Ames National Corp. (ATLO, Financial) filed Quarterly Report for the period ended 2009-03-31.
Ames National Corporation is a multi-bank holding company. Headquartered in Ames Iowa Ames National Corporation and its five individually chartered banks provide central Iowa with commercial banking services. Ames National Corp. has a market cap of $189.8 million; its shares were traded at around $20.12 with a P/E ratio of 18.1 and P/S ratio of 4.5. The dividend yield of Ames National Corp. stocks is 5.5%.
The Company s earnings for the first quarter decreased $460,000 from the $2,901,000 earned a year ago. The lower quarterly earnings can be primarily attributed to increased FDIC deposit insurance assessments, increased other real estate owned costs and security losses. The increase in the FDIC assessments of $439,000 is due primarily to higher deposit assessment rates for 2009 which are expected to negatively impact future quarters. The increase in other real estate owned costs of $397,000 is due primarily to impairment write downs of certain other real estate owned and an increased volume of other real estate owned. Securities losses of $351,000 in 2009 decreased noninterest income when compared to security gains of $248,000 in 2008. The security losses in 2009 were primarily attributable to the sale of certain corporate bonds, as the Company continues to lower its holdings of corporate bonds and thus reducing its risk in the corporate bond portfolio. Impairment of securities totaling $23,000 in 2009 related to a corporate bond issue of MGIC Investment Corporation. As of March 31, 2009, the carrying and fair value of the other-than-temporarily impaired securities totaled $734,000. Management believes that additional impairment charges may be necessary on investment securities in future quarters if financial and economic conditions do not improve as perceived by bond investors.
Insured banks and thrifts set aside $69.3 billion in provisions for loan and lease losses during the fourth quarter, more than twice the $32.1 billion that they set aside in the fourth quarter of 2007. Loss provisions represented 50.2% of the industry s net operating revenue (net interest income plus total noninterest income), the highest proportion since the second quarter of 1987 when provisions absorbed 53.2% of net operating revenue. As in the fourth quarter of 2007, a few institutions reported unusually large trading losses, while others took substantial charges for impairment of goodwill. Trading activities produced a $9.2 billion net loss in the quarter, compared to a loss of $11.2 billion a year earlier. These are the only two quarters in the past 25 years in which trading revenues have been negative. Goodwill impairment charges and other intangible asset expenses rose to $15.8 billion, from $11.5 billion in the fourth quarter of 2007. Other negative earnings factors included a $6.0-billion (12.8%) year-over-year decline in noninterest income, and $8.1 billion in realized losses on securities and other assets in the quarter, more than twice the $3.7 billion in losses realized a year earlier. The reduction in noninterest income was driven by declines in servicing income (down $3.1 billion from a year earlier) and securitization income (down $2.6 billion, or 52.3%).
Net income for all of 2008 was $16.1 billion, a decline of $83.9 billion (83.9%) from the $100 billion the industry earned in 2007. This is the lowest annual earnings total since 1990, when the industry earned $11.3 billion. The ROA for the year was 0.12%, the lowest since 1987, when the industry reported a net loss. Almost one in four institutions (23.4%) was unprofitable in 2008, and almost two out of every three institutions (62.5%) reported lower full-year earnings than in 2007. Loss provisions totaled $174.3 billion in 2008, an increase of $105.1 billion (151.9%) compared to 2007. Total noninterest income was $25.5 billion (10.9%) lower as a result of the industry s first-ever full-year trading loss ($1.8 billion), a $5.8-billion (27.4%) decline in securitization income, and a $6.8-billion negative swing in proceeds from sales of loans, foreclosed properties, and other assets. As low as the full-year earnings total was, it could easily have been worse. If the effect of failures and purchase accounting for mergers that occurred during the year is excluded from reported results, the industry would have posted a net loss in 2008. The magnitude of many year-over-year income and expense comparisons is muted by the impact of these structural changes and their accounting treatments.
