Alerus Financial Corporation Reports Second Quarter 2021 Net Income of $11.7 Million
Alerus Financial Corporation (Nasdaq: ALRS) reported a net income of $11.7 million for Q2 2021, reflecting a 23% decline from Q1 2021's $15.2 million. Earnings per diluted share were $0.66, compared to $0.86 in Q1. Notable metrics include a 1.50% return on average total assets, down from 2.02% in Q1, and a net interest margin of 2.88%, which also decreased. Noninterest income fell by 10.1% sequentially due to a drop in mortgage banking revenue. Total loans decreased by 7.3% since December 2020, while deposits rose by 5.4%.
- Mortgage originations increased by 5.3% from Q1 2021, totaling $545.4 million.
- Deposits rose by $138.9 million, or 5.4%, indicating strong client retention and inflow.
- Net income decreased by 23% quarter-over-quarter, impacting earnings per share.
- Return on average total assets dropped to 1.50% from 2.02% in the previous quarter.
- Noninterest income fell by $4.1 million, or 10.1%, primarily due to a decline in mortgage banking revenue.
Alerus Financial Corporation (Nasdaq: ALRS) reported net income of
CEO Comments
Chairman, President, and Chief Executive Officer Randy Newman said, “Alerus continues to deliver top tier financial performance, driven by our long-term strategies and focus on offering valued advice to clients, resulting in extraordinary revenue diversification and growth opportunities. Alerus continues to establish itself as a premier provider of holistic solutions to our consumer and business clients. Our client base of more than 540,000 consumer clients and 18,300 business clients is a significant differentiator in our ability to continue to grow and provide superior returns to our shareholders.
Our diversified business is rooted by our long-standing culture, focused on advice and working in the best interests of our clients, a foundation which has been built over decades of meeting our clients on their financial journey and guiding them to their path for financial success. This relationship focused model is a key differentiator both in working with clients and attracting talented professionals to our organization.
During the quarter we strengthened our U.S. Small Business Administration, or SBA, lending capabilities with the addition of an experienced SBA team. Led by industry veteran John Kimball, who most recently served as SBA lending manager at a large, regional community bank, the five-person team collectively has more than 100 years of business banking and small business lending experience at community and regional banks. These team members are aligned with our culture of providing expertise and value to our business clients so they can continue to grow and expand.”
Quarterly Highlights
-
Return on average total assets of
1.50% , compared to2.02% for the first quarter of 2021 -
Return on average tangible common equity(1) of
17.36% , compared to23.03% for the first quarter of 2021 -
Net interest margin (tax-equivalent)(1) was
2.88% , compared to3.12% for the first quarter of 2021 -
Allowance for loan losses to total loans, excluding Paycheck Protection Program, or PPP, loans, was
2.02% , compared to2.00% as of December 31, 2020 -
Efficiency ratio(1) of
71.46% , compared to66.43% for the first quarter of 2021 -
Noninterest income decreased
$4.1 million from the first quarter of 2021 and was63.48% of total revenue, compared to64.97% for the first quarter of 2021 -
Mortgage originations totaled
