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    Alerus Financial Corporation Reports First Quarter 2025 Net Income of $13.3 Million

    4/28/25 4:30:00 PM ET
    $ALRS
    Major Banks
    Finance
    Get the next $ALRS alert in real time by email

    Alerus Financial Corporation (NASDAQ:ALRS), or the Company, reported net income of $13.3 million for the first quarter of 2025, or $0.52 per diluted common share, compared to a net loss of ($0.1) million, or $0.00 per diluted common share, for the fourth quarter of 2024, and net income of $6.4 million, or $0.32 per diluted common share, for the first quarter of 2024.

    CEO Comments

    President and Chief Executive Officer Katie Lorenson said, "This quarter marked a strong start to the year, reflecting our team's commitment to disciplined execution and strategic integration efforts following our merger with Home Federal. We achieved notable improvements across key financial metrics, with balanced growth in loans and deposits resulting in a strengthened net interest margin. Our uniquely diversified business model and top decile fee income remain significant differentiators and reinforce the stability and resilience of our revenue streams. At the same time, we remain mindful of the evolving economic landscape and are proactively managing risk while maintaining our focus on efficiency and long-term shareholder value. With a well-diversified balance sheet and robust reserve levels, we will continue to adapt to market conditions, optimize operations, and drive strategic growth opportunities. I want to extend my appreciation to our employees for their dedication in navigating these dynamic times and delivering value to our stakeholders."

    First Quarter Highlights

    • Earnings per common share - diluted in the first quarter of 2025 of $0.52. Adjusted earnings per common share - diluted (non-GAAP) of $0.56 in the first quarter of 2025, an increase of 24.4% from $0.45 in the fourth quarter of 2024.
    • Net income was $13.3 million in the first quarter of 2025. Adjusted net income (non-GAAP) was $14.4 million in the first quarter of 2025, an increase of 27.6% from $11.2 million in the fourth quarter of 2024.
    • Total loans were $4.1 billion as of March 31, 2025, an increase of $92.9 million, or 2.3%, from December 31, 2024.
    • Total deposits were $4.5 billion as of March 31, 2025, an increase of $106.9 million, or 2.4%, from December 31, 2024.
    • The loan to deposit ratio was 91.1% as of March 31, 2025, compared to 91.2% as of December 31, 2024.
    • Net interest income was $41.2 million in the first quarter of 2025, an increase of 7.5% from $38.3 million in the fourth quarter of 2024.
    • Net interest margin was 3.41% in the first quarter of 2025, an increase of 21 basis points from 3.20% in the fourth quarter of 2024.
    • Pre-provision net revenue (non-GAAP) was $18.4 million in the first quarter of 2025. Adjusted pre-provision net revenue (non-GAAP) was $19.7 million in the first quarter of 2025, an increase of 8.2% from $18.2 million in the fourth quarter of 2024.
    • Efficiency ratio was 68.8% in the first quarter of 2025. Adjusted efficiency ratio (non-GAAP) was 66.9% in the first quarter of 2025, improved from 69.0% in the fourth quarter of 2024.
    • Net charge-offs to average loans were 0.04% for the first quarter of 2025, compared to 0.13% for the fourth quarter of 2024.
    • The ratio of nonperforming loans to total loans was 1.24% as of March 31, 2025, compared to 1.58% as of December 31, 2024.
    • Tangible book value per common share (non-GAAP) was $15.27 as of March 31, 2025, an increase of 5.7%, from $14.44 as of December 31, 2024.
    • Return on average total assets was 1.02% in the first quarter of 2025. Adjusted return on average total assets (non-GAAP) was 1.10% in the first quarter of 2025, an increase of 26 basis points from 0.85% in the fourth quarter of 2024.
    • Return on average tangible common equity (non-GAAP) was 16.50% in the first quarter of 2025. Adjusted return on average tangible common equity (non-GAAP) was 17.6% in the first quarter of 2025, an increase from 14.9% in the fourth 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)

     

    2025

     

     

    2024

     

     

    2024

     

    Performance Ratios

     

     

     

     

     

     

     

     

     

     

     

     

    Return on average total assets

     

     

    1.02

    %

     

     

    (0.00

    )%

     

     

    0.63

    %

    Adjusted return on average total assets (1)

     

     

    1.10

    %

     

     

    0.85

    %

     

     

    0.65

    %

    Return on average common equity

     

     

    10.82

    %

     

     

    (0.05

    )%

     

     

    7.04

    %

    Return on average tangible common equity (1)

     

     

    16.50

    %

     

     

    2.38

    %

     

     

    9.78

    %

    Adjusted return on average tangible common equity (1)

     

     

    17.61

    %

     

     

    14.89

    %

     

     

    10.10

    %

    Noninterest income as a % of revenue

     

     

    40.17

    %

     

     

    46.94

    %

     

     

    53.26

    %

    Net interest margin (tax-equivalent)

     

     

    3.41

    %

     

     

    3.20

    %

     

     

    2.30

    %

    Efficiency ratio (1)

     

     

    68.76

    %

     

     

    79.47

    %

     

     

    78.88

    %

    Adjusted efficiency ratio (1)

     

     

    66.86

    %

     

     

    68.97

    %

     

     

    78.24

    %

    Net charge-offs to average loans

     

     

    0.04

    %

     

     

    0.13

    %

     

     

    0.01

    %

    Dividend payout ratio

     

     

    38.46

    %

     

     

    —

    %

     

     

    59.38

    %

    Per Common Share

     

     

     

     

     

     

     

     

     

     

     

     

    Earnings per common share - basic

     

    $

    0.52

     

     

    $

    —

     

     

    $

    0.32

     

    Earnings per common share - diluted

     

    $

    0.52

     

     

    $

    —

     

     

    $

    0.32

     

    Adjusted earnings per common share - diluted (1)

     

    $

    0.56

     

     

    $

    0.45

     

     

    $

    0.33

     

    Dividends declared per common share

     

    $

    0.20

     

     

    $

    0.20

     

     

    $

    0.19

     

    Book value per common share

     

    $

    20.27

     

     

    $

    19.55

     

     

    $

    18.79

     

    Tangible book value per common share (1)

     

    $

    15.27

     

     

    $

    14.44

     

     

    $

    15.63

     

