ALRS Alerus Financial Corporation

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Delaware	001-39036	45-0375407
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Title of each class		Trading symbol		Name of each exchange on which registered
Common Stock, $1.00 par value per share		ALRS		The Nasdaq Stock Market LLC

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Exhibit No.		Description
99.1		Press Release of Alerus Financial Corporation, dated January 28, 2025
99.2		Investor Presentation of Alerus Financial Corporation
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

Date: January 28, 2025	Alerus Financial Corporation
	By:	/s/ Katie A. Lorenson
	Name:	Katie A. Lorenson
	Title:	President and Chief Executive Officer

Exhibit 99.1

 

Alan A. Villalon, Chief Financial Officer  952.417.3733 (Office)

 

FOR RELEASE (01.28.2025)

 

ALERUS FINANCIAL CORPORATION REPORTS

Fourth QUARTER 2024 NET INCOME OF $3.2 MILLION

 

MINNEAPOLIS, MN (January 28, 2025) – Alerus Financial Corporation (Nasdaq: ALRS), or the Company, reported net income of $3.2 million for the fourth quarter of 2024, or $0.13 per diluted common share, compared to net income of $5.2 million, or $0.26 per diluted common share, for the third quarter of 2024, and net loss of $14.8 million, or ($0.73) per diluted common share, for the fourth quarter of 2023.

 

CEO Comments

 

President and Chief Executive Officer Katie Lorenson said, “We are pleased to end 2024 with a solid quarter on across-the-board improvements to our performance metrics. The fourth quarter of 2024 was highlighted by the closing and conversion of HMN Financial, Inc. (“HMNF”), the largest acquisition in our Company history, and we welcome HMNF’s employees to the Alerus team. The combination of HMNF and meaningful organic growth in our underlying core business, drove an increase in earnings per share by a robust 41.9% versus the prior quarter. Notably, the net interest margin expanded 97 basis points, while our adjusted efficiency ratio improved significantly with a decrease to 69.0% from 77.7% in the third quarter.

 

For the full year 2024, we achieved market share gains and strong client base growth across all our business lines with our noninterest income, which represents nearly half of our total revenues. Noninterest income grew 19.4% quarter-over-quarter.

 

We enter 2025 with positive momentum and plan to continue making long term investments to support and grow our diversified revenue streams while continuing to prudently manage our expenses. While our capital ratios declined in the fourth quarter due to the HMNF acquisition, we remain above all well-capitalized thresholds and expect to build capital in 2025. We bolstered our reserves with the allowance for credit losses on loans to total loans moving up to 1.50%, while we continue to proactively identify and manage credit normalization.

 

Looking ahead, we remain committed to driving sustainable growth and delivering value to our shareholders. Our strategic focus on organic growth, diversification, valuable fee income, and maintaining strong asset quality will continue to guide our efforts in 2025 and beyond.

 

I want to thank all our team members - both the new team from HMNF and the long tenured legacy team - for your hard work, dedication and invaluable contributions supporting our company, our clients and our communities in 2024. Together, we will continue to build on our successes and return Alerus to top tier financial results.”

 

Fourth Quarter Highlights

 

	■	Adjusted earnings per common share (non-GAAP) of $0.44 in the fourth quarter of 2024, an increase of 41.9% from $0.31 in the third quarter of 2024.
	■	Completed the acquisition of HMN Financial, Inc. and its subsidiary, Home Federal Savings Bank (together, “HMNF”) in the fourth quarter of 2024, the 26th and largest acquisition in the Company’s history.
	■	Total loans were $4.0 billion as of December 31, 2024, an increase of $1.0 billion, or 31.7%, from September 30, 2024.

■

Total deposits were $4.4 billion as of December 31, 2024, an increase of $1.1 billion, or 31.7%, from September 30, 2024.

■

Non-interest bearing deposits were $903.5 million as of December 31, 2024, an increase of $245.9 million, or 37.4%, from September 30, 2024.

■

The loan to deposit ratio remained stable at 91.2% as of both December 31, 2024 and September 30, 2024.

■

Net interest income was $38.3 million in the fourth quarter of 2024, an increase of 69.8% from $22.5 million in the third quarter of 2024.

	■	Net interest margin was 3.20% in the fourth quarter of 2024, an increase of 97 basis points from 2.23% in the third quarter of 2024.
	■	Noninterest income was $33.9 million in the fourth quarter of 2024, which represented 46.9% of total revenues, an increase of 19.4% from $28.4 million in the third quarter of 2024.
	■	Adjusted pre-provision net revenue was $18.2 million in the fourth quarter of 2024, an increase of 88.6% from $9.7 million in the third quarter of 2024.
	■	Adjusted efficiency ratio (non-GAAP) was 69.0% in the fourth quarter of 2024, improved from 77.7% in the third quarter of 2024.

	■	Allowance for credit losses on loans to total loans was 1.50% as of December 31, 2024, an increase of 21 basis points from 1.29% as of September 30, 2024.
	■	Adjusted return on average tangible common equity (non-GAAP) was 14.7% in the fourth quarter of 2024, an increase from 9.0% in the third quarter of 2024.
	■	Book value per common share was $19.68 as of December 31, 2024, a 0.8% increase from $19.53 as of September 30, 2024.

 

Full Year 2024 Highlights

 

	■	Adjusted earnings per common share (non-GAAP) of $1.44 for the year ended December 31, 2024, a decrease of 0.7% from $1.45 for the year ended December 31, 2023.
	■	Total loans were $4.0 billion as of December 31, 2024, an increase of $1.2 billion, or 44.7%, from December 31, 2023.

■

Total deposits were $4.4 billion as of December 31, 2024, an increase of $1.3 billion, or 41.4%, from December 31, 2023.

