ATLO · Ames National Corporation

Ames National Corporation’s Q1 2026 results reflect strong operational improvement, with net income surging 74% year-over-year to $5.96 million, driven primarily by a $2.5 million (19.5%) increase in net interest income and a reversal in credit loss provisioning — shifting from $962 thousand of expense in Q1 2025 to a $347 thousand benefit in Q1 2026. The net interest margin expanded 48 basis points to 3.01% (tax-equivalent basis), fueled by higher yields on both loans (+$142 thousand in interest income) and investment securities (+$1.1 million), alongside meaningful reductions in deposit interest expense (−$1.1 million) and other borrowed funds expense (−$334 thousand). Management attributes the margin expansion to strategic reinvestment of maturing securities at higher rates, declining market rates lowering funding costs, and reduced borrowings. Credit quality metrics show mixed signals: while the allowance for credit losses remained stable at 1.36% of loans, substandard loans rose to $34.8 million (from $32.4 million), led by stress in the multi-family portfolio and two impaired agricultural relationships — contributing to a near-doubling of loans past due 30+ days to $19.4 million. Noninterest income grew 9.3% to $2.8 million, aided by wealth management and trust fee growth, while noninterest expense rose 5.9% to $10.9 million, largely due to $300 thousand in consultant fees tied to ongoing contract negotiations and higher bonus-related salaries. The efficiency ratio improved sharply to 59.69%, underscoring operating leverage gains. Capital and liquidity remain robust: capital ratio stood at 9.69%, all six affiliate banks are well-capitalized, and stockholders’ equity increased $24.5 million year-over-year, supported by retained earnings and reduced unrealized losses in the investment portfolio.