Ames National (ATLO) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $2.2 million ($0.24 per share), down from $2.6 million ($0.28 per share) in Q2 2023, mainly due to higher interest expense on deposits and borrowings, partially offset by increased loan interest income.

• For the six months ended June 30, 2024, net income was $4.5 million ($0.50 per share), compared to $5.8 million ($0.64 per share) for the same period in 2023.

• Management anticipates not meeting 2024 forecasted earnings due to higher than expected interest expense.

Financial highlights

• Net interest income for Q2 2024 was $10.9 million, down from $11.3 million in Q2 2023; net interest margin (FTE) declined to 2.14% from 2.20% year-over-year.

• Noninterest income rose 13.1% to $2.6 million in Q2 2024, mainly from higher estate fees in wealth management.

• Noninterest expense increased 1.7% to $10.7 million, driven by higher salaries, benefits, and consulting fees, partially offset by lower other expenses and the absence of a prior year wire fraud loss.

• Efficiency ratio was 79.61% in Q2 2024, up from 77.57% in Q2 2023.

• Q2 2024 credit loss expense was $182 thousand, up from $33 thousand in Q2 2023, due to loan growth.

Outlook and guidance

• Management expects liquidity sources to be sufficient to support operations for the foreseeable future.

• No material capital expenditures or changes in capital resource mix are anticipated.

• Management expects full-year 2024 earnings to fall short of forecasts, primarily due to elevated interest expense on deposits and borrowings.