What changed in AMES NATIONAL CORP's 2024 10-K compared to 2023?

Across the narrative sections we track, AMES NATIONAL CORP (ATLO) added 193 paragraphs, removed 194, and edited 175 between the 2023 and 2024 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+104/−104), Item 1. Business (+50/−51), Item 1A. Risk Factors (+26/−25).

Did AMES NATIONAL CORP add new Risk Factors in the 2024 10-K?

Yes — Item 1A Risk Factors shows 26 new/edited paragraphs and 25 removed paragraphs versus the 2023 10-K.

What changed in AMES NATIONAL CORP's MD&A (Item 7) in 2024?

Item 7 Management's Discussion & Analysis shows 104 new/edited paragraphs and 104 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did AMES NATIONAL CORP's Legal Proceedings (Item 3) change in 2024?

Item 3 shows 2 added/edited paragraphs and 2 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this ATLO 10-K diff come from?

The source filings are AMES NATIONAL CORP's official 2023 and 2024 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in AMES NATIONAL CORP's 10-K — 2023 vs 2024

Paragraph-level year-over-year comparison of AMES NATIONAL CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+193 added−194 removedSource: 10-K (2025-03-12) vs 10-K (2024-03-08)

Top changes in AMES NATIONAL CORP's 2024 10-K

193 paragraphs added · 194 removed · 175 edited across 7 sections

Item 7. Management's Discussion & Analysis+104 / −104 · 90 edited
Item 1. Business+50 / −51 · 50 edited
Item 1A. Risk Factors+26 / −25 · 23 edited
Item 5. Market for Registrant's Common Equity+8 / −8 · 8 edited
Item 2. Properties+3 / −3 · 3 edited

Item 1. Business

Business — how the company describes what it does

50 edited+0 added−1 removed144 unchanged

2023 filing

2024 filing

Biggest changeAll directors serving on Board committees are independent under NASDAQ governance standards. The Company has established an age limitation policy for directors. Three of the eleven directors are female. All directors own Company stock and in their capacities as directors of the Banks participated in the Director Stock Incentive Plan adopted by each of the Banks.

Biggest changeThree of the eleven directors are female. All directors own Company stock and participate in the Director Stock Incentive Plan adopted by each of the Banks if they serve as a director of one of the Banks. The Company CEO is excluded from the Director Stock Incentive Plan. Certain transactions in Company stock are prohibited, including short-selling and hedging.

As of December 31, 2023, the Banks exceeded all of their regulatory capital requirements and were designated as “well capitalized” under federal guidelines. See Note 15 to the “Notes to Consolidated Financial Statements,” which is included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Prompt Corrective Action.

As of December 31, 2024, the Banks exceeded all of their regulatory capital requirements and were designated as “well capitalized” under federal guidelines. See Note 15 to the “Notes to Consolidated Financial Statements,” which is included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Prompt Corrective Action.

The Company has established credit guidelines for the Banks’ lending portfolios which include guidelines relating to the more commonly requested loan types, as follows: Commercial Real Estate Loans - Commercial real estate loans, including agricultural real estate loans, are normally based on loan to appraisal value ratios that do not exceed 80% and are secured by a first priority lien position.

The Company has established credit guidelines for the Banks’ lending portfolios which include guidelines relating to the more commonly requested loan types, as follows: Commercial Real Estate Loans - Commercial real estate loans, including multi-family and agricultural real estate, are normally based on loan to appraisal value ratios that do not exceed 80% and are secured by a first priority lien position.

In addition to competitive base wages, the Company provides its employees with a comprehensive program of benefits, including comprehensive medical, vision and dental plans, long-term and short-term disability coverage, employee assistance programs, a 401(k) profit sharing plan, and a cash bonus based on bank performance. Our approach also produces longevity in our workforce.

In addition to competitive base wages, the Company provides its employees with a comprehensive program of benefits, including comprehensive medical, vision and dental plans, long-term and short-term disability coverage, employee assistance programs, a 401(k) plan, and a cash bonus based on bank performance. Our approach also produces longevity in our workforce.

The major employers in the Des Moines metro market are Principal Financial Group, Wells Fargo, UnityPoint Health, MercyOne Medical, Nationwide Insurance, Amazon, Hy-Vee Food Inc. and John Deere. First National maintains two offices in Osceola, Iowa with a population of 5,500. Osceola is the county seat of Clarke County.

The major employers in Clarke County are Hormel Foods, Miller Products Co., SIMCO Drilling Equipment, Inc., Clarke County Hospital, and Lakeside Casino. Loan services primarily include commercial and consumer types of credit, including operating lines, equipment loans and real estate loans. Boone Bank is located in Boone, Iowa with a population of 12,500.

The major employers are Story County Medical Center, Mid-American Manufacturing, Mid-States Millwright & Builders, Inc., Burke Corporation and Almaco. State Bank provides various types of loans with a major agricultural presence. Reliance Bank is headquartered in Story City, Iowa with a population of 3,400. The major employers in the Story City area are Bethany Manor, American Packaging, M.H.

The major employers are Story County Medical Center, Mid-States Millwright & Builders, Inc., Burke Corporation, Almaco and Verbio. State Bank provides various types of loans with a major agricultural presence. Reliance Bank is headquartered in Story City, Iowa with a population of 3,400. The major employers in the Story City area are Bethany Manor, American Packaging, M.H.

Such plans must require that any company that controls the undercapitalized institution must provide certain guarantees that the institution will comply with the plan until it is adequately capitalized. As of December 31, 2023, each of the Banks was categorized as “well capitalized” under regulatory prompt corrective action provisions. Restrictions on Dividends.

Such plans must require that any company that controls the undercapitalized institution must provide certain guarantees that the institution will comply with the plan until it is adequately capitalized. As of December 31, 2024, each of the Banks was categorized as “well capitalized” under regulatory prompt corrective action provisions. Restrictions on Dividends.

Eby, Inc. and Record Printing. The Bank also maintains an office in Garner, Iowa with a population of 3,100. Garner is the county seat of Hancock County. The major employers in the Garner area are Iowa Mold & Tooling and Stellar Industries. All locations are in agricultural areas and the Bank has a strong presence in this type of lending.

Eby, Inc. and Record Printing. The Bank also maintains an office in Garner, Iowa with a population of 3,000. Garner is the county seat of Hancock County. The major employers in the Garner area are Iowa Mold & Tooling and Stellar Industries. All locations are in agricultural areas and the Bank has a strong presence in this type of lending.

Loan services include primarily commercial and consumer types of credit including operating lines, equipment loans and real estate loans. Iowa State Bank is headquartered in Union County in Creston, Iowa with a population of 7,500. Iowa State Bank has one additional office in Creston and an additional office located in Taylor County in Lenox, Iowa with a population of 1,500.

Loan services include primarily commercial and consumer types of credit including operating lines, equipment loans and real estate loans. Iowa State Bank is headquartered in Union County in Creston, Iowa with a population of 7,400. Iowa State Bank has one additional office in Creston and an additional office located in Taylor County in Lenox, Iowa with a population of 1,400.

These loans are secured by a junior mortgage on the residential real estate and normally do not exceed a loan-to-market value ratio of 90% with the interest adjusted quarterly. Residential first mortgage loans, home equity term loans and home equity lines of credit represent approximately 22% of the loan portfolio.

The annual indexation of the reserve requirement exemption amount and the low reserve tranche for 2023 is required by statute but will not affect depository institutions' reserve requirements, which will remain zero. Currently the Board has no plans to re-impose reserve requirements but retains the right to do so.

The annual indexation of the reserve requirement exemption amount and the low reserve tranche for 2024 is required by statute but will not affect depository institutions' reserve requirements, which will remain zero. Currently the Board has no plans to re-impose reserve requirements but retains the right to do so.

Approximately 22% of the loan portfolio consists of loans made for 1-4 family residential purposes. 6 Consumer Loans. Consumer loans are typically available to finance consumer purchases, such as automobiles, household furnishings and boats. These loans are made on both a secured and an unsecured basis. Approximately 1% of the loan portfolio consists of loans made for consumer purposes.

Approximately 23% of the loan portfolio consists of loans made for 1-4 family residential purposes. 6 Consumer Loans. Consumer loans are typically available to finance consumer purchases, such as automobiles, household furnishings and boats. These loans are made on both a secured and an unsecured basis. Approximately 1% of the loan portfolio consists of loans made for consumer purposes.

There are no employment contracts between the Company and any of its employees as of December 31, 2023. As part of our compensation philosophy, we believe that we must offer and maintain market competitive compensation and benefit programs for our employees in order to attract and retain talent.

There are no employment contracts between the Company and any of its employees as of December 31, 2024. As part of our compensation philosophy, we believe that we must offer and maintain market competitive compensation and benefit programs for our employees in order to attract and retain talent.

United Bank is located in Marshalltown, Iowa with a population of 27,500. The major employers are Iowa Veterans Home, Marshalltown School District, JBS Swift & Co., Emerson Process Management/Fisher Division, Lennox Industries and UnityPoint Health. Marshalltown is the county seat of Marshall County.

United Bank is located in Marshalltown, Iowa with a population of 27,600. The major employers are Iowa Veterans Home, Marshalltown School District, JBS Swift & Co., Emerson Process Management/Fisher Division, Lennox Industries and UnityPoint Health. Marshalltown is the county seat of Marshall County.

Loan-to-value ratios generally do not exceed 75% of the cost or value of the assets. Loans are normally guaranteed by the principal(s). Commercial and agricultural operating and term loans represent approximately 16% of the loan portfolio.

The Company’s investment portfolios are managed in accordance with a written investment policy adopted by the Board of Directors. It is the Company’s general policy to purchase investment securities which are U.S. Government securities, U.S. government agency, state and local government obligations, corporate debt securities and overnight federal funds.

The Company does not engage in any material business activities apart from its ownership of its banking subsidiaries and the management of its own loan portfolios. The principal executive offices of the Company are located at 405 5th Street, Ames, Iowa 50010. The Company’s telephone number is (515) 232-6251 and website address is www.amesnational.com.

The Company does not engage in any material business activities apart from its ownership of its banking subsidiaries and the management of its own loan portfolios. The principal executive offices of the Company are located at 323 Sixth Street, Ames, Iowa 50010. The Company’s telephone number is (515) 232-6251 and website address is www.amesnational.com.

First National is headquartered in Ames, Iowa with a population of 66,300. The major employers are Iowa State University, Ames Laboratory, Iowa Department of Transportation, Mary Greeley Medical Center, Ames Community Schools, City of Ames, Danfoss and McFarland Clinic. First National maintains three offices in the Des Moines metro area with a population of approximately 740,000.

First National is headquartered in Ames, Iowa with a population of 65,700. The major employers are Iowa State University, Ames Laboratory, Iowa Department of Transportation, Mary Greeley Medical Center, Ames Community Schools, City of Ames, Danfoss and McFarland Clinic. First National maintains three offices in the Des Moines metro area with a population of approximately 740,000.

Boone is the county seat of Boone County. The major employers are Fareway Stores, Inc., Iowa National Guard, Union Pacific Railroad, Boone County Hospital and CDS Global. Boone Bank provides lending services to the agriculture, commercial and real estate markets. State Bank is located in Nevada, Iowa with a population of 6,900. Nevada is the county seat of Story County.

The Presidents of the Banks and the human resources officers are responsible for compensation, recruitment, development and retention. The Company annually reviews a succession plan for key employees. The Company employs approximately 273 employees, of which 93% are full-time employees and the remaining 7% are part-time employees. Of the 273 employees, 127 employees were considered officers of the Company.

The Presidents of the Banks and the human resources officers are responsible for compensation, recruitment, development and retention. The Company annually reviews a succession plan for key employees. The Company employs approximately 268 employees, of which 93% are full-time employees and the remaining 7% are part-time employees. Of the 268 employees, 120 employees were considered officers of the Company.

Total assets as of December 31, 2023 and 2022 were approximately $254.7 million and $258.5 million, respectively. 5 Business Strategy and Operations As a multi-bank holding company for six community banks, the Company emphasizes strong personal relationships to provide products and services that meet the needs of the Banks’ customers.

Total assets as of December 31, 2024 and 2023 were approximately $270.3 million and $254.7 million, respectively. 5 Business Strategy and Operations As a multi-bank holding company for six community banks, the Company emphasizes strong personal relationships to provide products and services that meet the needs of the Banks’ customers.

Each of the Banks is in compliance with capital level requirements as of December 31, 2023. Basel III Capital Requirements.

Each of the Banks is in compliance with capital level requirements as of December 31, 2024. Basel III Capital Requirements.

The Banks compete for loans primarily by offering competitive interest rates, experienced local lending personnel and quality products and services. As of December 31, 2023, there were 48 FDIC insured institutions having approximately 126 locations within Boone, Clarke, Hancock, Marshall, Polk, Story, Taylor and Union County, Iowa where the Banks' offices are located.

The Banks compete for loans primarily by offering competitive interest rates, experienced local lending personnel and quality products and services. As of December 31, 2024, there were 49 FDIC insured institutions having approximately 125 locations within Boone, Clarke, Hancock, Marshall, Polk, Story, Taylor and Union County, Iowa where the Banks' offices are located.

While its primary emphasis is in agricultural lending, Iowa State Bank also provides the traditional lending services typically offered by community banks. It conducts business from its main office located in Creston and full-service offices located in Creston and Lenox. As of December 31, 2023, Iowa State Bank had capital of $23.4 million and 34 full-time equivalent employees.

While its primary emphasis is in agricultural lending, Iowa State Bank also provides the traditional lending services typically offered by community banks. It conducts business from its main office located in Creston and full-service offices located in Creston and Lenox. As of December 31, 2024, Iowa State Bank had capital of $24.3 million and 34 full-time equivalent employees.

