                       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 September 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 X No __

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 November 9, 2001)
<PAGE>

                            AMES NATIONAL CORPORATION

                                      INDEX

                                                                            Page

Part I.  Financial Information

         Item 1.  Consolidated Financial Statements (Unaudited)

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

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

                  Consolidated  Statements  of Cash  Flows  for the nine
                  months ended September 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

<PAGE>

PART  1.  FINANCIAL  INFORMATION

Item 1. Consolidated Financial Statements (Unaudited)

                   AMES NATIONAL CORPORATION AND SUBSIDIARIES

                           Consolidated Balance Sheets
                                   (unaudited)

<TABLE>
                                                                             September 30,     December 31,
                                                                                 2001              2000
                                                                             ------------------------------
<S>                                                                          <C>               <C>
                                Assets
Cash and due from banks ..................................................   $  20,531,354     $ 28,775,032
Federal funds sold .......................................................      43,850,000          245,000
Interest bearing deposits in financial institutions ......................         250,000          348,174
Securities available-for-sale ............................................     220,578,969      232,706,157
Loans receivable, net ....................................................     326,561,537      344,014,727
Bank premises and equipment, net .........................................       6,385,697        5,216,301
Accrued income receivable ................................................       6,903,620        7,020,614
Other assets .............................................................         403,814        1,058,762
                                                                             ------------------------------
           Total assets ..................................................   $ 625,464,991      619,384,767
                                                                             ==============================

                 Liabilities and Stockholders' Equity
Deposits:
   Demand ................................................................   $  49,474,677       54,597,366
   NOW accounts ..........................................................     118,025,760       96,328,264
   Savings and money market ..............................................     125,573,633      122,321,564
   Time, $100,000 and over ...............................................      53,908,140       63,894,549
   Other time ............................................................     156,936,539      156,287,112
                                                                             ------------------------------
           Total deposits ................................................     503,918,749      493,428,855
                                                                             ------------------------------
 FHLB advances ...........................................................       4,500,000       16,000,000
Federal funds purchased and securities sold under agreements to repurchase      17,001,322       19,007,419
Dividends payable ........................................................       1,312,596        1,248,917
Deferred taxes ...........................................................       1,826,396          158,450
Accrued interest and other liabilities ...................................       3,466,930        3,363,665
                                                                             ------------------------------

           Total liabilities .............................................     532,025,993      533,207,306
                                                                             ------------------------------

Stockholders' Equity:
   Common stock, $5 par value; authorized 6,000,000 shares;
     issued 3,153,230 shares at September 30, 2001 and December 31, 2000 .      15,766,150       15,766,150
   Treasury stock, at cost; 28,001 and 30,937 shares at
     September 30, 2001 and December 31, 2000, respectively ..............      (1,530,805)      (1,677,605)
   Surplus ...............................................................      25,393,028       25,428,994
   Retained earnings .....................................................      48,142,044       44,036,378
   Accumulated other comprehensive income - net unrealized gain
     on securities available-for-sale ....................................       5,668,581        2,623,544
                                                                             ------------------------------
           Total stockholders' equity ....................................      93,438,998       86,177,461
                                                                             ------------------------------
           Total liabilities and stockholders' equity ....................   $ 625,464,991      619,384,767
                                                                             ==============================
</TABLE>
<PAGE>

                   AMES NATIONAL CORPORATION AND SUBSIDIARIES

                        Consolidated Statements of Income
                                   (unaudited)
<TABLE>

                                             Three Months Ended          Nine Months Ended
                                                September 30,               September 30,
                                         -----------------------------------------------------
                                             2001          2000          2001          2000
                                         -----------------------------------------------------
<S>                                      <C>           <C>           <C>           <C>
Interest and dividend income:
    Loans ............................   $ 6,797,377   $ 7,303,362   $21,175,726   $20,812,602
    Securities .......................     2,883,736     3,612,696     8,936,035    10,977,002
    Federal funds sold ...............       206,529       112,390       552,050       327,899
    Dividends ........................       319,251       249,530       826,844       762,760
                                         -----------------------------------------------------
                                          10,206,893    11,277,978    31,490,655    32,880,263
                                         -----------------------------------------------------
Interest expense:
    Deposits .........................     4,258,811     5,137,423    14,228,785    15,476,522
    Other borrowed funds .............       237,721     1,286,289       934,071     2,624,937
                                         -----------------------------------------------------
                                           4,496,532     6,423,712    15,162,856    18,101,459
                                         -----------------------------------------------------

