<SUBMISSION>
<ACCESSION-NUMBER>0000743530-01-500051
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>2
<PERIOD>20010630
<FILING-DATE>20010814
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>AMES NATIONAL CORP
<CIK>0001132651
<ASSIGNED-SIC>6770
<IRS-NUMBER>421039071
<STATE-OF-INCORPORATION>IA
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-32637
<FILM-NUMBER>1713919
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>PO BOX 846
<CITY>AMES
<STATE>IA
<ZIP>50010
<PHONE>5152326251
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>PO BOX 846
<CITY>AMES
<STATE>IA
<ZIP>50010
</MAIL-ADDRESS>
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<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>ames10q.txt
<TEXT>
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

[Mark One]
[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2001

[_]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

           For the transition period from ____________ to ____________

                         Commission File Number 0-32637

                            AMES NATIONAL CORPORATION
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

           IOWA                                                 42-1039071
-------------------------------                           ----------------------
(State or Other Jurisdiction of                             (I. R. S. Employer
Incorporation or Organization)                            Identification Number)

                                405 FIFTH STREET
                                AMES, IOWA 50010
                    ----------------------------------------
                    (Address of Principal Executive Offices)

       Registrant's Telephone Number, Including Area Code: (515) 232-6251

                                 Not Applicable
              ----------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                         if Changed Since Last Report)

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes ____ No X

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

COMMON STOCK, $5.00 PAR VALUE                           3,125,229
-----------------------------            ---------------------------------------
            (Class)                      (Shares Outstanding at August 10, 2001)
<PAGE>



                            AMES NATIONAL CORPORATION

                                      INDEX



Part I.  Financial Information

         Item 1.   Consolidated Financial
                   Statements (Unaudited)

                   Consolidated Statements of
                   Financial Condition at June 30, 2001
                   (Unaudited) and December 31, 2000

                   Consolidated Statements of
                   Income for the three and six months ended
                   June 30, 2001 and 2000 (Unaudited)

                   Consolidated Statements of
                   Cash Flows for the six months ended
                   June 30, 2001 and 2000 (Unaudited)

                   Notes to Consolidated Financial
                   Statements

         Item 2.   Management's Discussion and Analysis
                   of Financial Condition and Results of Operations

         Item 3.   Quantitative and Qualitative Disclosures
                   About Market Risk

Part II. Other Information

         Items 1 through 6

         Signatures

         Exhibits



                                       2
<PAGE>



PART 1.  FINANCIAL INFORMATION

Item 1.           Consolidated Financial Statements (Unaudited)

                   AMES NATIONAL CORPORATION AND SUBSIDIARIES

                           Consolidated Balance Sheets
                                   (unaudited)
<TABLE>
                                                                                  June 30,        December 31,
                                Assets                                              2001               2000
                                                                                ------------------------------
<S>                                                                             <C>               <C>
Cash and due from banks .....................................................   $  25,404,673     $ 28,775,032
Federal funds sold ..........................................................      18,985,000          245,000
Interest bearing deposits in financial institutions .........................         250,000          348,174
Securities available-for-sale ...............................................     223,407,992      232,706,157
Loans receivable, net .......................................................     332,201,912      344,014,727
Bank premises and equipment, net ............................................       5,648,974        5,216,301
Accrued income receivable ...................................................       5,673,159        7,020,614
Other assets ................................................................         607,890        1,058,762
                                                                                ------------------------------
           Total assets .....................................................   $ 612,179,600      619,384,767
                                                                                ==============================

                 Liabilities and Stockholders' Equity
Deposits:
   Demand ...................................................................   $  53,498,859       54,597,366
   NOW accounts .............................................................      97,341,021       96,328,264
   Savings and money market .................................................     126,257,885      122,321,564
   Time, $100,000 and over ..................................................      54,350,899       63,894,549
   Other time ...............................................................     159,211,770      156,287,112
                                                                                ------------------------------
           Total deposits ...................................................     490,660,434      493,428,855

FHLB advances ...............................................................      10,000,000       16,000,000
Federal funds purchased and securities sold under agreements to repurchase ..      14,981,103       19,007,419
Dividends payable ...........................................................       1,312,596        1,248,917
Deferred taxes ..............................................................         908,921          158,450
Accrued interest and other liabilities ......................................       3,827,279        3,363,665
                                                                                ------------------------------
           Total liabilities ................................................     521,690,333      533,207,306
                                                                                ------------------------------
Stockholders' Equity:
   Common stock, $5 par value; authorized 6,000,000 shares;
     issued 3,153,230 shares at June 30, 2001 and December 31, 2000 .........      15,766,150       15,766,150
   Treasury stock, at cost; 28,001 and 30,937 shares at
      June 30, 2001 and December 31, 2000, respectively .....................      (1,530,805)      (1,677,605)
   Surplus ..................................................................      25,393,028       25,428,994
   Retained earnings ........................................................      46,772,320       44,036,378
   Accumulated other comprehensive income (loss) - net unrealized gain (loss)
     on securities available-for-sale .......................................       4,088,574        2,623,544
                                                                                ------------------------------
           Total stockholders' equity .......................................      90,489,267       86,177,461
                                                                                ------------------------------

           Total liabilities and stockholders' equity .......................   $ 612,179,600      619,384,767
                                                                                ==============================
</TABLE>

                                       3
<PAGE>



                   AMES NATIONAL CORPORATION AND SUBSIDIARIES

                        Consolidated Statements of Income
                                   (unaudited)
<TABLE>
                                            Three Months Ended           Six Months Ended
                                         -----------------------------------------------------
                                                 June 30,                    June 30,
                                            2001           2000          2001         2000
                                         -----------------------------------------------------
<S>                                      <C>           <C>           <C>           <C>
Interest and dividend income:
    Loans ............................   $ 7,109,567   $ 6,997,732   $14,378,349   $13,509,240
    Securities .......................     2,958,595     3,673,597     6,059,233     7,381,862
    Federal funds sold ...............       256,731       142,029       345,801       208,502
    Dividends ........................       269,391       260,477       500,379       502,681
                                         -----------------------------------------------------
                                          10,594,284    11,073,835    21,283,762    21,602,285
                                         -----------------------------------------------------
Interest expense:
    Deposits .........................     4,840,597     5,268,333     9,969,974    10,339,099
    Other borrowed funds .............       299,188       821,656       696,350     1,338,648
                                         -----------------------------------------------------
                                           5,139,785     6,089,989    10,666,324    11,677,747
                                         -----------------------------------------------------
          Net interest income ........     5,454,499     4,983,846    10,617,438     9,924,538

Provision for loan losses ............       196,230       156,016       273,908       261,959
                                         -----------------------------------------------------
          Net interest income after
             provision for loan losses     5,258,269     4,827,830    10,343,530     9,662,579
                                         -----------------------------------------------------
Noninterest income:
    Trust department income ..........       257,054       246,899       487,802       455,725
    Service fees .....................       415,665       451,472       784,712       786,130
    Securities gains, net ............       662,682       195,092     1,151,531       188,779
    Other ............................       322,850       201,552       629,719       543,157
                                         -----------------------------------------------------
          Total noninterest income ...     1,658,251     1,095,015     3,053,764     1,973,791
                                         -----------------------------------------------------
Noninterest expense:
    Salaries and employee benefits ...     1,707,197     1,582,543     3,400,311     3,176,275
    Occupancy expenses ...............       155,348       164,622       368,949       342,583
    Data processing ..................       455,918       459,998       888,863       879,836
    Other operating expenses .........       544,617       322,926     1,073,711     1,081,557
                                         -----------------------------------------------------
          Total noninterest expense ..     2,863,080     2,530,089     5,731,834     5,480,251
                                         -----------------------------------------------------
          Income before income taxes .     4,053,440     3,392,756     7,665,460     6,156,119

Income tax expense ...................     1,336,042     1,004,695     2,368,004     1,758,619
                                         -----------------------------------------------------
          Net income .................   $ 2,717,398   $ 2,388,061   $ 5,297,456   $ 4,397,500
                                         =====================================================
Basic earnings per share .............   $      0.87   $      0.77   $      1.70   $      1.41
                                         =====================================================
Dividends per share ..................   $      0.40   $      0.38   $      0.80   $      0.76
                                         =====================================================
Comprehensive Income .................   $ 2,304,203   $ 2,137,030   $ 7,188,552   $ 3,321,833
                                         =====================================================
</TABLE>

                                       4
<PAGE>


                   AMES NATIONAL CORPORATION AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows
                                   (unaudited)
<TABLE>

                                                                                           Six Months Ended
                                                                                               June 30,
                                                                                    ----------------------------
                                                                                         2001            2000
                                                                                    ----------------------------
<S>                                                                                 <C>             <C>
Cash flows from operating activities:
   Net income ...................................................................   $  5,297,456    $  4,397,500
   Adjustments  to  reconcile  net  income  to net cash  provided  by  operating
     activities:
     Provision for loan losses ..................................................        273,908         261,959
     Amortization and accretion, net ............................................        (28,110)          8,938
     Depreciation ...............................................................        353,583         368,155
     Provision for deferred taxes ...............................................       (111,000)        (74,963)
     (Gain) Loss on sale of securities available-for-sale .......................     (1,151,531)       (188,779)
     Gain on sale of property and equipment .....................................           --           (94,137)
     (Increase) decrease in accrued income receivable ...........................      1,347,455         (47,827)
     Decrease (increase) in other assets ........................................        450,872        (116,684)
     (Decrease) increase in accrued interest and other liabilities ..............        463,614         268,965
                                                                                    ----------------------------
           Net cash provided by operating activities ............................      6,896,247       4,783,127
                                                                                    ----------------------------

Cash flow from investing activities:
   Purchase of securities available-for-sale ....................................    (24,417,996)    (19,645,935)
   Proceeds from sale of securities available-for-sale ..........................     11,501,993      14,872,200
   Proceeds from maturities of securities available-for-sale ....................     25,720,309       5,449,261
   Proceeds from sale of property and equipment .................................           --           145,518
   Net decrease (increase) in interest bearing deposits in financial institutions         98,174      (1,087,123)
   Net decrease (increase) in federal funds sold ................................    (18,740,000)       (555,000)
   Net decrease (increase) in loans .............................................     11,538,907     (26,387,227)
   Purchase of bank premises and equipment ......................................       (786,256)       (286,096)
                                                                                    ----------------------------
           Net cash used in investing activities ................................      4,915,131     (27,494,402)
                                                                                    ----------------------------

Cash flows from financing activities:
   Increase (decrease) in deposits ..............................................     (2,768,421)     (9,414,760)
   Increase (decrease) in Federal Home Loan Bank advances .......................     (6,000,000)     31,845,000
   Increase (decrease) in federal funds purchased and securities sold
     under agreements to repurchase .............................................     (4,026,316)     (2,617,761)
   Dividends paid ...............................................................     (2,497,834)     (2,370,174)
   Proceeds from issuance of common stock and treasury stock ....................        110,834       1,268,493
                                                                                    ----------------------------
           Net cash provided by (used in) financing activities ..................    (15,181,737)     18,710,798
                                                                                    ----------------------------

           Net increase in cash and cash equivalents ............................     (3,370,359)     (4,000,477)

Cash and cash equivalents at beginning of year ..................................     28,775,032      26,142,396
                                                                                    ----------------------------
Cash and cash equivalents at end of the period ..................................   $ 25,404,673      22,141,919
                                                                                    ============================

Supplemental disclosures of cash flow information:
   Cash paid for interest .......................................................   $ 10,917,324      11,652,747
   Cash paid for taxes ..........................................................      1,810,100       1,360,260
                                                                                    ============================
</TABLE>

                                       5
<PAGE>



AMES NATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)
--------------------------------------------------------------------------------

1. Significant Accounting Policies

The consolidated  financial statements for the three and six-month periods ended
June 30, 2001 and 2000 are  unaudited.  In the opinion of the management of Ames
National  Corporation (the "Company"),  these financial  statements  reflect all
adjustments,  consisting only of normal recurring accruals, necessary to present
fairly these consolidated  financial  statements.  The results of operations for
the  interim  periods are not  necessarily  indicative  of results  which may be
expected  for an  entire  year.  Certain  information  and  footnote  disclosure
normally included in complete financial  statements  prepared in accordance with
generally  accepted  accounting  principles have been omitted in accordance with
the  requirements  for  interim  financial  statements.  The  interim  financial
statements  and notes thereto  should be read in  conjunction  with the year-end
audited financial statements contained in the Company's  Registration  Statement
on Form 10. The consolidated condensed financial statements include the accounts
of the Company and its  wholly-owned  banking  subsidiaries  (the "Banks").  All
significant  intercompany  balances and  transactions  have been  eliminated  in
consolidation.

