Alerus Financial Corporation (Nasdaq: ALRS), or the Company,
reported net income of $6.4 million for the first quarter of 2024,
or $0.32 per diluted common share, compared to a net loss of $14.8
million, or ($0.73) per diluted common share, for the fourth
quarter of 2023, and net income of $8.2 million, or $0.40 per
diluted common share, for the first quarter of 2023.
CEO Comments
President and Chief Executive Officer Katie Lorenson said, “Our
momentum continues into 2024 as we started the year with strong
production and client acquisition in our commercial wealth bank and
national retirement businesses. Deposit growth and inflows were
robust at over 6%, adjusted net interest margin expanded another 7
basis points and our loan to deposit ratio trended down to 85.2%.
We leveraged the Bank Term Funding Program as a strategic arbitrage
which was additive to net interest income during the quarter and
helped drive over 3% sequential growth. The company’s fee income,
which accounted for 53.3% of total revenues, increased across each
diversified business line. Our adjusted efficiency ratio decreased
slightly, despite the inflationary headwinds, as we continue to
manage expenses prudently. Maintaining our fortress balance sheet
remained a priority and we ended the quarter with an allowance for
credit losses to total loans of 1.31%, a CET1 capital ratio of
11.86%, and growth in tangible book value per common share of 7.8%
over the prior year. We continue to make progress in returning the
company to top tier performance and remain focused on the long-term
success of the company. I would like to thank our team members for
all they do to create value for our clients, our communities, and
our shareholders.”
First Quarter Highlights
- Total deposits were $3.3 billion as of March 31, 2024, an
increase of $189.4 million, or 6.1%, from December 31, 2023
- Total loans were $2.8 billion as of March 31, 2024, an increase
of $39.9 million, or 1.4%, from December 31, 2023
- The loan to deposit ratio as of December 31, 2024 was 85.2%,
compared to 89.1% as of December 31, 2023; brokered deposits
remained at $0
- Net interest margin (on a tax equivalent basis) was 2.30% in
the first quarter of 2024, compared to 2.37% in the fourth quarter
of 2023. Adjusted net interest margin (on a tax-equivalent basis)
(non-GAAP) increased 7 basis points from 2.37% in the fourth
quarter of 2023 to 2.44% in the first quarter of 2024
- Net interest income increased 3.1%, from $21.6 million in the
fourth quarter of 2023 to $22.2 million in the first quarter of
2024
- Total assets under administration/management at March 31, 2024
were $42.7 billion, a 5.0% increase from December 31, 2023
- Net charge-offs to average loans of 0.01% for the first quarter
of 2024, compared to net recoveries to average loans of 0.04% for
the fourth quarter of 2023
- Total nonperforming assets were $7.3 million as of March 31,
2024, a decrease of $1.4 million, or 16.2%, from December 31,
2023
- Allowance for credit losses to nonperforming loans increased
from 410% as of December 31, 2023 to 498% as of March 31, 2024
- Tangible book value per common share (non-GAAP) was $15.63 as
of March 31, 2024, a 1.1% increase from December 31, 2023
- Common equity tier 1 capital to risk weighted assets as of
March 31, 2024 was 11.86%, compared to 11.82% as of December 31,
2023, and continues to be well above the minimum threshold to be
“well capitalized” of 6.50%
- Borrowed $355.0 million from the Bank Term Funding Program
(“BTFP”), earning 52 basis points of risk free return resulting in
$0.3 million in net interest income for the first quarter of
2024
Selected Financial Data (unaudited)
As of and for the
Three months ended
March 31,
December 31,
March 31,
(dollars and shares in thousands, except
per share data)
2024
2023
2023
Performance Ratios
Return on average total assets
0.63
%
(1.51)
%
0.88
%
Return on average common equity
7.04
%
(16.75)
%
9.17
%
Return on average tangible common equity
(1)
9.78
%
(18.85)
%
12.58
%
Noninterest income as a % of revenue
53.26
%
3.54
%
51.63
%
Net interest margin (tax-equivalent)
2.30
%
2.37
%
2.70
%
Adjusted net interest margin
(tax-equivalent) (1)
2.44
%
2.37
%
2.70
%
Efficiency ratio (1)
78.88
%
165.40
%
74.53
%
Adjusted efficiency ratio (1)
78.88
%
79.07
%
74.53
%
Net charge-offs/(recoveries) to average
loans
0.01
%
(0.04)
%
0.03
%
Dividend payout ratio
59.38
%
(26.03)
%
45.00
%
Per Common Share
Earnings per common share - basic
$
0.32
$
(0.74)
$
0.41
Earnings per common share - diluted
$
0.32
$
(0.73)
$
0.40
Dividends declared per common share
$
0.19
$
0.19
$
0.18
Book value per common share
$
18.79
$
18.71
$
17.90
Tangible book value per common share
(1)
$
15.63
$
15.46
$
14.50
Average common shares outstanding -
basic
19,739
19,761
20,028
Average common shares outstanding -
diluted
19,986
19,996
20,246
Other Data
Retirement and benefit services assets
under administration/management
$
38,488,523
$
36,682,425
$
33,404,342
Wealth management assets under
administration/management
$
4,242,408
$
4,018,846
$
3,675,684
Mortgage originations
$
54,101
$
65,488
$
77,728
____________________
(1)
Represents a non-GAAP financial measure.
