NEWS RELEASE

FOR IMMEDIATE RELEASE                               Contact:  Daniel L. Krieger,
                                                              President
                                                              (515) 232-6251
                                                              (515) 663-3042
October 18, 2002




                            AMES NATIONAL CORPORATION

                                    ANNOUNCES

                             THIRD QUARTER EARNINGS

         Third  quarter 2002 earnings  were  $2,952,000 or $.94 per share,  a 9%
increase over the $2,682,000 or $.86 per share earned for the same period a year
ago. For the first nine months of 2002  earnings  were  $8,634,000  or $2.76 per
share compared to $7,980,000 or $2.55 per share in 2001.  Lower interest expense
was the primary  contributor to the higher earnings this year. Return on average
assets this quarter was 1.87% compared to 1.76% for the same period in 2001.

         Deposits of $537 million  increased 7% over September 30, 2001.  United
Bank & Trust N.A.,  the de novo banking  operation in  Marshalltown,  opened for
business in late June with early results on target with projections.

         Loans  decreased  5% to $310  million  from  September  30,  2001  with
increased  competition  in pricing and the  political  and economic  instability
continuing to influence  business  decisions.  Total assets increased 6% to $660
million compared to $625 million a year ago.

         Total  capital was $101  million,  a 9%  increase  over the $93 million
reported in the third quarter 2001. An increase of $3 million in net  unrealized
gains on investment securities since September 30, 2001 helped move capital to a
record level.

         Ames National Corporation Iowa affiliate banks are First National Bank,
Ames,  Boone  Bank  &  Trust  Co.,  Boone,  State  Bank  &  Trust  Co.,  Nevada,
Randall-Story  State  Bank,  Story  City,  and  United  Bank  &  Trust  National
Association, Marshalltown.