    Average common shares outstanding - basic

     

     

    25,359

     

     

     

    24,857

     

     

     

    19,739

     

    Average common shares outstanding - diluted

     

     

    25,653

     

     

     

    25,144

     

     

     

    19,986

     

    Other Data

     

     

     

     

     

     

     

     

     

     

     

     

    Retirement and benefit services assets under administration/management

     

    $

    39,925,596

     

     

    $

    40,728,699

     

     

    $

    38,488,523

     

    Wealth management assets under administration/management

     

    $

    4,500,852

     

     

    $

    4,579,189

     

     

    $

    4,242,408

     

    Mortgage originations

     

    $

    70,593

     

     

    $

    88,576

     

     

    $

    54,101

     

    ____________________

    (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 2025 was $41.2 million, a $2.9 million, or 7.5%, increase from the fourth quarter of 2024. The increase was primarily due to lower average rates paid on deposit balances and increased interest income from organic loan growth at higher yields and earning assets acquired in the HMN Financial, Inc. ("HMNF") transaction.

    Net interest income increased $18.9 million, or 85.2%, from $22.2 million for the first quarter of 2024. Interest income increased $19.1 million, or 39.0%, from the first quarter of 2024, primarily driven by acquired earning assets acquired in the HMNF transaction, strong organic loan growth at higher yields, and purchase accounting accretion. Interest expense remained relatively stable, increasing just $0.2 million, or 0.8%, from the first quarter of 2024, as a decrease in the average rate paid on deposits largely offset the increase in interest-bearing deposits stemming from the acquisition of HMNF and organic deposit growth.

    Net interest margin (on a tax-equivalent basis) was 3.41% for the first quarter of 2025, a 21 basis point increase from 3.20% for the fourth quarter of 2024, and a 111 basis point increase from 2.30% for the first quarter of 2024. The quarter over quarter increase was mainly attributable to lower rates paid on deposits and organic loan growth at higher yields. The increase from the first quarter of 2024 was primarily driven by higher rates on interest earning assets from organic loan growth and the HMNF acquisition, purchase accounting accretion, and lower rates paid on deposits.

    Noninterest Income

    Noninterest income for the first quarter of 2025 was $27.6 million, a $6.2 million decrease from the fourth quarter of 2024. The quarter over quarter decrease was primarily driven by a decrease in other noninterest income of $4.0 million, or 62.2%, from the fourth quarter of 2024, primarily due to a $3.5 million gain on the sale of fixed assets recorded in the fourth quarter of 2024 and decreased swap fee income due to fewer commercial loan originations with swaps. Mortgage banking revenue decreased $1.8 million in the first quarter of 2025, from $3.3 million in the fourth quarter of 2024, primarily driven by a decrease of $0.7 million in the fair value of mortgage servicing rights. Retirement and benefit services revenue decreased $0.4 million in the first quarter of 2025, a 2.3% decrease from the fourth quarter of 2024, primarily driven by a decline in asset-based and other fees. Wealth revenue remained stable with a decrease of $0.1 million, or 1.5%, during the first quarter of 2025, compared to the fourth quarter of 2024. Combined assets under administration/management in retirement and benefit services and wealth decreased 1.9% from December 31, 2024. The slight decrease in combined assets under administration/management was due to net outflows and decreased market values.

    Noninterest income for the first quarter of 2025 increased by $2.3 million from the first quarter of 2024. Wealth revenue increased $0.8 million, or 12.9%, in the first quarter of 2025 compared to the first quarter of 2024, primarily driven by new client growth and a 6.1% increase in assets under administration/management during that same period. Retirement and benefit services revenue increased $0.5 million, or 2.9%, from $15.7 million in the first quarter of 2024, primarily driven by a 3.7% increase in assets under administration/management during that same period. Other noninterest income increased $1.0 million, or 63.8%, in the first quarter of 2025 compared to the first quarter of 2024, primarily due to increased swap fee income generated from commercial loan originations and increased fee income resulting from the HMNF transaction.

    Noninterest Expense

    Noninterest expense for the first quarter of 2025 was $50.4 million, a $10.1 million, or 16.7%, decrease from the fourth quarter of 2024. The quarter over quarter decrease was primarily driven by expenses related to the acquisition of HMNF incurred in the fourth quarter of 2024. Professional fees and assessments decreased $8.0 million, or 72.7%, from the fourth quarter of 2024, primarily driven by a $7.4 million decrease in acquisition-related expenses. Compensation expense decreased $3.7 million, or 13.9%, from the fourth quarter of 2024, primarily due to acquisition-related compensation expenses only recognized in the fourth quarter of 2024 in connection with the closing of the acquisition of HMNF. Business services, software and technology expense decreased $1.2 million, or 17.1%, from the fourth quarter of 2024, primarily driven by decreased core processing fees and computer supplies, both of which were driven by expense synergies realized from the HMNF transaction. Employee taxes and benefits expense increased $1.5 million, or 24.3%, from the fourth quarter of 2024, primarily due to seasonality.

    Noninterest expense for the first quarter of 2025 increased $11.3 million, or 29.1%, from $39.0 million in the first quarter of 2024. The increase was primarily driven by compensation expense, employee taxes and benefits expense, intangible amortization expense, professional fees and assessments, and occupancy and equipment expense. Compensation expense increased $3.6 million, or 18.8%, in the first quarter of 2025. Employee taxes and benefits expense increased $1.6 million, or 25.4%. Both compensation expense and employee taxes and benefits expense increased primarily due to increased headcount resulting from the HMNF transaction and talent acquisition hires throughout 2024. Intangible amortization expense increased $1.4 million in the first quarter of 2025, primarily driven by the $33.5 million core deposit intangible recorded in connection with the HMNF acquisition. Professional fees and assessments increased $1.0 million, or 50.3%, from the first quarter of 2024, primarily due to an increase in Federal Deposit Insurance Corporation ("FDIC") assessments. Occupancy and equipment expense increased $1.0 million, or 52.5%, from the first quarter of 2024, primarily driven by increased branch footprint resulting from the HMNF acquisition.

    Financial Condition

    Total assets were $5.3 billion as of March 31, 2025, an increase of $77.9 million, or 1.5%, from December 31, 2024. The increase was primarily due to a $92.9 million increase in loans and an increase of $21.7 million in cash and cash equivalents, partially offset by a decrease of $20.3 million in available-for-sale investment securities and a decrease of $7.0 million in held-to-maturity investment securities.

