Ames National Corporation (ATLO): Business Model Canvas [Dec-2025 Updated]

You're probably used to seeing big national banks, but the real story in regional finance often lies with institutions like Ames National Corporation, which skillfully blends deep Iowa community roots with necessary digital upgrades. As a former analyst, I see a model here that's successfully managing over $2.1 billion in assets as of mid-2025, driven by a core focus on local lending and a solid 61.76% efficiency ratio in Q3 2025. Honestly, it's a classic community banking structure that's clearly adapting to stay competitive, generating $14.0 million in Net Interest Income last quarter alone. If you want to see the precise mechanics behind how this six-affiliate bank structure actually creates and captures value, check out the full Business Model Canvas breakdown below.

Ames National Corporation (ATLO) - Canvas Business Model: Key Partnerships

You're looking at the structure Ames National Corporation uses to deliver its community banking value proposition across central Iowa. These partnerships are the backbone, letting the holding company maintain capital strength while local teams handle customer relationships. The key is how they manage the flow of capital and technology through these established relationships.

The core of the local delivery network involves six wholly-owned affiliate banks. These banks operate with local boards and leadership, which is how Ames National Corporation keeps its service model community-focused, even as the parent company manages capital centrally. As of September 30, 2025, the consolidated entity reported total assets of $2.1 billion and total stockholders' equity of $200.6 million, with all affiliate banks confirmed as well-capitalized under federal regulations.

Here is a breakdown of those essential local delivery partners:

• First National Bank, headquartered in Ames, Iowa.
• Boone Bank & Trust Co., headquartered in Boone, Iowa.
• State Bank & Trust Co., headquartered in Nevada, Iowa.
• Reliance State Bank, headquartered in Story City, Iowa.
• United Bank & Trust Co., headquartered in Marshalltown, Iowa.
• Iowa State Savings Bank, headquartered in Creston, Iowa.

The lending activities of these affiliates, which totaled net loans of $1.28 billion as of September 30, 2025, feed into the secondary market for liquidity management.

Ames National Corporation actively uses secondary market investors to manage its balance sheet, specifically by selling originated residential mortgage loans. This partnership type is crucial for maintaining liquidity and managing interest rate risk, especially given the recent reduction in the Company's own borrowings, which fell from $83.1 million at September 30, 2024, to $23.5 million at September 30, 2025.

For technology, the focus is on enhancing the customer experience through external support. Management has explicitly targeted 'upgrades to our treasury management platform for our business customers' as part of its strategic plan. This implies ongoing partnerships with external technology vendors to support the digital services that saw transaction volumes reach $127.4 million as of Q4 2023.

Finally, the relationship with professional service providers like legal counsel and external auditors underpins governance and regulatory compliance. While specific 2025 audit fees aren't public, the structure relies on these external experts to support the operations that generated $12.5 million in net income for the first nine months of 2025.

• The six affiliate banks operate independently, ensuring local decision-making.
• The Company reduced its Other Borrowed Funds Interest Expense by $726 thousand in Q3 2025 versus Q3 2024.
• The net interest margin improved to 2.83% for Q3 2025.
• The Company is focused on leveraging data across the organization to drive stronger revenues.

Finance: draft 13-week cash view by Friday.

Ames National Corporation (ATLO) - Canvas Business Model: Key Activities

You're looking at the engine room of Ames National Corporation (ATLO), the core actions that drive its financial performance in late 2025. It's all about local execution backed by a solid balance sheet. Here's the quick math on what they're actively doing.

Core deposit gathering to maintain a low cost of funds.

Ames National Corporation focuses heavily on attracting and retaining local funds. As of September 30, 2025, total deposits stood at $1.83 billion, representing a 1.7% increase compared to the prior year. This activity is key because it directly impacts the cost of funds, which helped the net interest margin improve to 2.83% for Q3 2025. However, you should note that approximately 16% of these deposits are tied to external indexes, which means that portion of the funding cost can be more volatile when rates shift.

