2019 SUMMARY
ANNUAL REPORT
BACKGROUND
Ames National Corporation (ANC) is an Iowa-based
AFFILIATE BANK STRUCTURE
Each Affiliate Bank operates independently with a
bank holding company. ANC was organized and
board of directors and a bank president. Decisions are
incorporated on January 21, 1975, under the laws of
made locally, which means customers receive quick
the State of Iowa to serve as a holding company for
responses to questions, and services are customized
its principal banking subsidiary, First National Bank,
to meet customer needs in each community.
Ames, Iowa. In 1983, ANC acquired the stock of State
Bank & Trust Co. located in Nevada, Iowa; in 1991, ANC
The Affiliate Banks’ lending activities consist primarily
acquired Boone Bank & Trust Co., located in Boone,
Iowa; in 1995, ANC acquired the stock of Reliance
State Bank located in Story City, Iowa; and in 2002,
of short-term and medium-term commercial,
agricultural and residential real estate loans,
agricultural and business operating loans, lines of
ANC chartered and commenced operations of United
credit, home improvement loans and the origination
Bank & Trust NA, located in Marshalltown, Iowa. In
2012, Reliance State Bank acquired an office located
in Garner, Iowa. In 2014, First National Bank acquired
three offices located in West Des Moines and Johnston,
Iowa, and three locations in the Osceola, Iowa area in
2018. Most recently, ANC acquired Iowa State Savings
Bank in the Creston, Iowa area.
of mortgage loans for sale into the secondary market.
Affiliate Banks also offer a variety of checking, savings
and time deposits accounts, cash management
services, wealth management and trust services,
merchant credit card processing and safe deposit box
services. Convenient access to funds and account
information is also available through: Online Banking,
Video Banking, Mobile Banking, Online Bill Pay, Mobile
Wallet, online statements and debit cards.
ANC SERVICES
ANC provides various services to the Affiliate Banks, which include: management assistance, payroll, internal
auditing services, human resources services, compliance management, marketing assistance, loan review,
technology support, training and employee development. ANC employees seek to incorporate efficiencies
across the Affiliate Banks’ operational functions so the management teams can focus on what they do best:
banking and taking care of customers’ financial needs.
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2019 Annual Report | Ames National Corporation
AMES NATIONAL CORPORATION AT A GLANCE
MISSION STATEMENT
Ames National Corporation is a results-oriented financial services holding
company providing leadership, counsel and support to its community affiliate
banks and superior performance for its shareholders.
CORE VALUES
Ames National Corporation’s foundation is built on these values which guide our actions.
EXCELLENCE • INTEGRITY • LEADERSHIP
STABILITY • TRUST • COMMUNITY
BOARD OF DIRECTORS
BACK, LEFT TO RIGHT:
Thomas H. Pohlman, Chairman
John P. Nelson, President & CEO
Steven D. Forth, Farmer
John L. Pierschbacher, Chief Financial
Officer
MIDDLE, LEFT TO RIGHT:
Michelle R. Cassabaum, Chief Operating
& Financial Officer, 21st Century Rehab
Betty A. Baudler Horras, President,
Baudler Enterprises, Inc.
Lisa M. Eslinger, Chief Financial and
Administrative Officer, Iowa State
University Foundation
FRONT, LEFT TO RIGHT:
Patrick G. Hagan, Retired Senior Vice
President of Fareway Stores, Inc.
David W. Benson, Partner, Nyemaster
Goode Attorneys at Law
Kevin L. Swartz, Chief Executive Officer,
Wolfe Clinic PC
James R. Larson, II, President, Larson
Development Corporation
Ames National Corporation | 2019 Annual Report
3
LETTER TO SHAREHOLDERS
As we reflect on 2019, we have much to celebrate at
Ames National Corporation. Your company reached new
growth milestones in addition to welcoming Iowa State
Savings Bank, our sixth affiliate bank, to the organization.
Net income, assets, loans and deposits climbed to record
highs as we continued to deliver on our core values. The
following report provides highlights of Ames National
Corporation’s financial results as well as an overview of
our continued focus on enhancing your shareholder value
through profitable growth.