    Loans

    Total loans were $4.1 billion as of March 31, 2025, an increase of $92.9 million, or 2.3%, from December 31, 2024. The increase was primarily driven by a $93.8 million increase in commercial loans, partially offset by a $0.9 million decrease in consumer 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)

     

    2025

     

     

    2024

     

     

    2024

     

     

    2024

     

     

    2024

     

    Commercial

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Commercial and industrial

     

    $

    658,446

     

     

    $

    666,727

     

     

    $

    606,245

     

     

    $

    591,779

     

     

    $

    575,259

     

    Commercial real estate

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Construction, land and development

     

     

    360,024

     

     

     

    294,677

     

     

     

    173,629

     

     

     

    161,751

     

     

     

    125,966

     

    Multifamily

     

     

    353,060

     

     

     

    363,123

     

     

     

    275,377

     

     

     

    242,041

     

     

     

    260,609

     

    Non-owner occupied

     

     

    951,559

     

     

     

    967,025

     

     

     

    686,071

     

     

     

    647,776

     

     

     

    565,979

     

    Owner occupied

     

     

    424,880

     

     

     

    371,418

     

     

     

    296,366

     

     

     

    283,356

     

     

     

    285,211

     

    Total commercial real estate

     

     

    2,089,523

     

     

     

    1,996,243

     

     

     

    1,431,443

     

     

     

    1,334,924

     

     

     

    1,237,765

     

    Agricultural

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Land

     

     

    68,894

     

     

     

    61,299

     

     

     

    45,821

     

     

     

    41,410

     

     

     

    41,149

     

    Production

     

     

    64,240

     

     

     

    63,008

     

     

     

    39,436

     

     

     

    40,549

     

     

     

    36,436

     

    Total agricultural

     

     

    133,134

     

     

     

    124,307

     

     

     

    85,257

     

     

     

    81,959

     

     

     

    77,585

     

    Total commercial

     

     

    2,881,103

     

     

     

    2,787,277

     

     

     

    2,122,945

     

     

     

    2,008,662

     

     

     

    1,890,609

     

    Consumer

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Residential real estate

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    First lien

     

     

    907,534

     

     

     

    921,019

     

     

     

    690,451

     

     

     

    686,286

     

     

     

    703,726

     

    Construction

     

     

    38,553

     

     

     

    33,547

     

     

     

    11,808

     

     

     

    22,573

     

     

     

    18,425

     

    HELOC

     

     

    175,600

     

     

     

    162,509

     

     

     

    134,301

     

     

     

    126,211

     

     

     

    120,501

     

    Junior lien

     

     

    43,740

     

     

     

    44,060

     

     

     

    36,445

     

     

     

    36,323

     

     

     

    36,381

     

    Total residential real estate

     

     

    1,165,427

     

     

     

    1,161,135

     

     

     

    873,005

     

     

     

    871,393

     

     

     

    879,033

     

    Other consumer

     

     

    38,953

     

     

     

    44,122

     

     

     

    36,393

     

     

     

    35,737

     

     

     

    29,833

     

    Total consumer

     

     

    1,204,380

     

     

     

    1,205,257

     

     

     

    909,398

     

     

     

    907,130

     

     

     

    908,866

     

    Total loans

     

    $

    4,085,483

     

     

    $

    3,992,534

     

     

    $

    3,032,343

     

     

    $

    2,915,792

     

     

    $

    2,799,475

     

    Deposits

    Total deposits were $4.5 billion as of March 31, 2025, an increase of $106.9 million, or 2.4%, from December 31, 2024. Interest-bearing deposits increased $121.1 million and noninterest-bearing deposits decreased $14.2 million, from December 31, 2024. The increase in total deposits was due primarily to expanded and new commercial deposit relationships and synergistic deposit growth. Synergistic deposits were $1.0 billion as of March 31, 2025, an increase of $73.5 million, or 7.5%, from December 31, 2024.

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

     

     

    March 31,

     

     

    December 31,

     

     

    September 30,

     

     

    June 30,

     

     

    March 31,

     

    (dollars in thousands)

     

    2025

     

     

    2024

     

     

    2024

     

     

    2024

     

     

    2024

     

    Noninterest-bearing demand

     

    $

    889,270

     

     

    $

    903,466

     

     

    $

    657,547

     

     

    $

    701,428

     

     

    $

    692,500

     

    Interest-bearing

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Interest-bearing demand

     

     

    1,283,031

     

     

     

    1,220,173

     

     

     

    1,034,694

     

     

     

    1,003,585

     

     

     

    938,751

     

    Savings accounts

     

     

    177,341

     

     

     

    165,882

     

     

     

    75,675

     

     

     

    79,747

     

     

     

    82,727

     

    Money market savings

     

     

    1,472,127

     

     

     

    1,381,924

     

     

     

    1,067,187

     

     

     

    1,022,470

     

     

     

    1,114,262

     

    Time deposits

     

     

    663,522

     

     

     

    706,965

     

     

     

    488,447

     

     

     

    491,345

     

     

     

    456,729

     

    Total interest-bearing

     

     

    3,596,021

     

     

     

    3,474,944

     

     

     

    2,666,003

     

     

     

    2,597,147

     

     

     

    2,592,469

     

    Total deposits

     

    $

    4,485,291

     

     

    $

    4,378,410

     

     

    $

    3,323,550

     

     

    $

    3,298,575

     

     

    $

    3,284,969

     

    Asset Quality

    Total nonperforming assets were $51.0 million as of March 31, 2025, a decrease of $11.9 million from December 31, 2024. As of March 31, 2025, the allowance for credit losses on loans was $61.9 million, or 1.52% of total loans, compared to $59.9 million, or 1.50% of total loans, as of December 31, 2024.

