ATLO's Net Income Soars 105% on Strong Net Interest Income Growth

TL;DR

**ATLO's Q3 earnings are a blowout, but keep an eye on rising credit losses – it's a buy if they can manage loan quality.**

AI Summary

AMES NATIONAL CORP (ATLO) reported a significant increase in net income for the three and nine months ended September 30, 2025. Net income for the third quarter of 2025 surged to $4.559 million, a 105.6% increase from $2.217 million in the same period of 2024. For the nine months ended September 30, 2025, net income more than doubled to $12.513 million, up from $6.705 million in 2024. This growth was primarily driven by a substantial rise in net interest income, which increased by 26.8% to $14.049 million for the three months and by 23.1% to $40.430 million for the nine months, largely due to higher interest and dividend income from loans and securities. Total assets decreased slightly to $2.108 billion from $2.133 billion at December 31, 2024, while total stockholders' equity increased to $200.592 million from $174.706 million. The company also saw an increase in credit loss expense to $627 thousand for the quarter and $1.697 million for the nine months, indicating potential loan portfolio risks. Strategic outlook includes evaluating new accounting pronouncements like ASU 2023-09 and ASU 2024-03, which could impact future financial disclosures.

Why It Matters

This robust earnings growth, particularly the 105.6% jump in Q3 net income, signals strong operational performance for AMES NATIONAL CORP, potentially making ATLO an attractive prospect for investors seeking regional bank exposure. The significant increase in net interest income suggests effective asset-liability management in a dynamic interest rate environment, outperforming many competitors. However, the rising credit loss expense warrants investor scrutiny, as it could indicate future asset quality challenges. For employees and customers, a financially stronger bank generally means greater stability and potentially better services, while the broader market will watch if ATLO can sustain this growth amidst evolving economic conditions and competitive pressures.

Risk Assessment

Risk Level: medium — The risk level is medium due to the notable increase in credit loss expense, which rose to $627 thousand for the three months ended September 30, 2025, from $371 thousand in the prior year, and to $1.697 million for the nine months from $722 thousand. This nearly doubled credit loss expense suggests potential deterioration in loan portfolio quality or a more conservative provisioning stance, which could impact future profitability despite strong net interest income.

Analyst Insight

Investors should consider initiating or increasing positions in ATLO, given the impressive net income growth and strong net interest income. However, closely monitor future filings for trends in credit loss expense and loan performance, as this is the primary potential headwind to sustained profitability.

Financial Highlights

revenue

$14.049M

total Assets

$2.108B

net Income

$4.559M

eps

$0.51

revenue Growth

+26.8%

Revenue Breakdown

Key Numbers

• $4.559M — Net Income (Q3 2025) (Increased 105.6% from $2.217M in Q3 2024)
• $12.513M — Net Income (YTD 2025) (Increased 86.6% from $6.705M in YTD 2024)
• $14.049M — Net Interest Income (Q3 2025) (Increased 26.8% from $11.077M in Q3 2024)
• $40.430M — Net Interest Income (YTD 2025) (Increased 23.1% from $32.855M in YTD 2024)
• $627K — Credit Loss Expense (Q3 2025) (Increased 69.0% from $371K in Q3 2024)
• $1.697M — Credit Loss Expense (YTD 2025) (Increased 135.0% from $722K in YTD 2024)
• $2.108B — Total Assets (Sept 30, 2025) (Decreased from $2.133B at Dec 31, 2024)
• $200.592M — Total Stockholders' Equity (Sept 30, 2025) (Increased from $174.706M at Dec 31, 2024)
• 8,892,167 — Shares Outstanding (Oct 31, 2025) (Decreased from 8,949,110 shares at Dec 31, 2024 due to repurchases)
• $0.51 — Basic and Diluted EPS (Q3 2025) (Increased from $0.25 in Q3 2024)

