Alerus Financial Corporation Reports Third Quarter 2024 Net Income of $5.2 Million
Alerus Financial (ALRS) reported Q3 2024 net income of $5.2 million, or $0.26 per diluted share, down from $6.2 million in Q2 2024 and $9.2 million in Q3 2023. The company completed its largest acquisition, expanding into Rochester and Southern Minnesota markets. Total loans increased 9.9% to $3.0 billion, while deposits grew 7.4% to $3.3 billion from December 2023. Noninterest income represented 55.7% of total revenues at $28.4 million. Assets under administration/management reached $45.6 billion, up 4.8% from Q2 2024. Net charge-offs to average loans were 0.04%, and tangible book value per share increased 6.7% to $16.50.
Alerus Financial (ALRS) ha riportato un utile netto per il terzo trimestre del 2024 di 5,2 milioni di dollari, ovvero 0,26 dollari per azione diluita, in calo rispetto ai 6,2 milioni di dollari del secondo trimestre del 2024 e ai 9,2 milioni di dollari nel terzo trimestre del 2023. L'azienda ha completato la sua più grande acquisizione, espandendosi nei mercati di Rochester e del Minnesota meridionale. I prestiti totali sono aumentati del 9,9% a 3,0 miliardi di dollari, mentre i depositi sono cresciuti del 7,4% a 3,3 miliardi di dollari rispetto a dicembre 2023. Il reddito non da interessi ha rappresentato il 55,7% delle entrate totali, pari a 28,4 milioni di dollari. Gli attivi sotto amministrazione/gestione hanno raggiunto i 45,6 miliardi di dollari, in aumento del 4,8% rispetto al secondo trimestre del 2024. Le cancellazioni nette su prestiti medi erano dello 0,04%, e il valore contabile tangibile per azione è aumentato del 6,7% a 16,50 dollari.
Alerus Financial (ALRS) reportó una ganancia neta de 5,2 millones de dólares, o 0,26 dólares por acción diluida, en el tercer trimestre de 2024, en comparación con 6,2 millones de dólares en el segundo trimestre de 2024 y 9,2 millones de dólares en el tercer trimestre de 2023. La compañía completó su adquisición más grande, expandiéndose a los mercados de Rochester y del sur de Minnesota. Los préstamos totales aumentaron un 9,9% a 3,0 mil millones de dólares, mientras que los depósitos crecieron un 7,4% a 3,3 mil millones de dólares desde diciembre de 2023. Los ingresos no por intereses representaron el 55,7% de los ingresos totales, alcanzando los 28,4 millones de dólares. Los activos bajo administración/gestión alcanzaron los 45,6 mil millones de dólares, un aumento del 4,8% desde el segundo trimestre de 2024. Las cancelaciones netas sobre préstamos promedios fueron del 0,04%, y el valor contable tangible por acción aumentó un 6,7% a 16,50 dólares.
Alerus Financial (ALRS)는 2024년 3분기 순이익이 520만 달러, 즉 희석 주당 0.26달러로, 2024년 2분기 620만 달러와 2023년 3분기 920만 달러에서 감소했다고 보고했습니다. 회사는 로체스터 및 미네소타 남부 시장으로 확장하는 가장 큰 인수를 완료했습니다. 총 대출은 9.9% 증가하여 30억 달러에 달했고, 예금은 2023년 12월 대비 7.4% 증가하여 33억 달러에 이르렀습니다. 비이자 소득은 총 수익의 55.7%를 차지하며 2840만 달러에 달했습니다. 관리/운용 자산은 456억 달러에 도달하여 2024년 2분기 대비 4.8% 증가했습니다. 평균 대출에 대한 순 대손상각비는 0.04%였고, 주당 장부가액은 6.7% 증가하여 16.50달러에 이르렀습니다.
Alerus Financial (ALRS) a annoncé un bénéfice net de 5,2 millions de dollars pour le troisième trimestre 2024, soit 0,26 dollar par action diluée, en baisse par rapport à 6,2 millions de dollars au deuxième trimestre 2024 et à 9,2 millions de dollars au troisième trimestre 2023. L'entreprise a achevé sa plus grande acquisition, s'étendant sur les marchés de Rochester et du sud du Minnesota. Les prêts totaux ont augmenté de 9,9 % pour atteindre 3,0 milliards de dollars, tandis que les dépôts ont crû de 7,4 % pour atteindre 3,3 milliards de dollars par rapport à décembre 2023. Les revenus non liés aux intérêts représentaient 55,7 % des revenus totaux, soit 28,4 millions de dollars. Les actifs sous gestion ont atteint 45,6 milliards de dollars, en hausse de 4,8 % par rapport au deuxième trimestre 2024. Les créances nettes sur les prêts moyens ont été de 0,04 %, et la valeur comptable tangible par action a augmenté de 6,7 % pour atteindre 16,50 dollars.
Alerus Financial (ALRS) berichtete für das 3. Quartal 2024 einen Nettogewinn von 5,2 Millionen Dollar, bzw. 0,26 Dollar pro verwässerter Aktie, ein Rückgang gegenüber 6,2 Millionen Dollar im 2. Quartal 2024 und 9,2 Millionen Dollar im 3. Quartal 2023. Das Unternehmen hat seine größte Übernahme abgeschlossen und sich in den Märkten von Rochester und Südmnnesota expandiert. Die Gesamtdarlehen stiegen um 9,9% auf 3,0 Milliarden Dollar, während die Einlagen um 7,4% auf 3,3 Milliarden Dollar seit Dezember 2023 wuchsen. Die Erträge aus Nichtzinsgeschäften machten 55,7% der Gesamteinnahmen von 28,4 Millionen Dollar aus. Das verwaltete Vermögen erreichte 45,6 Milliarden Dollar, was einem Anstieg von 4,8% im Vergleich zum 2. Quartal 2024 entspricht. Die Nettoabschreibungen auf durchschnittliche Darlehen lagen bei 0,04%, und der tangible Buchwert pro Aktie stieg um 6,7% auf 16,50 Dollar.
- Loan growth of 9.9% to $3.0 billion from December 2023
- Deposit growth of 7.4% to $3.3 billion with zero brokered deposits
- Assets under administration/management increased 4.8% to $45.6 billion
- Tangible book value per share increased 6.7% to $16.50
- Net income declined to $5.2 million from $9.2 million in Q3 2023
- EPS decreased to $0.26 from $0.45 in Q3 2023
- Net interest margin decreased to 2.23% from 2.39% in Q2 2024
- Nonperforming assets increased to $48.0 million from $8.8 million in December 2023
Insights
The Q3 2024 results for Alerus Financial (ALRS) show mixed performance with some concerning trends. Net income declined to
The net interest margin compressed to
The significant increase in nonperforming assets is particularly concerning, driven by a
The diversified revenue model with
CEO Comments
President and Chief Executive Officer Katie Lorenson said, “Earlier this month we closed on our 26th and largest acquisition in company history. In the transaction, we acquired a strong core deposit base and strategically expanded into the vibrant
We have continued to see market share gains and growth of our client base both in adding new business and deepening relationships with current clients. This year, our retirement and benefits business has grown over
Credit quality remains a key area of focus. Early identification of problem loans coupled with proactive and decisive actions are part of our credit culture. We continue to closely monitor and proactively downgrade loans where we see potential or emerging weaknesses. Normalization of credit continued during the quarter, as two large relationships drove the increase in nonaccrual loans. Charge-offs to average loans for the quarter were
We are focused on efficient headcount management, and balancing investments in talent, technology and infrastructure, while remaining committed to a strong balance sheet, capital levels, and improving performance as a bigger and better combined entity.
Thank you to the team members both new and long tenured for your hard work, dedication and invaluable contributions supporting our company, our clients and our communities, and helping us on our journey to achieving new milestones and our return to high-performance and top tier financial results.”