$545.4 million , a5.3% increase from the first quarter of 2021 -
Investment securities increased
$205.5 million , or34.7% , from the fourth quarter of 2020 -
Loans held for sale decreased
$55.6 million , or45.4% , from the fourth quarter of 2020 -
Loans held for investment decreased
$144.1 million , or7.3% , from the fourth quarter of 2020 -
Deposits increased
$138.9 million , or5.4% , from the fourth quarter of 2020
(1) |
Represents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.” |
|
||||||||||||||||||||
Selected Financial Data (unaudited) |
||||||||||||||||||||
As of and for the |
||||||||||||||||||||
Three months ended |
|
Six months ended |
||||||||||||||||||
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
||||||||||||
(dollars and shares in thousands, except per share data) |
|
2021 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
Performance Ratios |
|
|||||||||||||||||||
Return on average total assets |
|
1.50 |
% |
|
2.02 |
% |
|
1.68 |
% |
|
1.76 |
% |
|
1.31 |
% |
|||||
Return on average common equity |
|
13.82 |
% |
|
18.46 |
% |
|
15.30 |
% |
|
16.11 |
% |
|
11.35 |
% |
|||||
Return on average tangible common equity (1) |
|
17.36 |
% |
|
23.03 |
% |
|
18.88 |
% |
|
20.15 |
% |
|
14.39 |
% |
|||||
Noninterest income as a % of revenue |
|
63.48 |
% |
|
64.97 |
% |
|
65.55 |
% |
|
64.26 |
% |
|
62.69 |
% |
|||||
Net interest margin (tax-equivalent) (1) |
|
2.88 |
% |
|
3.12 |
% |
|
3.14 |
% |
|
3.00 |
% |
|
3.24 |
% |
|||||
Efficiency ratio (1) |
|
71.46 |
% |
|
66.43 |
% |
|
66.31 |
% |
|
68.84 |
% |
|
71.23 |
% |
|||||
Net charge-offs/(recoveries) to average loans |
|
— |
% |
|
0.10 |
% |
|
0.66 |
% |
|
0.05 |
% |
|
0.29 |
% |
|||||
Dividend payout ratio |
|
24.24 |
% |
|
17.44 |
% |
|
23.08 |
% |
|
20.39 |
% |
|
31.58 |
% |
|||||
Per Common Share |
|
|
|
|
|
|||||||||||||||
Earnings per common share - basic |
$ |
0.67 |
|
$ |
0.87 |
|
$ |
0.66 |
|
$ |
1.54 |
|
$ |
0.97 |
|
|||||
Earnings per common share - diluted |
$ |
0.66 |
|
$ |
0.86 |
|
$ |
0.65 |
|
$ |
1.52 |
|
$ |
0.95 |
|
|||||
Dividends declared per common share |
$ |
0.16 |
|
$ |
0.15 |
|
$ |
0.15 |
|
$ |
0.31 |
|
$ |
0.30 |
|
|||||
Tangible book value per common share (1) |
$ |
16.89 |
|
$ |
15.95 |
|
$ |
15.30 |
|
|
|
|||||||||
Average common shares outstanding - basic |
|
17,194 |
|
|
17,145 |
|
|
17,111 |
|
|
17,170 |
|
|
17,091 |
|
|||||
Average common shares outstanding - diluted |
|
17,497 |
|
|
17,465 |
|
|
17,445 |
|
|
17,482 |
|
|
17,425 |
|
|||||
Other Data |
|
|
|
|
|
|||||||||||||||
Retirement and benefit services assets under administration/management |
$ |
36,964,961 |
|
$ |
34,774,650 |
|
$ |
30,093,095 |
|
|||||||||||
Wealth management assets under administration/management |
|
3,538,959 |
|
|
3,357,530 |
|
|
2,957,213 |
|
|
|
|||||||||
Mortgage originations |
|
545,437 |
|
|
518,014 |
|
|
431,638 |
|
$ |
1,063,451 |
|
$ |
660,206 |
|
|||||
(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 second quarter of 2021 was
Net interest margin (tax-equivalent), a non-GAAP financial measure, was
Noninterest Income
Noninterest income for the second quarter of 2021 was
Noninterest income for the second quarter of 2021 decreased
Noninterest Expense
Noninterest expense for the second quarter of 2021 was
Noninterest expense for the second quarter of 2021 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:
(dollars in thousands) |
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
||||||
Commercial |
|
|
|
|
|
||||||||||
Commercial and industrial (1) |