          Net interest income ........     5,710,361     4,854,266    16,327,799    14,778,804

Provision for loan losses ............       283,229        84,174       557,137       346,133
                                         -----------------------------------------------------
          Net interest income after
             provision for loan losses     5,427,132     4,770,092    15,770,662    14,432,671
                                         -----------------------------------------------------
Noninterest income:
    Trust department income ..........       240,018       229,933       727,820       685,658
    Service fees .....................       395,323       408,181     1,180,035     1,194,311
    Securities gains, net ............         2,472       358,945     1,154,003       547,724
    Other ............................       337,103       259,278       966,822       802,435
                                         -----------------------------------------------------
          Total noninterest income ...       974,916     1,256,337     4,028,680     3,230,128
                                         -----------------------------------------------------

Noninterest expense:
    Salaries and employee benefits ...     1,659,592     1,574,925     5,059,903     4,751,200
    Occupancy expenses ...............       173,179       188,039       542,128       530,622
    Data processing ..................       380,094       355,284     1,268,956     1,181,768
    Other operating expenses .........       534,436       525,613     1,608,148     1,660,522
                                         -----------------------------------------------------
          Total noninterest expense ..     2,747,301     2,643,861     8,479,135     8,124,112
                                         -----------------------------------------------------

          Income before income taxes .     3,654,747     3,382,568    11,320,207     9,538,687

Income tax expense ...................       972,427       952,195     3,340,431     2,710,814
                                         -----------------------------------------------------
          Net income .................   $ 2,682,320   $ 2,430,373   $ 7,979,776   $ 6,827,873
                                         =====================================================

Basic and diluted earnings per share .   $      0.86   $      0.78   $      2.55   $      2.19
                                         =====================================================

Dividends per share ..................   $      0.42   $      0.40   $      1.22   $      1.16
                                         =====================================================

Comprehensive Income .................   $ 4,262,327   $ 5,091,939   $11,024,813   $ 8,343,924
                                         =====================================================
</TABLE>
<PAGE>

                   AMES NATIONAL CORPORATION AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows
                                   (unaudited)
<TABLE>
                                                                                          Nine Months Ended
                                                                                            September 30,
                                                                                    ----------------------------
                                                                                         2001            2000
                                                                                    ----------------------------
<S>                                                                                 <C>             <C>
Cash flows from operating activities:
   Net income ...................................................................   $  7,979,776    $  6,827,873
   Adjustments  to  reconcile  net  income  to net cash  provided  by  operating
     activities:
     Provision for loan losses ..................................................        557,137         346,133
     Amortization and accretion, net ............................................        (52,646)          5,359
     Depreciation ...............................................................        530,022         569,282
     Provision for deferred taxes ...............................................       (122,616)       (112,464)
     (Gain) Loss on sale of securities available-for-sale .......................     (1,154,003)       (547,724)
     (Gain) on sale of property and equipment ...................................             --         (94,137)
     (Increase) decrease in accrued income receivable ...........................        116,994      (1,010,976)
     Decrease (increase) in other assets ........................................        654,948        (363,721)
     (Decrease) increase in accrued interest and other liabilities ..............        103,265          16,508
                                                                                    ----------------------------
           Net cash provided by operating activities ............................      8,612,877       5,636,133
                                                                                    ----------------------------

