Ames National (ATLO) has posted Q2 2026 results with total revenue of US$18.9 million and net income of US$5.9 million, translating to basic EPS of US$0.67 and a trailing twelve month EPS of US$2.59. Over recent quarters the company has seen revenue move from US$16.0 million in Q2 2025 to US$18.9 million in Q2 2026, while quarterly EPS shifted from US$0.51 to US$0.67 and trailing net income reached US$23.0 million. This gives investors a clearer picture of earnings momentum backed by a trailing net profit margin of 31.2%. With that backdrop, the latest report puts the focus squarely on how sustainably Ames National is converting its revenue into profits.
See our full analysis for Ames National.With the headline numbers on the table, the next step is to set Ames National's recent results against the widely followed narratives around its growth, profitability, and risk profile to see which stories are reinforced and which are challenged.
Curious how numbers become stories that shape markets? Explore Community Narratives
Net interest margin at 3.18% with costs at 58.52%
- For Q2 2026, Ames National reported a net interest margin of 3.18% alongside a cost to income ratio of 58.52%, compared with 3.01% and 59.69% in Q1 2026 and 2.65% and 64.34% in Q2 2025.
- What stands out for a bullish view is that recent quarters pair a 3.18% net interest margin with a cost to income ratio below 60%, while a year earlier Q2 2025 combined a 2.65% margin with a 64.34% cost ratio. This suggests the current margin and cost mix looks more efficient even though the longer term 5 year earnings trend shows an annualized decline of 11.9%.
- Bulls who focus on profitability can point to trailing net profit margin at 31.2% versus 20.6% a year earlier, which lines up with the quarterly pattern of firmer net interest margin and lower cost to income ratios in 2026 versus early 2025.
- At the same time, the 11.9% annualized decline in earnings over five years challenges any bullish claim that this margin profile is firmly established, because it shows that historically profits have not moved in a straight line.
Loan quality and US$19.6 million in non performing loans
- Non performing loans were US$19.6 million at Q2 2026 on a trailing basis, compared with US$20.1 million at Q1 2026 and US$15.5 million at Q4 2025.
- Critics highlight credit risk in Ames National and the risk summary points out that the allowance for bad loans covers 87% of problem loans. A bearish narrative that focuses on credit quality will note that non performing loans have been hovering in the US$19 million to US$20 million range recently while reserves remain below 100%.
- Bears can link this to the unstable dividend record in the risk summary and argue that if credit losses rose, dividend decisions could stay sensitive to loan performance.
- However, the fact that non performing loans have not surged above the roughly US$20 million level over the past few quarters limits support for a more extreme bearish claim about a rapidly worsening loan book based on the provided figures.
P/E of 12.2x versus DCF fair value
- The stock trades at US$29.62 with a trailing P/E of 12.2x, which sits below the US market at 19.4x, roughly in line with the US Banks industry at 12.5x and above the peer average at 11x, while the stated DCF fair value is US$20.64.
- What is interesting for a general market view is that earnings over the last year grew 89.7% and net profit margin reached 31.2%. Yet the DCF fair value of US$20.64 is below the current share price of US$29.62 and the P/E is only slightly below the broader market, which means investors weighing a bullish story based on the recent earnings jump have to set that against a valuation model that points to a lower intrinsic value.
- The mixed picture, with a P/E below the overall US market but above the peer average, suggests the stock is not priced at a deep discount compared with similar banks despite the stronger recent margin and earnings figures.
- At the same time, the trailing basic EPS of US$2.59 and net income of US$23.0 million on a trailing basis provide the earnings base that both bullish and cautious investors will use when comparing the P/E and DCF fair value signals.
To see how other investors are connecting these profitability, credit, and valuation figures into a bigger picture for Ames National, it is worth reviewing the broader community narrative around the stock Curious how numbers become stories that shape markets? Explore Community Narratives.
Next Steps
Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Ames National's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.
If the mix of risks and rewards around Ames National feels finely balanced to you, now is the time to review the data and form your own view using the 3 key rewards and 2 important warning signs.
See What Else Is Out There
Ames National carries a mixed profile, with an 11.9% annualized decline in earnings over five years, non performing loans below full reserve coverage, and a P/E above close peers.
If that combination of earnings pressure, credit risk, and valuation leaves you cautious, use the 83 resilient stocks with low risk scores to quickly focus on companies with more resilient profiles and potentially steadier fundamentals.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com