2. Dividends

On May 9, 2001,  the  Company  declared  a cash  dividend  on its common  stock,
payable on July 2, 2001 to stockholders of record as of June 18, 2001,  equal to
$0.42 per share.

3. Earnings Per Share

Earnings per share amounts were  calculated  using the weighted  average  shares
outstanding  during the periods  presented.  The  weighted  average  outstanding
shares for the three  months  ended June 30,  2001 and 2000 were  3,122,743  and
3,119,256,  respectively.  The weighted average  outstanding  shares for the six
months ended June 30, 2001 and 2000 were 3,122,521 and 3,118,547, respectively.

4. Financial Accounting Standards Board - Statement 141, Business  Combinations,
   and Statement 142, Goodwill and Other Intangible Assets

The Company has not yet  completed  its full  assessment of the effects of these
new  pronouncements  on its financial  statements  and so is uncertain as to the
impact. The standards generally are required to be implemented by the Company in
its 2002 financial statements.

                                       6
<PAGE>


Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements about the
Company,  its  business and its  prospects.  Forward-looking  statements  can be
identified by the fact that they do not relate strictly to historical or current
facts.  They often include use of the words "believe",  "expect",  "anticipate",
"intend",  "plan",  "estimate"  or  words  of  similar  meaning,  or  future  or
conditional  verbs  such  as  "will",  "would",   "should",  "could"  or  "may".
Forward-looking   statements,   by  their  nature,  are  subject  to  risks  and
uncertainties.  A number of  factors,  many of which are  beyond  the  Company's
control,   could  cause   actual   conditions,   events  or  results  to  differ
significantly from those described in the forward-looking statements. Such risks
and  uncertainties  with  respect to the Company  include  those  related to the
economic  environment,  particularly  in the areas in which the  Company and the
Banks operate, competitive products and pricing, fiscal and monetary policies of
the U.S.  government,  changes in governmental  regulations  affecting financial
institutions,  including  regulatory fees and capital  requirements,  changes in
prevailing   interest  rates,   credit  risk   management  and   asset/liability
management,  the financial and securities  markets and the  availability  of and
costs associated with sources of liquidity.

Results of Operations for Three Months Ending June 30, 2001 and June 30, 2000

General

The Company  earned net income of  $2,717,000,  or $0.87 per share for the three
months ended June 30, 2001,  compared to net income of $2,388,000,  or $0.77 per
share,  for the three  months  ended June 30,  2000,  an  increase  of 14%.  The
Company's  return on average assets was 1.75% and 1.51%,  respectively,  for the
three-month periods ending June 30, 2001 and 2000.

The  improvement  in net income can be primarily  attributed to higher  security
gains and lower interest expense. Security gains totaled $663,000 for the second
quarter of 2001 versus  security  gains of $195,000 for the same period in 2000.
The lower interest expense for the quarter is attributable to a lower volume and
declining  interest  rates on other  borrowed  funds and lower interest rates on
savings, NOW and money market accounts. The lower interest expense was partially
offset by lower interest income as investment  securities  proceeds were used to
lower the level of other borrowed funds.

The  following  table sets forth certain  information  relating to the Company's
average balance sheets and reflects the average yield on assets and average cost
of  liabilities  for the three  month  periods  ended June 30, 2001 and June 30,
2000, respectively.

                                       7
<PAGE>

Distribution of Assets, Liabilities and Stockholders' Equity
(dollars in thousands)

                    INTEREST RATES AND INTEREST DIFFERENTIAL
<TABLE>
                                                       Three Months Ended June 30,
                                       ----------------------------------------------------------
                                                   2001                          2000
                                       ----------------------------  ----------------------------
                                        Average   Revenue/   Yield/  Average    Revenue/   Yield/
                                        balance   expense     rate   balance    expense     rate
                                       ----------------------------  ----------------------------
<S>                                    <C>        <C>        <C>     <C>        <C>        <C>
ASSETS
Loans
  Commercial .......................   $ 53,044   $  1,117    8.42%  $ 55,811   $  1,196    8.57%
  Agricultural .....................     29,645        658    8.88%    26,833        616    9.18%
  Real estate ......................    240,207      4,853    8.08%   230,413      4,669    8.11%
  Installment and other ............     24,189        482    7.97%    26,255        517    7.88%
                                       ----------------------------------------------------------
Total loans (including fees) .......   $347,085   $  7,110    8.19%  $339,312   $  6,998    8.25%

Investment securities
  Taxable ..........................   $149,356   $  2,379    6.37%  $187,132   $  2,986    6.38%
  Tax-exempt .......................     66,912      1,281    7.66%    71,887      1,392    7.75%
                                       ----------------------------------------------------------
Total investment securities ........   $216,268   $  3,660    6.77%  $259,019   $  4,378    6.76%

Interest bearing deposits with banks   $    250   $      3    4.80%  $  2,002   $     29    5.79%
Federal funds sold .................     23,988        257    4.29%     9,077        142    6.26%
                                       ----------------------------------------------------------
Total interest-earning assets ......   $587,591   $ 11,030    7.51%  $609,410   $ 11,547    7.58%

Noninterest-earning assets .........     33,211                        23,530
                                       ----------------------------------------------------------
TOTAL ASSETS .......................   $620,802                      $632,940
                                       ==========================================================
<FN>
1    Average loan balance include  nonaccrual  loans, if any. Interest income on
     nonaccrual loans has been included.

2    Tax-exempt  income has been  adjusted  to a  tax-equivalent  basis using an
     incremental rate of 34%.

3    Interest income on loans includes  amortization of loan fees,  which is not
     material.
</FN>
</TABLE>


                                       8
<PAGE>



Distribution of Assets, Liabilities and Stockholders' Equity
(dollars in thousands)

                    INTEREST RATES AND INTEREST DIFFERENTIAL
<TABLE>
                                                               Three Months Ended June 30,
                                               -------------------------------------------------------------
                                                           2001                            2000
                                               ----------------------------   ------------------------------
                                               Average    Revenue/   Yield/   Average     Revenue/    Yield/
                                               balance     expense    rate    balance     expense      rate
                                               ----------------------------   ------------------------------

<S>                                            <C>        <C>        <C>      <C>         <C>         <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities
Deposits
  Savings, NOW accounts, and money markets .   $225,130   $  1,563    2.78%   $224,759    $  2,068      3.68%
  Time deposits less than $100,000 .........    161,146      2,319    5.76%    160,592       2,218      5.52%
  Time deposits greater than $100,000 ......     63,351        959    6.06%     64,667         982      6.07%
                                               --------------------------------------------------------------
Total deposits .............................   $449,627   $  4,841    4.31%   $450,018    $  5,268      4.68%
Other borrowed funds .......................     24,497        299    4.88%     55,309         822      5.94%
                                               --------------------------------------------------------------
Total Interest-bearing .....................   $474,124   $  5,140    4.34%   $505,327    $  6,090      4.82%
liabilities

             Noninterest-bearing liabilities
Demand deposits ............................   $ 50,482                       $ 44,948
Other liabilities ..........................      5,781                          4,754
                                               --------                       --------

Stockholders' equity .......................   $ 90,415                       $ 77,911
                                               --------                       --------

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY .......................   $620,802                       $632,940
                                               ========                       ========

Net interest income ........................              $  5,890     4.01%              $  5,457      3.58%
                                                          ========                        ========
Margin Analysis
Interest income/ earning assets ............              $ 11,030     7.51%              $ 11,547      7.58%
Interest expense/earning assets ............                 5,140     3.50%                 6,090      4.00%
Net interest income/earning assets .........                 5,890     4.01%                 5,457      3.58%

<FN>
1   Tax-exempt income has been adjusted to a tax-equivalent basis using an
    incremental rate of 34%.
</FN>
</TABLE>
Net Interest Income

For the three months ended June 30, 2001, the Company's net interest  margin was
4.01%  compared to 3.58% for the three months ended June 30, 2000.  Net interest
income,  prior to the adjustment for  tax-exempt  income,  for the quarter ended
June 30, 2001 and 2000 totaled  $5,454,000 and  $4,984,000,  respectively.  This
9.4% increase  resulted  primarily from lower interest  expense  attributable to
lower  interest  rates on  savings,  NOW and money  market  accounts  and from a
significant  reduction  in both the volume and interest  rate on other  borrowed
funds.

For the three months ended June 30, 2001,  interest income decreased $480,000 or
4.3% when  compared  to the same period in 2000.  This  decrease  was  primarily
attributable  to the lower volume of investment  securities  whose proceeds were
utilized to lower the level of other borrowed funds.

Interest expense decreased $950,000 or 15.6% for the quarter ended June 30, 2001
when compared to the same period in 2000. Lower deposit expense on savings,  NOW
and money market accounts was offset by higher interest  expense on certificates
of  deposit  of less  than  $100,000.  The lower  volume  other  borrowed  funds
contributed to the lower level of interest expense.

                                       9
<PAGE>

Provision for Loan Losses

The Company  provided  $196,000  for loan losses for the three months ended June
30, 2001  compared to $156,000  during the same period last year.  While general
provisions for strong loan growth  accounted  most of the additional  provisions
expense in the second quarter of 2000, this quarter's current provisions are the
result of a deterioration in credit quality in a pool of purchased leases with a
June 30, 2001 outstanding balance of $3,010,000.

Noninterest Income and Expense

Noninterest  income increased  $563,000,  or 51.4% during the quarter ended June
30, 2001 compared to the same period in 2000.  The increase can be attributed to
significant  securities  gains in the Company's  equity portfolio of $663,000 in
2001 compared to $195,000 in second quarter 2000.