Cash flow from investing activities:
   Purchase of securities available-for-sale ....................................    (33,882,961)    (24,110,324)
   Proceeds from sale of securities available-for-sale ..........................     34,230,309      18,172,200
   Proceeds from maturities of securities available-for-sale ....................     17,822,087      14,232,540
   Proceeds from sale of property and equipment .................................             --         145,518
   Net decrease (increase) in interest bearing deposits in financial institutions         98,174      (1,439,757)
   Net decrease (increase) in federal funds sold ................................    (43,605,000)         40,000
   Net decrease (increase) in loans .............................................     16,896,053     (36,748,448)
   Purchase of bank premises and equipment ......................................     (1,699,418)       (396,071)
                                                                                    ----------------------------
           Net cash (used in) investing activities ..............................    (10,140,756)    (30,104,342)
                                                                                    ----------------------------

Cash flows from financing activities:
   Increase (decrease) in deposits ..............................................     10,489,894       8,181,852
   Increase (decrease) in Federal Home Loan Bank advances .......................    (11,500,000)     29,675,000
   Increase (decrease) in federal funds purchased and securities sold
     under agreements to repurchase .............................................     (2,006,097)    (18,371,978)
   Dividends paid ...............................................................     (3,810,430)     (3,619,091)
   Proceeds from issuance of common stock and treasury stock ....................        110,834       1,268,493
                                                                                    ----------------------------
           Net cash provided by (used in) financing activities ..................     (6,715,799)     17,134,276
                                                                                    ----------------------------

           Net decrease in cash and cash equivalents ............................     (8,243,678)     (7,333,933)
                                                                                    ----------------------------

Cash and cash equivalents at beginning of year ..................................     28,775,032      26,142,396
                                                                                    ----------------------------

Cash and cash equivalents at end of the period ..................................   $ 20,531,354      18,808,463
                                                                                    ============================

Supplemental disclosures of cash flow information:
   Cash paid for interest .......................................................   $ 14,900,989      15,898,217
   Cash paid for taxes ..........................................................      3,193,099       2,796,944
</TABLE>
<PAGE>

AMES NATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

1. Significant Accounting Policies

The consolidated financial statements for the three and nine-month periods ended
September 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 August 8, 2001,  the Company  declared a cash  dividend on its common  stock,
payable on October 1, 2001 to  stockholders  of record as of September 17, 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 September 30, 2001 and 2000 were 3,125,229 and
3,122,293,  respectively.  The weighted average  outstanding shares for the nine
months  ended  September  30,  2001  and  2000  were  3,123,437  and  3,119,800,
respectively.

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

The Company  does not  anticipate  that these new  pronouncements  will have any
significant  impact on its  financial  statements  at the time of adoption.  The
standards  generally are required to be  implemented  by the Company in its 2002
financial statements.

<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  September 30, 2001 and September
30, 2000

General

The Company  earned net income of  $2,682,000,  or $0.86 per share for the three
months ended September 30, 2001, compared to net income of $2,430,000,  or $0.78
per share,  for the three months ended  September  30, 2000, an increase of 10%.
The Company's  return on average assets was 1.78% and 1.53%,  respectively,  for
the three-month periods ending September 30, 2001 and 2000.

The  improvement  in net income can be primarily  attributed  to lower  interest
expense  partially offset by lower interest income and security gains. The lower
interest expense for the quarter is attributable to declining  interest rates on
deposits and other borrowed funds in addition to a significantly lower volume of
borrowed funds.  Offsetting interest income factors include lower loan rates and
volume as several large  commercial  customers  refinanced  loans with competing
institutions  for more  favorable  loan terms and a lower  volume of  investment
securities  as a result of using  investment  proceeds  to lower  the  Company's
levelof 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  September  30,  2001 and
September 30, 2000, respectively.
<PAGE>

Distribution of Assets, Liabilities and Stockholders' Equity

(dollars in thousands)