Third Quarter Highlights
-
Total loans were
$3.0 billion $272.8 million 9.9% , from December 31, 2023. -
Total deposits were
$3.3 billion $227.9 million 7.4% , from December 31, 2023; brokered deposits remained at$0 -
The loan to deposit ratio as of September 30, 2024 was
91.2% , compared to89.1% as of December 31, 2023. -
Noninterest income, which represented
55.7% of total revenues, was$28.4 million 3.6% from$27.4 million -
Total assets under administration/management at September 30, 2024 were
$45.6 billion 4.8% increase from June 30, 2024. -
Net charge-offs to average loans were
0.04% in the third quarter of 2024, a decrease of 32 basis points from0.36% in the second quarter of 2024. -
Tangible book value per common share (non-GAAP) was
$16.50 6.7% increase from December 31, 2023. -
Tangible common equity to tangible assets (non-GAAP) was
8.11% at September 30, 2024, an increase of 85 basis points from7.26% in the second quarter of 2024. -
Common equity tier 1 capital to risk weighted assets as of September 30, 2024 was
11.12% and continues to be well above the minimum threshold to be “well capitalized” of6.50% . -
Repaid Bank Term Funding Program (“BTFP”) borrowings, resulting in risk-free net interest income of
$1.2 million -
$400.0 million $400.0 million $200.0 million
HMN Financial Acquisition
On October 9, 2024, the Company completed its previously announced acquisition of HMN Financial, Inc. and its subsidiary, Home Federal Savings Bank (together, "HMNF"). The transaction expands the Company's franchise into
Selected Financial Data (unaudited)
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As of and for the |
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Three months ended |
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Nine months ended |
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(dollars and shares in thousands, except per share data) |
|
September
|
|
June 30,
|
|
September
|
|
September
|
|
September
|
||||||||||
Performance Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average total assets |
|
|
0.48 |
% |
|
|
0.58 |
% |
|
|
0.95 |
% |
|
|
0.56 |
% |
|
|
0.93 |
% |
Adjusted return on average total assets (1) |
|
|
0.57 |
% |
|
|
0.65 |
% |
|
|
0.75 |
% |
|
|
0.62 |
% |
|
|
0.85 |
% |
Return on average common equity |
|
|
5.52 |
% |
|
|
6.76 |
% |
|
|
10.05 |
% |
|
|
6.43 |
% |
|
|
9.79 |
% |
Return on average tangible common equity (1) |
|
|
7.83 |
% |
|
|
9.40 |
% |
|
|
13.51 |
% |
|
|
8.98 |
% |
|
|
13.27 |
% |
Adjusted return on average tangible common equity (1) |
|
|
9.04 |
% |
|
|
10.30 |
% |
|
|
10.97 |
% |
|
|
9.80 |
% |
|
|
12.27 |
% |
Noninterest income as a % of revenue |
|
|
55.72 |
% |
|
|
53.28 |
% |
|
|
58.21 |
% |
|
|
54.10 |
% |
|
|
54.51 |
% |
Net interest margin (tax-equivalent) |
|
|
2.23 |
% |
|
|
2.39 |
% |
|
|
2.27 |
% |
|
|
2.31 |
% |
|
|
2.50 |
% |
Adjusted net interest margin (tax-equivalent) (1) |
|
|
2.35 |
% |
|
|
2.47 |
% |
|
|
2.24 |
% |
|
|
2.41 |
% |
|
|
2.46 |
% |
Efficiency ratio (1) |
|
|
80.29 |
% |
|
|
72.50 |
% |
|
|
73.37 |
% |
|
|
77.17 |
% |
|
|
73.57 |
% |
Adjusted efficiency ratio (1) |
|
|
77.71 |
% |
|
|
70.80 |
% |
|
|
77.03 |
% |
|
|
75.50 |
% |
|
|
74.58 |
% |
Net charge-offs/(recoveries) to average loans |
|
|
0.04 |
% |
|
|
0.36 |
% |
|
|
(0.09 |
)% |
|
|
0.14 |
% |
|
|
(0.04 |
)% |
Dividend payout ratio |
|
|
76.92 |
% |
|
|
64.52 |
% |
|
|
42.22 |
% |
|
|
66.29 |
% |
|
|
43.08 |
% |
Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share - basic |
|
$ |
0.26 |
|
|
$ |
0.31 |
|
|
$ |
0.46 |
|
|
$ |
0.90 |
|
|
$ |
1.31 |
|
Earnings per common share - diluted |
|
$ |
0.26 |
|
|
$ |
0.31 |
|
|
$ |
0.45 |
|
|
$ |
0.89 |
|
|
$ |
1.30 |
|
Adjusted earnings per common share - diluted (1) |
|
$ |
0.31 |
|
|
$ |
0.34 |
|
|
$ |
0.36 |
|
|
$ |
0.98 |
|
|
$ |
1.19 |
|
Dividends declared per common share |
|
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.19 |
|
|
$ |
0.59 |
|
|
$ |
0.56 |
|
Book value per common share |
|
$ |
19.53 |
|
|
$ |
18.87 |
|
|
$ |
17.60 |
|
|
|
|
|
|
|
|
|
Tangible book value per common share (1) |
|
$ |
16.50 |
|
|
$ |
15.77 |
|
|
$ |
14.32 |
|
|
|
|
|
|
|
|
|
Average common shares outstanding - basic |
|
|
19,788 |
|
|
|
19,777 |
|
|
|
19,872 |
|
|
|
19,768 |
|
|
|
19,977 |
|
Average common shares outstanding - diluted |
|
|
20,075 |
|
|
|
20,050 |
|
|
|
20,095 |
|
|
|
20,037 |
|
|
|
20,193 |
|
Other Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement and benefit services assets under administration/management |
|
$ |
41,249,280 |
|
|
$ |
39,389,533 |
|
|
$ |
34,552,569 |
|
|
|
|
|
|
|
|
|
Wealth management assets under administration/management |
|
$ |
4,397,505 |
|
|
$ |
4,172,290 |
|
|
$ |
3,724,091 |
|
|
|
|
|
|
|
|
|
Mortgage originations |
|
$ |
82,388 |
|
|
$ |
109,254 |
|
|
$ |
109,637 |
|
|
$ |
245,743 |
|
|
$ |
298,626 |
|
| ______________ |
(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 third quarter of 2024 was
Net interest income increased
Net interest margin (on a tax-equivalent basis) was
Noninterest Income
Noninterest income for the third quarter of 2024 was
Noninterest income for the third quarter of 2024 decreased by
Noninterest Expense
Noninterest expense for the third quarter of 2024 was
Noninterest expense for the third 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:
|
|
September
|
|
June 30, |
|
March 30, |
|
December
|
|
September
|
|
|||||
(dollars in thousands) |
|
2024 |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
|
|||||
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
|
$ |
606,245 |
|
$ |
591,779 |
|
$ |
575,259 |
|
$ |
562,180 |
|
$ |
547,644 |
|
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction, land and development |