Noninterest  expense increased  $333,000 or 13.2% for the second quarter of 2001
compared to the same period in 2000. The increase can be primarily attributed to
a nonrecurring  expense of $197,000 incurred in the first quarter of 2000 to the
State of Iowa to  indemnify  the  uninsured  public  funds  of a failed  bank in
central  Iowa.  The payments  were refunded from the State of Iowa in the second
quarter of 2000 which lowered  non-interest expense  significantly.  Noninterest
expense items that  increased  from the second  quarter of 2001 compared to same
period in 2000 included higher salaries and benefits of $124,000 which were 7.9%
higher and legal and  professional  fees that  reflect an increase of $36,000 or
35.8%  primarily as the result of  registering  the Company's  common stock with
Securities and Exchange Commission.

Income Taxes

The  provision  for income taxes for June 30, 2001 and 2000 was  $1,336,000  and
$1,005,000,  respectively. This amount represents an effective tax rate of 33.0%
for the second  quarter  of 2001,  compared  to 29.6% for the second  quarter of
2000. The Company's  marginal  federal tax rate is currently 35%. The difference
between the Company's  effective  and marginal tax rate is primarily  related to
investments made in tax exempt securities.

Results of Operations for Six Months Ending June 30, 2001 and June 30, 2000

General

The  Company  earned  net  income of  $5,297,000  or $1.70 per share for the six
months ended June 30, 2001,  compared to net income of $4,398,000,  or $1.41 per
share,  for the six months  ended  June 30,  2000,  an  increase  of 20.5%.  The
Company's  return on average  assets was 1.72% and 1.42%,  respectively  for the
six-month period ending June 30, 2001 and 2000.

The  improvement  in net income can be primarily  attributed to higher  security
gains and lower  interest  expense.  Security  gains totaled  $1,152,000 for the
first half of 2001  versus  security  gains of  $189,000  for the same period in
2000. The lower interest expense for the first half of 2001 is attributable to a
lower volume and  declining  interest  rates on other  borrowed  funds and lower
interest  rates on savings,  NOW and money market  accounts.  The lower interest
expense was partially  offset by lower interest income as investment  securities
proceeds were used to lower the level of other borrowed funds.

The  following  table sets forth certain  information  relating to the Company's
average balance sheets and reflects the average yield on assets and average cost
of liabilities  for the six month periods ended June 30, 2001 and June 30, 2000,
respectively.

                                       10
<PAGE>

Distribution of Assets, Liabilities and Stockholders' Equity
(dollars in thousands)
<TABLE>
                                                    INTEREST RATES AND INTEREST DIFFERENTIAL

                                                        Six Months Ended June 30,
                                       ------------------------------------------------------------
                                                   2001                           2000
                                       ----------------------------   -----------------------------
                                       Average    Revenue/   Yield/   Average    Revenue/    Yield/
                                       balance    expense     rate    balance    expense      rate
                                       ----------------------------   -----------------------------
<S>                                    <C>        <C>        <C>      <C>        <C>         <C>
ASSETS
  Loans
  Commercial .......................   $ 52,935   $  2,299    8.69%   $ 50,825   $  2,250     8.85%
  Agricultural .....................     29,461      1,332    9.04%   $ 25,915      1,175     9.07%
  Real estate ......................    241,726      9,765    8.08%   $225,310      9,067     8.05%
  Installment and other ............     24,721        982    7.94%   $ 26,617      1,017     7.64%
                                       ------------------------------------------------------------
Total loans (including fees) .......   $348,843   $ 14,378    8.24%   $328,667   $ 13,509     8.22%

Investment securities
  Taxable ..........................   $152,612   $  4,874    6.39%   $188,023   $  6,001     6.38%
  Tax-exempt .......................     66,512      2,545    7.65%   $ 71,961      2,769     7.70%
                                       ------------------------------------------------------------
Total investment securities ........   $219,124   $  7,419    6.77%   $259,984   $  8,770     6.75%

Interest bearing deposits with banks   $    250   $      6    4.80%   $  1,937   $     56     5.78%
Federal funds sold .................     15,806        346    4.38%   $  6,960        209     6.01%
                                       ------------------------------------------------------------
Total interest-earning assets ......   $584,023   $ 22,149    7.58%   $597,548   $ 22,544     7.55%


Total noninterest-earning assets ...   $ 32,712                       $ 24,025
                                       ------------------------------------------------------------

TOTAL ASSETS .......................   $616,735                       $621,573
                                       ============================================================
<FN>
1    Average loan balance include  nonaccrual  loans, if any. Interest income on
     nonaccrual loans has been included.

2    Tax-exempt  income has been  adjusted  to a  tax-equivalent  basis using an
     incremental rate of 34%.

3    Interest income on loans includes  amortization of loan fees,  which is not
     material.
</FN>
</TABLE>

                                       11
<PAGE>

Distribution of Assets, Liabilities and Stockholders' Equity

(dollars in thousands)

                    INTEREST RATES AND INTEREST DIFFERENTIAL
<TABLE>
                                                                Six Months Ended June 30,
                                               ----------------------------------------------------------------
                                                              2001                            2000
                                               -------------------------------  --------------------------------
                                               Average     Revenue/     Yield/  Average      Revenue/     Yield/
                                               balance      expense      rate   balance      expense       rate
                                               -------------------------------  --------------------------------
<S>                                            <C>         <C>          <C>     <C>          <C>          <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities
Deposits
  Savings, NOW accounts, and money markets .   $220,960   $  3,343    3.03%     $221,290    $  4,015      3.63%
  Time deposits less than $100,000 .........    160,140      4,646    5.80%      161,417       4,406      5.46%
  Time deposits greater than $100,000 ......     64,105      1,981    6.18%       64,655       1,918      5.93%
                                               ----------------------------------------------------------------
Total deposits .............................   $445,205   $  9,970    4.48%     $447,362    $ 10,339      4.62%
Other borrowed funds .......................     26,681        696    5.22%       45,163       1,339      5.93%
                                               ----------------------------------------------------------------
Total Interest-bearing liabilities .........   $471,886   $ 10,666    4.52%     $492,525    $ 11,678      4.74%
                                                          --------                          --------


             Noninterest-bearing liabilities

Demand deposits ............................   $ 49,592                         $ 46,934
Other liabilities ..........................      6,030                            4,953
                                               --------                         --------
Stockholders' equity .......................   $ 89,227                         $ 77,161
                                               --------                         --------

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY .......................   $616,735                         $621,573
                                               ========                         ========

Net interest income ........................             $ 11,483     3.93%                 $ 10,866      3.64%
                                                         ========                           ========
Margin Analysis
Interest income/ earning assets ............             $ 22,149     7.58%                 $ 22,544      7.55%
Interest expense/earning assets ............               10,666     3.65%                   11,678      3.91%
Net interest income/earning assets .........               11,483     3.93%                   10,866      3.64%
<FN>
1    Tax-exempt  income has been  adjusted  to a  tax-equivalent  basis using an
     incremental rate of 34%.
</FN>
</TABLE>

Net Interest Income

For the six months ended June 30, 2001,  the Company's  net interest  margin was
3.93%  compared to 3.64% for the six months  ended June 30,  2000.  Net interest
income, prior to the adjustment for tax-exempt income, for the first half of the
year  ended  June  30,  2001  and  2000  totaled   $10,617,000  and  $9,925,000,
respectively.  This 7.0% increase resulted primarily from lower interest expense
attributable  to lower interest rates on savings,  NOW and money market accounts
and from a  significant  reduction in both the volume and interest rate on other
borrowed funds.  This savings in interest  expense was offset by higher interest
rates on certificates of deposit.

For the six months ended June 30, 2001,  interest income  decreased  $319,000 or
1.5% when  compared  to the same period in 2000.  This  decrease  was  primarily
attributable  to the lower volume of investment  securities  whose proceeds were
utilized to lower the level of other borrowed funds.

Interest expense decreased  $1,011,000 or 8.7% for the six months ended June 30,
2001 when compared to the same period in 2000. Lower deposit expense on savings,
NOW and  money  market  accounts  was  offset  by  higher  interest  expense  on
certificates  of deposit.  The lower volume and interest rates on other borrowed
funds contributed to the lower level of interest expense.

                                       12
<PAGE>

Provision for Loan Losses

The Company provided  $274,000 for loan losses for the six months ended June 30,
2001  compared to  $262,000  during the same  period  last year.  While  general
provisions for strong loan growth  accounted  most of the provisions  expense in
the first  half of 2000,  this  year's  current  provisions  are the result of a
deterioration in credit quality of several  previously  identified problem loans
and in a pool of  purchased  leases with June 30, 2001  outstanding  balances of
$3,010,000.

Noninterest Income and Expense

Noninterest  income increased  $1,080,000,  or 54.7% during the six months ended
June  30,  2001  compared  to the  same  period  in 2000.  The  increase  can be
attributed to significant  securities gains in the Company's equity portfolio of
$1,152,000 in 2001 compared to $189,000 in the first half of 2000.

Noninterest  expense  increased  $252,000  or 4.6%  for the  first  half of 2001
compared to the same period in 2000.  Noninterest  expense items that  increased
from the six months ended June 30, 2001 compared to same period in 2000 included
higher  salaries and  benefits of $224,000  which were 7.0% higher and legal and
professional  fees that reflect an increase of $81,000 or 40.9% primarily as the
result of registering  the Company's  common stock with  Securities and Exchange
Commission.

Income Taxes

The  provision for income taxes for the six months ending June 30, 2001 and 2000
was $2,368,000 and $1,759,000, respectively. This amount represents an effective
tax rate of 30.9% for the  first  half of 2001,  compared  to 28.6% for the same
period in 2000.  The Company's  marginal  federal tax rate is currently 35%. The
difference  between the  Company's  effective and marginal tax rate is primarily
related to investments made in tax exempt securities.

Financial Condition

Assets

For the quarter ended June 30, 2001, total assets are $612,180,000, a $7,205,000
decrease in  comparison  to December 31, 2000 totals.  The lower level of assets
are attributable to a lower volume of loans and investment securities.

Investment Portfolio

The decrease in the volume of investments securities to $223,408,000 on June 30,
2001 from  $232,706,000  on December 31, 2000  resulted from maturing and called
investment  securities  proceeds  being  utilized  to lower  the  level of other
borrowings and a significantly higher volume of fed funds sold.

Loan Portfolio

Net loans as of June 30, 2001 totaled  $332,202,000,  a decrease of  $11,813,000
from the outstanding balances as of December 31, 2000. Average loans outstanding
for the six months  ending  June 30,  2001  totaled  $348,843,000  compared to a
year-end 2000 average  balance of  $339,115,000.  The  decreased  level of loans
relates to several  large  commercial  real estate loans at First  National Bank
that were refinanced at other financial institutions for pricing considerations.