See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP
Financial Measures.”
Results of Operations
Net Interest Income
Net interest income for the first quarter of 2024 was $22.2
million, a $667.0 thousand, or 3.1%, increase from the fourth
quarter of 2023. The increase was due to interest income on
increased cash balances from deposit growth and BTFP borrowings, as
well as increased loan balances and lower interest expense on
borrowings due to lower borrowing balances. The increase was
partially offset by an increase in interest expense on deposits,
driven by higher deposit balances.
Net interest income decreased $1.4 million, or 6.1%, from $23.7
million for the first quarter of 2023 due to heightened deposit
competition, the impact of higher short-term interest rates on
indexed money market deposits, and clients moving deposits out of
noninterest bearing products into interest-bearing products.
Interest income increased $11.2 million, or 29.7%, from the first
quarter of 2023, primarily driven by higher yields on new loans and
strong organic loan growth, in addition to interest income on
higher cash balances due to the Company’s excess cash position. The
increase in interest income was offset by a $12.7 million, or
89.5%, increase in interest expense, primarily due to an increase
in rates paid on interest-bearing deposits and higher short-term
borrowing balances.
Net interest margin (on a tax-equivalent basis), was 2.30% for
the first quarter of 2024, a 7 basis point decrease from 2.37% for
the fourth quarter of 2023, and a 40 basis point decrease from
2.70% for the first quarter of 2023. The decrease in net interest
margin (on a tax-equivalent basis) was mainly attributable to
higher earning assets at lower yields resulting from the BTFP
opportunity. Adjusted net interest margin (on a tax-equivalent
basis) (non-GAAP), which excludes BTFP borrowings, was 2.44% for
the first quarter of 2024, a 7 basis point increase from 2.37% for
the fourth quarter of 2023, and a 26 basis point decrease from
2.70% for the first quarter of 2023. The increase in adjusted net
interest margin (on a tax-equivalent basis) (non-GAAP) from the
prior quarter reflected higher yields on new loans, partially
offset by higher cost of funds from continued growth on
interest-bearing deposits.
Noninterest Income
Noninterest income for the first quarter of 2024 was $25.3
million, a $24.5 million increase from the fourth quarter of 2023.
The quarter over quarter increase was primarily driven by the
balance sheet repositioning in the fourth quarter of 2023. Adjusted
noninterest income (non-GAAP) for the first quarter of 2024 was
$25.3 million, a 0.4% decrease from the fourth quarter of 2023.
Retirement and benefit services revenue increased $0.3 million, a
2.2% increase from fourth quarter of 2023 results, primarily due to
the growth in both asset-based revenue and transaction-based
revenue. Assets under administration/management in retirement and
benefit services increased 4.9% from December 31, 2023, due to
improved equity and bond markets. Wealth management revenues
increased $0.2 million during the first quarter of 2024, a 3.0%
increase from the fourth quarter of 2023, as assets under
administration/management increased 5.6% during that same period.
Mortgage saw a $0.4 million increase in mortgage banking revenue
with mortgage originations of $54.1 million for the first quarter
of 2024, compared to originations of $65.5 million in the fourth
quarter of 2023, primarily driven by an increase in the marked to
market derivative.
Noninterest income for the first quarter of 2024 was $25.3
million, an increase of $71 thousand, or 0.3%, from the first
quarter of 2023. While overall noninterest income was stable year
over year, wealth management revenues increased $0.9 million, or
17.8%, in the first quarter of 2024 as assets under
administration/management increased 15.4% during that same period.
Offsetting this increase, other revenue decreased $1.1 million, or
41.7%, from $2.6 million in the first quarter of 2023, primarily
due to $1.2 million in proceeds received on a bank-owned life
insurance claim in the first quarter of 2023.
