Ames National Corporation Annual Report 2013

FY2013 Annual Report · Ames National Corporation

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Ames National Corporation

405 5th Street, Box 846 | Ames, IA 50010
t (515) 232-6251 | f (515) 663-3033
info@amesnational.com

Mission
stAtemeNt

Mission
Ames National Corporation is a result-oriented financial services holding company providing
leadership, counsel and support to its community affiliate banks and superior performance
for its shareholders.

Corporate Culture
Provide an environment where our affiliates and employees can be successful and provide
products and services that enhance the financial well-being of customers and shareholders.

Core Values
Excellence:

Striving to exceed expectations

Integrity:

Demonstrating high moral and ethical conduct

Leadership:

Creating and developing opportunities that benefit our employees, customers,
communities, and shareholders

Stability:

Maintaining financial strength and a dedicated staff to successfully serve the current
and future needs of our employees, customers, communities, and shareholders

Trust:

Acting in the best interest of our employees, customers, and shareholders

Community: Dedicated to serving our communities through local decision making, community

involvement and active boards of directors

table of Contents

Ames National Corporation at a Glance . . . . . . . . . . . . . . 1
Letter to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-3
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2013 Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Five-Year Performance Record . . . . . . . . . . . . . . . . . . . . . 7
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Affiliate Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-11
Stock and Dividend Information . . . . . . . . . . . . . . . . . . . 12
Shareholder Information . . . . . . . . . . . . . . . . . . . . . . . . . 13

shareholder
iNformAtioN

Company Contact Information
Ames National Corporation
P.O. Box 846
405 5th Street
Ames, IA 50010
(515) 232-6251 | Fax (515) 663-3033
info@amesnational.com | www.amesnational.com

Company Officers

Thomas H. Pohlman President & CEO

John P. Nelson Vice President & CFO

John L. Pierschbacher Controller

Kevin G. Deardorff Vice President & Technology Director

Nicole J. Gebhart Vice President & Marketing Director

Tracy W. Laws Vice President & Auditor

Jennifer J. Hanson Asst. Vice President & Human Resources Director

Timothy J. Lupardus Vice President & Information Systems Manager

Joel P. Jacobsen Asst. Vice President & Compliance Officer

Lori J. Hill Asst. Corporate Secretary

Matthew R. Hackbart Vice President
& Information Systems Asst. Manager

Colin T. Richey Information Systems Officer

Independent Auditors
CliftonLarsonAllen LLP
West Des Moines, Iowa

Counsel
Nyemaster Goode, P.C.
Des Moines, Iowa

Annual Meeting
The Board of Directors of Ames National Corporation has established
Wednesday, April 30, 2014, at 4:30 p.m. as the date of the Annual
Meeting of Shareholders. Registration will begin at 4:00 p.m. We invite
all shareholders to attend the meeting, which will be held at Reiman
Gardens, 1407 University Boulevard, Ames, Iowa.

Market Makers
Ames National Corporation’s common stock is listed on the NASDAQ
Capital Market under the symbol “ATLO.” Market makers and brokers
in the stock include:

First Point Wealth Management , First National Bank, Ames
(515) 663-3074

Stifel Nicolaus | (515) 233-4064

Monroe Securities, Inc. | (800) 766-5560

Raymond James | (800) 800-4693

FTN Financial Group | (800) 456-5460

Stock Transfer Agent
Illinois Stock Transfer Company
433 S. Carlton Avenue
Wheaton, IL 60187
(800) 757-5755 | Fax: (630) 480-0641
www.istshareholderservices.com

Form 10-K and Other Information
A copy of the Company’s annual report to the Securities and Exchange
Commission on form 10-K will be available on the Securities and
Exchange Commission’s website at http://www.sec.gov and through
a link on the Company’s website, www.amesnational.com, at Financial
Information, SEC Filings. A copy of the annual report can also be
obtained upon request to John Nelson, Vice President & CFO at
515-232-6251 or info@amesnational.com.

ames national corporation
at a glance

Ames National Corporation (the “Company) is an Iowa-based bank
holding company. The Company was organized and incorporated on
January 21, 1975, under the laws of the State of Iowa to serve as a
holding company for its principal banking subsidiary, First National Bank,
Ames, Iowa. In 1983, the Company acquired the stock of the State Bank
& Trust Co. located in Nevada, Iowa; in 1991, the Company, through a
newly-chartered state bank known as Boone Bank & Trust Co., acquired
certain assets and assumed certain liabilities of the former Boone State
Bank & Trust Company located in Boone, Iowa; in 1995, the Company
acquired the stock of the Reliance State Bank located in Story City, Iowa;
and in 2002, the Company chartered and commenced operations of
United Bank & Trust NA, located in Marshalltown, Iowa. In 2012,
Reliance State Bank acquired two offices in Garner and Klemme, Iowa.
Today, each Affiliate Bank is operated as a wholly-owned subsidiary of
the Company.

