Ames National Corporation

What they do

The company owns 100% of six bank subsidiaries: First National Bank (Ames), State Bank & Trust Co. (Nevada), Boone Bank & Trust Co., Reliance State Bank (Story City), United Bank & Trust Co. (Marshalltown) and Iowa State Savings Bank (Creston). The Banks take deposits, make short- and medium-term commercial, multi-family, agricultural and residential real estate loans, agricultural and business operating loans, equipment and consumer loans, and originate mortgage loans for sale into the secondary market. Five of the six Banks also offer trust and wealth management services. All operations are in Iowa, in Boone, Clarke, Hancock, Marshall, Polk, Story, Taylor and Union counties.

Revenue drivers

• Net interest income — The largest contributor to net income: interest and fees on loans plus interest on investment securities (primarily bonds), less interest paid on deposits and borrowings. Net interest income was $16.4 million in Q2 2026.
• Wealth management and trust fees — Fees on wealth management services, including financial planning and managing trust, agency, estate and investment brokerage accounts, offered at five of the six Banks.
• Deposit service charges and card/merchant fees — Service fees on deposit accounts, merchant credit card processing and card fees. Noninterest income totaled $2.7 million in Q2 2026 versus $2.6 million a year earlier.
• Gain on sale of loans — The Banks originate mortgage loans for sale into the secondary market, producing gain-on-sale revenue.

Recent performance

For Q2 2026, net income was $5.9 million, or $0.67 per share, versus $4.5 million, or $0.51 per share, in Q2 2025. Six-month 2026 net income was $11.9 million, or $1.34 per share, versus $8.0 million, or $0.89 per share, a year earlier. Net interest income rose 21.7% year over year to $16.4 million; net interest margin (tax-equivalent) improved to 3.18% from 2.65%. Q2 2026 credit loss expense was $208 thousand with net charge-offs of $255 thousand, down from $1.1 million of charge-offs in Q2 2025. Total assets were $2.12 billion at June 30, 2026, with loans receivable, net, of $1.25 billion, deposits of $1.85 billion and stockholders' equity of $213.1 million.

Strategy

The company's stated competitive strategy is to use seasoned bank management and local decision-making authority to give customers faster response times and more flexibility than other financial institutions. It also aims to remain operationally efficient to improve profitability and offer more competitive loan and deposit rates. The holding company provides centralized support to the Banks in management, internal audit, human resources, compliance, marketing, technology, financial reporting, appraisals and training. The parent employs 29 people to support the Banks, alongside 232 full-time-equivalent Bank employees.

Risks

• Economic and market conditions — Earnings and asset quality depend on the Iowa and U.S. economies, including interest rates, inflation, employment and business confidence, which affect borrowers' ability to repay.
• Concentrated Iowa footprint — All operations are in Iowa, primarily in Boone, Clarke, Hancock, Marshall, Polk, Story, Taylor and Union counties, so results are tied to local economic conditions.
• Credit losses — Credit loss expense was recorded in both 2026 and 2025 primarily due to charge-offs in the commercial loan portfolio.
• Interest rate and margin sensitivity — Net interest income depends on managing the spread between earning-asset yields and funding costs; the company cites interest rate risk management as a principal management function.

Outlook

Management attributes the year-over-year earnings increase to higher yields and average balances on investments and a lower cost of funds driven by declining market rates and reduced borrowings. The company directs readers to its March 12, 2026 Form 10-K for the challenges, risks and uncertainties it has identified as potentially affecting future financial condition and results. The most recent 10-Q states management is positioning the company to respond to those challenges.