Noninterest Expense
Noninterest expense for the fourth quarter of 2024 was $39.0
million, a $0.4 million, or 0.9%, increase from the fourth quarter
of 2023. Employee taxes and benefits expense increased $1.6
million, a 35.2% increase from the fourth quarter of 2023,
primarily due to seasonality. This was partially offset by
decreases in professional fees and assessments, business services,
software and technology expense, and marketing and business
development expense totaling $1.0 million compared to the fourth
quarter of 2023. Professional fees and assessments expense
decreased $0.4 million, or 15.0%, from the fourth quarter of 2023,
primarily driven by higher fees resulting from increased audit,
examination, and other professional fees in the fourth quarter of
2023. Business services, software and technology expense decreased
$0.3 million, or 6.0%, from the fourth quarter of 2023, primarily
driven by seasonally higher contract renewals due to inflationary
pressures and equipment purchases in the fourth quarter of 2023.
Marketing and business development expense decreased $0.3 million,
or 31.6%, from the fourth quarter of 2023 due to a one-time
donation resulting in tax credits in the fourth quarter of
2023.
Noninterest expense for the first quarter of 2024 increased $1.2
million, or 3.0%, from $37.9 million in the first quarter of 2023.
The increase was primarily driven by higher professional fees and
assessments due to an increase in Federal Deposit Insurance
Corporation (“FDIC”) assessments and an increase in recruitment
expense driven by talent acquisitions in the first quarter of
2024.
Financial Condition
Total assets were $4.3 billion as of March 31, 2024, an increase
of $430.4 million, or 11.0%, from December 31, 2023. The increase
was primarily due to a $415.9 million increase in cash and cash
equivalents and a $39.9 million increase in loans, partially offset
by a decrease of $17.5 million in investment securities. The
increase in cash and cash equivalents was primarily driven by the
proceeds from BTFP borrowings.
Loans
Total loans were $2.8 billion as of March 31, 2024, an increase
of $39.9 million, or 1.4%, from December 31, 2023. The increase was
primarily driven by a $26.0 million increase in commercial real
estate loans, a $13.4 million increase commercial and industrial
loans, a $2.7 million increase in residential real estate junior
lien loans, and a $1.9 million increase in real estate construction
loans, partially offset by a $4.7 million decrease in residential
real estate first mortgage loans.
The following table presents the composition of our loan
portfolio as of the dates indicated:
March 31,
December 31,
September 30,
June 30,
March 31,
(dollars in thousands)
2024
2023
2023
2023
2023
Commercial
Commercial and industrial
$
611,695
$
598,321
$
582,387
$
551,860
$
553,578
Real estate construction
125,966
124,034
97,742
78,428
108,776
Commercial real estate
1,152,948
1,126,912
1,025,014
1,003,821
934,324
Total commercial
1,890,609
1,849,267
1,705,143
1,634,109
1,596,678
Consumer
Residential real estate first mortgage
722,151
726,879
717,793
707,630
698,002
Residential real estate junior lien
156,882
154,134
152,677
157,231
152,281
Other revolving and installment
29,833
29,303
30,817
34,552
39,664
Total consumer
908,866
910,316
901,287
899,413
889,947
Total loans
$
2,799,475
$
2,759,583
$
2,606,430
$
2,533,522
$
2,486,625
Deposits
Total deposits were $3.3 billion as of March 31, 2024, an
increase of $189.4 million, or 6.1%, from December 31, 2023.
Interest-bearing deposits increased $224.9 million, while
noninterest-bearing deposits decreased $35.6 million, from December
31, 2023. The increase in total deposits was due to both seasonal
inflows of public funds deposit balances and expanded commercial
deposit relationships, along with time deposit and synergistic
deposit growth. Synergistic deposits were $882.8 million as of
March 31, 2024, an increase of $31.3 million, or 3.7%, from
December 31, 2023. The Company continued to have $0 of brokered
deposits as of March 31, 2024.
The following table presents the composition of our deposit
portfolio as of the dates indicated:
March 31,
December 31,
September 30,
June 30,
March 31,
(dollars in thousands)
2024
2023
2023
2023
2023
Noninterest-bearing demand
$
692,500
$
728,082
$
717,990
$
715,534
$
792,977
Interest-bearing
Interest-bearing demand
938,751
840,711
759,812
753,194
817,675
Savings accounts
82,727
82,485
88,341
93,557
99,742
Money market savings
1,114,262
1,032,771
959,106
986,403
1,076,166
Time deposits
456,729
411,562
346,935
304,167
245,418
Total interest-bearing
2,592,469
2,367,529
2,154,194
2,137,321
2,239,001
Total deposits
$
3,284,969
$
3,095,611
$
2,872,184
$
2,852,855
$
3,031,978
Asset Quality
Total nonperforming assets were $7.3 million as of March 31,
2024, a decrease of $1.4 million, or 16.2%, from December 31, 2023.
As of March 31, 2024, the allowance for credit losses on loans was
$36.6 million, or 1.31% of total loans, compared to $35.8 million,
or 1.30% of total loans, as of December 31, 2023.