Total assets as of December 31, 2023 and 2022 were approximately $313.3 million and $303.0 million, respectively. United Bank & Trust Co., Marshalltown, Iowa. United Bank is an Iowa, state-chartered, FDIC insured commercial bank. It was chartered as a national bank in 2002 and converted to a state charter in 2022.

Total assets as of December 31, 2024 and 2023 were approximately $307.5 million and $313.3 million, respectively. United Bank & Trust Co., Marshalltown, Iowa. United Bank is an Iowa, state-chartered, FDIC insured commercial bank. It was chartered as a national bank in 2002 and converted to a state charter in 2022.

First National, Boone Bank, State Bank, United Bank and Iowa State Bank offer wealth management services typically found in a commercial bank with trust powers, including the administration of estates, conservatorships, personal and corporate trusts and agency accounts. Assets under management amount to $416.0 million and $379.5 million as of December 31, 2023 and 2022, respectively.

First National, Boone Bank, State Bank, United Bank and Iowa State Bank offer wealth management services typically found in a commercial bank with trust powers, including the administration of estates, conservatorships, personal and corporate trusts and agency accounts. Assets under management amount to $456.3 million and $416.0 million as of December 31, 2024 and 2023, respectively.

It offers a broad range of deposit and loan products, as well as wealth management services to customers located in the Marshalltown and surrounding Marshall County area. It conducts business from its main office and a full-service office, both located in Marshalltown. As of December 31, 2023, United Bank had capital of $9.9 million and 18 full-time equivalent employees.

It offers a broad range of deposit and loan products, as well as wealth management services to customers located in the Marshalltown and surrounding Marshall County area. It conducts business from its main office and a full-service office, both located in Marshalltown. As of December 31, 2024, United Bank had capital of $10.6 million and 17 full-time equivalent employees.

Approximately 55% of the loan portfolio consists of loans made for commercial purposes.

Approximately 53% of the loan portfolio consists of loans made for commercial purposes.

First National had net income for the years ended December 31, 2023 and 2022 of approximately $5.5 million and $10.4 million, respectively. Total assets as of December 31, 2023 and 2022 were approximately $1.14 billion and $1.12 billion, respectively. State Bank & Trust Co., Nevada, Iowa. State Bank is an Iowa, state-chartered, FDIC insured commercial bank.

First National had net income for the years ended December 31, 2024 and 2023 of approximately $5.2 million and $5.5 million, respectively. Total assets as of December 31, 2024 and 2023 were approximately $1.11 billion and $1.14 billion, respectively. State Bank & Trust Co., Nevada, Iowa. State Bank is an Iowa, state-chartered, FDIC insured commercial bank.

It conducts business from its main office located in Story City and a full-service office located in Garner. As of December 31, 2023, Reliance Bank had capital of $23.8 million and 32 full-time equivalent employees. Reliance Bank had net income for the years ended December 31, 2023 and 2022 of approximately $1.7 million and $2.4 million, respectively.

It conducts business from its main office located in Story City and a full-service office located in Garner. As of December 31, 2024, Reliance Bank had capital of $24.9 million and 32 full-time equivalent employees. Reliance Bank had net income for the years ended December 31, 2024 and 2023 of approximately $1.9 million and $1.7 million, respectively.

United Bank had net income for the years ended December 31, 2023 and 2022 of approximately $1.0 million and $1.2 million, respectively. Total assets as of December 31, 2023 and 2022 were approximately $118.5 million and $129.8 million, respectively. Iowa State Savings Bank, Creston, Iowa. Iowa State Bank is an Iowa, state-chartered, FDIC insured commercial bank.

United Bank had net income for the years ended December 31, 2024 and 2023 of approximately $1.1 million and $1.0 million, respectively. Total assets as of December 31, 2024 and 2023 were approximately $130.3 million and $118.5 million, respectively. Iowa State Savings Bank, Creston, Iowa. Iowa State Bank is an Iowa, state-chartered, FDIC insured commercial bank.

It has an experienced staff of bank officers including many who have spent the majority of their banking careers with First National and who emphasize long-term customer relationships. 4 As of December 31, 2023, First National had capital of $84.8 million and 119 full-time equivalent employees.

It has an experienced staff of bank officers including many who have spent the majority of their banking careers with First National and who emphasize long-term customer relationships. 4 As of December 31, 2024, First National had capital of $89.7 million and 117 full-time equivalent employees.

It has a strong presence in agricultural, commercial and residential real estate lending. As of December 31, 2023, State Bank had capital of $15.2 million and 21 full-time equivalent employees. State Bank had net income for the years ended December 31, 2023 and 2022 of approximately $1.4 million and $2.6 million, respectively.

It has a strong presence in agricultural, commercial and residential real estate lending. As of December 31, 2024, State Bank had capital of $16.4 million and 21 full-time equivalent employees. State Bank had net income for the years ended December 31, 2024 and 2023 of approximately $933 thousand and $1.4 million, respectively.

Iowa State Bank had net income for year ended December 31, 2023 and 2022 of approximately $2.0 million and $2.3 million, respectively.

Iowa State Bank had net income for year ended December 31, 2024 and 2023 of approximately $2.0 million.

Thomas was appointed as president of United Bank on July 1, 2020. Michael A. Wilson was appointed as Chief Lending Officer on November 9, 2023. Name Age Position with the Company or Bank and Principal Occupation and Employment During the Past Five Years Scott T. Bauer 61 President and Director of First National. Dan E.

Thomas was appointed as President of United Bank on July 1, 2020. Mr. Wilson was appointed as Chief Lending Officer of the Company on November 9, 2023. Name Age Position with the Company or Bank and Principal Occupation and Employment During the Past Five Years Scott T. Bauer 62 President and Director of First National. Justin C.

Total assets as of December 31, 2023 and 2022 were approximately $201.7 million and $215.5 million, respectively. Boone Bank & Trust Co., Boone, Iowa. Boone Bank is an Iowa, state-chartered, FDIC insured commercial bank.

Total assets as of December 31, 2024 and 2023 were approximately $198.6 million and $201.7 million, respectively. Boone Bank & Trust Co., Boone, Iowa. Boone Bank is an Iowa, state-chartered, FDIC insured commercial bank.

Generally, reserves of 3% had to be maintained against total transaction accounts of $691.7 million or less (subject to an exemption not in excess of the first $36.1 million of transaction accounts). A reserve of $19.668 million plus 10% of amounts in excess of $691.7 million had to be maintained in the event total transaction accounts exceeded $691.7 million.

Generally, reserves of 3% had to be maintained against total transaction accounts of $644.0 million or less (subject to an exemption not in excess of the first $36.1 million of transaction accounts). A reserve of $18.237 million plus 10% of amounts in excess of $644.0 million had to be maintained in the event total transaction accounts exceeded $644.0 million.

As of December 31, 2023, approximately 66% of our current workforce was female and 34% was male. Approximately 3% of our workforce consisted of ethnically diverse employees as of December 31, 2023. There are no labor unions involved with the Company and we consider our relationship with our employees to be satisfactory.

As of December 31, 2024, approximately 65% of our current workforce was female and 35% was male. Approximately 4% of our workforce consisted of ethnically diverse employees as of December 31, 2024. There are no labor unions involved with the Company and we consider our relationship with our employees to be satisfactory.

The Company will provide a paper copy of these reports free of charge upon written or telephonic request directed to John L. Pierschbacher, CFO, 405 5th Street, Ames, Iowa 50010 or (515) 232-6251 or by email request at info@amesnational.com .

The Company will provide a paper copy of these reports free of charge upon written or telephonic request directed to Justin C. Clausen, CFO, 323 Sixth Street, Ames, Iowa 50010 or (515) 232-6251 or by email request at info@amesnational.com .

Commercial and agricultural real estate loans represent approximately 55% of the loan portfolio.

Commercial real estate, multi-family and agricultural real estate loans represent approximately 54% of the loan portfolio.

As of December 31, 2023, Boone Bank had capital of $9.7 million and 20 full-time equivalent employees. Boone Bank had net income for the years ended December 31, 2023 and 2022 of approximately $740 thousand and $1.3 million, respectively. Total assets as of December 31, 2023 and 2022 were approximately $149.4 million and $158.2 million, respectively.

As of December 31, 2024, Boone Bank had capital of $10.3 million and 19 full-time equivalent employees. Boone Bank had net income for the years ended December 31, 2024 and 2023 of approximately $616 thousand and $740 thousand, respectively. Total assets as of December 31, 2024 and 2023 were approximately $156.7 million and $149.4 million, respectively.

Each executive officer has served in his current position for the past five years with the exception of Dan E. Johnson, Adam R. Snodgrass, Robert A. Thomas and Michael A. Wilson. Mr. Johnson was appointed President of State Bank on January 16, 2023. Mr. Snodgrass was appointed as president of Iowa State Bank on October 25, 2019. Mr.

Each executive officer has served in his current position for the past five years with the exception of Justin C. Clausen, Dan E. Johnson, Robert A. Thomas and Michael A. Wilson. Mr. Clausen was appointed as Chief Financial Officer of the Company on July 5, 2024. Mr. Johnson was appointed President of State Bank on January 16, 2023. Mr.

Thomas 64 President and Director of United Bank; previously Senior Loan Officer of United Bank. Michael A. Wilson 59 Chief Lending Officer; previously Executive Vice President of Innovation and Corporate Services of the Company and Chief Lending Officer of a privately held bank in Iowa. 15

Thomas 65 President and Director of United Bank; previously Senior Loan Officer of United Bank. Michael A. Wilson 60 Chief Lending Officer of the Company; Director and Chairman of Reliance Bank and State Bank.; previously Executive Vice President of Innovation and Corporate Services of the Company and Chief Lending Officer with Bankers Trust. 15

The Company CEO is excluded from the Director Stock Incentive Plan. Certain transactions in Company stock are prohibited, including short-selling and hedging. A significant portion of compensation of the executive officers is dependent on the Company’s operating results. Executive officer performance is evaluated annually. The Company provides a limited amount of perquisites to its executive officers.

A significant portion of compensation of the executive officers is dependent on the Company’s operating results. Executive officer performance is evaluated annually. The Company provides a limited amount of perquisites to its executive officers.

Director and Chairman of Boone Bank and Reliance Bank. Jeffrey K. Putzier 62 President and Director of Boone Bank. Richard J. Schreier 56 President and Director of Reliance Bank. Adam R. Snodgrass 43 President and Director of Iowa State Bank; previously CEO, CFO and director of Iowa State Bank prior to the Iowa State Bank Acquisition. Robert A.

Director and Chairman of First National, State Bank and United Bank and Director of Iowa State Bank. Jeffrey K. Putzier 63 President and Director of Boone Bank. Richard J. Schreier 57 President and Director of Reliance Bank. Adam R. Snodgrass 44 President and Director of Iowa State Bank. Robert A.

A number of our employees serve in leadership positions for nonprofit or community service organizations. Corporate Governance The Board of Directors has separated the CEO and Board Chair positions, with the Board Chair being a director who is independent under the NASDAQ governance standards. Nine of the eleven board members are independent directors.

Corporate Governance The Board of Directors has separated the CEO and Board Chair positions, with the Board Chair being a director who is independent under the NASDAQ governance standards. Nine of the eleven board members are independent directors. All directors serving on Board committees are independent under NASDAQ governance standards. The Company has established an age limitation policy for directors.

Johnson 52 President and Director of State Bank; previously Senior Loan Officer of State Bank. John P. Nelson 57 Chief Executive Officer, President and Director of the Company. Director and Chairman of First National, State Bank and United Bank and Director of Iowa State Bank. John L. Pierschbacher 64 Chief Financial Officer, Director and Secretary of the Company.

Clausen 37 Chief Financial Officer and Secretary of the Company; previously Chief Accounting Officer and Controller of the Company. Dan E. Johnson 53 President and Director of State Bank; previously Senior Loan Officer of State Bank. John P. Nelson 58 Chief Executive Officer, President and Director of the Company.

As the Company prepares for the workforce of the future, we are mindful of the importance of diversity and inclusion as a core component of these efforts. 8 Social/Sustainability The Company encourages our employees to be engaged in our communities. This engagement consists of sponsorship of local activities and donations to charitable organizations in our communities.

The average tenure of our employees is approximately eleven years. 8 Social/Sustainability The Company encourages our employees to be engaged in our communities. This engagement consists of sponsorship of local activities and donations to charitable organizations in our communities. The United Way is one organization that our Company and employees are involved with through time and generous donations.

The United Way is one organization that our Company and employees are involved with through time and generous donations. The Company contributed over $205 thousand to various charitable and community organizations in 2023. Company employees volunteered approximately 10,600 hours serving various charitable organizations in our Banks’ communities.

The Company contributed over $244 thousand to various charitable and community organizations in 2024. Company employees volunteered approximately 16,300 hours serving various charitable organizations in our Banks’ communities. A number of our employees serve in leadership positions for nonprofit or community service organizations.

Removed

The average tenure of our employees is approximately eleven years. The Company is committed to improving our recruiting and retention related to diversity and inclusion. To such ends, the Company has developed a Diversity and Inclusion Vision Statement.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

23 edited+3 added−2 removed120 unchanged

2023 filing

2024 filing

Biggest changeAs market interest rates rise, we experience competitive pressures to increase the rates we pay on deposits, which may decrease our net interest income. In addition, inflationary pressures will increase our operating costs and could have a significant negative effect on our borrowers and the values of collateral securing loans, which could negatively affect our financial performance.

Biggest changeIn addition, inflationary pressures will increase our operating costs and could have a significant negative effect on our borrowers and the values of collateral securing loans, which could negatively affect our financial performance. In addition, certain of our noninterest income and noninterest expenses are subject to adverse effect in an elevated interest rate environment.

Our financial performance generally, and in particular the ability of customers to pay interest on and repay principal of outstanding loans and the value of collateral securing those loans, as well as demand for loans and other products and services we offer, is highly dependent upon the business environment not only in the markets where we operate but also in the state of Iowa generally and in the United States as a whole.