$ |
572,734 |
$ |
678,029 |
$ |
691,858 |
$ |
789,036 |
$ |
794,204 |
|||||
Real estate construction |
|
36,549 |
|
40,473 |
|
44,451 |
|
33,169 |
|
31,344 |
|||||
Commercial real estate |
|
567,987 |
|
569,451 |
|
563,007 |
|
535,216 |
|
519,104 |
|||||
Total commercial |
|
1,177,270 |
|
1,287,953 |
|
1,299,316 |
|
1,357,421 |
|
1,344,652 |
|||||
Consumer |
|
|
|
|
|
||||||||||
Residential real estate first mortgage |
|
470,822 |
|
454,958 |
|
463,370 |
|
469,050 |
|
456,737 |
|||||
Residential real estate junior lien |
|
130,180 |
|
130,299 |
|
143,416 |
|
152,487 |
|
154,351 |
|||||
Other revolving and installment |
|
57,040 |
|
64,135 |
|
73,273 |
|
79,461 |
|
78,457 |
|||||
Total consumer |
|
658,042 |
|
649,392 |
|
680,059 |
|
700,998 |
|
689,545 |
|||||
Total loans |
$ |
1,835,312 |
$ |
1,937,345 |
$ |
1,979,375 |
$ |
2,058,419 |
$ |
2,034,197 |
|||||
| __________________________________ | |
(1)
|
Includes PPP loans of |
Deposits
Total deposits were
The following table presents the composition of our deposit portfolio as of the dates indicated:
(dollars in thousands) |
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
||||||
Noninterest-bearing demand |
$ |
758,820 |
$ |
775,434 |
$ |
754,716 |
$ |
693,450 |
$ |
700,892 |
|||||
Interest-bearing |
|
|
|
|
|
||||||||||
Interest-bearing demand |
|
736,043 |
|
674,466 |
|
618,900 |
|
590,366 |
|
579,840 |
|||||
Savings accounts |
|
89,437 |
|
87,492 |
|
79,902 |
|
78,659 |
|
75,973 |
|||||
Money market savings |
|
920,831 |
|
967,273 |
|
909,137 |
|
892,473 |
|
892,717 |
|||||
Time deposits |
|
205,809 |
|
212,908 |
|
209,338 |
|
207,422 |
|
203,731 |
|||||
Total interest-bearing |
|
1,952,120 |
|
1,942,139 |
|
1,817,277 |
|
1,768,920 |
|
1,752,261 |
|||||
Total deposits |
$ |
2,710,940 |
$ |
2,717,573 |
$ |
2,571,993 |
$ |
2,462,370 |
$ |
2,453,153 |
|||||
Asset Quality
Total nonperforming assets were
The following table presents selected asset quality data as of and for the periods indicated:
As of and for the three months ended |
||||||||||||||||||||
(dollars in thousands) |
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|||||||||||
Nonaccrual loans |
$ |
6,960 |
|
$ |
4,756 |
|
$ |
5,050 |
|
$ |
4,795 |
|
$ |
5,328 |
|
|||||
Accruing loans 90+ days past due |
|
— |
|
|
— |
|
|
30 |
|
|
— |
|
|
— |
|
|||||
Total nonperforming loans |
|
6,960 |
|
|
4,756 |
|
|
5,080 |
|
|
4,795 |
|
|
5,328 |
|
|||||
OREO and repossessed assets |
|
858 |
|
|
139 |
|
|
63 |
|
|
10 |
|
|
26 |
|
|||||
Total nonperforming assets |
$ |
7,818 |
|
$ |
4,895 |
|
$ |
5,143 |
|
$ |
4,805 |
|
$ |
5,354 |
|
|||||
Net charge-offs/(recoveries) |
|
(6 |
) |
|
488 |
|
|
(1,509 |
) |
|
(581 |
) |
|
3,264 |
|
|||||
Net charge-offs/(recoveries) to average loans |
|
— |
% |
|
0.10 |
% |
|
(0.30 |
)% |
|
(0.11 |
)% |
|
0.66 |
% |
|||||
Nonperforming loans to total loans |
|
0.38 |
% |
|
0.25 |
% |
|
0.26 |
% |
|
0.23 |
% |
|
0.26 |
% |
|||||
Nonperforming assets to total assets |
|
0.25 |
% |
|
0.16 |
% |
|
0.17 |
% |
|
0.17 |
% |
|
0.19 |
% |
|||||
Allowance for loan losses to total loans |
|
1.84 |
% |
|
1.74 |
% |
|
1.73 |
% |
|
1.52 |
% |
|
1.34 |
% |
|||||
Allowance for loan losses to nonperforming loans |
|
485 |
% |
|
710 |
% |
|
674 |
% |
|
654 |
% |
|
512 |
% |
|||||
For the second quarter of 2021, we had net recoveries of
There was no provision recorded for the second quarter of 2021, no change from the first quarter of 2021 and a decrease of
The ratio of nonperforming loans to total loans at June 30, 2021 was
