MINNEAPOLIS–(BUSINESS WIRE)–Alerus Financial Corporation (Nasdaq: ALRS) reported net income of $10.9 million for the fourth quarter of 2022, or $0.53 per diluted common share, compared to net income of $9.6 million, or $0.47 per diluted common share, for the third quarter of 2022, and net income of $12.7 million, or $0.72 per diluted common share, for the fourth quarter of 2021.
CEO Comments
President and Chief Executive Officer Katie Lorenson said, “2022 was a year of transitions and milestones for our Company. We completed our largest acquisition with Metro Phoenix Bank, which was transformational to our growth in the Arizona market. We added new leadership and had continued momentum in talent acquisitions with successful lift outs and additions of commercial bankers, treasury management professionals, and wealth and retirement advisors. We remain focused on client acquisition and deepening of relationships with existing clients through our diversified business model. We continue to right size our infrastructure and manage expenses, despite facing inflationary pressures. During the year, we returned over 33% of our earnings to our shareholders by increasing our dividend 11%. We remain focused on creating long-term value for our clients, and in return, our shareholders. I want to thank our employees for all their continued hard work in developing the strong foundation from which we will continue to grow from in 2023 and beyond.”
Quarterly Highlights
- Return on average total assets of 1.17%, compared to 1.02% for the third quarter of 2022
- Return on average common equity of 12.37%, compared to 10.25% for the third quarter of 2022
- Return on average tangible common equity(1) of 16.63%, compared to 13.89% for the third quarter of 2022
- Net interest margin (tax-equivalent) was 3.09%, compared to 3.21% for the third quarter of 2022
- Noninterest expense was $37.9 million, a $4.8 million, or 11.3%, decrease compared to $42.8 million for the third quarter of 2022
- Efficiency ratio(1) of 69.6%, compared to 74.8% for the third quarter of 2022
- Allowance for loan losses to total loans was 1.27% compared to 1.80% as of December 31, 2021. Excluding the acquisition of Metro Phoenix Bank the allowance for loan losses to total loans was 1.43% as of December 31, 2022
- Noninterest income for the third quarter of 2022 was 48.62% of total revenue, compared to 48.82% for the third quarter of 2022
- Loan to deposit ratio was 83.8%, compared to 60.2% as of December 31, 2021
- Common equity tier 1 capital to risk weighted assets was 13.39%, compared to 14.65% as of December 31, 2021
Full Year 2022 Highlights
- Net income of $40.0 million, a decrease of $12.7 million, or 24.1%, compared to $52.7 million in 2021
- Noninterest expense of $158.8 million, a decrease of $10.1 million, or 6.0%, compared to $168.9 million in 2021
- No provision for loan losses expense in 2022, compared to a $3.5 million reversal of provision for loan losses expense in 2021
- Loans held for investment increased $686.0 million, or 39.0%, since December 31, 2021, including $270.4 million of loans acquired from Metro Phoenix Bank. Excluding the acquisition of Metro Phoenix Bank and Paycheck Protection Program, or PPP, loans, loans held for investment increased $448.4 million, or 25.5%, since December 31, 2021
- Average loans of $2.1 billion, an increase of $200.7 million, or 10.8%, from 2021
- Average deposits of $2.9 billion, an increase of $158.0 million, or 5.8%, from 2021
- Diluted earnings per share, or EPS, of $2.10, compared to $2.97 in 2021
- Return on average total assets of 1.14%, compared to 1.66% in 2021
- Return on average common equity of 11.55%, compared to 15.22% in 2021
- Return on average tangible common equity(1) of 15.09%, compared to 18.89% in 2021
-