	■	Non-interest bearing deposits were $903.5 million as of December 31, 2024, an increase of $175.4 million, or 24.1%, from December 31, 2023.
	■	Net interest income was $107.0 million for the year ended December 31, 2024, an increase of 21.9% from $87.8 million for the year ended December 31, 2023.
	■	Net interest margin was 2.56% for the year ended December 31, 2024, an increase of 10 basis points from 2.46% for the year ended December 31, 2023.
	■	Noninterest income was $114.9 million for the year ended December 31, 2024, which represented 51.8% of total revenues,  an increase of 43.3% from $80.2 million for the year ended December 31, 2023.

■

Total assets under administration/management at December 31, 2024 were $45.3 billion, an 11.3% increase from December 31, 2023.

	■	Adjusted pre-provision net revenue was $50.2 for the year ended December 31, 2024, an increase of 24.3% from $40.4 million for the year ended December 31, 2023.
	■	Adjusted efficiency ratio (non-GAAP) was 73.4% for the year ended December 31, 2024, improved from 75.5% for the year ended December 31, 2023.

■

Allowance for credit losses on loans to total loans was 1.50% as of December 31, 2024, an increase of 20 basis points from 1.30% as of December 31, 2023.

■

Book value per common share was $19.68 as of December 31, 2024, a 5.2% increase from $18.71 as of December 31, 2023.

■

Dividends paid per common share totaled $0.79 for the year ended December 31, 2024, an increase of 5.3% from $0.75 for the year ended December 31, 2023.

 

 

Selected Financial Data (unaudited)

 

		As of and for the
		Three months ended												Year ended
		December 31,				September 30,				December 31,				December 31,				December 31,
(dollars and shares in thousands, except per share data)		2024				2024				2023				2024				2023
Performance Ratios
Return on average total assets			0.24	%			0.48	%			(1.51	)%			0.47	%			0.31	%
Adjusted return on average total assets (1)			0.83	%			0.57	%			0.52	%			0.68	%			0.77	%
Return on average common equity			2.68	%			5.52	%			(16.75	)%			5.30	%			3.26	%
Return on average tangible common equity (1)			6.01	%			7.83	%			(18.85	)%			8.16	%			5.37	%
Adjusted return on average tangible common equity (1)			14.65	%			9.04	%			8.38	%			11.15	%			11.30	%
Noninterest income as a % of revenue			46.94	%			55.72	%			3.54	%			51.78	%			47.74	%
Net interest margin (tax-equivalent)			3.20	%			2.23	%			2.37	%			2.56	%			2.46	%
Adjusted net interest margin (tax-equivalent) (1)			2.81	%			2.35	%			2.31	%			2.53	%			2.42	%
Efficiency ratio (1)			73.36	%			80.29	%			165.40	%			75.93	%			85.85	%
Adjusted efficiency ratio (1)			68.97	%			77.71	%			78.18	%			73.44	%			75.50	%
Net charge-offs/(recoveries) to average loans			0.13	%			0.04	%			(0.04	)%			0.13	%			(0.04	)%
Dividend payout ratio			153.85	%			76.92	%			(26.03	)%			80.61	%			129.31	%
Per Common Share
Earnings per common share - basic		$	0.13			$	0.26			$	(0.73	)		$	1.00			$	0.59
Earnings per common share - diluted		$	0.13			$	0.26			$	(0.73	)		$	0.98			$	0.58
Adjusted earnings per common share - diluted (1)		$	0.44			$	0.31			$	0.26			$	1.44			$	1.45
Dividends declared per common share		$	0.20			$	0.20			$	0.19			$	0.79			$	0.75
Book value per common share		$	19.68			$	19.53			$	18.71
Tangible book value per common share (1)		$	14.49			$	16.50			$	15.46
Average common shares outstanding - basic			24,857				19,788				19,761				21,047				19,922
Average common shares outstanding - diluted			25,144				20,075				19,996				21,321				20,143
Other Data
Retirement and benefit services assets under administration/management		$	40,728,699			$	41,249,280			$	36,682,425
Wealth management assets under administration/management		$	4,579,189			$	4,397,505			$	4,018,846
Mortgage originations		$	88,576			$	82,388			$	65,488			$	334,318			$	364,114

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(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 fourth quarter of 2024 was $38.3 million, a $15.7 million, or 69.8%, increase from the third quarter of 2024. The increase was primarily due to increased interest income on higher earning assets acquired in the HMNF transaction, organic loan growth, and lower average rates paid on deposit balances.

 

Net interest income increased $16.7 million, or 77.6%, from $21.6 million for the fourth quarter of 2023. Interest income increased $22.6 million, or 50.6%, from the fourth quarter of 2023, primarily driven by higher earning assets acquired in the HMNF transaction, strong organic loan growth at higher yields, and purchase accounting accretion. The increase in interest income was partially offset by a $5.9 million, or 25.4%, increase in interest expense, driven by an increase in interest-bearing deposits from the acquisition of HMNF and organic deposit growth.

 

Net interest margin (on a tax-equivalent basis) was 3.20% for the fourth quarter of 2024, a 97 basis point increase from 2.23% for the third quarter of 2024, and an 83 basis point increase from 2.37% for the fourth quarter of 2023. The increase in net interest margin (on a tax-equivalent basis) was mainly attributable to purchase accounting accretion, lower rates paid on deposits in the fourth quarter, the unwinding of the Bank Term Funding Program (“BTFP”) arbitrage trade late in the third quarter of 2024, and organic loan and deposit growth. 

 

Noninterest Income

 

Noninterest income for the fourth quarter of 2024 was $33.9 million, a $5.5 million increase from the third quarter of 2024. The quarter over quarter increase was primarily driven by improvement across all fee-based businesses. Mortgage banking revenue increased $1.1 million, from $2.6 million in the third quarter of 2024, primarily driven by higher mortgage originations and higher margins on sold mortgages. Wealth revenue increased $0.3 million during the fourth quarter of 2024, a 4.9% increase from the third quarter of 2024, primarily driven by the acquisition of HMNF. Retirement and benefit services revenue increased $0.3 million in the fourth quarter of 2024, a 2.1% increase from the third quarter of 2024, primarily driven by nonmarket-based fees. Combined assets under administration/management in wealth and retirement and benefit services decreased 0.7% from September 30, 2024. The slight decrease in combined assets under administration/management was primarily due to stable equity and bond markets. Additionally, other noninterest income increased $3.6 million during the fourth quarter of 2024, a 144.9% increase from the third quarter of 2024, primarily due to a gain on the sale of fixed assets related to the sale of a Fargo, North Dakota office and increased swap fee income generated from commercial loan originations.