Net loan and lease charge-offs totaled $37.9 billion in the fourth quarter, an increase of $21.6 billion (132.2%) from the fourth quarter of 2007. The annualized quarterly net charge-off rate was 1.91%, equaling the highest level in the 25 years that institutions have reported quarterly net charge-offs (the only other time the charge-off rate reached this level was in the fourth quarter of 1989). The year-over-year increase in quarterly net charge-offs was led by real estate construction and development loans (up $6.1 billion, or 448.1%), closed-end 1–4 family residential mortgage loans (up $4.6 billion, or 206.1%), commercial and industrial (C&I) loans (up $3.0 billion, or 97.3%), and credit cards (up $2.5 billion, or 60.1%). Charge-offs in all major loan categories increased from a year ago. Real estate loans accounted for almost two thirds of the total increase in charge-offs (64.7%).
The amount of loans and leases that were noncurrent rose sharply in the fourth quarter, increasing by $44.1 billion (23.7%). Noncurrent loans totaled $230.7 billion at year-end, up from $186.6 billion at the end of the third quarter. More than two-thirds of the increase during the quarter (69.3%) came from loans secured by real estate. Noncurrent closed-end 1–4 family residential mortgages increased by $18.5 billion (24.1%) during the quarter, while noncurrent C&I loans rose by $7.6 billion (43.0%). Noncurrent home equity loans increased by $3.0 billion (39.0%) and noncurrent loans secured by nonfarm nonresidential real estate increased by $2.9 billion (20.2%). In the 12 months ended December 31, total noncurrent loans at insured institutions increased by $118.8 billion (107.2%). At the end of the year, the percentage of loans and leases that were noncurrent stood at 2.93%, the highest level since the end of 1992. Real estate construction loans had the highest noncurrent rate of any major loan category at year-end, at 8.51%, up from 7.30% at the end of the third quarter.
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Ames National Corporation is a multi-bank holding company. Headquartered in Ames Iowa Ames National Corporation and its five individually chartered banks provide central Iowa with commercial banking services. Ames National Corp. has a market cap of $189.8 million; its shares were traded at around $20.12 with a P/E ratio of 18.1 and P/S ratio of 4.5. The dividend yield of Ames National Corp. stocks is 5.5%.
Highlight of Business Operations:
The Company had net income of $2,441,000, or $0.26 per share, for the three months ended March 31, 2009, compared to net income of $2,901,000, or $0.31 per share, for the three months ended March 31, 2008. Total equity capital as of March 31, 2009 totaled $104 million or 11.9% of total assets at the end of the quarter.The Company s earnings for the first quarter decreased $460,000 from the $2,901,000 earned a year ago. The lower quarterly earnings can be primarily attributed to increased FDIC deposit insurance assessments, increased other real estate owned costs and security losses. The increase in the FDIC assessments of $439,000 is due primarily to higher deposit assessment rates for 2009 which are expected to negatively impact future quarters. The increase in other real estate owned costs of $397,000 is due primarily to impairment write downs of certain other real estate owned and an increased volume of other real estate owned. Securities losses of $351,000 in 2009 decreased noninterest income when compared to security gains of $248,000 in 2008. The security losses in 2009 were primarily attributable to the sale of certain corporate bonds, as the Company continues to lower its holdings of corporate bonds and thus reducing its risk in the corporate bond portfolio. Impairment of securities totaling $23,000 in 2009 related to a corporate bond issue of MGIC Investment Corporation. As of March 31, 2009, the carrying and fair value of the other-than-temporarily impaired securities totaled $734,000. Management believes that additional impairment charges may be necessary on investment securities in future quarters if financial and economic conditions do not improve as perceived by bond investors.
