Attached files
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| 8-K - AMES NATIONAL CORPORATION 8-K 10-12-2012 - AMES NATIONAL CORP | form8k.htm |
EXHIBIT 99.1
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NEWS RELEASE
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FOR IMMEDIATE RELEASE
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CONTACT:
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THOMAS H. POHLMAN
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PRESIDENT
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OCTOBER 12, 2012
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(515) 232-6251
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AMES NATIONAL CORPORATION
ANNOUNCES 2012 THIRD QUARTER EARNINGS RESULTS
Three Months Ended September 30, 2012 Results:
For the quarter ended September 30, 2012, net income for Ames National Corporation (the Company) increased 7.6% and totaled $3,861,000, or $0.41 per share, compared to $3,590,000, or $0.38 per share in 2011. Net income increased primarily due to the net income attributable to the acquisition of the Garner and Klemme, Iowa offices by Reliance State Bank (RSB), lower interest expense on deposits and a higher gain on loans held for sale sold on the secondary market.
The Company’s management continues to be pleased with the results of the acquisition of the Garner and Klemme, Iowa offices by RSB on April 27, 2012. RSB’s net income for the quarter ended September 30, 2012 was $561,000, as compared to $344,000 for the quarter ended September 30, 2011.
Third quarter net interest income totaled $8,246,000, an increase of $374,000, or 4.7%, compared to the same quarter a year ago, primarily due to higher average balances on loans and investments and lower rates on deposits, partially offset in part by lower rates on loans and investments and higher balances on average deposits. The Company’s net interest margin was 3.34% for the quarter ended September 30, 2012, a decrease from 3.67% for the quarter ended September 30, 2011 as a result of lower market yields on interest earning assets, offset in part by lower market rates on interest bearing liabilities in 2012 as compared to 2011.
The provision for loan losses was $36,000 in the third quarter of 2012 as compared to $5,000 in the third quarter of 2011. Net loan charge-offs for the quarter ended September 30, 2012 were $47,000, compared to net loan charge-offs of $16,000 in 2011.
Noninterest income for the third quarter of 2012 totaled $2,059,000 as compared to $1,899,000 for the same period in 2011. The increase in noninterest income is primarily due to gain on the loans held for sale and merchant and ATM fees, offset in part by a decrease in security gains.
Noninterest expense for the third quarter of 2012 totaled $5,043,000 compared to $4,872,000 recorded in 2011. The increase of 3.5% in noninterest expense was primarily the result of the RSB acquisition that contributed to higher salaries and employee benefits, core deposit intangible amortization and increased other noninterest expense categories with the exception of other real estate owned costs. The lower other real estate costs are mainly due to higher impairment write downs in 2011 as compared to 2012. The efficiency ratio for the third quarter of 2012 was 48.93%, compared to 49.86% in 2011.
Nine Months Ended September 30, 2012 Results:
For the nine months ended September 30, 2012, net income for the Company increased 4.0% and totaled $10,714,000, or $1.15 per share, compared to $10,306,000 or $1.09 per share in 2011. Net income increased primarily due to the net income attributable to the RSB acquisition, lower interest expense on deposits and a higher gain on loans held for sale sold on the secondary market.
For the nine months ended September 30, 2012, net interest income totaled $24,157,000, an increase of $1,079,000, or 4.7%, compared to the same period a year ago, primarily due to higher average balances on loans and investments and lower rates on deposits, partially offset in part by lower rates on loans and investments and higher balances on average deposits. The Company’s net interest margin was 3.37% for the nine months ended September 30, 2012, a decrease from 3.61% for the nine months ended September 30, 2011 as a result of lower market yields on interest earning assets, offset in part by lower market rates on interest bearing liabilities in 2012 as compared to 2011.
The provision for loan losses was $151,000 for the nine months ended September 30, 2012 as compared to $410,000 for the same period in 2011. Net loan charge-offs were $47,000 for the nine months ended September 30, 2012, compared to net loan charge-offs of $65,000 for the same period in 2011.
Noninterest income for the nine months ended September 30, 2012 totaled $5,690,000 as compared to $5,358,000 for the same period in 2011. The increase in noninterest income is primarily due to gain on the loans held for sale and merchant and ATM fees, offset in part by a decrease in security gains.