Origination of commercial, agricultural, and real estate loans.

The bread and butter is originating loans across key sectors. While the absolute loan mix data is from the end of 2024, it clearly defines the activity focus. The affiliate banks' lending activities primarily involve short and medium-term commercial, agricultural, and residential real estate loans, along with business operating loans and lines of credit.

• Commercial loans made up about 53% of the loan book at year-end 2024.
• Residential mortgages accounted for roughly 23% of the loan book at year-end 2024.
• Agricultural loans represented around 22% of the loan book at year-end 2024.

Managing a $1.276 billion net loan portfolio as of Q3 2025.

The corporation actively manages the asset side of the balance sheet. As of September 30, 2025, the net loan portfolio was reported at $1.28 billion, a slight decrease of 1.5% from September 30, 2024. This management includes setting aside reserves; the allowance for credit losses on that date totaled $18.0 million, or 1.39% of loans. The activity of loan origination and management directly contributed to loan interest income being $658 thousand higher in Q3 2025 than in Q3 2024, due to improved yield.

Providing wealth management and trust services for fee income growth.

This activity is a crucial driver for non-interest income, which helps diversify revenue away from pure lending margins. For the third quarter of 2025, noninterest income totaled $2.5 million, which was a 5.0% increase compared to Q3 2024. This growth is specifically attributed to an increase in wealth management income driven by growth in assets under management and new account relationships.

Executing local decision-making through affiliate bank leadership.

Ames National Corporation operates through a decentralized model. This means the key activity of making credit and customer decisions happens at the local level, which is intended to provide quick responses and customized services. The structure supporting this involves six wholly owned affiliate banks operating across 11 communities in central Iowa. Each affiliate bank maintains its own board of directors and executive leadership.

To give you a clearer picture of the scale and recent performance tied to these activities, here are some key figures from the latest reporting period.

Finance: draft 13-week cash view by Friday.

Ames National Corporation (ATLO) - Canvas Business Model: Key Resources

You're mapping out the core assets Ames National Corporation relies on to run its business, and honestly, it's a mix of tangible scale and deep local trust. These resources are what let them compete in the Central Iowa market.

The financial foundation is definitely a key resource, showing stability. As of June 30, 2025, total assets stood at $2.1 billion. This scale supports their lending capacity and operational footprint. Furthermore, the capital base is structured to be strong, with the Common Equity Tier 1 (CET1) ratio reported at 13.9% in H1 2025, which is a solid buffer.

The physical presence and reputation are inseparable for a community bank like Ames National Corporation. They maintain a network of physical branches, which is supported by the structure of their six affiliate banks.

Here's a look at some of the hard numbers underpinning these resources as of the mid-year point in 2025:

The management structure is decentralized, relying on experienced local management teams within those six affiliate banks. This local focus is critical for underwriting and relationship management in their core Central Iowa markets, which include counties like Boone, Hancock, Marshall, Polk, and Story.

Finally, operational efficiency is supported by technology. Ames National Corporation utilizes digital banking platforms to help with customer access and internal efficiency. While specific usage statistics aren't always public, the platform is a necessary component for modern banking operations.

The key tangible and intangible assets are:

• Financial Strength: Total assets over $2.1 billion.
• Capital Adequacy: CET1 ratio of 13.9% for H1 2025.
• Physical Footprint: Network across six affiliate banks.
• Human Capital: Experienced local management teams.
• Technology: Digital banking platforms in use.

Finance: review the Q3 2025 efficiency ratio of 64.10% against the digital platform spend by end of Q4.

Ames National Corporation (ATLO) - Canvas Business Model: Value Propositions

You're looking at how Ames National Corporation delivers distinct value to its central Iowa customer base. It's not about being the biggest; it's about being the most connected locally.

Localized, relationship-focused service with quick, customized loan decisions.