Beginning in 2020, in accordance with the Interagency Statement on Loan Modifications and Reporting for Financial Institutions as issued on April 7, 2020, through June 30, 2021, we had entered into principal and interest deferrals on 584 loans, representing
Capital
Total stockholders’ equity was
The following table presents our capital ratios as of the dates indicated:
June 30, |
|
December 31, |
|
June 30, |
|||||
2021 |
|
2020 |
|
2020 |
|||||
Capital Ratios(1) |
|||||||||
Alerus Financial Corporation Consolidated |
|||||||||
Common equity tier 1 capital to risk weighted assets |
14.30 |
% |
12.75 |
% |
12.58 |
% |
|||
Tier 1 capital to risk weighted assets |
14.71 |
% |
13.15 |
% |
12.99 |
% |
|||
Total capital to risk weighted assets |
18.43 |
% |
16.79 |
% |
16.70 |
% |
|||
Tier 1 capital to average assets |
9.62 |
% |
9.24 |
% |
9.75 |
% |
|||
Tangible common equity / tangible assets (2) |
9.36 |
% |
9.27 |
% |
9.25 |
% |
|||
Alerus Financial, N.A. |
|
||||||||
Common equity tier 1 capital to risk weighted assets |
13.57 |
% |
12.10 |
% |
11.99 |
% |
|||
Tier 1 capital to risk weighted assets |
13.57 |
% |
12.10 |
% |
11.99 |
% |
|||
Total capital to risk weighted assets |
14.82 |
% |
13.36 |
% |
13.24 |
% |
|||
Tier 1 capital to average assets |
8.98 |
% |
8.50 |
% |
9.00 |
% |
|||
(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, July 29, 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 business and consumer clients through four distinct business segments—banking, retirement and benefit services, wealth management, and mortgage. Alerus provides clients with a primary point of contact to help fully understand the unique needs and delivery channel preferences of each client. Clients are provided with competitive products, valuable insight and sound advice supported by digital solutions designed to meet the clients’ needs. Alerus 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; changes to U.S. tax laws, regulations and guidance; 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) |
|
|||||||
|
June 30,
|
|
December 31,
|
|||||
Assets |
(Unaudited) |
|
(Audited) |
|||||
Cash and cash equivalents |
$ |
315,430 |
|
$ |
172,962 |
|
||
Investment securities |
|
|
||||||
Available-for-sale, at fair value |
|
651,546 |
|
|
592,342 |
|
||
Held-to-maturity, at carrying value |
|
146,316 |
|
|
— |
|
||
Loans held for sale |
|
66,856 |
|
|
122,440 |
|
||
Loans |
|
1,835,312 |
|
|
1,979,375 |
|
||
Allowance for loan losses |
|
(33,764 |
) |
|
(34,246 |
) |
||
Net loans |
|
1,801,548 |
|
|
1,945,129 |
|
||
Land, premises and equipment, net |
|
18,847 |
|
|
20,289 |
|
||
Operating lease right-of-use assets |
|
4,203 |
|
|
6,918 |
|
||
Accrued interest receivable |
|
8,463 |
|
|
9,662 |
|
||
Bank-owned life insurance |
|
32,752 |
|
|
32,363 |
|
||
Goodwill |
|
30,201 |
|
|
30,201 |
|
||
Other intangible assets |
|
23,680 |
|
|
25,919 |
|
||
Servicing rights |
|
1,964 |
|
|
1,987 |
|
||
Deferred income taxes, net |
|
11,522 |
|
|
9,409 |
|
||
Other assets |
|
43,901 |
|
|
44,150 |
|
||
Total assets |
$ |
3,157,229 |
|
$ |
3,013,771 |
|
||
Liabilities and Stockholders’ Equity |
|
|
||||||
Deposits |
|
|
||||||
Noninterest-bearing |
$ |
758,820 |
|
$ |
754,716 |
|
||
Interest-bearing |
|
1,952,120 |
|
|
1,817,277 |
|
||
Total deposits |
|
2,710,940 |
|
|
2,571,993 |
|
||
Long-term debt |
|
58,992 |
|
|
58,735 |
|
||
Operating lease liabilities |
|
4,868 |
|
|
7,861 |
|
||
Accrued expenses and other liabilities |
