UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
11-K
(Mark
One)
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T
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ANNUAL
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For the
fiscal year ended December 31,
2007
OR
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£
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TRANSITION
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For the
transition period from _______________ to _______________
Commission
File Number: 0-32637
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A.
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Full
title of the Plan and the address of the Plan, if different from that of
the issuer named below:
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Ames
National Corporation 401(k) Profit Sharing Plan
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B.
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Name
of the issuer of the securities held pursuant to the Plan and the address
of its principal executive office:
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Ames
National Corporation
405
Fifth Street
Ames,
Iowa 50010
REQUIRED
INFORMATION
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1.
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Financial
statements and schedules of the Ames National Corporation 401(k) Profit
Sharing Plan prepared in accordance with the financial reporting
requirements of the Employee Retirement Income Security Act of 1974 are
attached hereto.
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2.
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A
written consent of Independent Auditors is attached hereto as Exhibit 23
and is incorporated herein by this
reference.
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Page
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1
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2
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3
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4
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9
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10
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The Plan
Administrator
Ames
National Corporation 401(k) Profit Sharing Plan
Ames,
Iowa
We have
audited the accompanying statements of net assets available for benefits of Ames
National Corporation 401(k) Profit sharing Plan as of December 31, 2007 and
2006, and the related statements of changes in net assets available for benefits
for the years then ended. These financial statements are the responsibility of
the Plan’s management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The Plan
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Plan’s
internal control over financial reporting. Accordingly, we express no
such opinion. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the net assets available for benefits of Ames National
Corporation 401(k) Profit Sharing Plan as of December 31, 2007 and 2006, and the
changes in net assets available for benefits for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
Our
audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental
schedule is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor’s Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedule is the responsibility of the Plan’s
management. The supplemental schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is presented fairly, in all material respects, in relation to
the basic financial statements taken as a whole.
West Des
Moines, Iowa
June 23,
2008
401(k)
PROFIT SHARING PLAN
December
31, 2007 and 2006
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2007
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2006
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INVESTMENTS
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||||||||
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Participant-directed
investments
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$ | 20,045,982 | $ | 4,856,324 | ||||
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Nonparticipant-directed
investments
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- | 14,009,144 | ||||||
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Total
investments
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20,045,982 | 18,865,468 | ||||||
| CASH | 526,655 | 456,086 | ||||||
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RECEIVABLES
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||||||||
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Accrued
interest and dividends
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60,934 | 71,035 | ||||||
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Contributions
receivable from employer
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3,273 | 50,387 | ||||||
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NET
ASSETS AVAILABLE FOR BENEFITS
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$ | 20,636,844 | $ | 19,442,976 | ||||
The
accompanying notes are an integral part of the financial
statements.
AMES
NATIONAL CORPORATION
401(k)
PROFIT SHARING PLAN
Years
ended December 31, 2007 and 2006
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2007
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2006
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ADDITIONS
TO NET ASSETS ATTRIBUTED TO:
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Investment
income:
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Interest
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$ | 232,078 | $ | 326,142 | ||||
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Dividends
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186,461 | 395,948 | ||||||
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Net
appreciation in fair value of investments
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751,144 | 520,685 | ||||||
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Total
investment income
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1,169,683 | 1,242,775 | ||||||
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Contributions:
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Employer
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615,764 | 579,254 | ||||||
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Participants
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653,791 | 577,665 | ||||||
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Total
contributions
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1,269,555 | 1,156,919 | ||||||
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Total
additions
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2,439,238 | 2,399,694 | ||||||
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DEDUCTIONS
FROM NET ASSETS ATTRIBUTED TO:
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Benefits
paid to participants
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1,245,370 | 1,501,072 | ||||||
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Operating
expenses
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- | 338 | ||||||
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Total
deductions
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1,245,370 | 1,501,410 | ||||||
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NET
INCREASE
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1,193,868 | 898,284 | ||||||
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NET
ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR
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19,442,976 | 18,544,692 | ||||||
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NET
ASSETS AVAILABLE FOR BENEFITS, END OF YEAR
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$ | 20,636,844 | $ | 19,442,976 | ||||
The
accompanying notes are an integral part of the financial
statements.
