NEWS RELEASE
FOR IMMEDIATE RELEASE CONTACT: DANIEL L. KRIEGER,
CHAIRMAN & PRESIDENT
OR
JOHN P. NELSON
VICE PRESIDENT & CFO
(515) 232-6251
JANUARY 20, 2006
AMES NATIONAL CORPORATION
ANNOUNCES
2005 AND FOURTH QUARTER EARNINGS
As of December 31, 2005, loan levels reached record highs with total assets,
deposits and capital reaching record highs in the first two quarters of 2005.
However, the record balance sheet figures did not translate into improved
profitability for the Company in 2005. Net income for the year ended December
31, 2005 decreased 6% to $11,609,000 or $1.23 per share compared to the 2004
results of $12,390,000 or $1.32 per share.
Rising market interest rates resulted in annual net interest income declining 5%
as deposits repriced more quickly than loans and investments. Net interest
income of $25,373,000 was recorded for the year ending December 31, 2005 in
comparison to the $26,790,000 recorded in 2004. The Company's annual net
interest margin declined to 3.56% in 2005 compared to the 3.97% posted in 2004.
Annual interest expense on interest bearing liabilities rose to $15,933,000 for
2005 compared to $10,563,000 posted for 2004, a 51% increase. The higher
interest expense was offset by an 11% increase in annual interest income
totaling $41,306,000 for 2005 compared to the $37,354,000 recorded for 2004.
Return on average assets for 2005 and 2004 was 1.40% and 1.56%, respectively.
Return on equity for the same periods equaled 10.57% and 11.47%, respectively.
The efficiency ratio for the year ending December 31, 2005 was 49.09% compared
to 46.59% for the previous year. The decline in the efficiency ratio in 2005 was
primarily the result of lower net interest income as the 2005 annual noninterest
expense increased less than 2% compared to the same period in 2004. Annual net
securities gains, primarily relating to the Company's equity securities, and
higher trust department revenues contributed to a 7% increase in noninterest
income in 2005 compared to year end 2004 totals.
Net income for the quarter ended December 31, 2005 was $2,709,000, 15% lower
than the $3,191,000 earned in the fourth quarter last year. Earnings per share
were $0.29 for the quarter compared to over $0.34 for the same period in 2004.
Quarterly earnings are lower as higher market interest rates have also resulted
in lower quarterly net interest income. Net interest income has declined 13% to
$6,053,000 for the fourth quarter ended December 31, 2005 compared to $6,948,000
for the same quarter one year ago. Fourth quarter 2005 interest expense
increased 49% while interest income rose only 6% compared to the fourth quarter
of 2004 as loan and investment repricing has lagged behind the liability side of
the balance sheet.
Fourth quarter 2005 return on average assets was 1.32% compared to 1.53% in
fourth quarter 2004. Return on average equity was 9.94% for the three months
ended December 31, 2005 compared to the 11.56% posted a year ago. The efficiency
ratio for fourth quarter was 50.67%, compared to 46.41% last year.
Deposits increased to $668,342,000 on December 31, 2005, a 2% increase over the
$658,176,000 recorded at year-end 2004. An increase in certificates of deposits
offset significantly lower interest bearing checking (NOW) and money market
account deposit balances. The reduction in interest checking and money market
accounts is partially the result of depositors moving money to higher yielding
certificates of deposit. United Bank & Trust, Marshalltown, State Bank & Trust
Co., Nevada, and First National Bank, Ames increased their deposits in 2005.
Loans rose 9.0% to $440,318,000, a $28,679,000 increase over year end 2004 with
commercial operating and commercial real estate loans accounting for most of the
growth. The allowance for loan losses as of December 31, 2005 totaled $6,765,000
compared to $6,476,000 on December 31, 2004. Net charge-offs for the year ended
December 31, 2005 were $41,000 compared to $55,000 for the previous year.
Year end capital declined 2% to $109,227,000 compared to $110,924,000 on
December 31, 2004. Included in capital are unrealized gains on securities
available for sale, which amounted to $3,292,000 compared to $7,468,000 in 2004.
Capital represented over 13% of total assets at the end of 2005 and 2004.
Company stock, which is listed on the NASDAQ SmallCap Market under the symbol
ATLO, closed at $25.71 on December 31, 2005. During the fourth quarter, the
price ranged from $23.12 to $29.00. The 2005 dividends paid of $0.91 per share
were 15% higher than the $0.80 per share paid in 2004.
Ames National Corporation affiliate Iowa 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, Marshalltown.