Our financial performance generally, and in particular the ability of our customers to pay interest on and repay principal of outstanding loans and the value of collateral securing those loans, as well as demand for loans and other products and services we offer, is highly dependent upon the business environment not only in the markets where we operate but also in the state of Iowa generally and in the United States as a whole.

The weakening of these standards or procedures for any reason, such as an attempt to attract higher yielding loans, a lack of discipline or diligence by our employees in underwriting and monitoring loans, our inability to adequately adapt policies and procedures to changes in economic or any other conditions affecting borrowers may negatively impact the quality of our loan portfolio, result in loan defaults, foreclosures and additional charge-offs and necessitate that we significantly increase our allowance for credit losses, therefore reducing our earnings.

Any deterioration in economic conditions in central, north-central or south-central Iowa, particularly in the industries on which the area depends (including agriculture which, in turn, is dependent upon commodity prices, weather conditions, trade policies and government support programs), may adversely affect the quality of our loan portfolio and the demand for our products and services, and accordingly, our financial condition and results of operations.

Any deterioration in economic conditions in central, north-central or south-central Iowa, particularly in the industries on which the area depends (including agriculture which, in turn, is dependent upon commodity prices, input costs, weather conditions, trade policies and government support programs), may adversely affect the quality of our loan portfolio and the demand for our products and services, and accordingly, our financial condition and results of operations.

We monitor our interest rate risk exposure; however, we can provide no assurance that our efforts will appropriately protect us in the future from interest rate risk exposure. 18 The inability to deploy liquidity may adversely affect the Company ’ s business. Maintaining adequate liquidity is essential to the banking business.

We monitor our interest rate risk exposure; however, we can provide no assurance that our efforts will appropriately protect us in the future from interest rate risk exposure. 18 The inability to deploy or maintain liquidity may adversely affect the Company ’ s business. Maintaining adequate liquidity is essential to the banking business.

The level of the allowance reflects management’s continuing evaluation of industry concentrations; specific credit risks; credit loss experience; current loan portfolio quality; present economic, political and regulatory conditions; and unidentified losses inherent in the current loan portfolio. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain.

The level of the allowance reflects management’s continuing evaluation of industry concentrations; specific credit risks; credit loss experience; current loan portfolio quality; present economic, political and regulatory conditions; and unidentified losses inherent in the current loan portfolio. Determining the appropriate amount of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain.

Various federal and state laws and regulations limit the amounts of dividends that our Banks may pay to us. In addition, our right to participate in a distribution of assets upon a subsidiary’s liquidation or reorganization is subject to the prior claims of the subsidiary’s creditors.

Various federal and state laws and regulations limit the amounts of dividends that our Banks may pay to us. In addition, our right to participate in a distribution of assets upon the liquidation or reorganization of one of our Banks is subject to the prior claims of the Bank’s creditors.

In addition, such events could affect the stability of our deposit base, impair the ability of borrowers to repay outstanding loans, impair the value of collateral securing loans, cause significant property damage, result in loss of revenue or cause us to incur additional expenses.

In addition, such events could affect the stability of our deposit base, cause losses in the value of our investment portfolio, impair the ability of borrowers to repay outstanding loans, impair the value of collateral securing loans, cause significant property damage, result in loss of revenue or cause us to incur additional expenses.

Also, if charge-offs in future periods exceed the allowance for credit losses or increase significantly; we will need additional credit loss expenses to increase the allowance.

Also, if charge-offs in future periods exceed the allowance for credit losses or increase significantly; we will incur additional credit loss expenses to increase the allowance.

The challenge for the Company will be keeping wages competitive and maintaining general operating expenses at their current levels, while balancing a potential decrease in net interest income due to the Company’s greater sensitivity to the repricing of its interest-bearing liabilities than its interest-earning assets in the short-term.

Our challenge will be keeping wages competitive and maintaining general operating expenses at their current levels, while balancing a potential decrease in our net interest income due to the greater sensitivity to the repricing of our interest-bearing liabilities than our interest-earning assets in the short-term.

Commercial real estate loans were a significant portion of our total loan portfolio as of December 31, 2023. The market value of real estate securing these loans can fluctuate significantly in a short period of time as a result of market conditions in the geographic area in which the real estate is located.

Commercial real estate loans were a significant portion of our total loan portfolio as of December 31, 2024. The market value of real estate securing these loans can fluctuate significantly and potentially adversely in a short period of time as a result of market conditions in the geographic area in which the real estate is located.

Because we have grown in part through acquisitions, goodwill and intangible assets are included in the consolidated assets reflected in our financial statements. Goodwill and intangible assets were $13.9 million as of December 31, 2023.

Higher inflation may affect the Company ’ s interest rates, credit loss expenses and general operating expenses. Consumer inflation, as measured by the Consumer Price Index for All Urban Consumers (“CPI”) has increased 3.4% and 6.5% for the years ended December 31, 2023 and 2022, respectively.

Higher inflation may affect the Company ’ s interest rates, credit loss expenses and general operating expenses. Consumer inflation, as measured by the Consumer Price Index for All Urban Consumers (“CPI”) has increased 2.9% and 3.4% for the years ended December 31, 2024 and 2023, respectively.

As a lender, we are exposed to the risk that our borrowers will be unable to repay their loans according to their terms, and that the collateral securing repayment of their loans, if any, may not be sufficient to ensure repayment.

The operation of our business requires us to manage credit risk. As a lender, we are exposed to the risk that our borrowers will be unable to repay their loans according to their terms, and that the collateral securing repayment of their loans, if any, may not be sufficient to ensure repayment.

The Dodd-Frank Act represented a comprehensive overhaul of the financial services industry within the United States and, among many other things, established the federal CFPB and required the CFPB and other federal agencies to implement many significant rules and regulations with which we must comply.

An extended period of low commodity and/or livestock prices, together with other risks to which our agricultural borrowers are subject, including poor weather conditions, higher input costs, changes in governmental support programs and uncertainty regarding governmental mandates affecting ethanol production, could result in reduced cash flows and profit margins, negatively affecting these borrowers and making it more difficult for them to repay their loan obligations to us.

These conditions, together with other risks to which our agricultural borrowers are subject, including poor weather conditions, changes in governmental support programs, tariffs and uncertainty regarding governmental mandates affecting ethanol production, could result in reduced cash flows and profit margins, negatively affecting these borrowers and making it more difficult for them to repay their loan obligations to us.

In particular, the national economy is facing challenges due to inflationary pressures that began building during late 2021 and throughout the course of 2022 and 2023, resulting in significant upward pressure on consumer and wholesale prices.

In particular, the national economy is facing challenges due to inflationary pressures that began building during late 2021 and has persisted through 2024, resulting in significant upward pressure on consumer and wholesale prices.

This increase in inflation creates upward pressure on the cost of hiring, training, and retaining employees, other general operating expense and interest rates.

Elevated levels of inflation create upward pressure on the cost of hiring, training, and retaining employees, other general operating expense and interest rates.

Liquidity and Interest Rate Risks Fair values of investments in the Company ’ s securities portfolio may adversely change. As of December 31, 2023, the fair value of our securities portfolio was approximately $736.4 million.

Liquidity and Interest Rate Risks Fair values of investments in the Company ’ s securities portfolio may adversely change. As of December 31, 2024, the fair value of our securities portfolio, consisting primarily of fixed income debt securities, was approximately $648.5 million.

The fair value of the securities portfolio has an unrealized loss of $62.3 million as of December 31, 2023, resulting primarily from the negative impact of increased interest rates on the fair value of the portfolio.

The fair value of the securities portfolio has a net unrealized loss of $52.0 million as of December 31, 2024, resulting primarily from the negative impact of increased interest rates on the fair value of the portfolio.

A significant portion of our loan portfolio consists of loans to borrowers who are directly or indirectly affected by the health of the Iowa agricultural economy.

A significant portion of our loan portfolio consists of loans to borrowers who are directly or indirectly affected by the health of the Iowa agricultural economy, which has recently been under stress due to low commodity and livestock prices and higher input costs caused by inflation.

Market interest rates are highly sensitive to many factors beyond our control, including general economic conditions and the policies of various governmental and regulatory authorities, including the Federal Reserve. Throughout 2022 and 2023, the FOMC has raised the federal funds rate to its current targeted rate between 5.25% and 5.5% in an effort to curb inflation.

Market interest rates are highly sensitive to many factors beyond our control, including general economic conditions and the policies of various governmental and regulatory authorities, including the Federal Reserve. As market interest rates rise, we experience competitive pressures to increase the rates we pay on deposits, which may decrease our net interest income.

The Company’s credit loss expenses may be impacted by the borrower’s ability to service their debt if inflation is prolonged. 16 Credit Risks The Company ’ s business depends on our ability to successfully manage credit risk. The operation of our business requires us to manage credit risk.

Our credit loss expenses may be negatively impacted by our borrowers' ability to service their debt if inflation is prolonged. The trade policies of the new presidential administration are evolving and could lead to disruptions in major trade relationships that could negatively impact our customers.

Removed

In addition, certain of our noninterest income and noninterest expenses are subject to adverse effect in a rising interest rate environment.

Added

The new presidential administration has stated its intention to scrutinize the United States’ trade relationships with its economic partners, indicated an interest in renegotiating trade agreements, and begun to implement tariffs with some of the United States’ major trading partners, all of which could lead to a disruption of those trading relationships and trade wars.

Removed

Compliance with the law and regulations has resulted in additional costs, and not all the rules and regulations have been finalized.

Added

These statements and actions by the administration have signaled a change in the United States’ economic policies, and it is not clear which policies will be implemented and what effect these policies could have on the local, national and global economy.

Added

Tariffs, retaliatory tariffs imposed in response by trading partners and a potential trade war resulting from those actions could affect the economy and stock prices in the United States and could impact the costs of goods paid by customers, all of which could affect our deposit levels and concentration, the demand for loans and other products and services and the ability of our customers to repay outstanding loans, which could adversely affect our financial condition and the results of operations. 16 Credit Risks The Company ’ s business depends on our ability to successfully manage credit risk.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES The Company's office is housed in the main office of First National located at 405 5th Street, Ames, Iowa and an office owned by the Company at 323 6 th Street, Ames, Iowa. There is a lease agreement between the Company and First National.

Biggest changeITEM 2. PROPERTIES The Company's main office is located at 323 6 th Street, Ames, Iowa. The Company also leases space in the main office at First National, located at 405 5th Street, Ames, Iowa. There is a lease agreement between the Company and First National.

All of the Bank offices are owned by the respective Banks, with the exception of First National’s West Glen office which is owned by the Company and leased to First National. All of the properties owned by the Banks are free of any mortgages.

The West Glen office and Ames office owned by the Company are subject to a $3.1 million and $388 thousand mortgage, respectively.

The West Glen office owned by the Company is subject to a $2.5 million mortgage.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS The Banks are from time-to-time parties to various legal actions arising in the ordinary course of business. The Company believes that there is no threatened or pending proceeding against the Company or the Banks, which, if determined adversely, would have a material adverse effect on the business or financial condition of the Company or the Banks.

Biggest changeThe Company believes that there is no threatened or pending proceeding against the Company or the Banks, which, if determined adversely, would have a material adverse effect on the business or financial condition of the Company or the Banks. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 25 PART II

Removed

ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 25 PART II

Added

ITEM 3. LEGAL PROCEEDINGS The Banks are from time-to-time parties to various legal actions arising in the ordinary course of business and incidental to their business.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Removed

Financial Statements and Supplementary Data 51 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 95 Item 9A. Controls and Procedures 95 Item 9B. Other Information 95

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIn February 2024, the Company declared a quarterly cash dividend of approximately $2.4 million or $0.27 per share, payable on May 15, 2024.

Biggest changeThe Company declared aggregate annual cash dividends in 2024 and 2023 of approximately $8.4 million and $9.7, respectively, or $0.94 per share in 2024 and $1.08 per share in 2023. In February 2025, the Company declared a quarterly cash dividend of approximately $1.8 million, or $0.20 per share, payable on June 13, 2025.

The following table provides information with respect to purchases made by or on behalf of the Company or any “affiliated purchaser” (as defined in rule 10b-18(a)(3) under the Securities Exchange Act of 1934), of the Company’s common stock during the three months ended December 31, 2023.

The Company does not maintain or sponsor any equity compensation plans covering the directors, its executives or employees of the Company or the Banks. On November 8, 2023, the Board of Directors approved a Stock Repurchase Plan which provided for the repurchase of up to 100,000 shares of the Company’s common stock.

The Company does not maintain or sponsor any equity compensation plans covering the directors, its executives or employees of the Company or the Banks. On November 13, 2024, the Board of Directors approved a Stock Repurchase Plan which provided for the repurchase of up to 100,000 shares of the Company’s common stock.

ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES On February 28, 2024, the Company had approximately 249 shareholders of record and approximately 3,298 additional beneficial owners whose shares were held in nominee titles through brokerage or other accounts.

ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES On February 28, 2025, the Company had approximately 224 shareholders of record and approximately 3,876 additional beneficial owners whose shares were held in nominee titles through brokerage or other accounts.

This Stock Repurchase Plan replaced the previous Stock Repurchase Plan (approved in November 2022) that expired in November 2023. The Company did not purchase shares in 2023 and purchased 100,000 shares in 2022 under the Stock Repurchase Plans that were in effect during 2023 and 2022.

This Stock Repurchase Plan replaced the previous Stock Repurchase Plan (approved in November 2023) that expired in November 2024. The Company purchased 43,057 shares in 2024 and did not purchase any shares in 2023 under the Stock Repurchase Plans that were in effect during 2024 and 2023.

(2) A successor Stock Repurchase Plan was approved and became effective on November 9, 2023 and authorized the purchase of up to 100,000 shares. This plan is scheduled to expire on November 13, 2024. No shares were purchased under this plan during November or December 2023.

