IOWA
|
42-1039071
|
|
(State or Other
Jurisdiction of Incorporation
or Organization)
|
(I. R. S. Employer
Identification
Number)
|
COMMON
STOCK, $2.00 PAR VALUE
|
9,432,915
|
(Class)
|
(Shares
Outstanding at November 3, 2008)
|
Page
|
||
PART
I.
|
FINANCIAL
INFORMATION
|
|
Item
1.
|
3
|
|
3
|
||
4
|
||
|
||
5
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||
6
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||
Item
2.
|
9
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|
Item
3.
|
26
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|
Item
4.
|
26
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PART
II.
|
OTHER
INFORMATION
|
|
26
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||
28
|
AMES NATIONAL CORPORATION AND SUBSIDIARIES
|
||||||||
Consolidated
Balance Sheets
|
||||||||
(unaudited)
|
||||||||
September
30,
|
December
31,
|
|||||||
ASSETS
|
2008
|
2007
|
||||||
Cash
and due from banks
|
$ | 27,216,295 | $ | 26,044,577 | ||||
Federal
funds sold
|
- | 5,500,000 | ||||||
Interest
bearing deposits in financial institutions
|
7,550,340 | 634,613 | ||||||
Securities
available-for-sale
|
323,416,226 | 339,942,064 | ||||||
Loans
receivable, net
|
446,224,818 | 463,651,000 | ||||||
Loans
held for sale
|
1,169,084 | 344,970 | ||||||
Bank
premises and equipment, net
|
12,785,372 | 13,446,865 | ||||||
Other
real estate owned
|
12,648,962 | 2,845,938 | ||||||
Accrued
income receivable
|
7,723,433 | 8,022,900 | ||||||
Deferred
income taxes
|
7,263,335 | 929,326 | ||||||
Other
assets
|
473,967 | 228,895 | ||||||
Total
assets
|
$ | 846,471,832 | $ | 861,591,148 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
LIABILITIES
|
||||||||
Deposits
|
||||||||
Demand,
noninterest bearing
|
$ | 79,518,096 | $ | 80,638,995 | ||||
NOW
accounts
|
155,448,377 | 160,672,326 | ||||||
Savings
and money market
|
161,470,338 | 162,291,544 | ||||||
Time,
$100,000 and over
|
85,408,343 | 109,189,660 | ||||||
Other
time
|
165,418,906 | 177,326,270 | ||||||
Total
deposits
|
647,264,060 | 690,118,795 | ||||||
Federal
funds purchased and securities sold under agreementsto
repurchase
|
47,258,710 | 30,033,321 | ||||||
Other
short-term borrowings
|
1,089,061 | 737,420 | ||||||
Long-term
borrowings
|
39,500,000 | 24,000,000 | ||||||
Dividend
payable
|
2,641,216 | 2,545,987 | ||||||
Accrued
expenses and other liabilities
|
4,967,463 | 4,135,102 | ||||||
Total
liabilities
|
742,720,510 | 751,570,625 | ||||||
STOCKHOLDERS'
EQUITY
|
||||||||
Common
stock, $2 par value, authorized 18,000,000 shares; 9,432,915 and
9,429,580 shares issued and outstanding at September 30, 2008and December
31, 2007, respectively
|
18,865,830 | 18,859,160 | ||||||
Additional
paid-in capital
|
22,651,222 | 22,588,691 | ||||||
Retained
earnings
|
63,535,036 | 66,683,016 | ||||||
Accumulated
other comprehensive income (loss)-net unrealized gain (loss) on
securities available-for-sale
|
(1,300,766 | ) | 1,889,656 | |||||
Total
stockholders' equity
|
103,751,322 | 110,020,523 | ||||||
Total
liabilities and stockholders' equity
|
$ | 846,471,832 | $ | 861,591,148 |
AMES
NATIONAL CORPORATION AND SUBSIDIARIES
|
||||||||||||||||
Consolidated
Statements of Income
|
||||||||||||||||
(unaudited)
|
||||||||||||||||
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Interest
and dividend income:
|