Ames National Corporation maintains a deep local footprint, operating through six central Iowa banks across 11 communities, utilizing 18 banking offices. The stated mission reflects this focus: Customer Focused, Locally Empowered, and Team Member Driven. This structure supports the value of rapid, relationship-driven decision-making, which is critical for local commercial and agricultural borrowers who need certainty quickly.

Full-service financial suite: lending, deposits, and wealth management.

The offering covers the full spectrum of community banking needs. You see this breadth reflected in the balance sheet scale as of September 30, 2025, and the income drivers:

• Deposits totaled $1.83 billion as of September 30, 2025.
• Net loans stood at $1.28 billion as of September 30, 2025.
• Noninterest income, which includes wealth management fees, was $2.5 million for the third quarter of 2025, marking a 5% year-over-year increase.

The trust department provides estate planning, investment advisory, and fiduciary services, rounding out the comprehensive platform for personal and business clients.

Financial stability and security, with all affiliate banks well-capitalized.

Stability is a core promise, backed by strong regulatory standing and equity levels. As of September 30, 2025, Total Stockholders' Equity was $200.6 million. Critically, all six of the Company's affiliate banks are considered well-capitalized as defined by federal capital regulations. For context on capital strength, the CET1 ratio (Common Equity Tier 1) was 13.9% at the end of June 2025, significantly above the regulatory requirement of 8.5%. This defensive positioning allows for sustained operation even when credit quality shows stress, such as the recent weakening in certain loan segments.

Specialized expertise in agricultural and commercial real estate lending.

The loan portfolio is heavily weighted toward the regional economy's backbone: agriculture and commercial real estate. While credit quality concerns surfaced in these areas in Q3 2025, the focus remains a key differentiator. The loan book historically includes significant exposure to these sectors. For example, as of year-end 2023, the Agricultural Loan Portfolio was $214.6 million, and the Commercial loan portfolio was $412.3 million. Furthermore, approximately $315 million of loans were maturing within one year as of September 30, 2025, carrying an average yield of approximately 5.8%.

Here's a quick look at the scale supporting these value propositions as of late 2025:

The improved efficiency ratio of 61.76% in Q3 2025, down from 77.87% in Q3 2024, shows operational leverage is helping to support the value proposition of stability. That's a defintely meaningful improvement in cost control.

Ames National Corporation (ATLO) - Canvas Business Model: Customer Relationships

The customer relationship strategy for Ames National Corporation centers on maintaining deep, localized connections across its six affiliate banks operating in 11 central Iowa communities.

Dedicated, long-term personal relationships with local bankers are supported by the corporation's physical structure, which as of late 2024 included 18 banking offices. The structure emphasizes that decisions are made locally, which helps ensure customers receive quick responses and customized services.

High-touch advisory services for wealth management and trust clients show quantifiable growth. For the third quarter of 2025, noninterest income totaled $2.5 million, an increase of 5.0% compared to the third quarter of 2024. This increase is directly attributed to an increase in wealth management income driven by growth in assets under management and new account relationships.

Ames National Corporation employs a blended service model utilizing digital channels alongside its local presence. Services available include online banking, video banking, mobile banking, online bill pay, and mobile wallet access. For the nine months ended September 30, 2025, total deposits reached $1.83 billion, a 1.7% increase year-over-year, showing continued customer engagement across all service types.

Key relationship metrics and performance indicators for the period ending September 30, 2025, reflect the stability underpinning these interactions:

• Net income for nine months ended September 30, 2025: $12.5 million.
• Net income per share for nine months ended September 30, 2025: $1.41.
• Net interest margin for the third quarter of 2025: 2.83%.
• Efficiency ratio for the nine months ended September 30, 2025: 64.10%.
• Total deposits as of September 30, 2025: $1.83 billion.

The following table summarizes key financial results from the nine months ended September 30, 2025, which support the ongoing customer relationship infrastructure:

The corporation's commitment to its customer base is also reflected in its dividend policy. Ames National Corporation declared a quarterly cash dividend of $0.20 per share, payable on February 15, 2025, to stockholders of record as of January 31, 2025.