|
38,038 |
|
|
45,019 |
|
||
Total liabilities |
|
2,812,838 |
|
|
2,683,608 |
|
||
Stockholders’ equity |
|
|
||||||
Preferred stock, |
|
— |
|
|
— |
|
||
Common stock, |
|
17,198 |
|
|
17,125 |
|
||
Additional paid-in capital |
|
91,273 |
|
|
90,237 |
|
||
Retained earnings |
|
233,397 |
|
|
212,163 |
|
||
Accumulated other comprehensive income (loss) |
|
2,523 |
|
|
10,638 |
|
||
Total stockholders’ equity |
|
344,391 |
|
|
330,163 |
|
||
Total liabilities and stockholders’ equity |
$ |
3,157,229 |
|
$ |
3,013,771 |
|
||
|
|||||||||||||||
Alerus Financial Corporation and Subsidiaries Consolidated Statements of Income (dollars and shares in thousands, except per share data) |
|||||||||||||||
Three months ended |
|
Six months ended |
|||||||||||||
|
June 30, 2021 |
|
March 31, 2021 |
|
June 30, 2020 |
|
June 30, 2021 |
|
June 30, 2020 |
||||||
Interest Income |
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
||||||
Loans, including fees |
$ |
19,324 |
|
$ |
20,567 |
|
$ |
21,372 |
|
$ |
39,891 |
$ |
41,914 |
||
Investment securities |
|
|
|
|
|
|
|
|
|||||||
Taxable |
|
2,897 |
|
|
2,401 |
|
|
1,765 |
|
|
5,298 |
|
3,524 |
||
Exempt from federal income taxes |
|
233 |
|
|
236 |
|
|
239 |
|
|
469 |
|
474 |
||
Other |
|
130 |
|
|
117 |
|
|
130 |
|
|
247 |
|
700 |
||
Total interest income |
|
22,584 |
|
|
23,321 |
|
|
23,506 |
|
|
45,905 |
|
46,612 |
||
Interest Expense |
|
|
|
|
|
|
|
|
|||||||
Deposits |
|
906 |
|
|
995 |
|
|
2,558 |
|
|
1,901 |
|
5,950 |
||
Long-term debt |
|
538 |
|
|
288 |
|
|
857 |
|
|
826 |
|
1,734 |
||
Total interest expense |
|
1,444 |
|
|
1,283 |
|
|
3,415 |
|
|
2,727 |
|
7,684 |
||
Net interest income |
|
21,140 |
|
|
22,038 |
|
|
20,091 |
|
|
43,178 |
|
38,928 |
||
Provision for loan losses |
|
— |
|
|
— |
|
|
3,500 |
|
|
— |
|
6,000 |
||
Net interest income after provision for loan losses |
|
21,140 |
|
|
22,038 |
|
|
16,591 |
|
|
43,178 |
|
32,928 |
||
Noninterest Income |
|
|
|
|
|
|
|
|
|||||||
Retirement and benefit services |
|
17,871 |
|
|
17,255 |
|
|
13,710 |
|
|
35,126 |
|
29,930 |
||
Wealth management |
|
5,138 |
|
|
4,986 |
|
|
4,112 |
|
|
10,124 |
|
8,158 |
||
Mortgage banking |
|
12,287 |
|
|
17,132 |
|
|
17,546 |
|
|
29,419 |
|
22,591 |
||
Service charges on deposit accounts |
|
330 |
|
|
338 |
|
|
297 |
|
|
668 |
|
720 |
||
Net gains (losses) on investment securities |
|
— |
|
|
114 |
|
|
1,294 |
|
|
114 |
|
1,294 |
||
Other |
|
1,122 |
|
|
1,056 |
|
|
1,271 |
|
|
2,178 |
|
2,726 |
||
Total noninterest income |
|
36,748 |
|
|
40,881 |
|
|
38,230 |
|
|
77,629 |
|
65,419 |
||
Noninterest Expense |
|
|
|
|
|
|
|
|
|||||||
Compensation |
|
24,309 |
|
|
23,698 |
|
|
21,213 |
|
|
48,007 |
|
39,944 |
||
Employee taxes and benefits |
|
5,572 |
|
|
5,813 |
|
|
4,747 |
|
|
11,385 |
|
10,055 |
||
Occupancy and equipment expense |
|
1,918 |
|
|
2,231 |
|
|
2,612 |
|
|
4,149 |
|
5,104 |
||
Business services, software and technology expense |
|
4,958 |
|
|
4,976 |
|
|
4,580 |
|
|
9,934 |
|
9,123 |
||
Intangible amortization expense |
|
1,088 |
|
|
1,151 |
|
|
991 |
|
|
2,239 |
|
1,981 |
||
Professional fees and assessments |
|
1,509 |
|
|
1,472 |
|
|
1,177 |
|
|
2,981 |
|
2,233 |
||
Marketing and business development |
|
769 |
|
|
676 |
|
|
549 |
|
|
1,445 |
|
1,159 |
||
Supplies and postage |
|
503 |
|
|
531 |
|
|
675 |
|
|
1,034 |
|
1,382 |
||
Travel |
|
36 |
|
|
26 |
|
|
51 |
|
|
62 |
|
312 |
||
Mortgage and lending expenses |
|
1,199 |
|
|
1,332 |
|
|
1,341 |
|
|
2,531 |
|
2,482 |
||
Other |
