AUBURN NATIONAL BANCORPORATION, INC. AND SUBSIDIARIES Consolidated Statements of Earnings Year ended December 31 (Dollars in thousands, except share and per share data) 2011 2010 2009 Interest income: Loans, including fees $ 21,306 $ 21,809 $ 21,864 Securities 9,343 11,633 14,946 Federal funds sold and interest bearing bank deposits 57 30 24 Total interest income 30,706 33,472 36,834 Interest expense: Deposits 8,068 10,038 13,139 Short-term borrowings 12 23 55 Long-term debt 3,401 4,512 4,825 Total interest expense 11,481 14,573 18,019 Net interest income 19,225 18,899 18,815 Provision for loan losses 2,450 3,580 5,250 Net interest income after provision for loan losses 16,775 15,319 13,565 Noninterest income: Service charges on deposit accounts 1,167 1,280 1,243 Mortgage lending 1,922 2,494 3,349 Bank-owned life insurance 460 452 424 Affordable housing investment losses (646) (323) (228) Other 1,396 1,392 1,348 Securities gains, net: Realized gains, net 1,216 3,451 2,847 Total other-than-temporary impairments (468) (2,238) (6,807) Non-credit portion of other-than-temporary impairments recognized in other comprehensive income 130 210 257 Total securities gains (losses), net 878 1,423 (3,703) Total noninterest income 5,177 6,718 2,433 Noninterest expense: Salaries and benefits 8,167 7,402 7,120 Net occupancy and equipment 1,404 1,450 1,500 Professional fees 735 702 799 FDIC and other regulatory assessments 792 1,092 1,322 Other real estate owned, net 2,007 1,378 43 Prepayment penalty on long-term debt — 679 — Other 3,252 3,190 3,150 Total noninterest expense 16,357 15,893 13,934 Earnings before income taxes 5,595 6,144 2,064 Income tax expense (benefit) 57 798 (340) Net earnings $ 5,538 $ 5,346 $ 2,404 Net earnings per share: Basic and diluted $ 1.52 $ 1.47 $ 0.66 Weighted average shares outstanding: Basic and diluted 3,642,735 3,642,851 3,644,691 See accompanying notes to consolidated financial statements page 36