Alerus Financial Corporation Reports First Quarter 2024 Net Income of $6.4 Million
- Net income of $6.4 million for Q1 2024, a significant improvement from previous quarters.
- Total deposits increased by 6.1% to $3.3 billion, with total loans up by 1.4% to $2.8 billion.
- Adjusted net interest margin increased by 7 basis points to 2.44% in Q1 2024.
- Fee income accounted for 53.3% of total revenues, growing across all business lines.
- Efficiency ratio decreased despite inflationary pressures, focusing on managing expenses prudently.
- Maintained a fortress balance sheet with a CET1 capital ratio of 11.86% and growth in tangible book value per common share.
- Total assets under administration/management increased by 5.0% to $42.7 billion.
- Net charge-offs to average loans were 0.01% for Q1 2024.
- Total nonperforming assets decreased by 16.2% to $7.3 million.
- Tangible book value per common share increased by 1.1% to $15.63 in Q1 2024.
- Borrowed $355.0 million from the Bank Term Funding Program, contributing to net interest income growth.
- None.
Insights
The reported net income of
The substantial growth in the allowance for credit losses to
Investors should be mindful of the balance sheet expansion, driven by cash inflows and BTFP borrowings, which could be a double-edged sword if not managed with a forward-thinking strategy. While the increase in total loans and deposits illustrates business momentum, the potential risks associated with rapid growth should not be underestimated, especially in a potentially volatile interest rate environment.
The reported results from Alerus Financial Corporation underscore a broader trend in the banking sector towards diversification of revenue streams. The increase in fee income, accounting for over half of the total revenues, demonstrates resilience in the face of fluctuating interest rates. A well-diversified portfolio can help cushion a financial institution from market shocks and provide steady streams of income.
The growth in nonperforming assets, while still marginal, should be monitored closely, given they can be early indicators of credit quality issues. That said, the increased allowance for credit losses to nonperforming loans ratio paints a picture of a bank that is well-prepared for potential defaults. The efficiency ratio's slight decrease despite inflationary pressures demonstrates effective cost control, which is important in maintaining profitability during economic downturns.
From a market perspective, these results may instill confidence among investors, as the combination of strong deposit growth and robust fee income growth can signal a healthy financial ecosystem and the potential for sustained growth. However, it's vital that the retail investor pays attention to how Alerus manages its asset quality and interest rate risk as these factors will significantly influence future performance.
CEO Comments
President and Chief Executive Officer Katie Lorenson said, “Our momentum continues into 2024 as we started the year with strong production and client acquisition in our commercial wealth bank and national retirement businesses. Deposit growth and inflows were robust at over
First Quarter Highlights
-
Total deposits were
$3.3 billion $189.4 million 6.1% , from December 31, 2023 -
Total loans were
$2.8 billion $39.9 million 1.4% , from December 31, 2023 -
The loan to deposit ratio as of December 31, 2024 was
85.2% , compared to89.1% as of December 31, 2023; brokered deposits remained at$0 -
Net interest margin (on a tax equivalent basis) was
2.30% in the first quarter of 2024, compared to2.37% in the fourth quarter of 2023. Adjusted net interest margin (on a tax-equivalent basis) (non-GAAP) increased 7 basis points from2.37% in the fourth quarter of 2023 to2.44% in the first quarter of 2024 -
Net interest income increased
3.1% , from$21.6 million $22.2 million -
Total assets under administration/management at March 31, 2024 were
$42.7 billion 5.0% increase from December 31, 2023 -
Net charge-offs to average loans of
0.01% for the first quarter of 2024, compared to net recoveries to average loans of0.04% for the fourth quarter of 2023 -
Total nonperforming assets were
$7.3 million $1.4 million 16.2% , from December 31, 2023 -
Allowance for credit losses to nonperforming loans increased from
410% as of December 31, 2023 to498% as of March 31, 2024 -
Tangible book value per common share (non-GAAP) was
$15.63 1.1% increase from December 31, 2023 -
Common equity tier 1 capital to risk weighted assets as of March 31, 2024 was
11.86% , compared to11.82% as of December 31, 2023, and continues to be well above the minimum threshold to be “well capitalized” of6.50% -
Borrowed
$355.0 million $0.3 million