||||||||||||||||
Loans
|
$ | 7,237,129 | $ | 8,062,624 | $ | 22,386,655 | $ | 23,500,424 | ||||||||
Securities
|
||||||||||||||||
Taxable
|
2,497,103 | 2,322,438 | 7,487,230 | 6,981,845 | ||||||||||||
Tax-exempt
|
1,201,777 | 1,218,921 | 3,809,905 | 3,603,235 | ||||||||||||
Federal
funds sold
|
15,835 | 2,132 | 150,284 | 181,523 | ||||||||||||
Dividends
|
229,216 | 397,137 | 898,953 | 1,171,687 | ||||||||||||
Total
interest income
|
11,181,060 | 12,003,252 | 34,733,027 | 35,438,714 | ||||||||||||
Interest
expense:
|
||||||||||||||||
Deposits
|
3,289,349 | 5,232,913 | 11,363,993 | 16,041,795 | ||||||||||||
Other
borrowed funds
|
557,783 | 789,136 | 1,687,382 | 1,804,055 | ||||||||||||
Total
interest expense
|
3,847,132 | 6,022,049 | 13,051,375 | 17,845,850 | ||||||||||||
Net
interest income
|
7,333,928 | 5,981,203 | 21,681,652 | 17,592,864 | ||||||||||||
Provision
(credit) for loan losses
|
73,514 | (264,131 | ) | 1,002,208 | (110,527 | ) | ||||||||||
Net
interest income after provision (credit) for loan losses
|
7,260,414 | 6,245,334 | 20,679,444 | 17,703,391 | ||||||||||||
Non-interest
income:
|
||||||||||||||||
Trust
department income
|
391,115 | 438,383 | 1,222,268 | 1,543,048 | ||||||||||||
Service
fees
|
451,162 | 479,930 | 1,332,094 | 1,383,137 | ||||||||||||
Securities
gains (losses), net
|
(5,487,250 | ) | 537,969 | (6,900,899 | ) | 1,444,047 | ||||||||||
Gain
on sale of loans held for sale
|
217,928 | 241,548 | 604,467 | 539,652 | ||||||||||||
Merchant
and ATM fees
|
169,512 | 143,859 | 483,515 | 426,144 | ||||||||||||
Other
|
143,802 | 146,284 | 520,704 | 430,943 | ||||||||||||
Total
non-interest income (loss)
|
(4,113,731 | ) | 1,987,973 | (2,737,851 | ) | 5,766,971 | ||||||||||
Non-interest
expense:
|
||||||||||||||||
Salaries
and employee benefits
|
2,647,502 | 2,480,547 | 7,728,417 | 7,543,814 | ||||||||||||
Data
processing
|
511,166 | 535,527 | 1,681,526 | 1,643,884 | ||||||||||||
Occupancy
expenses
|
397,897 | 344,227 | 1,203,963 | 965,715 | ||||||||||||
Provision
for off-balance sheet commitments
|
4,000 | 233,000 | 15,000 | 233,000 | ||||||||||||
Other
operating expenses
|
773,195 | 711,887 | 2,230,776 | 2,146,260 | ||||||||||||
Total
non-interest expense
|
4,333,760 | 4,305,188 | 12,859,682 | 12,532,673 | ||||||||||||
Income
before income taxes
|
(1,187,077 | ) | 3,928,119 | 5,081,911 | 10,937,689 | |||||||||||
Income
tax expense (credit)
|
(1,193,983 | ) | 989,580 | 307,176 | 2,650,706 | |||||||||||
Net
income
|
$ | 6,906 | $ | 2,938,539 | $ | 4,774,735 | $ | 8,286,983 | ||||||||
Basic
and diluted earnings per share
|
$ | 0.00 | $ | 0.31 | $ | 0.51 | $ | 0.88 | ||||||||
Declared
dividends per share
|
$ | 0.28 | $ | 0.27 | $ | 0.84 | $ | 0.81 | ||||||||
Comprehensive
income (loss)
|
$ | (509,449 | ) | $ | 4,091,849 | $ | 1,584,313 | $ | 6,232,334 |
AMES
NATIONAL CORPORATION AND SUBSIDIARIES
|
||||||||
Consolidated
Statements of Cash Flows
|
||||||||
(unaudited)
|
||||||||
Nine
Months Ended
|
||||||||
September
30,
|
||||||||
2008
|
2007
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net
income
|
$ | 4,774,735 | $ | 8,286,983 | ||||
Adjustments
to reconcile net income to net cash
|
||||||||
provided
by operating activities:
|
||||||||
Provision
(credit) for loan losses
|
1,002,208 | (110,527 | ) | |||||
Provision
for off-balance sheet commitments