(2) A successor Stock Repurchase Plan was approved and became effective on November 14, 2024 and authorized the purchase of up to 100,000 shares. This plan is scheduled to expire on November 12, 2025. A total of 43,057 shares were purchased under this plan during December 2024.

Total Number Maximum of Shares Number of Purchased as Shares that Total Part of May Yet Be Number Average Publicly Purchased of Shares Price Paid Announced Under Period Purchased Per Share Plans The Plan October 1, 2023 to October 31, 2023 (1) - $ - - 100,000 November 1, 2023 to November 30, 2023 (1) and (2) - $ - - 100,000 December 1, 2023 to December 31, 2023 (2) - $ - - 100,000 Total - - (1) The Stock Repurchase Plan adopted in November 2022 expired in November 2023 and no shares remain available for purchase under this plan as a result of the expiration.

Total Number Maximum of Shares Number of Purchased as Shares that Total Part of May Yet Be Number Average Publicly Purchased of Shares Price Paid Announced Under Period Purchased Per Share Plans The Plan October 1, 2024 to October 31, 2024 (1) - $ - - 100,000 November 1, 2024 to November 30, 2024 (1) and (2) - $ - - 100,000 December 1, 2024 to December 31, 2024 (2) 43,057 $ 16.35 43,057 56,943 Total 43,057 43,057 (1) The Stock Repurchase Plan adopted in November 2023 expired in November 2024 without any purchases being made thereunder and 100,000 shares remained available for purchase under this plan prior to its expiration.

The Company’s common stock is traded on the NASDAQ Capital Market under the symbol “ATLO”. Trading in the Company’s common stock is, however, relatively limited. The closing price of the Company’s common stock was $18.46 on February 28, 2024. The Company declared aggregate annual cash dividends in 2023 and 2022 of approximately $9.7 million or $1.08 per share.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOf particular relevance are the economic conditions in the concentrated geographic area in central, north-central and south-central Iowa in which the Banks conduct their operations. ● Adequacy of the allowance for credit losses and changes in the level of nonperforming assets and charge-offs. ● Inflation and interest rate, securities market and monetary fluctuations, including increases in interest rates initiated during 2022 and 2023 in response to significant inflationary pressures affecting the national economy. ● Changes in the fair value of securities available-for-sale and management’s evaluation of credit losses of such securities. ● The effects of and changes in trade and monetary and fiscal policies and laws, including the changes in assessment rates established by the Federal Deposit Insurance Corporation for its Deposit Insurance Fund and interest rate policies of the Federal Open Market Committee of the Federal Reserve Board. ● Changes in sources and uses of funds, including loans, deposits and borrowings, including the ability of the Banks to maintain unsecured federal funds lines with correspondent banks. ● Changes imposed by regulatory agencies to increase capital to a level greater than the level currently required for well capitalized financial institutions. 49 ● Political instability, acts of war or terrorism, natural disasters and pandemics. ● The timely development and acceptance of new products and services and perceived overall value of these products and services by customers. ● Revenues being lower than expected. ● Changes in consumer spending, borrowings and savings habits. ● Changes in the financial performance and/or condition of the Company’s borrowers. ● Credit quality deterioration, which could cause an increase in the allowance for credit losses. ● Technological changes and operational and reputational risks related to breaches of data security and cyber-attacks. ● The ability to increase market share and control expenses. ● Changes in the competitive environment among financial or bank holding companies and other financial service providers. ● The effect of changes in laws and regulations with which the Company and the Banks must comply, including developments and changes related to the implementation of the Dodd-Frank Act and the effect of any Federal tax reform on the operations of the Company and its customers. ● Changes in the securities markets. ● The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the FASB, International Financial Reporting Standards and other accounting standard setters. ● The costs and effects of legal and regulatory developments, including the resolution of regulatory or other governmental inquiries and the results of regulatory examinations or reviews. ● Recent changes in the U.S. trade policy, including imposition of tariffs by the U.S. government and retaliatory tariffs imposed by foreign governments and the potential negative effect of these actions on the Company’s borrowers. ● The ability of the Company to successfully integrate the operations of financial institutions it has acquired or may acquire in the future. ● The Company’s success at managing the risks involved in the foregoing items.

Biggest changeOf particular relevance are the economic conditions in the concentrated geographic area in central, north-central and south-central Iowa in which the Banks conduct their operations. ● Uncertainties related to the policies of the new presidential administration, including the possibility of tariffs imposed on significant trading partners, the imposition of retaliatory tariffs, the potential for disruption of major trade relationships, new immigration policies and enforcement efforts, and reductions in federal employment levels, contracts and real estate holdings as part of the administration's effort to streamline the federal bureaucracy. ● The potential for decline in commercial real estate values resulting from reduced occupancy and/or rental rates and higher operating costs due to inflation, negatively impacting the ability of our commercial real estate borrowers to repay their loan obligations and reducing the value of the real estate collateral securing such loans. ● Factors adversely affecting the agricultural economy in Iowa, including the effects of tariffs and retaliatory tariffs, depressed commodity and livestock prices and higher input costs due to inflation, negatively impacting the ability of our agricultural borrowers to repay their loan obligations and reducing collateral values for such loans. ● Adequacy of the allowance for credit losses and changes in the level of non-performing assets and charge-offs. ● Inflation, interest rates, securities market and monetary fluctuations. ● Changes in the fair value of securities available-for-sale and management’s evaluation of credit losses of such securities. ● The effects of and changes in trade and monetary and fiscal policies and laws, including the changes in assessment rates established by the Federal Deposit Insurance Corporation for its Deposit Insurance Fund and interest rate policies of the Federal Open Market Committee of the Federal Reserve Board. ● Changes in sources and uses of funds, including loans, deposits and borrowings, including the ability of the Banks to maintain unsecured federal funds lines with correspondent banks. ● Changes imposed by regulatory agencies to increase capital to a level greater than the level currently required for well capitalized financial institutions. 49 ● Political instability, acts of war or terrorism, natural disasters and pandemics. ● The timely development and acceptance of new products and services and perceived overall value of these products and services by customers. ● Revenues being lower than expected. ● Changes in consumer spending, borrowings and savings habits. ● Changes in the financial performance and/or condition of the Company’s borrowers. ● Credit quality deterioration, which could cause an increase in the allowance for credit losses. ● Technological changes and operational and reputational risks related to breaches of data security and cyber-attacks. ● The ability to increase market share and control expenses. ● Changes in the competitive environment among financial or bank holding companies and other financial service providers. ● The effect of changes in laws and regulations with which the Company and the Banks must comply, including developments and changes related to the implementation of the Dodd-Frank Act and the effect of any Federal tax reform on the operations of the Company and its customers. ● Changes in the securities markets. ● The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the FASB, International Financial Reporting Standards and other accounting standard setters. ● The costs and effects of legal and regulatory developments, including the resolution of regulatory or other governmental inquiries and the results of regulatory examinations or reviews. ● The ability of the Company to successfully integrate the operations of financial institutions it has acquired or may acquire in the future. ● The Company’s success at managing the risks involved in the foregoing items.

However, the preparation of these statements requires management to make certain estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The Company’s significant accounting policies are described in the “Notes to Consolidated Financial Statements” accompanying the Company’s audited financial statements.

The BTFP allows for borrowing from the Federal Reserve Bank up to the par value of the pledged collateral. FHLB advances are loans from the FHLB that can mature daily or have longer maturities for fixed or floating rates of interest. Federal funds purchased are borrowings from other banks that mature daily.

The BTFP allows for borrowing from the Federal Reserve Bank up to the par value of the pledged collateral. FHLB advances are loans that can mature daily or have longer maturities for fixed or floating rates of interest. Federal funds purchased are borrowings from other banks that mature daily.

The amount of expense and the corresponding level of allowance for credit losses for loans are based on our evaluation of the collectability of the loan portfolio based on historical loss experience, reasonable and supportable forecasts, and other significant qualitative and quantitative factors.

The following discussion will provide a summary review of important items relating to: ● Challenges, Risks and Uncertainties ● Critical Accounting Policies ● Non-GAAP Financial Measures ● Income Statement Review ● Balance Sheet Review ● Asset Quality Review and Credit Risk Management ● Liquidity and Capital Resources ● Interest Rate Risk ● Inflation ● Forward-Looking Statements and Business Risks 28 Challenges, Risks and Uncertainties Management has identified certain events or circumstances that have the potential to negatively impact the Company’s financial condition and results of operations in the future and is attempting to position the Company to best respond to those challenges. ● If short-term interest rates remain elevated or continue to increase over a relatively short period of time due to inflationary pressures or other factors, the interest rate environment may present a challenge to the Company.

The following discussion will provide a summary review of important items relating to: ● Challenges, Risks and Uncertainties ● Critical Accounting Policies ● Non-GAAP Financial Measures ● Income Statement Review ● Balance Sheet Review ● Asset Quality Review and Credit Risk Management ● Liquidity and Capital Resources ● Interest Rate Risk ● Inflation ● Forward-Looking Statements and Business Risks 28 Challenges, Risks and Uncertainties Management has identified certain events or circumstances that have the potential to negatively impact the Company’s financial condition and results of operations in the future and is attempting to position the Company to best respond to those challenges. ● If short-term interest rates remain elevated or increase over a relatively short period of time due to inflationary pressures or other factors, the interest rate environment may present a challenge to the Company.

These loans generally have short maturities of less than five years, have either adjustable or fixed rates and are unsecured or secured by inventory, accounts receivable, equipment and/or real estate. Agricultural loans play an important part in the Banks’ loan portfolios. Iowa is a major agricultural state and is a national leader in both grain and livestock production.

These loans generally have short maturities of less than five years, have either adjustable or fixed rates and are generally secured by inventory, accounts receivable, equipment and/or real estate. Agricultural loans play an important part in the Banks’ loan portfolios. Iowa is a major agricultural state and is a national leader in both grain and livestock production.

Unrealized losses on the investment portfolio are excluded from regulatory capital. From time to time, the Company’s board of directors has authorized stock repurchase plans. Stock repurchase plans allow the Company to proactively manage its capital position and return excess capital to shareholders.

Net unrealized losses on the investment portfolio are excluded from regulatory capital. From time to time, the Company’s board of directors has authorized stock repurchase plans. Stock repurchase plans allow the Company to proactively manage its capital position and return excess capital to shareholders.

For further information on the allowance for credit losses for loans, see Note 1 - Summary of Significant Accounting Policies and Note 4 - Loans Receivable and Credit Disclosures in the notes to the financial statements of this Annual Report.

Management’s process for obtaining and validating the fair value of investment securities is discussed in Note 16 of the “Notes to Consolidated Financial Statements,” which is included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report. 39 Investment Maturities as of December 31, 2023 The investments in the following table are reported by contractual maturity.

Management’s process for obtaining and validating the fair value of investment securities is discussed in Note 16 of the “Notes to Consolidated Financial Statements,” which is included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report. 39 Investment Maturities as of December 31, 2024 The investments in the following table are reported by contractual maturity.

As of December 31, 2023, the most likely impact of these financial instruments on revenues, expenses, or cash flows of the Company would come from unidentified credit risk causing higher credit loss expense in future periods. These financial instruments are not expected to have a significant impact on the liquidity or capital resources of the Company.

As of December 31, 2024, the most likely impact of these financial instruments on revenues, expenses, or cash flows of the Company would come from unidentified credit risk causing higher credit loss expense in future periods. These financial instruments are not expected to have a significant impact on the liquidity or capital resources of the Company.

The Company requires adequate liquidity to pay its expenses and pay stockholder dividends. In 2023, dividends from the Banks amounted to $10.0 million compared to $10.2 million in 2022. Various federal and state statutory provisions limit the amount of dividends banking subsidiaries are permitted to pay to their holding companies without regulatory approval.

The Company requires adequate liquidity to pay its expenses and pay stockholder dividends. In 2024, dividends from the Banks amounted to $10.2 million compared to $10.0 million in 2023. Various federal and state statutory provisions limit the amount of dividends banking subsidiaries are permitted to pay to their holding companies without regulatory approval.

Liquidity is derived primarily from core deposit growth and retention; principal and interest payments on loans; principal and interest payments, sale, maturity, and prepayment of investment securities; net cash provided from operations; and access to other funding sources. Other funding sources include federal funds purchased lines, Federal Reserve BTFP, FHLB advances and other capital market sources.

The timing of these credit commitments varies with the underlying borrowers; however, the Company believes it has satisfactory liquidity to fund these obligations as of December 31, 2023. The primary cash flow uncertainty would be a sudden decline in deposits causing the Banks to liquidate securities.

The timing of these credit commitments varies with the underlying borrowers; however, the Company believes it has satisfactory liquidity to fund these obligations as of December 31, 2024. The primary cash flow uncertainty would be a sudden decline in deposits causing the Banks to liquidate securities.

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. The capital levels of the Company currently exceed applicable regulatory guidelines to be considered “well capitalized” as of December 31, 2023.

The Company completed a quantitative assessment of goodwill as of October 1, 2023 which indicated that goodwill was not impaired. Subsequently, the Company determined there were no adverse changes in criteria and key considerations to the previous assessment. Accordingly, the Company concluded that there is no impairment of goodwill as of December 31, 2023.

The Company completed a quantitative assessment of goodwill as of October 1, 2024 which indicated that goodwill was not impaired. Subsequently, the Company determined there were no adverse changes in criteria and key considerations to the previous assessment. Accordingly, the Company concluded that there is no impairment of goodwill as of December 31, 2024.

As of December 31, 2023, management believes that the level of liquidity and capital resources of the Company remain at a satisfactory level and compare favorably to that of other FDIC insured institutions and that the Company's liquidity sources will be sufficient to support its existing operations for the foreseeable future.