Selected Financial Data (unaudited)
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As of and for the |
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Three months ended |
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March 31, |
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December 31, |
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March 31, |
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(dollars and shares in thousands, except per share data) |
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2024 |
|
2023 |
|
2023 |
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Performance Ratios |
|
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|
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|
|
|
Return on average total assets |
|
|
0.63 |
% |
|
(1.51) |
% |
|
0.88 |
% |
Return on average common equity |
|
|
7.04 |
% |
|
(16.75) |
% |
|
9.17 |
% |
Return on average tangible common equity (1) |
|
|
9.78 |
% |
|
(18.85) |
% |
|
12.58 |
% |
Noninterest income as a % of revenue |
|
|
53.26 |
% |
|
3.54 |
% |
|
51.63 |
% |
Net interest margin (tax-equivalent) |
|
|
2.30 |
% |
|
2.37 |
% |
|
2.70 |
% |
Adjusted net interest margin (tax-equivalent) (1) |
|
|
2.44 |
% |
|
2.37 |
% |
|
2.70 |
% |
Efficiency ratio (1) |
|
|
78.88 |
% |
|
165.40 |
% |
|
74.53 |
% |
Adjusted efficiency ratio (1) |
|
|
78.88 |
% |
|
79.07 |
% |
|
74.53 |
% |
Net charge-offs/(recoveries) to average loans |
|
|
0.01 |
% |
|
(0.04) |
% |
|
0.03 |
% |
Dividend payout ratio |
|
|
59.38 |
% |
|
(26.03) |
% |
|
45.00 |
% |
Per Common Share |
|
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|
|
|
|
|
|
|
|
Earnings per common share - basic |
|
$ |
0.32 |
|
$ |
(0.74) |
|
$ |
0.41 |
|
Earnings per common share - diluted |
|
$ |
0.32 |
|
$ |
(0.73) |
|
$ |
0.40 |
|
Dividends declared per common share |
|
$ |
0.19 |
|
$ |
0.19 |
|
$ |
0.18 |
|
Book value per common share |
|
$ |
18.79 |
|
$ |
18.71 |
|
$ |
17.90 |
|
Tangible book value per common share (1) |
|
$ |
15.63 |
|
$ |
15.46 |
|
$ |
14.50 |
|
Average common shares outstanding - basic |
|
|
19,739 |
|
|
19,761 |
|
|
20,028 |
|
Average common shares outstanding - diluted |
|
|
19,986 |
|
|
19,996 |
|
|
20,246 |
|
Other Data |
|
|
|
|
|
|
|
|
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|
Retirement and benefit services assets under administration/management |
|
$ |
38,488,523 |
|
$ |
36,682,425 |
|
$ |
33,404,342 |
|
Wealth management assets under administration/management |
|
$ |
4,242,408 |
|
$ |
4,018,846 |
|
$ |
3,675,684 |
|
Mortgage originations |
|
$ |
54,101 |
|
$ |
65,488 |
|
$ |
77,728 |
|
____________________
(1) |
Represents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.” |
Results of Operations
Net Interest Income
Net interest income for the first quarter of 2024 was
Net interest income decreased
Net interest margin (on a tax-equivalent basis), was
Noninterest Income
Noninterest income for the first quarter of 2024 was
Noninterest income for the first quarter of 2024 was
Noninterest Expense
Noninterest expense for the fourth quarter of 2024 was
Noninterest expense for the first quarter of 2024 increased
Financial Condition
Total assets were
Loans
Total loans were
The following table presents the composition of our loan portfolio as of the dates indicated:
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March 31, |
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December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|||||
(dollars in thousands) |
|
2024 |
|
2023 |
|
2023 |
|
2023 |
|
2023 |
|||||
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
|
$ |
611,695 |
|
$ |
598,321 |
|
$ |
582,387 |
|
$ |
551,860 |
|
$ |
553,578 |
Real estate construction |
|
|
125,966 |
|
|
124,034 |
|
|
97,742 |
|
|
78,428 |
|
|
108,776 |
Commercial real estate |
|
|
1,152,948 |
|
|
1,126,912 |
|
|
1,025,014 |
|
|
1,003,821 |
|
|
934,324 |
Total commercial |
|
|
1,890,609 |
|
|
1,849,267 |
|
|
1,705,143 |
|
|
1,634,109 |
|
|
1,596,678 |
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential real estate first mortgage |
|
|
722,151 |
|
|
726,879 |
|
|
717,793 |
|
|
707,630 |
|
|
698,002 |
Residential real estate junior lien |
|
|
156,882 |
|
|
154,134 |
|
|
152,677 |
|
|
157,231 |
|
|
152,281 |
Other revolving and installment |
|
|
29,833 |
|
|
29,303 |
|
|
30,817 |
|
|
34,552 |
|
|
39,664 |
Total consumer |
|
|
908,866 |
|
|
910,316 |
|
|
901,287 |
|
|
899,413 |
|
|
889,947 |
Total loans |
|
$ |
2,799,475 |
|
$ |
2,759,583 |
|
$ |
2,606,430 |
|
$ |
2,533,522 |
|
$ |
2,486,625 |
Deposits
Total deposits were
The following table presents the composition of our deposit portfolio as of the dates indicated:
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|