                    INTEREST RATES AND INTEREST DIFFERENTIAL
<TABLE>
                                                      Three Months Ended September 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 .......................   $ 45,641   $    937     8.21%    $ 56,985   $  1,316      9.24%
  Agricultural .....................     27,691        605     8.74%      26,491        629      9.50%
  Real estate ......................    239,432      4,818     8.05%     237,736      4,849      8.16%
  Installment and other ............     23,141        437     7.55%      26,026        509      7.82%
                                       ---------------------------------------------------------------
Total loans (including fees) .......   $335,905   $  6,797     8.09%    $347,238   $  7,303      8.41%

Investment securities
  Taxable ..........................   $145,611   $  2,324     6.38%    $184,655   $  2,947      6.38%
  Tax-exempt .......................     68,721      1,326     7.72%      69,949      1,368      7.82%
                                       ---------------------------------------------------------------
Total investment securities ........   $214,332   $  3,650     6.81%    $254,604   $  4,315      6.78%

Interest bearing deposits with banks   $    250   $      4     6.40%    $    600   $     10      6.67%
Federal funds sold .................     23,788        207     3.48%       7,013        112      6.39%
                                       ---------------------------------------------------------------
Total interest-earning assets ......   $574,275   $ 10,658     7.42%    $609,455   $ 11,740      7.71%

Noninterest-earning assets .........     29,059                           25,867
                                       --------                         --------
TOTAL ASSETS .......................   $603,334                         $635,322
                                       ========                         ========
<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>
<PAGE>

Distribution of Assets, Liabilities and Stockholders' Equity

(dollars in thousands)

                    INTEREST RATES AND INTEREST DIFFERENTIAL
<TABLE>
                                                              Three Months Ended September 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 .   $223,356   $  1,368    2.45%    $205,802    $  1,939      3.77%
  Time deposits greater than $100,000 ......    158,314      2,150    5.43%     157,508       2,255      5.73%
  Time deposits less than $100,000 .........     54,006        741    5.49%      59,655         944      6.33%
                                               ---------------------------------------------------------------
Total deposits .............................   $435,676   $  4,259    3.91%    $422,965    $  5,138      4.86%
Other borrowed funds .......................     22,460        238    4.24%      77,381       1,286      6.64%
                                               ---------------------------------------------------------------
Total Interest-bearing liabilities .........   $458,136   $  4,497    3.93%    $500,346    $  6,424      5.13%

             Noninterest-bearing liabilities
Demand deposits ............................   $ 54,844                        $ 49,341
Other liabilities ..........................      5,204                           4,763
                                               --------                        --------
Stockholders' equity .......................   $ 92,123                        $ 80,872
                                               --------                        --------

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY .......................   $610,307                        $635,322
                                               ========                        ========

Net interest income ........................              $  6,161    4.29%               $  5,317      3.49%
                                                          ========                        ========
Margin Analysis
Interest income/ earning assets ............              $ 10,658    7.42%               $ 11,740      7.70%
Interest expense/earning assets ............                 4,497    3.13%                  6,424      4.21%
Net interest income/earning assets .........                 6,161    4.29%                  5,315      3.49%
<FN>
1    Tax-exempt  income has been  adjusted  to a  tax-equivalent  basis using an
     incremental rate of 34%.
</FN>
</TABLE>
<PAGE>

Net Interest Income

For the three months ended September 30, 2001, the Company's net interest margin
was 4.29%  compared to 3.49% for the three months ended  September 30, 2000. Net
interest income,  prior to the adjustment for tax-exempt income, for the quarter
ended  September  30,  2001  and  September  30,  2000  totaled  $5,710,000  and
$4,854,000,  respectively. This 17.6% increase resulted primarily from declining
interest   rates  on  deposits  and  other  borrowed  funds  in  addition  to  a
significantly lower volume of borrowed funds.

For the three  months  ended  September  30,  2001,  interest  income  decreased
$1,071,000 or 9.5% when  compared to the same period in 2000.  This decrease was
primarily  attributable  to lower  loan  rates of 8.1% as of the  quarter  ended
September  30, 2001 versus 8.4% for the quarter ended  September 30, 2000.  Also
loan volume was lower as several large  commercial  customers  refinanced  loans
with competing  institutions for more favorable loan terms and a lower volume of
investment  securities as a result of using  investment  proceeds from sales and
maturities to lower the Company's volume of other borrowed funds.