The availability of digital tools is crucial for the modern relationship, even for a community bank. The company is focused on improving the digital experience, including upgrades to its treasury management platform for business customers. Nationally, projections for 2025 estimated 216.8 million digital banking users in the U.S.

• Affiliate banks operate in 11 communities.
• The company has six wholly owned affiliate banks.
• The board approved repurchase of up to 100,000 shares through November 11, 2025.

Ames National Corporation (ATLO) - Canvas Business Model: Channels

You're looking at how Ames National Corporation (ATLO) gets its services to customers across central Iowa. The channel strategy blends a traditional, local physical presence with necessary digital access points.

Physical Branch Network and Local Presence

Ames National Corporation maintains a physical footprint through its six wholly owned affiliate banks, which collectively operate across 11 central Iowa communities. As of late 2024/early 2025 reporting, this network consisted of 18 banking offices or branches. This structure supports localized decision-making, which is key to their community banking model. The communities served include locations in Boone, Clarke, Hancock, Marshall, Polk, Story, Taylor, and Union Counties.

The physical channel is supported by the structure of its lending teams, particularly for complex credit needs. Direct loan officers are the primary interface for commercial and agricultural lending, ensuring that services like short-term and medium-term commercial, agricultural, and residential real estate loans are handled with local expertise. This direct relationship channel is crucial for their core business, which saw net loans reach $1.30 billion as of December 31, 2024.

Digital and Self-Service Access Points

To complement the physical network, Ames National Corporation provides a suite of digital channels for both retail and business customers. These include online banking, mobile banking, online bill pay, mobile wallet access, and online statements. The company is focused on improving this digital experience, including upgrades to its treasury management platform for business customers, as noted in early 2025 reports.

While the most granular digital statistics available are from Q4 2023, they show the direction of channel usage:

The focus on digital growth is clear, aiming to support the overall organization which reported total assets over $2.1 billion as of December 31, 2024.

Convenient Access and Teller Services

Convenient access outside of standard lobby hours is facilitated through automated teller machine (ATM) and video banking services. These automated/video teller machine access services are offered alongside traditional services like safe deposit boxes and wire transfers. This multi-channel approach ensures customers can manage basic transactions and access information when the physical offices aren't open.

The overall channel strategy supports the company's financial targets, with management forecasting earnings for the year ending December 31, 2025, in the range of $1.72 to $1.82 per share.

The key channel components are:

• Physical branch network across 11 central Iowa communities.
• 18 banking offices supporting local service delivery.
• Online and mobile banking for retail and business customers.
• Direct loan officers managing commercial and agricultural lending relationships.
• ATM and video banking services for 24/7 access.

Ames National Corporation (ATLO) - Canvas Business Model: Customer Segments

You're looking at the core customer base for Ames National Corporation, which is deeply rooted in its central and north-central Iowa service area. This isn't a national player; it's a local relationship bank.

Ames National Corporation operates as the bank holding company for six banking subsidiaries, serving customers across the central Iowa counties of Boone, Hancock, Marshall, Polk, and Story, from 18 banking offices across 11 communities.

The composition of their lending activity clearly defines the primary customer segments they focus on:

• Individuals and families in the central and north-central Iowa region.
• Small-to-medium-sized businesses (SMBs) in the local service area.
• Agricultural producers and farm operators.
• Affluent individuals seeking wealth management and trust services.

The loan portfolio, which stood at $1.31 billion in net loans as of March 31, 2025, shows where the focus lies. The growth drivers for that portfolio in early 2025 pointed directly to two of these segments.

Here's a look at the evidence supporting these segments based on recent financial activity:

For individuals and families, Ames National Corporation provides residential real estate loans, personal loans, and home improvement loans. The bank's business is built on establishing long-term relationships to offer the services and products they need.

