Alerus Financial Corporation Reports Fourth Quarter 2020 Net Income of $10.2 Million
Alerus Financial Corporation (Nasdaq: ALRS) reported a fourth-quarter net income of $10.2 million, or $0.57 per diluted share, down from $17.7 million in the previous quarter. Despite this decline, annual net income rose 51.2%, totaling $44.7 million for 2020. Key figures include a net interest margin of 3.23%, a 30.5% increase in deposits year-over-year, and a 15% rise in loans since 2019. The company closed its acquisition of Retirement Planning Services, boosting its market presence in the Rocky Mountain region.
- Annual net income increased by 51.2%, totaling $44.7 million in 2020.
- Deposits rose by $600.7 million, or 30.5%, from the previous year.
- Loans increased by 15.0%, with significant growth in commercial and industrial sectors.
- Net interest income grew by 6.4% quarter-over-quarter.
- Quarterly net income decreased to $10.2 million from $17.7 million in the prior quarter.
- Return on average assets dropped to 1.34%, down from 2.42% in the previous quarter.
- Efficiency ratio worsened to 74.44%, significantly higher than 58.42% in the third quarter.
Alerus Financial Corporation (Nasdaq: ALRS) reported net income of
CEO Comments
Chairman, President, and Chief Executive Officer Randy Newman said, “Alerus continues to be a purpose-driven company, focused on its business model, strategy and culture. In a year filled with so much uncertainty and adversity, our business strategy of serving as trusted advisors to our clients delivered to our shareholders record annual net income of
In this challenging environment we also remain committed to managing expenses. Our ability to continue serving clients and the transition of most of our employees to a remote working environment prompted the closure of six of our 23 offices. We are very proud of our company’s performance, ability to focus on long-term growth for our shareholders through our diversified business model, solid financial foundation and strategic focus on serving clients holistically and in their best interests.”
Quarterly Highlights
-
Return on average assets of
1.34% , compared to2.42% for the third quarter of 2020 -
Return on average tangible common equity(1) of
15.13% , compared to26.67% for the third quarter of 2020 -
Net interest margin (tax-equivalent)(1) was
3.23% , compared to3.17% for the third quarter of 2020 -
Allowance for loan losses to total loans, excluding Paycheck Protection Program, or PPP, loans, was
2.00% , compared to1.83% as of September 30, 2020 -
Efficiency ratio(1) of
74.44% , compared to58.42% for the third quarter of 2020 -
Noninterest income as a percentage of total revenue was
62.57% , compared to67.53% for the third quarter of 2020 -
Mortgage originations totaled
$607.2 million , an18.7% increase from the third quarter of 2020 -
Loans held for investment increased
$258.1 million , or15.0% , from the fourth quarter of 2019 -
Deposits increased
$600.7 million , or30.5% , from the fourth quarter of 2019
(1) |
Represents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.” |
Selected Financial Data (unaudited) |
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As of and for the |
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Three months ended |
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Year ended |
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December 31, |
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September 30, |
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December 31, |
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December 31, |
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December 31, |
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(dollars and shares in thousands, except per share data) |
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2020 |
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2020 |
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2019 |
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2020 |
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2019 |
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Performance Ratios |
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Return on average total assets |
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1.34 |
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% |
|
2.42 |
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% |
|
1.33 |
% |
|
1.61 |
% |
|
1.34 |
% |
Return on average common equity |
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|
12.30 |
|
% |
|
22.31 |
|
% |
|
10.65 |
% |
|
14.40 |
% |
|
12.78 |
% |
Return on average tangible common equity (1) |
|
|
15.13 |
|
% |
|
26.67 |
|
% |
|
13.78 |
% |
|
17.74 |
% |
|
17.46 |
% |
Noninterest income as a % of revenue |
|
|
62.57 |
|
% |
|
67.53 |
|
% |
|
61.56 |
% |
|
64.05 |
% |
|
60.50 |
% |
Net interest margin (tax-equivalent) (1) |
|
|
3.23 |
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% |
|
3.17 |
|
% |
|
3.45 |
% |
|
3.22 |
% |
|
3.65 |
% |
Efficiency ratio (1) |
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|
74.44 |
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% |
|
58.42 |
|
% |
|
73.68 |
% |
|
68.40 |
% |
|
73.22 |
% |
Net charge-offs/(recoveries) to average loans |
|
|
(0.30 |
) |
% |
|
(0.11 |
) |
% |
|
0.20 |
% |
|
0.03 |
% |
|
0.33 |
% |
Dividend payout ratio |
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26.32 |
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% |
|
15.15 |
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% |