 

 

Noninterest income for the fourth quarter of 2024 increased by $33.1 million from the fourth quarter of 2023. The year over year increase was primarily driven by the strategic balance sheet repositioning transaction completed in the fourth quarter of 2023, which resulted in a $24.6 million loss on the sale of investment securities. Year over year, the fee-based businesses each showed improvement. Mortgage banking revenue increased $2.4 million, from $1.3 million in the fourth quarter of 2023, primarily driven by higher mortgage originations and higher margins on sold mortgages. Retirement and benefit services revenue increased $1.2 million, or 7.6%, from $15.3 million in the fourth quarter of 2023, primarily driven by an increase in assets under administration/management of 11.0% during that same period. Wealth revenue increased $1.1 million, or 18.0%, in the fourth quarter of 2024, primarily driven by an increase in assets under administration/management of 13.9% during that same period. Other noninterest income increased $3.5 million, or 137.0%, in the fourth quarter of 2024 compared to the fourth quarter of 2023, primarily due to a gain on the sale of fixed assets related to the sale of a Fargo, North Dakota office and increased swap fee income generated from commercial loan originations. 

 

Noninterest Expense

 

Noninterest expense for the fourth quarter of 2024 was $56.0 million, a $13.6 million, or 32.0%, increase from the third quarter of 2024. The quarter over quarter increase was primarily driven by the acquisition of HMNF and related expenses. Compensation expense increased $5.6 million, or 26.6%, from the third quarter of 2024, primarily driven by acquisition-related compensation expenses, experienced talent acquisitions, and increased labor costs. Professional fees and assessments increased $2.3 million, or 53.0%, from the third quarter of 2024, primarily driven by increased acquisition-related expenses of $1.6 million. Business services, software and technology expense increased $2.1 million, or 42.1%, from the third quarter of 2024, primarily driven by increased core processing fees and equipment purchases in connection with the HMNF acquisition. Intangible amortization expense was $2.8 million, a $1.5 million increase from the third quarter of 2024, primarily driven by amortization expense related to the $33.5 million core deposit intangible recorded in connection with the HMNF acquisition. 

 

Noninterest expense for the fourth quarter of 2024 increased $17.4 million, or 44.9%, from $38.7 million in the fourth quarter of 2023. The increase was primarily driven by the acquisition of HMNF and related expenses. Compensation expense increased $7.4 million, or 38.7%, in the fourth quarter of 2024, primarily due to acquisition-related compensation expenses and increased labor costs. Professional fees and assessments increased primarily due to increased acquisition-related expenses of $3.3 million in connection with the acquisition of HMNF and an increase in Federal Deposit Insurance Corporation (“FDIC”) assessments. Employee taxes and benefits expense increased $1.7 million, or 36.4%, primarily due to increased expense related to the employee stock ownership program (“ESOP”) and costs related to group insurance. Business services, software and technology expense increased $1.2 million, or 22.0%, in the fourth quarter of 2024, primarily driven by increased core processing fees and equipment purchases in connection with the HMNF acquisition. Intangible amortization expense increased $1.5 million in the fourth quarter of 2024, primarily driven by amortization expense related to the $33.5 million core deposit intangible recorded in connection with the HMNF acquisition. 

 

Financial Condition

 

Total assets were $5.3 billion as of December 31, 2024, an increase of $1.4 billion, or 34.7%, from December 31, 2023. The increase was primarily due to a $1.2 billion increase in loans, a $101.3 million increase in available-for-sale investment securities, a $40.8 million increase in goodwill, and a $26.7 million increase in other intangible assets, partially offset by a decrease of $68.7 million in cash and cash equivalents and a decrease of $23.9 million in held-to-maturity investment securities. The increase in goodwill and other intangible assets was related to the acquisition of HMNF.

 

Loans

 

Total loans were $4.0 billion as of December 31, 2024, an increase of $1.2 billion, or 44.7%, from December 31, 2023. The increase was primarily driven by a $938.0 million increase in commercial loans and a $294.9 million increase in consumer loans. 

 

The following table presents the composition of our loan portfolio as of the dates indicated:

 

		December 31,				September 30,				June 30,				March 31,				December 31,
(dollars in thousands)		2024				2024				2024				2024				2023
Commercial
Commercial and industrial		$	666,727			$	606,245			$	591,779			$	575,259			$	562,180
Commercial real estate
Construction, land and development			294,677				173,629				161,751				125,966				124,034
Multifamily			363,123				275,377				242,041				260,609				245,103
Non-owner occupied			967,025				686,071				647,776				565,979				569,354
Owner occupied			371,418				296,366				283,356				285,211				271,623
Total commercial real estate			1,996,243				1,431,443				1,334,924				1,237,765				1,210,114
Agricultural
Land			61,299				45,821				41,410				41,149				40,832
Production			63,008				39,436				40,549				36,436				36,141
Total agricultural			124,307				85,257				81,959				77,585				76,973
Total commercial			2,787,277				2,122,945				2,008,662				1,890,609				1,849,267
Consumer
Residential real estate
First lien			921,019				690,451				686,286				703,726				697,900
Construction			33,547				11,808				22,573				18,425				28,979
HELOC			162,509				134,301				126,211				120,501				118,315
Junior lien			44,060				36,445				36,323				36,381				35,819
Total residential real estate			1,161,135				873,005				871,393				879,033				881,013
Other consumer			44,122				36,393				35,737				29,833				29,303
Total consumer			1,205,257				909,398				907,130				908,866				910,316
Total loans		$	3,992,534			$	3,032,343			$	2,915,792			$	2,799,475			$	2,759,583

 

 

Deposits

 

Total deposits were $4.4 billion as of December 31, 2024, an increase of $1.3 billion, or 41.4%, from December 31, 2023. Interest-bearing deposits increased $1.1 billion and noninterest-bearing deposits increased $175.4 million, from December 31, 2023. The increase in total deposits was due primarily to the recent acquisition of HMNF, expanded and new commercial deposit relationships, and synergistic deposit growth. Synergistic deposits were $973.6 million as of December 31, 2024, an increase of $122.0 million, or 14.3%, from December 31, 2023. 