|
689 |
|
|
1,136 |
|
|
1,798 |
|
|
1,825 |
|
2,685 |
||
Total noninterest expense |
|
42,550 |
|
|
43,042 |
|
|
39,734 |
|
|
85,592 |
|
76,460 |
||
Income before income taxes |
|
15,338 |
|
|
19,877 |
|
|
15,087 |
|
|
35,215 |
|
21,887 |
||
Income tax expense |
|
3,644 |
|
|
4,662 |
|
|
3,613 |
|
|
8,306 |
|
5,050 |
||
Net income |
$ |
11,694 |
|
$ |
15,215 |
|
$ |
11,474 |
|
$ |
26,909 |
$ |
16,837 |
||
Per Common Share Data |
|
|
|
|
|
|
|
|
|||||||
Earnings per common share |
$ |
0.67 |
|
$ |
0.87 |
|
$ |
0.66 |
|
$ |
1.54 |
$ |
0.97 |
||
Diluted earnings per common share |
$ |
0.66 |
|
$ |
0.86 |
|
$ |
0.65 |
|
$ |
1.52 |
$ |
0.95 |
||
Dividends declared per common share |
$ |
0.16 |
|
$ |
0.15 |
|
$ |
0.15 |
|
$ |
0.31 |
$ |
0.30 |
||
Average common shares outstanding |
|
17,194 |
|
|
17,145 |
|
|
17,111 |
|
|
17,170 |
|
17,091 |
||
Diluted average common shares outstanding |
|
17,497 |
|
17,465 |
|
17,445 |
|
17,482 |
|
17,425 |
|||||
|
||||||||||||||||
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) |
||||||||||||||||
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
June 30,
|
|||||||||
Tangible Common Equity to Tangible Assets |
|
|
|
|||||||||||||
Total common stockholders’ equity |
$ |
344,391 |
|
$ |
329,234 |
|
$ |
330,163 |
|
$ |
305,732 |
|
||||
Less: Goodwill |
|
30,201 |
|
|
30,201 |
|
|
30,201 |
|
|
27,329 |
|
||||
Less: Other intangible assets |
|
23,680 |
|
|
24,768 |
|
|
25,919 |
|
|
16,411 |
|
||||
Tangible common equity (a) |
|
290,510 |
|
|
274,265 |
|
|
274,043 |
|
|
261,992 |
|
||||
Total assets |
|
3,157,229 |
|
|
3,151,756 |
|
|
3,013,771 |
|
|
2,875,457 |
|
||||
Less: Goodwill |
|
30,201 |
|
|
30,201 |
|
|
30,201 |
|
|
27,329 |
|
||||
Less: Other intangible assets |
|
23,680 |
|
|
24,768 |
|
|
25,919 |
|
|
16,411 |
|
||||
Tangible assets (b) |
|
3,103,348 |
|
|
3,096,787 |
|
|
2,957,651 |
|
|
2,831,717 |
|
||||
Tangible common equity to tangible assets (a)/(b) |
|
9.36 |
% |
|
8.86 |
% |
|
9.27 |
% |
|
9.25 |
% |
||||
Tangible Book Value Per Common Share |
|
|
|
|
||||||||||||
Total common stockholders’ equity |
$ |
344,391 |
|
$ |
329,234 |
|
$ |
330,163 |
|
$ |
305,732 |
|
||||
Less: Goodwill |
|
30,201 |
|
|
30,201 |
|
|
30,201 |
|
|
27,329 |
|
||||
Less: Other intangible assets |
|
23,680 |
|
|
24,768 |
|
|
25,919 |
|
|
16,411 |
|
||||
Tangible common equity (c) |
|
290,510 |
|
|
274,265 |
|
|
274,043 |
|
|
261,992 |
|
||||
Total common shares issued and outstanding (d) |
|
17,198 |
|
|
17,190 |
|
|
17,125 |
|
|
17,120 |
|
||||
Tangible book value per common share (c)/(d) |
$ |
16.89 |
|
$ |
15.95 |
|
$ |
16.00 |
|
$ |
15.30 |
|
||||
Three months ended |
|
Six months ended |
||||||||||||||||||
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
||||||||||||
|
2021 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
||
Return on Average Tangible Common Equity |
||||||||||||||||||||
Net income |
$ |
11,694 |
|
$ |
15,215 |
|
$ |
11,474 |
|
$ |
26,909 |
|
$ |
16,837 |
|
|||||
Add: Intangible amortization expense (net of tax) |
|
860 |
|
|
909 |
|
|
783 |
|
|
1,769 |
|
|
1,565 |
|
|||||
Net income, excluding intangible amortization (e) |
|
12,554 |
|
|
16,124 |
|
|
12,257 |
|
|
28,678 |
|
|
18,402 |
|
|||||
Average total equity |
|
339,439 |
|
|
334,188 |
|
|
301,719 |
|
|
336,830 |
|
|
298,221 |
|
|||||
Less: Average goodwill |
|
30,201 |
|
|
30,201 |
|
|
27,329 |
|
|
30,201 |
|
|
27,329 |
|
|||||
Less: Average other intangible assets (net of tax) |
|
19,123 |
|
|
19,995 |
|
|
13,345 |
|