|
34.88 |
% |
|
23.81 |
% |
|
29.84 |
% |
Per Common Share |
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Earnings per common share - basic |
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$ |
0.58 |
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$ |
1.01 |
|
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$ |
0.44 |
|
$ |
2.57 |
|
$ |
1.96 |
|
Earnings per common share - diluted |
|
$ |
0.57 |
|
|
$ |
0.99 |
|
|
$ |
0.43 |
|
$ |
2.52 |
|
$ |
1.91 |
|
Dividends declared per common share |
|
$ |
0.15 |
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$ |
0.15 |
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$ |
0.15 |
|
$ |
0.60 |
|
$ |
0.57 |
|
Tangible book value per common share (1) |
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$ |
16.00 |
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$ |
16.31 |
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$ |
14.08 |
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Average common shares outstanding - basic |
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|
17,122 |
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|
|
17,121 |
|
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|
17,049 |
|
|
17,106 |
|
|
14,736 |
|
Average common shares outstanding - diluted |
|
|
17,450 |
|
|
|
17,453 |
|
|
|
17,397 |
|
|
17,438 |
|
|
15,093 |
|
Other Data |
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Retirement and benefit services assets under administration/management |
|
$ |
34,199,954 |
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$ |
30,470,645 |
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$ |
31,904,648 |
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Wealth management assets under administration/management |
|
|
3,338,594 |
|
|
|
3,043,173 |
|
|
|
3,103,056 |
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Mortgage originations |
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|
607,166 |
|
|
|
511,605 |
|
|
|
261,263 |
|
$ |
1,778,977 |
|
$ |
946,441 |
|
(1) |
Represents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.” |
Results of Operations
Net Interest Income
Net interest income for the fourth quarter of 2020 was
Net interest margin (tax-equivalent), a non-GAAP financial measure, was
Noninterest Income
Noninterest income for the fourth quarter of 2020 was
Noninterest income for the fourth quarter of 2020 increased
Noninterest Expense
Noninterest expense for the fourth quarter of 2020 was
Noninterest expense for the fourth quarter of 2020 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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December 31, |
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September 30, |
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June 30, |
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March 31, |
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December 31, |
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(dollars in thousands) |
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2020 |
|
2020 |
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2020 |
|
2020 |
|
2019 |
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Commercial |
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Commercial and industrial (1) |
|
$ |
691,858 |
|
$ |
789,036 |
|
$ |
794,204 |
|
$ |
502,637 |
|
$ |
479,144 |
Real estate construction |
|
|
44,451 |
|
|
33,169 |
|
|
31,344 |
|
|
25,487 |
|
|
26,378 |
Commercial real estate |
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|
563,007 |
|
|
535,216 |
|
|
519,104 |
|
|
522,106 |
|
|
494,703 |
Total commercial |
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|
1,299,316 |
|
|
1,357,421 |
|
|
1,344,652 |
|
|
1,050,230 |
|
|
1,000,225 |
Consumer |
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Residential real estate first mortgage |
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463,370 |
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|
469,050 |
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|
456,737 |
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|
457,895 |
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|
457,155 |
Residential real estate junior lien |
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|
143,416 |
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|
152,487 |
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|
154,351 |
|
|
170,538 |
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|
177,373 |
Other revolving and installment |
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|
73,273 |
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|
79,461 |
|
|
78,457 |
|
|
79,614 |
|
|
86,526 |
Total consumer |
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|
680,059 |
|
|
700,998 |
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|
689,545 |
|
|
708,047 |
|
|
721,054 |
Total loans |
|
$ |
1,979,375 |
|
$ |
2,058,419 |
|
$ |
2,034,197 |
|
$ |
1,758,277 |
|
$ |
1,721,279 |
(1) |
Includes PPP loans of |
Deposits
Total deposits were
The following table presents the composition of our deposit portfolio as of the dates indicated:
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December 31, |
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September 30, |
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June 30, |
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March 31, |
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December 31, |
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(dollars in thousands) |
