Ames National (US:ATLO)2024-08-09 17:00Net Income and Earnings Per Share - Net income for Q2 2024 was $2.2 million, or $0.24 per share, compared to $2.6 million, or $0.28 per share, in Q2 2023, primarily due to higher interest expenses on deposits[142] Interest Income and Expense - Interest income on loans increased due to higher rates and loan portfolio growth, while interest expense on deposits rose due to higher market rates[142] - Net interest income on an FTE basis (non-GAAP) was $11.007 million for Q2 2024, compared to $11.458 million in Q2 2023[149] - Net interest margin on an FTE basis (non-GAAP) was 2.14% for Q2 2024, down from 2.20% in Q2 2023[149] - Net interest income for Q2 2024 was $10.9 million, down from $11.3 million in Q2 2023, with a net interest margin of 2.14% compared to 2.20% in the same period last year[158] - Interest income increased by $2.0 million (11.1%) in Q2 2024 compared to Q2 2023, driven by higher average rates and loan portfolio growth[158] - Interest expense rose by $2.5 million (34.5%) in Q2 2024 compared to Q2 2023, primarily due to higher market interest rates and customer shifts to higher-rate deposit products[160] - Net interest income for the first six months of 2024 was $21.8 million, down from $23.0 million in the same period in 2023, with a net interest margin of 2.14% compared to 2.26%[172] - Interest income for the first six months of 2024 increased by $5.0 million (13.9%) compared to the same period in 2023, driven by higher average rates and loan portfolio growth[172] - Interest expense for the first six months of 2024 increased by $6.2 million (48.4%) compared to the same period in 2023, due to higher market rates and increased borrowings[174] Loan Portfolio and Credit Losses - No net loan charge-offs in Q2 2024, compared to $23 thousand in Q2 2023, with credit loss expense at $182 thousand in Q2 2024 versus $33 thousand in Q2 2023[142] - Credit loss expense for Q2 2024 was $182 thousand, up from $33 thousand in Q2 2023, mainly due to loan growth[160] - Credit loss expense for the first six months of 2024 was $351 thousand, up from $308 thousand in the same period in 2023, primarily due to loan growth and increased risks in commercial real estate collateral[175] - The loan portfolio increased slightly to $1.281 billion as of June 30, 2024, driven by growth in agriculture and multifamily loan portfolios[187] - Substandard-Impaired loans decreased by $1.2 million to $12.0 million as of June 30, 2024, primarily due to payments received during the year[192] - Nonaccrual loans totaled $12.6 million as of June 30, 2024, compared to $13.8 million as of December 31, 2023[195] - Loans past due 90 days and still accruing were $390 thousand as of June 30, 2024, compared to $109 thousand as of December 31, 2023[195] - Watch and special mention loans classified as agricultural real estate and operating totaled $31.1 million as of June 30, 2024, up from $19.9 million as of December 31, 2023[196] - Watch and special mention loans classified as commercial real estate totaled $51.4 million as of June 30, 2024, down from $73.3 million as of December 31, 2023[196] - The allowance for credit losses as a percentage of outstanding loans was 1.32% as of June 30, 2024, compared to 1.30% as of December 31, 2023[197] Noninterest Income and Expense - Noninterest income increased by 13.1% to $2.6 million in Q2 2024, driven by higher estate fees in wealth management income[160] - Noninterest expense rose by 1.7% to $10.7 million in Q2 2024, primarily due to increased employee numbers, salaries, and $300 thousand in consultant fees[161] - Noninterest income for the six months ended June 30, 2024 increased by 5.0% to $4.8 million compared to $4.6 million in the same period in 2023, driven by higher estate fees in wealth management income[176] - Noninterest expense for the six months ended June 30, 2024 increased by 2.9% to $20.9 million, primarily due to higher employee salaries, benefits, and $350 thousand in consultant fees[177] Assets and Investments - Total loans (including fees) averaged $1.292 billion in Q2 2024, with an average yield of 5.02%, compared to $1.242 billion and 4.51% in Q2 2023[154] - Total interest-earning assets averaged $2.055 billion in Q2 2024, with an average yield of 4.02%, compared to $2.079 billion and 3.59% in Q2 2023[154] - Commercial loans averaged $86.998 million in Q2 2024, with an average yield of 6.30%, compared to $86.477 million and 5.54% in Q2 2023[154] - Agricultural loans averaged $118.579 million in Q2 2024, with an average yield of 7.60%, compared to $92.094 million and 6.85% in Q2 2023[154] - Real estate loans averaged $1.069 billion in Q2 2024, with an average yield of 4.63%, compared to $1.046 billion and 4.22% in Q2 2023[154] - Total assets decreased by $29.2 million to $2.1 billion as of June 30, 2024, primarily due to proceeds from maturing investments used to reduce borrowings[179] - The investment portfolio decreased by $45.6 million to $690.8 million as of June 30, 2024, mainly due to maturities exceeding purchases[179] - Gross unrealized losses in the investment portfolio totaled $60.2 million as of June 30, 2024, attributed to the interest rate environment and not credit-related issues[180] - Total investments were $690.8 million as of June 30, 2024, compared to $736.4 million as of December 31, 2023[202] Deposits and Borrowings - Deposits increased to $1.82 billion as of June 30, 2024, with $603 million in estimated uninsured deposits, of which $166 million were collateralized[188] - Other borrowings decreased to $85.9 million as of June 30, 2024, with Bank Term Funding Program borrowings at $37.75 million and an average rate of 5.27%[189] Cash Flow and Equity - Net cash provided by operating activities for the six months ended June 30, 2024 totaled $5.3 million, down from $10.5 million for the same period in 2023[203] - Net cash provided by investing activities for the six months ended June 30, 2024 was $36.6 million, up from $28.8 million for the same period in 2023[203] - Total stockholders' equity as of June 30, 2024 totaled $167.1 million, up from $165.8 million as of December 31, 2023[208] Stock Repurchase Plan - The company approved a Stock Repurchase Plan in November 2023, allowing for the repurchase of up to 100,000 shares of common stock, with 100,000 shares remaining to be purchased as of June 30, 2024[213] - No shares were repurchased during the periods from April 1, 2024, to June 30, 2024, under the Stock Repurchase Plan[214] Internal Controls and Risk Factors - The company's disclosure controls and procedures were evaluated and deemed effective as of the end of the reporting period[211] - There were no material changes in the company's internal control over financial reporting during the last fiscal quarter[212] - The company's management concluded that there were no material changes in the risk factors disclosed in the Form 10-K filed on March 8, 2024[212] Tax Expense - Income tax expense for the six months ended June 30, 2024 decreased to $0.8 million from $1.1 million in 2023, with an effective tax rate of 15% compared to 16% in 2023[178] Liquid Assets - Liquid assets totaled $63.4 million as of June 30, 2024, compared to $55.1 million as of December 31, 2023[200]