|
15,000 | 233,000 | ||||||
Amortization
and accretion
|
(160,936 | ) | (162,610 | ) | ||||
Depreciation
|
832,365 | 788,951 | ||||||
Provision
(credit) for deferred taxes
|
(4,460,270 | ) | 5,264 | |||||
Securities
losses (gains), net
|
6,900,899 | (1,444,047 | ) | |||||
Change
in assets and liabilities:
|
||||||||
Decrease
in loans held for sale
|
(824,114 | ) | (228,434 | ) | ||||
Increase
(decrease) in accrued income receivable
|
299,467 | (537,536 | ) | |||||
Increase
in other assets
|
(245,072 | ) | (136,900 | ) | ||||
Increase
in accrued expenses and other liabilities
|
817,361 | 585,657 | ||||||
Net
cash provided by operating activities
|
8,951,643 | 7,279,801 | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Purchase
of securities available-for-sale
|
(122,947,883 | ) | (46,780,067 | ) | ||||
Proceeds
from sale of securities available-for-sale
|
54,824,181 | 6,076,548 | ||||||
Proceeds
from maturities and calls of securities available-for-sale
|
72,845,415 | 52,530,817 | ||||||
Net
decrease (increase) in interest bearing deposits in financial
institutions
|
(6,915,727 | ) | 882,421 | |||||
Net
decrease in federal funds sold
|
5,500,000 | 13,100,000 | ||||||
Net
decrease (increase) in loans
|
6,620,950 | (28,631,293 | ) | |||||
Purchase
of bank premises and equipment
|
(170,872 | ) | (1,890,880 | ) | ||||
Net
cash provided by (used in) investing activities
|
9,756,064 | (4,712,454 | ) | |||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Decrease
in deposits
|
(42,854,735 | ) | (29,376,571 | ) | ||||
Increase
in federal funds purchased and
securities sold under agreements to
repurchase
|
17,225,389 | 20,504,318 | ||||||
Increase
in other borrowings, net
|
15,851,641 | 22,891,419 | ||||||
Dividends
paid
|
(7,827,485 | ) | (7,541,244 | ) | ||||
Proceeds
from issuance of common stock
|
69,201 | 98,921 | ||||||
Net
cash provided by (used in) financing activities
|
(17,535,989 | ) | 6,576,843 | |||||
Net
increase in cash and cash equivalents
|
1,171,718 | 9,144,190 | ||||||
CASH
AND DUE FROM BANKS
|
||||||||
Beginning
|
26,044,577 | 16,510,082 | ||||||
Ending
|
$ | 27,216,295 | $ | 25,654,272 | ||||
|
||||||||
Cash
payments for:
|
||||||||
Interest
|
$ | 14,052,327 | $ | 17,688,771 | ||||
Income
taxes
|
3,737,210 | 2,526,719 | ||||||
|
||||||||
Noncash
transfer of loans to other real estate owned
|
$ | 9,803,024 | $ | 37,477 |
1.
|
Significant
Accounting Policies
|
2.
|
Dividends
|
3.
|
Earnings
Per Share
|
4.
|
Off-Balance
Sheet Arrangements
|
5.
|
Fair
Value Measurements
|
Description
|
Total
|
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||
Assets:
|
||||||||||||||||
Securities
available for sale
|
$ | 323,416,000 | $ | 68,212,000 | $ | 255,204,000 | $ | - |
Description
|
Total
|
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||
Assets:
|
||||||||||||||||
Loans
|
$ | 6,324,000 | $ | - | $ | - | $ | 6,324,000 |
6.
|
Investment
Securities Impairment
|
Less
than 12 Months
|
12
Months or More
|
Total
|
||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
|||||||||||||||||||
September
30, 2008:
|
||||||||||||||||||||||||
Securities
available for sale:
|
||||||||||||||||||||||||
U.S.
government agencies
|
$ | 12,802,000 | $ | (104,000 | ) | $ | 642,000 | $ | (23,000 | ) | $ | 13,444,000 | $ | (127,000 | ) | |||||||||
U.S.