Insured banks and thrifts set aside $69.3 billion in provisions for loan and lease losses during the fourth quarter, more than twice the $32.1 billion that they set aside in the fourth quarter of 2007. Loss provisions represented 50.2% of the industry s net operating revenue (net interest income plus total noninterest income), the highest proportion since the second quarter of 1987 when provisions absorbed 53.2% of net operating revenue. As in the fourth quarter of 2007, a few institutions reported unusually large trading losses, while others took substantial charges for impairment of goodwill. Trading activities produced a $9.2 billion net loss in the quarter, compared to a loss of $11.2 billion a year earlier. These are the only two quarters in the past 25 years in which trading revenues have been negative. Goodwill impairment charges and other intangible asset expenses rose to $15.8 billion, from $11.5 billion in the fourth quarter of 2007. Other negative earnings factors included a $6.0-billion (12.8%) year-over-year decline in noninterest income, and $8.1 billion in realized losses on securities and other assets in the quarter, more than twice the $3.7 billion in losses realized a year earlier. The reduction in noninterest income was driven by declines in servicing income (down $3.1 billion from a year earlier) and securitization income (down $2.6 billion, or 52.3%).
Net income for all of 2008 was $16.1 billion, a decline of $83.9 billion (83.9%) from the $100 billion the industry earned in 2007. This is the lowest annual earnings total since 1990, when the industry earned $11.3 billion. The ROA for the year was 0.12%, the lowest since 1987, when the industry reported a net loss. Almost one in four institutions (23.4%) was unprofitable in 2008, and almost two out of every three institutions (62.5%) reported lower full-year earnings than in 2007. Loss provisions totaled $174.3 billion in 2008, an increase of $105.1 billion (151.9%) compared to 2007. Total noninterest income was $25.5 billion (10.9%) lower as a result of the industry s first-ever full-year trading loss ($1.8 billion), a $5.8-billion (27.4%) decline in securitization income, and a $6.8-billion negative swing in proceeds from sales of loans, foreclosed properties, and other assets. As low as the full-year earnings total was, it could easily have been worse. If the effect of failures and purchase accounting for mergers that occurred during the year is excluded from reported results, the industry would have posted a net loss in 2008. The magnitude of many year-over-year income and expense comparisons is muted by the impact of these structural changes and their accounting treatments.
Net loan and lease charge-offs totaled $37.9 billion in the fourth quarter, an increase of $21.6 billion (132.2%) from the fourth quarter of 2007. The annualized quarterly net charge-off rate was 1.91%, equaling the highest level in the 25 years that institutions have reported quarterly net charge-offs (the only other time the charge-off rate reached this level was in the fourth quarter of 1989). The year-over-year increase in quarterly net charge-offs was led by real estate construction and development loans (up $6.1 billion, or 448.1%), closed-end 1–4 family residential mortgage loans (up $4.6 billion, or 206.1%), commercial and industrial (C&I) loans (up $3.0 billion, or 97.3%), and credit cards (up $2.5 billion, or 60.1%). Charge-offs in all major loan categories increased from a year ago. Real estate loans accounted for almost two thirds of the total increase in charge-offs (64.7%).
The amount of loans and leases that were noncurrent rose sharply in the fourth quarter, increasing by $44.1 billion (23.7%). Noncurrent loans totaled $230.7 billion at year-end, up from $186.6 billion at the end of the third quarter. More than two-thirds of the increase during the quarter (69.3%) came from loans secured by real estate. Noncurrent closed-end 1–4 family residential mortgages increased by $18.5 billion (24.1%) during the quarter, while noncurrent C&I loans rose by $7.6 billion (43.0%). Noncurrent home equity loans increased by $3.0 billion (39.0%) and noncurrent loans secured by nonfarm nonresidential real estate increased by $2.9 billion (20.2%). In the 12 months ended December 31, total noncurrent loans at insured institutions increased by $118.8 billion (107.2%). At the end of the year, the percentage of loans and leases that were noncurrent stood at 2.93%, the highest level since the end of 1992. Real estate construction loans had the highest noncurrent rate of any major loan category at year-end, at 8.51%, up from 7.30% at the end of the third quarter.
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