 

The following table presents the composition of the Company’s deposit portfolio as of the dates indicated:

 

		December 31,				September 30,				June 30,				March 31,				December 31,
(dollars in thousands)		2024				2024				2024				2024				2023
Noninterest-bearing demand		$	903,466			$	657,547			$	701,428			$	692,500			$	728,082
Interest-bearing
Interest-bearing demand			1,220,173				1,034,694				1,003,585				938,751				840,711
Savings accounts			165,882				75,675				79,747				82,727				82,485
Money market savings			1,381,924				1,067,187				1,022,470				1,114,262				1,032,771
Time deposits			706,965				488,447				491,345				456,729				411,562
Total interest-bearing			3,474,944				2,666,003				2,597,147				2,592,469				2,367,529
Total deposits		$	4,378,410			$	3,323,550			$	3,298,575			$	3,284,969			$	3,095,611

 

Asset Quality

 

Total nonperforming assets were $62.9 million as of December 31, 2024, an increase of $54.1 million from December 31, 2023. $25.0 million of the increase was due to one construction, land and development loan moving to nonaccrual status in the second quarter of 2024. During the third and fourth quarters of 2024, management elected to make protective advances totaling $5.4 million in order for construction to continue on the project. Management is actively working with the borrower on strategies to complete construction, preserve value, and support repayment of the loan. One large residential real estate relationship and one CRE non-owner occupied loan moving to nonaccrual status during the third quarter of 2024 also contributed $13.6 million to the increase. A further $1.5 million of the increase in the fourth quarter of 2024 was driven by loans acquired from HMNF. Nonperforming assets included one loan over 90 days past due and still on accrual. This loan was renewed subsequent to year end. 

 

As of December 31, 2024, the allowance for credit losses on loans was $59.9 million, or 1.50% 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
		December 31,				September 30,				June 30,				March 31,				December 31,
(dollars in thousands)		2024				2024				2024				2024				2023
Nonaccrual loans		$	54,433			$	48,026			$	27,618			$	7,345			$	8,596
Accruing loans 90+ days past due			8,453				—				—				—				139
Total nonperforming loans			62,886				48,026				27,618				7,345				8,735
OREO and repossessed assets			—				—				—				3				32
Total nonperforming assets		$	62,886			$	48,026			$	27,618			$	7,348			$	8,767
Net charge-offs/(recoveries)			1,258				316				2,522				58				(238	)
Net charge-offs/(recoveries) to average loans			0.13	%			0.04	%			0.36	%			0.01	%			(0.04	)%
Nonperforming loans to total loans			1.58	%			1.58	%			0.95	%			0.26	%			0.32	%
Nonperforming assets to total assets			1.19	%			1.18	%			0.63	%			0.17	%			0.22	%
Allowance for credit losses on loans to total loans			1.50	%			1.29	%			1.31	%			1.31	%			1.30	%
Allowance for credit losses on loans to nonperforming loans			95	%			82	%			139	%			498	%			410	%

 

For the fourth quarter of 2024, the Company had net charge-offs of $1.3 million, compared to net charge-offs of $0.3 million for the third quarter of 2024 and net recoveries of $0.2 million for the fourth quarter of 2023. The quarter-over-quarter increase in net charge-offs was driven by a $0.6 million charge-off of one residential real estate loan and a $0.4 million charge-off of one commercial and industrial loan in the fourth quarter of 2024.

 

The Company recorded a provision for credit losses of $12.0 million for the fourth quarter of 2024, compared to a provision for credit losses of $1.7 million for the third quarter of 2024 and a provision for credit losses of $1.5 million for the fourth quarter of 2023. The provision for credit losses for the fourth quarter of 2024 was primarily driven by a $7.8 million day one provision for credit losses and unfunded commitment reserve related to the acquisition of HMNF, as well as loan growth and an increase in nonaccrual loans.

 

The unearned fair value adjustments on acquired loan portfolios were $70.6 million and $5.2 million as of December 31, 2024 and 2023, respectively. 

 

 

Capital

 

Total stockholders’ equity was $498.7 million as of December 31, 2024, an increase of $129.6 million from December 31, 2023. This change was primarily driven by the issuance of stock in connection with to the acquisition of HMNF. Tangible book value per common share (non-GAAP) decreased to $14.49 as of December 31, 2024, from $15.46 as of December 31, 2023. Tangible common equity to tangible assets (non-GAAP) decreased to 7.15% as of December 31, 2024, from 7.94% as of December 31, 2023. Common equity tier 1 capital to risk weighted assets decreased to 9.98% as of December 31, 2024, from 11.82% as of December 31, 2023.

