AMES NATIONAL CORP
For the period ended Sep 30, 2025. Filed Nov 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 7, 2025
ATLO$33.90-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0001437749-25-025672
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001437749-25-033807
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 102 previous paragraphs and 96 current paragraphs.
57 unchanged; 39 reworded; 0 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 22 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Removed paragraphs (6)
Previous report
A credit loss expense of $108 thousand was recognized for the three months ended June 30, 2025 as compared to $182 thousand for the three months ended June 30, 2024. Net loan charge-offs for the three months ended June 30, 2025 totaled $1.1 million compared to no net loan charge-offs for the three months ended June 30, 2024. The charge-off in the second quarter 2025 was on a commercial loan relationship that was reserved for in the allowance for credit losses in the first quarter of 2025.
Previous report
At June 30, 2025, the Company’s investment securities portfolio included securities issued by 245 government municipalities and agencies located within 30 states with a fair value of $235.6 million. At December 31, 2024, the Company’s investment securities portfolio included securities issued by 258 government municipalities and agencies located within 30 states with a fair value of $245.6 million. No one municipality or agency represents a concentration within this segment of the investment portfolio. Omaha, Nebraska, sewer revenue bonds with a fair value of $5.5 million (approximately 2.3% of the fair value of the government municipalities and agencies) represent the largest exposure to any one municipality or agency for the Company as of June 30, 2025.
Previous report
The Company’s procedures for evaluating investments in states, municipalities and political subdivisions include but are not limited to reviewing the offering statement and the most current available financial information, comparing yields to yields of bonds of similar credit quality, confirming capacity to repay, assessing operating and financial performance, evaluating the stability of tax revenues, considering debt profiles and local demographics, and for revenue bonds, assessing the source and strength of revenue structures for municipal authorities. These procedures, as applicable, are utilized for all municipal purchases and are utilized in whole or in part for monitoring the portfolio of municipal holdings. The Company does not utilize third party credit rating agencies as a primary component of determining if the municipal issuer has an adequate capacity to meet the financial commitments under the security for the projected life of the investment, and, therefore, does not compare internal assessments to those of the credit rating agencies. Credit rating downgrades are utilized as an additional indicator of credit weakness and as a reference point for historical default rates.
Previous report
The following table summarizes the total general obligation and revenue bonds in the Company’s investment securities portfolios as of June 30, 2025 and December 31, 2024 identifying the state in which the issuing government municipality or agency operates*(in thousands)*:
Previous report
As of June 30, 2025 and December 31, 2024, the revenue bonds in the Company’s investment securities portfolios were issued by government municipalities and agencies to fund public services such as community school facilities, college and university dormitory facilities, water utilities and electrical utilities. The revenue bonds are to be paid from 5 primary revenue sources. The revenue sources that represent 5% or more, individually, as a percent of the total revenue bonds are summarized in the following table*(in thousands)*:
Previous report
The Company did not declare a dividend in the second quarter of 2025 but paid a cash dividend of $0.20 per share declared in the first quarter of 2025. Going forward, the Company, expects, subject to the discretion of the Board of Directors, to declare and pay dividends in the same quarter.
Reworded paragraphs (39)
Previous wording
The Company does not engage in any material business activities apart from its ownership of the Banks. Products and services offered by the Banks are for commercial and consumer purposes including loans, deposits and wealth management services. Wealth management services includes financial planning and managing trust, agencies, estates and investment brokerage accounts. The Company employs twenty-seven individuals to assist the Banks with its financial reporting, human resources, audit, compliance, marketing, technology systems, training, real estate valuation services and the coordination of management activities, in addition to 235 full-time equivalent individuals employed by the Banks.
Current wording
The Company does not engage in any material business activities apart from its ownership of the Banks. Products and services offered by the Banks are for commercial and consumer purposes including loans, deposits and wealth management services. Wealth management services includes financial planning and managing trust, agencies, estates and investment brokerage accounts. The Company employs twenty-seven individuals to assist the Banks with its financial reporting, human resources, audit, compliance, marketing, technology systems, training, real estate valuation services and the coordination of management activities, in addition to 231 full-time equivalent individuals employed by the Banks.
