Executive Summary

Q3 2025 marked another step-up in profitability: net income rose to $4.6M ($0.51 EPS) from $2.2M ($0.25) in Q3 2024, driven by higher asset yields and materially lower funding costs; net interest margin expanded to 2.83% from 2.21% YoY and 2.65% QoQ .
Operating leverage improved as noninterest expense fell 2.5% YoY and the efficiency ratio improved to 61.76% (from 77.87%); wealth management continued to lift fee income (+5% YoY) .
Credit remained manageable: a $0.63M credit loss expense reflected higher specific reserves in CRE/operating loans, offset by $0.34M net loan recoveries tied to a commercial loan charged off in Q2; allowance rose to 1.39% of loans .
Capital return accelerated: a new 200k-share repurchase authorization was approved Aug 13 and a $0.20 dividend was declared for payment Sep 15; borrowings continue to trend down on securities maturities, supporting lower funding costs .

What Went Well and What Went Wrong

What Went Well
- Net interest income rose 26.8% YoY to $14.0M as loan and securities yields improved and funding costs fell; NIM expanded to 2.83% (from 2.21% YoY and 2.65% QoQ). “These factors were the primary contributors to the Company’s net interest margin improving to 2.83%...” .
- Operating efficiency improved: noninterest expense declined 2.5% YoY and the efficiency ratio improved to 61.76% vs. 77.87% a year ago .
- Wealth management momentum: noninterest income grew 5.0% YoY on higher wealth management fees due to AUM growth and new relationships .
What Went Wrong
- Higher credit costs vs. last year: credit loss expense was $0.63M (vs. $0.37M in Q3’24), primarily from increased specific reserves in CRE and operating loans, reflecting softening in certain collateral and vacancy rates .
- Loan growth muted: net loans decreased 1.5% YoY to $1.276B; substandard and substandard-impaired balances were modestly higher YoY driven by CRE and ag exposures .
- Effective tax rate ticked up (20% vs. 15% in Q3’24), partially offsetting pre-tax improvement; management cites tax-exempt income and New Markets Tax Credits as drivers of a still “lower than expected” rate .

Financial Results

Metric (USD, unless noted)	Q3 2024	Q2 2025	Q3 2025
Net Income ($M)	$2.217	$4.511	$4.559
Diluted EPS ($)	$0.25	$0.51	$0.51
Net Interest Income ($M)	$11.077	$13.466	$14.049
Noninterest Income ($M)	$2.413	$2.641	$2.534
Total Revenue (NII + Noninterest) ($M)	$13.490	$16.107	$16.583
Net Interest Margin (FTE) (%)	2.21%	2.65%	2.83%
Efficiency Ratio (%)	77.87%	64.34%	61.76%
ROAA (%)	0.42%	0.85%	0.88%
ROAE (%)	5.12%	9.67%	9.31%
Credit Loss Expense ($M)	$0.371	$0.108	$0.627
Net Charge-offs (Recoveries) ($M)	$0.010 charge-offs	$1.100 charge-offs	$(0.344) recoveries
Effective Tax Rate (%)	15%	20%	20%

Notes: “Total Revenue” is constructed as Net Interest Income + Total Noninterest Income (company does not present “revenue”); values are calculated from reported line items .

Balance Sheet and Funding

Balance Sheet / Capital ($M)	Q3 2024	Q2 2025	Q3 2025
Total Assets	$2,123.2	$2,092.8	$2,108.0
Loans Receivable, net	$1,295.8	$1,279.6	$1,275.8
Deposits	$1,801.7	$1,819.2	$1,832.8
Other Borrowings	$83.1	$30.7	$23.5
Stockholders’ Equity	$183.4	$193.0	$200.6
ACL ($) and % of Loans	$17.6 (1.34%)	$17.0 (1.31%)	$18.0 (1.39%)

KPIs and Asset/Liability Positioning

KPI	Q1 2025	Q2 2025	Q3 2025
Securities maturing ≤1yr ($M, avg yld)	$105 @ ~1.6%	$99 @ ~1.5%	$96 @ ~1.5%
Loans maturing ≤1yr ($M, avg yld)	$279 @ ~6.2%	$317 @ ~5.9%	$315 @ ~5.8%
Deposits tied to external indexes (%)	~16%	~14%	~16%
Share repurchases (shares; avg price)	33,553 @ $16.41	16,868 @ $16.48	6,522 @ $18.73

Segment breakdown: Not applicable; the company reports on a consolidated basis (no separate operating segments in the release) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal financial guidance (revenue, margins, opex, tax)	2025	None provided	None provided	Maintained (no formal guidance)
Dividend per share	Q3 2025	—	$0.20 declared Aug 13; payable Sep 15, 2025	Announced/paid in-period
Share repurchase authorization	Announced Aug 13, 2025	Prior 100k program completed Jul 31, 2025	New 200k authorization; 200k available at 9/30/25	Increased capacity

Earnings Call Themes & Trends

Note: We did not locate a Q3 2025 earnings call transcript from primary sources or major aggregators, so themes reflect management’s quarterly releases across Q1–Q3 2025 .