Each Affiliate Bank operates with a local board of directors and a local
bank president. All decisions are made locally which means customers
receive quick responses to questions, and services are customized to
meet customer needs in each community. The principal sources of
Company revenue are: interest and fees earned on loans made and held
by the Company and Affiliate Banks, interest on fixed income
investments, fees on trust services provided by those Affiliate Banks
exercising trust powers, service charges on deposit accounts maintained
by Affiliate Banks, gain on sale of loans, securities gains and merchant
and card fees. The Affiliate Banks’ lending activities consist primarily of
short-term and medium-term commercial, agricultural and residential real
estate loans, agricultural and business operating loans and lines of credit,
equipment loans, vehicle loans, personal loans and lines of credit, home
improvement loans and origination of mortgage loans for sale into the
secondary market. Affiliate Banks also offer a variety of demand, savings
and time deposits, cash management services, merchant credit card
processing and safe deposit box services. Convenient access to funds
and account information is also available through online banking, mobile
banking, online bill pay, online statements and debit cards.

The Company provides various services to the Affiliate Banks which
include: management assistance, internal auditing services, human
resources services and administration, compliance management,
marketing assistance and coordination, loan review and technology
support. Company staff handles the backroom operations that make the
Company more efficient so the Affiliate Bank staff can focus on what they
do best: banking and taking care of customers’ financial needs.

The principal executive office of Ames National Corporation is located
at 405 5th Street, Ames, Iowa 50010. The Company’s phone number is
(515) 232-6251. More information about the Company can also be found
at www.amesnational.com.

recent recognitions
• Ranked 25th on Bank Director’s Nifty 50 for NYSE,

NYSE MKT and NASDAQ-listed companies based on profitability

and capital levels (1st Quarter 2014)

• Ranked among the top 100 best-performing

community banks in the country by SNL Financial (3/13)

• Ranked among the top 100 top banks with assets
less than $2 billion in assets based on a 3-year
average ROE by the American Banker Magazine (4/13)

• Ranked in the top 13 among banks between

$1 billion and $5 billion in assets based on the 2013
Bank Performance Scorecard for profitability, capital strength and

asset quality by Bank Director Magazine (8/13)

• Ranked as the 6th largest Iowa commercial bank

holding company based on total deposits

letter to
shareholders

Strategic Thinking. Strategic Goals. Strategic Focus.
2013 presented many challenges such as the interest rate environment
and regulatory changes. These challenges provided opportunities for our
staff to think strategically which resulted in positive outcomes transpiring
during the year. Total assets, loans and deposits reached record levels.
Loans grew over 10% and finished the year at a new all-time high. Asset
quality improved and our low ratio of problem loans to total assets ranked
up in the upper quartile (best performance) in comparison to our peers.
Our exceptional people provided quality products and services that fueled
the expansion of our client base. Our banks provide financial leadership in
the communities we serve, and we are fortunate to have the right people
in the proper positions who find extraordinary ways to serve our clients.
Our bankers are focused on making our client experiences valuable and
rewarding, as we build long-term, mutually beneficial relationships.

We are pleased to present our 2013 financial report, highlighting earnings
performance, growth strategies, new products and services, and our
people. Let’s begin with earnings.

Earnings.
Ames National Corporation ended 2013 with net income of 14.0 million,
or $1.50 per share, compared to $14.2 million, or $1.52 per share
earned in 2012. We were pleased with higher net interest income in 2013
over 2012 considering the low market interest rates for the first half of
the year, but earnings were lower primarily as the result of funding the
loan loss reserve. Net interest margins improved in the second half of the
year as intermediate and long term interest rates have increased
compared to those of one year ago. Loan growth, good asset quality, and
better intermediate interest rates should provide momentum for earnings
as we enter 2014.

Rapid growth in assets over the past several years and lower market
interest rates for much of that time have made it difficult to deliver our
historical norms for average Return on Average Assets (ROAA) during
2013. ROAA was 1.14% for the year compared to 1.24% in 2012. Return
on Average Equity (ROAE) was 9.76% for the year compared to 10.08%
in 2012. The Company’s ROAA and ROAE generally compared favorably
to the averages as shown below:

Ames National Corporation vs. U.S. and Iowa FDIC
Insured Banks (ROAA and ROAE)

Industry

Iowa-Based Banks

ROAA

ROAE

1.14%

9.76%

1.07%

9.56%

0.93%

10.19%

The Company’s efficiency ratio is a measurement of our ability to convert
resources into revenue, the lower the number, the more efficient the
organization. Ames National Corporation's efficiency ratio for 2013 was
52.78%, consistent with the 52.33% reported in 2012. The Company
compares favorably to the industry which reported 61.46% for FDIC
Insured Iowa Banks during 2013.

