Ames National Corporation Announces 2015 Q4 Earnings (1/22/16)
AMES NATIONAL CORPORATION ANNOUNCES 2015 FOURTH QUARTER EARNINGS RESULTS
Fourth Quarter 2015 Results:
For the quarter ended December 31, 2015, net income for Ames National Corporation (the Company) totaled $3,915,000 or $0.42 per share, compared to $3,139,000 or $0.34 per share earned in 2014. The higher earnings are the result of decreases in other real estate owned expenses; increased loan interest income primarily driven by higher loan volume from new loan originations; and decreased provision for loan losses, offset in part by a decrease in securities gains.
In October of 2015, the Company’s largest subsidiary, First National Bank (FNB) opened a new banking office in West Ames, Iowa, replacing the bank’s University Office that was sold in 2014. As a part of opening the West Ames Office, video banking was introduced to the Ames market. Video banking is an innovative and cost effective way of providing extended hours for live teller service through ATM kiosks.
As previously announced FNB, acquired First Bank, West Des Moines, Iowa on August 29, 2014. The acquired assets totaled approximately $89 million. The impact of the Acquisition on the Company’s net income was slightly accretive for the quarter and in line with expectations.
Fourth quarter net interest income totaled $9,892,000, an increase of $206,000, or 2%, compared to the same quarter a year ago, due primarily to growth in the real estate loan portfolio. Loan growth was over 6% for the year and was primarily attributable to favorable economic conditions in our markets. The Company’s net interest margin was 3.36% for the quarter ended December 31, 2015 as compared to 3.39% for the quarter ended December 31, 2014.
A provision for loan losses of $63,000 was recognized in the fourth quarter of 2015 as compared to $299,000 in the fourth quarter of 2014. Net loan charge offs were $1,000 for the quarter ended December 31, 2015 compared to net loan recoveries of $9,000 for the quarter ended December 31, 2014. Through December 31, 2015, asset quality indicators for the Company, including classified assets, impaired loans and past due loans, remain at favorable levels through December 31, 2015 in comparison to peer banks.
Noninterest income for the fourth quarter of 2015 totaled $2,144,000 as compared to $2,744,000 for the same period in 2014. The decrease in noninterest income is primarily due to a decrease in realized securities gains of $617,000 compared to the prior year’s quarter.
Noninterest expense for the fourth quarter of 2015 totaled $6,499,000 compared to $7,969,000 recorded in 2014, a decrease of 18%, which was primarily due to write downs of other real estate owned in 2014 with no corresponding write down in 2015. Exclusive of other real estate owned expense, noninterest expense was unchanged from the prior year’s quarter. The efficiency ratio was 53.99% for the fourth quarter of 2015 as compared to 64.11% in 2014.
Balance Sheet Review:
As of December 31, 2015, total assets were $1,326,747,000, a $25,716,000 increase compared to December 31, 2014. The increase in assets was due primarily to a higher volume of loans, as previously discussed, offset in part by a decrease in other real estate owned, securities available-for-sale and interest bearing deposits.
Securities available-for-sale as of December 31, 2015 declined to $537,633,000 from $542,502,000 as of December 31, 2014. The decrease in securities available-for-sale is primarily due to the sale or pay downs of U.S. government mortgage-backed bonds, offset in part by purchases of U.S. government agencies. The net bond proceeds were largely utilized to fund loan demand.
Net loans as of December 31, 2015 increased 6.5% to $701,328,000 as compared to $658,441,000 as of December 31, 2014. The growth was primarily due to favorable lending environments in most of the affiliate bank communities. This growth is primarily reflected in the construction real estate portfolios and commercial operating portfolios. Asset quality remained favorable as impaired loans, net of specific reserves, totaled $1,379,000, or 0.19% of gross loans as of December 31, 2015, compared to $2,070,000, or .31% of gross loans as of December 31, 2014. The allowance for loan losses on December 31, 2015 totaled $9,988,000, or 1.40% of gross loans, compared to $8,838,000 or 1.32% of gross loans as of December 31, 2014. The increase in the allowance for loan losses was provided to accommodate growth in the Company’s loan portfolios.
Deposits totaled $1,074,193,000 on December 31, 2015, a 2% increase from the $1,052,123,000 recorded at December 31, 2014. Securities sold under agreements to repurchase totaled $54,290,000 on December 31, 2015, a 6% increase from the $51,265,000 recorded at December 31, 2014.
The Company’s stockholders’ equity represented 12.15% of total assets as of December 31, 2015 with all of the Company’s five affiliate banks considered well-capitalized as defined by federal capital regulations. Total stockholders’ equity was $161,250,000 as of December 31, 2015, and $154,674,000 as of December 31, 2014. The increase in stockholders’ equity was the result of net income, offset by lower fair value on the securities available-for-sale which is reflected as a decrease in accumulated other comprehensive income and dividends.
Return on average assets was 1.18% for the quarter ended December 31, 2015, compared to 0.96% for the same period in 2014. Return on average equity was 9.69% for the quarter ended December 31, 2015, compared to the 8.07% in 2014.
Return on average assets was 1.13% for the year ended December 31, 2015, compared to 1.21% for the same period in 2014. Return on average equity was 9.44% for the year ended December 31, 2015, compared to the 10.09% in 2014.
The Company’s stock, which is listed on the NASDAQ Capital Market under the symbol ATLO, closed at $24.29 on December 31, 2015. During the fourth quarter of 2015, the price ranged from $22.75 to $26.41.
On November 11, 2015, the Company declared a quarterly cash dividend on common stock, payable on February 15, 2016 to stockholders of record as of January 29, 2016, equal to $0.20 per share.
About Ames National Corporation
Ames National Corporation is listed on the NASDAQ Capital Market under the ticker symbol, ATLO. The Corporation affiliate banks, all located in central Iowa, include: First National Bank, Ames, Boone Bank & Trust Co., Boone, State Bank & Trust Co., Nevada, Reliance State Bank, Story City, and United Bank & Trust, Marshalltown. Information regarding the process for purchasing stock can be obtained through Richard Nelson at First Point Wealth Management, (515) 663-3074.
For further information contact:
Thomas H. Pohlman, President and CEO
(515) 232-6251 or [email protected]