|
|
173,629 |
|
|
161,751 |
|
|
125,966 |
|
|
124,034 |
|
|
97,742 |
|
Multifamily |
|
|
275,377 |
|
|
242,041 |
|
|
260,609 |
|
|
245,103 |
|
|
214,148 |
|
Non-owner occupied |
|
|
686,071 |
|
|
647,776 |
|
|
565,979 |
|
|
569,354 |
|
|
504,827 |
|
Owner occupied |
|
|
296,366 |
|
|
283,356 |
|
|
285,211 |
|
|
271,623 |
|
|
264,458 |
|
Total commercial real estate |
|
|
1,431,443 |
|
|
1,334,924 |
|
|
1,237,765 |
|
|
1,210,114 |
|
|
1,081,175 |
|
Agricultural |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land |
|
|
45,821 |
|
|
41,410 |
|
|
41,149 |
|
|
40,832 |
|
|
41,581 |
|
Production |
|
|
39,436 |
|
|
40,549 |
|
|
36,436 |
|
|
36,141 |
|
|
34,743 |
|
Total agricultural |
|
|
85,257 |
|
|
81,959 |
|
|
77,585 |
|
|
76,973 |
|
|
76,324 |
|
Total commercial |
|
|
2,122,945 |
|
|
2,008,662 |
|
|
1,890,609 |
|
|
1,849,267 |
|
|
1,705,143 |
|
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First lien |
|
|
690,451 |
|
|
686,286 |
|
|
703,726 |
|
|
697,900 |
|
|
680,634 |
|
Construction |
|
|
11,808 |
|
|
22,573 |
|
|
18,425 |
|
|
28,979 |
|
|
37,159 |
|
HELOC |
|
|
134,301 |
|
|
126,211 |
|
|
120,501 |
|
|
118,315 |
|
|
116,296 |
|
Junior lien |
|
|
36,445 |
|
|
36,323 |
|
|
36,381 |
|
|
35,819 |
|
|
36,381 |
|
Total residential real estate |
|
|
873,005 |
|
|
871,393 |
|
|
879,033 |
|
|
881,013 |
|
|
870,470 |
|
Other consumer |
|
|
36,393 |
|
|
35,737 |
|
|
29,833 |
|
|
29,303 |
|
|
30,817 |
|
Total consumer |
|
|
909,398 |
|
|
907,130 |
|
|
908,866 |
|
|
910,316 |
|
|
901,287 |
|
Total loans |
|
$ |
3,032,343 |
|
$ |
2,915,792 |
|
$ |
2,799,475 |
|
$ |
2,759,583 |
|
$ |
2,606,430 |
|
Deposits
Total deposits were
The following table presents the composition of the Company’s deposit portfolio as of the dates indicated:
|
|
September
|
|
June 30, |
|
March 30, |
|
December
|
|
September
|
||||||||||
(dollars in thousands) |
|
2024 |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
||||||||||
Noninterest-bearing demand |
|
$ |
657,547 |
|
|
$ |
701,428 |
|
|
$ |
692,500 |
|
|
$ |
728,082 |
|
|
$ |
717,990 |
|
Interest-bearing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand |
|
|
1,034,694 |
|
|
|
1,003,585 |
|
|
|
938,751 |
|
|
|
840,711 |
|
|
|
759,812 |
|
Savings accounts |
|
|
75,675 |
|
|
|
79,747 |
|
|
|
82,727 |
|
|
|
82,485 |
|
|
|
88,341 |
|
Money market savings |
|
|
1,067,187 |
|
|
|
1,022,470 |
|
|
|
1,114,262 |
|
|
|
1,032,771 |
|
|
|
959,106 |
|
Time deposits |
|
|
488,447 |
|
|
|
491,345 |
|
|
|
456,729 |
|
|
|
411,562 |
|
|
|
346,935 |
|
Total interest-bearing |
|
|
2,666,003 |
|
|
|
2,597,147 |
|
|
|
2,592,469 |
|
|
|
2,367,529 |
|
|
|
2,154,194 |
|
Total deposits |
|
$ |
3,323,550 |
|
|
$ |
3,298,575 |
|
|
$ |
3,284,969 |
|
|
$ |
3,095,611 |
|
|
$ |
2,872,184 |
|
Asset Quality
Total nonperforming assets were
As of September 30, 2024, the allowance for credit losses on loans was
The following table presents selected asset quality data as of and for the periods indicated:
|
|
As of and for the three months ended |
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|
|
September 30, |
|
June 30, |
|
March 30, |
|
December 31, |
|
September 30, |
||||||||||
(dollars in thousands) |
|
2024 |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
||||||||||
Nonaccrual loans |
|
$ |
48,026 |
|
|
$ |
27,618 |
|
|
$ |
7,345 |
|
|
$ |
8,596 |
|
|
$ |
9,007 |
|
Accruing loans 90+ days past due |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
139 |
|
|
|
— |
|
Total nonperforming loans |
|
|
48,026 |
|
|
|
27,618 |
|
|
|
7,345 |
|
|
|
8,735 |
|
|
|
9,007 |
|
OREO and repossessed assets |
|
|
— |
|
|
|
— |
|
|
|
3 |
|
|
|
32 |
|
|
|
3 |
|
Total nonperforming assets |
|
$ |
48,026 |
|
|
$ |
27,618 |
|
|
$ |
7,348 |
|
|
$ |
8,767 |
|
|
$ |
9,010 |
|
Net charge-offs/(recoveries) |
|
|
316 |
|
|
|
2,522 |
|
|
|
58 |
|
|
|
(238 |
) |
|
|
(594 |
) |
Net charge-offs/(recoveries) to average loans |
|
|
0.04 |
% |
|
|
0.36 |
% |
|
|
0.01 |
% |
|
|
(0.04 |
)% |
|
|
(0.09 |
)% |
Nonperforming loans to total loans |
|
|
1.58 |
% |
|
|
0.95 |
% |
|
|
0.26 |
% |
|
|
0.32 |
% |
|
|
0.35 |
% |
Nonperforming assets to total assets |
|
|
1.18 |
% |
|
|
0.63 |
% |
|
|
0.17 |
% |
|
|
0.22 |
% |
|
|
0.23 |
% |
Allowance for credit losses on loans to total loans |
|
|
1.29 |
% |
|
|
1.31 |
% |
|
|
1.31 |
% |
|
|
1.30 |
% |
|
|
1.39 |
% |
Allowance for credit losses on loans to nonperforming loans |
|
|
82 |
% |
|
|
139 |
% |
|
|
498 |
% |
|
|
410 |
% |
|
|
403 |
% |
For the third quarter of 2024, the Company had net charge-offs of
The Company recorded a provision for credit losses of
The unearned fair value adjustments on the acquired Metro Phoenix Bank loan portfolio were
Capital
Total stockholders’ equity was
The following table presents our capital ratios as of the dates indicated:
|
|
September 30, |
|
December 31, |
|
September 30, |
||||||
|
|
2024 |
|
2023 |
|
2023 |
||||||
Capital Ratios(1) |
|
|
|
|
|
|
|
|
|
|
|
|
Alerus Financial Corporation Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital to risk weighted assets |
|
|
11.12 |
% |
|
|
11.82 |
% |
|
|
13.01 |
% |
Tier 1 capital to risk weighted assets |
|
|
11.38 |
% |
|
|
12.10 |
% |
|
|
13.30 |
% |
Total capital to risk weighted assets |
|
|
14.04 |
% |
|
|
14.76 |
% |
|
|
16.10 |
% |
Tier 1 capital to average assets |
|
|
9.30 |
% |
|
|
10.57 |
% |
|
|
11.14 |
% |
Tangible common equity / tangible assets (2) |
|
|
8.11 |
% |
|
|
7.94 |
% |
|
|
7.47 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Alerus Financial, N.A. |
|
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital to risk weighted assets |
|
|
10.73 |
% |
|
|
11.40 |
% |
|
|
12.68 |
% |
Tier 1 capital to risk weighted assets |
|
|
10.73 |