government mortgage-backed securities
|
41,233,000 | (385,000 | ) | 531,000 | (11,000 | ) | 41,764,000 | (396,000 | ) | |||||||||||||||
State
and political subsidivisions
|
50,239,000 | (26,000 | ) | 3,636,000 | (14,000 | ) | 53,875,000 | (40,000 | ) | |||||||||||||||
Corporate
obligations
|
40,712,000 | (2,971,000 | ) | 8,503,000 | (1,201,000 | ) | 49,215,000 | (4,172,000 | ) | |||||||||||||||
Equity
securities
|
3,052,000 | (405,000 | ) | - | - | 3,052,000 | (405,000 | ) | ||||||||||||||||
$ | 148,038,000 | $ | (3,891,000 | ) | $ | 13,312,000 | $ | (1,249,000 | ) | $ | 161,350,000 | $ | (5,140,000 | ) | ||||||||||
Less
than 12 Months
|
12
Months or More
|
Total
|
||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
|||||||||||||||||||
December
31, 2007:
|
||||||||||||||||||||||||
Securities
available for sale:
|
||||||||||||||||||||||||
U.S.
government agencies
|
$ | 2,497,127 | $ | (2,873 | ) | $ | 22,807,372 | $ | (108,334 | ) | $ | 25,304,499 | $ | (111,207 | ) | |||||||||
U.S.
government mortgage-backed
securities
|
12,696,160 | (71,106 | ) | 8,706,270 | (144,286 | ) | 21,402,430 | (215,392 | ) | |||||||||||||||
State
and political subsidivisions
|
14,067,294 | (84,174 | ) | 26,526,618 | (295,222 | ) | 40,593,912 | (379,396 | ) | |||||||||||||||
Corporate
obligations
|
21,577,269 | (786,802 | ) | 14,392,174 | (243,309 | ) | 35,969,443 | (1,030,111 | ) | |||||||||||||||
Equity
securities
|
6,336,950 | (1,344,550 | ) | - | - | 6,336,950 | (1,344,550 | ) | ||||||||||||||||
$ | 57,174,800 | (2,289,505) | $ | 72,432,434 | $ | (791,151 | ) | $ | 129,607,234 | $ | (3,080,656 | ) |
7.
|
Impaired
Loans and Allowance for Loan Losses
|
September
30,
|
December
31,
|
|||||||
2008
|
2007
|
|||||||
Impaired
loans without an allowance
|
$ | 3,510,000 | $ | 3,864,000 | ||||
Impaired
loans with an allowance
|
3,004,000 | 1,621,000 | ||||||
Total
impaired loans
|
6,514,000 | 5,485,000 | ||||||
Allowance
for loan losses related to impaired loans
|
$ | 190,000 | $ | 247,000 |
Three
months ended
|
Nine
months ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Balance
at beginning of period
|
$ | 6,609,000 | $ | 6,689,000 | $ | 5,781,000 | $ | 6,533,000 | ||||||||
Charge-offs
|
42,000 | 255,000 | 212,000 | 286,000 | ||||||||||||
Recoveries
|
22,000 | 11,000 | 91,000 | 44,000 | ||||||||||||
Net
charge-offs
|
20,000 | 244,000 | 121,000 | 242,000 | ||||||||||||
Provision
(credit) for loan losses
|
74,000 | (264,000 | ) | 1,002,000 | (111,000 | ) | ||||||||||
Balance
at end of period
|
$ | 6,663,000 | $ | 6,181,000 | $ | 6,662,000 | $ | 6,180,000 |
8.
|
Recent
Accounting Pronouncements
|
Item2.
|
Management’s
Discussion and Analysis of Financial Condition and
Results of Operations
|
|
·
|
Challenges
|
|
·
|
Key
Performance Indicators and Industry
Results
|
|
·
|
Income
Statement Review
|
|
·
|
Balance
Sheet Review
|
|
·
|
Asset
Quality and Credit Risk Management
|
|
·
|
Liquidity
and Capital Resources
|
|
·
|
Forward-Looking
Statements and Business Risks
|
|
·
|
On
July 16, 2008, the Company’s lead bank, First National Bank, entered into
an informal Memorandum of Understanding with the Office of the Comptroller
of the Currency regarding the Bank’s commercial real estate loan
portfolio, including actions to be taken with respect to commercial real
estate risk management procedures, credit underwriting and administration,
appraisal and evaluation process, problem loan management, credit risk
ratings recognition and loan review procedures. Since entering
into the Memorandum, management has been actively pursuing the corrective
actions required by the Memorandum in an effort to address the
deficiencies noted in administration of its commercial real estate loan
portfolio.
|
|
·
|
The
Company and affiliate banks have invested in FHLMC and FNMA preferred
stock and other corporate bond issues whose financial condition may
further deteriorate requiring additional impairment
charges. Additional impairment charges may be necessary on
investment securities in future periods if financial and economic
conditions do not improve as perceived by bond and equity
investors.