    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)

     

    2025

     

     

    2024

     

     

    2024

     

     

    2024

     

     

    2024

     

    Nonaccrual loans

     

    $

    50,517

     

     

    $

    54,433

     

     

    $

    48,026

     

     

    $

    27,618

     

     

    $

    7,345

     

    Accruing loans 90+ days past due

     

     

    —

     

     

     

    8,453

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

    Total nonperforming loans

     

     

    50,517

     

     

     

    62,886

     

     

     

    48,026

     

     

     

    27,618

     

     

     

    7,345

     

    OREO and repossessed assets

     

     

    493

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    3

     

    Total nonperforming assets

     

    $

    51,010

     

     

    $

    62,886

     

     

    $

    48,026

     

     

    $

    27,618

     

     

    $

    7,348

     

    Net charge-offs/(recoveries)

     

     

    407

     

     

     

    1,258

     

     

     

    316

     

     

     

    2,522

     

     

     

    58

     

    Net charge-offs/(recoveries) to average loans

     

     

    0.04

    %

     

     

    0.13

    %

     

     

    0.04

    %

     

     

    0.36

    %

     

     

    0.01

    %

    Nonperforming loans to total loans

     

     

    1.24

    %

     

     

    1.58

    %

     

     

    1.58

    %

     

     

    0.95

    %

     

     

    0.26

    %

    Nonperforming assets to total assets

     

     

    0.96

    %

     

     

    1.20

    %

     

     

    1.18

    %

     

     

    0.63

    %

     

     

    0.17

    %

    Allowance for credit losses on loans to total loans

     

     

    1.52

    %

     

     

    1.50

    %

     

     

    1.29

    %

     

     

    1.31

    %

     

     

    1.31

    %

    Allowance for credit losses on loans to nonperforming loans

     

     

    123

    %

     

     

    95

    %

     

     

    82

    %

     

     

    139

    %

     

     

    498

    %

    For the first quarter of 2025, the Company had net charge-offs of $0.4 million, compared to net charge-offs of $1.3 million for the fourth quarter of 2024 and net charge-offs of $58 thousand for the first quarter of 2024. The quarter over quarter decrease 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 $0.9 million for the first quarter of 2025, compared to a provision for credit losses of $12.0 million for the fourth quarter of 2024 and no provision for credit losses for the first quarter of 2024. The provision for credit losses for the first quarter of 2025 was primarily driven by loan growth in CRE construction, land and development loans. 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.

    The unearned fair value adjustments on acquired loan portfolios were $65.3 million as of March 31, 2025, $70.6 million as of December 31, 2024, and $4.7 million as of March 31, 2024.

    Capital

    Total stockholders' equity was $514.2 million as of March 31, 2025, an increase of $18.8 million from December 31, 2024. The change was primarily driven by an increase in retained earnings of $8.3 million and a decrease in accumulated other comprehensive loss of $10.1 million. Tangible book value per common share (non-GAAP) increased to $15.27 as of March 31, 2025, from $14.44 as of December 31, 2024. Tangible common equity to tangible assets (non-GAAP) increased to 7.43% as of March 31, 2025, from 7.13% as of December 31, 2024. Common equity tier 1 capital to risk weighted assets increased to 10.10% as of March 31, 2025, from 9.91% as of December 31, 2024.

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

     

     

    March 31,

     

     

    December 31,

     

     

    March 31,

     

     

     

    2025

     

     

    2024

     

     

    2024

     

    Capital Ratios(1)

     

     

     

     

     

     

     

     

     

     

     

     

    Alerus Financial Corporation Consolidated

     

     

     

     

     

     

     

     

     

     

     

     

    Common equity tier 1 capital to risk weighted assets

     

     

    10.10

    %

     

     

    9.91

    %

     

     

    11.86

    %

    Tier 1 capital to risk weighted assets

     

     

    10.31

    %

     

     

    10.12

    %

     

     

    12.13

    %

    Total capital to risk weighted assets

     

     

    12.67

    %

     

     

    12.49

    %

     

     

    14.79

    %

    Tier 1 capital to average assets

     

     

    8.86

    %

     

     

    8.65

    %

     

     

    9.89

    %

    Tangible common equity / tangible assets (2)

     

     

    7.43

    %

     

     

    7.13

    %

     

     

    7.23

    %

     

     

     

     

     

     

     

     

     

     

     

     

     

    Alerus Financial, N.A.

     

     

     

     

     

     

     

     

     

     

     

     

    Common equity tier 1 capital to risk weighted assets

     

     

    10.36

    %

     

     

    10.18

    %

     

     

    11.71

    %

    Tier 1 capital to risk weighted assets

     

     

    10.36

    %

     

     

    10.18

    %

     

     

    11.71

    %

    Total capital to risk weighted assets

     

     

    11.61

    %

     

     

    11.43

    %

     

     

    12.87

    %

    Tier 1 capital to average assets

     

     

    9.06

    %

     

     

    8.69

    %

     

     

    9.30

    %

    ____________________

    (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 Tuesday, April 29, 2025, 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 031147. 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 total assets, adjusted return on average tangible common equity, 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: the strength of the local, state, national and international economies and financial markets (including effects of inflationary pressures and future monetary policies of the Federal Reserve in response thereto); interest rate risk, including the effects of changes in interest rates; effects on the U.S. economy resulting from the threat or implementation of, or changes to, existing policies and executive orders, including tariffs, immigration policy, regulatory and other governmental agencies, foreign policy and tax regulations; disruptions to the global supply chain, including as a result of domestic or foreign policies; our ability to successfully manage credit risk, including in the commercial real estate 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 commercial real estate 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; changes in local, state and federal laws, regulations and governmental policies concerning the Company's general business, including changes in interpretation and prioritization of such laws, regulations and policies; 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 and responding to 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)

     

     

     

    March 31,

     

     

    December 31,

     

     

     

    2025

     

     

    2024

     

    Assets

     

    (Unaudited)

     

     

     

     

     

    Cash and cash equivalents

     

    $

    82,979

     

     

    $

    61,239

     

    Investment securities

     

     

     

     

     

     

     

     

    Trading, at fair value

     

     

    3,047

     

     

     

    3,309

     

    Available-for-sale, at fair value

     

     

    567,728

     

     

     

    588,053

     

    Held-to-maturity, at amortized cost (with an allowance for credit losses on investments of $129 and $131, respectively)

     

     

    268,631

     

     

     

    275,585

     

    Loans held for sale

     

     

    12,905

     

     

     

    16,518

     

    Loans

     

     

    4,085,483

     

     

     

    3,992,534

     

    Allowance for credit losses on loans

     