The regulatory environment has been a challenge as we work to maximize
earnings. With the expansion of regulatory mandates stemming from the
Dodd-Frank Act, more dollars have been shifted to complying with new
processes, which unfortunately can be discouraging for consumers when
obtaining financing and looking for access to products and services. The
most significant new mandate, the Ability-to-Repay Rule, significantly
increases the underwriting processes when making certain consumer
mortgage loans. Clients will be asked to provide more documentation and
verification information than previously required. Some mortgage loan
features and terms will no longer be offered due to the Ability-to-Repay
Rule. Other new mortgage rules require changes to disclosure
documents, loan servicing processes, appraisal usage, and lender
compensation and qualification requirements. Our compliance staff has
been diligently reviewing current procedures and changing processes to
meet the 2014 mandates.

Loan Growth.
An important part of Ames National Corporation’s success is driven by
loan growth. A quality, well-managed loan portfolio provides our
organization with the best opportunities to enhance earnings, and building
our loan business has been a strategic focus for our bankers. Loans grew
to $564.5 million, or a $54 million increase over 2012 levels. The
majority of this growth was in real estate, primary in the 1-4 family,
commercial and agricultural loan portfolios. As the economic environment
has improved, affiliate bank’s opportunities to assist clients with new
projects and business expansions have increased.

Loan growth will drive earnings as long as asset quality remains
favorable. We are pleased to report that the Company had net recoveries
for 2013 of $13,000; compared to net charge-offs of $154,000 for
2012. In addition, net impaired loans as of December 31, 2013, were
$2.2 million, or 0.39% of gross loans, compared to $5.9 million, or 1.1%
of gross loans as of the end of 2012. Ames National Corporation’s low
level of problem loans places us in the top 15% of peer bank-holding
companies in the country and is an indication of the importance we have
placed on effectively monitoring and managing credit quality.

On the Balance Sheet.
Driven by loan growth, assets reached record levels at $1.2 billion as of
December 31, 2013, a $15.4 million increase compared to year-end
2012. Deposits exceeded $1 billion at the end of 2013, a 0.7% increase
over last year. The deposit growth was primary due to increases in core
deposits, such as: interest-bearing checking, savings and money market
accounts. Long-term certificates of deposit decreased as we believe
clients are anticipating an interest rate increase and are keeping their
funds more liquid.

The Company’s stockholders’ equity represented 11.5% of total assets
as of December 31, 2013, with all of the Company’s five affiliate banks
continuing to maintain strong capital levels. Total equity was $142 million
as of December 31, 2013, compared to $145 million reported at year-end
2012. Lower capital levels were directly attributed to a change in the
unrealized gains in our investment portfolio, one of the elements included
in our capital. Capital is impacted by earnings, dividends and the fair value
of the investment portfolio. When interest rates increase, the fair value of
the investment portfolio is reduced and that change is reflected in capital.

Growth through Acquisition.
As we reflect on our strategic initiatives, acquisition considerations have
been a growth opportunity for Ames National Corporation. We are also
pleased to report that the acquisition of the Garner and Klemme, Iowa
offices by Reliance State Bank in April of 2012 continues to generate
positive returns. Reliance State Bank’s net income for 2013 was
$2,172,000, as compared to $1,833,000 for the year ended December
31, 2012, an 18.5% increase. The acquisition contributed to increases in
net interest income, noninterest income and noninterest expense, and has
proven to be a profitable model as we look for future growth strategies.

Company Stock.
Company stock, which is listed on the NASDAQ Capital Market under the
symbol ATLO, closed at $22.39 on December 31, 2013. During the year
the price ranged from $18.50 to $23.94 with 2,925,300 shares traded.
Dividends declared to shareholders in 2013 totaled $0.64 per share.

Our People.
During 2013, a director and long-term employee retired from service at
Ames National Corporation. Frederick Samuelson, president of James
Michael & Associates, Inc. and member of the Ames National Corporation
and State Bank & Trust Co. Boards of Directors and Michael Bloom, Senior
Vice President and Trust Officer and board member at United Bank &
Trust, retired from their respective positions during the year. We appreciate
their advice and council over the years. They will truly be missed.

We were pleased to welcome Richard Parker, Attorney, and the Company’s
Chief Financial Officer, John Nelson, to the Ames National Corporation
Board of Directors. Jim Kurtenbach, Sr. Manager at Web Filings, joined the
board at State Bank & Trust Co. With the acquisition of Garner and
Klemme, we added two new board positions at Reliance State Bank. Mike
Hrubes, farmer and business owner in Garner, and Neil Fell, Market
President for Reliance State Bank in Garner, joined the board in May. We
are fortunate to have these community leaders serving our organization.

We were saddened by the passing of Edward C. Jacobson, former
senior vice president at First National Bank, Treasurer of Ames National
Corporation and board member at Reliance State Bank, on December 30,
2013. He joined First National Bank in 1964 and was part of the original
group of incorporators of Ames National Corporation in 1975. Ed retired
from First National Bank in 2003 where he served his entire banking
career. We would like to express our condolences to Ed’s family.

