AMES NATIONAL CORP Debt Disclosure
Note 10. Borrowings
FHLB advances are collateralized by FHLB stock, certain 1-4 family residential real estate loans, multifamily real estate loans, commercial real estate loans and agricultural real estate loans. The Banks had available borrowing capacity with the FHLB of Des Moines, Iowa of $291.9 million and $245.3 million at December 31, 2025 and 2024, respectively. The Company had short-term FHLB advances of $3 million and $27 million as of December 31, 2025 and 2024, respectively. The Company also had an FHLB advance of $15 million with a maturity date of August 2026 and $1.5 million with a maturity date of October 2029 as of December 31, 2025 and 2024. The weighted average contractual rate on FHLB advances was 3.95% and 4.42% as of December 31, 2025 and 2024, respectively.
On April 25, 2024, the Company entered into a promissory note and line of credit agreement with an unaffiliated bank, providing for a -year dollar line of credit facility. The Company has secured its obligations under the Credit Agreement by pledging to the Lender all outstanding shares of common stock of its subsidiary bank, Reliance State Bank. The Company had no outstanding borrowings on the line of credit as of December 31, 2025 and $1 million of outstanding borrowings on the line of credit as of December 31, 2024. The Company did not comply with one covenant as of December 31, 2025 and 2024, requiring the modified Texas Ratio not exceed 20% at the end of each calendar quarter. The modified Texas Ratio is defined as substandard, substandard-impaired loans and other real estate owned, divided by the sum of Tier 1 capital plus the Allowance for Credit Losses – Loans. The modified Texas Ratio was 24.6% and 22.7% as of December 31, 2025 and 2024. The lender waived the noncompliance as of December 31, 2025 and 2024.
On June 6, 2022, the Company borrowed $4.0 million on a credit agreement with a commercial bank. The borrowings were used for general corporate purposes. Interest under the note is payable quarterly over years. Required quarterly principal payments of $150 thousand began in September 2022, with the remaining balance due June 2026. The interest rate is fixed at 3.35% and the outstanding balance was $1.9 million and $2.5 million as of December 31, 2025 and 2024, respectively. The note is secured by property in West Des Moines, Iowa.
Future required principal payments for long-term debt as of December 31, 2025 are shown in the table below (in thousands).
| 2026 | 16,900 | |||
| 2027 | - | |||
| 2028 | - | |||
| 2029 | 1,452 | |||
| 2030 | - | |||
| Thereafter | - | |||
| $ | 18,352 |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 12, 2026 | Showing above |
| 2024 | Mar 12, 2025 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.