     

    (61,929

    )

     

     

    (59,929

    )

    Net loans

     

     

    4,023,554

     

     

     

    3,932,605

     

    Land, premises and equipment, net

     

     

    40,733

     

     

     

    39,780

     

    Operating lease right-of-use assets

     

     

    12,983

     

     

     

    13,438

     

    Accrued interest receivable

     

     

    20,505

     

     

     

    20,075

     

    Bank-owned life insurance

     

     

    36,392

     

     

     

    36,033

     

    Goodwill

     

     

    85,634

     

     

     

    85,634

     

    Other intangible assets

     

     

    41,172

     

     

     

    43,882

     

    Servicing rights

     

     

    7,351

     

     

     

    7,918

     

    Deferred income taxes, net

     

     

    45,162

     

     

     

    52,885

     

    Other assets

     

     

    90,844

     

     

     

    84,719

     

    Total assets

     

    $

    5,339,620

     

     

    $

    5,261,673

     

    Liabilities and Stockholders' Equity

     

     

     

     

     

     

     

     

    Deposits

     

     

     

     

     

     

     

     

    Noninterest-bearing

     

    $

    889,270

     

     

    $

    903,466

     

    Interest-bearing

     

     

    3,596,021

     

     

     

    3,474,944

     

    Total deposits

     

     

    4,485,291

     

     

     

    4,378,410

     

    Short-term borrowings

     

     

    200,000

     

     

     

    238,960

     

    Long-term debt

     

     

    59,098

     

     

     

    59,069

     

    Operating lease liabilities

     

     

    18,515

     

     

     

    18,991

     

    Accrued expenses and other liabilities

     

     

    62,484

     

     

     

    70,833

     

    Total liabilities

     

     

    4,825,388

     

     

     

    4,766,263

     

    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: 25,365,662 and 25,344,803 issued and outstanding

     

     

    25,366

     

     

     

    25,345

     

    Additional paid-in capital

     

     

    270,159

     

     

     

    269,708

     

    Retained earnings

     

     

    281,961

     

     

     

    273,723

     

    Accumulated other comprehensive loss

     

     

    (63,254

    )

     

     

    (73,366

    )

    Total stockholders' equity

     

     

    514,232

     

     

     

    495,410

     

    Total liabilities and stockholders' equity

     

    $

    5,339,620

     

     

    $

    5,261,673

     

    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,

     

     

     

    2025

     

     

    2024

     

     

    2024

     

    Interest Income

     

    (Unaudited)

     

     

    (Unaudited)

     

     

    (Unaudited)

     

    Loans, including fees

     

    $

    61,495

     

     

    $

    60,009

     

     

    $

    39,294

     

    Investment securities

     

     

     

     

     

     

     

     

     

     

     

     

    Taxable

     

     

    5,707

     

     

     

    5,737

     

     

     

    4,568

     

    Exempt from federal income taxes

     

     

    160

     

     

     

    166

     

     

     

    174

     

    Other

     

     

    819

     

     

     

    1,395

     

     

     

    5,002

     

    Total interest income

     

     

    68,181

     

     

     

    67,307

     

     

     

    49,038

     

    Interest Expense

     

     

     

     

     

     

     

     

     

     

     

     

    Deposits

     

     

    23,535

     

     

     

    25,521

     

     

     

    20,152

     

    Short-term borrowings

     

     

    2,839

     

     

     

    2,837

     

     

     

    5,989

     

    Long-term debt

     

     

    650

     

     

     

    665

     

     

     

    678

     

    Total interest expense

     

     

    27,024

     

     

     

    29,023

     

     

     

    26,819

     

    Net interest income

     

     

    41,157

     

     

     

    38,284

     

     

     

    22,219

     

    Provision for credit losses

     

     

    863

     

     

     

    11,992

     

     

     

    —

     

    Net interest income after provision for credit losses

     

     

    40,294

     

     

     

    26,292

     

     

     

    22,219

     

    Noninterest Income

     

     

     

     

     

     

     

     

     

     

     

     

    Retirement and benefit services

     

     

    16,106

     

     

     

    16,488

     

     

     

    15,655

     

    Wealth management

     

     

    6,905

     

     

     

    7,010

     

     

     

    6,118

     

    Mortgage banking

     

     

    1,527

     

     

     

    3,277

     

     

     

    1,670

     

    Service charges on deposit accounts

     

     

    651

     

     

     

    644

     

     

     

    389

     

    Other

     

     

    2,443

     

     

     

    6,455

     

     

     

    1,491

     

    Total noninterest income

     

     

    27,632

     

     

     

    33,874

     

     

     

    25,323

     

    Noninterest Expense

     

     

     

     

     

     

     

     

     

     

     

     

    Compensation

     

     

    22,961

     

     

     

    26,657

     

     

     

    19,332

     

    Employee taxes and benefits

     

     

    7,762

     

     

     

    6,245

     

     

     

    6,188

     

    Occupancy and equipment expense

     

     

    2,907

     

     

     

    1,963

     

     

     

    1,906

     

    Business services, software and technology expense

     

     

    5,752

     

     

     

    6,935

     

     

     

    5,345

     

    Intangible amortization expense

     

     

    2,710

     

     

     

    2,804

     

     

     

    1,324

     

    Professional fees and assessments

     

     

    2,996

     

     

     

    10,964

     

     

     

    1,993

     

    Marketing and business development

     

     

    965

     

     

     

    1,050

     

     

     

    685

     

    Supplies and postage

     

     

    630

     

     

     

    726

     

     

     

    528

     

    Travel

     

     

    287

     

     

     

    449

     

     

     

    292

     

    Mortgage and lending expenses

     

     

    536

     

     

     

    571

     

     

     

    441

     

    Other

     

     

    2,859

     

     

     

    2,093

     

     

     

    985

     

    Total noninterest expense

     

     

    50,365

     

     

     

    60,457

     

     

     

    39,019

     

    Income before income tax expense

     

     

    17,561

     

     

     

    (291

    )

     

     

    8,523

     

    Income tax expense

     

     

    4,246

     

     

     

    (225

    )

     

     

    2,091

     

    Net income

     

    $

    13,315

     

     

    $

    (66

    )

     

    $

    6,432

     

    Per Common Share Data

     

     

     

     

     