As of December 31, 2024, management believes that the level of liquidity and capital resources of the Company remain at a satisfactory level and compare favorably to that of other FDIC insured institutions and that the Company's liquidity sources will be sufficient to support its existing operations for the foreseeable future.

Historically, the Banks have maintained an adequate level of short-term marketable investments to fund the temporary declines in deposit balances. There are no other known trends in liquidity and cash flow needs as of December 31, 2023, that are of concern to management.

Loans to any one borrower are limited by applicable state and federal banking laws. 37 Maturities and Sensitivities of Loans to Changes in Interest Rates as of December 31, 2023 The contractual maturities of the Company's loan portfolio are as shown below.

Loans to any one borrower are limited by applicable state and federal banking laws. 37 Maturities and Sensitivities of Loans to Changes in Interest Rates as of December 31, 2024 The contractual maturities of the Company's loan portfolio are as shown below.

The current economic environment, characterized by elevated short-term interest rates in response to inflationary pressures in the economy and the potential for a period of slower or negative economic growth resulting from efforts to dampen economic activity, has heightened the level of challenges, risks and uncertainties facing our business, including the following: ● Market interest rates may continue to increase during the course of 2024 in response to inflationary pressures on the economy which could adversely affect our net interest income, net interest margin and earnings; ● We may experience a potential slowdown in demand for our products and services, including the demand for traditional loans, although we believe the decline may be offset, in whole or in part, due to inflation and higher interest rates; ● We may experience an increase in risk of delinquencies, defaults and foreclosures, as well as declining collateral values and further impairment of the ability of our borrowers to repay their loans, all of which may result in additional credit charges and other losses in our loan portfolio; ● Goodwill is currently evaluated for impairment quarterly and goodwill has been determined to not be impaired as of December 31, 2023.

The current economic environment, characterized by elevated short-term interest rates in response to inflationary pressures in the economy and the potential for a period of slower or negative economic growth resulting from efforts to dampen economic activity, has heightened the level of challenges, risks and uncertainties facing our business, including the following: ● Market interest rates may remain elevated during 2025 in response to inflationary pressures on the economy which could adversely affect our net interest income, net interest margin and earnings; ● We may experience a potential slowdown in demand for our products and services, including the demand for traditional loans, although we believe the decline may be offset, in whole or in part, due to changes in inflation and interest rates; ● We may experience an increase in risk of delinquencies, defaults and foreclosures, as well as declining collateral values and further impairment of the ability of our borrowers to repay their loans, all of which may result in additional credit charges and other losses in our loan portfolio; ● Goodwill is currently evaluated for impairment quarterly and goodwill has been determined to not be impaired as of December 31, 2024.

In estimating the component of the allowance for credit losses for loans that share common risk characteristics, loans are segregated into loan classes. Loans are designated into loan classes based on loans pooled by product types and similar risk characteristics or areas of risk concentration.

In estimating the component of the allowance for credit losses for loans that share common risk characteristics, loans are segregated into loan segments. Loans are designated into loan segments based on loans pooled by product types and similar risk characteristics or areas of risk concentration.

An impairment of goodwill would decrease the Company’s earnings during the period in which the impairment is recorded; ● We have experienced a decline in the fair value of our investment portfolio as a result of the increasing interest rate environment.

As of December 31, 2023, commercial real estate loans have a pooled reserve of 1.50%. 45 Other factors considered when determining the adequacy of the pooled reserve include historical losses; watch, substandard and impaired loan volume; the ability to collect past due loans; loan growth; loan-to-value ratios; loan administration; collateral values; and economic factors.

As of December 31, 2024, commercial real estate loans have a pooled reserve of 1.45%. 45 Other factors considered when determining the adequacy of the pooled reserve include historical losses; watch, substandard and substandard-impaired loan volume; the ability to collect past due loans; loan growth; loan-to-value ratios; loan administration; collateral values; and economic factors.

As of December 31, 2023, the majority of the loans were originated directly by the Banks to borrowers within the Banks’ principal market areas. There are no foreign loans outstanding during the years presented.

As of December 31, 2024, the majority of the loans were originated directly by the Banks to borrowers within the Banks’ principal market areas. There are no foreign loans outstanding during the years presented.

Interest income on other impaired loans remaining on accrual is monitored and income is recognized based upon the terms of the underlying loan agreement. However, the recorded net investment in impaired loans, including accrued interest, is limited to the present value of the expected cash flows of the impaired loan or the observable fair value of the loan’s collateral.

Interest income on other non-performing loans remaining on accrual is monitored and income is recognized based upon the terms of the underlying loan agreement. However, the recorded net investment in non-performing loans, including accrued interest, is limited to the present value of the expected cash flows of the substandard-impaired loan or the observable fair value of the loan’s collateral.

Management believes that the allowance for credit losses as of December 31, 2023 remains adequate based on its analysis of the non-performing assets and the portfolio as a whole.

Management believes that the allowance for credit losses as of December 31, 2024 remains adequate based on its analysis of the non-performing assets and the portfolio as a whole.

Some Banks also offer investment services through a third-party broker-dealer. The Company employs 24 individuals to assist the Banks with financial reporting, human resources, marketing, audit, compliance, technology systems, property appraisals, training and the coordination of management activities, in addition to 243 full-time equivalent individuals employed by the Banks.

Some Banks also offer investment services through a third-party broker-dealer. The Company employs 26 individuals to assist the Banks with financial reporting, human resources, marketing, audit, compliance, technology systems, property appraisals, training and the coordination of management activities, in addition to 240 full-time equivalent individuals employed by the Banks.

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 $5.2 million (approximately 1.9% of the fair value of the government municipalities and subdivisions) represent the largest exposure to any one municipality or subdivision for the Company as of December 31, 2023.

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 $5.3 million (approximately 2.1% of the fair value of the government municipalities and subdivisions) represent the largest exposure to any one municipality or subdivision for the Company as of December 31, 2024.

The decrease in return on average equity and return on average assets when comparing 2023 to 2022 was primarily a result of a reduction in earnings.

The decrease in return on average equity and return on average assets when comparing 2024 to 2023 was primarily a result of a reduction in earnings.

Interest-bearing accounts earn interest at rates established by Bank management based on competitive market factors and the Company’s need for funds. While 87.0% of the Banks’ certificates of deposit mature in the next year, it is anticipated that many of these certificates will be renewed.

Interest-bearing accounts earn interest at rates established by Bank management based on competitive market factors and the Company’s need for funds. While 91.9% of the Banks’ certificates of deposit mature in the next year, it is anticipated that many of these certificates will be renewed.

ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview The following financial data of the Company for the three years ended December 31, 2021 through 2023 is derived from the Company's historical audited financial statements and related footnotes.

ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview The following financial data of the Company for the three years ended December 31, 2022 through 2024 is derived from the Company's historical audited financial statements and related footnotes.

The average yield on loans was 254 and 206 basis points higher in 2023 and 2022, respectively, in comparison to the average tax-equivalent investment portfolio yields. Types of Loans The Company's loan portfolio consists of real estate, commercial, agricultural and consumer loans.

The average yield on loans was 299 and 254 basis points higher in 2024 and 2023, respectively, in comparison to the average tax-equivalent investment portfolio yields. Types of Loans The Company's loan portfolio consists of real estate, commercial, agricultural and consumer loans.

As of December 31, 2023 and 2022, the investment portfolio comprised 34% and 37% of total assets, respectively. The decrease in investments during 2023 is primarily due to maturities in excess of purchases. The decrease is offset in part by lower unrealized losses in the investment portfolio.

As of December 31, 2024 and 2023, the investment portfolio comprised 30% and 34% of total assets, respectively. The decrease in investments during 2024 is primarily due to maturities in excess of purchases. The decrease is offset in part by lower unrealized losses in the investment portfolio.

Review of Commitments for Capital Expenditures, Cash Flow Uncertainties and Known Trends in Liquidity and Cash Flow Needs Commitments to extend credit totaled $262.7 million as of December 31, 2023 compared to a total of $262.9 million at the end of 2022.

Review of Commitments for Capital Expenditures, Cash Flow Uncertainties and Known Trends in Liquidity and Cash Flow Needs Commitments to extend credit totaled $232.0 million as of December 31, 2024 compared to a total of $262.7 million at the end of 2023.

The lower than expected tax rate in 2023 was primarily due to a higher proportion of tax-exempt interest income and New Markets Tax Credits to pretax income as compared to 2022. 36 Balance Sheet Review The Company’s assets are comprised primarily of loans and investment securities.

The decrease in income tax expense and lower than expected tax rate in 2024 and 2023 was primarily due to a higher proportion of tax-exempt interest income and New Markets Tax Credits to pretax income. 36 Balance Sheet Review The Company’s assets are comprised primarily of loans and investment securities.

The liquidity and capital resources discussion will cover the following topics: ● Review of the Company’s Current Liquidity Sources ● Review of the Consolidated Statements of Cash Flows ● Review of Company Only Cash Flows ● Review of Commitments for Capital Expenditures, Cash Flow Uncertainties and Known Trends in Liquidity and Cash Flow Needs ● Capital Resources Review of the Company’s Current Liquidity Sources Liquid assets of cash on hand, balances due from other banks and interest-bearing deposits in financial institutions for December 31, 2023 and 2022 totaled $55.1 million and $27.9 million, respectively.

The liquidity and capital resources discussion will cover the following topics: ● Review of the Company’s Current Liquidity Sources ● Review of the Consolidated Statements of Cash Flows ● Review of Company Only Cash Flows ● Review of Commitments for Capital Expenditures, Cash Flow Uncertainties and Known Trends in Liquidity and Cash Flow Needs ● Capital Resources Review of the Company’s Current Liquidity Sources Liquid assets of cash on hand, balances due from other banks, interest-bearing deposits in financial institutions and federal funds sold for December 31, 2024 and 2023 totaled $101.2 million and $55.1 million, respectively.

Approximately $173 million of estimated uninsured deposits were collateralized by pledged assets.

Approximately $168 million of estimated uninsured deposits were collateralized by pledged assets.

The investment portfolio provides the Company with a significant amount of liquidity since all investments are classified as available-for-sale as of December 31, 2023 and 2022. The investments have pretax net unrealized losses of $62.3 million and $83.6 million as of December 31, 2023 and 2022, respectively.

The investment portfolio provides the Company with a significant amount of liquidity since all investments are classified as available-for-sale as of December 31, 2024 and 2023. The investments have pretax net unrealized losses of $52.0 million and $62.3 million as of December 31, 2024 and 2023, respectively.

This model calculates an expected life-of-loan loss percentage for each loan category by using historical loss rate analysis for all loan pools. 30 The component of the allowance for credit losses for loans that share common risk characteristics also considers factors for each loan class to adjust for differences between the historical period used to calculate historical loss rates and expected conditions over the remaining lives of the loans in the portfolio related to: ● Lending policies and procedures, including changes in underwriting standards and collections; ● International, national, regional and local economic conditions; ● The nature and volume of the portfolio and terms of loans; ● The experience, depth, and ability of lending management; ● The volume and severity of past due loans and other similar conditions; ● The quality of the organization’s loan review system; ● The value of underlying collateral for collateral-dependent loans; ● The existence and effect of any concentrations of credit and changes in the levels of such concentrations; and ● The effect of other external factors such as competition, legal and regulatory requirements on the level of estimated credit losses in the existing portfolio.

The component of the allowance for credit losses for loans that share common risk characteristics also considers factors for each loan segment to adjust for differences between the historical period used to calculate historical loss rates and expected conditions over the remaining lives of the loans in the portfolio related to: ● Lending policies and procedures, including changes in underwriting standards and collections; ● International, national, regional and local economic conditions; ● The nature and volume of the portfolio and terms of loans; ● The experience, depth, and ability of lending management; ● The volume and severity of past due loans and other similar conditions; ● The quality of the organization’s loan review system; ● The value of underlying collateral for collateral-dependent loans; ● The existence and effect of any concentrations of credit and changes in the levels of such concentrations; and ● The effect of other external factors such as competition, legal and regulatory requirements on the level of estimated credit losses in the existing portfolio.

There were $109 thousand and no loans greater than 90 days past due and still accruing interest as of December 31, 2023 and 2022, respectively.

There were $736 thousand and $109 thousand of loans greater than 90 days past due and still accruing interest as of December 31, 2024 and 2023, respectively.

Reconciliation of net interest income and annualized net interest margin on an FTE basis to GAAP: 2023 2022 Net interest income (GAAP) $ 44,625 $ 53,244 Tax-equivalent adjustment (1) 609 690 Net interest income on an FTE basis (non-GAAP) 45,234 53,934 Average interest-earning assets $ 2,059,506 $ 2,060,959 Net interest margin on an FTE basis (non-GAAP) 2.20 % 2.62 % (1) Computed on a tax-equivalent basis using an incremental federal income tax rate of 21 percent for the years ended December 31, 2023 and 2022, adjusted to reflect the effect of the nondeductible interest expense associated with owning tax-exempt securities and loans. 32 Income Statement Review The following highlights a comparative discussion of the major components of net income and their impact for the last two years.

Reconciliation of net interest income and annualized net interest margin on an FTE basis to GAAP: 2024 2023 Net interest income (GAAP) $ 44,976 $ 44,625 Tax-equivalent adjustment (1) 531 609 Net interest income on an FTE basis (non-GAAP) 45,507 45,234 Average interest-earning assets $ 2,052,978 $ 2,059,506 Net interest margin on an FTE basis (non-GAAP) 2.22 % 2.20 % (1) Computed on a tax-equivalent basis using an incremental federal income tax rate of 21 percent for the years ended December 31, 2024 and 2023, adjusted to reflect the effect of the nondeductible interest expense associated with owning tax-exempt securities and loans. 32 Income Statement Review The following highlights a comparative discussion of the major components of net income and their impact for the last two years.