March 31, |
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December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
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(dollars in thousands) |
|
2024 |
|
2023 |
|
2023 |
|
2023 |
|
2023 |
|||||
Noninterest-bearing demand |
|
$ |
692,500 |
|
$ |
728,082 |
|
$ |
717,990 |
|
$ |
715,534 |
|
$ |
792,977 |
Interest-bearing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand |
|
|
938,751 |
|
|
840,711 |
|
|
759,812 |
|
|
753,194 |
|
|
817,675 |
Savings accounts |
|
|
82,727 |
|
|
82,485 |
|
|
88,341 |
|
|
93,557 |
|
|
99,742 |
Money market savings |
|
|
1,114,262 |
|
|
1,032,771 |
|
|
959,106 |
|
|
986,403 |
|
|
1,076,166 |
Time deposits |
|
|
456,729 |
|
|
411,562 |
|
|
346,935 |
|
|
304,167 |
|
|
245,418 |
Total interest-bearing |
|
|
2,592,469 |
|
|
2,367,529 |
|
|
2,154,194 |
|
|
2,137,321 |
|
|
2,239,001 |
Total deposits |
|
$ |
3,284,969 |
|
$ |
3,095,611 |
|
$ |
2,872,184 |
|
$ |
2,852,855 |
|
$ |
3,031,978 |
Asset Quality
Total nonperforming assets were
The following table presents selected asset quality data as of and for the periods indicated:
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As of and for the three months ended |
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|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
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(dollars in thousands) |
|
2024 |
|
2023 |
|
2023 |
|
2023 |
|
2023 |
|
|||||
Nonaccrual loans |
|
$ |
7,345 |
|
$ |
8,596 |
|
$ |
9,007 |
|
$ |
2,233 |
|
$ |
2,118 |
|
Accruing loans 90+ days past due |
|
|
— |
|
|
139 |
|
|
— |
|
|
347 |
|
|
— |
|
Total nonperforming loans |
|
|
7,345 |
|
|
8,735 |
|
|
9,007 |
|
|
2,580 |
|
|
2,118 |
|
OREO and repossessed assets |
|
|
3 |
|
|
32 |
|
|
3 |
|
|
— |
|
|
— |
|
Total nonperforming assets |
|
$ |
7,348 |
|
$ |
8,767 |
|
$ |
9,010 |
|
$ |
2,580 |
|
$ |
2,118 |
|
Net charge-offs/(recoveries) |
|
|
58 |
|
|
(238) |
|
|
(594) |
|
|
(403) |
|
|
170 |
|
Net charge-offs/(recoveries) to average loans |
|
|
0.01 |
% |
|
(0.04) |
% |
|
(0.09) |
% |
|
(0.07) |
% |
|
0.03 |
% |
Nonperforming loans to total loans |
|
|
0.26 |
% |
|
0.32 |
% |
|
0.35 |
% |
|
0.10 |
% |
|
0.09 |
% |
Nonperforming assets to total assets |
|
|
0.17 |
% |
|
0.22 |
% |
|
0.23 |
% |
|
0.07 |
% |
|
0.05 |
% |
Allowance for credit losses on loans to total loans |
|
|
1.31 |
% |
|
1.30 |
% |
|
1.39 |
% |
|
1.41 |
% |
|
1.41 |
% |
Allowance for credit losses on loans to nonperforming loans |
|
|
498 |
% |
|
410 |
% |
|
403 |
% |
|
1,384 |
% |
|
1,657 |
% |
For the first quarter of 2024, the Company had net charge-offs of
The Company recorded no provision for credit losses for the first quarter of 2024, compared to a provision of
Capital
Total stockholders’ equity was
The following table presents our capital ratios as of the dates indicated:
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|
|
|
|
|
March 31, |
|
December 31, |
|
March 31, |
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|
2024 |
|
2023 |
|
2023 |
|
|||
Capital Ratios(1) |
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|
Alerus Financial Corporation Consolidated |
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|
|
|
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|
|
Common equity tier 1 capital to risk weighted assets |
|
|
11.86 |
% |
|
11.82 |
% |
|
13.30 |
% |
Tier 1 capital to risk weighted assets |
|
|
12.13 |
% |
|
12.10 |
% |
|
13.60 |
% |
Total capital to risk weighted assets |
|
|
14.79 |
% |
|
14.76 |
% |
|
16.51 |
% |
Tier 1 capital to average assets |
|
|
9.89 |
% |
|
10.57 |
% |
|
11.00 |
% |
Tangible common equity / tangible assets (2) |
|
|
7.23 |
% |
|
7.96 |
% |
|
7.62 |
% |
|
|
|
|
|
|
|
|
|
|
|
Alerus Financial, N.A. |
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital to risk weighted assets |
|
|
11.71 |
% |
|
11.40 |
% |
|
12.67 |
% |
Tier 1 capital to risk weighted assets |
|
|
11.71 |
% |
|
11.40 |
% |
|
12.67 |
% |
Total capital to risk weighted assets |
|
|
12.87 |
% |
|
12.51 |
% |
|
13.87 |
% |
Tier 1 capital to average assets |
|
|
9.30 |
% |
|
9.92 |
% |
|
10.24 |
% |
____________________
| (1) | Capital ratios for the current quarter are to be considered preliminary until the Call Report for Alerus Financial, N.A. is filed. |
(2) |
Represents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.” |
Conference Call
The Company will host a conference call at 11:00 a.m. Central Time on Thursday, April 25, 2024, to discuss its financial results. The call can be accessed via telephone at 1-(833)-470-1428, using access code 557480. A recording of the call and transcript will be available on the Company’s investor relations website at investors.alerus.com following the call.