|
|
·
|
Banks
have historically earned higher levels of net interest income by investing
in longer term loans and securities at higher yields and paying lower
deposit expense rates on shorter maturity deposits. However,
the difference between the yields on short term and long term investments
was very low for much of 2006 and 2007, making it more difficult to manage
net interest margins. While this difference in long term and
short term yields improved in 2008, if this difference was to narrow or
invert during the remainder of 2008, the Company’s net interest margin may
compress and net interest income may be negatively
impacted. Historically, management has been able to position
the Company’s assets and liabilities to earn a satisfactory net interest
margin during periods when the yield curve is flat or inverted by
appropriately managing credit spreads on loans and maintaining adequate
liquidity to provide flexibility in an effort to hold down funding
costs. Management would seek to follow a similar approach in
dealing with this challenge for the remainder of
2008.
|
|
·
|
Yields
on U.S. Treasury securities with maturities of 2 to 5 years decreased on
average 53 basis points as of September 30, 2008 compared June 30,
2008. Historically, the Company has improved its net interest
margin in a declining interest rate environment. However,
increasing market interest rates may present a challenge to the Company if
they were to rise significantly in a short period of
time. Increases in interest rates may negatively impact the
Company’s net interest margin if interest expense increases more quickly
than interest income. The Company’s earning assets (primarily
its loan and investment portfolio) have longer maturities than its
interest bearing liabilities (primarily deposits and other borrowings);
therefore, in a rising interest rate environment, interest expense will
increase more quickly than interest income as the interest bearing
liabilities reprice more quickly than earning assets. In
response to this challenge, the Banks model quarterly the changes in
income that would result from various changes in interest
rates. Management believes Bank earning assets have the
appropriate maturity and repricing characteristics to optimize earnings
and the Banks’ interest rate risk
positions.
|
|
·
|
The
Company’s market in central Iowa has numerous banks, credit unions, and
investment and insurance companies competing for similar business
opportunities. This competitive environment will continue to
put downward pressure on the Banks’ net interest margins and thus affect
profitability. Strategic planning efforts at the Company and
Banks continue to focus on capitalizing on the Banks’ strengths in local
markets while working to identify opportunities for improvement to gain
competitive advantages.
|
|
·
|
A
substandard performance in the Company’s equity portfolio could lead to a
reduction in the historical level of realized security gains, thereby
negatively impacting the Company’s earnings. The Company
invests capital that may be utilized for future expansion in a portfolio
of primarily financial stocks with an estimated fair market value of
approximately $14 million as of September 30, 2008. The Company
focuses on stocks that have historically paid dividends in an effort to
lessen the negative effects of a bear
market.
|
|
·
|
The
economic conditions for commercial real estate developers in the Des
Moines metropolitan area deteriorated in 2007 and the first nine months of
2008. This deterioration has contributed to the Company’s
increased level of non-performing assets. During the third
quarter of 2008, the Company foreclosed on two real estate properties
(other real estate owned) totaling $10.5 million in the Des Moines
market. The Company has impaired loans totaling $2.3 million
with four Des Moines development companies with specific reserves totaling
$72,000. The Company has additional credit relationships with
real estate developers in the Des Moines area that presently, have
collateral values sufficient to cover loan balances. However,
the loans may become impaired in the future if economic conditions do not
improve or become worse. As of September 30, 2008, the Company
has a limited number of such credits and is actively engaged with the
customers to minimize credit risks.