Interest expense  decreased  $1,927,000 or 30.0% for the quarter ended September
30, 2001 when compared to the same period in 2000.  The lower  interest  expense
for the quarter is attributable to declining interest rates paid on deposits and
other borrowed funds as well as a significantly lower volume of borrowed funds.

Provision for Loan Losses

The  Company's  provision  for loan and lease  losses for the three months ended
September 30, 2001 was $283,000  compared to $84,000 during the same period last
year. While general  provisions for strong loan growth accounted for most of the
additional  provisions  expense  in the third  quarter  of 2000,  the 2001 third
quarter provisions are the result of a deterioration in credit quality in a pool
of purchased leases with a September 30, 2001 outstanding balance of $2,786,000.

Noninterest Income and Expense

Noninterest  income  decreased  $281,000,  or 22.4%  during  the  quarter  ended
September  30, 2001  compared to the same period in 2000.  The  decrease  can be
attributed to securities  gains in the Company's  equity  portfolio of $2,000 in
2001 compared to $359,000 in third quarter 2000.

Noninterest  expense  increased  $103,000 or 3.9% for the third  quarter of 2001
compared to the same period in 2000.  The  increase  in  noninterest  expense is
attributable  to a 5.4%  increase in salaries  and  benefits of $85,000 and 7.0%
increase data processing costs of $25,000.

Income Taxes

The provision for income taxes for September 30, 2001 and September 30, 2000 was
$972,000 and  $952,000,  respectively.  This amount  represents an effective tax
rate of 26.6% for the third  quarter  of 2001,  compared  to 28.2% for the third
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 Nine Months  Ending  September 30, 2001 and September
30, 2000

General

The  Company  earned  net income of  $7,980,000  or $2.55 per share for the nine
months ended September 30, 2001, compared to net income of $6,828,000,  or $2.19
per share,  for the nine months ended  September 30, 2000, an increase of 16.9%.
The Company's return on average assets was 1.73% and 1.45%, respectively for the
nine-month period ending September 30, 2001 and September 30, 2000.

The  improvement  in net income can be primarily  attributed to higher  security
gains and lower  interest  expense.  Security  gains totaled  $1,154,000 for the
first nine months of 2001  compared to gains of $548,000  for the same period in
2000. The lower interest  expense for the nine month period ending September 30,
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.
<PAGE>

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 nine month periods ended September 30, 2001 and September
30, 2000, respectively.

Distribution of Assets, Liabilities and Stockholders' Equity

(dollars in thousands)

                    INTEREST RATES AND INTEREST DIFFERENTIAL
<TABLE>
                                                       Nine Months Ended September 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 .......................   $ 50,430   $  3,237    8.56%    $ 52,160   $  3,519    9.00%
  Agricultural .....................     28,864      1,936    8.94%    $ 26,107      1,803    9.21%
  Real estate ......................    240,959     14,581    8.07%    $229,482     13,942    8.10%
  Installment and other ............     24,238      1,422    7.82%    $ 27,165      1,549    7.60%
                                       ------------------------------------------------------------
Total loans (including fees) .......   $344,491   $ 21,176    8.20%    $334,914   $ 20,813    8.29%

Investment securities
  Taxable ..........................   $150,266   $  7,199    6.39%    $186,767   $  8,949    6.39%
  Tax-exempt .......................     67,234      3,868    7.67%    $ 71,414      4,137    7.72%
                                       ------------------------------------------------------------
Total investment securities ........   $217,500   $ 11,067    6.78%    $258,181   $ 13,086    6.76%

Interest bearing deposits with banks   $    250   $     11    5.87%    $  1,824   $     57    4.17%
Federal funds sold .................     18,338        552    4.01%    $  8,010        331    5.51%
                                       ------------------------------------------------------------
Total interest-earning assets ......   $580,579   $ 32,806    7.53%    $602,929   $ 34,287    7.58%
Total noninterest-earning assets ...   $ 33,280                        $ 25,068
                                       --------                        --------
TOTAL ASSETS .......................   $613,859                        $627,997
                                       ========                        ========
<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>
<PAGE>