About Alerus Financial Corporation
Alerus Financial Corporation (Nasdaq: ALRS) is a commercial wealth bank and national retirement services provider with corporate offices in
Non-GAAP Financial Measures
Some of the financial measures included in this press release are not measures of financial performance recognized by
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
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, the following: interest rate risk, including the effects of significant rate increases by the Federal Reserve since 2020; our ability to successfully manage credit risk and maintain an adequate level of allowance for credit losses; new or revised accounting standards; business and economic conditions generally and in the financial services industry, nationally and within our market areas, including high rates of inflation and possible recession; the effects of recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short-period of time that resulted in recent bank failures; the overall health of the local and national real estate market; concentrations within our loan portfolio; the level of nonperforming assets on our balance sheet; our ability to implement our organic and acquisition growth strategies, including the integration of Metro Phoenix Bank which the Company acquired in 2022; the impact of economic or market conditions on our fee-based services; our ability to continue to grow our retirement and benefit services business; our ability to continue to originate a sufficient volume of residential mortgages; the occurrence of fraudulent activity, breaches or failures of our or our third party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools; interruptions involving our information technology and telecommunications systems or third-party servicers; potential losses incurred in connection with mortgage loan repurchases; the composition of our executive management team and our ability to attract and retain key personnel; rapid technological change in the financial services industry; increased competition in the financial services industry from non-banks such as credit unions and Fintech companies, including digital asset service providers; our ability to successfully manage liquidity risk, including our need to access higher cost sources of funds such as fed funds purchased and short-term borrowings; the concentration of large deposits from certain clients, who have balances above current FDIC insurance limits; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal proceedings and regulatory actions against us or to which the Company may become subject; potential impairment to the goodwill the Company recorded in connection with our past acquisitions, including the acquisition of Metro Phoenix Bank; the extensive regulatory framework that applies to us; the impact of recent and future legislative and regulatory changes, including in response to recent bank failures; fluctuations in the values of the securities held in our securities portfolio, including as a result of changes in interest rates; governmental monetary, trade and fiscal policies; risks related to climate change and the negative impact it may have on our customers and their businesses; severe weather, natural disasters, widespread disease or pandemics; acts of war or terrorism, including the ongoing Israeli-Palestinian conflict and the Russian invasion of
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) |
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March 31, |
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December 31, |
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|
|
2024 |
|
2023 |
||
Assets |
|
(Unaudited) |
|
(Audited) |
||
Cash and cash equivalents |