In Conclusion.
As we reflect on 2013, we would like to thank our shareholders,
employees and boards of directors for their commitment and support to
Ames National Corporation. We hope you find this report valuable and
informative as we review the financial results, growth in services and
Company accomplishments. 2014 will bring many new opportunities, and
we are looking forward to our continued focus on strategic direction and
profitable growth. Please mark your calendars and plan to join us for the
Ames National Corporation 39th Annual Meeting of Shareholders at
Reiman Gardens on April 30th. We encourage you to contact us if you
have any questions prior to the meeting.

Thomas H. Pohlman
President

Douglas C. Gustafson
Chairman

Board of
directors

BACk ROw, LEFT TO RIGHT:

Warren R. Madden
Vice President for Business & Finance, Iowa State University

John P. Nelson
Vice President and Chief Financial Officer of the Company

Douglas C. Gustafson
Retired Veterinarian, Boone Veterinary Hospital
and Chairman of the Company

Richard O. Parker
Attorney, Parker Law Firm

Thomas H. Pohlman
President of the Company

Steven D. Forth
Farmer

Charles D. Jons
Retired Physician, McFarland Clinic

FRONT ROw, LEFT TO RIGHT:

David W. Benson
Partner, Nyemaster Goode Attorneys at Law

Larry A. Raymon
Chief Executive Officer, Raymon Enterprises, Inc.

Betty A. Baudler Horras
President, Baudler Enterprises, Inc. (marketing)

James R. Larson, II
President, Larson Development Corporation (real estate development)

Robert L. Cramer
Retired President and Chief Operating Officer
Fareway Stores, Inc. (grocery stores)

2013
highlights

Innovative Financial Solutions. Client-Focused.
An important aspect of our plan for growth is providing unique
and valuable products and services that enhance the banking
experience for our clients. Providing innovative solutions that are
focused on our clients’ needs is a key component to maintaining
our client base and driving new business. When considering our
product and services mix, we have been diligently working on a
variety of strategic initiatives to engage our clients and generate
new opportunities. We would like to provide you with a snapshot
of some of these initiatives that our clients are finding important
in helping them at every life stage with their financial needs.

“ Banking should be easy, convenient and stress free –

and that’s what I get from First National Bank.”

Carrie and Andrew Ricklefs

Mobile Deposit Clients

online solutions: Simplifying Banking
Technology has given clients easy access to a myriad of information.
Through a few swipes on their smart phones or tablets, they have
powerful tools to help them make decisions. Clients have high
expectations for convenience, and these expectations are no different
with banking. Clients want their financial information easily accessible
so they can make manage their cash flow, wherever and whenever they
want. We are very much in-tune with the wants and needs of our clients
and are focused on providing solutions that simplify banking. Over the
past five years, we have been building our suite of mobile and online
banking services, and our clients are responding. Our most recent
launch of Mobile Deposit has given clients the ability to deposit checks
using their smart phones. Clients are enjoying the added convenience,
and the Company is benefiting from the powerful new retention tool.

id theftsmart: Offering Peace of Mind
Identify theft continues to grow each year. According to Javelin and
Associates, 12.6 million people were affected by identity theft in 2012.
As a victim, it can be a very time-consuming and overwhelming process
to repair the damage done. During 2013, we expanded our ID TheftSmart
restoration services to include a credit monitoring feature. Clients are
looking for solutions to help them restore confidence and their reputations
should they ever have problems, and this service brings peace of mind.

Wealth Management: Delivering Financial Expertise
Expanding our Wealth Management Services has been an important
strategic initiative over the past three years. The need for services like
financial management, trust services, financial planning and estate
planning continues to grow, and we have found a niche in delivering
financial expertise to assist clients with their short and long-term
financial goals. Within the Company, we have two CERTIFIED
FINANCIAL PLANNERS™ and a Chartered Financial Analyst on staff in
additional to many trust officers with extensive years of experience.
When combining financial expertise and a custom-designed
experience for each client, the response has been remarkable.

These are just a few of the services we offer to make our clients
financial lives better. By asking important questions and listening
to customers’ needs, we are continually enhancing our services
and building stronger client relationships. Our account numbers are
growing, and clients are finding value in our banking model. Clients
appreciate the fact that what our employees do, the decisions we
make and the services offered are truly in their best interest. We are
focused on doing the right things daily to take care of clients. This
philosophy produces long-term financial success for our clients, and,

in turn, for our organization.

financial
highlights

FOR THe YeAR

PERFORmANCE

2013

2012

2011

2010

2009

Net Income (in thousands)

$13,954

$14,182

$13,921

$12,966

$9,006

Return on

Average Assets
Average Equity

Efficiency Ratio

PER COmmON SHARE DATA

Basic and Diluted Earnings

Cash Dividends Declared

Dividend Payout Ratio

Dividend Yield

AT DeCeMBeR 31

BALANCE SHEET DATA (in thousands)

