Corporate Profile Robert W. Dumas President and CEO AuburnBank Auburn National Bancorporation, Inc., is a one-bank holding  company established in 1984, and incorporated under the laws  of the State of Delaware. Its total assets were $776 million as  of December 31, 2011. Since its inception, Auburn National  Bancorporation has wholly owned AuburnBank. Last year marked a milestone in the history of the bank as our  Chairman of the Board, E. L. Spencer, Jr., was inducted into the  Alabama Business Hall of Fame. Much of the bank’s success,  through prosperity and adversity, is the direct result of Mr.  Spencer's leadership. Top achievers remain at the top through their  example and performance. In particular, we have been fortunate to  have a leader like Mr. Spencer and our Board of Directors to guide  us through several years of an economic downturn. Throughout 2011, AuburnBank continued to emphasize sound  banking practices to mark a year of solid financial performance.  Although we continued to face a weak but improving housing  market and challenging credit conditions, AuburnBank  significantly exceeded last year’s bottom line and continued  to strengthen its reserves. For the sixth consecutive year,  AuburnBank was named one of the top 200 community banks  in America by  U.S. Banker  magazine, one of many external  measures of the bank’s strength. Our officers and staff have  worked extremely hard to produce these strong results. AuburnBank’s profitability showed a noticeable improvement  over the previous year, with $5.5 million in net earnings  compared to $5.3 million in 2010. Also, we reported $12.4  million growth in deposits and provided increased dividend  payments to shareholders for 15 of the last 16 years. By any  measure, AuburnBank is a well-capitalized bank with sound  reserves and significant liquidity to meet both short- and long- term cash needs. We continue to observe the highest standards  in our underwriting process and will continue our efforts to  provide our customers with the highest quality customer service  in the communities we serve. There were a number of challenges we faced during 2011 that  will continue to test us in the future. For example, the recently  formed Consumer Financial Protection Bureau (CFPB) has  not decided how far to extend enforcement for small banks. In  addition, we continue to prepare for and respond to regulatory  changes (Dodd-Frank) that could have a significant impact on  all banks. Other challenges we continue to focus our efforts on  include reducing our nonperforming assets, increasing our loans  outstanding, maintaining our overall efficiency and providing  top quality service.  AuburnBank has been operating continuously since 1907 when  it was established as the first financial institution in Auburn,  Alabama. Auburn National Bancorporation’s initial public  offering was held in 1995. The common stock is traded on the  NASDAQ Global Market under the symbol “AUBN.” To all of our current customers we would like to say thank you  for your continued support and to those prospective customers  we would like to invite you to give us a try. In addition to its principal office, AuburnBank operates full- service branches in Opelika, Valley, Hurtsboro, and Notasulga,  Alabama, as well as the Bent Creek branch in Auburn. In-store  branches are located in Auburn and Tiger Town Kroger  supermarkets as well as Wal-Mart SuperCenter stores in Auburn,  Opelika, and Phenix City, Alabama. Loan production offices  are also located in Phenix City and Montgomery, Alabama. An  extensive network of automated teller machines is operated  throughout East Alabama. Also, AuburnBank offers full  financial consulting through a partnership with Bert Harris and  Investment Professionals, Inc. (IPI), specializing in retirement  planning, college saving and estate planning. AuburnBank provides a wide range of services, including  traditional checking and savings accounts, loans, and internet  banking. These services are available to individuals, families, and  businesses, and are offered at our many convenient locations. Giving back to the communities we serve is part of the bank's  original mission. We remain involved in many local charities,  special events, education, and opportunities for service, both at  a corporate level and among individual employees. Throughout  the years, the bank has enjoyed a mutually beneficial relationship  among its customers, the University, and the communities  we serve. In 2012, we look forward to meeting your financial  needs, and we are pleased to be able to serve our customers and  shareholders from a position of financial strength. Highlighting the fourth quarter of 2011 was the launching of a full- service bank in Valley, Alabama. Although we have had a mortgage  production office in Valley for a number of years, we felt the time  was right to build a full-service bank in the greater Valley area.