Previous wording
The Company had net income of $4.5 million, or $0.51 per share, for the three months ended June 30, 2025, compared to net income of $2.2 million, or $0.24 per share, for the three months ended June 30, 2024. The increase in earnings is primarily due to an increase in net interest income. The net interest income expansion was driven by a combination of factors including improved loan yield, growth in interest-bearing cash deposits and a decreased cost of funds as market rates have decreased and the Company has reduced borrowings.
Current wording
The Company had net income of $4.6 million, or $0.51 per share, for the three months ended September 30, 2025, compared to net income of $2.2 million, or $0.25 per share, for the three months ended September 30, 2024. For the nine months ended September 30, 2025, net income for the Company totaled $12.5 million, or $1.41 per share, compared to $6.7 million, or $0.75 per share earned in the nine months ended September 30, 2024. The increase in earnings is primarily due to an increase in net interest income. Net interest income increased due to higher yields on loans and investments, combined with a lower cost of funds driven by declining market rates and reduced borrowings.
Previous wording
For the three months ended June 30, 2025 and 2024, the Company's net interest margin adjusted for tax exempt income was 2.65% and 2.14%, respectively. Net interest income, prior to the adjustment for tax-exempt income, for the three months ended June 30, 2025 totaled $13.5 million compared to $10.9 million for the three months ended June 30, 2024.
Current wording
For the three months ended September 30, 2025 and 2024, the Company's net interest margin adjusted for tax exempt income was 2.83% and 2.21%, respectively. Net interest income, prior to the adjustment for tax-exempt income, for the three months ended September 30, 2025 totaled $14.0 million compared to $11.1 million for the three months ended September 30, 2024.
Previous wording
For the three months ended June 30, 2025, interest income increased $1.0 million, or 4.6%, when compared to the same period in 2024. The increase is primarily due to improved yield on the loan portfolio and higher average balances in interest-bearing deposits with banks and federal funds sold.
Current wording
For the three months ended September 30, 2025, interest income increased $1.1 million, or 5.5%, when compared to the same period in 2024. The increase is primarily due to improved yield on the loan and investment portfolios.
Previous wording
Interest expense decreased $1.6 million, or 17.0%, for the three months ended June 30, 2025 when compared to the same period in 2024. The lower interest expense for the period is primarily due to reduced borrowings and a decrease in market rates.
Current wording
Interest expense decreased $1.8 million, or 19.0%, for the three months ended September 30, 2025 when compared to the same period in 2024. The lower interest expense for the period is primarily due to reduced borrowings and a decrease in market rates.
Previous wording
A credit loss expense of $108 thousand was recognized for the three months ended June 30, 2025 as compared to $182 thousand for the three months ended June 30, 2024. Net loan charge-offs for the three months ended June 30, 2025 totaled $1.1 million compared to no net loan charge-offs for the three months ended June 30, 2024. The charge-off in the second quarter 2025 was on a commercial loan relationship that was reserved for in the allowance for credit losses in the first quarter of 2025.
Current wording
A credit loss expense of $627 thousand was recognized for the three months ended September 30, 2025 as compared to $371 thousand for the three months ended September 30, 2024. Net loan recoveries for the three months ended September 30, 2025 totaled $344 thousand compared to net loan charge-offs totaled $10 thousand for the three months ended September 30, 2024. The credit loss expense in 2025 was primarily due to an increase in specific reserves in the commercial real estate and operating loan portfolios. The recovery in the third quarter 2025 was on a commercial loan relationship that was charged off in the second quarter of 2025.
Previous wording
Noninterest income for the three months ended June 30, 2025 totaled $2.64 million compared to $2.62 million for the three months ended June 30, 2024, an increase of 0.8%.
Current wording
Noninterest income for the three months ended September 30, 2025 totaled $2.5 million compared to $2.4 million for the three months ended September 30, 2024, an increase of 5.0%. The increase is primarily due to an increase in wealth management income due to growth in assets under management and new account relationships.
Previous wording
Noninterest expense for the three months ended June 30, 2025 totaled $10.4 million compared to $10.7 million recorded for the three months ended June 30, 2024, a decrease of 3.5%. The decrease in noninterest expense is primarily due to $300 thousand of consultant fees for certain contract negations completed in 2024. The efficiency ratio was 64.34% for the second quarter of 2025 as compared to 79.61% in the second quarter of 2024. The efficiency ratio continues to improve as net interest margin increases and noninterest expense is lower than the prior year.