Distribution of Assets, Liabilities and Stockholders' Equity

(dollars in thousands)

                    INTEREST RATES AND INTEREST DIFFERENTIAL
<TABLE>
                                                               Nine Months Ended September 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 .   $221,771   $  4,711    2.83%    $216,092    $  5,955    3.67%
  Time deposits < $100,000 .................    159,525      6,796    5.68%     160,105       6,662    5.55%
  Time deposits > $100,000 .................     60,701      2,722    5.98%      62,626       2,859    6.09%
                                               -------------------------------------------------------------
Total deposits .............................   $441,997   $ 14,229    4.29%    $438,823    $ 15,476    4.70%
Other borrowed funds .......................     25,100        934    4.97%      58,877       2,625    5.94%
                                               -------------------------------------------------------------
Total Interest-bearing liabilities .........   $467,097   $ 15,163    4.33%    $497,700    $ 18,101    4.85%

             Noninterest-bearing liabilities
Demand deposits ............................   $ 50,811                        $ 47,014
Other liabilities ..........................      5,754                           5,023
                                               --------                        --------
Stockholders' equity .......................   $ 90,197                        $ 78,260
                                               --------                        --------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .   $613,859                        $627,997
                                               ========                        ========

Net interest income ........................             $ 17,642     4.05%                $ 16,186    3.58%
                                                         ========                          ========
Margin Analysis

Interest income/ earning assets ............             $ 32,806     7.53%                $ 34,287    7.58%
Interest expense/earning assets ............               15,163     3.48%                  18,101    4.00%
Net interest income/earning assets .........               17,642     4.05%                  16,186    3.58%

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

Net Interest Income

For the nine months ended  September 30, 2001, the Company's net interest margin
was 4.05%  compared to 3.58% for the nine months ended  September 30, 2000.  Net
interest income,  prior to the adjustment for tax-exempt  income,  for the first
nine months of the year ended  September 30, 2001 and September 30, 2000 totaled
$16,328,000  and  $14,779,000,   respectively.   This  10.5%  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 rates on other borrowed funds.

For the  nine  months  ended  September  30,  2001,  interest  income  decreased
$1,390,000 or 4.2% 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  $2,939,000  or  16.2%  for the nine  months  ended
September 30, 2001 when compared to the same period in 2000. Interest expense on
savings,  NOW and money market  accounts was  significantly  lower in 2001 while
total interest  expense on certificates of deposit did not change  considerably.
The lower volume and interest rates on other  borrowed funds  contributed to the
lower level of interest expense.

Provision for Loan Losses

The  Company  provided  $557,000  for  loan  losses  for the nine  months  ended
September 30, 2001 compared to $346,000 during the same period last year.  While
general  provisions  for strong loan  growth  accounted  most of the  provisions
expense in the first three quarter of 2000,  this year's current  provisions are
the result of a  deterioration  in credit quality in a pool of purchased  leases
with September 30, 2001 outstanding balances of $2,786,000.

Noninterest Income and Expense

Noninterest  income  increased  $799,000,  or 24.7% during the nine months ended
September  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
$1,154,000 in 2001 compared to $548,000 in the first three quarter of 2000.

Noninterest expense increased $355,000 or 4.4% for the first nine months of 2001
compared to the same period in 2000.  Noninterest  expense items that  increased
from the nine months ended  September  30, 2001  compared to same period in 2000
included  higher  salaries and  benefits of $309,000  which were 6.5% higher and
legal and  professional  fees that  reflect  an  increase  of  $98,000  or 32.4%
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 nine months ending September 30, 2001 and
2000 was  $3,340,000 and  $2,711,000,  respectively.  This amount  represents an
effective tax rate of 29.5% for the first nine months of 2001, compared to 28.4%
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  September  30, 2001,  total assets were  $625,465,000,  a
$6,080,000  increase compared to December 31, 2000 totals.  This higher level of
assets is  attributable  to  significant  volume of federal funds sold resulting
from temporary large public fund deposit balances associated with the collection
of property  taxes.  A lower volume of loans and investment  securities  largely
offsets the increase in federal funds sold.