|
19,556 |
|
|
13,737 |
|
|||||
Average tangible common equity (f) |
|
290,115 |
|
|
283,992 |
|
|
261,045 |
|
|
287,073 |
|
|
257,155 |
|
|||||
Return on average tangible common equity (e)/(f) |
|
17.36 |
% |
|
23.03 |
% |
|
18.88 |
% |
|
20.15 |
% |
|
14.39 |
% |
|||||
Net Interest Margin (tax-equivalent) |
|
|||||||||||||||||||
Net interest income |
$ |
21,140 |
|
$ |
22,038 |
|
$ |
20,091 |
|
$ |
43,178 |
|
$ |
38,928 |
|
|||||
Tax-equivalent adjustment |
|
135 |
|
|
143 |
|
|
109 |
|
|
278 |
|
|
209 |
|
|||||
Tax-equivalent net interest income (g) |
|
21,275 |
|
|
22,181 |
|
|
20,200 |
|
|
43,456 |
|
|
39,137 |
|
|||||
Average earning assets (h) |
|
2,958,468 |
|
|
2,880,255 |
|
|
2,584,037 |
|
|
2,919,578 |
|
|
2,427,519 |
|
|||||
Net interest margin (tax-equivalent) (g)/(h) |
|
2.88 |
% |
|
3.12 |
% |
|
3.14 |
% |
|
3.00 |
% |
|
3.24 |
% |
|||||
Efficiency Ratio |
|
|
|
|
|
|||||||||||||||
Noninterest expense |
$ |
42,550 |
|
$ |
43,042 |
|
$ |
39,734 |
|
$ |
85,592 |
|
$ |
76,460 |
|
|||||
Less: Intangible amortization expense |
|
1,088 |
|
|
1,151 |
|
|
991 |
|
|
2,239 |
|
|
1,981 |
|
|||||
Adjusted noninterest expense (i) |
|
41,462 |
|
|
41,891 |
|
|
38,743 |
|
|
83,353 |
|
|
74,479 |
|
|||||
Net interest income |
|
21,140 |
|
|
22,038 |
|
|
20,091 |
|
|
43,178 |
|
|
38,928 |
|
|||||
Noninterest income |
|
36,748 |
|
|
40,881 |
|
|
38,230 |
|
|
77,629 |
|
|
65,419 |
|
|||||
Tax-equivalent adjustment |
|
135 |
|
|
143 |
|
|
109 |
|
|
278 |
|
|
209 |
|
|||||
Total tax-equivalent revenue (j) |
|
58,023 |
|
|
63,062 |
|
|
58,430 |
|
|
121,085 |
|
|
104,556 |
|
|||||
Efficiency ratio (i)/(j) |
|
71.46 |
% |
|
66.43 |
% |
|
66.31 |
% |
|
68.84 |
% |
|
71.23 |
% |
|||||
|
||||||||||||||||||||||||||||||
Alerus Financial Corporation and Subsidiaries Analysis of Average Balances, Yields, and Rates (unaudited) (dollars in thousands) |
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
Three months ended |
|
Six months ended |
||||||||||||||||||||||||||||
June 30, 2021 |
|
March 31, 2021 |
|
June 30, 2020 |
|
June 30, 2021 |
|
June 30, 2020 |
||||||||||||||||||||||
|
|
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 |
$ |
191,695 |
0.12 |
% |
$ |
184,376 |
0.12 |
% |
$ |
153,197 |
0.16 |
% |
$ |
188,056 |
0.12 |
% |
$ |
158,274 |
0.72 |
% |
||||||||||
Investment securities (1) |
|
800,812 |
1.60 |
% |
|
662,413 |
1.65 |
% |
|
369,247 |
2.25 |
% |
|
731,995 |
1.62 |
% |
|
353,203 |
2.35 |
% |
||||||||||
Loans held for sale |
|
71,447 |
2.26 |
% |
|
82,249 |
2.13 |
% |
|
69,606 |
2.69 |
% |
|
76,818 |
2.19 |
% |
|
51,372 |
2.81 |
% |
||||||||||
Loans |
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Commercial: |
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Commercial and industrial |
|
627,613 |
4.55 |
% |
|
674,935 |
4.72 |
% |
|
739,816 |
4.12 |
% |
|
651,143 |
4.64 |
% |
|
609,553 |
4.57 |
% |
||||||||||
Real estate construction |
|
42,511 |
4.28 |
% |
|
45,264 |
4.22 |
% |
|
31,660 |
4.48 |
% |
|
43,880 |
4.25 |
% |
|
29,191 |
4.73 |
% |
||||||||||
Commercial real estate |
|
568,827 |
3.71 |
% |
|
560,986 |
3.79 |
% |
|
513,497 |
4.31 |
% |
|
564,928 |
3.75 |
% |
|
510,831 |
4.46 |
% |
||||||||||
Total commercial |
|
1,238,951 |
4.15 |
% |
|
1,281,185 |
4.30 |
% |
|
1,284,973 |
4.21 |
% |
|
1,259,951 |
4.23 |
% |
|
1,149,575 |
4.53 |
% |
||||||||||
Consumer |
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Residential real estate first mortgage |
|
459,278 |
3.53 |
% |
|
457,882 |
3.76 |
% |
|
459,789 |