|
$ |
545,772 |
|
$ |
129,893 |
Investment securities |
|
|
|
|
|
|
Trading, at fair value |
|
|
4,553 |
|
|
— |
Available-for-sale, at fair value |
|
|
472,272 |
|
|
486,736 |
Held-to-maturity, at amortized cost (with an allowance for credit losses on investments of |
|
|
291,932 |
|
|
299,515 |
Loans held for sale |
|
|
10,625 |
|
|
11,497 |
Loans |
|
|
2,799,475 |
|
|
2,759,583 |
Allowance for credit losses on loans |
|
|
(36,584) |
|
|
(35,843) |
Net loans |
|
|
2,762,891 |
|
|
2,723,740 |
Land, premises and equipment, net |
|
|
18,162 |
|
|
17,940 |
Operating lease right-of-use assets |
|
|
5,112 |
|
|
5,436 |
Accrued interest receivable |
|
|
16,149 |
|
|
15,700 |
Bank-owned life insurance |
|
|
33,396 |
|
|
33,236 |
Goodwill |
|
|
46,783 |
|
|
46,783 |
Other intangible assets |
|
|
15,834 |
|
|
17,158 |
Servicing rights |
|
|
1,983 |
|
|
2,052 |
Deferred income taxes, net |
|
|
34,796 |
|
|
34,595 |
Other assets |
|
|
77,833 |
|
|
83,432 |
Total assets |
|
$ |
4,338,093 |
|
$ |
3,907,713 |
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
Noninterest-bearing |
|
$ |
692,500 |
|
$ |
728,082 |
Interest-bearing |
|
|
2,592,469 |
|
|
2,367,529 |
Total deposits |
|
|
3,284,969 |
|
|
3,095,611 |
Short-term borrowings |
|
|
555,000 |
|
|
314,170 |
Long-term debt |
|
|
58,985 |
|
|
58,956 |
Operating lease liabilities |
|
|
5,420 |
|
|
5,751 |
Accrued expenses and other liabilities |
|
|
62,084 |
|
|
64,098 |
Total liabilities |
|
|
3,966,458 |
|
|
3,538,586 |
Stockholders’ equity |
|
|
|
|
|
|
Preferred stock, |
|
|
— |
|
|
— |
Common stock, |
|
|
19,777 |
|
|
19,734 |
Additional paid-in capital |
|
|
150,740 |
|
|
150,343 |
Retained earnings |
|
|
275,374 |
|
|
272,705 |
Accumulated other comprehensive loss |
|
|
(74,256) |
|
|
(73,655) |
Total stockholders’ equity |
|
|
371,635 |
|
|
369,127 |
Total liabilities and stockholders’ equity |
|
$ |
4,338,093 |
|
$ |
3,907,713 |
Alerus Financial Corporation and Subsidiaries Consolidated Statements of Income (dollars and shares in thousands, except per share data) |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|||||||
|
|
March 31, |
|
December 31, |
|
March 31, |
|||
|
|
2024 |
|
2023 |
|
2023 |
|||
Interest Income |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|||
Loans, including fees |
|
$ |
39,294 |
|
$ |
37,731 |
|
$ |
30,933 |
Investment securities |
|
|
|
|
|
|
|
|
|
Taxable |
|
|
4,568 |
|
|
6,040 |
|
|
5,951 |
Exempt from federal income taxes |
|
|
174 |
|
|
182 |
|
|
190 |
Other |
|
|
5,002 |
|
|
742 |
|
|
735 |
Total interest income |
|
|
49,038 |
|
|
44,695 |
|
|
37,809 |
Interest Expense |
|
|
|
|
|
|
|
|
|
Deposits |
|
|
20,152 |
|
|
17,169 |
|
|
9,104 |
Short-term borrowings |
|
|
5,989 |
|
|
5,292 |
|
|
4,393 |
Long-term debt |
|
|
678 |
|
|
682 |
|
|
654 |
Total interest expense |
|
|
26,819 |
|
|
23,143 |
|
|
14,151 |
Net interest income |
|
|
22,219 |
|
|
21,552 |
|
|
23,658 |
Provision for credit losses |
|
|
— |
|
|
1,507 |
|
|
550 |
Net interest income after provision for credit losses |
|
|
22,219 |
|
|
20,045 |
|
|
23,108 |
Noninterest Income |
|
|
|
|
|
|
|
|
|
Retirement and benefit services |
|
|
15,655 |
|
|
15,317 |
|
|
15,482 |
Wealth management |
|
|
6,118 |
|
|
5,940 |
|
|
5,194 |
Mortgage banking |
|
|
1,670 |
|
|
1,279 |
|
|
1,717 |
Service charges on deposit accounts |
|
|
389 |
|
|
341 |
|
|
301 |
Net gains (losses) on investment securities |
|
|
— |
|
|
(24,643) |
|
|
— |
Other |
|
|
1,491 |
|
|
2,557 |
|
|
2,559 |
Total noninterest income |
|
|
25,323 |
|
|
791 |
|
|
25,253 |
Noninterest Expense |
|
|
|
|
|
|
|
|
|
Compensation |
|
|
19,332 |
|
|
19,214 |
|
|
19,158 |
Employee taxes and benefits |
|
|
6,188 |
|
|
4,578 |
|
|
5,853 |
Occupancy and equipment expense |