Revenue of $211.0 million, a decrease of $23.5 million, or 10.0%, compared to $234.5 million in 2021
- Net interest income was $99.7 million, an increase of $12.6 million, or 14.5%, compared to $87.1 million in 2021
- Noninterest income was $111.2 million, a decrease of $36.2 million, or 24.5%, compared to $147.4 million in 2021
- Dividends declared per common share were $0.70, a $0.07, or 11.1% increase compared to $0.63 in 2021
|
(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 |
|
Year ended |
|
|||||||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|||||
|
(dollars and shares in thousands, except per share data) |
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|||||
|
Performance Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average total assets |
|
|
1.17 |
% |
|
1.02 |
% |
|
1.50 |
% |
|
1.14 |
% |
|
1.66 |
% |
|
Return on average common equity |
|
|
12.37 |
% |
|
10.25 |
% |
|
14.12 |
% |
|
11.55 |
% |
|
15.22 |
% |
|
Return on average tangible common equity (1) |
|
|
16.63 |
% |
|
13.89 |
% |
|
17.36 |
% |
|
15.09 |
% |
|
18.89 |
% |
|
Noninterest income as a % of revenue |
|
|
48.62 |
% |
|
48.82 |
% |
|
59.67 |
% |
|
52.72 |
% |
|
62.86 |
% |
|
Net interest margin (tax-equivalent) |
|
|
3.09 |
% |
|
3.21 |
% |
|
2.84 |
% |
|
3.04 |
% |
|
2.90 |
% |
|
Efficiency ratio (1) |
|
|
69.62 |
% |
|
74.76 |
% |
|
71.06 |
% |
|
72.86 |
% |
|
70.02 |
% |
|
Net charge-offs/(recoveries) to average loans |
|
|
(0.03) |
% |
|
0.07 |
% |
|
(0.22) |
% |
|
0.02 |
% |
|
(0.04) |
% |
|
Dividend payout ratio |
|
|
33.96 |
% |
|
38.30 |
% |
|
22.22 |
% |
|
33.33 |
% |
|
21.21 |
% |
|
Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share – basic |
|
$ |
0.54 |
|
$ |
0.48 |
|
$ |
0.73 |
|
$ |
2.12 |
|
$ |
3.02 |
|
|
Earnings per common share – diluted |
|
$ |
0.53 |
|
$ |
0.47 |
|
$ |
0.72 |
|
$ |
2.10 |
|
$ |
2.97 |
|
|
Dividends declared per common share |
|
$ |
0.18 |
|
$ |
0.18 |
|
$ |
0.16 |
|
$ |
0.70 |
|
$ |
0.63 |
|
|
Book value per common share |
|
$ |
17.85 |
|
$ |
17.25 |
|
$ |
20.88 |
|
|
|
|
|
|
|
|
Tangible book value per common share (1) |
|
$ |
14.37 |
|
$ |
13.76 |
|
$ |
17.87 |
|
|
|
|
|
|
|
|
Average common shares outstanding – basic |
|
|
19,988 |
|
|
19,987 |
|
|
17,210 |
|
|
18,640 |
|
|
17,189 |
|
|
Average common shares outstanding – diluted |
|
|
20,232 |
|
|
20,230 |
|
|
17,480 |
|
|
18,884 |
|
|
17,486 |
|
|
Other Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement and benefit services assets under administration/management |
|
$ |
32,122,520 |
|
$ |
30,545,694 |
|
$ |
36,732,938 |
|
|
|
|
|
|
|
|
Wealth management assets under administration/management |
|
$ |
3,582,648 |
|
$ |
3,435,786 |
|
$ |
4,039,931 |
|
|
|
|
|
|
|
|
Mortgage originations |
|
$ |
126,254 |
|
$ |
229,901 |
|
$ |
356,821 |
|
$ |
812,314 |
|
$ |
1,836,064 |
|
|
(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 2022 was $27.0 million, a $1.4 million, or 4.8%, decrease from the third quarter of 2022. Net interest income increased $4.2 million, or 18.3%, from $22.8 million for the fourth quarter of 2021. The quarter over quarter decrease in net interest income was primarily driven by an increase of $4.8 million, or 123.5%, in interest expense, partially offset by a $3.5 million, or 11.0%, increase in interest income. The increase in interest expense was primarily due to increases of $3.8 million in interest expense paid on deposits and $1.0 million in interest expense paid on short-term borrowings. The increase in interest expense paid on deposits was primarily due to deposit rate increases in response to a highly competitive deposit environment arising from the Federal Reserve Bank raising short-term rates. Short-term borrowings expense increased as short-term rates increased and the average balance of short-term borrowings increased as loan growth outpaced deposit growth in the fourth quarter of 2022.