Problem loans  totaled  $3,591,000 as of June 30, 2001 compared to $2,905,000 as
of  December  31,  2000.  Problem  loans  includes  loans  accounted  for  on  a
non-accrual  basis;  accruing loans which are contractually  past due 90 days or
more as to principal or interest  payments;  and any  restructured  loans. As of
June 30,  2001,  non-accrual  loans  totaled  $2,894,000,  past due loans  still
accruing totaled  $697,000,  and there were no restructured  loans  outstanding.
Other real  estate  owned as of June 30,  2001 and  December  31,  2000  totaled
$116,000 and $76,000, respectively. As of June 30, 2001, potential problem loans
and leases  consisted of a pool of purchased leases with a June 30, 2001 balance
of $3,010,000.

Net charge offs were $265,000 for the six months ended June 30, 2001 as compared
to $13,000 net recoveries for the six months ended June 30, 2000. Losses related
to purchased  leases  totaled  $155,000  with the  remaining  losses coming from
previously  identified problem loans. The resulting allowance for loan losses as
percentage  of  outstanding  loans as of June 30, 2001 and December 31, 2000 was
1.59% and 1.54%, respectively.

                                       13
<PAGE>

The allowance for loan losses is  management's  best estimate of probable losses
inherent in the loan portfolio as of the balance sheet date.  Factors considered
in establishing an appropriate allowance include: an assessment of the financial
condition of the borrower;  a realistic  determination  of value and adequacy of
underlying  collateral;  the condition of the local economy and the condition of
the specific  industry of the borrower;  an analysis of the levels and trends of
loan categories; and a review of delinquent and classified loans.

Deposits  declined,  $2,768,000,  from  year-end  2000  but are up  $15,455,000,
compared to June 30, 2000.  The  Company's  deposits are typically at a seasonal
low point at the end of the second quarter of each year as First National Bank's
deposit levels are impacted by Iowa State University  students  departing in May
and June and returning in August.

Other  borrowed funds as of June 30, 2001,  consisted  primarily of Federal Home
Loan Bank advances and securities sold under  agreements to repurchase  totaling
$24,981,000  compared  to total  other  borrowing  as of  December  31,  2000 of
$35,007,000.  The  combination of repaying other  borrowings  with proceeds from
investment  securities  and a reduction in loan volume  since  December 31, 2000
contributed to the lower level of borrowings.

Stockholders equity increased to $90,489,000 as of June 30, 2001 as earnings and
unrealized  gains on  securities  available  for sale  continued  to augment the
company's strong capital base.

Liquidity and Capital Resources

The  objective  of  liquidity  management  is  to  ensure  the  availability  of
sufficient  cash flows to meet all  financial  commitments  and to capitalize on
opportunities for profitable business expansion.  The Company's principal source
of funds is deposits including demand, money market, savings and certificates of
deposits. Other sources include principal repayments on loans, proceeds from the
maturity and sale of investment securities,  federal fund purchased,  repurchase
agreements,  advances  from the  Federal  Home Loan Bank and funds  provided  by
operations.  Net cash  from  operating  activities  contributed  $6,896,000  and
$4,783,000  to  liquidity  for the six  months  ended  June 30,  2001 and  2000,
respectively.  Liquid  assets  including  cash on hand,  balances due from other
banks,   federal   funds  sold  and   interest-bearing   deposits  in  financial
institutions  increased to  $44,640,000 as of June 30, 2001 compared to year-end
2000 balance of  $29,368,000.  The increase in fed funds sold is attributable to
maturing and callable investment securities combined with decreased loan volume.

Securities  available for sale declined to $223,408,000 as of June 30, 2001 from
$232,706,000  as of  December  31,  2000.  Proceeds  from  called  and  maturing
investment  securities  have been  utilized  to  decrease  the  Company's  other
borrowings  and are also being invested in federal funds sold market to wait for
a more favorable investment opportunity.

To provide additional  external  liquidity,  the Banks have outstanding lines of
credit with the Federal Home Loan Bank of Des Moines,  Iowa of  $51,400,000  and
federal funds borrowing capacity at correspondent banks of $46,000,000. The FHLB
advances for the Company totaled $10,000,000 and $16,000,000, respectively as of
June 30, 2001 and  December  31,  2000.  The Company as of June 30, 2001 was not
borrowing any federal funds but had outstanding  securities sold under agreement
to repurchase of $14,981,000.  Management  believes that the Company's liquidity
sources will be sufficient to support  existing  operations for the  foreseeable
future.

The Company's total  stockholder's  equity  increased to  $90,489,000,  June 30,
2001, from $86,177,000,  December 31, 2000. June 30, 2001  stockholders'  equity
was 14.8% of total assets, compared to 13.9 % at December 31, 2000. Total equity
increased due to the retention of earnings and from  appreciation in the Company
and Banks'  stock and bond  portfolios.  No  material  capital  expenditures  or
material  changes in the  capital  resource  mix are  anticipated  at this time.
Management  believes  that, as of June 30, 2001,  the Company and its Banks meet
the capital  requirements  to which they are subject.  As of that date,  all the
Company's  Banks were "well  capitalized"  under  regulatory  prompt  corrective
action provisions.

Item 3.           Quantitative and Qualitative Disclosures About Market Risk

The Company's  market risk is comprised  primarily of interest rate risk arising
from its core banking  activities of lending and deposit  taking.  Interest rate
risk  results  from the changes in market  interest  rates  which may  adversely
affect the Company's net interest income.  Management  continually  develops and
applies  strategies to mitigate this risk.  Management does not believe that the
Company's  primary  market risk exposure and how it has been managed  to-date in
2001 changed significantly when compared to 2000.

                                       14
<PAGE>

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

        Not applicable

Item 2. Changes in Securities and Use of Proceeds

On June 15,  2001,  the Company sold a total of 2,936 shares of its common stock
pursuant  to the  Company's  stock  purchase  plan  to  eligible  employees  and
directors  of the Company  and the Banks at a price of $37.75 per share,  for an
aggregate purchase price of $110,834. The Company relied on Rule 504 promulgated
under the  Securities Act of 1933 (the  "Securities  Act") to exempt the sale of
such shares from the registration  provisions of the Securities Act. The Company
was at the time of the sales  eligible  to rely on Rule 504,  as the Company was
not then subject to the reporting requirements of the Securities Exchange Act of
1934. The total proceeds raised through the sales  ($110,834) did not exceed the
Rule 504 volume  limitations of $1,000,000 less the aggregate offering price for
all  securities  sold within the  proceeding  12 months in reliance on a Section
3(b)  exemption  or in  violation on Section 5, as there were no sales of common
stock or other securities by the Company during that period. No means of general
solicitation  were used in connection with the offering,  as all purchasers were
either  employees  of the  Company  or one of the Banks or  persons  serving  as
directors  of the  Company  or one of the  Banks.  The  Company  also  exercised
reasonable  care  to  assure  that  none  of the  purchasers  was  acting  as an
"underwriter",  as the Company obtained  written  assurances from each purchaser
that the purchaser was purchasing  the shares for  investment  purposes only and
made  written  disclosure  to each  purchaser  that  the  shares  had  not  been
registered  under the  Securities  Act and were  therefore  subject  to  certain
restrictions on resale imposed by the Securities  Act. In addition,  the Company
placed  an  appropriate   restrictive  legend  on  all  certificates  issued  in
connection with the purchases and marked its stock transfer  records to indicate
that  the  shares  could  not  be  transferred  absent  registration  under  the
Securities Act or an opinion of counsel that an exemption from such registration
was  available.  The Company also filed a Form D with the Commission on a timely
basis with respect to the offering.

Item 3. Defaults Upon Senior Securities

        Not applicable

Item 4. Submission of Matters to a Vote of Security Holders

The  Company  held a special  meeting of its  shareholders  on April 23, 2001 to
consider and vote upon adoption of proposed  Restated  Articles of Incorporation
of the Company (the "Restated  Articles").  At the meeting, a total of 2,221,073
shares were  represented in person or by proxy,  with all 2,221,073 shares being
voted in favor of adoption  of the  Restated  Articles.  The  Restated  Articles
became  effective  upon the filing  thereof with the Iowa  Secretary of State on
April 27, 2001.  A copy of the Restated  Articles was included as Exhibit 3.1 to
the  Company's  Registration  Statement on Form 10 filed with the  Commission on
April 30, 2001.

Item 5. Other Information

On August 8,  2001,  the Board of  Directors  of the  Company  adopted  Restated
Bylaws, a copy of which is included as Exhibit 3 to this report.

Item 6. Exhibits and Reports on Form 8-K

        (a)   Exhibits

              Exhibit 3 - Restated Bylaws of the Company

        (b)   Reports on Form 8-K

              None



                                       15
<PAGE>




                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                              AMES NATIONAL CORPORATION

DATE: August 14, 2001                         By:  /s/ Daniel L. Krieger
                                                   -----------------------------
                                                   Daniel L. Krieger, President

                                              By:  /s/ John P. Nelson
                                                   -----------------------------
                                                   John P. Nelson
                                                   Principal Financial Officer



                                       16
<PAGE>



                                  EXHIBIT INDEX

EXHIBIT
NUMBER                     TITLE

   3                       Restated Bylaws of the Company



                                       17

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>3
<FILENAME>amesnatbylaw.txt
<TEXT>

                                                         ADOPTED: August 8, 2001


                                     BYLAWS
                                       OF

                            AMES NATIONAL CORPORATION
                              (an Iowa Corporation)
                   (hereinafter referred to as "Corporation")

                                    ARTICLE 1

                                PRINCIPAL OFFICE

The location of the  principal  office of the  Corporation  in the State of Iowa
will be  identified  in the  Corporation's  annual  report  filed  with the Iowa
Secretary of State.

                                    ARTICLE 2

                           REGISTERED OFFICE AND AGENT

The initial  registered agent and office of the Corporation are set forth in the
Articles of Incorporation.  The registered agent or registered  office, or both,
may be changed by resolution of the Board of Directors.

                                    ARTICLE 3

                            MEETINGS OF SHAREHOLDERS

Section  3.1 Annual  Meeting.  The annual  meeting of the  shareholders  for the
election of  directors  and for the  transaction  of such other  business as may
properly come before the meeting,  shall be held on the last  Wednesday in April
of each year at such place as the board of directors  shall each year fix, or at
such other place,  time and date as the board of directors shall fix, which date
shall be  within  the  earlier  of the  first  six  months  after the end of the
Corporation's  fiscal year or fifteen (15) months after the  shareholders'  last
annual meeting.

Section 3.2 Special  Meetings.  Special  meetings of the  shareholders,  for any
purpose or purposes,  unless otherwise  prescribed by law (which for purposes of
these  bylaws  shall  mean as  required  from time to time by the Iowa  Business
Corporation Act or the articles of  incorporation  of the  Corporation),  may be
called by the Chairman of the Board,  President or the board of  directors,  and
shall be called by the board of directors upon the written demand, signed, dated
and  delivered to the  Secretary,  of the holders of at least ten percent of all
the votes  entitled  to be cast on any issue  proposed to be  considered  at the
meeting.  Such written demand shall state the purpose or purposes for which such
meeting is to be called.  The time,  date and place of any special meeting shall
be determined by the board of directors, by the Chairman of the Board, or by the
President.

Section 3.3 Notices and Reports to Shareholders.