Current wording
Noninterest expense for the three months ended September 30, 2025 totaled $10.2 million compared to $10.5 million recorded for the three months ended September 30, 2024, a decrease of 2.5%. The decrease in noninterest expense is primarily due to $449 thousand of consultant fees for certain contract negations completed in 2024. The efficiency ratio was 61.76% for the third quarter of 2025 as compared to 77.87% in the third quarter of 2024. The efficiency ratio continues to improve as net interest margin increases and noninterest expense is lower than the prior year.
Previous wording
Income tax expense for the three months ended June 30, 2025 totaled $1.1 million compared to $385 thousand recorded for the three months ended June 30, 2024. The effective tax rate was 20% and 15% for the three months ended June 30, 2025 and 2024. The lower than expected tax rate in 2025 and 2024 was due primarily to tax-exempt interest income and New Markets Tax Credits.
Current wording
Income tax expense for the three months ended September 30, 2025 totaled $1.2 million compared to $397 thousand recorded for the three months ended September 30, 2024. The effective tax rate was 20% and 15% for the three months ended September 30, 2025 and 2024. The lower than expected tax rate in 2025 and 2024 was due primarily to tax-exempt interest income and New Markets Tax Credits.
Previous wording
Income Statement Review for the Six Months ended June 30, 2025 and 2024
Current wording
Income Statement Review for the Nine Months ended September 30, 2025 and 2024
Previous wording
The following highlights a comparative discussion of the major components of net income and their impact for the six months ended June 30, 2025 and 2024:
Current wording
The following highlights a comparative discussion of the major components of net income and their impact for the nine months ended September 30, 2025 and 2024:
Previous wording
For the six months ended June 30, 2025 and 2024, the Company's net interest margin adjusted for tax exempt income was 2.59% and 2.14%, respectively. Net interest income, prior to the adjustment for tax-exempt income, for the six months ended June 30, 2025 totaled $26.4 million compared to $21.8 million for the six months ended June 30, 2024.
Current wording
For the nine months ended September 30, 2025 and 2024, the Company's net interest margin adjusted for tax exempt income was 2.67% and 2.16%, respectively. Net interest income, prior to the adjustment for tax-exempt income, for the nine months ended September 30, 2025 totaled $40.4 million compared to $32.9 million for the nine months ended September 30, 2024.
Previous wording
For the six months ended June 30, 2025, interest income increased $2.0 million, or 4.8%, when compared to the same period in 2024. The increase is primarily due to improved yield in the loan portfolio and higher average balances in interest-bearing deposits with banks and federal funds sold.
Current wording
For the nine months ended September 30, 2025, interest income increased $3.1 million, or 5.0%, when compared to the same period in 2024. The increase is primarily due to improved yield in the loan portfolio and higher average balances in interest-bearing deposits with banks and federal funds sold.
Previous wording
Interest expense decreased $2.7 million, or 14.0%, for the six months ended June 30, 2025 when compared to the same period in 2024. The lower interest expense for the period is primarily due to reduced borrowings and a decrease in market rates.
Current wording
Interest expense decreased $4.5 million, or 15.7%, for the nine months ended September 30, 2025 when compared to the same period in 2024. The lower interest expense for the period is primarily due to reduced borrowings and a decrease in market rates.
Previous wording
A credit loss expense of $1.1 million was recognized for the six months ended June 30, 2025 as compared to $351 thousand for the six months ended June 30, 2024. Net loan charge-offs for the six months ended June 30, 2025 totaled $1.2 million compared to net loan recoveries of $4 thousand for the six months ended June 30, 2024. The credit loss expense in 2025 was primarily due to charge-offs in the commercial loan portfolio.
Current wording
A credit loss expense of $1.7 million was recognized for the nine months ended September 30, 2025 as compared to $722 thousand for the nine months ended September 30, 2024. Net loan charge-offs for the nine months ended September 30, 2025 totaled $812 thousand compared to net loan charge-offs of $6 thousand for the nine months ended September 30, 2024. The credit loss expense in 2025 was primarily due to an increase in specific reserves in the commercial real estate and operating loan portfolios. The charge-offs in 2025 were primarily related to one commercial loan relationship.