|
|
1,906 |
|
|
1,858 |
|
|
1,899 |
Business services, software and technology expense |
|
|
5,345 |
|
|
5,686 |
|
|
5,324 |
Intangible amortization expense |
|
|
1,324 |
|
|
1,324 |
|
|
1,324 |
Professional fees and assessments |
|
|
1,993 |
|
|
2,345 |
|
|
1,152 |
Marketing and business development |
|
|
685 |
|
|
1,002 |
|
|
686 |
Supplies and postage |
|
|
528 |
|
|
521 |
|
|
460 |
Travel |
|
|
292 |
|
|
313 |
|
|
248 |
Mortgage and lending expenses |
|
|
441 |
|
|
501 |
|
|
497 |
Other |
|
|
985 |
|
|
1,312 |
|
|
1,268 |
Total noninterest expense |
|
|
39,019 |
|
|
38,654 |
|
|
37,869 |
Income (loss) before income tax expense (benefit) |
|
|
8,523 |
|
|
(17,818) |
|
|
10,492 |
Income tax expense (benefit) |
|
|
2,091 |
|
|
(3,064) |
|
|
2,306 |
Net income (loss) |
|
$ |
6,432 |
|
$ |
(14,754) |
|
$ |
8,186 |
Per Common Share Data |
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share |
|
$ |
0.32 |
|
$ |
(0.74) |
|
$ |
0.41 |
Diluted earnings (loss) per common share |
|
$ |
0.32 |
|
$ |
(0.73) |
|
$ |
0.40 |
Dividends declared per common share |
|
$ |
0.19 |
|
$ |
0.19 |
|
$ |
0.18 |
Average common shares outstanding |
|
|
19,739 |
|
|
19,761 |
|
|
20,028 |
Diluted average common shares outstanding |
|
|
19,986 |
|
|
19,996 |
|
|
20,246 |
Alerus Financial Corporation and Subsidiaries Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures (unaudited) (dollars and shares in thousands, except per share data) |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|||
|
|
2024 |
|
2023 |
|
2023 |
|
|||
Tangible Common Equity to Tangible Assets |
|
|
|
|
|
|
|
|
|
|
Total common stockholders’ equity |
|
$ |
371,635 |
|
$ |
369,127 |
|
$ |
359,118 |
|
Less: Goodwill |
|
|
46,783 |
|
|
46,783 |
|
|
47,087 |
|
Less: Other intangible assets |
|
|
15,834 |
|
|
17,158 |
|
|
21,131 |
|
Tangible common equity (a) |
|
|
309,018 |
|
|
305,186 |
|
|
290,900 |
|
Total assets |
|
|
4,338,093 |
|
|
3,907,713 |
|
|
3,886,773 |
|
Less: Goodwill |
|
|
46,783 |
|
|
46,783 |
|
|
47,087 |
|
Less: Other intangible assets |
|
|
15,834 |
|
|
17,158 |
|
|
21,131 |
|
Tangible assets (b) |
|
|
4,275,476 |
|
|
3,843,772 |
|
|
3,818,555 |
|
Tangible common equity to tangible assets (a)/(b) |
|
|
7.23 |
% |
|
7.94 |
% |
|
7.62 |
% |
Adjusted Tangible Common Equity to Tangible Assets |
|
|
|
|
|
|
|
|
|
|
Tangible assets (b) |
|
$ |
4,275,476 |
|
$ |
3,843,772 |
|
$ |
3,818,555 |
|
Less: Cash proceeds from BTFP |
|
|
355,000 |
|
|
— |
|
|
— |
|
Adjusted tangible assets (c) |
|
|
3,920,476 |
|
|
3,843,772 |
|
|
3,818,555 |
|
Adjusted tangible common equity to tangible assets (a)/(c) |
|
|
7.88 |
% |
|
7.94 |
% |
|
7.62 |
% |
Tangible Book Value Per Common Share |
|
|
|
|
|
|
|
|
|
|
Total common stockholders’ equity |
|
$ |
371,635 |
|
$ |
369,127 |
|
$ |
359,118 |
|
Less: Goodwill |
|
|
46,783 |
|
|
46,783 |
|
|
47,087 |
|
Less: Other intangible assets |
|
|
15,834 |
|
|
17,158 |
|
|
21,131 |
|
Tangible common equity (d) |
|
|
309,018 |
|
|
305,186 |
|
|
290,900 |
|
Total common shares issued and outstanding (e) |
|
|
19,777 |
|
|
19,734 |
|
|
20,067 |
|
Tangible book value per common share (d)/(e) |
|
$ |
15.63 |
|
$ |
15.46 |
|
$ |
14.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|||||||
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|||
|
|
2024 |
|
2023 |
|
2023 |
|
|||
Return on Average Tangible Common Equity |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
6,432 |
|
$ |
(14,754) |
|
$ |
8,186 |
|
Add: Intangible amortization expense (net of tax) |
|
|
1,046 |
|
|
1,046 |
|
|
1,046 |
|
Net income (loss), excluding intangible amortization (f) |
|
|
7,478 |
|
|
(13,708) |
|
|
9,232 |
|
Average total equity |
|
|
367,248 |
|
|
349,382 |
|
|
361,857 |
|