% |
|
|
11.40 |
% |
|
|
12.68 |
% |
Total capital to risk weighted assets |
|
|
11.98 |
% |
|
|
12.51 |
% |
|
|
13.86 |
% |
Tier 1 capital to average assets |
|
|
8.90 |
% |
|
|
9.92 |
% |
|
|
10.72 |
% |
| _______________ | |
(1) |
Capital ratios for the current quarter are to be considered preliminary until the Call Report for Alerus Financial, N.A. is filed. |
(2) |
Represents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.” |
Conference Call
The Company will host a conference call at 11:00 a.m. Central Time on Wednesday, October 30, 2024, to discuss its financial results. Attendees are encouraged to register ahead of time for the call at investors.alerus.com. The call can also be accessed via telephone at +1 (833) 470-1428, using access code 572067. 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
Alerus operates 29 banking and commercial wealth offices, with locations 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 changes in interest rates; 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 the level and impact 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; our ability to raise additional capital to implement our business plan; the overall health of the local and national real estate market; concentrations within our loan portfolio; the concentration of large loans to certain borrowers; our ability to successfully manage credit risk; the level of nonperforming assets on our balance sheet; our ability to implement our organic and acquisition growth strategies, including the integration of HMNF which the Company acquired in the fourth quarter of 2024; the 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, including from non-banks such as credit unions, Fintech companies and digital asset service providers; our ability to successfully manage liquidity risk, including our need to access higher cost sources of funds such as fed funds purchased and short-term borrowings; the concentration of large deposits from certain clients, including those who have balances above current FDIC insurance limits; the effectiveness of our risk management framework; 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 acquisitions of Metro Phoenix Bank and HMNF; the extensive regulatory framework that applies to us; the impact of recent and future legislative and regulatory changes, including in response to 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 conflict in the
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)
|
|
September 30, |
|
December 31, |
||||
|
|
2024 |
|
2023 |
||||
Assets |
|
(Unaudited) |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
65,975 |
|
|
$ |
129,893 |
|
Investment securities |
|
|
|
|
|
|
|
|
Trading, at fair value |
|
|
2,708 |
|
|
|
— |
|
Available-for-sale, at fair value |
|
|
466,003 |
|
|
|
486,736 |
|
Held-to-maturity, at amortized cost (with an allowance for credit losses on investments of |
|
|
281,913 |
|
|
|
299,515 |
|
Loans held for sale |
|
|
13,487 |
|
|
|
11,497 |
|
Loans |
|
|
3,032,343 |
|
|
|
2,759,583 |
|
Allowance for credit losses on loans |
|
|
(39,142 |
) |
|
|
(35,843 |
) |
Net loans |
|
|
2,993,201 |
|
|
|
2,723,740 |
|
Land, premises and equipment, net |
|
|
18,790 |
|
|
|
17,940 |
|
Operating lease right-of-use assets |
|
|
9,268 |
|
|
|
5,436 |
|
Accrued interest receivable |
|
|
16,469 |
|
|
|
15,700 |
|
Bank-owned life insurance |
|
|
35,793 |
|
|
|
33,236 |
|
Goodwill |
|
|
46,783 |
|
|
|
46,783 |
|
Other intangible assets |
|
|
13,186 |
|
|
|
17,158 |
|
Servicing rights |
|
|
1,874 |
|
|
|
2,052 |
|
Deferred income taxes, net |
|
|
33,054 |
|
|
|
34,595 |
|
Other assets |
|
|
86,136 |
|
|
|
83,432 |
|
Total assets |
|
$ |
4,084,640 |
|
|
$ |
3,907,713 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
Noninterest-bearing |
|
$ |
657,547 |
|
|
$ |
728,082 |
|
Interest-bearing |
|
|
2,666,003 |
|
|
|
2,367,529 |
|
Total deposits |
|
|
3,323,550 |
|
|
|
3,095,611 |
|
Short-term borrowings |
|
|
244,700 |
|
|
|
314,170 |
|
Long-term debt |
|
|
59,041 |
|
|
|
58,956 |
|
Operating lease liabilities |
|
|
9,643 |
|
|
|
5,751 |
|
Accrued expenses and other liabilities |
|
|
61,220 |
|
|
|
64,098 |
|
Total liabilities |
|
|
3,698,154 |
|
|
|
3,538,586 |
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
Preferred stock, |
|
|
— |
|
|
|
— |
|
Common stock, |
|
|
19,790 |
|
|
|
19,734 |
|
Additional paid-in capital |
|
|
151,257 |
|
|
|
150,343 |
|
Retained earnings |
|
|
278,863 |
|
|
|
272,705 |
|
Accumulated other comprehensive loss |
|
|
(63,424 |
) |
|
|
(73,655 |
) |
Total stockholders’ equity |
|
|
386,486 |
|
|
|
369,127 |
|
Total liabilities and stockholders’ equity |
|
$ |
4,084,640 |
|
|
$ |
3,907,713 |
|
Alerus Financial Corporation and Subsidiaries
Consolidated Statements of Income
(dollars and shares in thousands, except per share data)
|
|
Three months ended |
|
Nine months ended |
||||||||||||||||
|
|
September
|
|
June 30, |
|
September
|
|
September
|
|
September
|
||||||||||
|
|
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||||
Interest Income |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
||||||||||
Loans, including fees |
|
$ |
42,593 |
|
|
$ |
41,663 |
|
|
$ |
34,986 |
|
|
$ |
123,551 |
|
|
$ |
99,187 |
|
Investment securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
4,596 |
|
|
|
4,845 |
|
|
|
6,146 |
|
|
|
14,008 |
|
|
|
18,222 |
|
Exempt from federal income taxes |
|
|
169 |
|
|
|
170 |
|
|
|
182 |
|
|
|
512 |
|
|
|
558 |
|
Other |
|
|
4,854 |
|
|
|
6,344 |
|
|
|
724 |
|
|
|
16,200 |
|
|
|
2,221 |
|
Total interest income |
|
|
52,212 |
|
|
|
53,022 |
|
|
|
42,038 |
|
|
|
154,271 |
|
|
|
120,188 |
|
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
22,285 |
|
|