4.09 |
% |
|
458,584 |
3.65 |
% |
|
460,258 |
4.10 |
% |
||||||||||
Residential real estate junior lien |
|
129,544 |
4.58 |
% |
|
137,745 |
4.86 |
% |
|
163,345 |
4.79 |
% |
|
133,622 |
4.72 |
% |
|
168,390 |
4.98 |
% |
||||||||||
Other revolving and installment |
|
60,213 |
4.31 |
% |
|
68,625 |
4.38 |
% |
|
77,921 |
4.56 |
% |
|
64,396 |
4.35 |
% |
|
80,587 |
4.63 |
% |
||||||||||
Total consumer |
|
649,035 |
3.81 |
% |
|
664,252 |
4.05 |
% |
|
701,055 |
4.31 |
% |
|
656,602 |
3.93 |
% |
|
709,235 |
4.37 |
% |
||||||||||
Total loans (1) |
|
1,887,986 |
4.04 |
% |
|
1,945,437 |
4.21 |
% |
|
1,986,028 |
4.24 |
% |
|
1,916,553 |
4.13 |
% |
|
1,858,810 |
4.47 |
% |
||||||||||
Federal Reserve/FHLB stock |
|
6,528 |
4.36 |
% |
|
5,780 |
4.49 |
% |
|
5,959 |
4.59 |
% |
|
6,156 |
4.42 |
% |
|
5,860 |
4.67 |
% |
||||||||||
Total interest earning assets |
|
2,958,468 |
3.08 |
% |
|
2,880,255 |
3.30 |
% |
|
2,584,037 |
3.68 |
% |
|
2,919,578 |
3.19 |
% |
|
2,427,519 |
3.88 |
% |
||||||||||
Noninterest earning assets |
|
161,272 |
|
|
167,006 |
|
|
156,293 |
|
|
164,124 |
|
|
152,476 |
|
|||||||||||||||
Total assets |
$ |
3,119,740 |
|
$ |
3,047,261 |
|
$ |
2,740,330 |
|
$ |
3,083,702 |
|
$ |
2,579,995 |
|
|||||||||||||||
Interest-Bearing Liabilities |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Interest-bearing demand deposits |
$ |
697,789 |
0.14 |
% |
$ |
642,832 |
0.16 |
% |
$ |
534,733 |
0.30 |
% |
$ |
670,462 |
0.15 |
% |
$ |
496,880 |
0.38 |
% |
||||||||||
Money market and savings deposits |
|
1,015,358 |
0.14 |
% |
|
1,030,348 |
0.16 |
% |
|
900,812 |
0.67 |
% |
|
1,022,812 |
0.15 |
% |
|
852,325 |
0.85 |
% |
||||||||||
Time deposits |
|
208,338 |
0.56 |
% |
|
210,719 |
0.66 |
% |
|
201,147 |
1.30 |
% |
|
209,521 |
0.61 |
% |
|
200,117 |
1.44 |
% |
||||||||||
Short-term borrowings |
|
— |
— |
% |
|
— |
— |
% |
|
321 |
— |
% |
|
— |
— |
% |
|
161 |
— |
% |
||||||||||
Long-term debt |
|
58,996 |
3.66 |
% |
|
25,677 |
4.55 |
% |
|
58,747 |
5.87 |
% |
|
42,429 |
3.93 |
% |
|
58,751 |
5.94 |
% |
||||||||||
Total interest-bearing liabilities |
|
1,980,481 |
0.29 |
% |
|
1,909,576 |
0.27 |
% |
|
1,695,760 |
0.81 |
% |
|
1,945,224 |
0.28 |
% |
|
1,608,234 |
0.96 |
% |
||||||||||
Noninterest-Bearing Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Noninterest-bearing deposits |
|
755,773 |
|
|
731,680 |
|
|
692,500 |
|
|
743,793 |
|
|
628,404 |
|
|||||||||||||||
Other noninterest-bearing liabilities |
|
44,047 |
|
|
|
|
71,817 |
|
|
|
|
50,351 |
|
|
|
|
57,855 |
|
|
|
|
45,136 |
|
|||||||
Stockholders’ equity |
|
339,439 |
|
|
334,188 |
|
|
301,719 |
|
|
336,830 |
|
|
298,221 |
|
|||||||||||||||
Total liabilities and stockholders’ equity |
$ |
3,119,740 |
|
$ |
3,047,261 |
|
$ |
2,740,330 |
|
$ |
3,083,702 |
|
$ |
2,579,995 |
||||||||||||||||
Net interest rate spread |
|
2.79 |
% |
|
3.03 |
% |
|
2.87 |
% |
|
2.91 |
% |
|
2.92 |
% |
|||||||||||||||
Net interest margin, tax- |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
equivalent (2) |
|
2.88 |
% |
|
3.12 |
% |
|
3.14 |
% |
|
3.00 |
% |
|
3.24 |
% |
|||||||||||||||
(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/20210728005993/en/
FAQ
What was Alerus Financial's net income for Q2 2021?
How did Alerus Financial's earnings per share change from Q1 to Q2 2021?
What was the percentage change in mortgage originations for Alerus in Q2 2021?
How much did Alerus Financial's deposits increase in Q2 2021?
What was the net interest margin reported by Alerus Financial for Q2 2021?
