Important factors that could cause our actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, the following: the strength of the local, state, national and international economies and financial markets (including effects of inflationary pressures and future monetary policies of the Federal Reserve and executive orders in response thereto); interest rate risk, including the effects of changes in interest rates; effects on the U.S. economy resulting from actions taken by the federal government, including the threat or implementation of tariffs, immigration enforcement and changes in foreign policy; disruptions to the global supply chain, including as a result of domestic or foreign policies; our ability to successfully manage credit risk, including in the commercial real estate portfolio, and maintain an adequate level of allowance for credit losses; business and economic conditions generally and in the financial services industry, nationally and within our market areas, including the level and impact of inflation rates and possible recession; our ability to raise additional capital to implement our business plan; credit risks and risks from concentrations (including by type of borrower, geographic area, collateral, and industry) within our loan portfolio; the concentration of large loans to certain borrowers (including commercial real estate loans); the level of nonperforming assets on our balance sheet; our ability to implement organic and acquisition growth strategies; the commencement, cost, and outcome of litigation and other legal proceedings and regulatory actions against us or to which the Company may become subject, including with respect to pending actions relating to the Company’s previous employee stock ownership program fiduciary services commenced by government and private parties; the impact of economic or market conditions on our fee-based services; our ability to continue to grow our retirement and benefit services business; our ability to continue to originate a sufficient volume of residential mortgages; the occurrence of fraudulent activity, breaches or failures of our or our third-party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud; interruptions involving our information technology and telecommunications systems or third-party servicers; potential losses incurred in connection with mortgage loan repurchases; the composition of our executive management team and our ability to attract and retain key personnel; rapid and expensive technological changes implemented by us and other parties in the financial services industry, including third-party vendors, which may be more difficult to implement or more expensive than anticipated or which may have unforeseen consequences to us and our customers, including the development and implementation of tools incorporating artificial intelligence; 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 Federal Deposit Insurance Corporation insurance limits; the effectiveness of our risk management framework; potential impairment to the goodwill the Company recorded in connection with our past acquisitions, including the acquisitions of Metro Phoenix Bank and HMNF; the extensive regulatory framework that applies to us; the ability of the Bank to pay dividends to us and our ability to pay dividends to our stockholders; new or revised accounting standards, as may be adopted by state and federal regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission (the “SEC”) or the Public Company Accounting Oversight Board; fluctuations in the values of the securities held in our securities portfolio, including as a result of changes in interest rates; governmental monetary, trade and fiscal policies; risks related to climate change and the negative impact it may have on our customers and their businesses; severe weather and natural disasters, and widespread disease or pandemics; acts of war, military conflicts, or terrorism, including ongoing conflicts in the Middle East, the Russian invasion of Ukraine and the recent military actions in Venezuela, or other adverse external events and changes in foreign relations; any material weaknesses in our internal control over financial reporting; our success at managing and responding to the risks involved in the foregoing items; and any other risks described in the “Risk Factors” sections of the reports filed by Alerus Financial Corporation with the SEC. Three months ended Year ended December 31, September 30, December 31, December 31, December 31, 2025 2025 2024 2025 2024 Return on Average Tangible Common Equity Net (loss) income $ (33,050 ) $ 16,924 $ (66 ) $ 17,439 $ 17,780 Add: Intangible amortization expense (net of tax)(1) 1,882 2,141 2,215 8,304 5,353 Net income, excluding intangible amortization (d) (31,168 ) 19,065 2,149 25,743 23,133 Average total equity 552,106 524,459 478,092 525,323 397,738 Less: Average goodwill 85,634 85,634 84,393 85,634 56,237 Less: Average other intangible assets (net of tax) (1) 27,270 29,540 34,107 30,470 17,534 Average tangible common equity (e) 439,202 409,285 359,592 409,219 323,967 Return on average tangible common equity (d)/(e) (28.15 )% 18.48 % 2.38 % 6.29 % 7.14 % Efficiency Ratio Noninterest expense $ 51,881 $ 50,541 $ 60,457 $ 201,227 $ 180,675 Less: Intangible amortization expense 2,382 2,710 2,804 10,511 6,776 Noninterest expense excluding intangible amortization (f) 49,499 47,831 57,653 190,716 173,899 Net interest