|
2020 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|||||
Noninterest-bearing demand |
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$ |
754,716 |
|
$ |
693,450 |
|
$ |
700,892 |
|
$ |
608,559 |
|
$ |
577,704 |
Interest-bearing |
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|
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Interest-bearing demand |
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|
618,900 |
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|
590,366 |
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|
579,840 |
|
|
477,752 |
|
|
458,689 |
Savings accounts |
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|
79,902 |
|
|
78,659 |
|
|
75,973 |
|
|
60,181 |
|
|
55,777 |
Money market savings |
|
|
909,137 |
|
|
892,473 |
|
|
892,717 |
|
|
773,652 |
|
|
683,064 |
Time deposits |
|
|
209,338 |
|
|
207,422 |
|
|
203,731 |
|
|
201,370 |
|
|
196,082 |
Total interest-bearing |
|
|
1,817,277 |
|
|
1,768,920 |
|
|
1,752,261 |
|
|
1,512,955 |
|
|
1,393,612 |
Total deposits |
|
$ |
2,571,993 |
|
$ |
2,462,370 |
|
$ |
2,453,153 |
|
$ |
2,121,514 |
|
$ |
1,971,316 |
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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December 31, |
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September 30, |
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June 30, |
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March 31, |
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December 31, |
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(dollars in thousands) |
|
2020 |
|
|
2020 |
|
|
2020 |
|
2020 |
|
|
2019 |
|
|||||
Nonaccrual loans |
|
$ |
5,050 |
|
|
$ |
4,795 |
|
|
$ |
5,328 |
|
$ |
6,959 |
|
|
$ |
7,379 |
|
Accruing loans 90+ days past due |
|
|
30 |
|
|
|
— |
|
|
|
— |
|
|
11 |
|
|
|
448 |
|
Total nonperforming loans |
|
|
5,080 |
|
|
|
4,795 |
|
|
|
5,328 |
|
|
6,970 |
|
|
|
7,827 |
|
OREO and repossessed assets |
|
|
63 |
|
|
|
10 |
|
|
|
26 |
|
|
209 |
|
|
|
8 |
|
Total nonperforming assets |
|
$ |
5,143 |
|
|
$ |
4,805 |
|
|
$ |
5,354 |
|
$ |
7,179 |
|
|
$ |
7,835 |
|
Net charge-offs/(recoveries) |
|
|
(1,509 |
) |
|
|
(581 |
) |
|
|
3,264 |
|
|
(595 |
) |
|
|
857 |
|
Net charge-offs/(recoveries) to average loans |
|
|
(0.30 |
) |
% |
|
(0.11 |
) |
% |
|
0.66 |
% |
|
(0.14 |
) |
% |
|
0.20 |
% |
Nonperforming loans to total loans |
|
|
0.26 |
|
% |
|
0.23 |
|
% |
|
0.26 |
% |
|
0.40 |
|
% |
|
0.45 |
% |
Nonperforming assets to total assets |
|
|
0.17 |
|
% |
|
0.17 |
|
% |
|
0.19 |
% |
|
0.29 |
|
% |
|
0.33 |
% |
Allowance for loan losses to total loans |
|
|
1.73 |
|
% |
|
1.52 |
|
% |
|
1.34 |
% |
|
1.54 |
|
% |
|
1.39 |
% |
Allowance for loan losses to nonperforming loans |
|
|
674 |
|
% |
|
654 |
|
% |
|
512 |
% |
|
388 |
|
% |
|
306 |
% |
For the fourth quarter of 2020, we had net recoveries of
The provision for loan losses for the fourth quarter of 2020 was
The ratio of nonperforming loans to total loans at December 31, 2020 was
During 2020, we had entered into principal and interest deferrals on 577 loans, representing
Capital
Total stockholders’ equity was
The following table presents our capital ratios as of the dates indicated:
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|
December 31, |
|
September 30, |
|
December 31, |
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|
2020 |
|
2020 |
|
2019 |
|
|||
Capital Ratios(1) |
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|
Alerus Financial Corporation |
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital to risk weighted assets |
|
|
12.75 |
% |
|
13.08 |
% |
|
12.48 |
% |
Tier 1 capital to risk weighted assets |
|
|
13.15 |
% |
|
13.48 |
% |
|
12.90 |
% |
Total capital to risk weighted assets |
|
|
16.79 |
% |
|
17.13 |
% |
|
16.73 |
% |
Tier 1 capital to average assets |
|
|
9.24 |
% |
|
9.76 |
% |
|
11.05 |
% |
Tangible common equity / tangible assets (2) |
|
|
9.27 |
% |
|
9.78 |
% |
|
10.38 |
% |
|
|
|
|
|
|
|
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|
Alerus Financial, N.A. |
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|
|
|
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|
|
Common equity tier 1 capital to risk weighted assets |
|
|
12.10 |
% |
|
12.47 |
% |
|
11.91 |
% |
Tier 1 capital to risk weighted assets |
|
|
12.10 |
% |
|
12.47 |
% |
|
11.91 |
% |
Total capital to risk weighted assets |
|
|
13.36 |
% |
|
13.72 |
% |
|
13.15 |
% |
Tier 1 capital to average assets |
|
|
8.50 |
% |
|
9.03 |
% |
|
10.20 |
% |
(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 9:00 a.m. Central Time on Thursday, January 28, 2021, to discuss its financial results. The call can be accessed via telephone at (888) 317-6016. 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 is a diversified financial services company headquartered in Grand Forks, ND. Through its subsidiary, Alerus Financial, N.A., Alerus provides innovative and comprehensive financial solutions to businesses and consumers through four distinct business segments—banking, retirement and benefit services, wealth management, and mortgage. These solutions are delivered through a relationship-oriented primary point of contact along with responsive and client-friendly technology. Alerus Financial banking and wealth management offices are located in Grand Forks and Fargo, ND, the Minneapolis-St. Paul, MN metropolitan area and Scottsdale and Mesa, AZ. Alerus Retirement and Benefits plan administration offices are located in St. Paul, MN, East Lansing, MI, and Littleton, CO.