     

     

     

     

     

     

     

    Earnings per common share

     

    $

    0.52

     

     

    $

    —

     

     

    $

    0.32

     

    Diluted earnings per common share

     

    $

    0.52

     

     

    $

    —

     

     

    $

    0.32

     

    Dividends declared per common share

     

    $

    0.20

     

     

    $

    0.20

     

     

    $

    0.19

     

    Average common shares outstanding

     

     

    25,359

     

     

     

    24,857

     

     

     

    19,739

     

    Diluted average common shares outstanding

     

     

    25,653

     

     

     

    25,144

     

     

     

    19,986

     

    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,

     

     

     

    2025

     

     

    2024

     

     

    2024

     

    Tangible Common Equity to Tangible Assets

     

     

     

     

     

     

     

     

     

     

     

     

    Total common stockholders' equity

     

    $

    514,232

     

     

    $

    495,410

     

     

    $

    371,635

     

    Less: Goodwill

     

     

    85,634

     

     

     

    85,634

     

     

     

    46,783

     

    Less: Other intangible assets

     

     

    41,172

     

     

     

    43,882

     

     

     

    15,834

     

    Tangible common equity (a)

     

     

    387,426

     

     

     

    365,894

     

     

     

    309,018

     

    Total assets

     

     

    5,339,620

     

     

     

    5,261,673

     

     

     

    4,338,093

     

    Less: Goodwill

     

     

    85,634

     

     

     

    85,634

     

     

     

    46,783

     

    Less: Other intangible assets

     

     

    41,172

     

     

     

    43,882

     

     

     

    15,834

     

    Tangible assets (b)

     

     

    5,212,814

     

     

     

    5,132,157

     

     

     

    4,275,476

     

    Tangible common equity to tangible assets (a)/(b)

     

     

    7.43

    %

     

     

    7.13

    %

     

     

    7.23

    %

    Tangible Book Value Per Common Share

     

     

     

     

     

     

     

     

     

     

     

     

    Tangible common equity (a)

     

     

    387,426

     

     

     

    365,894

     

     

     

    309,018

     

    Total common shares issued and outstanding (c)

     

     

    25,366

     

     

     

    25,345

     

     

     

    19,777

     

    Tangible book value per common share (a)/(c)

     

    $

    15.27

     

     

    $

    14.44

     

     

    $

    15.63

     

     

     

    Three months ended

     

     

     

    March 31,

     

     

    December 31,

     

     

    March 31,

     

     

     

    2025

     

     

    2024

     

     

    2024

     

    Return on Average Tangible Common Equity

     

     

     

     

     

     

     

     

     

     

     

     

    Net income

     

    $

    13,315

     

     

    $

    (66

    )

     

    $

    6,432

     

    Add: Intangible amortization expense (net of tax) (1)

     

     

    2,141

     

     

     

    2,215

     

     

     

    1,046

     

    Net income, excluding intangible amortization (d)

     

     

    15,456

     

     

     

    2,149

     

     

     

    7,478

     

    Average total equity

     

     

    499,224

     

     

     

    478,092

     

     

     

    367,248

     

    Less: Average goodwill

     

     

    85,634

     

     

     

    84,393

     

     

     

    46,783

     

    Less: Average other intangible assets (net of tax) (1)

     

     

    33,718

     

     

     

    34,107

     

     

     

    13,018

     

    Average tangible common equity (e)

     

     

    379,872

     

     

     

    359,592

     

     

     

    307,447

     

    Return on average tangible common equity (d)/(e)

     

     

    16.50

    %

     

     

    2.38

    %

     

     

    9.78

    %

    Efficiency Ratio

     

     

     

     

     

     

     

     

     

     

     

     

    Noninterest expense

     

    $

    50,365

     

     

    $

    60,457

     

     

    $

    39,019

     

    Less: Intangible amortization expense

     

     

    2,710

     

     

     

    2,804

     

     

     

    1,324

     

    Adjusted noninterest expense (f)

     

     

    47,655

     

     

     

    57,653

     

     

     

    37,695

     

    Net interest income

     

     

    41,157

     

     

     

    38,284

     

     

     

    22,219

     

    Noninterest income

     

     

    27,632

     

     

     

    33,874

     

     

     

    25,323

     

    Tax-equivalent adjustment

     

     

    520

     

     

     

    385

     

     

     

    246

     

    Total tax-equivalent revenue (g)

     

     

    69,309

     

     

     

    72,543

     

     

     

    47,788

     

    Efficiency ratio (f)/(g)

     

     

    68.76

    %

     

     

    79.47

    %

     

     

    78.88

    %

    Pre-Provision Net Revenue

     

     

     

     

     

     

     

     

     

     

     

     

    Net interest income

     

    $

    41,157

     

     

    $

    38,284

     

     

    $

    22,219

     

    Add: Noninterest income

     

     

    27,632

     

     

     

    33,874

     

     

     

    25,323

     

    Less: Noninterest expense

     

     

    50,365

     

     

     

    60,457

     

     

     

    39,019

     

    Pre-provision net revenue

     

    $

    18,424

     

     

    $

    11,701

     

     

    $

    8,523

     

    Adjusted Noninterest Income

     

     

     

     

     

     

     

     

     

     

     

     

    Noninterest income

     

    $

    27,632

     

     

    $

    33,874

     

     

    $

    25,323

     

    Less: Adjusted noninterest income items

     

     

     

     

     

     

     

     

     

     

     

     

    Net gain on sale of premises and equipment

     

     

    —

     

     

     

    3,459

     

     

     

    5

     

    Total adjusted noninterest income items (h)

     

     

    —

     

     

     

    3,459

     

     

     

    5

     

    Adjusted noninterest income (i)

     

    $

    27,632

     

     

    $

    30,415

     

     

    $

    25,318

     

    Adjusted Noninterest Expense

     

     

     

     

     

     

     

     

     

     

     

     

    Noninterest expense

     

    $

    50,365

     

     

    $

    60,457

     

     

    $

    39,019

     

    Less: Adjusted noninterest expense items

     

     

     

     

     

     

     

     

     

     

     

     

    HMNF merger- and acquisition-related expenses

     

     

    286

     

     

     

    7,729

     

     

     

    28

     

    Severance and signing bonus expense

     

     