Previous wording
Noninterest income for the six months ended June 30, 2025 totaled $5.2 million compared to $4.8 million for the six months ended June 30, 2024, an increase of 8.2%. The increase in noninterest income is primarily due to an increase in wealth management income due to growth in assets under management and new account relationships.
Current wording
Noninterest income for the nine months ended September 30, 2025 totaled $7.7 million compared to $7.2 million for the nine months ended September 30, 2024, an increase of 7.1%. The increase in noninterest income is primarily due to an increase in wealth management income due to growth in assets under management and new account relationships.
Previous wording
Noninterest expense for the six months ended June 30, 2025 totaled $20.6 million compared to $20.9 million recorded for the six months ended June 30, 2024, a decrease of 1.5%. The decrease in noninterest expense is primarily due to $350 thousand of consultant fees for certain contract negotiations completed in 2024. The efficiency ratio was 65.34% for the six months ended June 30, 2025, as compared to 78.78% for the six months ended June 30, 2024. The efficiency ratio continues to improve as net interest margin increases and noninterest expense is lower than the prior year.
Current wording
Noninterest expense for the nine months ended September 30, 2025 totaled $30.9 million compared to $31.4 million recorded for the nine months ended September 30, 2024, a decrease of 1.8%. The decrease in noninterest expense is primarily due to $799 thousand of consultant fees for certain contract negotiations completed in 2024. The efficiency ratio was 64.10% for the nine months ended September 30, 2025, as compared to 78.47% for the nine months ended September 30, 2024. The efficiency ratio continues to improve as net interest margin increases and noninterest expense is lower than the prior year.
Previous wording
Income tax expense for the six months ended June 30, 2025 totaled $1.9 million compared to $801 thousand recorded for the six months ended June 30, 2024. The effective tax rate was 19% and 15% for the six months ended June 30, 2025 and 2024. The lower than expected tax rate in 2025 and 2024 was due primarily to tax-exempt interest income and New Markets Tax Credits.
Current wording
Income tax expense for the nine months ended September 30, 2025 totaled $3.1 million compared to $1.2 million recorded for the nine months ended September 30, 2024. The effective tax rate was 20% and 15% for the nine months ended September 30, 2025 and 2024. The lower than expected tax rate in 2025 and 2024 was due primarily to tax-exempt interest income and New Markets Tax Credits.
Previous wording
As of June 30, 2025, total assets were $2.1 billion, a $40.3 million decrease compared to December 31, 2024. This decrease in assets is primarily due to a decrease in the loan portfolio and interest-bearing deposits in financial institutions and federal funds sold.
Current wording
As of September 30, 2025, total assets were $2.1 billion, a $25.2 million decrease compared to December 31, 2024. This decrease in assets is primarily due to a decrease in the loan portfolio.
Previous wording
The investment portfolio totaled $644.7 million as of June 30, 2025, a decrease of $3.8 million from the December 31, 2024 balance of $648.5 million. The decrease in securities available-for-sale is primarily due to maturities in excess of purchases, offset in part by a decrease in unrealized losses.
Current wording
The investment portfolio totaled $650.7 million as of September 30, 2025, an increase of $2.2 million from the December 31, 2024 balance of $648.5 million. The increase in securities available-for-sale is primarily due to lower unrealized losses in the investment portfolio and partially offset by maturities in excess of purchases.
Previous wording
On a quarterly basis, the investment portfolio is reviewed for credit losses. As of June 30, 2025, gross unrealized losses of $35.6 million, are due to the interest rate environment and are not considered credit-related. Certain bonds in the investment portfolio may incur credit losses and could negatively affect the Company’s net income. As a result of the Company’s favorable liquidity position, the Company does not have the intent to sell securities with an unrealized loss at the present time. In addition, management believes it is more likely than not that the Company will hold these securities until recovery of their fair value to cost basis and expects full principal and interest to be collected. Therefore, the Company does not have an allowance for credit losses on these investments as of June 30, 2025.