Total Assets

Net Loans

Deposits

1.14%
9.76%

52.78%

1.24%
10.08%

52.33%

1.38%
10.82%

49.80%

1.40%
10.91%

50.12%

1.02%
8.31%

63.72%

$1.50

$0.64

$1.52

$0.60

42.67%

39.47%

2.9%

2.7%

$1.48

$0.52

35.14%

2.7%

$1.37

$0.44

32.12%

2.0%

$0.95

$0.40

42.11%

1.9%

$1,233,084

$1,217,692

$1,035,564

$962,975

$915,570

$564,502

$510,126

$438,651

$418,094

$415,434

$1,011,803

$1,004,732

$818,705

$743,862

$722,164

Stockholders' Equity

$ 142,106

$144,736

$134,557

$121,363

$112,340

LOAN QUALITy

Allowance for loan losses to total loans

Net charge-offs to average outstanding loans

Non performing loans to total loans

CAPITAL

Tier 1 Risk-Based Capital Ratio

Total Equity/Total Assets

Market Price per Share

Closing

High

Low

1.50%

0.00%

0.44%

11.0%

11.5%

$22.39

$23.94

$18.50

1.50%

0.03%

1.07%

10.9%

11.9%

$21.90

$24.00

$18.30

1.77%

0.03%

1.81%

12.2%

13.0%

$19.50

$21.92

$14.15

1.77%

0.19%

1.48%

12.5%

12.6%

$21.67

$22.84

$16.61

1.81%

0.16%

2.44%

12.0%

12.3%

$21.11

$28.79

$14.87

five-year
perforMance record

FIve-YeAR FINANCIAL HIGHLIGHTS

AveRAGe TOTAL ASSeTS

MILLIONS OF DOLLARS

AveRAGe DePOSITS

MILLIONS OF DOLLARS

AveRAGe LOANS

MILLIONS OF DOLLARS

$880

$929

$1,009

$1,143

$1226

$682

$717

$792

$923

$1004

$434

$418

$431

$483

$528

$1,200

$1,100

$1,000

$900

$800

$700

$600

$500

$400

$300

$1.60

$1.40

$1.20

$1.00

$.80

$.60

$.40

$.20

$.00

$1,000

$900

$800

$700

$600

$500

$400

$300

2009

2010

2011

2012

2013

$600

$500

$400

$300

$200

$100

2009

2010

2011

2012

2013

2009

2010

2011

2012

2013

eARNINGS PeR SHARe

DOLLARS

BOOK vALUe PeR SHARe

DeCLAReD DIvIDeNDS PeR SHARe

DOLLARS

$0.95

$1.37

$1.48

$1.52

$1.50

$11.91 $12.87 $14.45 $15.54

$15.26

$0.40

$0.44

$0.52

$0.60

$0.64

$16.00

$15.50

$15.00

$14.50

$14.00

$13.50

$13.00

$12.00

$11.50

$11.00

$10.50

$10.00

2009

2010

2011

2012

2013

$.80

$.60

$.40

$.20

$.00

2009

2010

2011

2012

2013

2009

2010

2011

2012

2013

report of independent registered public accounting firM

The Board of Directors of Ames National Corporation:

We have audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the consolidated
balance sheets of Ames National Corporation and subsidiaries as
of December 31, 2013 and 2012, and the related consolidated
statements of income, comprehensive income, stockholders’ equity
and cash flows (not presented herein) for each of the three years in
the period ended December 31, 2013; and in our report dated
March 12, 2014, we expressed an unqualified opinion on those
consolidated financial statements.

In our opinion, the information set forth in the accompanying condensed
consolidated financial statements is fairly stated, in all material respects,
in relation to the consolidated financial statements from which it has
been derived.

CliftonLarsonAllen LLP
West Des Moines, Iowa
March 12, 2014

condensed consolidated
balance sheets

December 31, 2013

December 31, 2012

ASSETS
Cash and due from banks
Interest bearing deposits in financial institutions
Securities available-for-sale
Loans receivable, net
Loans held for sale
Bank premises and equipment, net
Accrued income receivable
Other real estate owned
Deferred income taxes
Core deposit intangible, net
Goodwill
Other assets

Total assets

LIABILITIES AND STOCkHOLDERS’ EQUITy

LIABILITIES

Deposits

Demand, noninterest bearing
NOW accounts
Savings and money market
Time, $100,000 and over
Other time

Total deposits

Federal funds purchased and securities sold

under agreements to repurchase

FHLB advances and other long-term borrowings
Dividend payable
Deferred income taxes
Accrued expenses and other liabilities

Total liabilities

STOCKHOLDERS’ EQUITY

Common stock, $2 par value, authorized 18,000,000

shares; issued 9,432,915 shares; outstanding 9,310,913
shares as of December 31, 2013 and 2012