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 common equity per share, return on average tangible common equity, net interest margin (tax-equivalent), and the efficiency ratio. 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. 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 we calculate 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 we make 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 the future of 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 the 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 the forward-looking statements include, among others, the following: the effects of the COVID-19 pandemic, including its effects on the economic environment, our clients, and our operations, as well as any changes to federal, state, or local government laws, regulations, or orders in response to the pandemic; our ability to successfully manage credit risk and maintain an adequate level of allowance for loan losses; new or revised accounting standards, including as a result of the implementation of the new Current Expected Credit Loss Standard; business and economic conditions generally and in the financial services industry, nationally and within our market areas; 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; 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 information security controls or cybersecurity-related incidents; 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; our ability to successfully manage liquidity risk; 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 we may become subject; potential impairment to the goodwill we recorded in connection with our past acquisitions; the extensive regulatory framework that applies to us; the impact of recent and future legislative and regulatory changes; interest rate risks associated with our business; fluctuations in the values of the securities held in our securities portfolio; governmental monetary, trade and fiscal policies; severe weather, natural disasters, widespread disease or pandemics, such as the COVID-19 global pandemic, acts of war or terrorism or other adverse external events; any material weaknesses in our internal control over financial reporting; developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate, as well as other alternative rates; our success at managing the risks involved in the foregoing items; and any other risks described in the “Risk Factors” sections of the reports filed by Alerus Financial Corporation with the Securities and Exchange Commission.
Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake 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 and shares in thousands, except per share data) |
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|
|
December 31, |
|
December 31, |
||||
|
|
2020 |
|
|
2019 |
|
||
Assets |
|
(Unaudited) |
|
(Audited) |
||||
Cash and cash equivalents |
|
$ |
172,962 |
|
|
$ |
144,006 |
|
Investment securities, at fair value |
|
|
|
|
|
|
||
Available-for-sale |
|
|
592,342 |
|
|
|
310,350 |
|
Equity |
|
|
— |
|
|
|
2,808 |
|
Loans held for sale |
|
|
122,440 |
|
|
|
46,846 |
|
Loans |
|
|
1,979,375 |
|
|
|
1,721,279 |
|
Allowance for loan losses |
|
|
(34,246 |
) |
|
|
(23,924 |
) |
Net loans |
|
|
1,945,129 |
|
|
|
1,697,355 |
|
Land, premises and equipment, net |
|
|
20,289 |
|
|
|
20,629 |
|
Operating lease right-of-use assets |
|
|
6,918 |
|
|
|
8,343 |
|
Accrued interest receivable |
|
|
9,662 |
|
|
|
7,551 |
|
Bank-owned life insurance |
|
|
32,363 |
|
|
|
31,566 |
|
Goodwill |
|
|
30,201 |
|
|
|
27,329 |
|
Other intangible assets |
|
|
25,919 |
|
|
|
18,391 |
|
Servicing rights |
|
|
1,987 |
|
|
|
3,845 |
|
Deferred income taxes, net |
|
|
9,409 |
|
|
|
7,891 |
|
Other assets |