 

The following table presents our capital ratios as of the dates indicated:

 

		December 31,				September 30,				December 31,
		2024				2024				2023
Capital Ratios(1)
Alerus Financial Corporation Consolidated
Common equity tier 1 capital to risk weighted assets			9.98	%			11.12	%			11.82	%
Tier 1 capital to risk weighted assets			10.18	%			11.38	%			12.10	%
Total capital to risk weighted assets			12.55	%			14.04	%			14.76	%
Tier 1 capital to average assets			8.68	%			9.30	%			10.57	%
Tangible common equity / tangible assets (2)			7.15	%			8.11	%			7.94	%
Alerus Financial, N.A.
Common equity tier 1 capital to risk weighted assets			10.19	%			10.73	%			11.40	%
Tier 1 capital to risk weighted assets			10.19	%			10.73	%			11.40	%
Total capital to risk weighted assets			11.44	%			11.98	%			12.51	%
Tier 1 capital to average assets			8.66	%			8.90	%			9.92	%

---

(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 Wednesday, January 29, 2024, to discuss its financial results. Attendees are encouraged to register ahead of time for the call at investors.alerus.com. The call can also be accessed via telephone at +1 (833) 470-1428, using access code 092113. 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 benefit plans and services. Alerus provides clients with a primary point of contact to help fully understand their unique needs and delivery channel preferences. Clients are provided with competitive products, valuable insight, and sound advice supported by digital solutions designed to meet their needs.

 

Alerus operates 29 banking and commercial wealth offices, with locations in Grand Forks and Fargo, North Dakota; the Minneapolis-St. Paul, Minnesota metropolitan area; Rochester, Minnesota; Southern Minnesota area; Marshalltown, Iowa; Pewaukee, Wisconsin; and Phoenix and Scottsdale, Arizona. Alerus also operates a commercial wealth office in La Crosse, Wisconsin. The Alerus Retirement and Benefit business 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, tangible book value per common share, return on average tangible common equity, efficiency ratio, pre-provision net revenue, adjusted noninterest income, adjusted noninterest expense, adjusted pre-provision net revenue, adjusted efficiency ratio, adjusted net income, adjusted return on average assets, adjusted return on average tangible common equity, net interest margin (tax-equivalent), adjusted net interest margin (tax-equivalent), and adjusted earnings per common share - diluted. 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 changes in interest rates; effects on the U.S. economy resulting from the implementation of policies proposed by the new presidential administration, including tariffs, mass deportations, and tax regulations; our ability to successfully manage credit risk, including in the CRE portfolio, and maintain an adequate level of allowance for credit losses; business and economic conditions generally and in the financial services industry, nationally and within our market areas, including the level and impact of inflation rates 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 several bank failures; our ability to raise additional capital to implement our business plan; the overall health of the local and national real estate market; credit risks and risks from concentrations (by type of borrower, geographic area, collateral, and industry) within our loan portfolio; the concentration of large loans to certain borrowers (including CRE loans); the level of nonperforming assets on our balance sheet; our ability to implement our organic and acquisition growth strategies, including the integration of HMNF which the Company acquired in the fourth quarter of 2024; the commencement, cost, and outcome of litigation and other legal proceedings and regulatory actions against us or to which the Company may become subject, including with respect to pending actions relating to the Company’s previous ESOP fiduciary services commenced by government or private parties; 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 or as a result of insider fraud; 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 and expensive technological change in the financial services industry; increased competition in the financial services industry, including from non-banks such as credit unions, Fintech companies and 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, including those who have balances above current FDIC insurance limits; the effectiveness of our risk management framework; potential impairment to the goodwill the Company recorded in connection with our past acquisitions, including the acquisitions of Metro Phoenix Bank and HMNF; the extensive regulatory framework that applies to us; the impact of recent and future legislative and regulatory changes, including in response to prior bank failures; new or revised accounting standards, as may be adopted by state and federal regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission (the “SEC”) or the Public Company Accounting Oversight Board; 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 and natural disasters, and widespread disease or pandemics; acts of war or terrorism, including ongoing conflicts in the Middle East and 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 governmental policies concerning our general business, including changes in interpretation or prioritization and changes in response to prior bank failures; 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 SEC.

 

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)

 

		December 31,				December 31,
		2024				2023
Assets		(Unaudited)
Cash and cash equivalents		$	61,239			$	129,893
Investment securities
Trading, at fair value			3,309				—
Available-for-sale, at fair value			588,053				486,736
Held-to-maturity, at amortized cost (with an allowance for credit losses on investments of $131 and $213, respectively)			275,585				299,515
Loans held for sale			16,518				11,497
Loans			3,992,534				2,759,583
Allowance for credit losses on loans			(59,929	)			(35,843	)
Net loans			3,932,605				2,723,740
Land, premises and equipment, net			39,780				17,940
Operating lease right-of-use assets			13,438				5,436
Accrued interest receivable			20,075				15,700
Bank-owned life insurance			36,033				33,236
Goodwill			87,564				46,783
Other intangible assets			43,882				17,158
Servicing rights			7,918				2,052
Deferred income taxes, net			48,766				34,595
Other assets			90,543				83,432
Total assets		$	5,265,308			$	3,907,713
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing		$	903,466			$	728,082
Interest-bearing			3,474,944				2,367,529
Total deposits			4,378,410				3,095,611
Short-term borrowings			238,960				314,170
Long-term debt			59,069				58,956
Operating lease liabilities			18,991				5,751
Accrued expenses and other liabilities			71,179				64,098
Total liabilities			4,766,609				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: 25,344,803 and 19,734,077 issued and outstanding			25,345				19,734
Additional paid-in capital			269,708				150,343
Retained earnings			277,012				272,705
Accumulated other comprehensive loss			(73,366	)			(73,655	)
Total stockholders’ equity			498,699				369,127
Total liabilities and stockholders’ equity		$	5,265,308			$	3,907,713

 

 

Alerus Financial Corporation and Subsidiaries

Consolidated Statements of Income

(dollars and shares in thousands, except per share data)

 