Additional paid-in capital
Retained earnings

Accumulated other comprehensive income-net

unrealized income on securities available-for-sale

Treasury stock, at cost; 122,002 shares
at December 31, 2013 and 2012

Total stockholders’ equity

Total liabilities and stockholders’ equity

24,270,031
23,628,117
580,039,080
564,501,547
295,618
11,892,329
7,437,673
8,861,107
5,027,103
1,029,564
5,600,749
501,242
1,233,084,160

179,946,472
299,788,852
289,307,102
97,077,717
145,683,035
1,011,803,178

39,616,644
34,540,526
1,489,746
–
3,527,882
1,090,977,976

18,865,830
22,651,222
102,154,498

451,132

(2,016,498)

142,106,184
1,233,084,160

34,805,371
44,639,033
588,417,037
510,125,880
1,030,180
12,233,464
7,173,703
9,910,825
–
1,303,264
5,600,749
2,452,593
1,217,692,099

182,033,279
287,294,015
279,774,197
99,925,619
155,705,340
1,004,732,450

27,088,660
34,611,035
1,396,627
1,632,560
3,495,032
1,072,956,364

18,865,830
22,651,222
94,159,839

11,075,342

(2,016,498)

144,735,735
1,217,692,099

condensed consolidated
stateMents of incoMe

years Ended December 31,

2013

2012

2011

25,433,950

24,761,633

23,600,471

INTEREST INCOmE:

Loans
Securities

Taxable
Tax-exempt

Interest bearing deposits and federal funds sold

Total interest income

INTEREST ExPENSE:

Deposits
Other borrowed funds

Total interest expense
Net interest income

Provision for loan losses

Net interest income after
provision for loan losses

NONINTEREST INCOmE:
Trust services income
Service fees
Securities gains, net
Other-than-temporary impairment of investment securities
Gain on sale of loans held for sale
Merchant and card fees
Other noninterest income

Total noninterest income

NONINTEREST ExPENSE:

Salaries and employee benefits
Data processing
Occupancy expenses
FDIC insurance assessments
Professional fees
Business development
Other real estate owned, net
Core deposit intangible amortization
Other operating expenses, net

Total noninterest expense
Income before income taxes

5,744,321
6,864,948
390,594
38,433,813

3,861,713
1,213,050
5,074,763
33,359,050
786,390

32,572,660

1,970,938
1,580,811
1,002,920
–
1,200,402
1,142,027
820,680
7,717,778

13,131,556
2,414,564
1,471,978
661,127
1,127,666
957,702
651,401
273,700
989,178
21,678,872
18,611,566

6,058,556
6,767,545
484,004
38,071,738

4,472,337
1,279,604
5,751,941
32,319,797
22,277

32,297,520

2,060,308
1,578,672
646,755
(259,851)
1,589,122
1,055,613
764,765
7,435,384

12,465,403
2,239,003
1,462,898
664,285
1,224,093
941,090
482,904
196,736
1,126,541
20,802,953
18,929,951

4,747,643

14,182,308

1.52

6,993,213
6,555,546
466,475
37,615,705

5,313,476
1,416,589
6,730,065
30,885,640
532,961

30,352,679

2,046,914
1,465,055
1,025,714
–
1,048,583
739,951
644,163
6,970,380

11,631,032
1,985,329
1,377,333
738,893
989,856
816,639
434,041
–
878,849
18,851,972
18,471,087

4,550,280

13,920,807

1.48

PROvISION FOR INCOmE TAxES

NET INCOmE

Basic and diluted earnings per share

4,657,922

13,953,644

1.50

affiliate
banks

Organized: The former Boone State Bank & Trust Co., was organized in 1883. In 1992, the Bank was
organized by the Company under a new state charter in connection with a purchase and assumption
transaction, whereby Boone Bank & Trust Co. purchased certain assets and assumed certain liabilities of the
former Boone State Bank & Trust Co. in exchange for a cash payment.

Financial Highlights: As of December 31, 2013, Boone Bank had capital of $12,495,000 and 25 full-
time equivalent employees. Boone Bank had net income for the years ended December 31, 2013, 2012 and
2011 of approximately $1,533,000, $1,764,000 and $1,828,000, respectively. Total assets as of December
31, 2013, 2012 and 2011 were approximately $128,551,000, $123,829,000 and $118,345,000, respectively.

Locations:
Main Office:
716 8th Street, Boone

Boone Branch Office:
1326 S. Story Street, Boone

Contact Information:
Phone:

(515) 432-6200

Fax:

Web:

(515) 432-3312

www.boonebankiowa.com

Email:

service@boonebankiowa.com

Board Of Directors: Back Row, Left to Right: Robert L. Cramer, Richard D. Blomgren,

Front Row, Left to Right: William S. Zinnel, Thomas H. Pohlman, Jeffrey K. Putzier

Douglas C. Gustafson, DVM, Patrick J. McMullan

Organized: The Bank was organized in 1903 and became a wholly-owned subsidiary of the Company in
1975 through a bank holding company reorganization, whereby those shareholders of First National exchanged
all of their First National stock for stock in the Company.