         (a) Notice of the place,  date and time of all meetings of shareholders
and, in the case of a special  meeting,  the  purpose or purposes  for which the
meeting is called,  shall be communicated  not fewer than ten (10) days nor more
than sixty (60) days before the date of the meeting to each shareholder entitled
to vote at such meeting.  The board of directors may establish a record date for
the determination of shareholders entitled to notice, as provided in section 3.5
of these bylaws.  Notice of adjourned meetings need only be given if required by
law or section 3.7 of these bylaws.

         (b) In the event (i) of the issuance, or the authorization for issuance
of shares for promissory notes or promises to render services in the future,  or
(ii) of any indemnification of or advancement of expenses to a director required
by law to be reported to shareholders,  the Corporation shall report the same to
the shareholders  with or before the notice of the next  shareholders'  meeting,
including,  in the case of  issuance  of  shares,  the  number of shares and the
consideration received.

         (c) In the  event  corporate  action  is taken  without  a  meeting  in
accordance  with  section 3.12 of these  bylaws by less than  unanimous  written
consent,  prompt notice of the taking of such corporate action shall be given to
those shareholders who have not consented in writing.

                                       1
<PAGE>

         (d) If notice of  proposed  corporate  action is  required by law to be
given to  shareholders  not  entitled  to vote and the  action is to be taken by
consent of the voting shareholders,  the Corporation shall give all shareholders
written  notice of the proposed  action at least ten (10) days before the action
is taken.  The notice must contain or be  accompanied  by the same material that
would have been  required to be sent to  shareholders  not entitled to vote in a
notice of meeting at which the proposed  action would have been submitted to the
shareholders for action.

Section 3.4 Waiver of Notice.

         (a) Any  shareholder  may waive  any  notice  required  by law or these
bylaws if in writing  and signed by any  shareholder  entitled  to such  notice,
whether  before or after the date and time stated in such notice.  Such a waiver
shall be equivalent to notice to such shareholder in due time as required by law
or these  bylaws.  Any such waiver  shall be delivered  to the  Corporation  for
inclusion in the minutes or filing with the corporate records.

         (b) A  shareholder's  attendance  at a meeting,  in person or by proxy,
waives (i)  objection  to lack of notice or  defective  notice of such  meeting,
unless the  shareholder  at the  beginning  of the meeting or promptly  upon the
shareholder's  arrival objects to holding the meeting or transacting business at
the meeting,  and (ii) objection to consideration of a particular  matter at the
meeting  that is not within the  purpose or  purposes  described  in the meeting
notice,  unless the  shareholder  objects to  considering  the matter when it is
presented.

Section 3.5 Record Date.  The board of directors may fix, in advance,  a date as
the record date for any determination of shareholders for any purpose, such date
in every case to be not more than  seventy  (70) days prior to the date on which
the particular action or meeting requiring such determination of shareholders is
to be taken or held.  If no  record  date is so fixed for the  determination  of
shareholders,  the close of  business  on the day  before  the date on which the
first notice of a  shareholders'  meeting is communicated to shareholders or the
date  on  which  the  board  of  directors  authorizes  a  share  dividend  or a
distribution (other than one involving a repurchase or reacquisition of shares),
as the  case  may be,  shall  be the  record  date  for  such  determination  of
shareholders.  When a  determination  of  shareholders  entitled  to vote at any
meeting  of  shareholders  has  been  made as  provided  in this  section,  such
determination  shall  apply to any  adjournment  thereof,  unless  the  board of
directors  selects a new record  date or unless a new record date is required by
law.

Section 3.6  Shareholders'  List. After fixing a record date for a meeting,  the
Secretary  shall prepare an alphabetical  list of the names of all  shareholders
who are entitled to notice of a shareholders' meeting. The list must be arranged
by voting group and within each voting  group by class or series of shares,  and
show  the  address  of and  number  of  shares  held  by each  shareholder.  The
shareholders' list must be available for inspection by any shareholder beginning
two (2)  business  days after  notice of the meeting is given for which the list
was prepared and continuing through the meeting, at the Corporation's  principal
office or at a place  identified  in the  meeting  notice in the city  where the
meeting will be held. A shareholder,  or a shareholder's  agent or attorney,  is
entitled on written demand to inspect and,  subject to the  requirements of law,
to copy the list,  during regular  business  hours and at the person's  expense,
during the period it is available for inspection. The Corporation shall make the
shareholders'  list  available  at  the  meeting,  and  any  shareholder,  or  a
shareholder's  agent or  attorney,  is  entitled to inspect the list at any time
during the meeting or any adjournment.

Section 3.7 Quorum.

         (a) At any  meeting  of  the  shareholders,  a  majority  of the  votes
entitled to be cast on the matter by a voting group constitutes a quorum of that
voting group for action on that matter, unless the representation of a different
number is required by law, and in that case, the representation of the number so
required  shall  constitute  a quorum.  If a quorum  shall  fail to  attend  any
meeting,  the  chairperson of the meeting or a majority of the votes present may
adjourn the meeting to another place, date or time.

         (b) When a meeting is adjourned to another place,  date or time, notice
need not be given of the adjourned  meeting if the place,  date and time thereof
are  announced  at the  meeting  at which the  adjournment  is taken;  provided,
however,  that if the date of any  adjourned  meeting  is more than one  hundred
twenty (120) days after the date for which the meeting was  originally  noticed,
or if a new record date is fixed for the adjourned meeting, notice of the place,
date and time of the adjourned  meeting shall be given in conformity  with these
bylaws.  At any adjourned  meeting,  any business may be transacted  which might
have been transacted at the original meeting.

                                       2
<PAGE>

         (c) Once a share is  represented  for any  purpose at a meeting,  it is
deemed present for quorum  purposes for the remainder of the meeting and for any
adjournment  thereof  unless  a new  record  date is or  must  be set  for  that
adjourned meeting.

Section 3.8 Organization.

         (a) The Chairman of the Board,  or in the absence of the Chairman,  the
President,  or in the President's absence, such person as the board of directors
may have designated,  or, in the absence of such a person,  such person as shall
be  designated by the holders of a majority of the votes present at the meeting,
shall call meetings of the shareholders to order and shall act as chairperson of
such meetings.

         (b) The  Secretary  of the  Corporation  shall act as  secretary at all
meetings of the shareholders, but in the absence of the Secretary at any meeting
of the shareholders,  the chairperson may appoint any person to act as secretary
of the meeting.

Section 3.9 Voting of Shares.

         (a) Every shareholder  entitled to vote may vote in person or by proxy.
Except as provided in subsection (c) or unless  otherwise  provided by law, each
outstanding  share,  regardless of class,  shall be entitled to one vote on each
matter  submitted  to a vote at a  meeting  of  shareholders.  Unless  otherwise
provided by law,  directors  shall be elected by a majority of the votes cast by
the shares  entitled  to vote in the  election at a meeting at which a quorum is
present.  Shareholders  do not  have the  right  to  cumulate  their  votes  for
directors unless the articles of incorporation so provide.

         (b) The  shareholders  having the right to vote  shares at any  meeting
shall be only  those of  record on the stock  books of the  Corporation,  on the
record date fixed by law or pursuant to the  provisions  of section 3.5 of these
bylaws.

         (c) Absent special  circumstances,  the shares of the Corporation held,
directly or indirectly,  by another  corporation,  are not entitled to vote if a
majority of the shares  entitled to vote for the  election of  directors of such
other  corporation is held by the Corporation.  The foregoing does not limit the
power  of the  Corporation  to vote  any  shares  held by the  Corporation  in a
fiduciary capacity.

         (d) Voting by  shareholders  on any  question or in any election may be
viva voce unless the  chairperson of the meeting shall order or any  shareholder
shall demand that voting be by ballot. On a vote by ballot, each ballot shall be
signed by the  shareholder  voting,  or in the  shareholder's  name by proxy, if
there be such  proxy,  and  shall  state  the  number  of  shares  voted by such
shareholder.

         (e) If a quorum exists,  action on a matter, other than the election of
directors,  by a voting  group is  approved  if the votes cast within the voting
group  favoring the action exceed the votes cast  opposing the action,  unless a
greater number is required by law.

Section 3.10 Voting by Proxy or Representative.

         (a) At all meetings of the shareholders, a shareholder entitled to vote
may vote in person or by proxy appointed in writing,  which appointment shall be
effective  when  received by the  secretary  of the meeting or other  officer or
agent  authorized  to tabulate  votes.  An  appointment  of a proxy is valid for
eleven  months  from  the date of its  execution,  unless  a  longer  period  is
expressly provided in the appointment form.

         (b) Shares held by an administrator,  executor, guardian,  conservator,
receiver,  trustee,  pledgee, or another corporation may be voted as provided by
law.

                                       3
<PAGE>

Section  3.11  Inspectors.  The board of  directors in advance of any meeting of
shareholders  may (but shall not be obligated  to) appoint  inspectors to act at
such meeting or any adjournment thereof. If inspectors are not so appointed, the
officer or person  acting as  chairperson  of any such  meeting  may, and on the
request  of  any  shareholder  or  the  shareholder's  proxy,  shall  make  such
appointment.  In case any person  appointed as inspector shall fail to appear or
act, the vacancy may be filled by appointment  made by the board of directors in
advance of the  meeting,  or at the meeting by the  officer or person  acting as
chairperson.  The  inspectors  shall register  proxies,  determine the number of
shares  outstanding,  the voting power of each,  the shares  represented  at the
meeting,  the existence of a quorum,  the  authenticity,  validity and effect of
proxies,  receive votes,  ballots,  assents or consents,  hear and determine all
challenges and questions in any way arising in connection  with the vote,  count
and tabulate all votes, assents and consents, determine and announce the result,
and do such acts as may  appear  proper to  conduct  the  election  or vote with
fairness to all  shareholders.  The maximum number of such inspectors  appointed
shall be three, and no inspector  whether appointed by the board of directors or
by the officer or person acting as chairperson need be a shareholder.

Section  3.12 Action  Without  Meeting.  Except as  otherwise  set forth in this
section 3.12,  any action  required or permitted by law to be taken at a meeting
of the  shareholders  may be  taken  without  a  meeting  or vote if one or more
consents in writing  setting forth the action taken shall be signed and dated by
the holders of  outstanding  shares having not less than ninety percent (90%) of
the votes entitled to be cast at a meeting at which all shares  entitled to vote
on the action were present and voted,  and are delivered to the  Corporation for
inclusion  in the  minutes or filing  with the  Corporation's  records.  Written
consents from a sufficient  number of shareholders must be obtained within sixty
(60) days from the date of the earliest  dated  consent for such  consents to be
effective to take corporate action.  Provided,  however, a director shall not be
removed by written  consents  unless  written  consents  are  obtained  from the
holders of all the outstanding shares of the Corporation. If not otherwise fixed
by law or in  accordance  with these  bylaws,  the record  date for  determining
shareholders  entitled  to take  action  without a meeting is the date the first
shareholder signs such a written consent.

Section 3.13 Conduct of Business. The chairperson of any meeting of shareholders
shall  determine the order of business and  procedure at the meeting,  including
such  regulation  of the manner of voting and the conduct of business as seem to
him or her to be in order.