Topic	Previous Mentions (Q2 and Q1)	Current Period (Q3 2025)	Trend
Net interest margin and funding costs	NIM improved to 2.65% in Q2 from 2.53% in Q1; drivers were improved loan yield, higher interest-bearing cash balances, and lower deposit/borrowing costs as rates declined and borrowings fell .	NIM rose further to 2.83%; deposit interest expense down $1.1M YoY; borrowed funds expense down $0.73M YoY on reduced borrowings .	Improving sequentially and YoY.
Credit quality/ACL	Q1: higher specific reserve on a commercial relationship; Q2: $1.1M net charge-offs on that relationship reserved in Q1 .	Q3: $0.34M net recoveries as that commercial loan partially reversed; ACL at 1.39% with higher specific reserves in CRE/operating loans .	Stabilizing from Q2’s charge-off; reserves remain prudent.
Fee/wealth management	Q1 noninterest income +17% YoY; Q2 fee income +0.8% YoY; both cited AUM growth .	Q3 noninterest income +5% YoY on wealth management growth .	Steady contribution from wealth.
Operating efficiency	Efficiency ratio improved from 66.4% (Q1) to 64.3% (Q2) on lower consulting fees and higher NIM .	Efficiency improved to 61.8% on higher NIM and lower noninterest expense .	Positive operating leverage.
Balance sheet mix	Borrowings steadily reduced as securities mature; deposits stable with shift toward time/public funds .	Borrowings $23.5M (vs. $83.1M YoY); deposits +1.7% YoY, mix shifting to time/public funds .	Lower wholesale funding; modest deposit growth.
Tax rate	Q1 19%; Q2 20% driven by tax-exempt income and NMTCs .	Q3 ~20% with same drivers .	Stable low-20s.

Management Commentary

“These factors were the primary contributors to the Company’s net interest margin improving to 2.83% for the quarter ended September 30, 2025 as compared to 2.21% for the quarter ended September 30, 2024 and 2.65% for the quarter ended June 30, 2025.” (Q3 News Release) .
“Deposit interest expense decreased $1.1 million… primarily due to decreases in market rates. Other borrowed funds interest expense decreased $726 thousand… due primarily to reduced borrowings.” (Q3 News Release) .
“Noninterest income… increased… primarily due to an increase in wealth management income due to growth in assets under management and new account relationships.” (Q3 News Release) .
“The credit loss expense in 2025 was primarily due to an increase in specific reserves in the commercial real estate and operating loan portfolios.” (Q3 News Release) .
“The efficiency ratio continues to improve as net interest margin increases and noninterest expense is lower than the prior year.” (Q3 News Release) .

Q&A Highlights

We did not locate a Q3 2025 earnings call transcript; no Q&A was available to analyze .

Estimates Context

S&P Global (Capital IQ) consensus coverage appears sparse for this micro-cap. For Q3 2025, we did not receive EPS or revenue consensus data; only an “actual” revenue figure was available via S&P Global feeds (no estimate counts provided). Values retrieved from S&P Global.
S&P Global “actual” revenue for Q3 2025: $15.956M* (definition may differ from our constructed “Total Revenue” above, which sums NII and noninterest income from the company’s release). Values retrieved from S&P Global.

Metric	Q3 2025 Consensus	Q3 2025 Actual (S&P Global)
EPS	NA*	NA*
Revenue ($M)	NA*	$15.956*

Notes: “NA” reflects unavailable consensus data in our S&P Global pull; asterisks indicate values retrieved from S&P Global.

Key Takeaways for Investors

Margin inflection remains intact: NIM advanced to 2.83% with visibility to further repricing as ~$96M of low-yield securities (<~1.5%) mature within a year and ~$315M of loans at ~5.8% reprice—supportive for 2026 as funding costs normalize .
Operating leverage improving: efficiency ratio fell to ~62% driven by higher NII and lower noninterest expense; further leverage possible if credit costs remain contained .
Credit normalization manageable: higher specific reserves in CRE/operating loans amid soft occupancy/valuations; Q3 net recoveries suggest stabilization following a Q2 commercial charge-off .
Reduced balance sheet risk: other borrowings declined to $23.5M from $83.1M YoY, reducing rate sensitivity and funding cost volatility .
Shareholder returns accelerating: new 200k-share buyback and resumed in-quarter dividend cadence ($0.20) provide capital return while equity builds (9.5% of assets) .
Estimate implications: with sparse Street coverage, reported NIM expansion and operating efficiency may drive upward internal models on NII and pre-provision earnings for Q4/Q1; monitor credit provisioning cadence given CRE/Ag exposures .
Trading setup: narrative is shifting from defense (funding costs/wholesale reliance) to offense (asset yields/efficiency), a constructive backdrop for multiple normalization if credit trends don’t deteriorate .

Citations

Q3 2025 8‑K and Exhibit 99.1 press release:
Q2 2025 8‑K and Exhibit 99.1 press release:
Q1 2025 8‑K and Exhibit 99.1 press release:
Company press releases (dividend/repurchase and Q3 earnings page):
Transcript availability check:

S&P Global estimates disclaimer

Asterisks in the Estimates Context section denote values retrieved from S&P Global. Coverage for EPS/revenue consensus on ATLO was unavailable in our pull.

AMES NATIONAL CORP (ATLO)·Q3 2025 Earnings Summary