    1,027

     

     

     

    2,276

     

     

     

    280

     

    Total adjusted noninterest expense items (j)

     

     

    1,313

     

     

     

    10,005

     

     

     

    308

     

    Adjusted noninterest expense (k)

     

    $

    49,052

     

     

    $

    50,452

     

     

    $

    38,711

     

    ____________________

    (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

     

     

     

    March 31,

     

     

    December 31,

     

     

    March 31,

     

     

     

    2025

     

     

    2024

     

     

    2024

     

    Adjusted Pre-Provision Net Revenue

     

     

     

     

     

     

     

     

     

     

     

     

    Net interest income

     

    $

    41,157

     

     

    $

    38,284

     

     

    $

    22,219

     

    Add: Adjusted noninterest income (i)

     

     

    27,632

     

     

     

    30,415

     

     

     

    25,318

     

    Less: Adjusted noninterest expense (k)

     

     

    49,052

     

     

     

    50,452

     

     

     

    38,711

     

    Adjusted pre-provision net revenue

     

    $

    19,737

     

     

    $

    18,247

     

     

    $

    8,826

     

    Adjusted Efficiency Ratio

     

     

     

     

     

     

     

     

     

     

     

     

    Adjusted noninterest expense (k)

     

    $

    49,052

     

     

    $

    50,452

     

     

    $

    38,711

     

    Less: Intangible amortization expense

     

     

    2,710

     

     

     

    2,804

     

     

     

    1,324

     

    Adjusted noninterest expense for efficiency ratio (l)

     

     

    46,342

     

     

     

    47,648

     

     

     

    37,387

     

    Tax-equivalent revenue

     

     

     

     

     

     

     

     

     

     

     

     

    Net interest income

     

     

    41,157

     

     

     

    38,284

     

     

     

    22,219

     

    Add: Adjusted noninterest income (i)

     

     

    27,632

     

     

     

    30,415

     

     

     

    25,318

     

    Add: Tax-equivalent adjustment

     

     

    520

     

     

     

    385

     

     

     

    246

     

    Total tax-equivalent revenue (m)

     

     

    69,309

     

     

     

    69,084

     

     

     

    47,783

     

    Adjusted efficiency ratio (l)/(m)

     

     

    66.86

    %

     

     

    68.97

    %

     

     

    78.24

    %

    Adjusted Net Income

     

     

     

     

     

     

     

     

     

     

     

     

    Net income

     

    $

    13,315

     

     

    $

    (66

    )

     

    $

    6,432

     

    Less: Adjusted noninterest income items (net of tax) (1) (h)

     

     

    —

     

     

     

    2,733

     

     

     

    4

     

    Add: HMNF day one provision for credit losses and unfunded commitments (net of tax) (1)

     

     

    —

     

     

     

    6,140

     

     

     

    —

     

    Add: Adjusted noninterest expense items (net of tax) (1) (j)

     

     

    1,037

     

     

     

    7,904

     

     

     

    243

     

    Adjusted net income (n)

     

    $

    14,352

     

     

    $

    11,245

     

     

    $

    6,671

     

    Adjusted Return on Average Total Assets

     

     

     

     

     

     

     

     

     

     

     

     

    Average total assets (o)

     

    $

    5,272,319

     

     

    $

    5,272,777

     

     

    $

    4,139,053

     

    Adjusted return on average total assets (n)/(o)

     

     

    1.10

    %

     

     

    0.85

    %

     

     

    0.65

    %

    Adjusted Return on Average Tangible Common Equity

     

     

     

     

     

     

     

     

     

     

     

     

    Adjusted net income (n)

     

    $

    14,352

     

     

    $

    11,245

     

     

    $

    6,671

     

    Add: Intangible amortization expense (net of tax) (1)

     

     

    2,141

     

     

     

    2,215

     

     

     

    1,046

     

    Adjusted net income, excluding intangible amortization (p)

     

     

    16,493

     

     

     

    13,460

     

     

     

    7,717

     

    Average total equity

     

     

    499,224

     

     

     

    478,092

     

     

     

    367,248

     

    Less: Average goodwill

     

     

    85,634

     

     

     

    84,393

     

     

     

    46,783

     

    Less: Average other intangible assets (net of tax)

     

     

    33,718

     

     

     

    34,107

     

     

     

    13,018

     

    Average tangible common equity (q)

     

     

    379,872

     

     

     

    359,592

     

     

     

    307,447

     

    Adjusted return on average tangible common equity (p)/(q)

     

     

    17.61

    %

     

     

    14.89

    %

     

     

    10.10

    %

    Adjusted Earnings Per Common Share - Diluted

     

     

     

     

     

     

     

     

     

     

     

     

    Adjusted net income (n)

     

    $

    14,352

     

     

    $

    11,245

     

     

    $

    6,671

     

    Less: Dividends and undistributed earnings allocated to participating securities

     

     

    99

     

     

     

    (54

    )

     

     

    40

     

    Net income available to common stockholders (r)

     

     

    14,253

     

     

     

    11,299

     

     

     

    6,631

     

    Weighted-average common shares outstanding for diluted earnings per share (s)

     

     

    25,653

     

     

     

    25,144

     

     

     

    19,986

     

    Adjusted earnings per common share - diluted (r)/(s)

     

    $

    0.56

     

     

    $

    0.45

     

     

    $

    0.33

     

    ____________________
    (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

     

     

     

    March 31, 2025

     

     

    December 31, 2024

     

     

    March 31, 2024

     

     

     

     

     

     

     

    Average

     

     

     

     

     

     

    Average

     

     

     

     

     

     

    Average

     

     

     

    Average

     

     

    Yield/

     

     

    Average

     

     

    Yield/

     

     

    Average

     

     

    Yield/

     

     

     

    Balance

     

     

    Rate

     

     

    Balance

     

     

    Rate

     

     

    Balance

     

     

    Rate

     

    Interest Earning Assets

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Interest-bearing deposits with banks

     

    $

    33,425

     

     

     

    4.74

    %

     

    $

    74,217

     

     

     

    5.34

    %

     

    $

    352,038

     

     

     

    5.33

    %

    Investment securities (1)

     

     

    859,696

     

     

     

    2.79

     

     

     

    883,116

     

     

     

    2.68

     

     

     

