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1. Company Snapshot

1.a. Company Description

Ames National Corporation operates as a multi-bank holding company that provides banking products and services primarily in Boone, Clarke, Hancock, Marshall, Polk, Story, and Union counties in central, north-central, and south-central Iowa.The company accepts a range of deposits, including checking and savings accounts; and time deposits, such as money market accounts and certificates of deposit.It also provides loans, such as short-term and medium-term commercial and agricultural real estate, residential real estate loans, equipment, vehicle, and home improvement loans; personal loans and lines of credit; agricultural and business operating loans and lines of credit; and originates mortgage loans for sale into the secondary market.


In addition, the company offers cash management, merchant credit card processing, safe deposit box, wire transfer, direct deposit of payroll and social security check, and automated/video teller machine access services; and automatic drafts for various accounts, as well as wealth management services.Further, it provides farm management, investment, and custodial services for individuals, businesses, and non-profit organizations; and online, mobile, and private banking services.Ames National Corporation was founded in 1903 and is based in Ames, Iowa.

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1.b. Last Insights on ATLO

Ames National's recent performance has been positively influenced by its strong capital position and conservative loan-to-deposit ratio, which support short-term stability. The company's recent improvements in efficiency and profitability are also encouraging. Additionally, its dividend yield of 4.2% is attractive, according to a recent analysis. Institutional ownership stands at 26.5%, indicating a stable shareholder base. Comparisons with peers, such as Lakeland Financial and Mercantile Bank, highlight Ames National's competitive positioning in terms of profitability and valuation.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Head to Head Contrast: Ames National (NASDAQ:ATLO) & Mercantile Bank (NASDAQ:MBWM)

Oct -26

Source: defenseworld.net

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Analyzing Lakeland Financial (NASDAQ:LKFN) & Ames National (NASDAQ:ATLO)

Oct -22

Source: defenseworld.net

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Ames National: Appealing Yield But Risky Income Play, Hold

Aug -20

Source: seekingalpha.com

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Ames National Grows Income in Q2

Jul -21

Source: fool.com

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Ames National: Market's Overreaction To Dividend Cut Creates Opportunity (Rating Upgrade)

Jan -08

Source: seekingalpha.com

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Dividend Champion, Contender, And Challenger Highlights: Week Of April 9

Apr -09

Source: Seeking Alpha

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Ames National: Reliable Income Stream From A Small Community Bank

Jan -25

Source: Seeking Alpha

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Ames National: High Dividend Yield, Positive Earnings Outlook For Next Year

Sep -11

Source: Seeking Alpha

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Commercial Banking

Expected Growth: 4.5%

The commercial banking segment is expected to grow driven by increasing demand for cash management, lending, and treasury services among businesses, as well as Ames National Corporation's strategic expansion into new markets and digitalization of services.

7. Detailed Products

Commercial Loans

Ames National Corporation offers commercial loans to businesses of all sizes, providing financing for various business needs such as expansion, equipment purchases, and working capital.

Agricultural Loans

The corporation offers agricultural loans to farmers and ranchers, providing financing for land, equipment, and operating expenses.

Mortgage Loans

Ames National Corporation offers mortgage loans to individuals and families, providing financing for home purchases, refinancing, and construction projects.

Consumer Loans

The corporation offers consumer loans to individuals, providing financing for personal expenses, debt consolidation, and other financial needs.

Deposit Services

Ames National Corporation offers a range of deposit services, including checking and savings accounts, certificates of deposit, and individual retirement accounts.

Treasury Management Services

The corporation offers treasury management services, including cash management, wire transfers, and account reconciliation.

Trust and Investment Services

Ames National Corporation offers trust and investment services, including investment management, trust administration, and retirement plan services.

8. Ames National Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Ames National Corporation is medium due to the availability of alternative banking services and products.

Bargaining Power Of Customers

The bargaining power of customers for Ames National Corporation is low due to the lack of concentration of buyers and the availability of multiple banking options.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Ames National Corporation is medium due to the moderate concentration of suppliers and the availability of alternative suppliers.

Threat Of New Entrants

The threat of new entrants for Ames National Corporation is high due to the low barriers to entry and the attractiveness of the banking industry.

Intensity Of Rivalry

The intensity of rivalry for Ames National Corporation is high due to the high level of competition in the banking industry and the presence of multiple competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 49.82%
Debt Cost 3.95%
Equity Weight 50.18%
Equity Cost 6.76%
WACC 5.36%
Leverage 99.27%

11. Quality Control: Ames National Corporation passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Guaranty Bancshares

A-Score: 7.2/10

Value: 4.9

Growth: 5.6

Quality: 7.8

Yield: 8.0

Momentum: 9.5

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Ames National

A-Score: 6.9/10

Value: 7.2

Growth: 3.6

Quality: 6.2

Yield: 8.0

Momentum: 7.5

Volatility: 8.7

1-Year Total Return ->

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FirstBank

A-Score: 6.2/10

Value: 6.4

Growth: 6.7

Quality: 5.9

Yield: 4.0

Momentum: 6.0

Volatility: 8.3

1-Year Total Return ->

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Eagle Bancorp Montana

A-Score: 6.1/10

Value: 6.9

Growth: 5.2

Quality: 3.4

Yield: 6.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

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Pathward Financial

A-Score: 5.7/10

Value: 8.7

Growth: 4.2

Quality: 8.2

Yield: 0.0

Momentum: 5.0

Volatility: 8.0

1-Year Total Return ->

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HomeStreet

A-Score: 4.6/10

Value: 9.4

Growth: 1.9

Quality: 3.8

Yield: 3.0

Momentum: 4.0

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

22.08$

Current Price

22.08$

Potential

-0.00%

Expected Cash-Flows