Ames National (ATLO) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $2.2 million ($0.25 per share), down from $2.9 million ($0.33 per share) in Q3 2023, mainly due to higher credit loss expense and one-time consultant fees for vendor contracts.

• For the nine months ended September 30, 2024, net income was $6.7 million ($0.75 per share), down from $8.7 million ($0.97 per share) in the same period last year.

• Net interest income rose to $11.1 million in Q3 2024 from $10.7 million in Q3 2023, driven by higher loan rates and portfolio growth.

• Noninterest income increased 2.2% year-over-year to $2.41 million, while noninterest expense rose 7.2% to $10.5 million, reflecting higher salaries and consultant fees.

• Loan growth and a specific commercial loan reserve drove increased credit loss expense; consultant fees were a one-time item tied to contract negotiations.

Financial highlights

• Total assets were $2.12 billion as of September 30, 2024, a decrease of $32.3 million from December 31, 2023, mainly due to lower securities available-for-sale.

• Loans receivable, net, increased to $1.30 billion from $1.28 billion at year-end, led by growth in residential, multi-family, and agricultural loans.

• Deposits declined slightly to $1.80 billion from $1.81 billion, with a shift toward higher-rate time deposits.

• Investment portfolio stood at $688.6 million, down $47.8 million from year-end, with $39.8 million in gross unrealized losses attributed to interest rate changes.

• Allowance for credit losses was $17.6 million (1.34% of loans), up from $16.8 million (1.30%) at year-end.

Outlook and guidance

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

• No additional consultant fees are anticipated for the remainder of 2024; benefits from negotiated contracts will be recognized over time.

• No material capital expenditures or changes in capital resource mix are anticipated; capital levels exceed regulatory well-capitalized thresholds.

• No significant changes in risk factors or critical accounting policies since year-end.

• Management notes risks from economic conditions, interest rates, credit quality, and regulatory changes.