FINANCIAL RESULTS
Net income for 2019 totaled $17.2 million or $1.86 per
share, compared to $17.0 million or $1.83 per share earned
in 2018. The primary drivers of the growth in earnings were
improvements in loan interest income, increases in home
mortgage originations and wealth management income
and the income resulting from the Osceola acquisition.
Higher interest expense and a competitive interest rate
landscape for loan and deposit customers were among the
biggest challenges in 2019, so we were pleased with the
continued growth of the balance sheet and the stable net
interest margin despite these obstacles. With the organic
growth at our affiliate banks combined with the recent
acquisition, assets reached a record high of $1.7 billion,
up $281.5 million compared to year-end last year. Loans
increased 18% to just over $1 billion, and deposits grew to a
record $1.5 billion.
2019 was also a good year for non-interest income in
the areas of home mortgage originations and Wealth
Management Services. Mortgage origination income
increased $264,000 or 34% over 2018 while Wealth
Management Services income grew by $252,000 or 8% over
2019. Both of these teams have built a loyal customer base
by providing tailored, exceptional service in the markets we
serve. Customers value the continuum of services provided
by our team of experts for all of life’s financial stages, and
our Banks benefit from long-term customer relationships.
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2019 Annual Report | Ames National Corporation
Credit quality remains favorable as measured by our
problem loans to total equity capital ratio of 20%. Provisions
for loan losses of $1,314,000 were recognized in 2019 as
compared to $639,000 for the previous year. The increase
in the provision for loan losses was necessary to maintain
an adequate allowance for loan losses on the increasing
outstanding loan portfolio.
GROWTH
We are pleased to report that the 2018 and 2019
acquisitions of Clarke County State Bank in Osceola, Iowa,
and Iowa State Savings Bank, in Creston, Iowa, have an
important role in growing profitably. Since 2012, Ames
National Corporation has completed four acquisitions,
resulting in additional assets of over $500 million. Ames
National Corporation is proactively seeking strategically
aligned acquisition opportunities that will enhance
shareholder value through profitable growth. With our large
capital base and strong earnings, we are well-positioned
and excited to continue to expand our footprint throughout
Iowa.
STRATEGIC DIRECTION
During 2019, our Management Team and Board of Directors
developed a five-year strategic plan focused on initiatives
that will help us “move the needle” and reach our goals. We
incorporated employee and customer feedback as well as
industry research to help guide us to three major strategic
initiatives:
•
•
•
Employee Engagement - Enhance systems
and activities to acquire, develop and retain
employees.
Customer Engagement - Develop a customer
experience that supports relationship growth and
customer acquisition.
Continuous Improvement - Continually
improve key processes to increase customer
engagement, employee engagement and
shareholder value.
To remain financial leaders in the communities we serve, we
must strategically focus on growth and continue to identify
ways to stand out above the competition. It is also important
to have an optimal balance of serving our customers,
shareholders and employees.
Through Strategic Planning, we developed a Vision
Statement to cultivate a culture that engages our employees
so they are empowered, equipped and encouraged to
build relationships, deliver financial solutions and grow
professionally.
As we wrap up another decade of dedicated service to
our customers, community and shareholders, we believe
that there are great opportunities ahead as we continue to
expand our proven model of local, community banking. We
continue to set high standards for profitable growth and
are focused on serving our communities. On behalf of the
employees and board of directors, thank for your ongoing
support of Ames National Corporation, and we appreciate
the opportunity to serve you.
Thomas H. Pohlman
Chairman
John P. Nelson
President & CEO
Ames National Corporation | 2019 Annual Report
5
FINANCIAL HIGHLIGHTS
As of December 31, 2019
Assets
$1.7 Billion
ROE
9.48%
Declared Dividends
Per Share
$0.96
Net Income
$17.2 Million
ROA
1.14%
ATLO Closing Price
$28.06
Per Common Share
Loan Quality
Market Price Per Share
2019 2018
2019 2018
Cash Dividends
$0.96
Allowance
1.19% 1.30%
Closing
$28.06 $25.42
Dividend Payout
51.61%
Net Charge-Offs 0.04% 0.03%
High
$29.46 $32.15
Dividend Yield
3.42%
Non Performing 0.48% 0.38%
Low
$24.47 $24.51
6
2019 Annual Report | Ames National Corporation
PERFORMANCERECORD
THREE-YEAR FINANCIAL HIGHLIGHTS
$17.5
$17.0
$16.5
$16
$15.5
$15
$14.5
$14
$13.5
$13
$1,600
$1,500
$1,400
$1,300
$1,200
$1,100
$1,000
$900
$800
$700
.