Current wording
On a quarterly basis, the investment portfolio is reviewed for credit losses. As of September 30, 2025, gross unrealized losses of $29.6 million, are due to the interest rate environment and are not considered credit-related. Certain bonds in the investment portfolio may incur credit losses and could negatively affect the Company’s net income. As a result of the Company’s favorable liquidity position, the Company does not have the intent to sell securities with an unrealized loss at the present time. In addition, management believes it is more likely than not that the Company will hold these securities until recovery of their fair value to cost basis and expects full principal and interest to be collected. Therefore, the Company does not have an allowance for credit losses on these investments as of September 30, 2025.
Previous wording
Deposits totaled $1.82 billion and $1.85 billion as of June 30, 2025 and December 31, 2024, respectively. The decrease is primarily due to a decrease in noninterest-bearing checking accounts and partially offset by increases in interest-bearing checking and time deposits as customers seek higher interest rates. Securities sold under agreements to repurchase decreased to $40.1 million as of June 30, 2025 compared to $52.4 million as of December 31, 2024. Securities sold under agreements to repurchase and deposit balances fluctuate as customers’ liquidity needs vary and could be impacted by prevailing market interest rates, competition, and economic conditions. Approximately 14% of deposits are tied to external indexes as of June 30, 2025. Deposit interest expense related to these deposits can be more volatile than other deposit products in a changing interest rate environment.
Current wording
Deposits totaled $1.83 billion and $1.85 billion as of September 30, 2025 and December 31, 2024, respectively. The decrease is primarily due to a decrease in noninterest-bearing checking accounts and partially offset by increases in public funds and time deposits as customers seek higher interest rates. Securities sold under agreements to repurchase decreased to $40.6 million as of September 30, 2025 compared to $52.4 million as of December 31, 2024. Securities sold under agreements to repurchase and deposit balances fluctuate as customers’ liquidity needs vary and could be impacted by prevailing market interest rates, competition, and economic conditions. Approximately 16% of deposits are tied to external indexes as of September 30, 2025. Deposit interest expense related to these deposits can be more volatile than other deposit products in a changing interest rate environment.
Previous wording
Other borrowings decreased to $30.7 million as of June 30, 2025 compared to $47.0 million as of December 31, 2024. The Company has continued to reduce borrowings as debt has matured.
Current wording
Other borrowings decreased to $23.5 million as of September 30, 2025 compared to $47.0 million as of December 31, 2024. The Company has continued to reduce borrowings as debt has matured.
Previous wording
The Company’s credit risk is historically centered in the loan portfolio, which totaled $1.28 billion and $1.30 billion as of June 30, 2025 and December 31, 2024, respectively. Net loans comprise 61% of total assets as of June 30, 2025. The objective in managing loan portfolio risk is to reduce the risk of loss resulting from a customer’s failure to perform according to the terms of an agreement and to quantify and manage credit risk on a portfolio basis. The Company’s level of problem loans (consisting of nonaccrual loans and loans past due 90 days or more) as a percentage of total loans was 1.47% at June 30, 2025, as compared to 1.17% at December 31, 2024. The Company’s level of problem loans as a percentage of total loans at June 30, 2025 of 1.47% is higher as compared to the Iowa State Average peer group of FDIC insured institutions as of March 31, 2025, of 0.57%, most recent available.
Current wording
The Company’s credit risk is historically centered in the loan portfolio, which totaled $1.28 billion and $1.30 billion as of September 30, 2025 and December 31, 2024, respectively. Net loans comprise 61% of total assets as of September 30, 2025. The objective in managing loan portfolio risk is to reduce the risk of loss resulting from a customer’s failure to perform according to the terms of an agreement and to quantify and manage credit risk on a portfolio basis. The Company’s level of problem loans (consisting of nonaccrual loans and loans past due 90 days or more) as a percentage of total loans was 1.51% at September 30, 2025, as compared to 1.17% at December 31, 2024. The Company’s level of problem loans as a percentage of total loans at September 30, 2025 of 1.51% is higher as compared to the Iowa State Average peer group of FDIC insured institutions as of June 30, 2025, of 0.66%, most recent available.
Previous wording
Substandard-Impaired loans totaled $18.4 million as of June 30, 2025 and have increased $4.2 million as compared to the substandard-impaired loans of $14.2 million as of December 31, 2024. The increase is primarily due to one relationship in the agricultural real estate and operating loan portfolios.