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AMES NATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2005 and 2004
ASSETS 2005 2004
- ----------------------------------------------------------------------------------------------------------------
Cash and due from banks ........................................................ $ 18,092,139 $ 18,759,086
Federal funds sold ............................................................. 300,000 19,865,000
Interest bearing deposits in financial institutions ............................ 5,983,542 9,575,174
Securities available-for-sale .................................................. 333,510,152 363,459,462
Loans receivable, net .......................................................... 440,317,685 411,638,565
Loans held for sale ............................................................ 981,280 234,469
Bank premises and equipment, net ............................................... 11,030,840 8,790,636
Accrued income receivable ...................................................... 6,633,795 6,262,424
Deferred income taxes .......................................................... 343,989 --
Other assets ................................................................... 2,190,652 1,167,971
-----------------------------
Total assets ........................................................... $ 819,384,074 $ 839,752,787
=============================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits
Demand, noninterest bearing ................................................ $ 74,155,477 $ 71,666,385
NOW accounts ............................................................... 151,680,984 172,313,429
Savings and money market ................................................... 160,998,014 174,358,165
Time, $100,000 and over .................................................... 101,042,024 69,063,977
Other time ................................................................. 180,465,836 170,773,883
-----------------------------
Total deposits ......................................................... 668,342,335 658,175,839
Federal funds purchased and securities sold under agreements
to repurchase ................................................................ 35,521,113 64,072,475
Dividend payable ............................................................... 2,354,818 1,537,162
Deferred income taxes .......................................................... -- 2,334,670
Accrued expenses and other liabilities ......................................... 3,938,507 2,708,701
-----------------------------
Total liabilities ...................................................... 710,156,773 728,828,847
-----------------------------
STOCKHOLDERS' EQUITY
Common stock, $2 par value, authorized 18,000,000 shares; 9,419,271 issued and
outstanding at December 31, 2005
9,459,690 and 9,411,198 shares issued and outstanding 2004 ................. 18,838,542 18,919,380
Additional paid-in capital ................................................... 22,383,375 22,225,516
Retained earnings ............................................................ 64,713,530 63,200,352
Treasury stock, at cost; 48,592 shares at December 31, 2004 .................. -- (889,020)
Accumulated other comprehensive income, net unrealized
gain on securities available-for-sale ...................................... 3,291,854 7,467,712
-----------------------------
Total stockholders' equity ............................................. 109,227,301 110,923,940
-----------------------------
Total liabilities and stockholders' equity ............................. $ 819,384,074 $ 839,752,787
=============================
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AMES NATIONAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2005 2004 2005 2004
-----------------------------------------------------
Interest and dividend income:
Loans, including fees ............ $ 7,090,638 $ 6,327,758 $26,979,358 $22,872,764
Securities:
Taxable ........................ 2,087,397 2,151,337 8,558,156 8,536,759
Tax-exempt ..................... 1,027,592 1,067,308 4,190,268 4,274,033
Federal funds sold ............... -- 78,277 130,182 159,438
Dividends ........................ 394,352 381,297 1,447,663 1,510,665
-----------------------------------------------------
Total interest income ...... 10,599,979 10,005,977 41,305,627 37,353,659
-----------------------------------------------------
Interest expense:
Deposits ......................... 4,143,093 2,797,572 14,380,214 9,942,250
Other borrowed funds ............. 404,319 260,380 1,552,894 621,077
-----------------------------------------------------
Total interest expense ..... 4,547,412 3,057,952 15,933,108 10,563,327
-----------------------------------------------------
Net interest income ........ 6,052,567 6,948,025 25,372,519 26,790,332
Provision for loan losses .......... 84,244 274,467 331,282 479,355
-----------------------------------------------------
Net interest income after
provision for loan losses .. 5,968,323 6,673,558 25,041,237 26,310,977
-----------------------------------------------------
Noninterest income:
Trust department income .......... 360,048 309,984 1,375,308 1,185,681
Service fees ..................... 460,832 492,900 1,796,503 1,813,795
Securities gains, net ............ 162,226 272,667 795,780 324,030
Loan and secondary market fees ... 137,444 136,572 606,277 610,077
Merchant and ATM fees ............ 141,705 128,108 570,914 534,897
Other ............................ 117,096 120,473 468,410 800,835
-----------------------------------------------------
Total noninterest income ... 1,379,351 1,460,704 5,613,192 5,269,315
-----------------------------------------------------
Noninterest expense:
Salaries and employee benefits ... 2,143,307 2,250,850 9,208,902 9,019,139
Data processing .................. 611,014 650,820 2,126,040 2,241,441
Occupancy expenses ............... 284,368 292,589 1,148,738 1,048,323
Other operating expenses ......... 726,940 707,900 2,726,222 2,626,451
-----------------------------------------------------
Total noninterest expense .. 3,765,629 3,902,159 15,209,902 14,935,354
-----------------------------------------------------
Income before income taxes . 3,582,045 4,232,103 15,444,527 16,644,938
Income tax expense ................. 873,122 1,041,525 3,835,992 4,255,392
-----------------------------------------------------
Net income ................. $ 2,708,923 $ 3,190,578 $11,608,535 $12,389,546
=====================================================
Basic and diluted earnings per share $ 0.29 $ 0.34 $ 1.23 $ 1.32
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