AMES NATIONAL CORP Sees EPS Jump Amidst Net Income Dip

TL;DR

**ATLO's EPS nearly doubled, but the slight net income dip means it's a mixed bag for this regional bank.**

AI Summary

AMES NATIONAL CORP reported a net income of $8,898,689 for the six months ended June 30, 2025, a decrease from $8,949,110 for the same period in 2024. Diluted earnings per share for the six months ended June 30, 2025, were $0.54, compared to $0.27 for the six months ended June 30, 2024, indicating an improvement despite the slight net income dip. The company's credit loss expense for off-balance sheet credit exposures was a benefit of $69 thousand for the six months ended June 30, 2025, a positive change from an expense of $2 thousand in the prior year. The filing highlights portfolio layer method basis adjustments related to loans hedged in a closed portfolio, which impact the net loan balance. These adjustments are not allocated to individual loans but are crucial for understanding the overall loan portfolio health. The company maintains a consistent common stock share count of 18,000,000 throughout the reported periods. Strategic outlook remains focused on managing its loan portfolio and derivative financial instruments, as detailed in Note 11.

Why It Matters

For investors, the significant increase in diluted EPS to $0.54 from $0.27 year-over-year, despite a slight net income decrease, suggests improved operational efficiency or share buybacks, which could signal a more attractive valuation. Employees might see this as a stable period, with the company managing its financial instruments effectively. Customers of AMES NATIONAL CORP, a national commercial bank, can expect continued stability in banking services. In the broader market, this performance indicates resilience in the regional banking sector, especially with careful management of credit exposures and derivative instruments, potentially setting a benchmark for smaller financial institutions.

Risk Assessment

Risk Level: medium — The risk level is medium due to the slight decrease in net income from $8,949,110 in 2024 to $8,898,689 in 2025 for the six-month period, indicating potential headwinds. However, this is partially offset by a significant increase in diluted EPS from $0.27 to $0.54, suggesting effective capital management or share reduction, which isn't explicitly detailed as a risk but warrants further investigation.

Analyst Insight

Investors should investigate the drivers behind the diluted EPS increase, specifically if it's due to share buybacks or improved operational efficiency, and monitor future net income trends. Consider holding ATLO if the EPS growth is sustainable, but be cautious of the slight net income decline.

Financial Highlights

net Income

$8,898,689

eps

$0.54

Key Numbers

• $8.9M — Net Income (6 months) (Decreased slightly from $8.95M in 2024 to $8.90M in 2025.)
• $0.54 — Diluted EPS (6 months) (Increased significantly from $0.27 in 2024.)
• $69K — Credit Loss Benefit (For off-balance sheet exposures, a positive change from a $2K expense in 2024.)
• 18M — Common Stock Shares (Consistent number of shares outstanding.)

Key Players & Entities

• AMES NATIONAL CORP (company) — filer of the 10-Q
• $8,898,689 (dollar_amount) — net income for six months ended June 30, 2025
• $8,949,110 (dollar_amount) — net income for six months ended June 30, 2024
• $0.54 (dollar_amount) — diluted earnings per share for six months ended June 30, 2025
• $0.27 (dollar_amount) — diluted earnings per share for six months ended June 30, 2024
• $69 thousand (dollar_amount) — credit loss benefit related to off-balance sheet credit exposures for six months ended June 30, 2025
• $2 thousand (dollar_amount) — credit loss expense related to off-balance sheet credit exposures for six months ended June 30, 2024
• 18,000,000 (dollar_amount) — common stock shares outstanding
• SEC (regulator) — recipient of the 10-Q filing
• Bloomberg (company) — publisher of the analysis

FAQ

Industry Context

AMES NATIONAL CORP operates within the national commercial banking sector. This industry is characterized by its sensitivity to interest rate changes, regulatory oversight, and competition from both traditional banks and emerging fintech companies. The focus on managing loan portfolios and derivative instruments is a common strategy for banks to mitigate risks and optimize returns in this environment.

Regulatory Implications

As a national commercial bank, AMES NATIONAL CORP is subject to stringent regulations from bodies like the Federal Reserve and the FDIC. Compliance with capital requirements, lending standards, and consumer protection laws is paramount. Changes in monetary policy or new financial regulations could significantly impact the company's profitability and operational strategies.

What Investors Should Do

1. Monitor loan portfolio performance and credit loss trends.
2. Analyze the impact of derivative financial instruments (Note 11).
3. Evaluate the significance of portfolio layer method basis adjustments.

Glossary

Portfolio layer method basis adjustments

Adjustments made to the carrying value of loans when they are part of a hedged portfolio. These adjustments are not assigned to individual loans but affect the overall net loan balance. (These adjustments are crucial for understanding the true net loan balance and the impact of hedging strategies on the loan portfolio's valuation.)

Off-balance sheet credit exposures

Potential credit risks that are not recorded on the company's balance sheet, such as loan commitments or letters of credit. (The company reported a benefit from credit loss expense for these exposures, indicating a positive shift in risk assessment for these contingent liabilities.)

Diluted earnings per share (EPS)

A measure of a company's profit allocated to each outstanding share of common stock, assuming all convertible securities and stock options were exercised. (The significant increase in diluted EPS from $0.27 to $0.54, despite a slight dip in net income, suggests improved profitability on a per-share basis.)