income (v) 45,174 43,136 38,284 172,499 107,045 Noninterest (loss) income (36,949 ) 29,430 33,874 51,876 114,930 Tax-equivalent adjustment 654 638 385 2,402 1,202 Total tax-equivalent revenue (g) 8,879 73,204 72,543 226,777 223,177 Efficiency ratio (f)/(g) 557.48 % 65.34 % 79.47 % 84.10 % 77.92 % Pre-Provision Net Revenue Net interest income (v) $ 45,174 $ 43,136 $ 38,284 $ 172,499 $ 107,045 Add: Noninterest (loss) income (36,949 ) 29,430 33,874 51,876 114,930 Less: Noninterest expense 51,881 50,541 60,457 201,227 180,675 Pre-provision net revenue $ (43,656 ) $ 22,025 $ 11,701 $ 23,148 $ 41,300 Adjusted Noninterest Income Noninterest (loss) income $ (36,949 ) $ 29,430 $ 33,874 $ 51,876 $ 114,930 Less: Adjusted noninterest (loss) income items Net gains (losses) on investment securities (68,403 ) — — (68,403 ) — Net gain (loss) on sale of loans — (35 ) — 2,080 — Net gain (loss) on sale/disposal of premises and equipment (445 ) — 3,459 (530 ) 3,941 Total adjusted noninterest (loss) income items (h) (68,848 ) (35 ) 3,459 (66,853 ) 3,941 Adjusted noninterest income (i) $ 31,899 $ 29,465 $ 30,415 $ 118,729 $ 110,989 Adjusted Noninterest (Loss) Income as a Percentage of Revenue Adjusted noninterest income (i) $ 31,899 $ 29,465 $ 30,415 $ 118,729 $ 110,989 Net interest income (v) 45,174 43,136 38,284 172,499 107,045 Adjusted revenue (w) $ 77,073 $ 72,601 $ 68,699 $ 291,228 $ 218,034 Adjusted noninterest (loss) income as a percentage of revenue (i)/(w) 41.39 % 40.58 % 44.27 % 40.77 % 50.90 % Adjusted Noninterest Expense Noninterest expense $ 51,881 $ 50,541 $ 60,457 $ 201,227 $ 180,675 Less: Adjusted noninterest expense items HMNF merger- and acquisition-related expenses (112 ) (43 ) 7,729 142 9,980 Severance and signing bonus expense 212 104 2,276 1,319 2,901 Total adjusted noninterest expense items (j) 100 61 10,005 1,461 12,881 Adjusted noninterest expense (k) $ 51,781 $ 50,480 $ 50,452 $ 199,766 $ 167,794 Three months ended Year ended December 31, September 30, December 31, December 31, December 31, 2025 2025 2024 2025 2024 Adjusted Pre-Provision Net Revenue Net interest income (v) $ 45,174 $ 43,136 $ 38,284 $ 172,499 $ 107,045 Add: Adjusted noninterest income (i) 31,899 29,465 30,415 118,729 110,989 Less: Adjusted noninterest expense (k) 51,781 50,480 50,452 199,766 167,794 Adjusted pre-provision net revenue $ 25,292 $ 22,121 $ 18,247 $ 91,462 $ 50,240 Adjusted Efficiency Ratio Adjusted noninterest expense (k) $ 51,781 $ 50,480 $ 50,452 $ 199,766 $ 167,794 Less: Intangible amortization expense 2,382 2,710 2,804 10,511 6,776 Adjusted noninterest expense for efficiency ratio (l) 49,399 47,770 47,648 189,255 161,018 Tax-equivalent revenue Net interest income (v) 45,174 43,136 38,284 172,499 107,045 Add: Adjusted noninterest income (i) 31,899 29,465 30,415 118,729 110,989 Add: Tax-equivalent adjustment 654 638 385 2,402 1,202 Total tax-equivalent revenue (m) 77,727 73,239 69,084 293,630 219,236 Adjusted efficiency ratio (l)/(m) 63.55 % 65.22 % 68.97 % 64.45 % 73.45 % Adjusted Net Income Net (loss) income $ (33,050 ) $ 16,924 $ (66 ) $ 17,439 $ 17,780 Less: Adjusted noninterest (loss) income items (net of tax) (1) (h) (54,390 ) (28 ) 2,733 (52,814 ) 3,113 Add: HMNF day one provision for credit losses and unfunded commitments (net of tax) (1) — — 6,140 — 6,140 Add: Adjusted noninterest expense items (net of tax)(1)(j) 79 48 7,904 1,154 10,176 Adjusted net income (n) $ 21,419 $ 17,000 $ 11,245 $ 71,407 $ 30,983 Adjusted Return on Average Total Assets Average total assets (o) $ 5,252,046 $ 5,273,306 $ 5,272,777 $ 5,277,867 $ 4,503,483 Adjusted return on average total assets (n)/(o) 1.62 % 1.28 % 0.85 % 1.35 % 0.69 % Adjusted Return on Average Tangible Common Equity Adjusted net income (n) $ 21,419 $ 17,000 $ 11,245 $ 71,407 $ 30,983 Add: Intangible amortization expense (net of tax)(1) 1,882 2,141 2,215 8,304 5,353 Adjusted net income, excluding intangible amortization (p) 23,301 19,141 13,460 79,711 36,336 Average total equity 552,106 524,459 478,092 525,323 397,738 Less: Average goodwill 85,634 85,634 84,393 85,634 56,237 Less: Average other intangible assets (net of tax) 27,270 29,540 34,107 30,470 17,534 Average tangible common equity (q) 439,202 409,285 359,592 409,219 323,967 Adjusted return on average tangible common equity (p)/(q) 21.05 % 18.55 % 14.89 % 19.48 % 11.22 % Adjusted Earnings Per Common Share - Diluted Adjusted net income (n) $ 21,419 $ 17,000 $ 11,245 $ 71,407 $ 30,983 Less: Dividends and undistributed earnings allocated to participating securities (462 ) 148 (54 ) (29 ) 37 Adjusted net income available to common stockholders (r) 21,881 16,852 11,299 71,436 30,946 Weighted-average common shares outstanding for diluted earnings per share (s) 25,710 25,713 25,144 25,697 21,321 Adjusted earnings per common share - diluted (r)/(s) $ 0.85 $ 0.66 $ 0.45 $ 2.78 $ 1.45 Adjusted Net Charge-Offs to Average Loans Net charge-offs (recoveries) $ (311 ) $ (1,715 ) $ 1,258 $ 2,148 $ 4,154 Less: Charge-off of PCD reserves on loans transferred to non-mortgage loans held for sale — — — 3,053 — Adjusted net charge-offs (recoveries) (t) (311 ) (1,715 ) 1,258 (905 ) 4,154 Average total loans (u) $ 4,049,082 $ 4,036,936 $ 3,814,934 $ 4,047,034 $ 3,099,015 Adjusted net charge-offs (recoveries) to average loans (t)/(u) (0.03 )% (0.17 )% 0.13 % (0.02 )% 0.13 %
Author: Alerus Financial Corporation
Published at: 2026-01-28 21:30:00
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