Alerus (ALRS) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this company, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings esti ...

Have you been paying attention to shares of Alerus (ALRS) ? Shares have been on the move with the stock up 7.3% over the past month. The stock hit a new 52-week high of $25.45 in the previous session. Alerus has gained 11.3% since the start of the year compared to the 1.7% move for the Zacks Finance sector and the -3.5% return for the Zacks Financial - Miscellaneous Services industry.What's Driving the Outperformance?The stock has an impressive record of positive earnings surprises, having beaten the Zacks ...

David Long from Raymond James sets a price target of $29 for ALRS, indicating a potential upside of 18.76%.The Q4 2025 earnings call provides crucial insights into ALRS's financial health and strategic direction.ALRS's current trading price of $24.62 shows a 1.07% increase, with a year-high of $25 and a low of $15.78.Alerus Financial Corporation, listed on NASDAQ:ALRS, is a prominent financial services company. It offers a comprehensive suite of services including banking, mortgage, wealth management, and r ...

Financial Data and Key Metrics Changes - The company reported a core return on assets (ROA) of 1.62% for the quarter and an adjusted ROA of 1.35% with an adjusted efficiency ratio of 64.45% [3][4] - Net interest income increased by 4.7% over the prior quarter, while adjusted non-interest income rose by 8.3% [17] - The tangible common equity (TCE) ratio improved to 8.72%, up from 8.24% in the prior quarter [25] Business Line Data and Key Metrics Changes - The retirement division generated total revenue of $17.3 million, a 4.6% increase over the prior quarter, driven by growth in asset and transaction-based fees [22] - The wealth management business saw revenues increase by 13.4% to $7.4 million, with end-of-quarter assets under management rising by 0.8% [24] - Core revenues from fee income grew by 7% year-over-year, maintaining over 40% of total revenues [9] Market Data and Key Metrics Changes - The company experienced a decline in loans by 1.3% over the previous quarter due to strategic downsizing of the loan portfolio [19] - Deposits decreased by 5%, primarily due to the calling in of broker deposits and other wholesale funding [20] - The loan-to-deposit ratio stood at 96.6%, with a deposit retention rate close to 95% since the acquisition of Home Federal [21] Company Strategy and Development Direction - The company aims for sustainable organic growth and a return to top-tier profitability, focusing on enhancing its commercial bank and improving returns [5][6] - A strategic entry into the mid-market commercial and industrial (C&I) space is expected to drive growth, with strong pipelines entering 2026 [7] - The company plans to double the number of wealth management advisors and invest in technology and AI to enhance scalability and improve margins [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic position and momentum as it enters 2026, highlighting strong core financial performance and successful execution of strategic initiatives [3][4] - The company anticipates loan growth in the mid-single digits and deposit growth in the low single digits for 2026, with a projected net interest margin of around 3.5% to 3.6% [26][27] - Management noted that the competitive environment for deposits is expected to remain strong, impacting net interest margin [79] Other Important Information - The company successfully converted its entire wealth business onto a new system, achieving 100% client retention [11] - The allowance for loan losses remained robust at 1.53% of total loans, with net recoveries reported [9] - The company has close to $2.8 billion in liquidity to support loan growth and other liquidity events [25] Q&A Session Summary Question: Balancing dynamics for 2026 regarding loan and deposit growth - Management aims to maintain a loan-to-deposit ratio around 95% to 96%, acknowledging potential seasonal fluctuations [34] Question: Insights on expenses and technology investments - Guidance includes team additions and variable costs related to technology investments [36][37] Question: Loan growth expectations and credit trimming - A significant portion of loan runoff was intentional, focusing on reducing marginal credits and enhancing C&I relationships [42] Question: Non-performing loans and resolution expectations - An increase in non-performing loans was related to a multifamily loan, with expectations for resolution in the first half of the year [45] Question: Margin trajectory and expectations for 2026 - Management expects gradual improvement in net interest margin, influenced by deposit flows [46] Question: Update on capital and acquisition opportunities - The company continues to explore potential acquisitions in the retirement and HSA space while prioritizing organic growth [54] Question: Competition in deposit pricing - The deposit market remains competitive, with rational pricing generally observed [79]

