2ND QUARTER | 2020QUARTERLY REPORTTO SHAREHOLDERS
Company Stock
ATLONASDAQ Capital Market
June 30, 2020 Closing Price: $19.74
Second Quarter Price Range: $17.25 to $23.89
Cash Dividend Declared on July 8, 2020: $0.25(To be paid on August 14, 2020)
SECOND QUARTER FINANCIAL HIGHLIGHTS• Net income for the Company totaled $4,428,000, or $0.49 per share,
compared to$4,618,000, or $0.50 per share, earned in the second quarter of 2019. The decrease in earnings is primarily the result of the additional provision for loan losses in 2020.
• A provision for loan losses of $1,566,000 was recognized in the second quarter of 2020 as compared to $68,000 in the second quarter of 2019 while net loan charge-offs totaled $471,000 for the second quarter 2020. The increase in the provision for loan losses was primarily due to the economic slowdown associated with COVID-19 and to a lesser extent the increase in net charge-offs. Given that it is difficult to determine the severity of the effects of COVID-19 on our operations, Management feels that it is prudent to increase provisions to the loan loss reserve at this time.
• Second quarter 2020 loan interest income was $1,762,000 higher than second quarter 2019, primarily due to the “Acquisition” of Iowa State Savings Bank on October 25, 2019; deposit interest expense decreased $708,000 during this same time period, primarily due to market rate decreases. Second quarter 2020 net interest income totaled $13,680,000, an increase of $2,750,000, or 25%, compared to the same quarter a year ago. The increase in net interest income was primarily due to the Acquisi-tion. The acquired assets totaled approximately $215 million.
• Total assets were $1.9 billion, a $428 million increase in assets at quar-ter-end compared to last year. Net loans increased 31%, to $1.1 billion, as compared to $874 million as of June 30, 2019. Deposits totaled $1.6 billion on June 30, 2020, compared to $1.2 billion at June 30, 2019.
• On July 8, 2020, the Company declared a quarterly cash dividend on common stock, payable on August 14, 2020 to stockholders of record as of July 31, 2020, equal to $0.25 per share. Dividends in the future may be reduced or eliminated if the COVID-19 restrictions have an adverse effect on net income.
Three Months EndedJune 30,
2019 2020Net Income $ 4,618,000 $ 4,428,000Earnings Per Share – Basic $ 0.50 $ 0.49Return on Average Assets (ROA) 1.27% 0.94%Return on Average Equity (ROE) 10.32% 9.09%Efficiency Ratio 54.92% 56.49%Net Interest Margin (FTE) 3.20% 3.10%Equity Capital Ratio 12.48% 10.60%
20192020
$4.6$4.4
$2.5$2.0 $3.0 $3.5 $4.0 $4.5 $5.0
NET INCOMEMillions of DollarsQuarter Ended June 30
20192020
$874$1,146
$800$700 $900 $1,000 $1,200 $1,300 $1,400
LOANSMillions of DollarsAs of June 30
20192020
$1,469$1,897
$1,400$1,300 $1,500 $1,600 $1,700 $1,800 $1,900
ASSETSMillions of DollarsAs of June 30
DEPOSITSMillions of DollarsAs of June 30
AT A GLANCEFINANCIAL HIGHLIGHTS
20192020
$1,244$1,644
$1,200$1,100 $1,300 $1,400 $1,500 $1,600 $1,700
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
ASSETS
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Total stockholders’ equity
Total liabilities and stockholders’ equity
(unaudited)
CONSOLIDATED BALANCE SHEETS
$ 22,615,322
67,435,442
458,763,315
2,655,700
873,639,020
766,945
15,733,212
8,998,009
217,856
2,806,029
1,213,746
2,374,906
9,744,472
1,631,159
$ 1,468,595,133
Cash and due from banks
Interest bearing deposits in financial institutions & Fed Funds sold
Securities available-for-sale
Federal Home Loan Bank and Federal Reserve Bank stock, at cost
Loans receivable, net
Loans held for sale
Bank premises and equipment