401(k)
PROFIT SHARING PLAN
December
31, 2007 and 2006
NOTE
1 - DESCRIPTION OF PLAN
The Ames
National Corporation 401(k) Profit Sharing Plan (the Plan) is sponsored by Ames
National Corporation and its subsidiaries: First National Bank, Ames,
Iowa (the Plan trustee); Boone Bank & Trust, Boone, Iowa; Randall-Story
State Bank, Story City, Iowa; State Bank & Trust, Nevada, Iowa; and United
Bank & Trust, Marshalltown, Iowa (collectively, the
Companies). The following description of the Plan provides only
general information. Participants should refer to the Plan agreement
for a more complete description of the Plan’s provisions.
General
and eligibility
The Plan
is a defined contribution plan covering employees of the Companies who have
completed six months of employment with a minimum of 500 hours of service and
are age 21 or older. Employees are eligible to make salary deferral
contributions to the Plan on January 1, or July 1, following their eligibility
date. To be entitled to employer contributions, a participant must
complete 1,000 hours of service during the plan year and must be employed by the
Companies on the last day of the Plan year. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
Contributions
Participants
may contribute up to 100% of their annual compensation as defined by the Plan
subject to limits of $15,500 and $15,000 in 2007 and 2006,
respectively. The Companies provide a matching contribution up to 2%
of the participant’s compensation, a nondiscretionary contribution of 5% of the
participants’ compensation and may also make additional discretionary
contributions based on profits. The discretionary contributions are
determined by the Boards of Directors on an annual
basis. Participants may also contribute amounts representing
distributions from other qualified defined benefit or contribution
plans. For 2007, all Plan investments were
participant-directed. In 2006, the Plan investments for deferral and
matching contributions were participant-directed, and the Companies’
nondiscretionary and discretionary contributions were invested by the Plan
trustee (nonparticipant-directed).
Participant
accounts
Each
participant’s account is credited with that participant’s contribution, the
Companies’ matching contribution and an allocation of (a) the Companies’
discretionary contribution and (b) Plan earnings. Allocations are
based on participant earnings or account balances, as defined. The
benefit to which a participant is entitled is the benefit that can be provided
from the participant’s vested account. Forfeited balances of
terminated participants’ nonvested balances are used to reduce future
contributions from the Companies.
Vesting
Participants
are immediately vested in their voluntary contributions and the employer
matching contributions and earnings thereon. Vesting in the
Companies’ discretionary and nondiscretionary contributions and earnings thereon
is based on years of continuous service. A participant is 100% vested
in discretionary contributions after three years of credited service with no
vesting prior to that time.
AMES
NATIONAL CORPORATION
401(k)
PROFIT SHARING PLAN
NOTES
TO FINANCIAL STATEMENTS
December
31, 2007 and 2006
NOTE 1 - DESCRIPTION OF PLAN
(CONTINUED)
Payment
of benefits
On
termination of service due to death, disability, retirement or any other reason,
a participant or their beneficiaries may elect to receive an amount equal to the
value of the participant’s vested interest in his or her account in a lump sum
amount.
Loans
to participants
Participants
may borrow from their fund accounts up to a maximum equal to the lesser of
$50,000 or 50% of their vested account balance. Loan transactions are
treated as transfers between the investment fund and the participant loan
fund. Loans outstanding at December 31, 2007 mature through 2017 and
the interest rates (as determined by the plan administrator) range from 4.5% to
7.75%. Principal and interest are paid ratably through monthly
payroll deductions, generally, over five years. However, repayment of loans for
the purchase of a primary residence may exceed five years. The loans
are secured by the balance in the participant’s account.
Forfeited
accounts
The
forfeitures are used to reduce contributions from the
Companies. Forfeitures for non-vested account balances for the years
ended December 31, 2007 and 2006, were approximately $7,000 and $13,300,
respectively.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
The Plan
year ends on December 31. Significant accounting policies followed by
the Plan are presented below.
Basis
of presentation
The
accompanying financial statements have been prepared on the accrual basis of
accounting and present the net assets available for plan benefits and changes in
those assets in accordance with generally accepted accounting
principles.
Use
of estimates in preparing financial statements
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements and
reported amounts of additions to and deductions from net assets during the
reporting period. Actual results could differ from those
estimates.
AMES
NATIONAL CORPORATION
401(k)
PROFIT SHARING PLAN
NOTES
TO FINANCIAL STATEMENTS
December
31, 2007 and 2006
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
Investments
The
Plan’s investments are stated at fair value. The fair value of the
interest-bearing cash and certificates of deposit included in the ANC Balanced
Fund are determined to be equal to cost plus accrued interest. The
fair values of other investments in the ANC Balanced Fund, which includes U.S.
government and government agency securities, corporate bonds, and preferred and
common stocks, and the Plan investments in Ames National Corporation common
stock, are based on quoted market prices. Shares of mutual funds are
valued at the net asset value, based on quoted market prices, of shares held by
the Plan at year-end. The fair value of participant loans has been
determined to be equal to the unpaid principal balance.