|
21,284 |
|
|
|
14,436 |
|
|
|
63,721 |
|
|
|
36,218 |
|
Short-term borrowings |
|
|
6,706 |
|
|
|
7,053 |
|
|
|
6,528 |
|
|
|
19,748 |
|
|
|
15,684 |
|
Long-term debt |
|
|
679 |
|
|
|
684 |
|
|
|
679 |
|
|
|
2,041 |
|
|
|
1,999 |
|
Total interest expense |
|
|
29,670 |
|
|
|
29,021 |
|
|
|
21,643 |
|
|
|
85,510 |
|
|
|
53,901 |
|
Net interest income |
|
|
22,542 |
|
|
|
24,001 |
|
|
|
20,395 |
|
|
|
68,761 |
|
|
|
66,287 |
|
Provision for credit losses |
|
|
1,661 |
|
|
|
4,489 |
|
|
|
— |
|
|
|
6,150 |
|
|
|
550 |
|
Net interest income after provision for credit losses |
|
|
20,881 |
|
|
|
19,512 |
|
|
|
20,395 |
|
|
|
62,611 |
|
|
|
65,737 |
|
Noninterest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement and benefit services |
|
|
16,144 |
|
|
|
16,078 |
|
|
|
18,605 |
|
|
|
47,876 |
|
|
|
49,977 |
|
Wealth management |
|
|
6,684 |
|
|
|
6,360 |
|
|
|
5,271 |
|
|
|
19,161 |
|
|
|
15,915 |
|
Mortgage banking |
|
|
2,573 |
|
|
|
2,554 |
|
|
|
2,510 |
|
|
|
6,796 |
|
|
|
7,132 |
|
Service charges on deposit accounts |
|
|
488 |
|
|
|
456 |
|
|
|
328 |
|
|
|
1,333 |
|
|
|
940 |
|
Other |
|
|
2,474 |
|
|
|
1,923 |
|
|
|
1,693 |
|
|
|
5,891 |
|
|
|
5,475 |
|
Total noninterest income |
|
|
28,363 |
|
|
|
27,371 |
|
|
|
28,407 |
|
|
|
81,057 |
|
|
|
79,439 |
|
Noninterest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
|
21,058 |
|
|
|
20,265 |
|
|
|
19,071 |
|
|
|
60,655 |
|
|
|
57,076 |
|
Employee taxes and benefits |
|
|
5,400 |
|
|
|
5,134 |
|
|
|
4,895 |
|
|
|
16,722 |
|
|
|
15,472 |
|
Occupancy and equipment expense |
|
|
2,082 |
|
|
|
1,815 |
|
|
|
1,883 |
|
|
|
5,803 |
|
|
|
5,619 |
|
Business services, software and technology expense |
|
|
4,879 |
|
|
|
4,599 |
|
|
|
4,774 |
|
|
|
14,823 |
|
|
|
15,367 |
|
Intangible amortization expense |
|
|
1,324 |
|
|
|
1,324 |
|
|
|
1,324 |
|
|
|
3,972 |
|
|
|
3,972 |
|
Professional fees and assessments |
|
|
4,267 |
|
|
|
2,373 |
|
|
|
1,716 |
|
|
|
8,633 |
|
|
|
4,397 |
|
Marketing and business development |
|
|
764 |
|
|
|
651 |
|
|
|
750 |
|
|
|
2,200 |
|
|
|
2,139 |
|
Supplies and postage |
|
|
422 |
|
|
|
370 |
|
|
|
410 |
|
|
|
1,321 |
|
|
|
1,275 |
|
Travel |
|
|
330 |
|
|
|
332 |
|
|
|
322 |
|
|
|
954 |
|
|
|
876 |
|
Mortgage and lending expenses |
|
|
684 |
|
|
|
467 |
|
|
|
689 |
|
|
|
1,592 |
|
|
|
1,401 |
|
Other |
|
|
1,237 |
|
|
|
1,422 |
|
|
|
1,426 |
|
|
|
3,543 |
|
|
|
3,909 |
|
Total noninterest expense |
|
|
42,447 |
|
|
|
38,752 |
|
|
|
37,260 |
|
|
|
120,218 |
|
|
|
111,503 |
|
Income before income tax expense |
|
|
6,797 |
|
|
|
8,131 |
|
|
|
11,542 |
|
|
|
23,450 |
|
|
|
33,673 |
|
Income tax expense |
|
|
1,590 |
|
|
|
1,923 |
|
|
|
2,381 |
|
|
|
5,604 |
|
|
|
7,222 |
|
Net income |
|
$ |
5,207 |
|
|
$ |
6,208 |
|
|
$ |
9,161 |
|
|
$ |
17,846 |
|
|
$ |
26,451 |
|
Per Common Share Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share |
|
$ |
0.26 |
|
|
$ |
0.31 |
|
|
$ |
0.46 |
|
|
$ |
0.90 |
|
|
$ |
1.31 |
|
Diluted earnings per common share |
|
$ |
0.26 |
|
|
$ |
0.31 |
|
|
$ |
0.45 |
|
|
$ |
0.89 |
|
|
$ |
1.30 |
|
Dividends declared per common share |
|
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.19 |
|
|
$ |
0.59 |
|
|
$ |
0.56 |
|
Average common shares outstanding |
|
|
19,788 |
|
|
|
19,777 |
|
|
|
19,872 |
|
|
|
19,768 |
|
|
|
19,977 |
|
Diluted average common shares outstanding |
|
|
20,075 |
|
|
|
20,050 |
|
|
|
20,095 |
|
|
|
20,037 |
|
|
|
20,193 |
|
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)
|
|
September
|
|
June 30, |
|
December
|
|
September
|
||||||||
|
|
2024 |
|
2024 |
|
2023 |
|
2023 |
||||||||
Tangible Common Equity to Tangible Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common stockholders’ equity |
|
$ |
386,486 |
|
|
$ |
373,226 |
|
|
$ |
369,127 |
|
|
$ |
349,402 |
|
Less: Goodwill |
|
|
46,783 |
|
|
|
46,783 |
|
|
|
46,783 |
|
|
|
46,783 |
|
Less: Other intangible assets |
|
|
13,186 |
|
|
|
14,510 |
|
|
|
17,158 |
|
|
|
18,482 |
|
Tangible common equity (a) |
|
|
326,517 |
|
|
|
311,933 |
|
|
|
305,186 |
|
|
|
284,137 |
|
Total assets |
|
|
4,084,640 |
|
|
|
4,358,623 |
|
|
|
3,907,713 |
|
|
|
3,869,138 |
|
Less: Goodwill |
|
|
46,783 |
|
|
|
46,783 |
|
|
|
46,783 |
|
|
|
46,783 |
|
Less: Other intangible assets |
|
|
13,186 |
|
|
|
14,510 |
|
|
|
17,158 |
|
|
|
18,482 |
|
Tangible assets (b) |
|
|
4,024,671 |
|
|
|
4,297,330 |
|
|
|
3,843,772 |
|
|
|
3,803,873 |
|
Tangible common equity to tangible assets (a)/(b) |
|
|
8.11 |
% |
|
|
7.26 |
% |
|
|
7.94 |
% |
|
|
7.47 |
% |
Adjusted Tangible Common Equity to Tangible Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible assets (b) |
|
$ |
4,024,671 |
|
|
$ |
4,297,330 |
|
|
$ |
3,843,772 |
|
|
$ |
3,803,873 |
|
Less: Cash proceeds from BTFP |
|
|
— |
|
|
|
355,000 |
|
|
|
— |
|
|
|
— |
|
Adjusted tangible assets (c) |
|
|
4,024,671 |
|
|
|
3,942,330 |
|
|
|
3,843,772 |
|
|
|
3,803,873 |
|
Adjusted tangible common equity to tangible assets (a)/(c) |
|
|
8.11 |
% |
|
|
7.91 |
% |
|
|
7.94 |
% |
|
|
7.47 |
% |
Tangible Book Value Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common stockholders’ equity |
|
$ |
386,486 |
|
|
$ |
373,226 |
|
|
$ |
369,127 |
|
|
$ |
349,402 |
|
Less: Goodwill |
|
|
46,783 |
|
|
|
46,783 |
|
|
|
46,783 |
|
|
|
46,783 |
|
Less: Other intangible assets |
|
|
13,186 |
|
|
|
14,510 |
|
|
|
17,158 |
|
|
|
18,482 |
|
Tangible common equity (d) |
|
|
326,517 |
|
|
|
311,933 |
|
|
|
305,186 |
|
|
|
284,137 |
|
Total common shares issued and outstanding (e) |
|
|
19,790 |
|
|
|
19,778 |
|
|
|
19,734 |
|
|
|
19,848 |
|
Tangible book value per common share (d)/(e) |
|
$ |
16.50 |
|
|
$ |
15.77 |
|
|
$ |
15.46 |
|
|
$ |
14.32 |
|
|
|
Three months ended |
|
Nine months ended |
||||||||||||||||