2
7
1
$
9
1
0
2
.
0
7
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$
8
1
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2
Earnings
Millions of Dollars
4
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9
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2
5
8
3
,
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.
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9
6
3
,
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2
$2.00
$1.90
$1.80
$1.70
$1.60
$1.50
$1.40
$1.30
$1.20
$1.10
$1,300
$1,200
$1,100
$1,000
$900
$800
$700
$600
$500
$400
6
8
.
1
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9
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3
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Earnings Per Share
Dollars
8
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$200
$190
$180
$170
$160
$150
$140
$130
$120
$110
$1,000
$900
$800
$700
$600
$500
$400
$300
$200
$100
8
8
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9
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Capital
Millions of Dollars
1
2
9
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7
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Average Total Assets
Millions of Dollars
Average Deposits
Millions of Dollars
Average Loans
Millions of Dollars
Ames National Corporation | 2019 Annual Report
7
AFFILIATE BANKS
Contact: (515) 432-6200
www.boonebankiowa.com
Charter: State
Organized: 1883
Offices: Two locations in
Boone, Iowa
Employees: 22
Capital: $13.7 Million
Assets: $135 Million
2019 Net Income: $1.5 Million
Contact: (515) 382-2191
www.bankSBT.com
Charter: State
Organized: 1939
Offices: One location in
Nevada, Iowa
Employees: 20
Capital: $15.6 Million
Assets: $159 Million
2019 Net Income: $2.1 Million
Contact: (641) 753-5900
www.ISSBbank.com
Charter: State
Organized: 1883
Offices: Five locations in
Creston, Corning, Diagonal,
and Lenox, Iowa
Employees: 38
Capital: $24.3 Million
Assets: $215 Million
2019 Net Income: $303,000
(since acquisition)
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2019 Annual Report | Ames National Corporation
Contact: (515) 733-4396
www.RSBiowa.com
Charter: State
Organized: 1928
Offices: Two locations in Story
City and Garner, Iowa
Employees: 32
Capital: $27.5 Million
Assets: $230 Million
2019 Net Income: $2.8 Million
Contact: (641) 753-5900
www.ubtna.com
Charter: National
Organized: 2002
Offices: Two locations in
Marshalltown, Iowa
Employees: 21
Capital: $10.3 Million
Assets: $100 Million
2019 Net Income: $930,000
Contact: (515) 232-5561
www.FNB247.com
Charter: National
Organized: 1903
Offices: 10 locations in Ames,
Ankeny, Johnston, Murray,
Osceola, and West Des Moines,
Iowa
Employees: 133
Capital: $89 Million
Assets: $913 Million
2019 Net Income: $10.3 Million
Contact: (515) 432-6200
www.boonebankiowa.com
Charter: State
Organized: 1883
Offices: Two locations in
Boone, Iowa
Employees: 22
Capital: $13.7 Million
Assets: $135 Million
2019 Net Income: $1.5 Million
Contact: (515) 382-2191
www.bankSBT.com
Charter: State
Organized: 1939
Offices: One location in
Nevada, Iowa
Employees: 20
Capital: $15.6 Million
Assets: $159 Million
2019 Net Income: $2.1 Million
Contact: (641) 753-5900
www.ISSBbank.com
Charter: State
Organized: 1883
Offices: Five locations in
Creston, Corning, Diagonal,
and Lenox, Iowa
Employees: 38
Capital: $24.3 Million
Assets: $215 Million
2019 Net Income: $303,000
(since acquisition)
Contact: (515) 733-4396
www.RSBiowa.com
Charter: State
Organized: 1928
Offices: Two locations in Story
City and Garner, Iowa
Employees: 32
Capital: $27.5 Million
Assets: $230 Million
2019 Net Income: $2.8 Million
Contact: (641) 753-5900
www.ubtna.com
Charter: National
Organized: 2002
Offices: Two locations in
Marshalltown, Iowa
Employees: 21
Capital: $10.3 Million
Assets: $100 Million
2019 Net Income: $930,000
Contact: (515) 232-5561
www.FNB247.com
Charter: National
Organized: 1903
Offices: 10 locations in Ames,
Ankeny, Johnston, Murray,
Osceola, and West Des Moines,
Iowa
Employees: 133