The following table presents selected asset quality data as of
and for the periods indicated:
As of and for the three months
ended
March 31,
December 31,
September 30,
June 30,
March 31,
(dollars in thousands)
2024
2023
2023
2023
2023
Nonaccrual loans
$
7,345
$
8,596
$
9,007
$
2,233
$
2,118
Accruing loans 90+ days past due
—
139
—
347
—
Total nonperforming loans
7,345
8,735
9,007
2,580
2,118
OREO and repossessed assets
3
32
3
—
—
Total nonperforming assets
$
7,348
$
8,767
$
9,010
$
2,580
$
2,118
Net charge-offs/(recoveries)
58
(238)
(594)
(403)
170
Net charge-offs/(recoveries) to average
loans
0.01
%
(0.04)
%
(0.09)
%
(0.07)
%
0.03
%
Nonperforming loans to total loans
0.26
%
0.32
%
0.35
%
0.10
%
0.09
%
Nonperforming assets to total assets
0.17
%
0.22
%
0.23
%
0.07
%
0.05
%
Allowance for credit losses on loans to
total loans
1.31
%
1.30
%
1.39
%
1.41
%
1.41
%
Allowance for credit losses on loans to
nonperforming loans
498
%
410
%
403
%
1,384
%
1,657
%
For the first quarter of 2024, the Company had net charge-offs
of $58 thousand, compared to net recoveries of $238 thousand for
the fourth quarter of 2023 and net charge-offs of $170 thousand for
the first quarter of 2023.
The Company recorded no provision for credit losses for the
first quarter of 2024, compared to a provision of $1.5 million for
the fourth quarter of 2023 and a provision of $550 thousand for the
first quarter of 2023. The unearned fair value adjustments on the
acquired Metro Phoenix Bank loan portfolio were $4.7 million as of
March 31, 2024, $5.2 million as of December 31, 2023, and $6.9
million as of March 31, 2023.
Capital
Total stockholders’ equity was $371.6 million as of March 31,
2024, an increase of $2.5 million from December 31, 2023. This
change was primarily driven by an increase in retained earnings of
$2.7 million. Tangible book value per common share (non-GAAP)
increased to $15.63 as of March 31, 2024, from $15.46 as of
December 31, 2023. Tangible common equity to tangible assets
(non-GAAP) decreased to 7.23% as of March 31, 2024, from 7.94% as
of December 31, 2023. Common equity tier 1 capital to risk weighted
assets increased to 11.86% as of March 31, 2024, from 11.82% as of
December 31, 2023.
The following table presents our capital ratios as of the dates
indicated:
March 31,
December 31,
March 31,
2024
2023
2023
Capital Ratios(1)
Alerus Financial Corporation
Consolidated
Common equity tier 1 capital to risk
weighted assets
11.86
%
11.82
%
13.30
%
Tier 1 capital to risk weighted assets
12.13
%
12.10
%
13.60
%
Total capital to risk weighted assets
14.79
%
14.76
%
16.51
%
Tier 1 capital to average assets
9.89
%
10.57
%
11.00
%
Tangible common equity / tangible assets
(2)
7.23
%
7.96
%
7.62
%
Alerus Financial, N.A.
Common equity tier 1 capital to risk
weighted assets
11.71
%
11.40
%
12.67
%
Tier 1 capital to risk weighted assets
11.71
%
11.40
%
12.67
%
Total capital to risk weighted assets
12.87
%
12.51
%
13.87
%
Tier 1 capital to average assets
9.30
%
9.92
%
10.24
%
____________________
(1)
Capital ratios for the current quarter are
to be considered preliminary until the Call Report for Alerus
Financial, N.A. is filed.
(2)
Represents a non-GAAP financial measure.
See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP
Financial Measures.”
Conference Call
The Company will host a conference call at 11:00 a.m. Central
Time on Thursday, April 25, 2024, to discuss its financial results.
The call can be accessed via telephone at 1-(833)-470-1428, using
access code 557480. A recording of the call and transcript will be
available on the Company’s investor relations website at
investors.alerus.com following the call.
About Alerus Financial Corporation
Alerus Financial Corporation (Nasdaq: ALRS) is a commercial
wealth bank and national retirement services provider with
corporate offices in Grand Forks, North Dakota, and the
Minneapolis-St. Paul, Minnesota metropolitan area. Through its
subsidiary, Alerus Financial, National Association, Alerus provides
diversified and comprehensive financial solutions to business and
consumer clients, including banking, wealth services, and
retirement and benefits plans and services. Alerus provides clients
with a primary point of contact to help fully understand the unique
needs and delivery channel preferences of each client. Clients are
provided with competitive products, valuable insight, and sound
advice supported by digital solutions designed to meet the clients’
needs. Alerus has banking and wealth offices in Grand Forks and
Fargo, North Dakota, the Minneapolis-St. Paul, Minnesota
metropolitan area, and Phoenix and Scottsdale, Arizona. Alerus
Retirement and Benefits serves advisors, brokers, employers, and
plan participants across the United States.