		Three months ended												Year ended
		December 31,				September 30,				December 31,				December 31,				December 31,
		2024				2024				2023				2024				2023
Interest Income		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Loans, including fees		$	60,009			$	42,593			$	37,731			$	183,560			$	136,918
Investment securities
Taxable			5,737				4,596				6,040				19,745				24,262
Exempt from federal income taxes			166				169				182				679				740
Other			1,395				4,854				742				17,595				2,963
Total interest income			67,307				52,212				44,695				221,579				164,883
Interest Expense
Deposits			25,521				22,285				17,169				89,243				53,387
Short-term borrowings			2,837				6,706				5,292				22,584				20,976
Long-term debt			665				679				682				2,707				2,681
Total interest expense			29,023				29,670				23,143				114,534				77,044
Net interest income			38,284				22,542				21,552				107,045				87,839
Provision for credit losses			11,992				1,661				1,507				18,141				2,057
Net interest income after provision for credit losses			26,292				20,881				20,045				88,904				85,782
Noninterest Income
Retirement and benefit services			16,488				16,144				15,317				64,365				65,294
Wealth management			7,010				6,684				5,940				26,171				21,855
Mortgage banking			3,673				2,573				1,279				10,469				8,411
Service charges on deposit accounts			644				488				341				1,976				1,280
Net gains (losses) on investment securities			—				—				(24,643	)			—				(24,643	)
Other			6,059				2,474				2,557				11,950				8,032
Total noninterest income			33,874				28,363				791				114,931				80,229
Noninterest Expense
Compensation			26,657				21,058				19,214				87,311				76,290
Employee taxes and benefits			6,245				5,400				4,578				22,967				20,051
Occupancy and equipment expense			1,963				2,082				1,858				7,766				7,477
Business services, software and technology expense			6,935				4,879				5,686				21,758				21,053
Intangible amortization expense			2,804				1,324				1,324				6,776				5,296
Professional fees and assessments			6,530				4,267				2,345				15,162				6,743
Marketing and business development			1,050				764				1,002				3,249				3,027
Supplies and postage			726				422				521				2,046				1,796
Travel			449				330				313				1,403				1,189
Mortgage and lending expenses			571				684				501				2,162				1,902
Other			2,093				1,237				1,312				5,641				5,333
Total noninterest expense			56,023				42,447				38,654				176,241				150,157
Income before income tax expense			4,143				6,797				(17,818	)			27,594				15,854
Income tax expense			921				1,590				(3,064	)			6,525				4,158
Net income		$	3,222			$	5,207			$	(14,754	)		$	21,069			$	11,696
Per Common Share Data
Earnings per common share		$	0.13			$	0.26			$	(0.73	)		$	1.00			$	0.59
Diluted earnings per common share		$	0.13			$	0.26			$	(0.73	)		$	0.98			$	0.58
Dividends declared per common share		$	0.20			$	0.20			$	0.19			$	0.79			$	0.75
Average common shares outstanding			24,857				19,788				19,761				21,047				19,922
Diluted average common shares outstanding			25,144				20,075				19,996				21,321				20,143

 

 

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)

 

		December 31,				September 30,				December 31,
		2024				2024				2023
Tangible Common Equity to Tangible Assets
Total common stockholders’ equity		$	498,699			$	386,486			$	369,127
Less: Goodwill			87,564				46,783				46,783
Less: Other intangible assets			43,882				13,186				17,158
Tangible common equity (a)			367,253				326,517				305,186
Total assets			5,265,308				4,084,640				3,907,713
Less: Goodwill			87,564				46,783				46,783
Less: Other intangible assets			43,882				13,186				17,158
Tangible assets (b)			5,133,862				4,024,671				3,843,772
Tangible common equity to tangible assets (a)/(b)			7.15	%			8.11	%			7.94	%
Tangible Book Value Per Common Share
Total common stockholders’ equity		$	498,699			$	386,486			$	369,127
Less: Goodwill			87,564				46,783				46,783
Less: Other intangible assets			43,882				13,186				17,158
Tangible common equity (c)			367,253				326,517				305,186
Total common shares issued and outstanding (d)			25,345				19,790				19,734
Tangible book value per common share (c)/(d)		$	14.49			$	16.50			$	15.46

 

		Three months ended												Year ended
		December 31,				September 30,				December 31,				December 31,				December 31,
		2024				2024				2023				2024				2023
Return on Average Tangible Common Equity
Net income		$	3,222			$	5,207			$	(14,754	)		$	21,069			$	11,696
Add: Intangible amortization expense (net of tax) (1)			2,215				1,046				1,046				5,353				4,184
Net income, excluding intangible amortization (e)			5,437				6,253				(13,708	)			26,422				15,880
Average total equity			478,128				375,229				349,382				397,747				358,268
Less: Average goodwill			84,414				46,783				46,783				56,242				46,959
Less: Average other intangible assets (net of tax) (1)			34,107				10,933				14,067				17,534				15,624
Average tangible common equity (f)			359,607				317,513				288,532				323,971				295,685
Return on average tangible common equity (e)/(f)			6.01	%			7.83	%			(18.85	)%			8.16	%			5.37	%
Efficiency Ratio
Noninterest expense		$	56,023			$	42,447			$	38,654			$	176,241			$	150,157
Less: Intangible amortization expense			2,804				1,324				1,324				6,776				5,296
Adjusted noninterest expense (g)			53,219				41,123				37,330				169,465				144,861
Net interest income			38,284				22,542				21,552				107,045				87,839
Noninterest income			33,874				28,363				791				114,931				80,229
Tax-equivalent adjustment			385				314				226				1,202				671
Total tax-equivalent revenue (h)			72,543				51,219				22,569				223,178				168,739
Efficiency ratio (g)/(h)			73.36	%			80.29	%			165.40	%			75.93	%			85.85	%

---

(1)	Items calculated after-tax utilizing a marginal income tax rate of 21.0%.