Asset Quality Review and Credit Risk Management The Company’s credit risk is centered in the loan portfolio, which on December 31, 2023, totaled $1.28 billion as compared to $1.23 billion as of December 31, 2022, an increase of 4.2%. Net loans comprise approximately 59% of total assets as of the end of 2023.

Asset Quality Review and Credit Risk Management The Company’s credit risk is centered in the loan portfolio, which on December 31, 2024, totaled $1.30 billion as compared to $1.28 billion as of December 31, 2023, an increase of 2.0%. Net loans comprise approximately 61% of total assets as of the end of 2024.

A sustained reduction in deposit volume would have a significant negative impact on the Company’s operations and liquidity. The Company had $6.9 million and $11.4 million of brokered deposits as of December 31, 2023 and 2022, respectively. The Company has approximately $590 million of estimated uninsured deposits as of December 31, 2023.

A sustained reduction in deposit volume would have a significant negative impact on the Company’s operations and liquidity. The Company had $14.2 million and $6.9 million of brokered deposits as of December 31, 2024 and 2023, respectively. The Company has approximately $643 million of estimated uninsured deposits as of December 31, 2024.

No shares of common stock were repurchased under stock repurchase plans in 2023 and 100,000 shares of common stock were repurchased in 2022. Also see Part II, Item 5 - Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities, included elsewhere in this Annual Report.

A total of 43,057 shares of common stock were repurchased under stock repurchase plans in 2024 and no shares of common stock were repurchased in 2023. Also see Part II, Item 5 - Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities, included elsewhere in this Annual Report.

Balances fluctuate as customer liquidity needs vary and could be impacted by prevailing market interest rates, competition, and economic conditions. Approximately 12% of deposits are tied to external indexes as of December 31, 2023. Deposit interest expense related to these deposits increase more quickly than our other deposit products in a rising interest rate environment.

Balances fluctuate as customer 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 December 31, 2024. Deposit interest expense related to these deposits can be more volatile than our other deposit products in a changing interest rate environment.

The Company’s level of non-performing loans as a percentage of loans of 1.08% as of December 31, 2023, is higher than the Iowa State Average peer group of FDIC insured institutions as of December 31, 2023, of 0.39%.

The Company’s level of non-performing loans as a percentage of loans of 1.17% as of December 31, 2024, is higher than the Iowa State Average peer group of FDIC insured institutions as of December 31, 2024, of 0.47%.

The Company considers non-performing loans to generally include nonaccrual loans, loans past due 90 days or more and still accruing and other loans that may or may not meet the former nonperforming criteria but are considered to meet the definition of impaired. 44 The allowance for credit losses related to these impaired loans was approximately $118 thousand and $95 thousand at December 31, 2023 and 2022, respectively.

The Company considers non-performing loans to generally include nonaccrual loans, loans past due 90 days or more and still accruing and other loans that may or may not meet the former non-performing criteria. 44 The allowance for credit losses related to these non-performing loans was approximately $98 thousand and $118 thousand at December 31, 2024 and 2023, respectively.

Non-performing Assets The following table sets forth information concerning the Company's non-performing assets for the past three years ended December 31, 2023 (dollars in thousands) : 2023 2022 2021 Nonperforming assets: Nonaccrual loans $ 13,811 $ 14,722 $ 12,670 Loans 90 days or more past due 108 - 169 Total nonperforming loans 13,919 14,722 12,839 Securities available-for-sale - - - Other real estate owned - - 218 Total nonperforming assets $ 13,919 $ 14,722 $ 13,057 Ratio of nonaccrual loans to total loans outstanding 1.07 % 1.19 % 1.09 % Ratio of allowance for credit losses to nonaccrual loans 121.47 % 106.62 % 131.18 % The accrual of interest on nonaccrual and other impaired loans is generally discontinued at 90 days or when, in the opinion of management, the borrower may be unable to meet payments as they become due.

Non-performing Assets The following table sets forth information concerning the Company's non-performing assets for the past three years ended December 31, 2024 (dollars in thousands) : 2024 2023 2022 Nonperforming assets: Nonaccrual loans $ 14,772 $ 13,811 $ 14,722 Loans 90 days or more past due 736 109 - Total nonperforming loans 15,508 13,920 14,722 Securities available-for-sale - - - Other real estate owned - - - Total nonperforming assets $ 15,508 $ 13,920 $ 14,722 Ratio of nonaccrual loans to total loans outstanding 1.12 % 1.07 % 1.19 % Ratio of allowance for credit losses to nonaccrual loans 115.48 % 121.47 % 106.62 % The accrual of interest on nonaccrual and other non-performing loans is generally discontinued at 90 days or when, in the opinion of management, the borrower may be unable to meet payments as they become due.

Capital Resources The Company’s total stockholders’ equity increased to $165.8 million at December 31, 2023, from $149.1 million at December 31, 2022. As of December 31, 2023 and 2022, stockholders’ equity as a percentage of total assets was 7.7% and 7.0%, respectively.

Capital Resources The Company’s total stockholders’ equity increased to $174.7 million at December 31, 2024, from $165.8 million at December 31, 2023. As of December 31, 2024 and 2023, stockholders’ equity as a percentage of total assets was 8.2% and 7.7%, respectively.

The Company reported net income of $10.8 million for the year ended December 31, 2023 compared to $19.3 million for the year ended December 31, 2022. This represents a decrease in net income of 44% when comparing 2023 with 2022.

The Company reported net income of $10.2 million for the year ended December 31, 2024 compared to $10.8 million for the year ended December 31, 2023. This represents a decrease in net income of 5.5% when comparing 2024 with 2023.

For the years December 31, 2023 and 2022, the Company's non-GAAP net interest margin was 2.20% and 2.62%, respectively, computed on an FTE basis. For further information, refer to the Non-GAAP Financial Measures section of this report. Net interest income during 2023 and 2022 totaled $44.6 million and $53.2 million, respectively, representing a 15.9% decrease in 2023 compared to 2022.

For the years December 31, 2024 and 2023, the Company's non-GAAP net interest margin was 2.22% and 2.20%, respectively, computed on an FTE basis. For further information, refer to the Non-GAAP Financial Measures section of this report. Net interest income during 2024 and 2023 totaled $45.0 million and $44.6 million, respectively, representing a 0.8% increase in 2024 compared to 2023.

As of December 31, 2023, the Company had outstanding FHLB advances and other borrowings of $110.6 million, no federal funds purchased, and securities sold under agreements to repurchase of $54.0 million. Total investments as of December 31, 2023, were $736.4 million compared to $786.4 million as of year-end 2022.

As of December 31, 2024, the Company had outstanding FHLB advances and other borrowings of $47.0 million, no federal funds purchased, and securities sold under agreements to repurchase of $52.4 million. Total investments as of December 31, 2024, were $648.5 million compared to $736.4 million as of year-end 2023.

The revenue bonds are to be paid from 16 revenue sources in 2023 and 2022.

The revenue bonds are to be paid from 15 and 16 revenue sources in 2024 and 2023, respectively.

The higher balance of liquid assets as of December 31, 2023 primarily relates to increased deposits at the Federal Reserve Bank. Other sources of liquidity available to the Banks as of December 31, 2023 include available borrowing capacity with the FHLB of $280.9 million and federal funds borrowing capacity at correspondent banks of $101.5 million.

The higher balance of liquid assets as of December 31, 2024 primarily relates to increased deposits at the Federal Reserve Bank. Other sources of liquidity available to the Banks as of December 31, 2024 include available borrowing capacity with the FHLB of $245.3 million and federal funds borrowing capacity at correspondent banks of $97.0 million.

For example, real estate loan interest income increased $7.4 million in 2023 compared to 2022. Increased volume of real estate loans increased interest income in 2023 by $2.4 million and higher interest rates increased interest income in 2023 by $5.0 million.

For example, real estate loan interest income increased $5.6 million in 2024 compared to 2023. Increased volume of real estate loans increased interest income in 2024 by $1.1 million and higher interest rates increased interest income in 2024 by $4.5 million.

The Company has unconsolidated cash and interest-bearing deposits totaling $1.9 million that is available as of December 31, 2023 to provide additional liquidity to the Banks.

The Company has unconsolidated cash and interest-bearing deposits totaling $992 thousand that is available as of December 31, 2024 to provide additional liquidity to the Banks.

All six Banks demonstrated profitable operations during 2023 and 2022. The Company’s return on average equity for 2023 was 7.05% compared to 11.43% in 2022. The return on average assets for 2023 was 0.51% compared to 0.90% in 2022.

All six Banks demonstrated profitable operations during 2024 and 2023. The Company’s return on average equity for 2024 was 6.02% compared to 7.05% in 2023. The return on average assets for 2024 was 0.48% compared to 0.51% in 2023.

The Company's investment portfolio had an expected duration of 3.55 years and 4.06 years as of December 31, 2023 and 2022, respectively. At December 31, 2023 and 2022, the Company’s investment securities portfolio included securities issued by 272 and 289 government municipalities and agencies located within 30 states with a fair value of $269.9 million and $286.0 million, respectively.

The Company's investment portfolio had an expected duration of 3.1 years and 3.6 years as of December 31, 2024 and 2023, respectively. At December 31, 2024 and 2023, the Company’s investment securities portfolio included securities issued by 258 and 272 government municipalities and agencies located within 30 states with a fair value of $245.6 million and $269.9 million, respectively.

Loan Portfolio Net loans as of December 31, 2023 totaled $1.28 billion, an increase of 4.2% from the $1.23 billion as of December 31, 2022. Loans increased primarily due to increases in the commercial operating, construction and multi-family loan portfolios. Loans are the primary contributor to the Company’s revenues and cash flows.

Loan Portfolio Net loans as of December 31, 2024 totaled $1.30 billion, an increase of 2.0% from the $1.28 billion as of December 31, 2023. Loans increased primarily due to increases in the 1 to 4 family residential real estate and agricultural operating loan portfolios. Loans are the primary contributor to the Company’s revenues and cash flows.

It is not anticipated at the present time that loans held for sale will become a significant portion of total assets. Investment Portfolio Total investments as of December 31, 2023 were $736.4 million, a decrease of $50.0 million or 6.4% from the prior year end.

It is not anticipated at the present time that loans held for sale will become a significant portion of total assets. Investment Portfolio Total investments as of December 31, 2024 were $648.5 million, a decrease of $87.9 million or 11.9% from the prior year end.

The change in net cash provided by (used in) financing activities in 2023 was due primarily to a decrease in deposits and partially offset by new borrowings. 47 Review of Company Only Cash Flows The Company’s liquidity on an unconsolidated basis is heavily dependent upon dividends paid to the Company by the Banks.

The change in net cash (used in) financing activities in 2024 was due primarily to fewer proceeds from other borrowings between periods and partially offset by an increase in deposits. 47 Review of Company Only Cash Flows The Company’s liquidity on an unconsolidated basis is heavily dependent upon dividends paid to the Company by the Banks.

Noninterest expense for the Company consists of all operating expenses other than interest expense on deposits and other borrowed funds. Salaries and employee benefits are the largest component of the Company’s operating expenses and comprise 59% of noninterest expense in 2023 and 2022. Noninterest expense during the years ended 2023 and 2022 totaled $40.2 million and $38.6 million, respectively.

Noninterest expense for the Company consists of all operating expenses other than interest expense on deposits and other borrowed funds. Salaries and employee benefits are the largest component of the Company’s operating expenses and comprise 60% and 59% of noninterest expense in 2024 and 2023, respectively.

The average balances of impaired loans for the years ended December 31, 2023 and 2022 were $12.7 million and $13.0 million, respectively. For the years ended December 31, 2023 and 2022, interest income, which would have been recorded under the original terms of nonaccrual loans, was approximately $768 thousand and $733 thousand, respectively.

The average balances of non-performing loans for the years ended December 31, 2024 and 2023 were $14.4 million and $13.2 million, respectively. For the years ended December 31, 2024 and 2023, interest income, which would have been recorded under the original terms of nonaccrual loans, was approximately $963 thousand and $768 thousand, respectively.

As the following chart indicates, the Company’s non-performing assets have decreased by 5% from December 31, 2022 and total $13.9 million as of December 31, 2023.

As the following chart indicates, the Company’s non-performing assets have increased by 11.4% from December 31, 2023 and total $15.5 million as of December 31, 2024.

As of December 31, 2023, gross loans totaled approximately $1.29 billion, which equals approximately 71.4% of total deposits and 60.0% of total assets. The Iowa State Average Report (consisting of 237 banks in the State of Iowa) loan to deposit ratio as of December 31, 2023 was 77%.

As of December 31, 2024, gross loans totaled approximately $1.32 billion, which equals approximately 71.5% of total deposits and 61.9% of total assets. The Iowa State Average Report (consisting of 232 banks in the State of Iowa) loan to deposit ratio as of December 31, 2024 was 78%.

Any combination of these factors could produce losses within the Company's agricultural loan portfolio and in the commercial loan portfolio with respect to borrowers whose businesses are directly or indirectly impacted by the health of the agricultural economy. Such losses could result in an accelerated level of charge-offs and the need to increase provision expenses, thus resulting in reduced earnings.

The following table summarizes the outstanding amount of, and the average rate on, borrowed funds as of December 31, 2023 and 2022 (dollars in thousands) . 2023 2022 Average Average Balance Rate Balance Rate Federal funds purchased and repurchase agreements $ 53,994 2.83 % $ 40,676 2.50 % Other borrowings 110,588 4.63 % 39,120 4.39 % Total $ 164,582 4.04 % $ 79,796 3.43 % Average Annual Borrowed Funds The following table sets forth the average amount of and the average rate paid on borrowed funds for the years ended December 31, 2023 and 2022 (dollars in thousands) . 2023 2022 Average Average Balance Rate Balance Rate Federal funds purchased and repurchase agreements $ 48,602 2.80 % $ 41,143 1.17 % Other borrowings 84,316 4.56 % 14,731 3.49 % Total $ 132,918 3.92 % $ 55,874 1.78 % 43 Off-Balance-Sheet Arrangements The Company is party to financial instruments with off-balance-sheet risk in the normal course of business.