The small-to-medium-sized business segment is served through commercial loans, business operating loans and lines of credit, and equipment loans. The bank's loan book is mainly comprised of commercial real estate loans, alongside residential mortgages and agricultural loans. The allowance for credit losses on September 30, 2025, totaled $18.0 million, with increases in specific reserves tied to the commercial loan portfolio.

Agricultural producers are a key focus, evidenced by the growth in the agriculture loan portfolio in the first quarter of 2025. They offer agricultural real estate loans and agricultural operating loans and lines of credit.

The segment for affluent individuals is served through wealth management services. Noninterest income for the third quarter of 2025 specifically cited an increase due to growth in assets under management and new account relationships. Also, the bank offers merchant services and credit cards.

Finance: review the Q3 2025 asset under management growth rate for wealth management by next Tuesday.

Ames National Corporation (ATLO) - Canvas Business Model: Cost Structure

Interest expense on deposits, though Q3 2025 saw a $1.1 million decrease compared to the third quarter of 2024, driven primarily by decreases in market rates.

Personnel costs for the multi-bank structure and branch network are embedded within the overall noninterest expense structure. The total noninterest expense for Ames National Corporation in the third quarter of 2025 was $10.2 million, a decrease of 2.5% year-over-year from $10.5 million in Q3 2024.

Noninterest expenses showed improvement, with the efficiency ratio for Q3 2025 standing at 61.76%, a significant improvement from 77.87% in Q3 2024. The decrease in noninterest expense was primarily attributed to lower consultant fees, specifically a $449 thousand reduction YoY for the quarter.

Credit loss expense was notably higher, reflecting specific reserve builds. The credit loss expense recognized in Q3 2025 was $627 thousand, up from $371 thousand in Q3 2024. This was tied to higher specific reserves in the CRE (Commercial Real Estate) and operating loan portfolios. The allowance for credit losses stood at 1.39% of loans as of September 30, 2025.

Key expense and efficiency metrics for Q3 2025 versus Q3 2024:

The cost structure management is reflected in the efficiency ratio trend:

• Efficiency Ratio Q3 2025: 61.76%
• Efficiency Ratio Q3 2024: 77.87%
• Efficiency Ratio Nine Months Ended Sep 30, 2025: 64.10%

Specific drivers impacting the cost side include:

• Deposit interest expense decreased by $1.1 million year-over-year for the third quarter.
• Other borrowed funds interest expense decreased by $726 thousand for the third quarter due to reduced borrowings.
• The allowance for credit losses on September 30, 2025, totaled $18.0 million.

Ames National Corporation (ATLO) - Canvas Business Model: Revenue Streams

The primary engine for Ames National Corporation (ATLO) revenue generation centers on traditional banking activities, heavily weighted toward interest income derived from its asset base.

Net Interest Income (NII), the difference between interest earned on loans and investments and interest paid on deposits and borrowings, was a significant contributor, totaling $14.0 million in Q3 2025. This figure represented a substantial increase of 26.8% compared to the same quarter in the prior year, driven by higher yields on assets and lower funding costs.

Beyond the core NII, Ames National Corporation (ATLO) generates revenue through noninterest sources. Noninterest income for the third quarter of 2025 totaled $2.5 million. This stream saw growth, increasing by 5.0% year-over-year, largely attributed to performance in wealth management.

Here's a quick look at the key components of the Q3 2025 revenue profile:

The interest income component is sourced across the lending and investment portfolios, reflecting Ames National Corporation (ATLO)'s role as a community lender. You see this revenue stream broken down by asset class:

• Interest income from the commercial loan portfolio, benefiting from improved portfolio yield in Q3 2025.
• Interest income from real estate loans.
• Interest income from consumer loan portfolios.
• Interest income from investment securities, which increased by $289 thousand in Q3 2025 due to reinvesting maturities at higher rates.

A secondary, though less detailed in recent public reporting, revenue stream involves the servicing and disposition of assets. This includes gains realized on the sale of mortgage loans into the secondary market, which provides liquidity and fee income outside of the recurring net interest margin.