                                    ARTICLE 4

                               BOARD OF DIRECTORS

Section 4.1  Qualifications and General Powers. No director is required to be an
officer or employee or a  shareholder  of the  Corporation  or a resident of the
State of Iowa.  The  business  and affairs of the  Corporation  shall be managed
under the  direction  of the board of  directors.  The  board of  directors  may
authorize any officer or officers,  agent or agents,  to enter into any contract
or to  execute  and  deliver  any  instrument  in the name and on  behalf of the
Corporation,  and  such  authority  may  be  general  or  confined  to  specific
instances.

Section  4.2  Number  of  Directors;  Tenure.  The  number of  directors  of the
Corporation  shall be no fewer than 5 nor more than 25, the exact number  within
such  range to be  determined  from time to time by  resolution  of the board of
directors. The board of directors shall not be authorized to change the range or
to  change  to  a  fixed  number  of  directors  without  the  approval  of  the
shareholders.  Each director shall hold office until his or her successor  shall
have been  elected  and  qualifies,  or until his or her death,  resignation  or
removal.

Section  4.3 Quorum and  Manner of  Acting.  A quorum of the board of  directors
consists of a majority of the number of directors  prescribed in accordance with
section 4.2. If at any meeting of the board there be less than a quorum present,
a majority of the  directors  present may adjourn the meeting  from time to time
until a quorum  shall be present.  Notice of any  adjourned  meeting need not be
given.  At all meetings of  directors,  a quorum being  present,  the act of the
majority of the  directors  present at the meeting shall be the act of the board
of directors.

Section 4.4 Resignation.  Any director of the Corporation may resign at any time
by  delivering  written  notice  to the  Chairman  of the  Board,  the  board of
directors,  or the  Corporation.  A resignation  is effective when the notice is
delivered unless the notice specifies a later effective date.

Section 4.5  Removal.  A director  shall be subject to removal,  with or without
cause,  at a meeting of the  shareholders  called for that purpose in the manner
prescribed by law.

                                       4
<PAGE>

Section 4.6 Vacancies.  Any vacancy  occurring in the board of directors through
death,  resignation,  removal or any other  cause,  including an increase in the
number  of  directors,  may be  filled  by the  shareholders  or by the board of
directors.  If the directors  remaining in office constitute fewer than a quorum
of the board, they may fill the vacancy by the affirmative vote of a majority of
the remaining directors.

Section 4.7  Compensation of Directors.  The directors may be reimbursed for any
expenses paid by them on account of attendance at any regular or special meeting
of the board of directors  and the board may fix the  compensation  of directors
from time to time by resolution of the board.

Section 4.8 Place of Meetings, etc. The board of directors may hold its meetings
at such place or places  within or without  the State of Iowa,  as the board may
from time to time determine.

Section  4.9  Annual  Meeting.  The board of  directors  shall  meet the  second
Wednesday  of May of each year at such a place and time as the Board  shall fix,
for the purpose of organization, the election of officers and the transaction of
other  business.  Notice of such meeting need not be given.  Such meeting may be
held at any  other  time or place as shall  be  specified  in a notice  given as
hereinafter  provided  for special  meetings of the board of  directors  or in a
consent  and  waiver of notice  thereof  signed by all the  directors,  at which
meeting the same matters shall be acted upon as is above provided.

Section 4.10 Regular Meetings.  Regular meetings of the board of directors shall
be held at such  place  and at such  times as the  board of  directors  shall by
resolution  fix and determine from time to time. No notice shall be required for
any such regular meeting of the board.

Section 4.11 Special Meetings; Notice.

         (a) Special  meetings of the board of directors  shall be held whenever
called by direction of the Chairman of the Board,  the  President,  or one-third
(1/3) of the directors at the time being in office.

         (b) Notice of each such meeting shall be  communicated to each director
at least two (2) days before the date on which the  meeting is to be held.  Each
notice  shall  state the date,  time and place of the  meeting and maybe made by
telephone,  letter, or in person. Unless otherwise stated in the notice thereof,
any and all business may be transacted at a special  meeting.  At any meeting at
which every director shall be present, even without any notice, any business may
be transacted.

Section 4.12 Waiver of Notice.  A director may waive any notice  required by law
or these bylaws if in writing and signed by a director  entitled to such notice,
whether  before or after the date and time stated in such notice.  Such a waiver
shall  be  equivalent  to  notice  in due  time as  required  by  these  bylaws.
Attendance of a director at or  participation  in a meeting  shall  constitute a
waiver of notice of such  meeting,  unless the director at the  beginning of the
meeting or promptly upon arrival  objects to holding the meeting or  transacting
business  at the meeting  and does not  thereafter  vote for or assent to action
taken at the meeting.

Section 4.13 Director's  Assent  Presumed.  A director of the Corporation who is
present at a meeting of its board of directors at which action on any  corporate
matter is taken shall be presumed to have  assented to the action  taken  unless
the director's  dissent shall be entered in the minutes of the meeting or unless
the director shall file a written  dissent to such action with the person acting
as the secretary of the meeting before the adjournment  thereof or shall forward
such dissent by registered or certified mail to the Secretary of the Corporation
immediately  after the  adjournment of the meeting.  Such right to dissent shall
not apply to a director who voted in favor of such action.

Section 4.14 Order of Business.

         (a) At meetings of the board of directors, business shall be transacted
in such order as, from time to time,  the board of  directors  may  determine by
resolution.

         (b) At all meetings of the board,  the Chairman of the Board, or in his
or her absence,  the President,  or in the  President's  absence the most senior
Vice  President  present,  or otherwise  the person  designated by the vote of a
majority of the directors present shall preside.

Section 4.15 Action Without Meeting.  Any action required or permitted by law to
be taken at any meeting of the board of directors may be taken without a meeting
if the action is taken by all  members of the board and if one or more  consents
in writing  describing the action so taken shall be signed by each director then
in office  and  included  in the  minutes or filed  with the  corporate  records
reflecting  the action taken.  Action taken under this section is effective when
the last director  signs the consent,  unless the consent  specifies a different
effective date.

                                       5
<PAGE>

Section 4.16 Committees.

         (a) The board of directors,  by resolution  adopted by the  affirmative
vote of a majority of the number of directors then in office,  may establish one
or more  committees,  each  committee  to consist  of two (2) or more  directors
appointed by the board of directors.  Any such committee shall serve at the will
of the board of directors.  Each such committee shall have the powers and duties
delegated to it by the board of directors.  The board of directors may elect one
or more of its members as alternate  members of any such  committee who may take
the place of any absent member or members at any meeting of such committee, upon
request  by the  President  or the  chairperson  of such  committee.  Each  such
committee shall fix its own rules governing the conduct of its activities as the
board of directors may request.

         (b) A committee of the board shall not: (i) authorize  distributions by
the  Corporation;  (ii) approve or propose to  shareholders  of the  Corporation
action that the law requires be approved by  shareholders;  (iii) fill vacancies
on the board of directors of the Corporation or on any of its  committees;  (iv)
amend the articles of  incorporation  of the  Corporation;  (v) adopt,  amend or
repeal  bylaws of the  Corporation;  (vi) approve a plan of merger not requiring
shareholder approval;  (vii) authorize or approve reacquisition of shares by the
Corporation,  except according to a formula or method prescribed by the board of
directors;  or (viii)  authorize or approve the issuance or sale or contract for
sale of shares,  or determine the designation and relative  rights,  preferences
and  limitations  of a class or  series  of  shares,  except  that the  board of
directors  may  authorize  a  committee  or a senior  executive  officer  of the
Corporation  to do so  within  limits  specifically  prescribed  by the board of
directors.

                                    ARTICLE 5

                                    OFFICERS

Section 5.1 Executive Officers.  The executive officers of the Corporation shall
be a President, one or more Vice Presidents (the number thereof to be determined
by the board of directors),  a Secretary, a Treasurer and such other officers as
may from time to time be  appointed  by the board of  directors.  One person may
hold the offices and perform the duties of any two or more of said  offices.  In
its discretion,  the board of directors may delegate the powers or duties of any
officer to any other officer or agents,  notwithstanding  any provision of these
bylaws,  and the board of directors may leave unfilled for any such period as it
may fix, any office except those of  President,  Treasurer  and  Secretary.  The
officers  of the  Corporation  shall  be  appointed  annually  by the  board  of
directors at the annual  meeting  thereof.  Each such officer  shall hold office
until the next succeeding annual meeting of the board of directors and until his
or her  successor  shall have been duly chosen and shall qualify or until his or
her death or until he or she shall resign or shall have been removed.

Section  5.2  Resignation  and  Removal.  An  officer  may resign at any time by
delivering  notice to the Secretary.  A resignation is effective when the notice
is delivered unless the notice specifies a later effective date. Any officer may
be removed by the board of directors at any time with or without cause, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed.

Section  5.3 Power and Duties of the  President.  Subject to the  control of the
board of directors,  the President  shall have general  charge of and direct the
operations of the Corporation  and shall be the chief  executive  officer of the
Corporation.  The President shall keep the board of directors fully informed and
shall freely consult with them concerning the business of the Corporation in his
or her charge.  He or she shall have authority to sign,  execute and acknowledge
all contracts,  checks, deeds, mortgages,  bonds, leases or other obligations on
behalf of the Corporation as may be deemed necessary or proper to be executed in
the course of the Corporation's  regular business,  or which shall be authorized
by the board of directors,  and with the Secretary may sign all certificates for
the shares of the capital  stock of the  Corporation.  The President may sign in
the name of the Corporation reports and all other documents or instruments which
are  necessary  or  proper to be  executed  in the  course of the  Corporation's
business.  He or she  shall  perform  all  duties  as from  time to time  may be
assigned by the board of directors.  The President  shall, in the absence of the
Chairman of the Board,  preside at all meetings of the shareholders or the board
of directors.

Section 5.4 Power and Duties of the  Chairman of the Board.  The Chairman of the
Board shall, when present, preside at all meetings of the shareholders and shall
preside at all meetings of the board of  directors.  He or she shall perform all
duties  incident to the office of Chairman of the Board as herein  defined,  and
all such  other  duties  as from  time to time may be  assigned  by the board of
directors.

                                       6
<PAGE>

Section  5.5 Powers and Duties of the Vice  President(s).  In the absence of the
President  or in the event of the  death,  inability  or  refusal  to act of the
President,  the Vice  President  (or in the  event  there be more  than one Vice
President,  the Vice  Presidents  in the order  designated  at the time of their
appointment, or in the absence of any designation,  the senior Vice President in
length of  service)  shall  perform  the  duties of the  President,  and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the  President.  Any Vice  President  may sign,  with the Secretary or Assistant
Secretary,  certificates for shares of the  Corporation;  and shall perform such
other  duties and have such  authority  as from time to time may be  assigned to
such Vice President by the President or by the board of directors.