 

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												Year ended
		December 31,				September 30,				December 31,				December 31,				December 31,
		2024				2024				2023				2024				2023
Pre-Provision Net Revenue
Net interest income		$	38,284			$	22,542			$	21,552			$	107,045			$	87,839
Add: Noninterest income			33,874				28,363				791				114,931				80,229
Less: Noninterest expense			56,023				42,447				38,654				176,241				150,157
Pre-provision net revenue		$	16,135			$	8,458			$	(16,311	)		$	45,735			$	17,911
Adjusted Noninterest Income
Noninterest income		$	33,874			$	28,363			$	791			$	114,931			$	80,229
Less: Adjusted noninterest income items
BOLI mortality proceeds (non-taxable)			—				—				—				—				1,196
Gain on sale of ESOP trustee business			—				—				—				—				2,775
Net gains (losses) on investment securities			—				—				(24,643	)			—				(24,643	)
Net gain on sale of premises and equipment			3,459				476				—				3,941				50
Total adjusted noninterest income items (i)			3,459				476				(24,643	)			3,941				(20,622	)
Adjusted noninterest income (j)		$	30,415			$	27,887			$	25,434			$	110,990			$	100,851
Adjusted Noninterest Expense
Noninterest expense		$	56,023			$	42,447			$	38,654			$	176,241			$	150,157
Less: Adjusted noninterest expense items
HMNF merger- and acquisition-related expenses			3,295				1,661				—				5,546				—
Severance and signing bonus expense			2,276				31				422				2,901				1,897
Total adjusted noninterest expense items (k)			5,571				1,692				422				8,447				1,897
Adjusted noninterest expense (l)		$	50,452			$	40,755			$	38,232			$	167,794			$	148,260
Adjusted Pre-Provision Net Revenue
Net interest income		$	38,284			$	22,542			$	21,552			$	107,045			$	87,839
Add: Adjusted noninterest income (j)			30,415				27,887				25,434				110,990				100,851
Less: Adjusted noninterest expense (l)			50,452				40,755				38,232				167,794				148,260
Adjusted pre-provision net revenue		$	18,247			$	9,674			$	8,754			$	50,241			$	40,430
Adjusted Efficiency Ratio
Adjusted noninterest expense (l)		$	50,452			$	40,755			$	38,232			$	167,794			$	148,260
Less: Intangible amortization expense			2,804				1,324				1,324				6,776				5,296
Adjusted noninterest expense for efficiency ratio (m)			47,648				39,431				36,908				161,018				142,964
Tax-equivalent revenue
Net interest income			38,284				22,542				21,552				107,045				87,839
Add: Adjusted noninterest income (j)			30,415				27,887				25,434				110,990				100,851
Add: Tax-equivalent adjustment			385				314				226				1,202				671
Total tax-equivalent revenue (n)			69,084				50,743				47,212				219,237				189,361
Adjusted efficiency ratio (m)/(n)			68.97	%			77.71	%			78.18	%			73.44	%			75.50	%
Adjusted Net Income
Net income		$	3,222			$	5,207			$	(14,754	)		$	21,069			$	11,696
Less: Adjusted noninterest income items (net of tax) (1) (i)			2,733				376				(19,468	)			3,113				(16,040	)
Add: HMNF day one provision for credit losses and unfunded commitments (net of tax) (1)			6,140				—				—				6,140				—
Add: Adjusted noninterest expense items (net of tax) (1) (k)			4,401				1,337				333				6,673				1,499
Adjusted net income (o)		$	11,030			$	6,168			$	5,047			$	30,769			$	29,235
Adjusted Return on Average Assets
Average total assets (p)		$	5,272,816			$	4,298,080			$	3,868,206			$	4,503,493			$	3,817,017
Adjusted return on average assets (o)/(p)			0.83	%			0.57	%			0.52	%			0.68	%			0.77	%
Adjusted Return on Average Tangible Common Equity
Adjusted net income (o)		$	11,030			$	6,168			$	5,047			$	30,769			$	29,235
Add: Intangible amortization expense (net of tax) (1)			2,215				1,046				1,046				5,353				4,184
Adjusted net income, excluding intangible amortization (q)			13,245				7,214				6,093				36,122				33,419
Average total equity			478,128				375,229				349,382				397,747				358,268
Less: Average goodwill			84,414				46,783				46,783				56,242				46,959
Less: Average other intangible assets (net of tax)			34,107				10,933				14,067				17,534				15,624
Average tangible common equity (r)			359,607				317,513				288,532				323,971				295,685
Return on average tangible common equity (q)/(r)			14.65	%			9.04	%			8.38	%			11.15	%			11.30	%

---

(1)	Items calculated after-tax utilizing a marginal income tax rate of 21.0%.

 

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												Year ended
		December 31,				September 30,				December 31,				December 31,				December 31,
		2024				2024				2023				2024				2023
Adjusted Net Interest Margin (Tax-Equivalent)
Net interest income		$	38,284			$	22,542			$	21,552			$	107,045			$	87,839
Less: BTFP cash interest income			—				4,113				—				12,494				—
Add: BTFP interest expense			—				3,717				—				11,291				—
Less: Purchase accounting net accretion			4,692				152				521				6,121				1,490
Net interest income excluding BTFP impact			33,592				21,994				21,031				99,721				86,349
Add: Tax equivalent adjustment for loans and securities			385				314				226				1,202				671
Adjusted net interest income (s)		$	33,977			$	22,308			$	21,257			$	100,923			$	87,020
Interest earning assets			4,808,230				4,077,716				3,645,184				4,221,832				3,592,476
Less: Average cash proceeds balance from BTFP			—				303,043				—				231,366				—
Add: Change in unearned purchase accounting discount			4,692				152				521				6,121				1,490
Adjusted interest earning assets (t)		$	4,812,922			$	3,774,825			$	3,645,705			$	3,996,587			$	3,593,966
Adjusted net interest margin (tax-equivalent) (s)/(t)			2.81	%			2.35	%			2.31	%			2.53	%			2.42	%
Adjusted Earnings Per Common Share - Diluted
Adjusted net income (o)		$	11,030			$	6,168			$	5,047			$	30,769			$	29,235
Less: Dividends and undistributed earnings allocated to participating securities			(16	)			24				(247	)			79				(5	)
Net income available to common stockholders (u)			11,046				6,144				5,294				30,690				29,240
Weighted-average common shares outstanding for diluted earnings per share (v)			25,144				20,075				19,996				21,321				20,143
Adjusted earnings per common share - diluted (u)/(v)		$	0.44			$	0.31			$	0.26			$	1.44			$	1.45

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(1)	Items calculated after-tax utilizing a marginal income tax rate of 21.0%.