    775,305

     

     

     

    2.48

     

    Loans held for sale

     

     

    11,348

     

     

     

    5.32

     

     

     

    15,409

     

     

     

    5.60

     

     

     

    9,014

     

     

     

    5.67

     

    Loans

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Commercial and industrial

     

     

    657,838

     

     

     

    7.31

     

     

     

    616,356

     

     

     

    7.28

     

     

     

    564,125

     

     

     

    6.96

     

    CRE − Construction, land and development

     

     

    342,718

     

     

     

    5.84

     

     

     

    250,869

     

     

     

    6.33

     

     

     

    127,587

     

     

     

    8.04

     

    CRE − Multifamily

     

     

    364,247

     

     

     

    6.34

     

     

     

    351,804

     

     

     

    6.50

     

     

     

    250,513

     

     

     

    5.56

     

    CRE − Non-owner occupied

     

     

    960,152

     

     

     

    6.66

     

     

     

    1,002,857

     

     

     

    6.68

     

     

     

    564,552

     

     

     

    5.75

     

    CRE − Owner occupied

     

     

    379,948

     

     

     

    6.19

     

     

     

    293,169

     

     

     

    6.56

     

     

     

    279,165

     

     

     

    5.36

     

    Agricultural − Land

     

     

    67,228

     

     

     

    5.85

     

     

     

    59,400

     

     

     

    5.73

     

     

     

    40,310

     

     

     

    4.75

     

    Agricultural − Production

     

     

    60,933

     

     

     

    7.28

     

     

     

    58,999

     

     

     

    7.36

     

     

     

    35,331

     

     

     

    6.39

     

    RRE − First lien

     

     

    899,835

     

     

     

    4.78

     

     

     

    904,414

     

     

     

    4.50

     

     

     

    701,756

     

     

     

    4.01

     

    RRE − Construction

     

     

    36,913

     

     

     

    8.40

     

     

     

    31,722

     

     

     

    9.74

     

     

     

    21,559

     

     

     

    5.20

     

    RRE − HELOC

     

     

    168,599

     

     

     

    7.12

     

     

     

    153,344

     

     

     

    7.60

     

     

     

    118,957

     

     

     

    8.30

     

    RRE − Junior lien

     

     

    44,096

     

     

     

    6.24

     

     

     

    47,041

     

     

     

    6.25

     

     

     

    35,824

     

     

     

    6.38

     

    Other consumer

     

     

    40,356

     

     

     

    7.02

     

     

     

    44,959

     

     

     

    7.19

     

     

     

    28,835

     

     

     

    6.43

     

    Total loans (1)

     

     

    4,022,863

     

     

     

    6.23

     

     

     

    3,814,934

     

     

     

    6.27

     

     

     

    2,768,514

     

     

     

    5.72

     

    Federal Reserve/FHLB stock

     

     

    22,397

     

     

     

    7.77

     

     

     

    20,717

     

     

     

    7.66

     

     

     

    16,658

     

     

     

    8.14

     

    Total interest earning assets

     

     

    4,949,729

     

     

     

    5.63

     

     

     

    4,808,393

     

     

     

    5.60

     

     

     

    3,921,529

     

     

     

    5.05

     

    Noninterest earning assets

     

     

    322,590

     

     

     

     

     

     

     

    464,384

     

     

     

     

     

     

     

    217,524

     

     

     

     

     

    Total assets

     

    $

    5,272,319

     

     

     

     

     

     

    $

    5,272,777

     

     

     

     

     

     

    $

    4,139,053

     

     

     

     

     

    Interest-Bearing Liabilities

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Interest-bearing demand deposits

     

    $

    1,247,725

     

     

     

    1.81

    %

     

    $

    1,209,674

     

     

     

    1.98

    %

     

    $

    869,060

     

     

     

    1.97

    %

    Money market and savings deposits

     

     

    1,590,616

     

     

     

    2.89

     

     

     

    1,520,616

     

     

     

    3.15

     

     

     

    1,186,900

     

     

     

    3.77

     

    Time deposits

     

     

    688,569

     

     

     

    3.91

     

     

     

    698,358

     

     

     

    4.24

     

     

     

    431,679

     

     

     

    4.46

     

    Fed funds purchased and BTFP

     

     

    49,834

     

     

     

    4.69

     

     

     

    22,012

     

     

     

    4.93

     

     

     

    282,614

     

     

     

    4.99

     

    FHLB short-term advances

     

     

    200,000

     

     

     

    4.59

     

     

     

    200,000

     

     

     

    5.10

     

     

     

    200,000

     

     

     

    4.99

     

    Long-term debt

     

     

    59,084

     

     

     

    4.46

     

     

     

    59,055

     

     

     

    4.48

     

     

     

    58,971

     

     

     

    4.62

     

    Total interest-bearing liabilities

     

     

    3,835,828

     

     

     

    2.86

     

     

     

    3,709,715

     

     

     

    3.11

     

     

     

    3,029,224

     

     

     

    3.56

     

    Noninterest-Bearing Liabilities and Stockholders' Equity

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Noninterest-bearing deposits

     

     

    849,687

     

     

     

     

     

     

     

    847,153

     

     

     

     

     

     

     

    675,926

     

     

     

     

     

    Other noninterest-bearing liabilities

     

     

    87,580

     

     

     

     

     

     

     

    237,817

     

     

     

     

     

     

     

    66,655

     

     

     

     

     

    Stockholders' equity

     

     

    499,224

     

     

     

     

     

     

     

    478,092

     

     

     

     

     

     

     

    367,248

     

     

     

     

     

    Total liabilities and stockholders' equity

     

    $

    5,272,319

     

     

     

     

     

     

    $

    5,272,777

     

     

     

     

     

     

    $

    4,139,053

     

     

     

     

     

    Net interest rate spread

     

     

     

     

     

     

    2.77

    %

     

     

     

     

     

     

    2.49

    %

     

     

     

     

     

     

    1.49

    %

    Net interest margin, tax-equivalent (1)

     

     

     

     

     

     

    3.41

    %

     

     

     

     

     

     

    3.20

    %

     

     

     

     

     

     

    2.30

    %

    ____________________
    (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/20250428531925/en/

    Alan A. Villalon, Chief Financial Officer

    952.417.3733 (Office)

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