Purchases
and sales of investment securities are recorded on a trade-date
basis. Interest is recorded on the accrual
basis. Dividends are recorded on the ex-dividend date.
Payment
of benefits
Benefits
are recorded when paid.
New
accounting pronouncement
The
following new accounting pronouncement may affect future financial reporting by
the Plan:
In
September 2006, the FASB issued Statement No. 157 (SFAS No. 157), Fair Value
Measurements. SFAS No. 157 defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles,
and expands disclosures about fair value measurements. SFAS No. 157
applies to other accounting pronouncements that require or permit fair value
measurements and does not require any new fair value
measurements. SFAS No. 157 is effective for fiscal years beginning
after November 15, 2007 generally for financial assets and liabilities, and is
effective for fiscal years beginning after November 15, 2008 generally for
non-financial assets and liabilities. The Plan sponsor does not
expect that the adoption of SFAS No. 157 will have a material effect on the
Plan’s net assets or changes in net assets.
NOTE
3 - FINANCIAL INSTRUMENT RISK
The Plan
maintains cash in bank deposit accounts, which, at times may exceed federally
insured limits. The Plan sponsor believes the Plan is not exposed to
any significant credit risk on its cash accounts.
NOTE
4 - ADMINISTRATIVE EXPENSES
Certain
administrative functions are performed by officers or employees of the
Companies. No such officer or employee receives compensation from the
Plan. Certain other administrative expenses are paid directly by the
Companies.
AMES
NATIONAL CORPORATION
401(k)
PROFIT SHARING PLAN
NOTES
TO FINANCIAL STATEMENTS
December
31, 2007 and 2006
NOTE
5 - INVESTMENTS
The
following table presents the Plan investments that represent 5% or more of the
Plan’s net assets:
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2007
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2006
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ANC
Balanced Fund
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$ | 11,325,090 | $ | 14,009,144 | * | |||
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Ames
National Corporation common stock
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2,779,800 | 3,124,055 | ||||||
*Nonparticipant-directed
in 2006. (see Note 6)
During
2007 and 2006, the Plan’s investments (including investments bought, sold and
held during the years) appreciated in value by $751,144 and $520,685,
respectively. Interest and dividends realized on the Plan investments
for the years ended 2007 and 2006 was $418,539 and $722,090,
respectively.
NOTE
6 - NONPARTICIPANT-DIRECTED INVESTMENTS
For the
year ended December 31, 2007, all assets were
participant-directed. As of and for the year ended December 31, 2006,
information about the net assets and the significant components of the changes
in net assets relating to the nonparticipant-directed investments is as
follows:
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Net
assets:
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||||
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Common
stocks
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$ | 8,196,381 | ||
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Preferred
stocks
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556,200 | |||
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Corporate
bonds
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1,963,302 | |||
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U.S.
government and government agency securities
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2,053,755 | |||
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Mutual
funds
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643,336 | |||
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Certificates
of deposit
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95,057 | |||
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Interest-bearing
cash
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501,113 | |||
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Total
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$ | 14,009,144 | ||
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Changes
in net assets in 2006:
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||||
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Contributions
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$ | 971,300 | ||
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Investment
income
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1,004,890 | |||
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Benefits
paid to participants
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(1,439,651 | ) | ||
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Transfers
to participant directed investments
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(4,248,977 | ) | ||
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Total
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$ | (3,712,438 | ) | |
AMES
NATIONAL CORPORATION
401(k)
PROFIT SHARING PLAN
NOTES
TO FINANCIAL STATEMENTS
December
31, 2007 and 2006
NOTE
7 - TRANSACTIONS WITH PARTIES-IN-INTEREST
At
December 31, 2007 and 2006, the Plan held 139,507 and 148,839 shares of Ames
National Corporation, a party-in-interest, common stock with a fair value of
$2,779,800 and $3,124,055, respectively. At December 31, 2007 and
2006, the Plan also held cash totaling $526,655 and $456,086 with First National
Bank, Ames, Iowa.
The Plan
trustee is the Trust Department of First National Bank, a subsidiary of the Plan
sponsor, Ames National Corporation. All assets are held through trust
agreement by the trustee, who is also a party-in-interest.