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
||||||||||
|
|
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||||
Return on Average Tangible Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
5,207 |
|
|
$ |
6,208 |
|
|
$ |
9,161 |
|
|
$ |
17,846 |
|
|
$ |
26,451 |
|
Add: Intangible amortization expense (net of tax) (1) |
|
|
1,046 |
|
|
|
1,046 |
|
|
|
1,046 |
|
|
|
3,138 |
|
|
|
3,138 |
|
Net income, excluding intangible amortization (f) |
|
|
6,253 |
|
|
|
7,254 |
|
|
|
10,207 |
|
|
|
20,984 |
|
|
|
29,589 |
|
Average total equity |
|
|
375,229 |
|
|
|
369,217 |
|
|
|
361,735 |
|
|
|
370,758 |
|
|
|
361,260 |
|
Less: Average goodwill |
|
|
46,783 |
|
|
|
46,783 |
|
|
|
46,882 |
|
|
|
46,783 |
|
|
|
47,018 |
|
Less: Average other intangible assets (net of tax) (1) |
|
|
10,933 |
|
|
|
11,969 |
|
|
|
15,109 |
|
|
|
11,969 |
|
|
|
16,149 |
|
Average tangible common equity (g) |
|
|
317,513 |
|
|
|
310,465 |
|
|
|
299,744 |
|
|
|
312,006 |
|
|
|
298,093 |
|
Return on average tangible common equity (f)/(g) |
|
|
7.83 |
% |
|
|
9.40 |
% |
|
|
13.51 |
% |
|
|
8.98 |
% |
|
|
13.27 |
% |
Efficiency Ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense |
|
$ |
42,447 |
|
|
$ |
38,752 |
|
|
$ |
37,260 |
|
|
$ |
120,218 |
|
|
$ |
111,503 |
|
Less: Intangible amortization expense |
|
|
1,324 |
|
|
|
1,324 |
|
|
|
1,324 |
|
|
|
3,972 |
|
|
|
3,972 |
|
Adjusted noninterest expense (h) |
|
|
41,123 |
|
|
|
37,428 |
|
|
|
35,936 |
|
|
|
116,246 |
|
|
|
107,531 |
|
Net interest income |
|
|
22,542 |
|
|
|
24,001 |
|
|
|
20,395 |
|
|
|
68,761 |
|
|
|
66,287 |
|
Noninterest income |
|
|
28,363 |
|
|
|
27,371 |
|
|
|
28,407 |
|
|
|
81,057 |
|
|
|
79,439 |
|
Tax-equivalent adjustment |
|
|
314 |
|
|
|
255 |
|
|
|
180 |
|
|
|
816 |
|
|
|
444 |
|
Total tax-equivalent revenue (i) |
|
|
51,219 |
|
|
|
51,627 |
|
|
|
48,982 |
|
|
|
150,634 |
|
|
|
146,170 |
|
Efficiency ratio (h)/(i) |
|
|
80.29 |
% |
|
|
72.50 |
% |
|
|
73.37 |
% |
|
|
77.17 |
% |
|
|
73.57 |
% |
| ______________ | |
(1) |
Items calculated after-tax utilizing a marginal income tax rate of |
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 |
|
Nine months ended |
||||||||||||||||
|
|
September
|
|
June 30, |
|
September
|
|
September
|
|
September
|
||||||||||
|
|
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||||
Pre-Provision Net Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
22,542 |
|
|
$ |
24,001 |
|
|
$ |
20,395 |
|
|
$ |
68,761 |
|
|
$ |
66,287 |
|
Add: Noninterest income |
|
|
28,363 |
|
|
|
27,371 |
|
|
|
28,407 |
|
|
|
81,057 |
|
|
|
79,439 |
|
Less: Noninterest expense |
|
|
42,447 |
|
|
|
38,752 |
|
|
|
37,260 |
|
|
|
120,218 |
|
|
|
111,503 |
|
Pre-provision net revenue |
|
$ |
8,458 |
|
|
$ |
12,620 |
|
|
$ |
11,542 |
|
|
$ |
29,600 |
|
|
$ |
34,223 |
|
Adjusted Noninterest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income |
|
$ |
28,363 |
|
|
$ |
27,371 |
|
|
$ |
28,407 |
|
|
$ |
81,057 |
|
|
$ |
79,439 |
|
Less: Adjusted noninterest income items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BOLI mortality proceeds (non-taxable) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,196 |
|
Gain on sale of ESOP trustee business |
|
|
— |
|
|
|
— |
|
|
|
2,775 |
|
|
|
— |
|
|
|
2,775 |
|
Net gain on sale of premises and equipment |
|
|
476 |
|
|
|
— |
|
|
|
— |
|
|
|
476 |
|
|
|
— |
|
Total adjusted noninterest income items (j) |
|
|
476 |
|
|
|
— |
|
|
|
2,775 |
|
|
|
476 |
|
|
|
3,971 |
|
Adjusted noninterest income (k) |
|
$ |
27,887 |
|
|
$ |
27,371 |
|
|
$ |
25,632 |
|
|
$ |
80,581 |
|
|
$ |
75,468 |
|
Adjusted Noninterest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense |
|
$ |
42,447 |
|
|
$ |
38,752 |
|
|
$ |
37,260 |
|
|
$ |
120,218 |
|
|
$ |
111,503 |
|
Less: Adjusted noninterest expense items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HMNF merger- and acquisition-related expenses |
|
|
1,661 |
|
|
|
563 |
|
|
|
— |
|
|
|
2,251 |
|
|
|
— |
|
Severance and signing bonus expense |
|
|
31 |
|
|
|
315 |
|
|
|
343 |
|
|
|
626 |
|
|
|
1,475 |
|
Total adjusted noninterest expense items (l) |
|
|
1,692 |
|
|
|
878 |
|
|
|
343 |
|
|
|
2,877 |
|
|
|
1,475 |
|
Adjusted noninterest expense (m) |
|
$ |
40,755 |
|
|
$ |
37,874 |
|
|
$ |
36,917 |
|
|
$ |
117,341 |
|
|
$ |
110,028 |
|
Adjusted Pre-Provision Net Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
22,542 |
|
|
$ |
24,001 |
|
|
$ |
20,395 |
|
|
$ |
68,761 |
|
|
$ |
66,287 |
|
Add: Adjusted noninterest income (k) |
|
|
27,887 |
|
|
|
27,371 |
|
|
|
25,632 |
|
|
|
80,581 |
|
|
|
75,468 |
|
Less: Adjusted noninterest expense (m) |
|
|
40,755 |
|
|
|
37,874 |
|
|
|
36,917 |
|
|
|
117,341 |
|
|
|
110,028 |
|
Adjusted pre-provision net revenue |
|
$ |
9,674 |
|
|
$ |
13,498 |
|
|
$ |
9,110 |
|
|
$ |
32,001 |
|
|
$ |
31,727 |
|
Adjusted Efficiency Ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted noninterest expense (m) |
|
$ |
40,755 |
|
|
$ |
37,874 |
|
|
$ |
36,917 |
|
|
$ |
117,341 |
|
|
$ |
110,028 |
|
Less: Intangible amortization expense |
|
|
1,324 |
|
|
|
1,324 |
|
|
|
1,324 |
|
|
|
3,972 |
|
|
|
3,972 |
|
Adjusted noninterest expense for efficiency ratio (n) |
|
|
39,431 |
|
|
|
36,550 |
|
|
|
35,593 |
|
|
|
113,369 |
|
|
|
106,056 |
|
Tax-equivalent revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
22,542 |
|
|
|
24,001 |
|
|
|
20,395 |
|
|
|
68,761 |
|
|
|
66,287 |
|
Add: Adjusted noninterest income (k) |
|
|
27,887 |
|
|
|
27,371 |
|
|
|
25,632 |
|
|
|
80,581 |
|
|
|
75,468 |
|
Add: Tax-equivalent adjustment |
|
|
314 |
|
|
|
255 |
|
|
|
180 |
|
|
|
816 |
|
|
|
444 |
|
Total tax-equivalent revenue (o) |
|
|
50,743 |
|
|
|
51,627 |
|
|
|
46,207 |
|
|
|
150,158 |
|
|
|
142,199 |
|
Adjusted efficiency ratio (n)/(o) |