|
|
44,150 |
|
|
|
29,968 |
|
Total assets |
|
$ |
3,013,771 |
|
|
$ |
2,356,878 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
||
Deposits |
|
|
|
|
|
|
||
Noninterest-bearing |
|
$ |
754,716 |
|
|
$ |
577,704 |
|
Interest-bearing |
|
|
1,817,277 |
|
|
|
1,393,612 |
|
Total deposits |
|
|
2,571,993 |
|
|
|
1,971,316 |
|
Long-term debt |
|
|
58,735 |
|
|
|
58,769 |
|
Operating lease liabilities |
|
|
7,861 |
|
|
|
8,864 |
|
Accrued expenses and other liabilities |
|
|
45,019 |
|
|
|
32,201 |
|
Total liabilities |
|
|
2,683,608 |
|
|
|
2,071,150 |
|
Stockholders’ equity |
|
|
|
|
|
|
||
Preferred stock, |
|
|
— |
|
|
|
— |
|
Common stock, |
|
|
17,125 |
|
|
|
17,050 |
|
Additional paid-in capital |
|
|
90,237 |
|
|
|
88,650 |
|
Retained earnings |
|
|
212,163 |
|
|
|
178,092 |
|
Accumulated other comprehensive income (loss) |
|
|
10,638 |
|
|
|
1,936 |
|
Total stockholders’ equity |
|
|
330,163 |
|
|
|
285,728 |
|
Total liabilities and stockholders’ equity |
|
$ |
3,013,771 |
|
|
$ |
2,356,878 |
|
Alerus Financial Corporation and Subsidiaries Consolidated Statements of Income (dollars and shares in thousands, except per share data) |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Year ended |
|||||||||||
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|||||
|
|
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||
Interest Income |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Audited) |
|||||
Loans, including fees |
|
$ |
22,549 |
|
$ |
21,962 |
|
$ |
20,659 |
|
$ |
86,425 |
|
$ |
85,830 |
Investment securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
2,301 |
|
|
1,973 |
|
|
1,555 |
|
|
7,798 |
|
|
5,576 |
Exempt from federal income taxes |
|
|
237 |
|
|
238 |
|
|
180 |
|
|
949 |
|
|
798 |
Other |
|
|
114 |
|
|
116 |
|
|
493 |
|
|
930 |
|
|
1,096 |
Total interest income |
|
|
25,201 |
|
|
24,289 |
|
|
22,887 |
|
|
96,102 |
|
|
93,300 |
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
1,210 |
|
|
1,683 |
|
|
3,532 |
|
|
8,843 |
|
|
13,334 |
Short-term borrowings |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,805 |
Long-term debt |
|
|
838 |
|
|
841 |
|
|
896 |
|
|
3,413 |
|
|
3,610 |
Total interest expense |
|
|
2,048 |
|
|
2,524 |
|
|
4,428 |
|
|
12,256 |
|
|
18,749 |
Net interest income |
|
|
23,153 |
|
|
21,765 |
|
|
18,459 |
|
|
83,846 |
|
|
74,551 |
Provision for loan losses |
|
|
1,400 |
|
|
3,500 |
|
|
1,797 |
|
|
10,900 |
|
|
7,312 |
Net interest income after provision for loan losses |
|
|
21,753 |
|
|
18,265 |
|
|
16,662 |
|
|
72,946 |
|
|
67,239 |
Noninterest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement and benefit services |
|
|
15,922 |
|
|
15,104 |
|
|
17,669 |
|
|
60,956 |
|
|
63,811 |
Wealth management |
|
|
4,807 |
|
|
4,486 |
|
|
4,117 |
|
|
17,451 |
|
|
15,502 |
Mortgage banking |
|
|
16,781 |
|
|
22,269 |
|
|
6,066 |
|
|
61,641 |
|
|
25,805 |
Service charges on deposit accounts |
|
|
334 |
|
|
355 |
|
|
451 |
|
|
1,409 |
|
|
1,772 |
Net gains (losses) on investment securities |
|
|
15 |
|
|
1,428 |
|
|
— |
|
|
2,737 |
|
|
357 |
Other |
|
|
837 |
|
|
1,614 |
|
|
1,253 |
|
|
5,177 |
|
|
6,947 |
Total noninterest income |
|
|
38,696 |
|
|
45,256 |
|
|
29,556 |
|
|
149,371 |
|
|
114,194 |
Noninterest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
|
26,522 |
|
|
22,740 |
|
|
19,021 |
|
|
89,206 |
|
|
74,018 |
Employee taxes and benefits |
|
|
4,962 |
|
|
5,033 |
|
|
4,268 |
|
|
20,050 |
|
|
19,456 |
Occupancy and equipment expense |
|
|
2,681 |
|
|
2,768 |
|
|
2,665 |
|
|
11,073 |
|
|
10,751 |
Business services, software and technology expense |
|
|
5,740 |
|
|
4,420 |
|
|
4,337 |
|
|
19,124 |
|
|
16,381 |
Intangible amortization expense |
|
|
990 |
|
|
990 |
|
|
990 |
|
|
3,961 |
|
|
