AUBURN NATIONAL BANCORPORATION INC

In the normal course of its business, the Company and the Bank are, from time to time, involved

in legal proceedings. The

Company’s and Bank’s

management believe there are no pending or threatened legal, governmental, or

regulatory

proceedings that, upon resolution, are expected to have a material adverse effect

upon the Company’s or the Bank’s

financial condition or results of operations. See also, Part I, Item 3 of the Company’s

Annual Report on Form 10-K for the

year ended December 31, 2023.

In addition to the other information set forth in this report, you should carefully consider the

factors discussed in Part I,

in the Company’s Annual Report

on Form 10-K for the year ended December 31, 2023,

which could materially affect our business, financial condition

or future results. The risks described in our annual report on

Form 10-K are not the only the risks facing our Company.

The persistence of inflation above the Federal Reserve’s

long

term targets, and the maintenance of or further increases in, tightened Federal

Reserve monetary policy by increased target

interest rates and reductions in the Federal Reserve’s

securities portfolio, have and are expected to continue to affect the

levels of interest rates, mortgage originations and income, the market values of our securities

portfolio and loans and have

resulted in unrealized losses that have adversely affected our stockholders’

equity.

These have affected and are expected to

continue to affect our deposit costs and mixes, and consumer savings and

payment behaviors.

These may also affect our

borrower’s operating costs, expected returns and cash flows available

to service our loans.

Additional risks and

uncertainties not currently known to us or that we currently deem to be immaterial

also may materially adversely affect our

business, financial condition, and/or operating results in the future.