Section 5.6 Powers and Duties of the  Secretary.  The  Secretary  shall (a) keep
minutes of all meetings of the shareholders  and of the board of directors;  (b)
authenticate  records of the  Corporation  and attend to giving and  serving all
notices of the  Corporation  as provided by these  bylaws or as required by law;
(c) be custodian of the corporate seal, if any, the stock  certificate books and
such other books,  records and papers as the board of directors may direct;  (d)
keep a stock record showing the names of all persons who are shareholders of the
Corporation,  their post office addresses as furnished by each such shareholder,
and the number of shares of each class of stock held by them  respectively,  and
at least ten (10) days before  each  shareholders'  meeting,  prepare a complete
list of shareholders  entitled to vote at such meeting  arranged in alphabetical
order;  (e) sign with the President or a Vice President  certificates for shares
of the Corporation,  the issuance of which shall have been duly authorized;  and
(f) in general,  perform all duties incident to the office of Secretary and such
other  duties  as from  time to time may be  assigned  to the  Secretary  by the
President or the board of directors.

Section 5.7 Powers and Duties of the  Treasurer.  The  Treasurer  shall (a) have
custody of and be responsible for all moneys and securities of the  Corporation,
shall keep full and  accurate  records and  accounts in books  belonging  to the
Corporation,   showing  the  transactions  of  the  Corporation,  its  accounts,
liabilities and financial condition and shall see that all expenditures are duly
authorized and are evidenced by proper receipts and vouchers; (b) deposit in the
name of the  Corporation in such  depository or  depositories as are approved by
the board of directors,  all moneys that may come into the Treasurer's hands for
the Corporation's  account; (c) prepare annual financial statements that include
a balance  sheet as of the end of the fiscal  year and an income  statement  for
that year;  and (d) in general,  perform such duties as may from time to time be
assigned to the Treasurer by the President or by the board of directors.

Section 5.8 Assistants.  There shall be such number of Assistant Secretaries and
Assistant  Treasurers as the board of directors may from time to time  authorize
and appoint.  The Assistant  Secretaries and Assistant  Treasurers,  in general,
shall perform such duties as shall be assigned to them by the Secretary,  or the
Treasurer,  respectively,  or by the  President or the board of  directors.  The
board  of  directors  shall  have the  power to  appoint  any  person  to act as
assistant to any other  officer,  or to perform the duties of any other officer,
whenever for any reason it is impracticable  for such officer to act personally,
and such  assistant  or acting  officer  so  appointed  shall  have the power to
perform  all the duties of the office to which he or she is so  appointed  to be
assistant, or as to which he or she is so appointed to act, except as such power
may be otherwise defined or restricted by the board of directors.

                                    ARTICLE 6

                       SHARES, THEIR ISSUANCE AND TRANSFER

Section 6.1  Consideration  for Shares.  The board of  directors  may  authorize
shares to be issued for  consideration  consisting of any tangible or intangible
property  or benefit  to the  Corporation,  including  cash,  promissory  notes,
services performed,  contracts for services to be performed, or other securities
of the Corporation. Before the Corporation issues shares, the board of directors
must determine that the  consideration  received or to be received for shares to
be issued is adequate.

Section 6.2 Certificates for Shares.  Every shareholder of the Corporation shall
be entitled to a certificate or certificates, to be in such form as the board of
directors  shall  prescribe,  certifying  the  number and class of shares of the
Corporation owned by such shareholder.

                                       7
<PAGE>

Section 6.3  Execution of  Certificates.  The  certificates  for shares of stock
shall be numbered in the order in which they shall be issued and shall be signed
by the President or a Vice President and the Secretary or an Assistant Secretary
of the  Corporation.  The  signatures of the President or Vice President and the
Secretary or Assistant  Secretary or other persons  signing for the  Corporation
upon a certificate  may be facsimiles if the certificate is  countersigned  by a
transfer agent, or registered by a registrar,  other than the Corporation itself
or an  employee  of the  Corporation.  In case any  officer or other  authorized
person who has signed or whose  facsimile  signature  has been  placed upon such
certificate for the Corporation shall have ceased to be such officer or employee
or agent before such certificate is issued,  it may be issued by the Corporation
with the same  effect as if he or she were such  officer or employee or agent at
the date of its issue.

Section 6.4 Share  Record.  A record shall be kept by the  Secretary,  or by any
other officer,  employee or agent  designated by the board of directors,  of the
names and addresses of all  shareholders and the number and class of shares held
by each represented by such certificates and the respective dates thereof and in
case of cancellation, the respective dates of cancellation.

Section 6.5 Cancellation.  Every certificate  surrendered to the Corporation for
exchange or transfer shall be cancelled,  and no new certificate or certificates
shall be issued in exchange for any  existing  certificate  until such  existing
certificate  shall have been so cancelled,  except in cases  provided in section
6.8 of these bylaws.

Section 6.6 Transfers of Stock.  Transfers of shares of the capital stock of the
Corporation  shall be made only on the books of the  Corporation  by the  record
holder  thereof,  or by his or her  attorney  thereunto  authorized  by power of
attorney duly executed and filed with the Secretary of the  Corporation,  and on
surrender of the certificate or certificates  for such shares properly  endorsed
and the payment of all taxes  thereon.  The person in whose name shares of stock
stand on the books of the Corporation  shall be deemed the owner thereof for all
purposes  as regards the  Corporation;  provided,  however,  that  whenever  any
transfer of shares shall be made for collateral  security,  and not  absolutely,
such fact, if known to the Secretary of the  Corporation,  shall be so expressed
in the entry of transfer.

Section 6.7  Regulations.  The board of directors  may make such other rules and
regulations as it may deem expedient,  not inconsistent with law, concerning the
issue,  transfer and registration of certificates for shares of the stock of the
Corporation.

Section 6.8 Lost,  Destroyed,  or  Mutilated  Certificates.  In the event of the
loss, theft or destruction of any certificate of stock, another may be issued in
its place  pursuant to such  regulations as the board of directors may establish
concerning proof of such loss, theft or destruction and concerning the giving of
a satisfactory bond or bonds of indemnity.

                                    ARTICLE 7

                      CONTRACTS, LOANS, CHECKS AND DEPOSITS

Section 7.1  Contracts.  The board of  directors  may  authorize  any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the  Corporation,  and such authority
may be general or confined to specific instances.

Section 7.2 Loans. No loans shall be contracted on behalf of the Corporation and
no evidences of indebtedness  shall be issued in its name unless authorized by a
resolution of the board of directors.  Such authority may be general or confined
to specific instances.

Section 7.3 Checks,  Drafts,  etc.  All checks,  drafts or other  orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the  Corporation,  shall be signed by the  President  or such  other  officer or
officers,  agent or agents of the  Corporation  and in such manner as shall from
time to time be  determined  by the  President or by  resolution of the board of
directors.

                                    ARTICLE 8

                            MISCELLANEOUS PROVISIONS

Section 8.1  Facsimile  Signatures.  In addition  to the  provisions  for use of
facsimile  signatures  elsewhere   specifically   authorized  in  these  bylaws,
facsimile  signatures of any officer or officers of the  Corporation may be used
whenever and as authorized by the board of directors or a committee thereof.

Section 8.2 Corporate Seal. The Corporation may adopt an official seal.

                                       8
<PAGE>

Section 8.3 Fiscal Year.  The fiscal year of the  Corporation  shall be from the
first day of January through the last day of December.

Section 8.4 Corporate Records. The books and records of the Corporation shall be
kept (except that the shareholder list must also be kept at the places described
in section 3.6 of these bylaws) at the principal office of the Corporation.

Section  8.5  Voting of Stocks  Owned by the  Corporation.  In the  absence of a
resolution of the board of directors to the contrary, the President and any Vice
President  acting  within the scope of his or her authority as provided in these
bylaws,  are authorized and empowered on behalf of the Corporation to attend and
vote,  or to  grant  discretionary  proxies  to  be  used,  at  any  meeting  of
shareholders of any corporation in which this  Corporation  holds or owns shares
of stock, and in that connection,  on behalf of this  Corporation,  to execute a
waiver of notice of any such  meeting or a written  consent to action  without a
meeting. The board of directors shall have authority to designate any officer or
person  as a proxy or  attorney-in-fact  to vote  shares  of stock in any  other
corporation in which this Corporation may own or hold shares of stock.

Section 8.6 Shareholders' Right to Information.

         (a) A shareholder  of the  Corporation is entitled to inspect and copy,
during regular business hours at the Corporation's  principal office, any of the
following records of the Corporation:

         (i)   Articles or restated articles of incorporation and all amendments
               currently in effect;

         (ii)  Bylaws or restated bylaws and all amendments currently in effect;

         (iii) Resolutions  adopted by the board of  directors  creating  one or
               more  classes  or series  of shares  and  fixing  their  relative
               rights, preferences and limitations, if shares issued pursuant to
               those resolutions are outstanding;

         (iv)  Minutes of all  shareholders'  meetings and records of all action
               taken by shareholders  without a meeting,  for the past three (3)
               years;

         (v)   All written  communications to shareholders  generally within the
               past three years,  including the financial  statements  furnished
               for the past three (3) years;

         (vi)  A list of the names and business  addresses of the  Corporation's
               current directors and officers; and

         (vii) The Corporation's most recent annual report delivered to the Iowa
               Secretary of State. Provided the shareholder shall have given the
               Corporation  written notice of the shareholder's  demand at least
               five  business  days  before  the date on which  the  shareholder
               wishes to inspect and copy.

         (b) If a  shareholder  makes a demand  in good  faith  and for a proper
purpose,   the   shareholder   describes  with  reasonable   particularity   the
shareholder's  purpose and the records the shareholder  desires to inspect,  and
the  record  requested  is  directly  connected  with the  shareholder's  stated
purpose,  then the  shareholder  shall be entitled  to inspect and copy,  during
regular  business hours at a reasonable  location  specified by the Corporation,
any of the following  records of the Corporation  provided the shareholder gives
the  Corporation  written  notice  of the  shareholder's  demand  at least  five
business  days  before the date on which the  shareholder  wishes to inspect and
copy any of the following:

         (i)   Excerpts  from minutes of any meeting of the board of  directors,
               records of any actions of a committee  of the board of  directors
               while  acting in place of the board of directors on behalf of the
               Corporation,  minutes  of any  meeting of the  shareholders,  and
               records  of  action  taken by the  shareholders  or the  board of
               directors  without  a  meeting  to  the  extent  not  subject  to
               inspection under paragraph (a) above;

         (ii)  Accounting records of the Corporation; and

         (iii) The record of shareholders of the Corporation.

                                       9
<PAGE>

         (c) Upon written request from a shareholder,  the  Corporation,  at its
expense,  shall furnish to that shareholder the annual  financial  statements of
the  Corporation,  including a balance  sheet and income  statement  and, if the
annual  financial  statements  are reported  upon by a public  accountant,  that
report must accompany them.

         (d) The Corporation may impose a reasonable charge,  covering the costs
of labor and material,  for copies of any documents provided to the shareholder.
The charge shall not exceed the estimated cost of production or  reproduction of
the records.