|
|
77.71 |
% |
|
|
70.80 |
% |
|
|
77.03 |
% |
|
|
75.50 |
% |
|
|
74.58 |
% |
Adjusted Net Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
5,207 |
|
|
$ |
6,208 |
|
|
$ |
9,161 |
|
|
$ |
17,846 |
|
|
$ |
26,451 |
|
Less: Adjusted noninterest income items (net of tax) (1) (j) |
|
|
376 |
|
|
|
— |
|
|
|
2,192 |
|
|
|
376 |
|
|
|
3,388 |
|
Add: Adjusted noninterest expense items (net of tax) (1) (l) |
|
|
1,337 |
|
|
|
694 |
|
|
|
271 |
|
|
|
2,273 |
|
|
|
1,165 |
|
Adjusted net income (p) |
|
$ |
6,168 |
|
|
$ |
6,902 |
|
|
$ |
7,240 |
|
|
$ |
19,743 |
|
|
$ |
24,228 |
|
Adjusted Return on Average Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total assets (q) |
|
$ |
4,298,080 |
|
|
$ |
4,297,294 |
|
|
$ |
3,821,601 |
|
|
$ |
4,245,181 |
|
|
$ |
3,799,645 |
|
Adjusted return on average assets (p)/(q) |
|
|
0.57 |
% |
|
|
0.65 |
% |
|
|
0.75 |
% |
|
|
0.62 |
% |
|
|
0.85 |
% |
Adjusted Return on Average Tangible Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (p) |
|
$ |
6,168 |
|
|
$ |
6,902 |
|
|
$ |
7,240 |
|
|
$ |
19,743 |
|
|
$ |
24,228 |
|
Add: Intangible amortization expense (net of tax) (1) |
|
|
1,046 |
|
|
|
1,046 |
|
|
|
1,046 |
|
|
|
3,138 |
|
|
|
3,138 |
|
Adjusted net income, excluding intangible amortization (r) |
|
|
7,214 |
|
|
|
7,948 |
|
|
|
8,286 |
|
|
|
22,881 |
|
|
|
27,366 |
|
Average total equity |
|
|
375,229 |
|
|
|
369,217 |
|
|
|
361,735 |
|
|
|
370,758 |
|
|
|
361,260 |
|
Less: Average goodwill |
|
|
46,783 |
|
|
|
46,783 |
|
|
|
46,882 |
|
|
|
46,783 |
|
|
|
47,018 |
|
Less: Average other intangible assets (net of tax) |
|
|
10,933 |
|
|
|
11,969 |
|
|
|
15,109 |
|
|
|
11,969 |
|
|
|
16,149 |
|
Average tangible common equity (s) |
|
|
317,513 |
|
|
|
310,465 |
|
|
|
299,744 |
|
|
|
312,006 |
|
|
|
298,093 |
|
Return on average tangible common equity (r)/(s) |
|
|
9.04 |
% |
|
|
10.30 |
% |
|
|
10.97 |
% |
|
|
9.80 |
% |
|
|
12.27 |
% |
| ______________ | |
(1) |
Items calculated after-tax utilizing a marginal income tax rate of |
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 |
|
Nine months ended |
||||||||||||||||
|
|
September
|
|
June 30, |
|
September
|
|
September
|
|
September
|
||||||||||
|
|
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||||
Adjusted Net Interest Margin (Tax-Equivalent) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
22,542 |
|
|
$ |
24,001 |
|
|
$ |
20,395 |
|
|
$ |
68,761 |
|
|
$ |
66,287 |
|
Less: BTFP cash interest income |
|
|
4,113 |
|
|
|
4,766 |
|
|
|
— |
|
|
|
12,494 |
|
|
|
— |
|
Add: BTFP interest expense |
|
|
3,717 |
|
|
|
4,307 |
|
|
|
— |
|
|
|
11,291 |
|
|
|
— |
|
Less: Purchase accounting net accretion |
|
|
152 |
|
|
|
985 |
|
|
|
294 |
|
|
|
1,429 |
|
|
|
969 |
|
Net interest income excluding BTFP impact |
|
|
21,994 |
|
|
|
22,557 |
|
|
|
20,101 |
|
|
|
66,129 |
|
|
|
65,318 |
|
Add: Tax equivalent adjustment for loans and securities |
|
|
314 |
|
|
|
255 |
|
|
|
180 |
|
|
|
816 |
|
|
|
444 |
|
Adjusted net interest income (t) |
|
$ |
22,308 |
|
|
$ |
22,812 |
|
|
$ |
20,281 |
|
|
$ |
66,945 |
|
|
$ |
65,762 |
|
Interest earning assets |
|
|
4,077,716 |
|
|
|
4,075,003 |
|
|
|
3,591,478 |
|
|
|
4,024,942 |
|
|
|
3,574,675 |
|
Less: Average cash proceeds balance from BTFP |
|
|
303,043 |
|
|
|
355,000 |
|
|
|
— |
|
|
|
309,051 |
|
|
|
— |
|
Add: Change in unearned purchase accounting discount |
|
|
152 |
|
|
|
985 |
|
|
|
294 |
|
|
|
1,429 |
|
|
|
969 |
|
Adjusted interest earning assets (u) |
|
$ |
3,774,825 |
|
|
$ |
3,720,988 |
|
|
$ |
3,591,772 |
|
|
$ |
3,717,320 |
|
|
$ |
3,575,644 |
|
Adjusted net interest margin (tax-equivalent) (t)/(u) |
|
|
2.35 |
% |
|
|
2.47 |
% |
|
|
2.24 |
% |
|
|
2.41 |
% |
|
|
2.46 |
% |
Adjusted Earnings Per Common Share - Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (p) |
|
$ |
6,168 |
|
|
$ |
6,902 |
|
|
$ |
7,240 |
|
|
$ |
19,743 |
|
|
$ |
24,228 |
|
Less: Dividends and undistributed earnings allocated to participating securities |
|
|
24 |
|
|
|
38 |
|
|
|
67 |
|
|
|
102 |
|
|
|
186 |
|
Net income available to common stockholders (v) |
|
|
6,144 |
|
|
|
6,864 |
|
|
|
7,173 |
|
|
|
19,641 |
|
|
|
24,042 |
|
Weighted-average common shares outstanding for diluted earnings per share (w) |
|
|
20,075 |
|
|
|
20,050 |
|
|
|
20,095 |
|
|
|
20,037 |
|
|
|
20,193 |
|
Adjusted earnings per common share - diluted (v)/(w) |
|
$ |
0.31 |
|
|
$ |
0.34 |
|
|
$ |
0.36 |
|
|
$ |
0.98 |
|
|
$ |
1.19 |
|
| _____________ | |
(1) |
Items calculated after-tax utilizing a marginal income tax rate of |
Alerus Financial Corporation and Subsidiaries
Analysis of Average Balances, Yields, and Rates (unaudited)
(dollars in thousands)
|
|
Three months ended |
|
Nine months ended |
||||||||||||||||||||||||||||||||||||
|
|
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2023 |
|
September 30, 2024 |
|
September 30, 2023 |
||||||||||||||||||||||||||||||
|
|
|
|
|
|
Average |
|
|
|
|
|
Average |
|
|
|
|
|
Average |
|
|
|
|
|
Average |
|
|
|
|
|
Average |
||||||||||
|
|
Average |
|
Yield/ |
|
Average |
|
Yield/ |
|
Average |
|
Yield/ |
|
Average |
|
Yield/ |
|
Average |
|
Yield/ |
||||||||||||||||||||
|
|
Balance |
|
Rate |
|
Balance |
|
Rate |
|
Balance |
|
Rate |
|
Balance |
|
Rate |
|
Balance |
|
Rate |
||||||||||||||||||||
Interest Earning Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits with banks |
|
$ |
326,350 |
|
|
|
5.47 |
% |
|
$ |
448,245 |
|
|
|
5.38 |
% |
|
$ |
29,450 |
|
|
|
3.09 |
% |
|
$ |
375,365 |
|
|
|
5.39 |
% |
|
$ |
35,892 |
|
|
|
3.45 |
% |
Investment securities (1) |
|
|
749,062 |
|
|
|
2.55 |
|
|
|
756,413 |
|
|
|
2.69 |
|
|
|
971,913 |
|
|
|
2.60 |
|
|
|
760,219 |
|
|
|
2.58 |
|
|
|
1,004,436 |
|
|
|
2.52 |
|
Loans held for sale |
|