4,081 |
Professional fees and assessments |
|
|
1,469 |
|
|
1,031 |
|
|
865 |
|
|
4,700 |
|
|
4,011 |
Marketing and business development |
|
|
1,045 |
|
|
929 |
|
|
1,138 |
|
|
3,133 |
|
|
3,162 |
Supplies and postage |
|
|
544 |
|
|
247 |
|
|
695 |
|
|
2,169 |
|
|
2,722 |
Travel |
|
|
21 |
|
|
26 |
|
|
452 |
|
|
359 |
|
|
1,787 |
Mortgage and lending expenses |
|
|
1,573 |
|
|
1,231 |
|
|
887 |
|
|
5,039 |
|
|
2,853 |
Other |
|
|
1,578 |
|
|
799 |
|
|
1,117 |
|
|
4,985 |
|
|
3,315 |
Total noninterest expense |
|
|
47,125 |
|
|
40,214 |
|
|
36,435 |
|
|
163,799 |
|
|
142,537 |
Income before income taxes |
|
|
13,324 |
|
|
23,307 |
|
|
9,783 |
|
|
58,518 |
|
|
38,896 |
Income tax expense |
|
|
3,144 |
|
|
5,648 |
|
|
2,131 |
|
|
13,843 |
|
|
9,356 |
Net income |
|
$ |
10,180 |
|
$ |
17,659 |
|
$ |
7,652 |
|
$ |
44,675 |
|
$ |
29,540 |
Per Common Share Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share |
|
$ |
0.58 |
|
$ |
1.01 |
|
$ |
0.44 |
|
$ |
2.57 |
|
$ |
1.96 |
Diluted earnings per common share |
|
$ |
0.57 |
|
$ |
0.99 |
|
$ |
0.43 |
|
$ |
2.52 |
|
$ |
1.91 |
Dividends declared per common share |
|
$ |
0.15 |
|
$ |
0.15 |
|
$ |
0.15 |
|
$ |
0.60 |
|
$ |
0.57 |
Average common shares outstanding |
|
|
17,122 |
|
|
17,121 |
|
|
17,049 |
|
|
17,106 |
|
|
14,736 |
Diluted average common shares outstanding |
|
|
17,450 |
|
|
17,453 |
|
|
17,397 |
|
|
17,438 |
|
|
15,093 |
Alerus Financial Corporation and Subsidiaries Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures (unaudited) (dollars and shares in thousands, except per share data) |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
|||
|
|
2020 |
|
2020 |
|
2019 |
|
|||
Tangible Common Equity to Tangible Assets |
|
|
|
|
|
|
|
|
|
|
Total common stockholders’ equity |
|
$ |
330,163 |
|
$ |
322,003 |
|
$ |
285,728 |
|
Less: Goodwill |
|
|
30,201 |
|
|
27,329 |
|
|
27,329 |
|
Less: Other intangible assets |
|
|
25,919 |
|
|
15,421 |
|
|
18,391 |
|
Tangible common equity (a) |
|
|
274,043 |
|
|
279,253 |
|
|
240,008 |
|
Total assets |
|
|
3,013,771 |
|
|
2,898,809 |
|
|
2,356,878 |
|
Less: Goodwill |
|
|
30,201 |
|
|
27,329 |
|
|
27,329 |
|
Less: Other intangible assets |
|
|
25,919 |
|
|
15,421 |
|
|
18,391 |
|
Tangible assets (b) |
|
|
2,957,651 |
|
|
2,856,059 |
|
|
2,311,158 |
|
Tangible common equity to tangible assets (a)/(b) |
|
|
9.27 |
% |
|
9.78 |
% |
|
10.38 |
% |
Tangible Book Value Per Common Share |
|
|
|
|
|
|
|
|
|
|
Total common stockholders’ equity |
|
$ |
330,163 |
|
$ |
322,003 |
|
$ |
285,728 |
|
Less: Goodwill |
|
|
30,201 |
|
|
27,329 |
|
|
27,329 |
|
Less: Other intangible assets |
|
|
25,919 |
|
|
15,421 |
|
|
18,391 |
|
Tangible common equity (c) |
|
|
274,043 |
|
|
279,253 |
|
|
240,008 |
|
Total common shares issued and outstanding (d) |
|
|
17,125 |
|
|
17,122 |
|
|
17,050 |
|
Tangible book value per common share (c)/(d) |
|
$ |
16.00 |
|
$ |
16.31 |
|
$ |
14.08 |
|
|
|
Three months ended |
|
Year ended |
|
|||||||||||
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|||||
|
|
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|||||
Return on Average Tangible Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
10,180 |
|
$ |
17,659 |
|
$ |
7,652 |
|
$ |
44,675 |
|
$ |
29,540 |
|
Add: Intangible amortization expense (net of tax) |
|
|
782 |
|
|
782 |
|
|
782 |
|
|
3,129 |
|
|
3,224 |
|
Net income, excluding intangible amortization (e) |
|
|
10,962 |
|
|
18,441 |
|
|
8,434 |
|
|
47,804 |
|
|
32,764 |
|
Average total equity |
|
|
329,210 |
|
|
314,921 |
|
|
285,017 |
|
|
310,208 |
|
|
231,084 |
|
Less: Average goodwill |
|
|
27,766 |
|
|
27,329 |
|
|
27,329 |
|
|
27,439 |
|
|
27,329 |
|
Less: Average other intangible assets (net of tax) |
|
|
13,206 |
|
|
12,565 |
|
|