Financial Data and Key Metrics Changes - The company reported a core return on assets (ROA) of 1.62% for the quarter and an adjusted ROA of 1.35% with an adjusted efficiency ratio of 64.45% [3][4] - Net interest income increased by 4.7% over the prior quarter, while adjusted non-interest income rose by 8.3% [17] - The tangible common equity (TCE) ratio improved to 8.72%, up from 8.24% in the prior quarter [25] Business Line Data and Key Metrics Changes - The retirement division generated total revenue of $17.3 million, a 4.6% increase over the prior quarter, driven by growth in asset and transaction-based fees [22] - The wealth management business saw revenues increase by 13.4% to $7.4 million, with end-of-quarter assets under management rising by 0.8% [24] - Core revenues from fee income grew by 7% year-over-year, maintaining over 40% of total revenues [9] Market Data and Key Metrics Changes - The company experienced a decline in loans by 1.3% over the previous quarter due to strategic downsizing of the loan portfolio [19] - Deposits declined by 5%, primarily due to the calling in of broker deposits and other wholesale funding [20] - The loan-to-deposit ratio was reported at 96.6%, with a deposit retention rate close to 95% since the acquisition of Home Federal [21] Company Strategy and Development Direction - The company aims for sustainable organic growth and a return to top-tier profitability, focusing on enhancing its commercial bank and improving returns [5][6] - A strategic entry into the mid-market commercial and industrial (C&I) space is expected to drive growth, with strong pipelines entering 2026 [7] - The company plans to double the number of wealth management advisors and invest in technology and AI to enhance scalability and improve margins [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic position and momentum as it enters 2026, highlighting strong core financial performance and successful execution of strategic initiatives [3][4] - The company anticipates loan growth in the mid-single digits and deposit growth in the low single digits for 2026, with a net interest margin projected around 3.5%-3.6% [26][27] - Management noted that the competitive environment for deposits remains strong, with expectations of continued pressure on margins [80] Other Important Information - The company successfully converted its entire wealth business onto a new system, achieving 100% client retention [11] - The allowance for loan losses remained robust at 1.53% of total loans, with net recoveries reported [9] - The company has close to $2.8 billion in liquidity to support loan growth and other liquidity events [25] Q&A Session Summary Question: Balancing dynamics for 2026 regarding loan and deposit growth - The company aims to manage a loan-to-deposit ratio around 95%-96%, acknowledging potential seasonal fluctuations [34] Question: Insights on expenses and technology investments - The guidance incorporates team additions and variable costs related to technology investments [36][37] Question: Loan growth expectations and credit trimming - A significant portion of loan runoff was intentional, focusing on reducing marginal credits and enhancing C&I relationships [42] Question: Non-performing loans and resolution expectations - The increase in non-performing loans was related to a multifamily loan, with expectations for resolution in the first half of the year [45] Question: Tax rate expectations for 2026 - The anticipated tax rate for 2026 is 24% [73]

