On July 19, 2024, Ames National Corp (ATLO, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. Ames National Corporation is a United States-based bank holding company that provides a range of banking services through its subsidiaries, including checking, savings, and time deposits, cash management services, and various loan products. The company operates primarily in central, north central, and south-central Iowa.
Performance and Challenges
Ames National Corp (ATLO, Financial) reported a net income of $2.2 million, or $0.24 per share, for the second quarter of 2024, compared to $2.6 million, or $0.28 per share, in the same period of 2023. For the six months ended June 30, 2024, net income totaled $4.5 million, or $0.50 per share, down from $5.8 million, or $0.64 per share, in the previous year. The decline in earnings is primarily attributed to higher interest expenses on deposits and other borrowed funds, partially offset by increased interest income on loans.
Financial Achievements
Despite the challenges, Ames National Corp (ATLO, Financial) achieved notable financial milestones. The company's loan interest income for the second quarter of 2024 was $2.2 million higher than the same period in 2023, driven by higher average interest rates and growth in the loan portfolio. Additionally, noninterest income increased by 13.1% to $2.6 million, primarily due to higher estate fees recognized in wealth management income.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 |
|---|---|---|---|---|
| Net Income (in thousands) | $2,184 | $2,557 | $4,488 | $5,754 |
| Earnings per Share | $0.24 | $0.28 | $0.50 | $0.64 |
| Return on Average Assets | 0.41% | 0.47% | 0.42% | 0.54% |
| Return on Average Equity | 5.40% | 6.45% | 5.50% | 7.40% |
| Efficiency Ratio | 79.61% | 77.57% | 78.78% | 73.87% |
| Net Interest Margin | 2.14% | 2.20% | 2.14% | 2.26% |
Income Statement Highlights
Net interest income for the second quarter of 2024 was $10.9 million, a decrease of $0.4 million, or 3.8%, compared to the same quarter in 2023. The net interest margin was 2.14% for the quarter, down from 2.20% in the previous year. The decrease in net interest margin is primarily due to an increase in market interest rates and deposits repricing more quickly than interest-earning assets.
Balance Sheet Highlights
As of June 30, 2024, total assets were $2.1 billion, a decrease of $47.9 million compared to June 30, 2023. The decrease in assets was primarily due to a reduction in interest-bearing deposits and securities available-for-sale, partially offset by an increase in loans. Net loans increased to $1.28 billion, up from $1.23 billion in the previous year, driven by growth in the agriculture, commercial real estate, and multifamily loan portfolios.
Cash Dividend Announcement
On May 8, 2024, Ames National Corp (ATLO, Financial) declared a quarterly cash dividend of $0.27 per share, payable on August 15, 2024, to stockholders of record as of August 1, 2024. This reflects the company's commitment to returning value to its shareholders.
Analysis
The financial performance of Ames National Corp (ATLO, Financial) in the second quarter of 2024 highlights the impact of rising interest expenses on the company's profitability. While the increase in loan interest income and noninterest income are positive indicators, the higher interest expenses on deposits and other borrowed funds pose challenges. The company's ability to manage these expenses and maintain a healthy net interest margin will be crucial for its future performance.
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Explore the complete 8-K earnings release (here) from Ames National Corp for further details.