Financial Highlights: As of December 31, 2013, First National had capital of $63,571,000 and 96 full-
time equivalent employees. First National had net income for the years ended December 31, 2013, 2012 and
2011 of approximately $7,200,000, $7,193,000 and $7,517,000, respectively. Total assets as of December 31,
2013, 2012 and 2011 were approximately $629,414,000, $616,287,000 and $560,753,000, respectively.

Locations:
Main Office:
405 5th Street, Ames

University Office:
2330 Lincoln Way, Ames

North Grand Office:
2406 Grand Avenue, Ames

Ankeny Office:
1205 North Ankeny Blvd., Ankeny

Contact Information:
(515) 232-5561
Phone:

Fax:

Web:

(515) 232-5778

www.FNBames.com

Email:

info@FNBames.com

Board Of Directors: Back Row, Left to Right: Warren R. Madden, Scott T. Bauer, David W. Benson

Front Row, Left to Right: Charles D. Jons, Lisa M. Eslinger, Betty A. Baudler Horras,

Thomas H. Pohlman,Terrill L. Wycoff, James R. Larson, II

John R. Linch

Organized: Reliance State Bank, formerly known as “Randall-Story State Bank,” Story City, Iowa, is an Iowa,
state-chartered, FDIC insured commercial bank. Organized in 1928, Reliance Bank was acquired by the
Company in 1995 through a stock transaction whereby the then shareholders of Reliance Bank exchanged all
their Reliance Bank stock for stock in the Company. In 2012, Reliance Bank acquired the Garner, Iowa and
Klemme, Iowa offices with a purchase and assumption transaction whereby Reliance Bank purchased certain
assets and assumed certain liabilities in exchange for a cash payment.

Financial Highlights: As of December 31, 2013, Reliance Bank had capital of $24,204,000 and 31 full-
time equivalent employees. Reliance Bank had net income for the years ended December 31, 2013, 2012 and
2011 of approximately $2,172,000, $1,833,000 and $1,234,000, respectively. Total assets as of December
31, 2013, 2012 and 2011 were approximately $221,597,000, $221,799,000 and $91,279,000, respectively.

Locations:
606 Broad Street, Story City

175 E. 3rd Street, Garner

100 E. Main Street, Klemme

Contact Information:
(515) 733-4396
Phone:

Fax:

Web:

(515) 733-2068

www.RSBiowa.com

Email:

info@rsbiowa.com

Board Of Directors: Back Row, Left to Right: Harold E. Thompson, Cory K. Milbrandt, Michael M. Hrubes, Elaine C. Tekippe, Steven D. Forth, Gary G. Vulgamott

Front Row, Left to Right: Neil W. Fell, John P. Nelson, Richard J. Schreier

Organized: The Bank was organized in 1939 and acquired by the Company in 1983 through a stock transaction,
whereby those shareholders of State Bank exchanged all of their State Bank stock for stock in the Company.

Financial Highlights: As of December 31, 2013, State Bank had capital of $16,738,000 and 23 full-time
equivalent employees. State Bank had net income for the years ended December 31, 2013, 2012 and 2011 of
approximately $2,122,000, $2,208,000 and $2,059,000, respectively. Total assets as of December 31, 2013, 2012
and 2011 were approximately $154,405,000, $151,859,000 and $148,839,000, respectively.

Locations:
Main Office:
1025 6th Street, Nevada

Colo Office:
405 Main Street, Colo

Contact Information:
Phone:

(515) 382-2191

Fax:

Web:

(515) 382-3826

www.banksbt.com

Email:

info@banksbt.com

Board Of Directors: Back Row, Left to Right: Dan E. Johnson, Stephen C. McGill, Richard O. Parker, James M. Kurtenbach

Front Row, Left to Right: Laurie L. Henry, Thomas H. Pohlman, Michelle R. Cassabaum

Organized: The Bank was chartered as a national bank in June 2002.

Financial Highlights: As of December 31, 2013, United Bank had capital of $13,160,000 and 23 full-time
equivalent employees. United Bank had net income for the years ended December 31, 2013, 2012 and 2011 of
approximately $1,103,000, $1,269,000 and $1,228,000, respectively. Total assets as of December 31, 2013,
2012 and 2011 were approximately $111,420,000, $107,627,000 and $107,555,000, respectively.

