Ames National (NASDAQ: ATLO) earnings jump on higher net interest income

What happened

Ames National Corporation (NASDAQ: ATLO) said on October 16, 2026 that third-quarter net income rose to $7.0 million. Earnings were $0.80 a share, up from $4.6 million, or $0.51, in the third quarter of 2025. For the nine months ended September 30, 2026, net income reached $18.9 million, or $2.14 a share, from $12.5 million, or $1.41, a year earlier.

The company said the increase mainly came from higher net interest income. That rose on higher yields and average balances on investments, lower market rates and reduced borrowings. The release also said the efficiency ratio improved to 54.97% from 61.76%. Stockholders' equity was $205.8 million. Book value per common share was $23.23, and the quarterly cash dividend was $0.24 per share.

Key numbers

Metric Latest Change Source
Third-quarter net income $7.0 million from $4.6 million, + $2.5 million News Release dated October 16, 2026
Third-quarter earnings per share $0.80 from $0.51, + $0.29 News Release dated October 16, 2026
Nine-month net income $18.9 million from $12.5 million, + $6.4 million News Release dated October 16, 2026
Net interest income $17.0 million from $14.0 million, + $2.9 million News Release dated October 16, 2026
Net interest margin 3.38% from 2.83%, +0.55 percentage points News Release dated October 16, 2026
Stockholders' equity $205.8 million from $200.6 million, + $5.2 million News Release dated October 16, 2026

Read more: Ames National (ATLO) stock analysis and investment case

Why it matters

Quarterly net interest income rose to $17.0 million from $14.0 million. Net interest margin widened to 3.38% from 2.83%, a 0.55 percentage-point increase. That matters for the investment case because OptimistFi's view is that ATLO works if its Iowa community-bank deposit franchise can keep funding stable assets at acceptable costs while credit losses stay benign.

Deposits were $1.83 billion at September 30, 2026, down 0.1% from $1.83 billion a year earlier. Other borrowings fell to $1.5 million from $23.5 million. The allowance for credit losses was 1.31% of loans, down from 1.39%. But substandard loans rose to $52.0 million from $29.7 million, and unrealized losses on the investment portfolio increased.

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What's next

The company said consultant fees of $600 thousand in the quarter are expected to continue throughout 2026 as negotiations are in process. It also said about $376 million of loans mature within one year at an average yield of about 5.6%, and about $100 million of investments mature within one year at about 1.9%.

Keeping borrowings low and credit losses contained would reinforce the case. More substandard loans or further unrealized losses would weaken it.

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Originally published on OptimistFi, evidence-first equity research. More at optimistfi.com.