Less: Average goodwill |
|
|
46,783 |
|
|
46,783 |
|
|
47,087 |
|
Less: Average other intangible assets (net of tax) |
|
|
13,018 |
|
|
14,067 |
|
|
17,209 |
|
Average tangible common equity (g) |
|
|
307,447 |
|
|
288,532 |
|
|
297,561 |
|
Return on average tangible common equity (f)/(g) |
|
|
9.78 |
% |
|
(18.85) |
% |
|
12.58 |
% |
Efficiency Ratio |
|
|
|
|
|
|
|
|
|
|
Noninterest expense |
|
$ |
39,019 |
|
$ |
38,654 |
|
$ |
37,869 |
|
Less: Intangible amortization expense |
|
|
1,324 |
|
|
1,324 |
|
|
1,324 |
|
Adjusted noninterest expense (h) |
|
|
37,695 |
|
|
37,330 |
|
|
36,545 |
|
Net interest income |
|
|
22,219 |
|
|
21,552 |
|
|
23,658 |
|
Noninterest income |
|
|
25,323 |
|
|
791 |
|
|
25,253 |
|
Tax-equivalent adjustment |
|
|
247 |
|
|
226 |
|
|
123 |
|
Total tax-equivalent revenue (i) |
|
|
47,789 |
|
|
22,569 |
|
|
49,034 |
|
Efficiency ratio (h)/(i) |
|
|
78.88 |
% |
|
165.40 |
% |
|
74.53 |
% |
Adjusted Efficiency Ratio |
|
|
|
|
|
|
|
|
|
|
Noninterest expense |
|
$ |
39,019 |
|
$ |
38,654 |
|
$ |
37,869 |
|
Less: Intangible amortization expense |
|
|
1,324 |
|
|
1,324 |
|
|
1,324 |
|
Adjusted noninterest expense (j) |
|
|
37,695 |
|
|
37,330 |
|
|
36,545 |
|
Net interest income |
|
|
22,219 |
|
|
21,552 |
|
|
23,658 |
|
Noninterest income |
|
|
25,323 |
|
|
791 |
|
|
25,253 |
|
Tax-equivalent adjustment |
|
|
247 |
|
|
226 |
|
|
123 |
|
Less: Net gains (losses) on investment securities |
|
|
— |
|
|
(24,643) |
|
|
— |
|
Total tax-equivalent revenue (k) |
|
|
47,789 |
|
|
47,212 |
|
|
49,034 |
|
Adjusted efficiency ratio (j)/(k) |
|
|
78.88 |
% |
|
79.07 |
% |
|
74.53 |
% |
Alerus Financial Corporation and Subsidiaries Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures (unaudited) (dollars and shares in thousands, except per share data) |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|||||||
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|||
|
|
2024 |
|
2023 |
|
2023 |
|
|||
Adjusted Noninterest Income |
|
|
|
|
|
|
|
|
|
|
Noninterest income |
|
$ |
25,323 |
|
$ |
791 |
|
$ |
25,253 |
|
Add: Net gains (losses) on investment securities |
|
|
— |
|
|
(24,643) |
|
|
— |
|
Adjusted noninterest income |
|
$ |
25,323 |
|
$ |
25,434 |
|
$ |
25,253 |
|
Adjusted Net Interest Margin (Tax-Equivalent) |
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
22,219 |
|
$ |
21,552 |
|
$ |
23,658 |
|
Less: BTFP cash interest income |
|
|
3,615 |
|
|
— |
|
|
— |
|
Add: BTFP interest expense |
|
|
3,266 |
|
|
— |
|
|
— |
|
Net interest income excluding BTFP impact |
|
|
21,870 |
|
|
21,552 |
|
|
23,658 |
|
Add: Tax equivalent adjustment for loans and securities |
|
|
247 |
|
|
226 |
|
|
124 |
|
Adjusted net interest income (l) |
|
$ |
22,117 |
|
$ |
21,778 |
|
$ |
23,782 |
|
Interest earning assets |
|
|
3,921,529 |
|
|
3,645,184 |
|
|
3,567,402 |
|
Less: Average cash proceeds balance from BTFP |
|
|
269,176 |
|
|
— |
|
|
— |
|
Adjusted interest earning assets (m) |
|
$ |
3,652,353 |
|
$ |
3,645,184 |
|
$ |
3,567,402 |
|
Adjusted net interest margin (tax-equivalent) (l)/(m) |
|
|
2.44 |
% |
|
2.37 |
% |
|
2.70 |
% |
|
|
|
|
|
|
|
|
|
|
|
Alerus Financial Corporation and Subsidiaries Analysis of Average Balances, Yields, and Rates (unaudited) (dollars in thousands) |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
||||||||||||||||
|
|
March 31, 2024 |
|
December 31, 2023 |
|
March 31, 2023 |
||||||||||||
|
|
|
|
|
Average |
|
|
|
|
Average |
|
|
|
|
Average |
|||
|
|
Average |
|
Yield/ |
|
Average |
|
Yield/ |
|
Average |
|
Yield/ |
||||||
|
|
Balance |
|
Rate |
|
Balance |
|
Rate |
|
Balance |
|
Rate |
||||||
Interest Earning Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits with banks |
|
$ |
352,038 |
|
5.33 |
% |
|
$ |
33,920 |
|