                                    ARTICLE 9

                    INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 9.1. Indemnity.  The Corporation shall indemnify and advance expenses to
any person who was or is a party to or is  threatened  to be made a party to any
threatened,  pending or completed  claim,  action,  suit or proceeding,  whether
civil,  criminal,  administrative  or  investigative  (including  a  grand  jury
proceeding)  and  whether  formal or  informal,  by reason of the fact that such
person (a) is or was a director  or officer of the  Corporation,  or (b) while a
director,  officer,  or  employee of the  Corporation,  is or was serving at the
request of the Corporation as a director,  officer,  employee, agent, partner or
trustee (or in a similar capacity) of another  corporation,  partnership,  joint
venture,  trust,  other  enterprise,  or employee  benefit  plan, to the maximum
extent it is empowered to indemnify and advance expenses to a director by Part E
of Division VIII of the Iowa Business  Corporation Act as the same exists or may
hereafter  be amended  or changed  (but,  in the case of any such  amendment  or
change,  only  to  the  extent  that  such  amendment  or  change  empowers  the
Corporation  to provide  broader  indemnification  than said law  empowered  the
Corporation  to provide prior to such amendment or change),  against  reasonable
expenses (including attorneys' fees), judgments, fines, penalties,  including an
excise tax assessed with respect to an employee  benefit plan,  and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such claim, action, suit or proceeding or any appeal thereof; provided, however,
that  except  as  provided  in  section  9.2 of these  bylaws  with  respect  to
proceedings  seeking to enforce rights of  indemnification,  entitlement to such
indemnification  shall be conditional  upon the  Corporation  being afforded the
opportunity  to  participate  directly  on behalf of such  person in such claim,
action, suit or proceeding or any settlement  discussions  relating thereto, and
with  respect to any  settlement  or other  non-adjudicated  disposition  of any
threatened  or  pending  claim,  action,  suit  or  proceeding,  entitlement  to
indemnification  shall be further  conditional  upon the prior  approval  by the
Corporation  of the proposed  settlement  or  nonadjudicated  disposition.  Such
approval  shall be made (a) by the  board of  directors  by  majority  vote of a
quorum  consisting  of directors  not at the time parties to the claim,  action,
suit or  proceeding,  or (b) by special legal  counsel  selected by the board of
directors by majority vote, of a quorum  consisting of directors not at the time
parties to the claim,  action or proceeding,  or, if the requisite quorum of the
full board cannot be obtained therefor, by a majority vote of the full board, in
which selection of counsel  directors who are parties may participate.  Approval
or  disapproval  by  the  Corporation  of  any  proposed   settlement  or  other
nonadjudicated disposition shall not subject the Corporation to any liability to
or require  indemnification  or  reimbursement of any party whom the Corporation
would not otherwise  have been required to indemnify or reimburse.  The right to
indemnification  conferred in this Article shall include the right to payment or
reimbursement by the Corporation of reasonable  expenses  incurred in connection
with  any such  claim,  action,  suit or  proceeding  in  advance  of its  final
disposition;  provided,  however,  that the  payment  or  reimbursement  of such
expenses  in advance of the final  disposition  of such claim,  action,  suit or
proceeding  shall be made only upon (a) delivery to the Corporation of a written
undertaking,  by or on behalf of the person claiming  indemnification under this
Article to repay all amounts so advanced if it shall  ultimately  be  determined
that such  person is not  entitled  to be  indemnified  under  this  Article  or
otherwise,  or (b) delivery to the Corporation of a written  affirmation of such
person's good faith belief that such person has met the  applicable  standard of
conduct necessary to require indemnification by the Corporation pursuant to this
Article or otherwise,  or (c) a determination that the facts then known to those
making the determination would not preclude indemnification under this Article.

                                       10
<PAGE>

Section 9.2. Payment.  Any  indemnification  or advancement of expenses required
under this Article shall be made promptly  upon,  and in any event within thirty
(30) days after,  the written  request of the person  entitled  thereto.  If the
Corporation  denies a written  request for indemnity or advancement of expenses,
in whole or in part,  or if payment in full pursuant to such request is not made
within thirty (30) days of the date such request is received by the Corporation,
the person seeking indemnification or advancement of expenses as granted by this
Article may at any time within the applicable  statute of limitations bring suit
against the Corporation in any court of competent jurisdiction to establish such
person's right to indemnity or advancement of expenses.  Such person's costs and
expenses incurred in connection with successfully  establishing his or her right
to indemnification in any such action or proceeding shall also be indemnified by
the  Corporation.  It shall be a  defense  to any  action  brought  against  the
Corporation to compel indemnification (other than an action brought to enforce a
claim for the advancement of expenses pursuant to this Article where the written
affirmation of good faith or the undertaking to repay as required above has been
received  by the  Corporation)  that the  claimant  has not met the  standard of
conduct set forth in Section 490.851 of the Iowa Business  Corporation  Act, but
the burden of proving such defense shall be on the Corporation.  Neither (a) the
failure of the  Corporation  (including  its board of  directors,  special legal
counsel  or  the  shareholders)  to  have  made  a  determination  prior  to the
commencement  of such action that  indemnification  of the claimant is proper in
the circumstances  because he or she has met the applicable  standard of conduct
set forth in Section 490.851 of the Iowa Business  Corporation  Act, nor (b) the
fact that there has been an actual  determination by the Corporation  (including
its board of  directors,  special legal  counsel or the  shareholders)  that the
claimant  has not met  such  applicable  standard  of  conduct,  shall  create a
presumption that the claimant has not met the applicable standard of conduct. In
the  event  that the  applicable  standard  of  conduct  has been met as to some
claims, actions, suits or proceedings,  but not as to others, a person who has a
right of indemnification  pursuant to this Article shall be indemnified  against
all expenses  (including attorney fees) actually and reasonably incurred by such
person in connection with the claim,  action, suit or proceeding as to which the
applicable  standard has been met. Nothing contained in this section shall limit
the  obligation,  duty or ability of the Corporation to indemnify such person as
provided elsewhere in this Article.

Section 9.3. Contract. The provisions of this Article shall be deemed a contract
between  the  Corporation  and each  director  and  officer  who  serves in such
capacity at any time while this Article and the relevant  provisions of the Iowa
Business  Corporation  Act are in effect,  and any repeal or modification of any
such law or of this Article shall not adversely affect any rights or obligations
then existing with respect to any state of facts then or theretofore existing or
any claim,  action,  suit or proceeding  theretofore  or  thereafter  brought or
threatened based in whole or in part upon any such state of facts.

Section 9.4. Witnesses.  The Corporation shall indemnify and advance expenses to
any person who was or is a witness in or is  threatened  to be made a witness in
any threatened,  pending or completed claim, action, suit or proceeding, whether
civil,  criminal,  administrative  or  investigative  (including  a  grand  jury
proceeding)  and  whether  formal or  informal,  by reason of the fact that such
person (a) is or was a director  or officer of the  Corporation,  or (b) while a
director or officer of the Corporation,  is or was serving at the request of the
Corporation as a director, officer, employee, agent, partner or trustee (or in a
similar capacity) of another  corporation,  partnership,  joint venture,  trust,
other enterprise,  or employee benefit plan, to the same extent that such person
would be entitled to  indemnification  and  advancement  of expenses  under this
Article if such person  were,  or were  threatened  to be made,  a party to such
claim,  action,  suit or  proceeding,  against  reasonable  expenses  (including
attorneys'  fees) actually and reasonably  incurred by such person in connection
with such claim, action, suit or proceeding or any appeal thereof.

Section  9.5.  Nonexclusive.  Except as limited  by section  490.851 of the Iowa
Business  Corporation  Act,  the  indemnification  and  advancement  of expenses
provided by or granted pursuant to this Article shall not be deemed exclusive of
any other rights to which a person  seeking  indemnification  or  advancement of
expenses may be entitled under any bylaw,  agreement,  vote of  shareholders  or
disinterested directors, or otherwise; provided, however, that in no event shall
any such provision or agreement provide  indemnification  to a person who was or
is a director or officer of the  Corporation (a) for a breach of a director's or
officer's duty of loyalty to the Corporation or its  shareholders,  (b) for acts
or  omissions  not in good  faith or which  involve  intentional  misconduct  or
knowing  violation  of the law,  (c) for a  transaction  from  which the  person
seeking  indemnification  derived  an  improper  personal  benefit  or  (d)  for
liability under section 490.833 of the Iowa Business Corporation Act.

                                       11
<PAGE>

Section 9.6.  Applicability.  This Article  shall be  applicable  to all claims,
actions, suits or proceedings commenced after the effective date hereof, whether
arising  from acts or omissions  occurring  before or after the  effective  date
hereof.  Each  person  who is now  serving  or who  shall  hereafter  serve as a
director  or  officer  of the  Corporation  shall  be  deemed  to be doing so in
reliance upon the rights of  indemnification  provided for in this Article,  and
such rights of  indemnification  shall continue as to a person who has ceased to
be a  director  or  officer,  and  shall  inure  to the  benefit  of the  heirs,
executors,  administrators  and  legal  or  personal  representatives  of such a
person. If this Article or any portion hereof shall be invalidated on any ground
by any court of competent jurisdiction,  then the Corporation shall nevertheless
indemnify  each director and officer of the  Corporation  to the maximum  extent
permitted  by any  applicable  portion of this  Article that shall not have been
invalidated.

Section 9.7. Initiation of Claims.  Notwithstanding  anything in this Article to
the contrary,  except with respect to proceedings initiated to enforce rights of
indemnification  to  which  such  person  is  entitled  under  this  Article  or
otherwise,  the Corporation shall indemnify any such person in connection with a
claim,  action,  suit or proceeding  (or part thereof)  initiated by such person
only if the  initiation  of such  claim,  action,  suit or  proceeding  (or part
thereof) was authorized by the board of directors.

Section 9.8. Insurance.  The Corporation may purchase and maintain insurance, at
its expense, to protect itself and any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation  as a  director,  officer,  partner,  trustee,  employee or agent of
another corporation,  partnership,  joint venture,  trust, other enterprise,  or
employee  benefit plan against any  liability  asserted  against such person and
incurred by such person in such capacity, or arising out of such person's status
as such,  whether or not the Corporation  would have the power to indemnify such
person  against such liability  under the  provisions of this Article,  the Iowa
Business Corporation Act or otherwise.  The Corporation may create a trust fund,
grant a security interest and/or use other means (including, without limitation,
letters of credit, surety bonds and/or similar  arrangements),  as well as enter
into contracts  providing for indemnification to the maximum extent permitted by
law and  including  as part thereof any or all of the  foregoing,  to ensure the
payment of such sums as may become necessary to effect full indemnification. The
Corporation's  obligation to make  indemnification  and pay expenses pursuant to
this Article shall be in excess of any insurance purchased and maintained by the
Corporation and such insurance shall be primary. To the extent that indemnity or
expenses  of a person  entitled  to  indemnification  and  payment  of  expenses
pursuant  to this  Article  are  paid on  behalf  of or to such  person  by such
insurance  such  payments  shall  be  deemed  to  be  in   satisfaction  of  the
Corporation's obligation to such person to make indemnification and pay expenses
pursuant to this Article.

                                   ARTICLE 10

                                   AMENDMENTS

Section 10.1  Amendments  to Bylaws.  These bylaws may be amended or repealed by
the board of  directors  or by the  shareholders;  provided,  however,  that the
shareholders may from time to time specify  particular  provisions of the bylaws
which shall not be amended or repealed by the board of directors.

</TEXT>
</DOCUMENT>
</SUBMISSION>