Capital: $89 Million
Assets: $913 Million
2019 Net Income: $10.3 Million
Ames National Corporation | 2019 Annual Report
9
CONSOLIDATED BALANCE SHEETS
Unaudited
ASSETS
Cash and due from banks
Interest bearing deposits in financial institutions
Securities available-for-sale
Federal Home Loan Bank (FHLB) and Federal Reserve Bank (FRB) stock, at cost
Loans receivable, net
Loans held for sale
Bank premises and equipment, net
Accrued income receivable
Other real estate owned
Bank-owned life insurance
Deferred income taxes
Other intangible assets, net
Goodwill
Other assets
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Deposits
Non-interest bearing checking
Interest bearing checking
Savings and money market
Time, $250,000 and over
Other time
Total deposits
Securities sold under agreements to repurchase
FHLB advances
Dividends payable
Accrued expenses and other liabilities
Total liabilities
STOCKHOLDERS’ EQUITY
Common stock, $2 par value, authorized 18,000,000 shares; issued and outstanding
9,222,747 and 9,293,305 shares as of December 31, 2019 and 2018, respectively
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income (loss)
Total stockholders’ equity
Total liabilities and stockholders’ equity
10
2019 Annual Report | Ames National Corporation
December 31, 2019
December 31, 2018
$
34,616,880
$
30,384,066
108,947,624
479,843,448
3,138,900
1,048,147,496
2,776,785
17,810,605
11,788,409
4,003,684
2,842,713
1,151,016
3,959,260
12,114,559
6,041,126
26,057,513
458,971,162
3,191,200
890,461,479
401,287
15,813,196
9,415,570
829,603
2,773,729
3,848,713
2,677,884
9,744,472
1,117,477
$
1,737,182,505
$
1,455,687,351
$
267,441,988
$
230,113,170
461,857,728
481,642,221
74,206,421
207,026,740
366,178,715
418,384,284
40,014,550
166,393,120
1,493,175,098
1,221,083,839
42,033,570
5,000,000
2,213,459
7,180,906
40,674,486
14,600,000
2,137,460
4,326,502
1,549,603,033
1,282,822,287
18,445,494
18,586,610
18,794,141
146,225,085
4,114,752
20,461,724
137,891,821
(4,075,091)
187,579,472
172,865,064
$
1,737,182,505
$
1,455,687,351
CONSOLIDATED STATEMENTS OF INCOME
Unaudited
December 31, 2019
December 31, 2018
$
44,282,197
$
38,013,249
INTEREST AND DIVIDEND INCOME:
Loans, including fees
Securities
Taxable
Tax-exempt
Other interest and dividend income
Total interest and dividend 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
NON-INTEREST INCOME:
Wealth management income
Service fees
Securities gains, net
Gain on sale of loans held for sale
Merchant and card fees
Gain on foreclosure of other real estate owned
Other non-interest income
Total non-interest income
NON-INTEREST EXPENSE:
Salaries and employee benefits
Data processing
Occupancy expenses, net
FDIC insurance assessments
Professional fees
Business development
Intangible asset amortization
Data conversion costs
New market tax credit projects amortization
Other operating expenses, net
Total non-interest expense
Income before income taxes
INCOME TAX EXPENSE
NET INCOME
Basic and diluted earnings per share
Declared dividends per share
6,483,893
4,047,054
1,364,349
56,177,493
10,200,626
728,723
10,929,349
45,248,144
1,314,104
43,934,040
3,596,770
1,619,269
17,031
1,044,798
1,525,309
-
826,221
8,629,398
19,675,952
4,130,506
2,275,882
193,593
1,753,531
1,242,271
609,624
-
581,563
1,058,747
31,521,669
21,041,769
3,847,600
17,194,169
1.86
0.96
$
$
$
$
$
$
6,188,403
4,582,970
942,341
49,726,963
6,841,807
761,389
7,603,196
42,123,767
639,316
41,484,451
3,344,579
1,425,361
-
780,947
1,427,334
162,862
759,854
7,900,937
17,821,753
3,478,640
2,008,331
404,514
1,482,911
1,166,688
430,537
228,854
-
943,182
27,965,410
21,419,978
4,406,100
17,013,878
1.83
1.17
11
Ames National Corporation | 2019 Annual Report
COMMUNITY INVOLVEMENT
We believe that the success our company is measured by the success of
our stakeholders – our clients, community, business partners, employees
and shareholders. We recognize our civic responsibility and appreciate
all of our employees’ efforts to support the communities that help us
grow.