Year-Over-Year Comparison

For the six months ended June 30, 2025, AMES NATIONAL CORP reported net income of $8,898,689, a marginal decrease from $8,949,110 in the prior year. However, diluted earnings per share saw a substantial increase to $0.54 from $0.27, indicating improved per-share profitability. A notable positive change is the shift from a $2 thousand credit loss expense for off-balance sheet exposures in 2024 to a $69 thousand benefit in 2025, suggesting a more favorable risk assessment in this area.

Key Financial Figures

• $2 — 8,689 shares of common stock, par value $2, outstanding. Table of Contents AMES
• $250 — d money market 547,277 540,491 Time, $250 and over 88,692 84,996 Other time 2

Filing Documents

• atlo20250630_10q.htm (10-Q) — 4206KB
• ex_823344.htm (EX-31.1) — 8KB
• ex_823345.htm (EX-31.2) — 8KB
• ex_823346.htm (EX-32.1) — 4KB
• ex_823347.htm (EX-32.2) — 4KB
• 0001437749-25-025672.txt ( ) — 18279KB
• atlo-20250630.xsd (EX-101.SCH) — 61KB
• atlo-20250630_cal.xml (EX-101.CAL) — 63KB
• atlo-20250630_def.xml (EX-101.DEF) — 418KB
• atlo-20250630_lab.xml (EX-101.LAB) — 388KB
• atlo-20250630_pre.xml (EX-101.PRE) — 457KB
• atlo20250630_10q_htm.xml (XML) — 5700KB

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 35 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 51 Item 4.

Controls and Procedures

Controls and Procedures 51 PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 51 Item 1.A.

Risk Factors

Risk Factors 51 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 52 Item 3. Defaults Upon Senior Securities 52 Item 4. Mine Safety Disclosures 52 Item 5. Other Information 52 Item 6. Exhibits 53

Signatures

Signatures 54 2 Table of Contents AMES NATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) June 30, December 31, 2025 2024 (unaudited) (audited) ASSETS Cash and due from banks $ 24,148 $ 19,525 Interest-bearing deposits in financial institutions and federal funds sold 71,063 81,702 Total cash and cash equivalents 95,211 101,227 Interest-bearing time deposits 6,918 6,166 Securities available-for-sale 644,702 648,513 Federal Home Loan Bank (FHLB) and Federal Reserve Bank (FRB) stock, at cost 3,166 3,883 Loans receivable, net 1,279,644 1,303,917 Loans held for sale 341 342 Bank premises and equipment, net 21,239 21,567 Accrued income receivable 12,166 13,864 Bank-owned life insurance 3,256 3,214 Deferred income taxes, net 9,949 14,056 Intangible assets, net 938 1,092 Goodwill 12,424 12,424 Other assets 2,890 2,915 Total assets $ 2,092,844 $ 2,133,180 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits Noninterest-bearing checking $ 309,379 $ 358,386 Interest-bearing checking 629,728 619,951 Savings and money market 547,277 540,491 Time, $250 and over 88,692 84,996 Other time 244,129 242,858 Total deposits 1,819,205 1,846,682 Securities sold under agreements to repurchase 40,061 52,412 Other borrowings 30,652 46,952 Dividends payable - 1,790 Accrued interest payable 2,472 3,208 Accrued expenses and other liabilities 7,425 7,430 Total liabilities 1,899,815 1,958,474 STOCKHOLDERS' EQUITY Common stock, $ 2 par value, authorized 18,000,000 shares; issued and outstanding 8,898,689 and 8,949,110 shares as of June 30, 2025 and December 31, 2024, respectively 17,797 17,898 Additional paid-in capital 12,907 13,635 Retained earnings 188,442 182,236 Accumulated other comprehensive (loss) ( 26,117 ) ( 39,063 ) Total stockholders' equity 193,029 174,706 Total liabilities and stockhol

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 1. Significant Accounting Policies The accompanying unaudited consolidated financial statements have been prepared by Ames National Corporation (the "Company") pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the company believes that the disclosures made are adequate to make the information not misleading. It is suggested that these interim financial statements be read in conjunction with the year-end audited financial statements contained in the Company's Annual Report on Form 10 -K for the year ended December 31, 2024 (the "Annual Report"). The consolidated balance sheet of the Company as of December 31, 2024 has been derived from the audited consolidated balance sheet of the Company as of that date. In the opinion of management, the accompanying consolidated financial statements of the Company contain all adjustments necessary to fairly present the financial results for the interim periods reported. Those adjustments consist only of normal recurring adjustments. The results of operations for the interim periods are not necessarily indicative of results which may be expected for an entire year. The consolidated financial statements include the accounts of the Company and its wholly-owned banking subsidiaries (the "Banks"). All significant intercompany balances and transactions have been eliminated in consolidation. Subsequent Events: The Company has evaluated subsequent events through the filing date of this Quarterly Report on Form 10 -Q with the SEC. Goodwill: Goodwill represents the excess of cost over the fair value of net assets acquired. Goodwill resulting from acquisitions is not amortized but is tested for impairmen

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View this 10-Q filing on SEC EDGAR