Net interest margin (tax-equivalent), a non-GAAP financial measure, was 3.09% for the fourth quarter of 2022, a 12 basis point decrease from 3.21% for the third quarter of 2022, and a 25 basis point increase from 2.84% in the fourth quarter of 2021. The linked quarter decrease was primarily driven by a 79 basis point increase in the rate paid on interest-bearing liabilities, partially offset by a 45 basis point increase in interest earning asset yields. The increase in the rate paid on interest-bearing liabilities was the result of a 73 basis point increase on the rate paid on interest-bearing deposits and a 143 basis point increase in the rate paid on fed funds purchased and short-term borrowings. The increase in interest earning asset yields was primarily driven by a 49 basis point increase in loan yields. Additionally, we saw a $97.4 million increase in average total loans, primarily due to a $56.6 million increase in the average balance of commercial real estate and real estate construction loans.
Noninterest Income
Noninterest income for the fourth quarter of 2022 was $25.5 million, a $1.5 million, or 5.5%, decrease from the third quarter of 2022. The quarter over quarter decrease was primarily driven by a $1.6 million decrease in mortgage banking revenue, partially offset by a $292 thousand increase in wealth management revenue. The decrease in mortgage banking revenue was primarily due to a $103.6 million, or 45.1%, decrease in mortgage originations driven by macroeconomic challenges, partially offset by a 41 basis point increase in the gain on sale margin. The increase in wealth management revenue was primarily driven by a $146.9 million increase in assets under management, due to increased market value from improved bond and equity markets.
Noninterest income for the fourth quarter of 2022 decreased $8.2 million, or 24.3%, from $33.7 million in the fourth quarter of 2021. The decrease in noninterest income was primarily due to decreases of $5.8 million in mortgage banking revenue, $2.0 million in retirement and benefit services revenue and $489 thousand in wealth management revenue. The decrease in mortgage banking revenue was primarily due to a $230.6 million decrease in mortgage originations driven by macroeconomic challenges. The decrease in retirement and benefit services revenue was primarily due to a $4.6 billion decrease in assets under administration/management. Wealth management revenue decreased primarily due to a $457.3 million decrease in assets under management. Both decreases in assets under administration/management were mainly driven by lower bond and equity markets.
Noninterest Expense
Noninterest expense for the fourth quarter of 2022 was $37.9 million, a $4.8 million, or 11.3%, decrease compared to the third quarter of 2022. The linked quarter decrease in noninterest expense was primarily due to decreases of $2.0 million in compensation expense, $1.7 million in professional fees and assessments, and $968 thousand in business services, software and technology expense. Compensation expense decreased primarily due to lower mortgage incentives associated with the decrease in mortgage originations as well as an accrual adjustment to performance bonus accruals. The decrease in professional fees and assessments was primarily driven by a decline in the one-time expenses associated with the acquisition of Metro Phoenix Bank. Business services, software and technology expense decreased primarily due to the timing of contract renewals.
Noninterest expense for the fourth quarter of 2022 decreased $3.3 million, or 8.1%, from $41.3 million in the fourth quarter of 2021. The year over year decrease in noninterest expense was primarily driven by decreases of $2.9 million in compensation expense, $815 thousand of business services, software and technology expense, and $703 thousand in employee taxes and benefits expense, partially offset by a $1.0 million increase in other noninterest expense. The decrease in compensation expense was primarily due to lower mortgage incentives associated with the decrease in mortgage originations. Business services, software and technology expense decreased primarily due to the timing of contract renewals. The decrease in employee taxes and benefits expense was primarily due to a $531 thousand decrease in share-based compensation from an acceleration upon employee retirements. The increase in other noninterest expense included $469 thousand in one-time expenses from our divestiture of payroll services and $247 thousand increase in the provision for unfunded commitments.