Investment Portfolio

The  decrease  in the  volume  of  investments  securities  to  $220,579,000  on
September  30, 2001 from  $232,706,000  on December 31, 2000  resulted  from the
proceeds from maturing and called investment  securities being utilized to lower
the level of other borrowings.

Loan Portfolio

Net  loans  as of  September  30,  2001  totaled  $326,562,000,  a  decrease  of
$17,453,000  from  outstanding  balances as of December 31, 2000.  Average loans
outstanding for the nine months ending  September 30, 2001 totaled  $344,491,000
compared to a year-end 2000 average balance of $339,115,000. The decreased level
of loans relates to significant market competition for loans.
<PAGE>

Problem loans totaled $3,448,000 as of September 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
September 30, 2001,  non-accrual loans totaled $2,995,000,  past due loans still
accruing  totaled  $453,000 and there were no  restructured  loans  outstanding.
Other real estate owned as of  September  30, 2001 and December 31, 2000 totaled
$101,000 and $76,000,  respectively. As of September 30, 2001, potential problem
loans and leases  consisted of a pool of purchased  leases with a September  30,
2001 balance of $2,786,000.

Net charge offs were  $508,000 for the nine months ended  September  30, 2001 as
compared to $4,000 in net  recoveries  for the nine months ended  September  30,
2000.  Losses related to purchased  leases  totaled  $376,000 with the remaining
losses coming from previously  identified problem loans. The resulting allowance
for loan losses as percentage of outstanding  loans as of September 30, 2001 and
December 31, 2000 was 1.63% and 1.54%, respectively.

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  increased by $10,490,000 from year-end 2000 and are $11,117,000 higher
than  September  30, 2000  balances.  The increase in deposits  from year end is
attributable  to a large influx of public funds  invested on a short-term  basis
until  the funds are  withdrawn  over the  following  30 to 60 day  period.  The
Company's deposits typically increase  significantly at the end of the first and
third quarters as local municipalities receive local property tax payments.

Other  borrowed funds as of September 30, 2001,  consisted  primarily of Federal
Home Loan Bank  advances and  securities  sold under  agreements  to  repurchase
totaling  $21,501,000  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  $93,439,000  as of  September  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  $8,613,000  and
$5,636,000 to liquidity  for the nine months ended  September 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  $64,631,000  as of September  30, 2001  compared to
year-end  2000  balance  of  $29,368,000.  The  increase  in fed  funds  sold is
attributable  to public fund  deposits  and  maturing  and  callable  investment
securities.

Securities  available for sale declined to $220,579,000 as of September 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 in lieu of a
more favorable investment environment.

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 $4,500,000 and $16,000,000,  respectively as of
September  30, 2001 and December 31, 2000.  The Company as of September 30, 2001
was not borrowing any federal funds but had  outstanding  securities  sold under
agreement to repurchase of $17,001,000.  Management  believes that the Company's
liquidity  sources will be sufficient  to support  existing  operations  for the
foreseeable future.
<PAGE>

The Company's total stockholder's equity increased to $93,439,000, September 30,
2001,  from  $86,177,000,  December 31, 2000.  September 30, 2001  stockholders'
equity was 14.9% 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 September 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.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

        Not applicable

Item 2. Changes in Securities and Use of Proceeds

        None

Item 3. Defaults Upon Senior Securities

        Not applicable

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

        None

Item 5. Other Information

        None

Item 6. Exhibits and Reports on Form 8-K

       (a)  Exhibits

            None

       (b)  Reports on Form 8-K

            None

<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: November 14, 2001                       By:  /s/ Daniel L. Krieger
                                                   -----------------------------
                                                   Daniel L. Krieger, President

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