Non-GAAP Financial Measures
Some of the financial measures included in this press release
are not measures of financial performance recognized by U.S.
Generally Accepted Accounting Principles, or GAAP. These non-GAAP
financial measures include the ratio of tangible common equity to
tangible assets, adjusted tangible common equity to tangible
assets, tangible book value per common share, return on average
tangible common equity, efficiency ratio, adjusted efficiency
ratio, adjusted noninterest income, net interest margin
(tax-equivalent), and adjusted net interest margin
(tax-equivalent). Management uses these non-GAAP financial measures
in its analysis of its performance, and believes financial analysts
and investors frequently use these measures, and other similar
measures, to evaluate capital adequacy and financial performance.
Reconciliations of non-GAAP disclosures used in this press release
to the comparable GAAP measures are provided in the accompanying
tables. Management, banking regulators, many financial analysts and
other investors use these measures in conjunction with more
traditional bank capital ratios to compare the capital adequacy of
banking organizations with significant amounts of goodwill or other
intangible assets, which typically stem from the use of the
purchase accounting method of accounting for mergers and
acquisitions.
These non-GAAP financial measures should not be considered in
isolation or as a substitute for total stockholders’ equity, total
assets, book value per share, return on average assets, return on
average equity, or any other measure calculated in accordance with
GAAP. Moreover, the manner in which the Company calculates these
non-GAAP financial measures may differ from that of other companies
reporting measures with similar names.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include, without limitation, statements concerning
plans, estimates, calculations, forecasts and projections with
respect to the anticipated future performance of Alerus Financial
Corporation. These statements are often, but not always, identified
by words such as “may”, “might”, “should”, “could”, “predict”,
“potential”, “believe”, “expect”, “continue”, “will”, “anticipate”,
“seek”, “estimate”, “intend”, “plan”, “projection”, “would”,
“annualized”, “target” and “outlook”, or the negative version of
those words or other comparable words of a future or
forward-looking nature. Examples of forward-looking statements
include, among others, statements the Company makes regarding our
projected growth, anticipated future financial performance,
financial condition, credit quality, management’s long-term
performance goals and the future plans and prospects of Alerus
Financial Corporation.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations and assumptions regarding our
business, future plans and strategies, projections, anticipated
events and trends, the economy and other future conditions. Because
forward-looking statements relate to the future, they are subject
to inherent uncertainties, risks and changes in circumstances that
are difficult to predict and many of which are outside of our
control. Our actual results and financial condition may differ
materially from those indicated in forward-looking statements.
Therefore, you should not rely on any of these forward-looking
statements. Important factors that could cause our actual results
and financial condition to differ materially from those indicated
in forward-looking statements include, among others, the following:
interest rate risk, including the effects of significant rate
increases by the Federal Reserve since 2020; our ability to
successfully manage credit risk and maintain an adequate level of
allowance for credit losses; new or revised accounting standards;
business and economic conditions generally and in the financial
services industry, nationally and within our market areas,
including high rates of inflation and possible recession; the
effects of recent developments and events in the financial services
industry, including the large-scale deposit withdrawals over a
short-period of time that resulted in recent bank failures; the
overall health of the local and national real estate market;
concentrations within our loan portfolio; the level of
nonperforming assets on our balance sheet; our ability to implement
our organic and acquisition growth strategies, including the
integration of Metro Phoenix Bank which the Company acquired in
2022; the impact of economic or market conditions on our fee-based
services; our ability to continue to grow our retirement and
benefit services business; our ability to continue to originate a
sufficient volume of residential mortgages; the occurrence of
fraudulent activity, breaches or failures of our or our third party
vendors’ information security controls or cybersecurity-related
incidents, including as a result of sophisticated attacks using
artificial intelligence and similar tools; interruptions involving
our information technology and telecommunications systems or
third-party servicers; potential losses incurred in connection with
mortgage loan repurchases; the composition of our executive
management team and our ability to attract and retain key
personnel; rapid technological change in the financial services
industry; increased competition in the financial services industry
from non-banks such as credit unions and Fintech companies,
including digital asset service providers; our ability to
successfully manage liquidity risk, including our need to access
higher cost sources of funds such as fed funds purchased and
short-term borrowings; the concentration of large deposits from
certain clients, who have balances above current FDIC insurance
limits; the effectiveness of our risk management framework; the
commencement and outcome of litigation and other legal proceedings
and regulatory actions against us or to which the Company may
become subject; potential impairment to the goodwill the Company
recorded in connection with our past acquisitions, including the
acquisition of Metro Phoenix Bank; the extensive regulatory
framework that applies to us; the impact of recent and future
legislative and regulatory changes, including in response to recent
bank failures; fluctuations in the values of the securities held in
our securities portfolio, including as a result of changes in
interest rates; governmental monetary, trade and fiscal policies;
risks related to climate change and the negative impact it may have
on our customers and their businesses; severe weather, natural
disasters, widespread disease or pandemics; acts of war or
terrorism, including the ongoing Israeli-Palestinian conflict and
the Russian invasion of Ukraine, or other adverse external events;
any material weaknesses in our internal control over financial
reporting; changes to U.S. or state tax laws, regulations and
guidance, including the 1.0% excise tax on stock buybacks by
publicly traded companies; potential changes in federal policy and
at regulatory agencies as a result of the upcoming 2024
presidential election; talent and labor shortages and employee
turnover; our success at managing the risks involved in the
foregoing items; and any other risks described in the “Risk
Factors” sections of the reports filed by Alerus Financial
Corporation with the Securities and Exchange Commission.