Each year, our employees give of their time to support our key areas
of focus. Each affiliate community is unique and our employees play
integral roles in helping our community members live more productive,
educated and enriched lives.
FINANCIAL LITERACY
Financial Literacy has long been an important part of our community
involvement. Whether through our school bank partnerships, classroom
visits by our bankers, bank tours or online financial resources, we are
dedicated to providing the tools to help youth in our communities reach
their greatest potential and feel confident in their financial decisions.
In 2019, we expanded our financial education efforts to include adult
financial learning opportunities. First National Bank launched FNB U,
an online, personalized education tool that helps users build financial
health and confidence by completing short learning modules. Optimized
for mobile use, this program is designed to equip busy adults with the
critical knowledge and skills to make informed financial decisions.
12
2019 Annual Report | Ames National Corporation
AREAS OF SUPPORT
17 Locations serving 10 Communities
FINANCIAL LITERACY
AND EDUCATION
COMMUNITY AND
ECONOMIC DEVELOPMENT
COMMUNITY
ARTS
AFFORDABLE HOUSING AND
ECONOMIC REVITALIZATION
HEALTH AND
HUMAN SERVICES
YOUTH
PROGRAMS
Ames National Corporation | 2019 Annual Report
13
ACQUISITION UPDATE
Iowa State Savings Bank Board of Directors
Front Row, L-R: John Linch, Adam Snodgrass, Tia Samo | Back Row, L-R: Dave Driskell, Kevin Stewart, John Nelson, Scot Trost, Mike Tamerius
Ames National Corporation Welcomes Iowa
State Savings Bank as its Sixth Affiliate Bank
On July 29, 2019, Ames National Corporation entered into
a Stock Purchase Agreement to acquire Iowa State Savings
Bank in Creston, Iowa. The Agreement provided for the
purchase of 100% of the outstanding stock of Iowa State
Savings Bank.
With this acquisition, the Company determined that
Iowa State Savings Bank would remain an independently
chartered bank with local decisions, no name change and
no account changes. In addition, the same management
team continues to lead the Bank along with a local board of
directors.
Community banking with local decisions is the basis
of our banking philosophy. It was clear that Iowa State
Savings Bank shared this same philosophy of delivering
local, responsive service and serving the community. The
synergies between Iowa State Savings Bank and Ames
National Corporation’s approach to customer service
and community involvement are key components in this
strategic acquisition. This approach has served our banks
and customers well over the past 44 years.
On October 25th, 116 days after the announcement,
the acquisition was complete. Iowa State Savings Bank
added approximately $212 million in assets, $138 million
in loans and $189 million in deposits to the Company. The
addition of Iowa State Savings Bank brings a stable loan
and deposit customer base, a talented team of bankers
and an expanded geographic footprint for the Company.
We believe this acquisition will be an excellent fit for our
community banking model and we will continue to actively
seek growth opportunities to enhance shareholder value.
14
2019 Annual Report | Ames National Corporation
SHAREHOLDER INFORMATION
ANNUAL MEETING
The Board of Directors of Ames National Corporation
has established Wednesday, April 29, 2020, 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:
STOCK TRANSFER AGENT
Continental Stock Transfer & Trust
17 Battery Place
New York, NY 10004
(212) 509-4000
www.continentalstock.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 on or about, March 17, 2020.
First Point Wealth Management , First National Bank,
Ames | (515) 663-3074
Fig Partners, LLC | (404) 601-7200
Raymond James | (800) 800-4693
Additional information is also available by contacting
John L. Pierschbacher, CFO at 515-232-6251 or
info@amesnational.com.
PROFESSIONAL EXPERTS
Accounts: CliftonLarsonAllen LLP
West Des Moines, Iowa
Counsel: Nyemaster Goode, P.C.
Des Moines, Iowa
Ames National Corporation | 2019 Annual Report
15
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