3.22 |
% |
|
$ |
41,947 |
|
3.23 |
% |
Investment securities (1) |
|
|
775,305 |
|
2.48 |
|
|
|
921,555 |
|
2.70 |
|
|
|
1,034,288 |
|
2.43 |
|
Loans held for sale |
|
|
9,014 |
|
5.67 |
|
|
|
11,421 |
|
6.01 |
|
|
|
10,345 |
|
4.98 |
|
Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
|
|
599,456 |
|
6.93 |
|
|
|
573,174 |
|
6.89 |
|
|
|
559,416 |
|
6.09 |
|
Real estate construction |
|
|
127,587 |
|
8.04 |
|
|
|
117,765 |
|
8.12 |
|
|
|
103,099 |
|
6.56 |
|
Commercial real estate |
|
|
1,134,540 |
|
5.58 |
|
|
|
1,053,812 |
|
5.47 |
|
|
|
911,634 |
|
4.95 |
|
Total commercial |
|
|
1,861,583 |
|
6.18 |
|
|
|
1,744,751 |
|
6.12 |
|
|
|
1,574,149 |
|
5.46 |
|
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential real estate first mortgage |
|
|
723,315 |
|
4.05 |
|
|
|
724,110 |
|
4.00 |
|
|
|
688,754 |
|
3.76 |
|
Residential real estate junior lien |
|
|
154,781 |
|
7.86 |
|
|
|
155,137 |
|
7.86 |
|
|
|
149,720 |
|
7.21 |
|
Other revolving and installment |
|
|
28,835 |
|
6.43 |
|
|
|
29,510 |
|
6.33 |
|
|
|
44,531 |
|
5.86 |
|
Total consumer |
|
|
906,931 |
|
4.77 |
|
|
|
908,757 |
|
4.73 |
|
|
|
883,005 |
|
4.45 |
|
Total loans (1) |
|
|
2,768,514 |
|
5.72 |
|
|
|
2,653,508 |
|
5.64 |
|
|
|
2,457,154 |
|
5.10 |
|
Federal Reserve/FHLB stock |
|
|
16,658 |
|
8.14 |
|
|
|
24,780 |
|
7.48 |
|
|
|
23,668 |
|
6.87 |
|
Total interest earning assets |
|
|
3,921,529 |
|
5.05 |
|
|
|
3,645,184 |
|
4.89 |
|
|
|
3,567,402 |
|
4.31 |
|
Noninterest earning assets |
|
|
217,524 |
|
|
|
|
|
223,022 |
|
|
|
|
|
224,134 |
|
|
|
Total assets |
|
$ |
4,139,053 |
|
|
|
|
$ |
3,868,206 |
|
|
|
|
$ |
3,791,536 |
|
|
|
Interest-Bearing Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand deposits |
|
$ |
869,060 |
|
1.97 |
% |
|
$ |
798,634 |
|
1.65 |
% |
|
$ |
746,660 |
|
0.87 |
% |
Money market and savings deposits |
|
|
1,186,900 |
|
3.77 |
|
|
|
1,092,656 |
|
3.53 |
|
|
|
1,165,269 |
|
2.17 |
|
Time deposits |
|
|
431,679 |
|
4.46 |
|
|
|
383,715 |
|
4.27 |
|
|
|
231,959 |
|
2.23 |
|
Fed funds purchased and Bank Term Funding Program |
|
|
282,614 |
|
4.99 |
|
|
|
189,568 |
|
5.71 |
|
|
|
290,187 |
|
4.85 |
|
Short-term borrowings |
|
|
200,000 |
|
4.99 |
|
|
|
200,000 |
|
5.09 |
|
|
|
80,000 |
|
4.69 |
|
Long-term debt |
|
|
58,971 |
|
4.62 |
|
|
|
58,943 |
|
4.59 |
|
|
|
58,858 |
|
4.51 |
|
Total interest-bearing liabilities |
|
|
3,029,224 |
|
3.56 |
|
|
|
2,723,516 |
|
3.37 |
|
|
|
2,572,933 |
|
2.23 |
|
Noninterest-Bearing Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
|
|
675,926 |
|
|
|
|
|
719,895 |
|
|
|
|
|
789,134 |
|
|
|
Other noninterest-bearing liabilities |
|
|
66,655 |
|
|
|
|
|
75,413 |
|
|
|
|
|
67,612 |
|
|
|
Stockholders’ equity |
|
|
367,248 |
|
|
|
|
|
349,382 |
|
|
|
|
|
361,857 |
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
4,139,053 |
|
|
|
|
$ |
3,868,206 |
|
|
|
|
$ |
3,791,536 |
|
|
|
Net interest income (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate spread |
|
|
|
|
1.49 |
% |
|
|
|
|
1.52 |
% |
|
|
|
|
2.08 |
% |
Net interest margin, tax-equivalent (1) |
|
|
|
|
2.30 |
% |
|
|
|
|
2.37 |
% |
|
|
|
|
2.70 |
% |
(1) |
Taxable-equivalent adjustment was calculated utilizing a marginal income tax rate of |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240424309336/en/
Alan A. Villalon, Chief Financial Officer
952.417.3733 (Office)
Source: Alerus Financial Corporation
FAQ
What was Alerus Financial 's net income for the first quarter of 2024?
How much did total deposits increase by in Q1 2024?
What was the adjusted net interest margin for Alerus Financial in Q1 2024?
What percentage of total revenues did fee income account for in the first quarter of 2024?
What was the CET1 capital ratio for Alerus Financial in Q1 2024?