Current wording
Substandard-Impaired loans totaled $18.8 million as of September 30, 2025 and have increased $4.6 million as compared to the substandard-impaired loans of $14.2 million as of December 31, 2024. The increase is primarily due to weakening in the commercial real estate and agricultural loan portfolios. Some commercial real estate loans are experiencing a decline in occupancy rates and collateral valuation, while the agricultural portfolio was primarily impacted by one agricultural loan relationship.
Previous wording
Loans past due 90 days or more that are still accruing interest are reviewed no less frequently than quarterly to determine if there continues to be a strong reason that the credit should not be placed on nonaccrual. As of June 30, 2025, nonaccrual loans totaled $18.9 million and $133 thousand of loans past due 90 days and still accruing. This compares to nonaccrual loans of $14.8 million and $736 thousand of loans past due 90 days and still accruing as of December 31, 2024. There was $125 thousand other real estate owned as of June 30, 2025 and no other real estate owned as of December 31, 2024.
Current wording
Loans past due 90 days or more that are still accruing interest are reviewed no less frequently than quarterly to determine if there continues to be a strong reason that the credit should not be placed on nonaccrual. As of September 30, 2025, nonaccrual loans totaled $19.3 million and $174 thousand of loans past due 90 days and still accruing. This compares to nonaccrual loans of $14.8 million and $736 thousand of loans past due 90 days and still accruing as of December 31, 2024. There was $204 thousand other real estate owned as of September 30, 2025 and no other real estate owned as of December 31, 2024.
Previous wording
Loans past due 30 days or more totaled $11.8 million as of June 30, 2025, compared to $6.9 million as of December 31, 2024. The increase is primarily related to the agriculture operating and 1-4 family real estate loan portfolios.
Current wording
Loans past due 30 days or more totaled $10.3 million as of September 30, 2025, compared to $6.9 million as of December 31, 2024. The increase is primarily related to the 1-4 family real estate, construction real estate, and agriculture operating loan portfolios, partially offset by a decrease in the agriculture real estate loan portfolio.
Previous wording
The watch and special mention loans classified as agricultural real estate and operating totaled $35.4 million as of June 30, 2025 as compared to $30.9 million as of December 31, 2024. The substandard and substandard-impaired loans in these categories totaled $6.4 million and $5.2 million as of June 30, 2025 and December 31, 2024, respectively. The increase is primarily due to variable yields, weather impacts and commodity prices affecting agricultural loans.
Current wording
The watch and special mention loans classified as agricultural real estate and operating totaled $36.3 million as of September 30, 2025 as compared to $30.9 million as of December 31, 2024. The substandard and substandard-impaired loans in these categories totaled $4.8 million and $5.2 million as of September 30, 2025 and December 31, 2024, respectively. The increase in watch and special mention loans is primarily due to variable yields, weather impacts and commodity prices affecting agricultural loans.
Previous wording
The watch and special mention loans classified as commercial real estate totaled $40.0 million as of June 30, 2025 as compared to $40.3 million as of December 31, 2024. The substandard and substandard-impaired commercial real estate loans totaled $30.5 million and $35.6 million as of June 30, 2025 and December 31, 2024, respectively. The decrease is primarily due to payoffs of substandard and substandard-impaired loans.
Current wording
The watch and special mention loans classified as commercial real estate totaled $37.8 million as of September 30, 2025 as compared to $40.3 million as of December 31, 2024. The substandard and substandard-impaired commercial real estate loans totaled $30.1 million and $35.6 million as of September 30, 2025 and December 31, 2024, respectively. The decrease is primarily due to payoffs of substandard and substandard-impaired loans.
Previous wording
The allowance for credit losses as a percentage of outstanding loans as of June 30, 2025 was 1.31%, as compared to 1.29% at December 31, 2024. The allowance for credit losses totaled $17.0 million and $17.1 million as of June 30, 2025 and December 31, 2024, respectively. The decrease in the allowance for credit losses is primarily due to a decrease in loan balances.