Noninterest expense for the nine months ended September 30, 2012 totaled $15,376,000 compared to $14,213,000 recorded in 2011. The increase of 8.2% in noninterest expense was primarily the result of the RSB acquisition that contributed to higher salaries and employee benefits, core deposit intangible amortization and the increase in other noninterest expense categories. The efficiency ratio for the nine months ended September 30, 2012 was 51.52%, compared to 49.98% in 2011.
Balance Sheet Review:
As of September 30, 2012, total assets were $1,167,878,000, a $147,650,000 increase compared to September 30, 2011. The increase in assets was mainly a result of the acquisition of the Garner and Klemme, Iowa offices by RSB.
Securities available-for-sale as of September 30, 2012 totaled $573,557,000, compared to $500,084,000 as of September 30, 2011, mainly as a result of increased purchases of U.S. government mortgage-backed securities and state and political subdivision bonds, as cash obtained as a part of the acquisition was invested in securities available-for-sale.
Net loans as of September 30, 2012 increased to $488,426,000 compared to $428,364,000 as of September 30, 2011, or 14.0%, mainly as a result of the acquisition. The allowance for loan losses on September 30, 2012 totaled $8,009,000, or 1.61% of gross loans, compared to $7,865,000 or 1.80% of gross loans as of September 30, 2011. The decline in the ratios of the allowance for loan losses to gross loans was primarily due to a purchase accounting adjustment for the acquired loans. Impaired loans as of September 30, 2012, were $4,918,000, or 1.0% of gross loans, compared to $5,624,000, or 1.3% of gross loans as of September 30, 2011. The decrease in impaired loans is due primarily to the transfer of repossessed collateral from a borrower to other real estate owned.
Other real estate owned was $9,940,000 as of September 30, 2012 which is slightly higher than $9,886,000 as of September 30, 2011, primarily due to transfers from loan receivables slightly exceeding sales of other real estate owned. Due to potential changes in the real estate markets, it is at least reasonably possible that management’s assessments of fair value will change in the near term and that such changes could materially affect the amounts reported in the Company’s financial statements.
Deposits totaled $942,222,000 on September 30, 2012, a 17.7% increase from the $800,236,000 recorded at September 30, 2011. This increase is mainly the result of the assumption of deposits as a part of the office acquisition and continued growth in demand, NOW and money market accounts balances.
The Company’s stockholders’ equity represented 12.3% of total assets as of September 30, 2012 with all of the Company’s five affiliate banks considered well-capitalized as defined by federal capital regulations. Tangible equity capital as of September 30, 2012 was 11.8% of total tangible assets. Total stockholders’ equity was $144,054,000 as of September 30, 2012, and $133,516,000 as of September 30, 2011.
Shareholder Information:
Return on average assets was 1.32% for the quarter ended September 30, 2012, compared to 1.43% for the same period in 2011. Return on average equity was 10.86% for the quarter ended September 30, 2012, compared to the 10.91% in 2011. Return on average assets was 1.27% for the nine months ended September 30, 2012, compared to 1.37% for the same period in 2011. Return on average equity was 10.26% for the nine months ended September 30, 2012, compared to the 10.80% in 2011.
The Company’s stock, which is listed on the NASDAQ Capital Market under the symbol ATLO, closed at $20.84 on September 30, 2012. During the third quarter of 2012, the price ranged from $20.06 to $23.72.
On August 8, 2012, the Company declared a quarterly cash dividend on its common stock, payable on November 15, 2012 to stockholders of record as of November 1, 2012, equal to $0.15 per share.
Ames National Corporation affiliate Iowa banks are First National Bank, Ames; Boone Bank & Trust Co., Boone; State Bank & Trust Co., Nevada; Reliance State Bank, Story City; and United Bank & Trust, Marshalltown.