Accrued income receivable
Other real estate owned
Bank-owned life insurance
Deferred income taxes, net
Other intangible assets, net
Goodwill
Other assets
Total assets
$ 220,241,881
386,894,248
413,412,483
50,144,650
173,763,838
1,244,457,100
31,693,100
2,000,000
2,215,709
-
4,977,688
$ 1,285,343,597
$ 18,464,244
19,019,767
142,312,863
3,454,662
183,251,536
$ 1,468,595,133
Deposits
Noninterest bearing checking
Interest bearing checking
Savings and money market
Time, $250,000 and over
Other time
Total assets
Securities sold under agreements to repurchase
Federal Home Loan Bank advances
Dividend payable
Deferred income taxes
Accrued expenses and other liabilities
Total liabilities
2020
$ 12,569,869
1,917,332 954,525 195,703
15,637,429
1,898,046 59,355
1,957,401 13,680,028 1,566,476
12,113,552
909,728 305,544
43,910 572,718 410,414 185,910
2,428,224
5,812,449 1,336,401
656,752 49,857
397,755 181,546 217,223145,390 302,138
9,099,511 5,442,265
1,014,600
$ 4,427,665
$ 0.49
$ -
$ 25,156,883
3,738,572 1,864,422
713,015
31,472,892
4,548,412 198,527
4,746,939 26,725,953
3,882,631
22,843,322
1,771,461 746,237 429,925 839,458 836,254 436,081
5,059,416
11,587,645 2,527,453
1,347,938 49,857
741,479 445,689
434,446 290,771 724,282
18,149,560 9,753,178
1,771,000
$ 7,982,178
$ 0.87
$ 0.25
NONINTEREST INCOME:Wealth management income Service feesSecurities gains, netGain on sale of loans held for saleMerchant and card feesOther noninterest income Total noninterest income
NONINTEREST EXPENSE:Salaries and employee benefitsData processingOccupancy expenses, netFDIC insurance assessmentsProfessional feesBusiness developmentIntangible asset amortizationNew market tax credit project amortizationOther operating expenses, net Total noninterest expense Income before income taxes
INCOME TAX EXPENSE
NET INCOME
Basic and diluted earnings per share
Declared dividends per share
INTEREST AND DIVIDEND INCOME:Loans, including feesSecurities Taxable Tax-exemptOther interest and dividend income Total interest & dividend income
INTEREST EXPENSE:DepositsOther borrowed funds Total interest expense Net interest incomeProvision for loan losses Net interest income after provision for loan losses
Three Months EndedJune 30,
Six Months EndedJune 30,
2019 2020 2019
SECOND QUARTER FINANCIAL HIGHLIGHTS• Net income for the Company totaled $4,428,000, or $0.49 per share,
compared to$4,618,000, or $0.50 per share, earned in the second quarter of 2019. The decrease in earnings is primarily the result of the additional provision for loan losses in 2020.
• A provision for loan losses of $1,566,000 was recognized in the second quarter of 2020 as compared to $68,000 in the second quarter of 2019 while net loan charge-offs totaled $471,000 for the second quarter 2020. The increase in the provision for loan losses was primarily due to the economic slowdown associated with COVID-19 and to a lesser extent the increase in net charge-offs. Given that it is difficult to determine the severity of the effects of COVID-19 on our operations, Management feels that it is prudent to increase provisions to the loan loss reserve at this time.
• Second quarter 2020 loan interest income was $1,762,000 higher than second quarter 2019, primarily due to the “Acquisition” of Iowa State Savings Bank on October 25, 2019; deposit interest expense decreased $708,000 during this same time period, primarily due to market rate decreases. Second quarter 2020 net interest income totaled $13,680,000, an increase of $2,750,000, or 25%, compared to the same quarter a year ago. The increase in net interest income was primarily due to the Acquisi-tion. The acquired assets totaled approximately $215 million.