Current wording
The allowance for credit losses as a percentage of outstanding loans as of September 30, 2025 was 1.39%, as compared to 1.29% at December 31, 2024. The allowance for credit losses totaled $18.0 million and $17.1 million as of September 30, 2025 and December 31, 2024, respectively. The increase in the allowance for credit losses is primarily due to an increase in specific reserves.
Previous wording
Liquid assets of cash on hand, balances due from other banks and interest-bearing deposits in financial institutions as of June 30, 2025 and December 31, 2024 totaled $95.2 million and $101.2 million, respectively, and management believes these sources provide an adequate level of liquidity given current economic conditions.
Current wording
Liquid assets of cash on hand, balances due from other banks and interest-bearing deposits in financial institutions as of September 30, 2025 and December 31, 2024 totaled $108.2 million and $101.2 million, respectively, and management believes these sources provide an adequate level of liquidity given current economic conditions.
Previous wording
Other sources of liquidity available to the Banks as of June 30, 2025 include outstanding lines of credit with the FHLB of Des Moines, Iowa of $235.7 million, with $27.5 million of outstanding FHLB advances. Federal funds borrowing capacity at correspondent banks was $97.2 million, with no outstanding federal fund purchase balances as of June 30, 2025. The Company had securities sold under agreements to repurchase totaling $40.1 million as of June 30, 2025.
Current wording
Other sources of liquidity available to the Banks as of September 30, 2025 include outstanding lines of credit with the FHLB of Des Moines, Iowa of $271.2 million, with $21.5 million of outstanding FHLB advances. Federal funds borrowing capacity at correspondent banks was $97.2 million, with no outstanding federal fund purchase balances as of September 30, 2025. The Company had securities sold under agreements to repurchase totaling $40.6 million as of September 30, 2025.
Previous wording
Total investments as of June 30, 2025 were $644.7 million compared to $648.5 million as of December 31, 2024. These investments provide the Company with liquidity since all of the investments are classified as available-for-sale as of June 30, 2025. The Company has $354.6 million of unpledged securities available-for-sale and interest-bearing deposits as of June 30, 2025. The investment portfolio serves an important role in the overall context of balance sheet management in terms of balancing capital utilization and liquidity. The decision to purchase or sell securities is based upon the current assessment of economic and financial conditions, including the interest rate environment, liquidity and credit considerations. The portfolio’s scheduled maturities and payments represent a significant source of liquidity.
Current wording
Total investments as of September 30, 2025 were $650.7 million compared to $648.5 million as of December 31, 2024. These investments provide the Company with liquidity since all of the investments are classified as available-for-sale as of September 30, 2025. The Company has $360.9 million of unpledged securities available-for-sale and interest-bearing deposits as of September 30, 2025. The investment portfolio serves an important role in the overall context of balance sheet management in terms of balancing capital utilization and liquidity. The decision to purchase or sell securities is based upon the current assessment of economic and financial conditions, including the interest rate environment, liquidity and credit considerations. The portfolio’s scheduled maturities and payments represent a significant source of liquidity.
Previous wording
Net cash provided by operating activities for the six months ended June 30, 2025 totaled $11.1 million compared to $5.3 million for the six months ended June 30, 2024. The increase of $5.8 million in cash provided by operating activities was primarily due to higher net interest income.
Current wording
Net cash provided by operating activities for the nine months ended September 30, 2025 totaled $13.9 million compared to $8.4 million for the nine months ended September 30, 2024. The increase of $5.5 million in cash provided by operating activities was primarily due to higher net interest income.
Previous wording
Net cash provided by investing activities for the six months ended June 30, 2025 was $43.4 million compared to $36.6 million for the six months ended June 30, 2024. The increase of $6.8 million in cash provided by investing activities was primarily due to maturities of securities-available-for-sale and a decrease in loans, partially offset by purchases of securities available-for-sale.
Current wording
Net cash provided by investing activities for the nine months ended September 30, 2025 was $48.4 million compared to $51.6 million for the nine months ended September 30, 2024. The decrease of $3.2 million in cash provided by investing activities was primarily due to purchases of securities available-for-sale, partially offset by a decrease in loans and maturities of securities-available-for-sale.
