Ames National Corporation (ATLO) is a $2.14 billion total-asset Iowa bank holding company operating six community bank subsidiaries. Under a liquidation lens, the recovery posture is modestly positive given the asset composition, but with meaningful caveats. Applying standard bank liquidation haircuts: cash and interest-bearing deposits ($118.2M) recover at par; the AFS investment portfolio ($688.8M amortized cost, $688.8M fair value but carrying $30.1M gross unrealized losses) is marked-to-market and classifies as high-recovery — the filing confirms all securities are classified AFS and are liquid, with $384.7M unpledged. Net loans ($1.28B gross, $1.26B net of $17.4M ACL) carry the highest risk; applying a 90-95% recovery haircut to gross loans (reflecting the 1.57% problem loan ratio, $20.1M nonaccrual, $19.6M substandard-impaired, and an agricultural concentration with deteriorating quality) yields estimated gross recovery of approximately $1.15-1.22B, well below face. PP&E ($21.0M) recovers at 50-70%, or roughly $10.5-14.7M. Goodwill ($12.4M) and other intangibles ($0.7M) are zeroed under liquidation. BOLI ($3.3M) is recoverable at or near face. On the liability side, deposits face-value at $1.87B, FHLB advances $16.5M, repo agreements $36.7M, and other liabilities $10.4M — total liabilities at face $1.93B. Rough liquidation value of equity: approximately $118M (cash) + $640-690M (investments, haircut for residual illiquidity) + $1.15-1.22B (loans) + $10-15M (PP&E) + $3M (BOLI) minus $1.93B (liabilities) = roughly zero to modestly positive recovery, with significant sensitivity to loan recovery assumptions. The book equity of $207.6M is not fully realizable. Since the prior period (10-K, December 31, 2025), the loan portfolio contracted modestly ($1.28B to $1.26B net), nonaccrual loans increased from $15.1M to $20.1M, and substandard-impaired loans increased from $14.6M to $19.6M — both adverse trends for liquidation recovery. The investment portfolio grew by $32.8M, which is additive to liquid assets but accompanied by an increase in unrealized losses. Agricultural credit quality continues to deteriorate, driven by variable yields, weather, and commodity prices. FHLB advances declined marginally. No external holding company debt is outstanding. The filing discusses a $5.0M increase in substandard-impaired loans and a $12.1M jump in loans past due 30+ days in MD&A but these specific metrics are not separately tagged in XBRL.
▼ Community Notes