|
15,795 |
|
|
|
3.20 |
|
|
|
16,473 |
|
|
|
8.91 |
|
|
|
16,518 |
|
|
|
5.55 |
|
|
|
13,768 |
|
|
|
6.01 |
|
|
|
13,822 |
|
|
|
5.29 |
|
Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
|
|
593,685 |
|
|
|
7.26 |
|
|
|
578,544 |
|
|
|
7.39 |
|
|
|
523,263 |
|
|
|
6.61 |
|
|
|
578,839 |
|
|
|
7.21 |
|
|
|
524,083 |
|
|
|
6.54 |
|
CRE − Construction, land and development |
|
|
184,611 |
|
|
|
5.68 |
|
|
|
126,744 |
|
|
|
8.01 |
|
|
|
88,450 |
|
|
|
8.52 |
|
|
|
146,454 |
|
|
|
7.03 |
|
|
|
93,098 |
|
|
|
7.46 |
|
CRE − Multifamily |
|
|
242,558 |
|
|
|
5.62 |
|
|
|
243,076 |
|
|
|
5.52 |
|
|
|
209,020 |
|
|
|
5.17 |
|
|
|
245,372 |
|
|
|
5.57 |
|
|
|
171,043 |
|
|
|
5.15 |
|
CRE − Non-owner occupied |
|
|
663,539 |
|
|
|
5.88 |
|
|
|
617,338 |
|
|
|
5.90 |
|
|
|
491,948 |
|
|
|
5.34 |
|
|
|
615,320 |
|
|
|
5.85 |
|
|
|
492,098 |
|
|
|
5.15 |
|
CRE − Owner occupied |
|
|
289,963 |
|
|
|
5.41 |
|
|
|
283,754 |
|
|
|
5.47 |
|
|
|
256,983 |
|
|
|
5.22 |
|
|
|
284,315 |
|
|
|
5.41 |
|
|
|
253,460 |
|
|
|
5.03 |
|
Agricultural − Land |
|
|
42,162 |
|
|
|
4.93 |
|
|
|
40,932 |
|
|
|
4.72 |
|
|
|
40,685 |
|
|
|
4.85 |
|
|
|
41,138 |
|
|
|
4.80 |
|
|
|
39,417 |
|
|
|
4.77 |
|
Agricultural − Production |
|
|
40,964 |
|
|
|
6.84 |
|
|
|
38,004 |
|
|
|
6.69 |
|
|
|
32,386 |
|
|
|
6.68 |
|
|
|
38,110 |
|
|
|
6.65 |
|
|
|
29,377 |
|
|
|
6.42 |
|
RRE − First lien |
|
|
689,382 |
|
|
|
3.98 |
|
|
|
694,866 |
|
|
|
4.07 |
|
|
|
681,610 |
|
|
|
3.83 |
|
|
|
695,313 |
|
|
|
4.02 |
|
|
|
667,041 |
|
|
|
3.75 |
|
RRE − Construction |
|
|
16,792 |
|
|
|
3.86 |
|
|
|
21,225 |
|
|
|
5.38 |
|
|
|
33,264 |
|
|
|
5.14 |
|
|
|
19,847 |
|
|
|
4.89 |
|
|
|
33,693 |
|
|
|
4.99 |
|
RRE − HELOC |
|
|
130,705 |
|
|
|
8.00 |
|
|
|
123,233 |
|
|
|
8.30 |
|
|
|
118,965 |
|
|
|
8.24 |
|
|
|
124,321 |
|
|
|
8.19 |
|
|
|
118,630 |
|
|
|
7.97 |
|
RRE − Junior lien |
|
|
36,818 |
|
|
|
5.74 |
|
|
|
36,181 |
|
|
|
6.60 |
|
|
|
35,974 |
|
|
|
5.89 |
|
|
|
36,276 |
|
|
|
6.23 |
|
|
|
35,034 |
|
|
|
5.70 |
|
Other consumer |
|
|
37,768 |
|
|
|
6.76 |
|
|
|
33,335 |
|
|
|
6.67 |
|
|
|
32,288 |
|
|
|
6.11 |
|
|
|
33,329 |
|
|
|
6.64 |
|
|
|
38,148 |
|
|
|
5.99 |
|
Total loans (1) |
|
|
2,968,947 |
|
|
|
5.73 |
|
|
|
2,837,232 |
|
|
|
5.88 |
|
|
|
2,544,836 |
|
|
|
5.44 |
|
|
|
2,858,634 |
|
|
|
5.78 |
|
|
|
2,495,122 |
|
|
|
5.30 |
|
Federal Reserve/FHLB stock |
|
|
17,562 |
|
|
|
8.25 |
|
|
|
16,640 |
|
|
|
8.53 |
|
|
|
28,761 |
|
|
|
6.83 |
|
|
|
16,956 |
|
|
|
8.30 |
|
|
|
25,403 |
|
|
|
6.81 |
|
Total interest earning assets |
|
|
4,077,716 |
|
|
|
5.12 |
|
|
|
4,075,003 |
|
|
|
5.26 |
|
|
|
3,591,478 |
|
|
|
4.66 |
|
|
|
4,024,942 |
|
|
|
5.15 |
|
|
|
3,574,675 |
|
|
|
4.51 |
|
Noninterest earning assets |
|
|
220,364 |
|
|
|
|
|
|
|
222,291 |
|
|
|
|
|
|
|
230,123 |
|
|
|
|
|
|
|
220,239 |
|
|
|
|
|
|
|
224,970 |
|
|
|
|
|
Total assets |
|
$ |
4,298,080 |
|
|
|
|
|
|
$ |
4,297,294 |
|
|
|
|
|
|
$ |
3,821,601 |
|
|
|
|
|
|
$ |
4,245,181 |
|
|
|
|
|
|
$ |
3,799,645 |
|
|
|
|
|
Interest-Bearing Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand deposits |
|
$ |
1,003,595 |
|
|
|
2.31 |
% |
|
$ |
959,119 |
|
|
|
2.24 |
% |
|
$ |
751,455 |
|
|
|
1.34 |
% |
|
$ |
944,143 |
|
|
|
2.18 |
% |
|
$ |
757,995 |
|
|
|
1.16 |
% |
Money market and savings deposits |
|
|
1,146,896 |
|
|
|
3.82 |
|
|
|
1,147,525 |
|
|
|
3.79 |
|
|
|
1,073,297 |
|
|
|
3.20 |
|
|
|
1,160,391 |
|
|
|
3.79 |
|
|
|
1,127,630 |
|
|
|
2.72 |
|
Time deposits |
|
|
485,533 |
|
|
|
4.46 |
|
|
|
458,125 |
|
|
|
4.50 |
|
|
|
327,264 |
|
|
|
3.94 |
|
|
|
458,545 |
|
|
|
4.47 |
|
|
|
276,797 |
|
|
|
3.26 |
|
Fed funds purchased and BTFP |
|
|
327,543 |
|
|
|
4.97 |
|
|
|
366,186 |
|
|
|
4.90 |
|
|
|
312,121 |
|
|
|
5.50 |
|
|
|
325,455 |
|
|
|
4.95 |
|
|
|
320,861 |
|
|
|
5.23 |
|
FHLB short-term advances |
|
|
200,000 |
|
|
|
5.20 |
|
|
|
200,000 |
|
|
|
5.21 |
|
|
|
173,913 |
|
|
|
5.02 |
|
|
|
200,000 |
|
|
|
5.13 |
|
|
|
84,982 |
|
|
|
4.92 |
|
Long-term debt |
|
|
59,027 |
|
|
|
4.58 |
|
|
|
58,999 |
|
|
|
4.66 |
|
|
|
58,914 |
|
|
|
4.57 |
|
|
|
58,999 |
|
|
|
4.62 |
|
|
|
58,886 |
|
|
|
4.54 |
|
Total interest-bearing liabilities |
|
|
3,222,594 |
|
|
|
3.66 |
|
|
|
3,189,954 |
|
|
|
3.66 |
|
|
|
2,696,964 |
|
|
|
3.18 |
|
|
|
3,147,533 |
|
|
|
3.63 |
|
|
|
2,627,151 |
|
|
|
2.74 |
|
Noninterest-Bearing Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
|
|
628,114 |
|
|
|
|
|
|
|
665,930 |
|
|
|
|
|
|
|
692,742 |
|
|
|
|
|
|
|
656,553 |
|
|
|
|
|
|
|
743,253 |
|
|
|
|
|
Other noninterest-bearing liabilities |
|
|
72,143 |
|
|
|
|
|
|
|
72,193 |
|
|
|
|
|
|
|
70,160 |
|
|
|
|
|
|
|
70,337 |
|
|
|
|
|
|
|
67,981 |
|
|
|
|
|
Stockholders’ equity |
|
|
375,229 |
|
|
|
|
|
|
|
369,217 |
|
|
|
|
|
|
|
361,735 |
|
|
|
|
|
|
|
370,758 |
|
|
|
|
|
|
|
361,260 |
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
4,298,080 |
|
|
|
|
|
|
$ |
4,297,294 |
|
|
|
|
|
|
$ |
3,821,601 |
|
|
|
|
|
|
$ |
4,245,181 |
|
|
|
|
|
|
$ |
3,799,645 |
|
|
|
|
|
Net interest income (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate spread |
|
|
|
|
|
|
1.46 |
% |
|
|
|
|
|
|
1.60 |
% |
|
|
|
|
|
|
1.48 |
% |
|
|
|
|
|
|
1.52 |
% |
|
|
|
|
|
|
1.77 |
% |
Net interest margin, tax-equivalent (1) |
|
|
|
|
|
|
2.23 |
% |
|
|
|
|
|
|
2.39 |
% |
|
|
|
|
|
|
2.27 |
% |
|
|
|
|
|
|
2.31 |
% |
|
|
|
|
|
|
2.50 |
% |
| _____________ | |
(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/20241029387161/en/
Alan A. Villalon, Chief Financial Officer
952.417.3733 (Office)
Source: Alerus Financial Corporation
FAQ
What was Alerus Financial's (ALRS) net income for Q3 2024?
How much did ALRS's loans grow in Q3 2024?
What was ALRS's deposit growth in Q3 2024?
What was ALRS's asset quality status in Q3 2024?