• Total assets were $1.9 billion, a $428 million increase in assets at quar-ter-end compared to last year. Net loans increased 31%, to $1.1 billion, as compared to $874 million as of June 30, 2019. Deposits totaled $1.6 billion on June 30, 2020, compared to $1.2 billion at June 30, 2019.
• On July 8, 2020, the Company declared a quarterly cash dividend on common stock, payable on August 14, 2020 to stockholders of record as of July 31, 2020, equal to $0.25 per share. Dividends in the future may be reduced or eliminated if the COVID-19 restrictions have an adverse effect on net income.
STOCKHOLDERS’ EQUITY
June 30,2020
June 30,2019
$ 32,528,234
145,990,834
513,615,814
3,154,800
1,146,046,388
2,033,360
17,628,860
10,801,448
631,647
2,878,838
-
3,524,814
12,424,434
5,712,963
$ 1,896,972,434
$ 332,285,659
483,065,694
553,546,573
69,189,546
205,455,750
1,643,543,222
36,892,657
3,000,000
-
1,194,894
11,191,759
$ 1,285,343,597
$ 18,245,494
17,001,736
151,910,115
13,992,557
201,149,902
$ 1,896,972,434
$ 10,808,142
1,554,713 1,067,955
290,465
13,721,275
2,606,384 184,634
2,791,018 10,930,257
68,320
10,861,937
1,019,143 387,133
1,890 224,031 386,384 194,358
2,212,939
4,797,497 872,064 518,559
91,666 382,983 248,178 139,314
- 167,717
7,217,978 5,856,898
1,239,305
$ 4,617,593
$ 0.50
$ 0.24
$ 21,509,571
3,043,565 2,168,529
528,033
27,249,698
4,965,216 383,848
5,349,064 21,900,634
166,414
21,734,220
1,803,757 757,429
1,890 396,757 747,525 431,289
4,138,647
9,513,325 1,763,445 1,117,564
191,895 771,829 516,775 302,978
- 496,923
14,674,734 11,198,133
2,343,105
$ 8,855,028
$ 0.96
$ 0.48
Common stock, $2 par value, authorized 18,000,000 shares; issued and outstanding 9,122,747 and 9,232,122 shares as of June 30, 2020 and 2019, respectively
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income
MISSION STATEMENTAmes National Corporation is a result-oriented financial services holding company providing leadership, counsel and support to its commu-nity affiliate banks and superior performance for its shareholders.
CORE VALUESExcellenceStriving to exceed expectations
IntegrityDemonstrating high moral and ethical conduct
LeadershipCreating and developing opportunities that benefit our employees, customers, communities, and shareholders
StabilityMaintaining financial strength and a dedicated staff to successfully serve the current and future needs of our employees, customers, communities, and shareholders
TrustActing in the best interest of our employees, customers, and shareholders
CommunityDedicated to serving our communities through local decision making, community involvement and active boards of directors
AFFILIATE BANKS
Ames National Corporation405 5th Street • Ames, IA 50010PHONE 515-232-6251FAX 515-663-3033EMAIL [email protected] www.amesnational.com
THOMAS H. POHLMANChairman, Ames National Corporation
JOHN P. NELSONPresident & CEO, Ames National Corporation
DAVID W. BENSONAttorney, Nyemaster Goode, P.C.
MICHELLE R. CASSABAUMChief Operating and Financial Officer, 21st Century Rehab P.C.
LISA M. ESLINGERChief Financial and Administrative Officer,Iowa State University Foundation
STEVEN D. FORTHFarmer
PATRICK G. HAGANRetired Senior Vice President and Treasurer,Fareway Stores, Inc.
BETTY A. BAUDLER HORRASPresident, Baudler Enterprises, Inc.
JAMES R. LARSON, IIPresident, Larson Development Corporation
JOHN L. PIERSCHBACHERChief Financial Officer, Ames National Corporation
KEVIN L. SWARTZChief Executive Officer, Wolfe Clinic PC
COMPANY DIRECTORS