NOTE
8 - PLAN TERMINATION
Although
they have not expressed any intent to do so, the Companies have the right to
terminate the Plan at any time subject to the provisions of
ERISA. Upon termination all participants will become 100%
vested.
NOTE
9 - TAX STATUS
The Plan
obtained its latest determination letter dated August 24, 2004, in which the
Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Internal Revenue Code (IRC)
and, therefore, not subject to tax. The Plan has been amended since
receiving the aforementioned determination letter. However, the Plan
Administrator believes that the Plan is currently designed and being operated in
compliance with applicable requirements of the IRC.
NOTE
10 - RISKS AND UNCERTAINTIES
The Plan
invests in various investment securities. Investment securities are
exposed to various risks such as interest rate, market and credit
risks. Due to the level of risk associated with certain investment
securities, it is at least reasonably possible that changes in the values of
investment securities will occur in the near term and that such changes could
materially affect participants’ account balances and the amounts reported in the
statements of net assets available for benefits.
This
information is an integral part of the accompanying financial
statements.
AMES
NATIONAL CORPORATION
401(k)
PROFIT SHARING PLAN
December
31, 2007
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Number
of
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|||||||||||||
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Shares
or
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|||||||||||||
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Interest
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Due
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Principal
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Fair
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||||||||||
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Description
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Rate
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Date
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Amount
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Value
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Assets
held by First National Bank, as Trustee*
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Mutual
funds:
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American
Funds Capital
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Income
Builder R5
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3,458 | $ | 216,347 | ||||||||||
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American
Europacific Growth R5
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6,089 | 309,756 | |||||||||||
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American
Funds Income Fund
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10,678 | 206,941 | |||||||||||
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American
Growth Fund of AM R5
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15,114 | 513,891 | |||||||||||
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Davis
NY Venture A
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10,879 | 435,255 | |||||||||||
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DWS
Dreman High Return Equity-A
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8,042 | 374,108 | |||||||||||
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Metlife
Stable Value Fund
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3,325 | 41,942 | |||||||||||
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Oppenheimer
Develop Markets
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17,230 | 838,225 | |||||||||||
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Vangaurd
500 Index
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2,222 | 300,237 | |||||||||||
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Vangaurd
Small-Cap Index
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15,735 | 512,635 | |||||||||||
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Vanguard
Develop Markets Index
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21,246 | 288,310 | |||||||||||
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Vanguard
Mid-Cap Index
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18,297 | 378,754 | |||||||||||
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Vanguard
Target Retire 2005
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184 | 2,216 | |||||||||||
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Vanguard
Target Retire 2015
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7,402 | 96,677 | |||||||||||
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Vanguard
Target Retire 2025
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35,623 | 488,744 | |||||||||||
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Vanguard
Target Retire 2035
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14,301 | 209,087 | |||||||||||
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Vanguard
Target Retire 2045
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10,250 | 154,666 | |||||||||||
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Vanguard
Target Retire Income
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4,138 | 46,052 | |||||||||||
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Vanguard
Total Bond Market Index
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36,616 | 372,023 | |||||||||||
| 5,785,866 | |||||||||||||
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Bank
administred trust fund:
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ANC
Balanced Fund*
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1,002,423 | 11,325,090 | |||||||||||
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Common
stock:
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Ames
National Corporation*
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139,507 | 2,779,800 | |||||||||||
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Participant
loans*
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4.5%
to
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September
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|||||||||||
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7.75%
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2008
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||||||||||||
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through
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|||||||||||||
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April
2017
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155,226 | ||||||||||||
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Total
investments
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$ | 20,045,982 | |||||||||||
*
Indicates a party-in-interest to the Plan
SIGNATURES
The Plan. Pursuant
to the requirements of the Securities Exchange Act of 1934, the trustees (or
other persons who administer the employee benefit plan) have duly caused this
Annual Report to be signed on its behalf by the undersigned hereunto duly
authorized.
Date: June
27, 2008
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AMES
NATIONAL CORPORATION
401(k)
PROFIT SHARING PLAN
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By: First
National Bank, Ames, Iowa, Trustee
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| By: |
/s/
Steven
J. McLaughlin
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| Name: |
Steven
J. McLaughlin
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| Title: |
Senior
Trust Officer
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EXHIBIT
INDEX
|
Exhibit
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Number
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Exhibit
|
|
Consent
of Independent Registered Accounting
Firm
|