Previous wording
Net cash (used in) financing activities for the six months ended June 30, 2025 totaled ($60.5) million compared to ($33.6) million for the six months ended June 30, 2024. The increase of $26.9 million in cash used by financing activities was primarily due to a decrease in deposits, partially offset by a decrease in net payments on other borrowings between periods. As of June 30, 2025, the Company did not have any external debt financing, off-balance sheet financing arrangements, or derivative instruments linked to its stock.
Current wording
Net cash (used in) financing activities for the nine months ended September 30, 2025 totaled ($55.4) million compared to ($56.1) million for the nine months ended September 30, 2024. The decrease of $725 thousand in cash used by financing activities was primarily due to a decrease in net payments on other borrowings between periods, partially offset by a larger decrease in deposits. As of September 30, 2025, the Company did not have any external debt financing, off-balance sheet financing arrangements, or derivative instruments linked to its stock.
Previous wording
The Company’s liquidity on an unconsolidated basis is heavily dependent upon dividends paid to the Company by the Banks. The Banks provide adequate liquidity to pay the Company’s expenses and stockholder dividends. Dividends paid by the Banks to the Company amounted to $6.4 million and $5.3 million for the six months ended June 30, 2025 and 2024, respectively. Various federal and state statutory provisions limit the amounts of dividends banking subsidiaries are permitted to pay to their holding companies without regulatory approval. Federal Reserve policy further limits the circumstances under which bank holding companies may declare dividends. For example, a bank holding company should not continue its existing rate of cash dividends on its common stock unless its net income is sufficient to fully fund each dividend and its prospective rate of earnings retention appears consistent with its capital needs, asset quality and overall financial condition. In addition, the Federal Reserve and the FDIC have issued policy statements, which provide that insured banks and bank holding companies should generally pay dividends only out of current operating earnings. Federal and state banking regulators may also restrict the payment of dividends by order.
Current wording
The Company’s liquidity on an unconsolidated basis is heavily dependent upon dividends paid to the Company by the Banks. The Banks provide adequate liquidity to pay the Company’s expenses and stockholder dividends. Dividends paid by the Banks to the Company amounted to $9.7 million and $7.9 million for the nine months ended September 30, 2025 and 2024, respectively. Various federal and state statutory provisions limit the amounts of dividends banking subsidiaries are permitted to pay to their holding companies without regulatory approval. Federal Reserve policy further limits the circumstances under which bank holding companies may declare dividends. For example, a bank holding company should not continue its existing rate of cash dividends on its common stock unless its net income is sufficient to fully fund each dividend and its prospective rate of earnings retention appears consistent with its capital needs, asset quality and overall financial condition. In addition, the Federal Reserve and the FDIC have issued policy statements, which provide that insured banks and bank holding companies should generally pay dividends only out of current operating earnings. Federal and state banking regulators may also restrict the payment of dividends by order.
Previous wording
The Company, on an unconsolidated basis, has interest-bearing deposits totaling $2.1 million as of June 30, 2025.
Current wording
The Company, on an unconsolidated basis, has interest-bearing deposits totaling $2.3 million as of September 30, 2025.
Previous wording
The Company’s total stockholders’ equity as of June 30, 2025 totaled $193.0 million and was $18.3 million higher than the $174.7 million recorded as of December 31, 2024. The increase in stockholders’ equity was primarily the result of a decrease in unrealized losses on the investment portfolio and the retention of net income in excess of dividends. At June 30, 2025 and December 31, 2024, stockholders’ equity as a percentage of total assets was 9.2% and 8.2%, respectively. The capital levels of the Company currently exceed applicable regulatory guidelines to be considered “well capitalized” as of June 30, 2025. Unrealized losses on the investment portfolio are excluded from regulatory capital.
Current wording
The Company’s total stockholders’ equity as of September 30, 2025 totaled $200.6 million and was $25.9 million higher than the $174.7 million recorded as of December 31, 2024. The increase in stockholders’ equity was primarily the result of a decrease in unrealized losses on the investment portfolio and the retention of net income in excess of dividends. At September 30, 2025 and December 31, 2024, stockholders’ equity as a percentage of total assets was 9.5% and 8.2%, respectively. The capital levels of the Company currently exceed applicable regulatory guidelines to be considered “well capitalized” as of September 30, 2025. Unrealized losses on the investment portfolio are excluded from regulatory capital.