Financial Condition
Total assets were $3.8 billion as of December 31, 2022, an increase of $386.9 million, or 11.4%, from December 31, 2021. The increase in assets included an increase of $686.0 million in loans held for investment, partially offset by decreases of $184.1 million in cash and cash equivalents and $166.5 million in investment securities.
Loans
Total loans were $2.4 billion as of December 31, 2022, an increase of $686.0 million, or 39.0%, from December 31, 2021. The increase in total loans was primarily due to increases of $415.6 million in organic loan growth and $270.4 million in loans acquired from Metro Phoenix Bank. Excluding loans acquired from Metro Phoenix Bank, the increase in organic loan growth included increases of $154.5 million in commercial real estate, $149.2 million in residential real estate first mortgages and $50.5 million in commercial and industrial loans. Excluding PPP loans and loans acquired from Metro Phoenix Bank, commercial and industrial loans increased $83.4 million.
The following table presents the composition of our loan portfolio as of the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|||||
|
(dollars in thousands) |
|
2022 |
|
2022 |
|
2022 |
|
2022 |
|
2021 |
|||||
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial (1) |
|
$ |
583,876 |
|
$ |
564,655 |
|
$ |
484,426 |
|
$ |
467,449 |
|
$ |
436,761 |
|
Real estate construction |
|
|
97,810 |
|
|
89,215 |
|
|
48,870 |
|
|
41,604 |
|
|
40,619 |
|
Commercial real estate |
|
|
881,670 |
|
|
819,068 |
|
|
599,737 |
|
|
602,158 |
|
|
598,893 |
|
Total commercial |
|
|
1,563,356 |
|
|
1,472,938 |
|
|
1,133,033 |
|
|
1,111,211 |
|
|
1,076,273 |
|
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential real estate first mortgage |
|
|
679,551 |
|
|
649,818 |
|
|
568,571 |
|
|
522,489 |
|
|
510,716 |
|
Residential real estate junior lien |
|
|
150,479 |
|
|
143,681 |
|
|
135,255 |
|
|
130,604 |
|
|
125,668 |
|
Other revolving and installment |
|
|
50,608 |
|
|
51,794 |
|
|
53,384 |
|
|
53,738 |
|
|
45,363 |
|
Total consumer |
|
|
880,638 |
|
|
845,293 |
|
|
757,210 |
|
|
706,831 |
|
|
681,747 |
|
Total loans |
|
$ |
2,443,994 |
|
$ |
2,318,231 |
|
$ |
1,890,243 |
|
$ |
1,818,042 |
|
$ |
1,758,020 |
|
(1) |
Includes PPP loans of $737 thousand at December 31, 2022, $2.9 million at September 30, 2022, $6.9 million at June 30, 2022, $13.1 million at March 31, 2022 and $33.6 million at December 31, 2021. |
Deposits
Total deposits were $2.9 billion as of December 31, 2022, a decrease of $5.1 million, or 0.2%, from December 31, 2021. Interest-bearing deposits increased $72.8 million, while noninterest-bearing deposits decreased $77.9 million in the fourth quarter of 2022. In the third quarter of 2022, we acquired $353.7 million in deposits from our acquisition of Metro Phoenix Bank. Excluding deposits acquired from Metro Phoenix Bank, deposits decreased $358.8 million, or 12.3%, from December 31, 2021. The decrease was primarily due to decreases of $184.7 million in interest-bearing deposits and $174.0 million in noninterest-bearing deposits. Interest-bearing deposits decreased primarily due to a $84.9 million decrease in money market savings accounts, and a $69.0 million decrease in time deposits. Noninterest-bearing deposits decreased primarily due to a $68.3 million decrease in synergistic deposits. Synergistic deposits, which include deposits from our retirement and benefit services and wealth management segments as well as HSA deposits, increased $22.6 million from December 31, 2021, primarily due to increases in our synergistic deposits from our wealth management division.
