Ames National (ATLO)2025-03-12 19:01Financial Performance - As of December 31, 2024, First National Bank had total assets of approximately 1.14 billion in 2023, with net income of approximately 5.5 million in 2023[20]. - State Bank reported total assets of approximately 201.7 million in 2023, with net income of approximately 1.4 million in 2023[22]. - Boone Bank's total assets increased to approximately 149.4 million in 2023, with net income of approximately 740 thousand in 2023[24]. - Reliance Bank had total assets of approximately 313.3 million in 2023, with net income of approximately 1.7 million in 2023[26]. - United Bank's total assets increased to approximately 118.5 million in 2023, with net income of approximately 1.0 million in 2023[28]. - Iowa State Bank reported total assets of approximately 254.7 million in 2023, with net income of approximately 10.2 million for the year ended December 31, 2024, a decrease of 5.5% compared to 1.14, down from 82.6 million in 2024 from 37.6 million from 45.0 million, a 0.8% increase from 453 thousand in 2024 compared to 18.0 million to 250,000 per depositor, per insured depository institution for each account ownership category[87]. - The Federal Reserve requires bank holding companies to obtain approval before acquiring more than 5% of the voting stock of any bank[75]. - The Dodd-Frank Act subjects the Banks to regulations from the Consumer Financial Protection Bureau, which has substantial power over consumer financial products and services[85]. - Iowa law currently has a deposit concentration limit of 15% on the amount of deposits that any one banking organization can control[80]. - The Basel III Capital Rules require a Common Equity Tier 1 (CET1) ratio of 6.5% for well-capitalized status[91]. - The Federal Reserve and the FDIC have issued policy statements that generally restrict insured banks and bank holding companies from paying dividends unless out of current operating earnings[96]. - The Company’s ability to pay dividends is subject to federal regulatory considerations and may be impacted by its financial condition and capital requirements[167]. Market Competition - The geographic market area served by the Banks is highly competitive, with 49 FDIC insured institutions having around 125 locations in the primary trade areas[67]. - The Company anticipates continued changes in bank competition, particularly from fintech companies and credit unions, which have significant competitive advantages[69]. - The Company faces significant competition from larger financial institutions, which may adversely affect its ability to compete effectively in the market[140]. - The competitive landscape in Ames, Iowa, includes fifteen banks and five credit unions, which may exert downward pressure on the net interest margin[211]. Operational Risks - The Company employs approximately 268 individuals, with 93% being full-time employees and an average tenure of about eleven years[52]. - The Company faces risks related to credit losses, particularly if actual credit losses exceed the allowance for credit losses, which could decrease net income[116]. - The Company must maintain disciplined underwriting standards to manage credit risk effectively, as weakening these standards could lead to increased loan defaults[113]. - The Company is exposed to operational risks from data processing failures and employee misconduct, which could result in financial losses and regulatory sanctions[125]. - Operational risks include the potential inability to attract and retain key personnel, which could hinder business growth and operations[124]. - The Company faces cybersecurity risks, with increased threats due to remote working, which could lead to significant financial losses[129]. - Damage to the company's reputation from various sources, including cybersecurity breaches, could lead to lost revenue and increased costs[136]. Investment and Asset Management - Assets under management for wealth management services increased to 416.0 million in 2023[38]. - The investment policy focuses on U.S. Government securities and corporate debt securities, balancing liquidity needs with risk minimization and yield maximization[49]. - The fair value of the Company's securities portfolio was approximately 52.0 million primarily due to increased interest rates[119]. - The company's investment securities portfolio generated a total revenue of 15,575 and a yield of 2.03% in 2023[204]. Economic Environment - Consumer inflation, as measured by the Consumer Price Index, increased by 3.4% for the year ended December 31, 2023, and 2.9% for the year ended December 31, 2024[111]. - The economic environment, including inflation and interest rates, significantly impacts the Company's financial performance and the ability of customers to repay loans[109]. - The Company is subject to risks from evolving trade policies that could disrupt major trade relationships, affecting customer repayment capabilities[112]. - The Federal Open Market Committee has initiated a series of increases in the short-term federal funds interest rate to combat inflation, which could adversely affect economic activity[110]. - The Company is facing challenges from elevated interest rates, which may negatively impact net interest income and margins going forward[184]. Shareholder Returns - The Company declared aggregate annual cash dividends of approximately 9.7 million in 2023, translating to 1.08 per share in 2023[166]. - A successor Stock Repurchase Plan was approved on November 14, 2024, allowing for the purchase of up to 100,000 shares, set to expire on November 12, 2025[172]. - The Company purchased 43,057 shares under its Stock Repurchase Plan in 2024, with no purchases made in 2023[169]. - The Company relies on dividends from its banks for nearly all revenue, and any inability to receive these dividends could adversely affect financial obligations[123].