The Private Securities Litigation Reform Act of 1995 provides the Company with the opportunity to make cautionary statements regarding forward-looking statements contained in this News Release, including forward-looking statements concerning the Company’s future financial performance and asset quality. Any forward-looking statement contained in this News Release is based on management’s current beliefs, assumptions and expectations of the Company’s future performance, taking into account all information currently available to management. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to management. If a change occurs, the Company’s business, financial condition, liquidity, results of operations, asset quality, plans and objectives may vary materially from those expressed in the forward-looking statements. The risks and uncertainties that may affect the actual results of the Company include, but are not limited to, the following: economic conditions, particularly in the concentrated geographic area in which the Company and its affiliate banks operate; competitive products and pricing available in the marketplace; changes in credit and other risks posed by the Company’s loan and investment portfolios, including declines in commercial or residential real estate values or changes in the allowance for loan losses dictated by new market conditions or regulatory requirements; fiscal and monetary policies of the U.S. government; changes in governmental regulations affecting financial institutions (including regulatory fees and capital requirements); changes in prevailing interest rates; credit risk management and asset/liability management; the financial and securities markets; the availability of and cost associated with sources of liquidity; and other risks and uncertainties inherent in the Company’s business, including those discussed under the heading “Risk Factors” in the Company’s annual report on Form 10-K. Management intends to identify forward-looking statements when using words such as “believe”, “expect”, “intend”, “anticipate”, “estimate”, “should”, “forecasting” or similar expressions. Undue reliance should not be placed on these forward-looking statements. The Company undertakes no obligation to revise or update such forward-looking statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
AMES NATIONAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
September 30, 2012 and 2011
(unaudited)
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ASSETS
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2012
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2011
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Cash and due from banks
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$ | 23,542,568 | $ | 23,033,128 | ||||
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Interest bearing deposits in financial institutions
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35,759,545 | 34,581,968 | ||||||
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Securities available-for-sale
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573,557,196 | 500,084,113 | ||||||
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Loans receivable, net
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488,426,392 | 428,364,432 | ||||||
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Loans held for sale
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1,570,621 | 1,303,825 | ||||||
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Bank premises and equipment, net
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12,040,379 | 11,427,144 | ||||||
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Accrued income receivable
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8,041,189 | 7,320,692 | ||||||
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Other real estate owned
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9,939,706 | 9,885,618 | ||||||
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Core deposit intangible, net
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1,377,040 | - | ||||||
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Goodwill
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5,600,749 | - | ||||||
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Other assets
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8,022,953 | 4,227,090 | ||||||
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Total assets
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$ | 1,167,878,338 | $ | 1,020,228,010 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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LIABILITIES
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Deposits
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Demand, noninterest bearing
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$ | 150,811,637 | $ | 116,786,018 | ||||
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NOW accounts
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276,439,976 | 230,266,256 | ||||||
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Savings and money market
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257,844,279 | 208,990,036 | ||||||
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Time, $100,000 and over
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99,310,392 | 103,098,557 | ||||||
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Other time
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157,815,497 | 141,095,598 | ||||||
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Total deposits
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942,221,781 | 800,236,465 | ||||||
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Federal funds purchased and securities sold under agreements to repurchase
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38,974,691 | 40,088,022 | ||||||
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Short-term borrowings
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- | 1,001,014 | ||||||
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Federal Home Loan Bank advances and other long-term borrowings
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34,628,314 | 39,195,476 | ||||||
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Dividend payable
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1,396,637 | 1,217,669 | ||||||
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Deferred income taxes
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2,441,988 | 1,159,697 | ||||||
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Accrued expenses and other liabilities
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4,161,343 | 3,813,896 | ||||||
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Total liabilities
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1,023,824,754 | 886,712,239 | ||||||
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STOCKHOLDERS' EQUITY
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Common stock, $2 par value, authorized 18,000,000 shares; issued 9,432,915 shares; outstanding 9,310,913 and 9,366,684 shares as of Setpember 30, 2012 and 2011, respectively
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18,865,830 | 18,865,830 | ||||||
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Additional paid-in capital
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22,651,222 | 22,651,222 | ||||||
