Confident Investing Starts With TipRanks Premium

Get 55% Off
TipRanks
Go Ultimate55% OFF

Auburn National Bancorporation (AUBN) Risk Analysis

Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning. Auburn National Bancorporation disclosed 58 risk factors in its most recent earnings report. Auburn National Bancorporation reported the most risks in the “Finance & Corporate” category.

Risk Overview Q4, 2022

Source: the company's latest filing for the period ended Dec 31, 2022, filed Mar 17, 2023

Risk Distribution
58Risks
Sector Avg.Finance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Risk Change Over Time

Auburn National Bancorporation disclosed risks per quarterNo. of Risks58Q4Showing: Q4, 2022
Risks removedRisks addedRisks changedAuburn National Bancorporation Risk Factors
New Risk (1)
  • Debt & Financing - Risk 1
    parties regardingthe Bank’sprocessing of loans for the PPP and risks of potentialSBA or bank regulatory claims.

    parties regarding the Bank's processing of loans for the PPP and risks of potential SBA or bank regulatory claims. The Bank participated as a lender in the PPP and made a total of $56.7 million of PPP loans in 2020 and 2021, generally to support existing customers in the Bank's markets. All PPP loans made by the Bank have been forgiven by the SBA, except for one credit where the borrower is voluntarily repaying the loan. Since the beginning of the PPP, various banks have been subject to litigation regarding the processes and procedures used in processing applications for the PPP, and greater governmental attention is directed at preventing fraud. We may be exposed to similar litigation risks, from both customers and non-customers that approached the Bank regarding PPP loans that we extended. The SBA, the Department of Justice and the bank regulators are investigating various PPP lenders and borrowers with respect to potential fraud or improper activities under the PPP loan programs. Although the SBA has not indicated any issues with the Bank's participation in the PPP program and honored all PPP forgiveness requests, the Bank could have potential liability if the SBA later determines deficiencies in the manner in which PPP loans were originated, funded or serviced by the Bank, such as an issue with the eligibility of a borrower to receive a PPP loan, or its forgiveness of a PPP properly, including those related to the ambiguities in the laws, rules and guidance regarding the PPP's operation. The Bank is unaware of any such investigation or claims. If any such claims are made against the Bank and are not resolved favorably to the Bank, it may result in financial liability or adversely affect our reputation. Any financial liability, litigation costs or reputational damage caused by PPP related litigation could have a material adverse effect on our business, financial condition and results of operations. Similar issues may also result in the denial of forgiveness of PPP loans, which could expose us to potential borrower bankruptcies and potential losses and additional costs.

  • Debt & Financing - Risk 2
    Our cost of funds may increase as a resultof general economic conditions, interest rates, inflationand changes in customer

    Our cost of funds may increase as a result of general economic conditions, interest rates, inflation and changes in customer

Read and Evaluate the RiskReserved for Ultimate MembersUpgrade

Risk Highlights Q4, 2022

Main Risk Category
Finance & Corporate
With 28 Risks
Number of Disclosed Risks
58
-6
From last report
S&P 500 Average: 32
Recent Changes
1Risks added
7Risks removed
2Risks changed
Since Dec 2022
Number of Risk Changed
2
-2
From last report
S&P 500 Average: 1

Risk Word Cloud

nonperforming and similar assets take significant time to resolveand may adversely affect our results of operationsandsignificant time to resolveandlitigation and regulatory actions could harmour reputation and adversely affect our resultsof operations and financialadversely affect our resultsof operationsour information systems may experience interruptions andsecurity breaches.experience interruptions andsecurity breacheschanges in accounting and tax rules applicable to banks could adverselyaffect our financial conditions and results oftax rules applicable to banksmortgage servicing rights requirementsmay change and requireus to incur additional costs and risks.requireus to incur additional costsour operations and tax planning strategies do not support this amount, and the amountof net operating loss carry-forwardsamountof net operating loss carry-forwardsmortgage servicing rights requirementsmay change and requireus to incur additional costs and risks.mortgage servicing rights requirementsmay changewe arerequired to maintaincapital to meet regulatory requirements,and if we fail to maintain sufficient capital, ourfail to maintain sufficient capitalwe may needto raise additional capital in the future, but that capitalmay not be available when it is needed or onneedto raise additional capitalwe aresubject to extensive regulation that could limit or restrictour activities and adversely affect our earnings.aresubject to extensive regulation