Any forward-looking statement made by us in this press release
is based only on information currently available to us and speaks
only as of the date on which it is made. The Company undertakes no
obligation to publicly update any forward-looking statement,
whether written or oral, that may be made from time to time,
whether as a result of new information, future developments or
otherwise.
Alerus Financial Corporation and
Subsidiaries
Consolidated Balance Sheets
(dollars in thousands, except share and
per share data)
March 31,
December 31,
2024
2023
Assets
(Unaudited)
(Audited)
Cash and cash equivalents
$
545,772
$
129,893
Investment securities
Trading, at fair value
4,553
—
Available-for-sale, at fair value
472,272
486,736
Held-to-maturity, at amortized cost (with
an allowance for credit losses on investments of $207 and $213,
respectively)
291,932
299,515
Loans held for sale
10,625
11,497
Loans
2,799,475
2,759,583
Allowance for credit losses on loans
(36,584)
(35,843)
Net loans
2,762,891
2,723,740
Land, premises and equipment, net
18,162
17,940
Operating lease right-of-use assets
5,112
5,436
Accrued interest receivable
16,149
15,700
Bank-owned life insurance
33,396
33,236
Goodwill
46,783
46,783
Other intangible assets
15,834
17,158
Servicing rights
1,983
2,052
Deferred income taxes, net
34,796
34,595
Other assets
77,833
83,432
Total assets
$
4,338,093
$
3,907,713
Liabilities and Stockholders’
Equity
Deposits
Noninterest-bearing
$
692,500
$
728,082
Interest-bearing
2,592,469
2,367,529
Total deposits
3,284,969
3,095,611
Short-term borrowings
555,000
314,170
Long-term debt
58,985
58,956
Operating lease liabilities
5,420
5,751
Accrued expenses and other liabilities
62,084
64,098
Total liabilities
3,966,458
3,538,586
Stockholders’ equity
Preferred stock, $1 par value, 2,000,000
shares authorized: 0 issued and outstanding
—
—
Common stock, $1 par value, 30,000,000
shares authorized: 19,776,786 and 19,734,077 issued and
outstanding
19,777
19,734
Additional paid-in capital
150,740
150,343
Retained earnings
275,374
272,705
Accumulated other comprehensive loss
(74,256)
(73,655)
Total stockholders’ equity
371,635
369,127
Total liabilities and stockholders’
equity
$
4,338,093
$
3,907,713
Alerus Financial Corporation and
Subsidiaries
Consolidated Statements of
Income
(dollars and shares in thousands, except
per share data)
Three months ended
March 31,
December 31,
March 31,
2024
2023
2023
Interest Income
(Unaudited)
(Unaudited)
(Unaudited)
Loans, including fees
$
39,294
$
37,731
$
30,933
Investment securities
Taxable
4,568
6,040
5,951
Exempt from federal income taxes
174
182
190
Other
5,002
742
735
Total interest income
49,038
44,695
37,809
Interest Expense
Deposits
20,152
17,169
9,104
Short-term borrowings
5,989
5,292
4,393
Long-term debt
678
682
654
Total interest expense
26,819
23,143
14,151
Net interest income
22,219
21,552
23,658
Provision for credit losses
—
1,507
550
Net interest income after provision for
credit losses
22,219
20,045
23,108
Noninterest Income
Retirement and benefit services
15,655
15,317
15,482
Wealth management
6,118
5,940
5,194
Mortgage banking
1,670
1,279
1,717
Service charges on deposit accounts
389
341
301
Net gains (losses) on investment
securities
—
(24,643)
—
Other
1,491
2,557
2,559
Total noninterest income
25,323
791
25,253
Noninterest Expense
Compensation
19,332
19,214
19,158
Employee taxes and benefits
6,188
4,578
5,853
Occupancy and equipment expense
1,906
1,858
1,899
Business services, software and technology
expense
5,345
5,686
5,324
Intangible amortization expense
1,324
1,324
1,324
Professional fees and assessments
1,993
2,345
1,152
Marketing and business development