14,912 |
|
|
13,309 |
|
|
16,101 |
|
Average tangible common equity (f) |
|
|
288,238 |
|
|
275,027 |
|
|
242,776 |
|
|
269,460 |
|
|
187,654 |
|
Return on average tangible common equity (e)/(f) |
|
|
15.13 |
% |
|
26.67 |
% |
|
13.78 |
% |
|
17.74 |
% |
|
17.46 |
% |
Net Interest Margin (tax-equivalent) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
23,153 |
|
$ |
21,765 |
|
$ |
18,459 |
|
$ |
83,846 |
|
$ |
74,551 |
|
Tax-equivalent adjustment |
|
|
131 |
|
|
116 |
|
|
89 |
|
|
455 |
|
|
347 |
|
Tax-equivalent net interest income (g) |
|
|
23,284 |
|
|
21,881 |
|
|
18,548 |
|
|
84,301 |
|
|
74,898 |
|
Average earning assets (h) |
|
|
2,869,767 |
|
|
2,744,758 |
|
|
2,135,682 |
|
|
2,618,427 |
|
|
2,052,758 |
|
Net interest margin (tax-equivalent) (g)/(h) |
|
|
3.23 |
% |
|
3.17 |
% |
|
3.45 |
% |
|
3.22 |
% |
|
3.65 |
% |
Efficiency Ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense |
|
$ |
47,125 |
|
$ |
40,214 |
|
$ |
36,435 |
|
$ |
163,799 |
|
$ |
142,537 |
|
Less: Intangible amortization expense |
|
|
990 |
|
|
990 |
|
|
990 |
|
|
3,961 |
|
|
4,081 |
|
Adjusted noninterest expense (i) |
|
|
46,135 |
|
|
39,224 |
|
|
35,445 |
|
|
159,838 |
|
|
138,456 |
|
Net interest income |
|
|
23,153 |
|
|
21,765 |
|
|
18,459 |
|
|
83,846 |
|
|
74,551 |
|
Noninterest income |
|
|
38,696 |
|
|
45,256 |
|
|
29,556 |
|
|
149,371 |
|
|
114,194 |
|
Tax-equivalent adjustment |
|
|
131 |
|
|
116 |
|
|
89 |
|
|
455 |
|
|
347 |
|
Total tax-equivalent revenue (j) |
|
|
61,980 |
|
|
67,137 |
|
|
48,104 |
|
|
233,672 |
|
|
189,092 |
|
Efficiency ratio (i)/(j) |
|
|
74.44 |
% |
|
58.42 |
% |
|
73.68 |
% |
|
68.40 |
% |
|
73.22 |
% |
Alerus Financial Corporation and Subsidiaries Analysis of Average Balances, Yields, and Rates (unaudited) (dollars in thousands) |
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Year ended |
||||||||||||||||||||||||||
|
|
December 31, 2020 |
|
September 30, 2020 |
|
December 31, 2019 |
|
December 31, 2020 |
|
December 31, 2019 |
||||||||||||||||||||
|
|
|
|
|
Average |
|
|
|
|
Average |
|
|
|
|
Average |
|
|
|
|
Average |
|
|
|
|
Average |
|||||
|
|
Average |
|
Yield/ |
|
Average |
|
Yield/ |
|
Average |
|
Yield/ |
|
Average |
|
Yield/ |
|
Average |
|
Yield/ |
||||||||||
|
|
Balance |
|
Rate |
|
Balance |
|
Rate |
|
Balance |
|
Rate |
|
Balance |
|
Rate |
|
Balance |
|
Rate |
||||||||||
Interest Earning Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits with banks |
|
$ |
164,052 |
|
0.12 |
% |
|
$ |
169,770 |
|
0.12 |
% |
|
$ |
100,058 |
|
1.69 |
% |
|
$ |
162,616 |
|
0.41 |
% |
|
$ |
34,876 |
|
1.88 |
% |
Investment securities (1) |
|
|
549,198 |
|
1.88 |
% |
|
|
443,705 |
|
2.04 |
% |
|
|
296,773 |
|
2.38 |
% |
|
|
425,219 |
|
2.12 |
% |
|
|
266,204 |
|
2.47 |
% |
Loans held for sale |
|
|
122,820 |
|
2.18 |
% |
|
|
90,634 |
|
2.44 |
% |
|
|
51,766 |
|
3.01 |
% |
|
|
79,201 |
|
2.46 |
% |
|
|
36,035 |
|
3.16 |
% |
Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
|
|
745,415 |
|
4.91 |
% |
|
|
782,853 |
|
4.34 |
% |
|
|
473,489 |
|
5.30 |
% |
|
|
687,266 |
|
4.60 |
% |
|
|
500,652 |
|
5.45 |
% |
Real estate construction |
|
|
40,009 |
|
4.31 |
% |
|
|
32,747 |
|
4.47 |
% |
|
|
23,901 |
|
5.20 |
% |
|
|
32,804 |
|
4.54 |
% |
|
|
23,625 |
|
5.45 |
% |
Commercial real estate |
|
|
545,432 |
|
3.82 |
% |
|
|
525,514 |
|
4.02 |
% |
|
|
460,457 |
|
4.71 |
% |
|
|
523,219 |
|
4.18 |
% |
|
|
448,869 |
|
4.95 |
% |
Total commercial |
|
|
1,330,856 |
|
4.45 |
% |
|
|
1,341,114 |
|
4.22 |
% |
|
|
957,847 |
|
5.01 |
% |
|
|
1,243,289 |
|
4.42 |
% |
|
|
973,146 |
|
5.22 |
% |
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential real estate first mortgage |
|
|
471,125 |
|
3.73 |
% |
|
|
460,995 |
|
3.96 |
% |
|
|
454,854 |
|
4.15 |
% |
|
|