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Retained earnings
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92,087,734 | 83,157,897 | ||||||
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Accumulated other comprehensive income-net unrealized income on securities available-for-sale
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12,465,296 | 9,930,797 | ||||||
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Treasury stock, at cost; 122,002 shares and 66,231 shares at September 30, 2012 and 2011, respectively
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(2,016,498 | ) | (1,089,975 | ) | ||||
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Total stockholders' equity
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144,053,584 | 133,515,771 | ||||||
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Total liabilities and stockholders' equity
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$ | 1,167,878,338 | $ | 1,020,228,010 | ||||
AMES NATIONAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(unaudited)
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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2012
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2011
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2012
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2011
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Interest income:
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Loans
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$ | 6,413,866 | $ | 5,905,777 | $ | 18,470,183 | $ | 17,646,097 | ||||||||
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Securities
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Taxable
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1,441,987 | 1,906,708 | 4,660,121 | 5,365,245 | ||||||||||||
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Tax-exempt
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1,697,690 | 1,624,310 | 5,046,835 | 4,892,269 | ||||||||||||
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Interest bearing deposits and federal funds sold
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113,149 | 112,929 | 371,328 | 337,622 | ||||||||||||
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Total interest income
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9,666,692 | 9,549,724 | 28,548,467 | 28,241,233 | ||||||||||||
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Interest expense:
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Deposits
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1,097,372 | 1,323,083 | 3,419,854 | 4,076,697 | ||||||||||||
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Other borrowed funds
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322,887 | 353,739 | 972,023 | 1,086,646 | ||||||||||||
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Total interest expense
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1,420,259 | 1,676,822 | 4,391,877 | 5,163,343 | ||||||||||||
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Net interest income
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8,246,433 | 7,872,902 | 24,156,590 | 23,077,890 | ||||||||||||
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Provision for loan losses
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35,664 | 4,904 | 151,369 | 409,692 | ||||||||||||
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Net interest income after provision for loan losses
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8,210,769 | 7,867,998 | 24,005,221 | 22,668,198 | ||||||||||||
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Noninterest income:
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Trust services income
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491,943 | 547,917 | 1,527,657 | 1,619,617 | ||||||||||||
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Service fees
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429,958 | 401,055 | 1,161,170 | 1,095,273 | ||||||||||||
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Securities gains, net
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220,230 | 361,444 | 538,298 | 947,570 | ||||||||||||
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Gain on sale of loans held for sale
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440,232 | 252,163 | 1,082,126 | 680,551 | ||||||||||||
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Merchant and ATM fees
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273,514 | 183,987 | 809,764 | 555,481 | ||||||||||||
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Other noninterest income
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202,627 | 152,115 | 571,009 | 459,011 | ||||||||||||
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Total noninterest income
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2,058,504 | 1,898,681 | 5,690,024 | 5,357,503 | ||||||||||||
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Noninterest expense:
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Salaries and employee benefits
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3,112,396 | 2,945,361 | 9,293,203 | 8,667,217 | ||||||||||||
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Data processing
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558,314 | 524,602 | 1,632,518 | 1,451,420 | ||||||||||||
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Occupancy expenses
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362,217 | 349,918 | 1,069,972 | 1,066,383 | ||||||||||||
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FDIC insurance assessments
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158,745 | 129,289 | 477,961 | 607,785 | ||||||||||||
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Other real estate owned, net
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31,330 | 252,039 | 472,123 | 418,175 | ||||||||||||
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Core deposit intangible amortization
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73,776 | — | 122,960 | — | ||||||||||||
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Other operating expenses, net
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745,781 | 670,714 | 2,307,533 | 2,002,262 | ||||||||||||
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Total noninterest expense
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5,042,559 | 4,871,923 | 15,376,270 | 14,213,242 | ||||||||||||
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Income before income taxes
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5,226,714 | 4,894,756 | 14,318,975 | 13,812,459 | ||||||||||||
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Income tax expense
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1,365,719 | 1,304,882 | 3,605,406 | 3,506,692 | ||||||||||||
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Net income
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$ | 3,860,995 | $ | 3,589,874 | $ | 10,713,569 | $ | 10,305,767 | ||||||||
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Basic and diluted earnings per share
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$ | 0.41 | $ | 0.38 | $ | 1.15 | $ | 1.09 | ||||||||
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Declared dividends per share
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$ | 0.15 | $ | 0.13 | $ | 0.45 | $ | 0.39 | ||||||||