0001437749-26-007976
SEC filingAmes National Corporation reported net income of $19.0 million for FY 2025, a significant increase of 86.2% from $10.2 million in FY 2024. This growth was primarily driven by a 23.8% increase in net interest income to $55.7 million, resulting from higher yields on loans and investments combined with a lower cost of funds. Total interest and dividend income rose to $87.1 million, while total interest expense decreased to $31.4 million. Noninterest income increased to $11.2 million, and noninterest expense remained stable at $41.9 million. The company's return on average assets improved to 0.90% from 0.48%, and return on average equity increased to 9.95% from 6.02%. Total assets were $2.13 billion as of December 31, 2025, with total deposits of $1.85 billion and stockholders' equity of $207.9 million.
Ames National Corporation reported strong financial results for FY 2025, with net income of $19.0 million, representing an 86.2% increase from $10.2 million in FY 2024. This significant improvement was primarily driven by a 23.8% increase in net interest income to $55.7 million, resulting from higher yields on loans and investments combined with a lower cost of funds. Total interest and dividend income increased to $87.1 million from $82.6 million in the prior year, while total interest expense decreased to $31.4 million from $37.6 million. Noninterest income grew to $11.2 million from $9.8 million, and noninterest expense remained relatively stable at $41.9 million. The company's return on average assets improved to 0.90% from 0.48%, and return on average equity increased to 9.95% from 6.02%. Basic earnings per share were $2.14 compared to $1.14 in the prior year.
The company's revenue is primarily derived from interest income on loans and investments. For FY 2025, interest income from loans, including fees, was $68.3 million, while securities income totaled $14.7 million ($13.0 million taxable and $1.7 million tax-exempt). Other interest and dividend income contributed $4.1 million. Noninterest income of $11.2 million included wealth management income of $6.3 million, service fees of $1.5 million, gain on sale of loans held for sale of $0.5 million, merchant and card fees of $1.4 million, and other noninterest income of $1.4 million. The increase in net interest income was attributed to higher yields on earning assets and a reduction in the cost of funds driven by declining market rates and reduced borrowings.
The company's net interest margin improved to 2.75% in FY 2025 from 2.22% in FY 2024. The efficiency ratio, which measures noninterest expense as a percentage of net interest income plus noninterest income, improved to 62.74% from 76.59%. Income before income taxes was $23.9 million, representing a 94.9% increase from $12.2 million in the prior year. The provision for income taxes was $4.8 million compared to $2.0 million in FY 2024. Credit loss expense was $1.0 million, up from $0.6 million in the prior year. The company's operating margin, calculated as income before income taxes divided by total revenue (net interest income plus noninterest income), was 35.7% in FY 2025 compared to 22.3% in FY 2024.
Net cash provided by operating activities was $21.3 million in FY 2025, while net cash provided by investing activities was $44.2 million, primarily from proceeds from maturities and calls of securities available-for-sale of $139.4 million. Net cash used in financing activities was $40.0 million, mainly due to payments on other borrowings of $22.4 million and dividends paid of $7.1 million. Total assets were $2.13 billion as of December 31, 2025, with loans receivable, net of $1.28 billion and securities available-for-sale of $656.0 million. Total deposits were $1.85 billion, and total liabilities were $1.93 billion. Stockholders' equity increased to $207.9 million from $174.7 million, with the equity to assets ratio improving to 9.74% from 8.19%.
The company faces challenges from potential changes in interest rates, with management noting that if short-term rates remain elevated or increase, net interest margin could be negatively impacted if interest expense increases more quickly than interest income. The agricultural loan portfolio is subject to commodity price fluctuations, trade policy changes, and weather conditions. Commercial real estate loans face challenging conditions from reduced occupancy and higher operating costs due to inflationary pressures. Management monitors interest rate risk through quarterly modeling and believes earning assets have appropriate maturity and repricing characteristics. The company may reduce or eliminate dividends to maintain capital and liquidity positions if economic conditions deteriorate. Cybersecurity risks and competition from financial technology companies are also noted as ongoing concerns.