The following table summarizes the outstanding amount of, and the average rate on, borrowed funds as of December 31, 2024 and 2023 (dollars in thousands) . 2024 2023 Average Average Balance Rate Balance Rate Federal funds purchased and repurchase agreements $ 52,412 3.14 % $ 53,994 2.83 % Other borrowings 46,952 4.42 % 110,588 4.63 % Total $ 99,364 3.74 % $ 164,582 4.04 % Average Annual Borrowed Funds The following table sets forth the average amount of and the average rate paid on borrowed funds for the years ended December 31, 2024 and 2023 (dollars in thousands) . 2024 2023 Average Average Balance Rate Balance Rate Federal funds purchased and repurchase agreements $ 45,075 3.21 % $ 48,602 2.80 % Other borrowings 83,370 5.01 % 84,316 4.56 % Total $ 128,445 4.38 % $ 132,918 3.92 % 43 Off-Balance-Sheet Arrangements The Company is party to financial instruments with off-balance-sheet risk in the normal course of business.

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) : 2023 2022 Estimated Estimated Amortized Fair Amortized Fair Cost Value Cost Value Revenue bonds by revenue source Sales tax $ 29,409 $ 27,284 $ 31,768 $ 28,917 Water 20,394 18,968 21,754 19,792 College and universities, primarily dormitory revenues 16,944 15,340 19,550 17,368 Sewer 12,771 11,465 13,333 11,592 Leases 8,060 7,421 10,863 9,929 Other 35,402 33,064 39,840 36,654 Total revenue bonds by revenue source $ 122,980 $ 113,542 $ 137,108 $ 124,252 41 Deposits Total deposits were $1.81 billion and $1.90 billion as of December 31, 2023 and 2022, respectively.

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) : 2024 2023 Estimated Estimated Amortized Fair Amortized Fair Cost Value Cost Value Revenue bonds by revenue source Sales tax $ 27,404 $ 25,327 $ 29,409 $ 27,284 Water 19,373 17,967 20,394 18,968 College and universities, primarily dormitory revenues 16,207 14,685 16,944 15,340 Sewer 12,205 11,024 12,771 11,465 Leases 7,936 7,364 8,060 7,421 Other 32,262 30,311 35,402 33,064 Total revenue bonds by revenue source $ 115,387 $ 106,678 $ 122,980 $ 113,542 41 Deposits Total deposits were $1.85 billion and $1.81 billion as of December 31, 2024 and 2023, respectively.

The following table sets forth information regarding net charge-offs to average loans outstanding by loan type during the years ended December 31, 2023 and 2022 (in thousands). 2023 2022 Net Net charge-offs charge-offs Net (recoveries) Net (recoveries) charge-offs Average to average charge-offs Average to average (recoveries) Loans loans (recoveries) Loans loans Net charge-offs (recoveries): Real estate Construction $ - $ 62,056 0.00 % $ - $ 43,905 0.00 % 1-4 Family residential (5 ) 287,062 0.00 % 15 266,029 0.01 % Multi-family - 190,525 0.00 % - 175,154 0.00 % Commercial (5 ) 347,267 0.00 % (3 ) 344,007 0.00 % Agricultural - 160,199 0.00 % - 155,989 0.00 % Commercial 28 85,914 0.03 % 37 72,844 0.05 % Agricultural 198 93,813 0.21 % 7 95,029 0.01 % Consumer and other (3 ) 16,403 -0.02 % (6 ) 16,200 -0.04 % Totals $ 213 $ 1,243,239 0.02 % $ 50 $ 1,169,157 0.00 % Pooled reserves for loan categories range from 0.64% to 2.69% of the outstanding loan balances as of December 31, 2023.

The following table sets forth information regarding net charge-offs to average loans outstanding by loan type during the years ended December 31, 2024 and 2023 (in thousands). 2024 2023 Net Net charge-offs charge-offs Net (recoveries) Net (recoveries) charge-offs Average to average charge-offs Average to average (recoveries) Loans loans (recoveries) Loans loans Net charge-offs (recoveries): Real estate Construction $ - $ 64,619 0.00 % $ - $ 62,056 0.00 % 1-4 Family residential (13 ) 296,073 0.00 % (5 ) 287,062 0.00 % Multi-family - 198,980 0.00 % - 190,525 0.00 % Commercial - 353,580 0.00 % (5 ) 347,267 0.00 % Agricultural - 159,577 0.00 % - 160,199 0.00 % Commercial 464 89,932 0.52 % 28 85,914 0.03 % Agricultural - 118,947 0.00 % 198 93,813 0.21 % Consumer and other 2 16,763 0.01 % (3 ) 16,403 -0.02 % Totals $ 453 $ 1,298,471 0.03 % $ 213 $ 1,243,239 0.02 % Pooled reserves for loan categories range from 0.81% to 2.41% of the outstanding loan balances as of December 31, 2024.

Average Deposits by Type The following table sets forth the average balances for each major category of deposit and the weighted average interest rate paid for deposits during the years ended December 31, 2023 and 2022 (dollars in thousands) . 2023 2022 Average Average Amount Rate Amount Rate Non-interest bearing checking deposits $ 373,704 0.00 % $ 397,436 0.00 % Interest bearing checking deposits 609,965 1.61 % 612,419 0.47 % Money market deposits 395,351 1.45 % 457,053 0.48 % Savings deposits 207,314 0.59 % 228,031 0.18 % Time certificates 255,434 3.01 % 206,401 0.88 % $ 1,841,768 $ 1,901,340 Deposit Maturity The following table shows the amounts and remaining maturities of time certificates of deposit that had balances in excess of the FDIC insurance limit of $250 thousand as of December 31, 2023 and 2022 (in thousands) . 2023 2022 3 months or less $ 32,036 $ 14,444 Over 3 through 6 months 15,808 13,261 Over 6 through 12 months 16,427 7,166 Over 12 months 3,961 8,015 Total $ 68,232 $ 42,886 42 The following table shows the amounts and remaining maturities of estimated uninsured time certificates of deposit as of December 31, 2023 and 2022 ( in thousands ). 2023 2022 3 months or less $ 21,942 $ 8,862 Over 3 through 6 months 11,174 8,010 Over 6 through 12 months 18,355 5,109 Over 12 months 7,701 8,616 Total $ 59,172 $ 30,597 Borrowed Funds Borrowed funds that may be utilized by the Company are comprised of the Federal Reserve Bank Term Funding Program (BTFP), FHLB advances, federal funds purchased and securities sold under agreements to repurchase (repurchase agreements).

Average Deposits by Type The following table sets forth the average balances for each major category of deposit and the weighted average interest rate paid for deposits during the years ended December 31, 2024 and 2023 (dollars in thousands) . 2024 2023 Average Average Amount Rate Amount Rate Non-interest bearing checking deposits $ 340,868 0.00 % $ 373,704 0.00 % Interest bearing checking deposits 618,728 1.97 % 609,965 1.61 % Money market deposits 361,723 1.65 % 395,351 1.45 % Savings deposits 187,427 0.64 % 207,314 0.59 % Time certificates 307,229 4.12 % 255,434 3.01 % $ 1,815,975 $ 1,841,768 Deposit Maturity The following table shows the amounts and remaining maturities of time certificates of deposit that had balances in excess of the FDIC insurance limit of $250 thousand as of December 31, 2024 and 2023 (in thousands) . 2024 2023 3 months or less $ 39,710 $ 31,537 Over 3 through 6 months 20,620 15,808 Over 6 through 12 months 15,227 16,427 Over 12 months 9,439 3,961 Total $ 84,996 $ 67,733 42 The following table shows the amounts and remaining maturities of the portion of estimated time deposits in excess of FIDC Insurance Limits as of December 31, 2024 and 2023 ( in thousands ). 2024 2023 3 months or less $ 26,573 $ 21,942 Over 3 through 6 months 23,538 11,174 Over 6 through 12 months 16,124 18,355 Over 12 months 11,172 7,701 Total $ 77,407 $ 59,172 Borrowed Funds Borrowed funds that may be utilized by the Company are comprised of the Federal Reserve Bank Term Funding Program (BTFP), FHLB advances, federal funds purchased and securities sold under agreements to repurchase (repurchase agreements).

The following table sets forth information regarding changes in the Company's specific reserve on loans individually evaluated for impairment and loans individually evaluated for impairment for the most recent three years (dollars in thousands) : 2023 2022 2021 Specific reserve on loans individually evaluated for credit losses $ 118 $ 95 $ 1,392 Loans individually evaluated for credit losses $ 13,794 $ 14,386 $ 12,312 Percentage increase (decrease) in specific reserve on loans individually evaluated for credit losses 24 % -93 % -23 % Percentage increase (decrease) in loans individually evaluated for credit losses -4 % 17 % -19 % Allocation of the Allowance for Credit Losses The following table sets forth information concerning the Company’s allocation of the allowance for credit losses for the most recent three years (dollars in thousands) : 2023 2022 2021 Amount % * Amount % * Amount % * Balance at end of period applicable to: Real Estate Construction $ 408 5 % $ 730 4 % $ 675 4 % 1-4 family residential 3,333 22 % 3,028 23 % 2,752 21 % Multi-family 2,542 15 % 2,493 15 % 2,501 15 % Commercial 5,236 28 % 4,742 29 % 5,905 29 % Agricultural 1,238 13 % 1,625 13 % 1,584 13 % Commercial 1,955 7 % 1,153 6 % 1,170 7 % Agricultural 1,607 9 % 1,705 9 % 1,836 10 % Consumer and other 457 1 % 221 1 % 198 1 % $ 16,776 100 % $ 15,697 100 % $ 16,621 100 % * Percent of loans in each category to total loans. 46 Liquidity and Capital Resources Liquidity management is the process by which the Company, through its Banks’ Asset and Liability Committees (ALCO), ensures adequate liquid funds are available to meet its financial commitments on a timely basis, at a reasonable cost and within acceptable risk tolerances.

The following table sets forth information regarding changes in the Company's specific reserve on loans individually evaluated for credit losses and loans individually evaluated for credit losses for the most recent three years (dollars in thousands) : 2024 2023 2022 Specific reserve on loans individually evaluated for credit losses $ 98 $ 118 $ 95 Loans individually evaluated for credit losses $ 14,772 $ 13,794 $ 14,386 Percentage increase (decrease) in specific reserve on loans individually evaluated for credit losses -17 % 24 % -93 % Percentage increase (decrease) in loans individually evaluated for credit losses 7 % -4 % 17 % Allocation of the Allowance for Credit Losses The following table sets forth information concerning the Company’s allocation of the allowance for credit losses for the most recent three years (dollars in thousands) : 2024 2023 2022 Amount % * Amount % * Amount % * Balance at end of period applicable to: Real Estate Construction $ 482 5 % $ 408 5 % $ 730 4 % 1-4 family residential 3,890 23 % 3,333 22 % 3,028 23 % Multi-family 2,188 15 % 2,542 15 % 2,493 15 % Commercial 4,932 27 % 5,236 28 % 4,742 29 % Agricultural 1,584 12 % 1,238 13 % 1,625 13 % Commercial 1,759 7 % 1,955 7 % 1,153 6 % Agricultural 1,805 10 % 1,607 9 % 1,705 9 % Consumer and other 418 1 % 457 1 % 221 1 % $ 17,058 100 % $ 16,776 100 % $ 15,697 100 % * Percent of loans in each category to total loans.

Years Ended December 31, (dollars in thousands, except per share amounts) 2023 2022 2021 STATEMENT OF INCOME DATA Interest income $ 74,301 $ 61,553 $ 60,482 Interest expense 29,676 8,309 4,485 Net interest income 44,625 53,244 55,997 Credit loss expense (benefit) 789 (874 ) (757 ) Net interest income after credit loss expense (benefit) 43,836 54,118 56,754 Noninterest income 9,215 9,687 10,537 Noninterest expense 40,162 38,644 36,618 Income before provision for income tax 12,889 25,161 30,673 Provision for income taxes 2,072 5,868 6,760 Net income $ 10,817 $ 19,293 $ 23,913 DIVIDENDS AND EARNINGS PER SHARE DATA Cash dividends declared* $ 9,712 $ 9,739 $ 11,753 Cash dividends declared per share* $ 1.08 $ 1.08 $ 1.29 Basic and diluted earnings per share $ 1.20 $ 2.14 $ 2.62 Weighted average shares outstanding 8,992,167 9,033,410 9,114,379 BALANCE SHEET DATA Total assets $ 2,155,481 $ 2,134,926 $ 2,137,041 Net loans 1,277,812 1,226,011 1,144,108 Deposits 1,811,831 1,897,957 1,878,019 Stockholders' equity 165,788 149,098 207,778 Equity to assets ratio 7.69 % 6.98 % 9.72 % FINANCIAL PERFORMANCE Net income $ 10,817 $ 19,293 $ 23,913 Average assets 2,140,034 2,134,947 2,082,705 Average stockholders' equity 153,530 168,752 209,135 Return on assets (net income divided by average assets) 0.51 % 0.90 % 1.15 % Return on equity (net income divided by average equity) 7.05 % 11.43 % 11.43 % Net interest margin (net interest income divided by average earning assets)** 2.20 % 2.62 % 2.83 % Efficiency ratio (noninterest expense divided by noninterest income plus net interest income) 74.60 % 61.41 % 55.04 % Dividend payout ratio (dividends per share divided by net income per share)* 90.00 % 50.47 % 49.24 % Dividend yield (dividends per share divided by closing year-end market price)* 5.06 % 4.57 % 5.27 % Equity to assets ratio (average equity divided by average assets) 7.17 % 7.90 % 10.04 % * Dividends are typically declared in one quarter and then paid in the subsequent quarter.