685
1,002
686
Supplies and postage
528
521
460
Travel
292
313
248
Mortgage and lending expenses
441
501
497
Other
985
1,312
1,268
Total noninterest expense
39,019
38,654
37,869
Income (loss) before income tax expense
(benefit)
8,523
(17,818)
10,492
Income tax expense (benefit)
2,091
(3,064)
2,306
Net income (loss)
$
6,432
$
(14,754)
$
8,186
Per Common Share Data
Earnings (loss) per common share
$
0.32
$
(0.74)
$
0.41
Diluted earnings (loss) per common
share
$
0.32
$
(0.73)
$
0.40
Dividends declared per common share
$
0.19
$
0.19
$
0.18
Average common shares outstanding
19,739
19,761
20,028
Diluted average common shares
outstanding
19,986
19,996
20,246
Alerus Financial Corporation and
Subsidiaries
Non-GAAP to GAAP Reconciliations and
Calculation of Non-GAAP Financial Measures (unaudited)
(dollars and shares in thousands, except
per share data)
March 31,
December 31,
March 31,
2024
2023
2023
Tangible Common Equity to Tangible
Assets
Total common stockholders’ equity
$
371,635
$
369,127
$
359,118
Less: Goodwill
46,783
46,783
47,087
Less: Other intangible assets
15,834
17,158
21,131
Tangible common equity (a)
309,018
305,186
290,900
Total assets
4,338,093
3,907,713
3,886,773
Less: Goodwill
46,783
46,783
47,087
Less: Other intangible assets
15,834
17,158
21,131
Tangible assets (b)
4,275,476
3,843,772
3,818,555
Tangible common equity to tangible assets
(a)/(b)
7.23
%
7.94
%
7.62
%
Adjusted Tangible Common Equity to
Tangible Assets
Tangible assets (b)
$
4,275,476
$
3,843,772
$
3,818,555
Less: Cash proceeds from BTFP
355,000
—
—
Adjusted tangible assets (c)
3,920,476
3,843,772
3,818,555
Adjusted tangible common equity to
tangible assets (a)/(c)
7.88
%
7.94
%
7.62
%
Tangible Book Value Per Common
Share
Total common stockholders’ equity
$
371,635
$
369,127
$
359,118
Less: Goodwill
46,783
46,783
47,087
Less: Other intangible assets
15,834
17,158
21,131
Tangible common equity (d)
309,018
305,186
290,900
Total common shares issued and outstanding
(e)
19,777
19,734
20,067
Tangible book value per common share
(d)/(e)
$
15.63
$
15.46
$
14.50
Three months ended
March 31,
December 31,
March 31,
2024
2023
2023
Return on Average Tangible Common
Equity
Net income (loss)
$
6,432
$
(14,754)
$
8,186
Add: Intangible amortization expense (net
of tax)
1,046
1,046
1,046
Net income (loss), excluding intangible
amortization (f)
7,478
(13,708)
9,232
Average total equity
367,248
349,382
361,857
Less: Average goodwill
46,783
46,783
47,087
Less: Average other intangible assets (net
of tax)
13,018
14,067
17,209
Average tangible common equity
(g)
307,447
288,532
297,561
Return on average tangible common equity
(f)/(g)
9.78
%
(18.85)
%
12.58
%
Efficiency Ratio
Noninterest expense
$
39,019
$
38,654
$
37,869
Less: Intangible amortization expense
1,324
1,324
1,324
Adjusted noninterest expense
(h)
37,695
37,330
36,545
Net interest income
22,219
21,552
23,658
Noninterest income
25,323
791
25,253
Tax-equivalent adjustment
247
226
123
Total tax-equivalent revenue
(i)
47,789
22,569
49,034
Efficiency ratio (h)/(i)
78.88
%
165.40
%
74.53
%
Adjusted Efficiency Ratio
Noninterest expense
$
39,019
$
38,654
$
37,869
Less: Intangible amortization expense
1,324
1,324
1,324
Adjusted noninterest expense
(j)
37,695
37,330
36,545
Net interest income
22,219
21,552
23,658
Noninterest income
25,323
791
25,253
Tax-equivalent adjustment
247
226
123
Less: Net gains (losses) on investment
securities
—
(24,643)
—
Total tax-equivalent revenue
(k)
47,789
47,212
49,034
Adjusted efficiency ratio
(j)/(k)
78.88
%
79.07
%
74.53
%
Alerus Financial Corporation and
Subsidiaries
Non-GAAP to GAAP Reconciliations and
Calculation of Non-GAAP Financial Measures (unaudited)