The following table presents the composition of our deposit portfolio as of the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|||||
|
(dollars in thousands) |
|
2022 |
|
2022 |
|
2022 |
|
2022 |
|
2021 |
|||||
|
Noninterest-bearing demand |
|
$ |
860,987 |
|
$ |
905,228 |
|
$ |
764,808 |
|
$ |
831,558 |
|
$ |
938,840 |
|
Interest-bearing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand |
|
|
706,275 |
|
|
653,216 |
|
|
642,641 |
|
|
760,321 |
|
|
714,669 |
|
Savings accounts |
|
|
99,882 |
|
|
101,820 |
|
|
97,227 |
|
|
99,299 |
|
|
96,825 |
|
Money market savings |
|
|
1,035,981 |
|
|
1,079,520 |
|
|
914,423 |
|
|
976,905 |
|
|
937,305 |
|
Time deposits |
|
|
212,359 |
|
|
222,027 |
|
|
200,451 |
|
|
224,184 |
|
|
232,912 |
|
Total interest-bearing |
|
|
2,054,497 |
|
|
2,056,583 |
|
|
1,854,742 |
|
|
2,060,709 |
|
|
1,981,711 |
|
Total deposits |
|
$ |
2,915,484 |
|
$ |
2,961,811 |
|
$ |
2,619,550 |
|
$ |
2,892,267 |
|
$ |
2,920,551 |
Asset Quality
Total nonperforming assets were $3.8 million as of December 31, 2022, an increase of $742 thousand, or 24.1%, from December 31, 2021. As of December 31, 2022, the allowance for loan losses was $31.1 million, or 1.27% of total loans, compared to $31.6 million, or 1.80% of total loans, as of December 31, 2021. Excluding Metro Phoenix Bank, the allowance for loan losses to total loans was 1.43% as of December 31, 2022.
The following table presents selected asset quality data as of and for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the three months ended |
|
|||||||||||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
|||||
|
(dollars in thousands) |
|
2022 |
|
2022 |
|
2022 |
|
2022 |
|
2021 |
|
|||||
|
Nonaccrual loans |
|
$ |
3,794 |
|
$ |
4,303 |
|
$ |
4,370 |
|
$ |
4,069 |
|
$ |
2,076 |
|
|
Accruing loans 90+ days past due |
|
|
— |
|
|
1,000 |
|
|
— |
|
|
146 |
|
|
121 |
|
|
Total nonperforming loans |
|
|
3,794 |
|
|
5,303 |
|
|
4,370 |
|
|
4,215 |
|
|
2,197 |
|
|
OREO and repossessed assets |
|
|
30 |
|
|
904 |
|
|
860 |
|
|
865 |
|
|
885 |
|
|
Total nonperforming assets |
|
$ |
3,824 |
|
$ |
6,207 |
|
$ |
5,230 |
|
$ |
5,080 |
|
$ |
3,082 |
|
|
Net charge-offs/(recoveries) |
|
|
(178) |
|
|
405 |
|
|
340 |
|
|
(141) |
|
|
(1,006) |
|
|
Net charge-offs/(recoveries) to average loans |
|
|
(0.03) |
% |
|
0.07 |
% |
|
0.07 |
% |
|
(0.03) |
% |
|
(0.22) |
% |
|
Nonperforming loans to total loans |
|
|
0.16 |
% |
|
0.23 |
% |
|
0.23 |
% |
|
0.23 |
% |
|
0.12 |
% |
|
Nonperforming assets to total assets |
|
|
0.10 |
% |
|
0.17 |
% |
|
0.16 |
% |
|
0.15 |
% |
|
0.09 |
% |
|
Allowance for loan losses to total loans |
|
|
1.27 |
% |
|
1.34 |
% |
|
1.66 |
% |
|
1.74 |
% |
|
1.80 |
% |
|
Allowance for loan losses to nonperforming loans |
|
|
821 |
% |
|
584 |
% |
|
718 |
% |
|
752 |
% |
|
1,437 |
% |
For the fourth quarter of 2022, we had net recoveries of $178 thousand compared to net charge-offs of $405 thousand for the third quarter of 2022 and $1.0 million of net recoveries for the fourth quarter of 2021.