Years Ended December 31, (dollars in thousands, except per share amounts) 2024 2023 2022 STATEMENT OF INCOME DATA Interest income $ 82,607 $ 74,301 $ 61,553 Interest expense 37,631 29,676 8,309 Net interest income 44,976 44,625 53,244 Credit loss expense (benefit) 592 789 (874 ) Net interest income after credit loss expense (benefit) 44,384 43,836 54,118 Noninterest income 9,837 9,215 9,687 Noninterest expense 41,980 40,162 38,644 Income before provision for income tax 12,241 12,889 25,161 Provision for income taxes 2,023 2,072 5,868 Net income $ 10,218 $ 10,817 $ 19,293 DIVIDENDS AND EARNINGS PER SHARE DATA Cash dividends declared $ 8,444 $ 9,712 $ 9,739 Cash dividends declared per share $ 0.94 $ 1.08 $ 1.08 Basic and diluted earnings per share $ 1.14 $ 1.20 $ 2.14 Weighted average shares outstanding 8,991,286 8,992,167 9,033,410 BALANCE SHEET DATA Total assets $ 2,133,180 $ 2,155,481 $ 2,134,926 Net loans 1,303,917 1,277,812 1,226,011 Deposits 1,846,682 1,811,831 1,897,957 Stockholders' equity 174,706 165,788 149,098 Equity to assets ratio 8.19 % 7.69 % 6.98 % FINANCIAL PERFORMANCE Net income $ 10,218 $ 10,817 $ 19,293 Average assets 2,127,051 2,140,034 2,134,947 Average stockholders' equity 169,732 153,530 168,752 Return on assets (net income divided by average assets) 0.48 % 0.51 % 0.90 % Return on equity (net income divided by average equity) 6.02 % 7.05 % 11.43 % Net interest margin (net interest income divided by average earning assets)* 2.22 % 2.20 % 2.62 % Efficiency ratio (noninterest expense divided by noninterest income plus net interest income) 76.59 % 74.60 % 61.41 % Dividend payout ratio (dividends per share divided by net income per share) 82.46 % 90.00 % 50.47 % Dividend yield (dividends per share divided by closing year-end market price) 4.87 % 5.06 % 4.57 % Equity to assets ratio (average equity divided by average assets) 7.98 % 7.17 % 7.90 % * See page 32 for further discussion of this Non-GAAP financial measure. 27 The following discussion is provided for the consolidated operations of the Company and its Banks.

Credit rating downgrades are utilized as an additional indicator of credit weakness and as a reference point for historical default rates. 40 The following table summarizes the total general obligation and revenue bonds in the Company’s investment securities portfolios as of December 31, 2023 and 2022 identifying the state in which the issuing government municipality or agency operates (in thousands) : 2023 2022 Estimated Estimated Amortized Fair Amortized Fair Cost Value Cost Value Obligations of states and political subdivisions: General Obligation bonds: Iowa $ 59,721 $ 55,827 $ 66,168 $ 60,884 Texas 29,199 26,721 29,750 26,241 Nebraska 19,660 17,202 20,165 16,845 Oregon 9,885 9,299 11,049 10,079 Washington 9,632 8,860 10,911 9,898 Connecticut 8,700 8,183 8,701 7,936 Other (2023: 15 states; 2022: 15 states) 32,698 30,257 33,327 29,868 Total general obligation bonds $ 169,495 $ 156,349 $ 180,071 $ 161,751 Revenue bonds: Iowa $ 48,645 $ 45,953 $ 57,330 $ 53,649 Texas 14,794 13,193 14,824 12,680 Nebraska 9,397 8,238 9,777 8,265 Other (2023: 23 states; 2022: 23 states) 50,144 46,158 55,177 49,658 Total revenue bonds $ 122,980 $ 113,542 $ 137,108 $ 124,252 Total obligations of states and political subdivisions $ 292,475 $ 269,891 $ 317,179 $ 286,003 As of December 31, 2023 and 2022, 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 and water utilities.

Credit rating downgrades are utilized as an additional indicator of credit weakness and as a reference point for historical default rates. 40 The following table summarizes the total general obligation and revenue bonds in the Company’s investment securities portfolios as of December 31, 2024 and 2023 identifying the state in which the issuing government municipality or agency operates (in thousands) : 2024 2023 Estimated Estimated Amortized Fair Amortized Fair Cost Value Cost Value Obligations of states and political subdivisions: General Obligation bonds: Iowa $ 51,515 $ 47,768 $ 59,721 $ 55,827 Texas 25,859 23,995 29,199 26,721 Nebraska 19,256 17,005 19,660 17,202 Oregon 9,167 8,651 9,885 9,299 Connecticut 8,698 8,089 8,700 8,183 Washington 7,885 7,184 9,632 8,860 Other (2024: 15 states; 2023: 15 states) 28,351 26,192 32,698 30,257 Total general obligation bonds $ 150,731 $ 138,884 $ 169,495 $ 156,349 Revenue bonds: Iowa $ 43,859 $ 41,320 $ 48,645 $ 45,953 Texas 14,764 13,266 14,794 13,193 Nebraska 9,042 8,029 9,397 8,238 Other (2024: 23 states; 2023: 23 states) 47,722 44,063 50,144 46,158 Total revenue bonds $ 115,387 $ 106,678 $ 122,980 $ 113,542 Total obligations of states and political subdivisions $ 266,118 $ 245,562 $ 292,475 $ 269,891 As of December 31, 2024 and 2023, 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 and water utilities.

(3) Tax-exempt income has been adjusted to a tax-equivalent basis using an incremental tax rate of 21% for the years ended December 31, 2023 and 2022. 33 Average Balances and Interest Rates (continued) 2023 2022 Average Revenue/ Yield/ Average Revenue/ Yield/ balance expense rate balance expense rate LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing liabilities Deposits Savings, interest-bearing checking and money markets accounts $ 1,212,630 $ 16,794 1.38 % $ 1,297,503 $ 5,498 0.42 % Time deposits 255,434 7,677 3.01 % 206,401 1,818 0.88 % Total deposits 1,468,064 24,471 1.67 % 1,503,904 7,316 0.49 % Other borrowed funds 132,918 5,205 3.92 % 55,874 993 1.78 % Total interest-bearing liabilities 1,600,982 29,676 1.85 % 1,559,778 8,309 0.53 % Noninterest-bearing liabilities Noninterest-bearing checking 373,704 397,436 Other liabilities 11,818 8,981 Stockholders' equity 153,530 168,752 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,140,034 $ 2,134,947 Net interest income (FTE) (4) $ 45,234 $ 53,934 Net interest spread (FTE) 1.79 % 2.49 % Net interest margin (FTE) (4) 2.20 % 2.62 % (4) Net interest income (FTE) is a non-GAAP financial measure.

(2) Tax-exempt income has been adjusted to a tax-equivalent basis using an incremental tax rate of 21% for the years ended December 31, 2024 and 2023. 33 Average Balances and Interest Rates (continued) 2024 2023 Average Revenue/ Yield/ Average Revenue/ Yield/ balance expense rate balance expense rate LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing liabilities Deposits Savings, interest-bearing checking and money markets accounts $ 1,167,878 $ 19,351 1.66 % $ 1,212,630 $ 16,794 1.38 % Time deposits 307,229 12,660 4.12 % 255,434 7,677 3.01 % Total deposits 1,475,107 32,011 2.17 % 1,468,064 24,471 1.67 % Other borrowed funds 128,445 5,620 4.38 % 132,918 5,205 3.92 % Total interest-bearing liabilities 1,603,552 37,631 2.35 % 1,600,982 29,676 1.85 % Noninterest-bearing liabilities Noninterest-bearing checking 340,868 373,704 Other liabilities 12,899 11,818 Stockholders' equity 169,732 153,530 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,127,051 $ 2,140,034 Net interest income (FTE) (3) $ 45,507 $ 45,234 Net interest spread (FTE) 1.70 % 1.79 % Net interest margin (FTE) (3) 2.22 % 2.20 % (3) Net interest income (FTE) is a non-GAAP financial measure.

Total assets increased to $2.16 billion in 2023 compared to $2.13 billion in 2022, or 1.0%. The increase was primarily due to interest-bearing deposit and loan growth funded by other borrowings. The increase was offset in part by a decrease in securities available-for-sale due primarily to maturities in the investment portfolio.

Total assets decreased to $2.13 billion in 2024 compared to $2.16 billion in 2023, or 1.0%. The decrease was primarily due to a decrease in securities available-for-sale and partially offset by an increase in loans and interest-bearing deposits in financial institutions.

Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. Subsequent evaluations of the then-existing loan portfolio, in light of the factors then prevailing, may result in significant changes in the allowance for credit losses in those future periods.

Subsequent evaluations of the then-existing loan portfolio, in light of the factors then prevailing, may result in significant changes in the allowance for credit losses in those future periods.

Review of the Consolidated Statements of Cash Flows Net cash provided by operating activities for the years ended December 31, 2023 and 2022 totaled $19.5 million and $21.2 million, respectively.

Review of the Consolidated Statements of Cash Flows Net cash provided by operating activities for the years ended December 31, 2024 and 2023 totaled $14.3 million and $19.2 million, respectively. The change in net cash provided by operating activities in 2024 was primarily due to payments of accrued interest on borrowings.

Net loan charge-offs totaled $213 thousand for the year ended December 31, 2023 compared to net loan charge-offs of $50 thousand for the previous year. The credit loss expense in 2023 was primarily due to growth in the loan portfolio and charge-offs in the agriculture loan portfolio.

The Company’s credit loss expense for the year ended December 31, 2024 was $592 thousand compared to a credit loss expense of $789 thousand for the previous year. Net loan charge-offs totaled $453 thousand for the year ended December 31, 2024 compared to net loan charge-offs of $213 thousand for the previous year.

Such factors are used to adjust the historical loss rates so that they reflect management’s expectation of future conditions based on a reasonable and supportable forecast.

This model calculates an expected life-of-loan loss percentage for each loan category by using historical loss rate analysis for all loan pools. 30 Factors are used to adjust the historical loss rates so that they reflect management’s expectation of future conditions based on a reasonable and supportable forecast.

The decrease of $86.1 million between the periods can be primarily attributed to decreases in savings and money market accounts as customers seek higher interest rates. A portion of the decline in savings and money market accounts was offset by an increase in time deposits.

The increase of $34.9 million between the periods can be primarily attributed to increases in time deposits and public funds. A portion of the increase in time deposits and public funds was offset by a decline in noninterest-bearing checking, savings and money market accounts.

Refer to the net interest income discussion following the tables for additional detail (dollars in thousands). 2023 2022 Average Revenue/ Yield/ Average Revenue/ Yield/ balance expense rate balance expense rate ASSETS Interest-earning assets Loans (1) Commercial $ 85,914 $ 4,888 5.69 % $ 72,844 $ 3,381 4.64 % Agricultural 93,813 6,396 6.82 % 95,029 4,576 4.82 % Real estate 1,047,109 44,792 4.28 % 985,084 37,342 3.79 % Consumer and other 16,403 734 4.47 % 16,200 657 4.06 % Total loans (including fees) 1,243,239 56,810 4.57 % 1,169,157 45,956 3.93 % Investment securities (2) Taxable 654,718 12,674 1.94 % 693,636 12,101 1.74 % Tax-exempt (3) 111,401 2,901 2.60 % 130,474 3,285 2.52 % Total investment securities 766,119 15,575 2.03 % 824,110 15,386 1.87 % Other interest-earning assets 50,148 2,525 5.04 % 67,692 901 1.33 % Total interest-earning assets 2,059,506 $ 74,910 3.64 % 2,060,959 $ 62,243 3.02 % Noninterest-earning assets Cash and due from banks 21,236 23,390 Premises and equipment, net 20,904 18,213 Other, less allowance for loan losses (2) 38,388 32,385 Total noninterest-earning assets 80,528 73,988 TOTAL ASSETS $ 2,140,034 $ 2,134,947 (1) Average loan balance includes nonaccrual loans, if any.

Refer to the net interest income discussion following the tables for additional detail (dollars in thousands). 2024 2023 Average Revenue/ Yield/ Average Revenue/ Yield/ balance expense rate balance expense rate ASSETS Interest-earning assets Loans (1) Commercial $ 89,932 $ 5,612 6.24 % $ 85,914 $ 4,888 5.69 % Agricultural 118,947 8,909 7.49 % 93,813 6,396 6.82 % Real estate 1,072,829 50,424 4.70 % 1,047,109 44,792 4.28 % Consumer and other 16,763 846 5.05 % 16,403 734 4.47 % Total loans (including fees) 1,298,471 65,791 5.07 % 1,243,239 56,810 4.57 % Investment securities Taxable 603,831 12,014 1.99 % 654,718 12,674 1.94 % Tax-exempt (2) 93,768 2,525 2.69 % 111,401 2,901 2.60 % Total investment securities 697,599 14,539 2.08 % 766,119 15,575 2.03 % Other interest-earning assets 56,908 2,808 4.93 % 50,148 2,525 5.04 % Total interest-earning assets 2,052,978 $ 83,138 4.05 % 2,059,506 $ 74,910 3.64 % Noninterest-earning assets Cash and due from banks 19,754 21,236 Premises and equipment, net 22,070 20,904 Other, less allowance for loan losses 32,249 38,388 Total noninterest-earning assets 74,073 80,528 TOTAL ASSETS $ 2,127,051 $ 2,140,034 (1) Average loan balance includes nonaccrual loans, if any.

… 38 more changes not shown on this page.

Top changes in AMES NATIONAL CORP's 2024 10-K

Item 1. Business

Item 1A. Risk Factors

Item 2. Properties

Item 3. Legal Proceedings

Item 4. Mine Safety Disclosures

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Other ATLO 10-K year-over-year comparisons