 

Alerus Financial Corporation and Subsidiaries

Analysis of Average Balances, Yields, and Rates (unaudited)

(dollars in thousands)

 

		Three months ended																								Year ended
		December 31, 2024								September 30, 2024								December 31, 2023								December 31, 2024								December 31, 2023
						Average								Average								Average								Average								Average
		Average				Yield/				Average				Yield/				Average				Yield/				Average				Yield/				Average				Yield/
		Balance				Rate				Balance				Rate				Balance				Rate				Balance				Rate				Balance				Rate
Interest Earning Assets
Interest-bearing deposits with banks		$	74,054				5.35	%		$	326,350				5.47	%		$	33,920				3.23	%		$	299,625				5.39	%		$	35,395				3.40	%
Investment securities (1)			883,116				2.68				749,062				2.55				921,555				2.70				791,111				2.60				983,545				2.56
Loans held for sale			15,409				5.60				15,795				3.20				11,421				6.01				14,180				5.90				13,217				5.46
Loans
Commercial and industrial			616,356				7.28				593,685				7.26				538,694				6.90				588,269				7.23				527,795				6.63
CRE − Construction, land and development			250,869				6.33				184,611				5.68				117,765				8.12				172,700				6.77				99,315				7.66
CRE − Multifamily			351,804				6.50				242,558				5.62				227,453				5.48				272,125				5.87				185,262				5.25
CRE − Non-owner occupied			1,002,857				6.68				663,539				5.88				519,021				5.67				712,734				6.14				498,884				5.28
CRE − Owner occupied			293,169				6.56				289,963				5.41				266,274				5.18				286,540				5.71				256,690				5.07
Agricultural − Land			59,400				5.73				42,162				4.93				41,064				4.82				45,729				5.10				39,832				4.78
Agricultural − Production			58,999				7.36				40,964				6.84				34,480				6.64				43,361				6.89				30,663				6.48
RRE − First lien			904,414				4.50				689,382				3.98				691,152				3.95				747,874				4.17				673,118				3.80
RRE − Construction			31,722				9.74				16,792				3.86				32,958				4.97				22,832				6.58				33,508				4.98
RRE − HELOC			153,344				7.60				130,705				8.00				118,722				8.37				131,617				8.02				118,653				8.07
RRE − Junior lien			47,041				6.25				36,818				5.74				36,415				6.21				38,982				6.24				35,382				5.83
Other consumer			44,959				7.19				37,768				6.76				29,510				6.33				36,252				6.81				35,971				6.06
Total loans (1)			3,814,934				6.27				2,968,947				5.73				2,653,508				5.64				3,099,015				5.93				2,535,073				5.39
Federal Reserve/FHLB stock			20,717				7.66				17,562				8.25				24,780				7.48				17,901				8.12				25,246				6.98
Total interest earning assets			4,808,230				5.60				4,077,716				5.12				3,645,184				4.89				4,221,832				5.28				3,592,476				4.61
Noninterest earning assets			464,586								220,364								223,022								281,661								224,541
Total assets		$	5,272,816							$	4,298,080							$	3,868,206							$	4,503,493							$	3,817,017
Interest-Bearing Liabilities
Interest-bearing demand deposits		$	1,209,674				1.98	%		$	1,003,595				2.31	%		$	798,634				1.65	%		$	1,010,888				2.12	%		$	768,238				1.29	%
Money market and savings deposits			1,520,616				3.15				1,146,896				3.82				1,092,656				3.53				1,250,939				3.60				1,118,815				2.92
Time deposits			698,358				4.24				485,533				4.46				383,715				4.27				518,826				4.39				303,746				3.58
Fed funds purchased and BTFP			22,012				4.93				327,543				4.97				189,568				5.71				249,180				4.95				287,768				5.31
FHLB short-term advances			200,000				5.10				200,000				5.20				200,000				5.09				200,000				5.12				113,973				5.00
Long-term debt			59,055				4.48				59,027				4.58				58,943				4.59				59,013				4.59				58,900				4.55
Total interest-bearing liabilities			3,709,715				3.11				3,222,594				3.66				2,723,516				3.37				3,288,846				3.48				2,651,440				2.91
Noninterest-Bearing Liabilities and Stockholders' Equity
Noninterest-bearing deposits			847,153								628,114								719,895								704,463								737,365
Other noninterest-bearing liabilities			237,820								72,143								75,413								112,437								69,944
Stockholders’ equity			478,128								375,229								349,382								397,747								358,268
Total liabilities and stockholders’ equity		$	5,272,816							$	4,298,080							$	3,868,206							$	4,503,493							$	3,817,017
Net interest rate spread							2.49	%							1.46	%							1.52	%							1.80	%							1.70	%
Net interest margin, tax-equivalent (1)							3.20	%							2.23	%							2.37	%							2.56	%							2.46	%

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(1)	Taxable-equivalent adjustment was calculated utilizing a marginal income tax rate of 21.0%.

 

Exhibit 99.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

v3.24.4

Document And Entity Information	Jan. 28, 2025
Document Information [Line Items]
Entity, Registrant Name	Alerus Financial Corporation
Document, Type	8-K
Document, Period End Date	Jan. 28, 2025
Entity, Incorporation, State or Country Code	DE
Entity, File Number	001-39036
Entity, Tax Identification Number	45-0375407
Entity, Address, Address Line One	401 Demers Avenue
Entity, Address, City or Town	Grand Forks
Entity, Address, State or Province	ND
Entity, Address, Postal Zip Code	58201
City Area Code	701
Local Phone Number	795-3200
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $1.00 par value per share
Trading Symbol	ALRS
Security Exchange Name	NASDAQ
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0000903419

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