Risk Factors Full Breakdown - Total Risks 58

Share Price & Shareholder Rights3 | 5.2%
  • Share Price & Shareholder Rights - Risk 1
    The Company is an entity separate and distinct fromthe Bank.

    The Company is an entity separate and distinct from the Bank. The Company is an entity separate and distinct from the Bank. Company transactions with the Bank are limited by Sections 23A and 23B of the Federal Reserve Act and Federal Reserve Regulation W. We depend upon the Bank's earnings and dividends, which are limited by law and regulatory policies and actions, for cash to pay the Company's corporate obligations, and to pay dividends to our shareholders. If the Bank's ability to pay dividends to the Company was terminated or limited, the Company's liquidity and financial condition could be materially and adversely affected.

  • Share Price & Shareholder Rights - Risk 2
    A limited trading market exists for our common shares,which could result in price volatility.

    A limited trading market exists for our common shares, which could result in price volatility. Your ability to sell or purchase common shares depends upon the existence of an active trading market for our common stock. Although our common stock is quoted on the Nasdaq Global Market under the trading symbol "AUBN," our trading volume has been limited historically. As a result, you may be unable to sell or purchase shares of our common stock at the volume, price and time that you desire. Additionally, whether the purchase or sales prices of our common stock reflects a reasonable valuation of our common stock also is affected by limited trading market, and thus the price you receive for a thinly-traded stock, such as our common stock, may not reflect its true or intrinsic value. The limited trading market for our common stock may cause fluctuations in the market value of our common stock to be exaggerated, leading to price volatility in excess of that which would occur in a more active trading market. Legal and Regulatory Risks

  • Share Price & Shareholder Rights - Risk 3
    securities.

    We are allowed to carry -back losses for two years for Federal income tax purposes. As of December 31, 2022, we had a net deferred tax asset of $13.8 million with gross deferred tax assets of $15.6 million. These and future deferred tax assets may be further reduced in the future if our estimates of future taxable income from our operations and tax planning strategies do not support the amount of the deferred tax asset. The amount of net operating loss carry-forwards realizable for income tax purposes potentially could be further reduced under Section 382 of the Internal Revenue Code by a significant offering and/or other sales of our capital securities. Current bank capital rules also reduce the regulatory capital benefits of deferred tax assets.

Accounting & Financial Operations8 | 13.8%
Debt & Financing12 | 20.7%
Corporate Activity and Growth5 | 8.6%

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky. The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment. They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result. It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process. Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”. Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report. According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing. You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector. Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements. A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below. 1. Financial & Corporate Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results. Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing. Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments. Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances. 2. Legal & Regulatory Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company. Regulation – risks related to compliance, GDPR, and new legislation. Environmental / Social – risks related to environmental regulation and to data privacy. Taxation & Government Incentives – risks related to taxation and changes in government incentives. 3. Production Costs – risks related to costs of production including commodity prices, future contracts, inventory. Supply Chain – risks related to the company’s suppliers. Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls. Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation. 4. Technology & Innovation Innovation / R&D – risks related to innovation and new product development. Technology – risks related to the company’s reliance on technology. Cyber Security – risks related to securing the company’s digital assets and from cyber attacks. Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying. 5. Ability to Sell Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers. Competition – risks related to the company’s competition including substitutes. Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration. Brand & Reputation – risks related to the company’s brand and reputation. 6. Macro & Political Economy & Political Environment – risks related to changes in economic and political conditions. Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19. International Operations – risks related to the global nature of the company. Capital Markets – risks related to exchange rates and trade, cryptocurrency.