(dollars and shares in thousands, except
per share data)
Three months ended
March 31,
December 31,
March 31,
2024
2023
2023
Adjusted Noninterest Income
Noninterest income
$
25,323
$
791
$
25,253
Add: Net gains (losses) on investment
securities
—
(24,643)
—
Adjusted noninterest income
$
25,323
$
25,434
$
25,253
Adjusted Net Interest Margin
(Tax-Equivalent)
Net interest income
$
22,219
$
21,552
$
23,658
Less: BTFP cash interest income
3,615
—
—
Add: BTFP interest expense
3,266
—
—
Net interest income excluding BTFP
impact
21,870
21,552
23,658
Add: Tax equivalent adjustment for loans
and securities
247
226
124
Adjusted net interest income
(l)
$
22,117
$
21,778
$
23,782
Interest earning assets
3,921,529
3,645,184
3,567,402
Less: Average cash proceeds balance from
BTFP
269,176
—
—
Adjusted interest earning assets
(m)
$
3,652,353
$
3,645,184
$
3,567,402
Adjusted net interest margin
(tax-equivalent) (l)/(m)
2.44
%
2.37
%
2.70
%
Alerus Financial Corporation and
Subsidiaries
Analysis of Average Balances, Yields,
and Rates (unaudited)
(dollars in thousands)
Three months ended
March 31, 2024
December 31, 2023
March 31, 2023
Average
Average
Average
Average
Yield/
Average
Yield/
Average
Yield/
Balance
Rate
Balance
Rate
Balance
Rate
Interest Earning Assets
Interest-bearing deposits with banks
$
352,038
5.33
%
$
33,920
3.22
%
$
41,947
3.23
%
Investment securities (1)
775,305
2.48
921,555
2.70
1,034,288
2.43
Loans held for sale
9,014
5.67
11,421
6.01
10,345
4.98
Loans
Commercial:
Commercial and industrial
599,456
6.93
573,174
6.89
559,416
6.09
Real estate construction
127,587
8.04
117,765
8.12
103,099
6.56
Commercial real estate
1,134,540
5.58
1,053,812
5.47
911,634
4.95
Total commercial
1,861,583
6.18
1,744,751
6.12
1,574,149
5.46
Consumer
Residential real estate first mortgage
723,315
4.05
724,110
4.00
688,754
3.76
Residential real estate junior lien
154,781
7.86
155,137
7.86
149,720
7.21
Other revolving and installment
28,835
6.43
29,510
6.33
44,531
5.86
Total consumer
906,931
4.77
908,757
4.73
883,005
4.45
Total loans (1)
2,768,514
5.72
2,653,508
5.64
2,457,154
5.10
Federal Reserve/FHLB stock
16,658
8.14
24,780
7.48
23,668
6.87
Total interest earning assets
3,921,529
5.05
3,645,184
4.89
3,567,402
4.31
Noninterest earning assets
217,524
223,022
224,134
Total assets
$
4,139,053
$
3,868,206
$
3,791,536
Interest-Bearing Liabilities
Interest-bearing demand deposits
$
869,060
1.97
%
$
798,634
1.65
%
$
746,660
0.87
%
Money market and savings deposits
1,186,900
3.77
1,092,656
3.53
1,165,269
2.17
Time deposits
431,679
4.46
383,715
4.27
231,959
2.23
Fed funds purchased and Bank Term Funding
Program
282,614
4.99
189,568
5.71
290,187
4.85
Short-term borrowings
200,000
4.99
200,000
5.09
80,000
4.69
Long-term debt
58,971
4.62
58,943
4.59
58,858
4.51
Total interest-bearing liabilities
3,029,224
3.56
2,723,516
3.37
2,572,933
2.23
Noninterest-Bearing Liabilities and
Stockholders' Equity
Noninterest-bearing deposits
675,926
719,895
789,134
Other noninterest-bearing liabilities
66,655
75,413
67,612
Stockholders’ equity
367,248
349,382
361,857
Total liabilities and stockholders’
equity
$
4,139,053
$
3,868,206
$
3,791,536
Net interest income (1)
Net interest rate spread
1.49
%
1.52
%
2.08
%
Net interest margin, tax-equivalent
(1)
2.30
%
2.37
%
2.70
%
(1)
Taxable-equivalent adjustment was
calculated utilizing a marginal income tax rate of 21.0%.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240424309336/en/
Alan A. Villalon, Chief Financial Officer 952.417.3733
(Office)
Grafico Azioni Alerus Financial (NASDAQ:ALRS)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Alerus Financial (NASDAQ:ALRS)
Storico
Da Gen 2024 a Gen 2025
