Item 8. Financial Statements and Supplementary Data