463,174 |
|
3.97 |
% |
|
|
455,635 |
|
4.23 |
% |
Residential real estate junior lien |
|
|
149,456 |
|
4.72 |
% |
|
|
153,326 |
|
4.54 |
% |
|
|
179,714 |
|
5.29 |
% |
|
|
159,844 |
|
4.81 |
% |
|
|
184,972 |
|
5.63 |
% |
Other revolving and installment |
|
|
76,466 |
|
4.53 |
% |
|
|
79,343 |
|
4.50 |
% |
|
|
88,896 |
|
4.69 |
% |
|
|
79,238 |
|
4.57 |
% |
|
|
93,226 |
|
4.65 |
% |
Total consumer |
|
|
697,047 |
|
4.03 |
% |
|
|
693,664 |
|
4.15 |
% |
|
|
723,464 |
|
4.50 |
% |
|
|
702,256 |
|
4.23 |
% |
|
|
733,833 |
|
4.64 |
% |
Total loans (1) |
|
|
2,027,903 |
|
4.30 |
% |
|
|
2,034,778 |
|
4.20 |
% |
|
|
1,681,311 |
|
4.79 |
% |
|
|
1,945,545 |
|
4.35 |
% |
|
|
1,706,979 |
|
4.97 |
% |
Federal Reserve/FHLB stock |
|
|
5,794 |
|
4.46 |
% |
|
|
5,871 |
|
4.40 |
% |
|
|
5,774 |
|
4.67 |
% |
|
|
5,846 |
|
4.55 |
% |
|
|
8,664 |
|
5.08 |
% |
Total interest earning assets |
|
|
2,869,767 |
|
3.51 |
% |
|
|
2,744,758 |
|
3.54 |
% |
|
|
2,135,682 |
|
4.27 |
% |
|
|
2,618,427 |
|
3.69 |
% |
|
|
2,052,758 |
|
4.56 |
% |
Noninterest earning assets |
|
|
158,417 |
|
|
|
|
|
163,386 |
|
|
|
|
|
153,838 |
|
|
|
|
|
156,713 |
|
|
|
|
|
159,235 |
|
|
|
Total assets |
|
$ |
3,028,184 |
|
|
|
|
$ |
2,908,144 |
|
|
|
|
$ |
2,289,520 |
|
|
|
|
$ |
2,775,140 |
|
|
|
|
$ |
2,211,993 |
|
|
|
Interest-Bearing Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand deposits |
|
$ |
622,854 |
|
0.19 |
% |
|
$ |
589,633 |
|
0.27 |
% |
|
$ |
442,945 |
|
0.52 |
% |
|
$ |
551,861 |
|
0.29 |
% |
|
$ |
428,162 |
|
0.47 |
% |
Money market and savings deposits |
|
|
1,012,497 |
|
0.20 |
% |
|
|
961,669 |
|
0.32 |
% |
|
|
698,533 |
|
1.19 |
% |
|
|
920,072 |
|
0.53 |
% |
|
|
681,621 |
|
1.22 |
% |
Time deposits |
|
|
208,378 |
|
0.79 |
% |
|
|
204,969 |
|
0.98 |
% |
|
|
195,963 |
|
1.72 |
% |
|
|
203,413 |
|
1.16 |
% |
|
|
186,781 |
|
1.62 |
% |
Short-term borrowings |
|
|
— |
|
— |
% |
|
|
— |
|
— |
% |
|
|
— |
|
— |
% |
|
|
80 |
|
— |
% |
|
|
71,421 |
|
2.53 |
% |
Long-term debt |
|
|
58,726 |
|
5.68 |
% |
|
|
58,739 |
|
5.70 |
% |
|
|
58,760 |
|
6.05 |
% |
|
|
58,742 |
|
5.81 |
% |
|
|
58,789 |
|
6.14 |
% |
Total interest-bearing liabilities |
|
|
1,902,455 |
|
0.43 |
% |
|
|
1,815,010 |
|
0.55 |
% |
|
|
1,396,201 |
|
1.26 |
% |
|
|
1,734,168 |
|
0.71 |
% |
|
|
1,426,774 |
|
1.31 |
% |
Noninterest-Bearing Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
|
|
738,319 |
|
|
|
|
|
698,594 |
|
|
|
|
|
559,363 |
|
|
|
|
|
673,676 |
|
|
|
|
|
512,586 |
|
|
|
Other noninterest-bearing liabilities |
|
|
58,200 |
|
|
|
|
|
79,619 |
|
|
|
|
|
48,939 |
|
|
|
|
|
57,088 |
|
|
|
|
|
41,549 |
|
|
|
Stockholders’ equity |
|
|
329,210 |
|
|
|
|
|
314,921 |
|
|
|
|
|
285,017 |
|
|
|
|
|
310,208 |
|
|
|
|
|
231,084 |
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
3,028,184 |
|
|
|
|
$ |
2,908,144 |
|
|
|
|
$ |
2,289,520 |
|
|
|
|
$ |
2,775,140 |
|
|
|
|
$ |
2,211,993 |
|
|
|
Net interest rate spread |
|
|
|
|
3.08 |
% |
|
|
|
|
2.99 |
% |
|
|
|
|
3.01 |
% |
|
|
|
|
2.98 |
% |
|
|
|
|
3.25 |
% |
Net interest margin, tax-equivalent (2) |
|
|
|
|
3.23 |
% |
|
|
|
|
3.17 |
% |
|
|
|
|
3.45 |
% |
|
|
|
|
3.22 |
% |
|
|
|
|
3.65 |
% |
(1) |
Taxable-equivalent adjustment was calculated utilizing a marginal income tax rate of |
(2) |
Represents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.” |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210127005207/en/
FAQ
What was Alerus Financial's net income for the fourth quarter of 2020?
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What was the increase in deposits for Alerus Financial year-over-year?
What is the current stock symbol for Alerus Financial Corporation?
When did Alerus Financial close its acquisition of Retirement Planning Services?