Locations:
Main Office:
2101 S. Center Street, Marshalltown
Courthouse Branch:
29 S. Center Street, Marshalltown

Contact Information:
(641) 753-5900
Phone:

Fax:

Web:

(641) 753-0800

www.ubtna.com

Email:

info@ubtna.com

Board Of Directors: Back Row, Left to Right: Michael W. Bloom, John S. Wise, Thomas H. Pohlman

Front Row, Left to Right: Keith R. Brown, Larry A. Raymon, Kathy L. Baker, Curtis A. Hoff, Kevin L. Swartz

stock & dividend
inforMation

market Price & Dividend Information
On February 28, 2014, the Company had approximately 416 shareholders and 1,091 beneficial owners
whose shares were held in nominee titles through brokerage or other accounts. The Company’s common
stock is traded on the NASDAQ Capital Market under the symbol “ATLO.” Trading in the Company’s
common stock is, however, relatively limited. The closing price of the Company’s common stock was
$22.28 on February 28, 2014.

Below is a summary of the Company’s high and low sales price for the common stock on a per share
basis during the last two years, based on information provided to and gathered by the Company on an
informal basis. The comparison also outlines the Company’s declared cash dividends during the past two
years. The Company declared aggregate annual cash dividends in 2013 and 2012 of $5,959,000 and
$5,587,000, respectively, or $0.64 per share in 2013 and $0.60 per share in 2012. In February 2014,
the company declared a cash dividend of $1,676,000 or $0.18 per share.

market Price & Dividend Two-year Comparison

2013

2012

MARKeT PRICe
High
$22.91
$23.15
$23.94
$23.05

Quarter
1st
2nd
3rd
4th

Low
$19.92
$18.50
$19.87
$21.09

CASH
DIvIDeNDS
Declared
$0.16
$0.16
$0.16
$0.16

MARKeT PRICe
High
$24.00
$24.00
$23.72
$21.99

Quarter
1st
2nd
3rd
4th

Low
$18.30
$19.51
$20.06
$18.39

CASH
DIvIDeNDS
Declared
$0.15
$0.15
$0.15
$0.15

The decision to declare cash dividends in the future and the amount thereof rests within the discretion
of the Board of Directors of the Company and will be subject to, among other things, the future earnings,
capital requirements and financial condition of the Company and certain regulatory restrictions imposed
on the payment of dividends by the Banks. Such restrictions are discussed in greater detail in
Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity
and Capital Resources and Regulatory Matters and in the Notes to the Company’s Financial Statements
appearing in the Company's Annual Report on Form 10-K.

Mission
stAtemeNt

Corporate Culture
Provide an environment where our affiliates and employees can be successful and provide
products and services that enhance the financial well-being of customers and shareholders.

Core Values
Excellence:

Striving to exceed expectations

Integrity:

Demonstrating high moral and ethical conduct

Leadership:

Creating and developing opportunities that benefit our employees, customers,
communities, and shareholders

Stability:

Maintaining financial strength and a dedicated staff to successfully serve the current
and future needs of our employees, customers, communities, and shareholders

Trust:

Acting in the best interest of our employees, customers, and shareholders

Community: Dedicated to serving our communities through local decision making, community

involvement and active boards of directors

table of Contents

shareholder
iNformAtioN

Company Contact Information
Ames National Corporation
P.O. Box 846
405 5th Street
Ames, IA 50010
(515) 232-6251 | Fax (515) 663-3033
info@amesnational.com | www.amesnational.com

Company Officers

Thomas H. Pohlman President & CEO

John P. Nelson Vice President & CFO

John L. Pierschbacher Controller

Kevin G. Deardorff Vice President & Technology Director

Nicole J. Gebhart Vice President & Marketing Director

Tracy W. Laws Vice President & Auditor

Jennifer J. Hanson Asst. Vice President & Human Resources Director

Timothy J. Lupardus Vice President & Information Systems Manager

Joel P. Jacobsen Asst. Vice President & Compliance Officer

Lori J. Hill Asst. Corporate Secretary

Matthew R. Hackbart Vice President
& Information Systems Asst. Manager

Colin T. Richey Information Systems Officer

Independent Auditors
CliftonLarsonAllen LLP
West Des Moines, Iowa

Counsel
Nyemaster Goode, P.C.
Des Moines, Iowa

Market Makers
Ames National Corporation’s common stock is listed on the NASDAQ
Capital Market under the symbol “ATLO.” Market makers and brokers
in the stock include:

First Point Wealth Management , First National Bank, Ames
(515) 663-3074

Stifel Nicolaus | (515) 233-4064

Monroe Securities, Inc. | (800) 766-5560

Raymond James | (800) 800-4693

FTN Financial Group | (800) 456-5460

Stock Transfer Agent
Illinois Stock Transfer Company
433 S. Carlton Avenue
Wheaton, IL 60187
(800) 757-5755 | Fax: (630) 480-0641
www.istshareholderservices.com

Ames National Corporation

405 5th Street, Box 846 | Ames, IA 50010
t (515) 232-6251 | f (515) 663-3033
info@amesnational.com