|
September
30, 2008
|
June
30, 2008
|
Years
Ended December 31,
|
||||||||||||||||||||||||||||||
3
Months Ended
|
9
Months Ended
|
6
Months
Ended
|
2007
|
2006
|
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|
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Company
|
Company
|
Company
|
Industry*
|
Company
|
Industry
|
Company
|
Industry
|
|||||||||||||||||||||||||
Return
on assets
|
0.003 | % | 0.74 | % | 1.09 | % | 0.37 | % | 1.30 | % | 0.86 | % | 1.34 | % | 1.28 | % | ||||||||||||||||
Return
on equity
|
0.03 | % | 5.79 | % | 8.54 | % | 3.58 | % | 9.89 | % | 8.17 | % | 9.99 | % | 12.34 | % | ||||||||||||||||
Net
interest margin
|
3.99 | % | 3.90 | % | 3.85 | % | 3.35 | % | 3.39 | % | 3.29 | % | 3.29 | % | 3.31 | % | ||||||||||||||||
Efficiency
ratio
|
134.58 | % | 67.88 | % | 54.22 | % | 57.93 | % | 53.71 | % | 59.37 | % | 52.27 | % | 56.79 | % | ||||||||||||||||
Capital
ratio
|
12.64 | % | 12.74 | % | 12.78 | % | 7.89 | % | 13.20 | % | 7.98 | % | 13.38 | % | 8.23 | % |
|
·
|
Return
on Assets
|
|
·
|
Return
on Equity
|
●
|
Net Interest Margin
|
|
·
|
Efficiency
Ratio
|
|
·
|
Capital
Ratio
|
AVERAGE
BALANCE SHEETS AND INTEREST RATES
|
||||||||||||||||||||||||
Three
Months Ended September 30,
|
||||||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||||||
ASSETS
|
Average
|
Revenue/
|
Yield/
|
Average
|
Revenue/
|
Yield/
|
||||||||||||||||||
(dollars
in thousands)
|
balance
|
expense
|
rate
|
balance
|
expense
|
rate
|
||||||||||||||||||
Interest-earning
assets
|
||||||||||||||||||||||||
Loans (1)
|
||||||||||||||||||||||||
Commercial
|
$ | 85,821 | $ | 1,230 | 5.73 | % | $ | 79,248 | $ | 1,584 | 8.00 | % | ||||||||||||
Agricultural
|
30,469 | 520 | 6.83 | % | 31,873 | 688 | 8.63 | % | ||||||||||||||||
Real
estate
|
321,966 | 5,124 | 6.37 | % | 325,532 | 5,414 | 6.65 | % | ||||||||||||||||
Installment
and other
|
24,422 | 363 | 5.95 | % | 21,973 | 376 | 6.84 | % | ||||||||||||||||
Total
loans (including fees)
|
$ | 462,678 | $ | 7,237 | 6.26 | % | $ | 458,626 | $ | 8,062 | 7.03 | % | ||||||||||||
Investment
securities
|
||||||||||||||||||||||||
Taxable
|
$ | 205,033 | $ | 2,533 | 4.94 | % | $ | 202,803 | $ | 2,458 | 4.85 | % | ||||||||||||
Tax-exempt
(2)
|
133,365 | 2,056 | 6.17 | % | 138,165 | 2,266 | 6.56 | % | ||||||||||||||||
Total
investment securities
|
$ | 338,398 | $ | 4,589 | 5.42 | % | $ | 340,968 | $ | 4,724 | 5.54 | % | ||||||||||||
Interest
bearing deposits with banks
|
$ | 5,224 | $ | 59 | 4.52 | % | $ | 767 | $ | 8 | 4.17 | % | ||||||||||||
Federal
funds sold
|
1,687 | 16 | 3.79 | % | 56 | 2 | 14.29 | % | ||||||||||||||||
Total
interest-earning assets
|
$ | 807,987 | $ | 11,901 | 5.89 | % | $ | 800,417 | $ | 12,796 | 6.39 | % | ||||||||||||
Non-interest-earning
assets
|
36,964 | 42,516 | ||||||||||||||||||||||
TOTAL
ASSETS
|
$ | 844,951 | $ | 842,933 |
1
Average loan balances include nonaccrual loans, if
any. Interest income collected on nonaccrual loans has been
included.
|
2
Tax-exempt income has been adjusted to a tax-equivalent basis using an
incremental tax rate of
35%.