There was no provision expense recorded for the three months ended December 31, 2022, no change compared to the three months ended September 30, 2022, and a $1.5 million increase as compared to the three months ended December 31, 2021. With the decrease in nonperforming assets, as well as adjustments for pandemic related qualitative factors, management concluded no need for additional provision expense in the period.
Capital
Total stockholders’ equity was $356.9 million as of December 31, 2022, a decrease of $2.5 million, or 0.7%, from December 31, 2021. The decrease in stockholders’ equity was primarily due to a $94.4 million decrease in other comprehensive loss, due to rising interest rates, which resulted in a lower fair value of our available-for-sale investment securities portfolio. Tangible book value per common share, a non-GAAP financial measure, decreased to $14.37 as of December 31, 2022, from $17.87 as of December 31, 2021. Tangible common equity to tangible assets, a non-GAAP financial measure, decreased to 7.74% as of December 31, 2022, from 9.21% as of December 31, 2021. Common equity tier 1 capital to risk weighted assets decreased to 13.39% as of December 31, 2022, from 14.65% as of December 31, 2021.
The following table presents our capital ratios as of the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
|||
|
|
|
2022 |
|
2022 |
|
2021 |
|
|||
|
Capital Ratios(1) |
|
|
|
|
|
|
|
|
|
|
|
Alerus Financial Corporation Consolidated |
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital to risk weighted assets |
|
|
13.39 |
% |
|
13.63 |
% |
|
14.65 |
% |
|
Tier 1 capital to risk weighted assets |
|
|
13.69 |
% |
|
13.94 |
% |
|
15.06 |
% |
|
Total capital to risk weighted assets |
|
|
16.48 |
% |
|
16.84 |
% |
|
18.64 |
% |
|
Tier 1 capital to average assets |
|
|
11.25 |
% |
|
10.82 |
% |
|
9.79 |
% |
|
Tangible common equity / tangible assets (2) |
|
|
7.74 |
% |
|
7.59 |
% |
|
9.21 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Alerus Financial, N.A. |
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital to risk weighted assets |
|
|
12.76 |
% |
|
13.01 |
% |
|
13.87 |
% |
|
Tier 1 capital to risk weighted assets |
|
|
12.76 |
% |
|
13.01 |
% |
|
13.87 |
% |
|
Total capital to risk weighted assets |
|
|
13.83 |
% |
|
14.11 |
% |
|
15.12 |
% |
|
Tier 1 capital to average assets |
|
|
10.48 |
% |
|
11.12 |
% |
|
9.01 |
% |
|
(1) |
Capital ratios for the current quarter are to be considered preliminary until the Call Report for Alerus Financial, N.A. is filed. |
|
(2) |
Represents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.” |
Conference Call
The Company will host a conference call at 11:00 a.m. Central Time on Thursday, January 26, 2023, to discuss its financial results. The call can be accessed via telephone at (844) 200-6205, using access code 249132. 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 with corporate offices in Grand Forks, North Dakota, and the Minneapolis-St. Paul, Minnesota metropolitan area. 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 has banking, mortgage, and wealth management offices in Grand Forks and Fargo, North Dakota, the Minneapolis-St. Paul, Minnesota metropolitan area, and Phoenix, Scottsdale, and Mesa Arizona. Alerus Retirement and Benefits plan administration hubs are located in Minnesota, Michigan, and Colorado.
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 and financial performance. 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.
Contacts
Alan A. Villalon, Chief Financial Officer
952.417.3733 (Office)