Key Players & Entities

• AMES NATIONAL CORP (company) — Registrant
• SEC (regulator) — Securities and Exchange Commission
• FASB (regulator) — Financial Accounting Standards Board
• $4.559 million (dollar_amount) — Net income for Q3 2025
• $2.217 million (dollar_amount) — Net income for Q3 2024
• $12.513 million (dollar_amount) — Net income for nine months ended Sept 30, 2025
• $6.705 million (dollar_amount) — Net income for nine months ended Sept 30, 2024
• $14.049 million (dollar_amount) — Net interest income for Q3 2025
• $11.077 million (dollar_amount) — Net interest income for Q3 2024
• $627 thousand (dollar_amount) — Credit loss expense for Q3 2025

FAQ

Risk Factors

• Increased Credit Loss Expense [medium — financial]: Credit loss expense rose to $627 thousand for Q3 2025, a 69.0% increase from $371 thousand in Q3 2024. For the nine months ended September 30, 2025, it increased to $1.697 million, up 135.0% from $722 thousand in the prior year. This indicates potential risks within the loan portfolio.
• Goodwill Impairment Assessment [low — operational]: The company performs annual goodwill impairment tests, which involve significant judgment in estimating fair value, developing cash flow projections, and selecting discount rates. While a quantitative assessment as of October 1, 2024, did not indicate impairment, future economic or market changes could impact this assessment.
• New Accounting Pronouncements [low — regulatory]: The company is evaluating new accounting pronouncements such as ASU 2023-09 and ASU 2024-03. These could impact future financial disclosures and reporting requirements.

Industry Context

AMES NATIONAL CORP operates within the banking sector, a highly competitive and regulated industry. Key trends include managing interest rate sensitivity, adapting to evolving digital banking preferences, and navigating a complex regulatory environment. Profitability is heavily influenced by net interest margins and the ability to manage credit risk effectively.

Regulatory Implications

As a financial institution, ATLO is subject to stringent regulatory oversight from bodies like the Federal Reserve and FDIC. The company must comply with capital requirements, lending regulations, and consumer protection laws. The evaluation of new accounting pronouncements like ASU 2023-09 and ASU 2024-03 highlights the need for ongoing compliance with evolving accounting standards.

What Investors Should Do

1. Monitor Credit Loss Trends
2. Analyze Net Interest Income Drivers
3. Assess Impact of New Accounting Standards
4. Review Share Repurchase Activity

Key Dates

• 2025-09-30: End of Q3 and Nine Months Reporting Period — Reported significant net income growth driven by net interest income, alongside an increase in credit loss expense.
• 2025-10-31: Shares Outstanding Date — Shares outstanding decreased to 8,892,167 from 8,949,110 at year-end 2024 due to share repurchases.
• 2024-12-31: Previous Fiscal Year End — Provided the comparative baseline for total assets ($2.133B) and total stockholders' equity ($174.706M).
• 2024-10-01: Goodwill Impairment Assessment Date — A quantitative assessment of goodwill was performed on this date, which did not indicate impairment at that time.

Glossary

Net Interest Income

The difference between the interest income generated by a bank or financial institution and the interest it pays out to its lenders. It's a key measure of profitability for banks. (This was the primary driver of the significant increase in net income for ATLO in Q3 2025.)

Credit Loss Expense

The amount a financial institution sets aside to cover potential losses from loans that may not be repaid. It reflects the expected credit losses on loans and other financial instruments. (The increase in this expense for ATLO suggests potential concerns about the quality of its loan portfolio.)

Goodwill

An intangible asset that arises when one company acquires another for a price higher than the fair market value of its net assets. It is not amortized but tested annually for impairment. (ATLO's goodwill is subject to annual impairment testing, which requires significant management judgment and could impact future earnings if impaired.)

ASU 2023-09

Accounting Standards Update from the FASB related to income taxes, specifically concerning the presentation of tax expense or benefit by jurisdiction. (This pronouncement is being evaluated by ATLO and could affect its future financial reporting disclosures.)