|
AVERAGE
BALANCE SHEETS AND INTEREST RATES
|
||||||||||||||||||||||||
Three
Months Ended September 30,
|
||||||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
Average
|
Revenue/
|
Yield/
|
Average
|
Revenue/
|
Yield/
|
||||||||||||||||||
(dollars
in thousands)
|
balance
|
expense
|
rate
|
balance
|
expense
|
rate
|
||||||||||||||||||
Interest-bearing
liabilities
|
||||||||||||||||||||||||
Deposits
|
||||||||||||||||||||||||
Savings,
NOW accounts, and money markets
|
$ | 311,207 | $ | 894 | 1.15 | % | $ | 290,779 | $ | 1,762 | 2.42 | % | ||||||||||||
Time
deposits < $100,000
|
166,718 | 1,528 | 3.67 | % | 178,839 | 2,037 | 4.56 | % | ||||||||||||||||
Time
deposits > $100,000
|
91,710 | 867 | 3.78 | % | 114,533 | 1,434 | 5.01 | % | ||||||||||||||||
Total
deposits
|
$ | 569,635 | $ | 3,289 | 2.31 | % | $ | 584,151 | $ | 5,233 | 3.58 | % | ||||||||||||
Other
borrowed funds
|
83,495 | 558 | 2.67 | % | 67,904 | 789 | 4.65 | % | ||||||||||||||||
Total
interest-bearing
|
$ | 653,130 | $ | 3,847 | 2.36 | % | $ | 652,055 | $ | 6,022 | 3.69 | % | ||||||||||||
liabilities
|
||||||||||||||||||||||||
Non-interest-bearing
liabilities
|
||||||||||||||||||||||||
Demand
deposits
|
$ | 77,776 | $ | 73,338 | ||||||||||||||||||||
Other
liabilities
|
7,223 | 7,539 | ||||||||||||||||||||||
Stockholders'
equity
|
$ | 106,822 | $ | 110,001 | ||||||||||||||||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 844,951 | $ | 842,933 | ||||||||||||||||||||
Net
interest: income / margin
|
$ | 8,054 | 3.99 | % | $ | 6,774 | 3.39 | % | ||||||||||||||||
Spread
Analysis
|
||||||||||||||||||||||||
Interest
income/average assets
|
$ | 11,901 | 5.63 | % | $ | 12,796 | 6.07 | % | ||||||||||||||||
Interest
expense/average assets
|
3,847 | 1.82 | % | 6,022 | 2.86 | % | ||||||||||||||||||
Net
interest income/average assets
|
8,054 | 3.81 | % | 6,774 | 3.21 | % |
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||
AVERAGE
BALANCE SHEETS AND INTEREST RATES
|
||||||||||||||||||||||||
Nine
Months Ended September 30,
|
||||||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||||||
ASSETS
|
Average
|
Revenue/
|
Yield/
|
Average
|
Revenue/
|
Yield/
|
||||||||||||||||||
(dollars
in thousands)
|
balance
|
expense
|
rate
|
balance
|
expense
|
rate
|
||||||||||||||||||
Loans (1)
|
||||||||||||||||||||||||
Commercial
|
$ | 83,809 | $ | 3,817 | 6.07 | % | $ | 77,569 | $ | 4,643 | 7.98 | % | ||||||||||||
Agricultural
|
31,218 | 1,655 | 7.07 | % | 32,079 | 2,047 | 8.51 | % | ||||||||||||||||
Real
estate
|
327,785 | 15,820 | 6.44 | % | 317,712 | 15,676 | 6.58 | % | ||||||||||||||||
Installment
and other
|
24,206 | 1,095 | 6.03 | % | 22,746 | 1,134 | 6.65 | % | ||||||||||||||||
Total
loans (including fees)
|
$ | 467,018 | $ | 22,387 | 6.39 | % | $ | 450,106 | $ | 23,500 | 6.96 | % | ||||||||||||
Investment
securities
|
||||||||||||||||||||||||
Taxable
|
$ | 204,253 | $ | 7,699 | 5.03 | % | $ | 208,004 | $ | 7,365 | 4.72 | % | ||||||||||||
Tax-exempt
(2)
|
139,161 | 6,722 | 6.44 | % | 136,721 | 6,706 | 6.54 | % | ||||||||||||||||
Total
investment securities
|
$ | 343,414 | $ | 14,421 | 5.60 | % | $ | 344,725 | $ | 14,071 | 5.44 | % | ||||||||||||
Interest
bearing deposits with banks
|
$ | 3,191 | $ | 128 | 5.35 | % | $ | 942 | $ | 33 | 4.67 | % | ||||||||||||
Federal
funds sold
|
$ | 8,575 | $ | 150 | 2.33 | % | 4,762 | 182 | 5.10 | % | ||||||||||||||
Total
interest-earning assets
|
$ | 822,198 | $ | 37,086 | 6.01 | % | $ | 800,535 | $ | 37,786 | 6.29 | % | ||||||||||||
Total
noninterest-earning assets
|
$ | 41,674 | $ | 44,071 | ||||||||||||||||||||
TOTAL
ASSETS
|
$ | 863,872 | $ | 844,606 |
1
Average loan balance include nonaccrual loans, if any. Interest
income collected on nonaccrual loans has been included.
|
2
Tax-exempt income has been adjusted to a tax-equivalent basis using an
incremental tax rate
of 35%.