ASU 2024-03

Accounting Standards Update from the FASB, likely related to specific financial reporting areas. (Specific topic not detailed in provided text). (This pronouncement is being evaluated by ATLO and could affect its future financial reporting disclosures.)

Year-Over-Year Comparison

Compared to the prior year, AMES NATIONAL CORP (ATLO) has demonstrated robust net income growth, more than doubling for both the quarter and year-to-date periods, primarily fueled by a substantial increase in net interest income. While total assets saw a slight decrease, stockholders' equity has grown significantly. However, a notable concern is the sharp rise in credit loss expense, indicating potential deterioration in loan portfolio quality that warrants investor attention.

Key Financial Figures

• $2 — 2,167 shares of common stock, par value $2, outstanding. Table of Contents AMES
• $250 — d money market 526,935 540,491 Time, $250 and over 92,330 84,996 Other time 2

Filing Documents

• atlo20250930_10q.htm (10-Q) — 4134KB
• ex_855279.htm (EX-31.1) — 8KB
• ex_855280.htm (EX-31.2) — 8KB
• ex_855281.htm (EX-32.1) — 4KB
• ex_855282.htm (EX-32.2) — 4KB
• 0001437749-25-033807.txt ( ) — 18360KB
• atlo-20250930.xsd (EX-101.SCH) — 61KB
• atlo-20250930_cal.xml (EX-101.CAL) — 63KB
• atlo-20250930_def.xml (EX-101.DEF) — 427KB
• atlo-20250930_lab.xml (EX-101.LAB) — 404KB
• atlo-20250930_pre.xml (EX-101.PRE) — 468KB
• atlo20250930_10q_htm.xml (XML) — 5732KB

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 49 Item 4.

Controls and Procedures

Controls and Procedures 49 PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 49 Item 1.A.

Risk Factors

Risk Factors 49 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 50 Item 3. Defaults Upon Senior Securities 50 Item 4. Mine Safety Disclosures 50 Item 5. Other Information 50 Item 6. Exhibits 51

Signatures

Signatures 52 2 Table of Contents AMES NATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) September 30, December 31, 2025 2024 (unaudited) (audited) ASSETS Cash and due from banks $ 22,706 $ 19,525 Interest-bearing deposits in financial institutions and federal funds sold 85,455 81,702 Total cash and cash equivalents 108,161 101,227 Interest-bearing time deposits 5,678 6,166 Securities available-for-sale 650,660 648,513 Federal Home Loan Bank (FHLB) and Federal Reserve Bank (FRB) stock, at cost 2,891 3,883 Loans receivable, net 1,275,794 1,303,917 Loans held for sale 888 342 Bank premises and equipment, net 21,008 21,567 Accrued income receivable 15,001 13,864 Bank-owned life insurance 3,279 3,214 Deferred income taxes, net 8,606 14,056 Intangible assets, net 861 1,092 Goodwill 12,424 12,424 Other assets 2,748 2,915 Total assets $ 2,107,999 $ 2,133,180 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits Noninterest-bearing checking $ 310,155 $ 358,386 Interest-bearing checking 658,686 619,951 Savings and money market 526,935 540,491 Time, $250 and over 92,330 84,996 Other time 244,713 242,858 Total deposits 1,832,819 1,846,682 Securities sold under agreements to repurchase 40,623 52,412 Other borrowings 23,502 46,952 Dividends payable - 1,790 Accrued interest payable 2,485 3,208 Accrued expenses and other liabilities 7,978 7,430 Total liabilities 1,907,407 1,958,474 STOCKHOLDERS' EQUITY Common stock, $ 2 par value, authorized 18,000,000 shares; issued and outstanding 8,892,167 and 8,949,110 shares as of September 30, 2025 and December 31, 2024, respectively 17,784 17,898 Additional paid-in capital 12,798 13,635 Retained earnings 191,235 182,236 Accumulated other comprehensive (loss) ( 21,225 ) ( 39,063 ) Total stockholders' equity 200,592 174,706 Total liabilities a

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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