|
AVERAGE
BALANCE SHEETS AND INTEREST RATES
|
||||||||||||||||||||||||
Nine
Months Ended September 30,
|
||||||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
Average
|
Revenue/
|
Yield/
|
Average
|
Revenue/
|
Yield/
|
||||||||||||||||||
(dollars
in thousands)
|
balance
|
expense
|
rate
|
balance
|
expense
|
rate
|
||||||||||||||||||
Interest-bearing
liabilities
|
||||||||||||||||||||||||
Deposits
|
||||||||||||||||||||||||
Savings,
NOW accounts, and money markets
|
$ | 318,577 | $ | 2,975 | 1.25 | % | $ | 311,610 | $ | 6,078 | 2.60 | % | ||||||||||||
Time
deposits < $100,000
|
171,879 | 5,179 | 4.02 | % | 180,233 | 5,967 | 4.41 | % | ||||||||||||||||
Time
deposits > $100,000
|
101,425 | 3,210 | 4.22 | % | 107,932 | 3,997 | 4.94 | % | ||||||||||||||||
Total
deposits
|
$ | 591,881 | $ | 11,364 | 2.56 | % | $ | 599,775 | $ | 16,042 | 3.57 | % | ||||||||||||
Other
borrowed funds
|
76,992 | 1,687 | 2.92 | % | 53,214 | 1,804 | 4.52 | % | ||||||||||||||||
Total
interest-bearing
|
$ | 668,873 | $ | 13,051 | 2.60 | % | $ | 652,989 | $ | 17,846 | 3.64 | % | ||||||||||||
liabilities
|
||||||||||||||||||||||||
Noninterest-bearing
liabilities
|
||||||||||||||||||||||||
Demand
deposits
|
$ | 76,578 | $ | 72,417 | ||||||||||||||||||||
Other
liabilities
|
8,404 | 7,814 | ||||||||||||||||||||||
Stockholders'
equity
|
$ | 110,017 | $ | 111,386 | ||||||||||||||||||||
TOTAL
LIABILITIES AND
|
||||||||||||||||||||||||
STOCKHOLDERS'
EQUITY
|
$ | 863,872 | $ | 844,606 | ||||||||||||||||||||
Net
interest income / margin
|
$ | 24,035 | 3.90 | % | $ | 19,940 | 3.32 | % | ||||||||||||||||
Spread
Analysis
|
||||||||||||||||||||||||
Interest
income/average assets
|
$ | 37,086 | 5.72 | % | $ | 37,786 | 5.97 | % | ||||||||||||||||
Interest
expense/average assets
|
13,051 | 2.01 | % | 17,846 | 2.82 | % | ||||||||||||||||||
Net
interest income/average assets
|
24,035 | 3.71 | % | 19,940 | 3.15 | % |
|
·
|
Review
the Company’s Current Liquidity
Sources
|
|
·
|
Review
of the Statements of Cash Flows
|
|
·
|
Company
Only Cash Flows
|
|
·
|
Review
of Commitments for Capital Expenditures, Cash Flow Uncertainties and Known
Trends in Liquidity and Cash Flows
Needs
|
|
·
|
Capital
Resources
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market
Risk
|
Item
4.
|
Controls
and Procedures
|
PART
II.
|
OTHER
INFORMATION
|
Item1.
|
Legal
Proceedings
|
Item1.a.
|
Risk
Factors
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
||
Not applicable | |||
Item
3.
|
Defaults
Upon Senior Securities
|
||
Not applicable | |||
Item
4.
|
Submission of Matters to a Vote of Security Holders | ||
None | |||
Item
5.
|
Other
Information
|
||
None | |||
Item
6.
|
Exhibits
|
||
(a)
|
Exhibits | ||
|
Certification
of Principal Executive Officer Pursuant to Section 302 of Sarbanes-Oxley
Act of 2002.
|
||
|
Certification
of Principal Financial Officer Pursuant to Section 302 of Sarbanes-Oxley
Act of 2002.
|
||
|
Certification
of Principal Executive Officer Pursuant to 18 U.S.C. Section
1350.
|
||
|
Certification
of Principal Financial Officer Pursuant to 18 U.S.C. Section
1350.
|
AMES NATIONAL CORPORATION | ||
DATE:
November 10, 2008
|
By: | /s/ Thomas H. Pohlman |
Thomas H. Pohlman, President | ||
Principal Executive Officer | ||
By: | /s/ John P. Nelson | |
John P. Nelson, Vice President | ||
Principal Financial Officer |