Financial Data and Key Metrics Changes - Alerus Financial reported a core return on assets (ROA) of 1.62% for Q4 2025, with an adjusted ROA of 1.35% and an adjusted efficiency ratio of 64.45% [3][4] - Net interest income increased by 4.7% over the prior quarter, reaching $45.2 million, while adjusted non-interest income grew by 8.3% [17][19] - The reported net interest margin (NIM) increased to 3.69%, with a core interest margin of 3.17%, reflecting a 12-basis point improvement from the previous quarter [18][19] Business Line Data and Key Metrics Changes - The retirement division generated total revenue of $17.3 million, a 4.6% increase over the prior quarter, driven by growth in asset and transaction-based fees [22] - The wealth management business saw revenues increase by 13.4% to $7.4 million, with end-of-quarter assets under management rising by 0.8% [23] - Core revenues from fee income businesses grew by 7% year-over-year, maintaining over 40% of total revenues [9][10] Market Data and Key Metrics Changes - Organic loan growth for 2025 would have been mid-single digits if not for strategic reductions in commercial real estate (CRE) and targeted loan sales [6] - The company experienced a 5% decline in deposits, primarily due to the calling in of broker deposits and other wholesale funding [20] - The deposit retention rate since the acquisition of Home Federal remains close to 95% [20] Company Strategy and Development Direction - Alerus aims to enhance its commercial banking operations and improve returns while focusing on long-term strategies, including a purposeful deleveraging plan [5][6] - The company is committed to organic growth and strategic hiring, particularly in the mid-market commercial and industrial (C&I) space [13] - Alerus plans to double the number of wealth management advisors and expand its national presence through partnerships and technology investments [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic position and momentum entering 2026, highlighting strong financial performance and integration capabilities [3][4] - The outlook for 2026 includes expectations for mid-single-digit loan growth and low single-digit deposit growth, with a projected net interest margin of 3.5%-3.6% [26][27] - Management noted that the economic environment appears favorable for businesses in 2026, with expectations of continued improvement in core businesses [68] Other Important Information - The tangible common equity ratio improved to 8.72%, providing a strong position for organic loan growth [25] - The company has approximately $2.8 billion in liquidity to support loan growth and other liquidity events [25] - Alerus is focused on maintaining a diversified revenue engine across banking, wealth, and retirement sectors [14] Q&A Session Summary Question: Balancing dynamics for 2026 regarding loan and deposit growth - Management aims for a loan-to-deposit ratio around 95%-96%, acknowledging potential increases during seasonal outflows [33] Question: Insights on expenses and technology investments - Guidance includes team additions and variable costs related to new technology platforms [35][36] Question: Loan growth expectations and credit trimming - A significant portion of loan runoff was intentional, focusing on improving the risk profile by reducing marginal credits [40] Question: Non-performing assets and resolution expectations - Management expects resolution of several non-performing assets in the first half of the year [72] Question: Tax rate expectations for 2026 - The anticipated tax rate for 2026 is 24% [73]

INVESTOR PRESENTATION 4Q 2025 NASDAQ: ALRS DISCLAIMERS Forward-Looking Statements This presentation 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, ...

Core Insights - Alerus reported a revenue of $63.35 million for the quarter ended December 2025, reflecting a 12.2% decrease year-over-year and falling short of the Zacks Consensus Estimate of $71.1 million by 10.9% [1] - The company's EPS was $0.85, significantly higher than the $0.44 reported in the same quarter last year, and exceeded the consensus EPS estimate of $0.57 by 48.26% [1] Financial Performance Metrics - Alerus's efficiency ratio was reported at 557.5%, which is substantially higher than the average estimate of 70.9% from two analysts [4] - The average balance of total interest-earning assets was $4.93 billion, slightly below the estimated $5.04 billion [4] - The net charge-offs to average loans stood at -0%, compared to the estimated 0.1% [4] - The net interest margin, tax-equivalent, was reported at 3.7%, exceeding the estimate of 3.3% [4] - Retirement and benefit services revenue was $17.26 million, above the estimated $16.77 million [4] - Wealth management revenue reached $7.44 million, surpassing the estimate of $6.95 million [4] - Mortgage banking revenue was $3.2 million, exceeding the average estimate of $2.8 million [4] - Tax-equivalent net interest income was reported at $45.83 million, higher than the estimated $42.26 million [4] - Total noninterest income was $31.45 million, compared to the average estimate of $28.85 million [4] - Service charges on deposit accounts were $0.73 million, slightly below the estimated $0.83 million [4] Stock Performance - Alerus shares have returned +7.4% over the past month, outperforming the Zacks S&P 500 composite, which saw a +0.8% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Viewpoint - Alerus (ALRS) reported quarterly earnings of $0.85 per share, exceeding the Zacks Consensus Estimate of $0.57 per share, and showing a significant increase from $0.44 per share a year ago, resulting in an earnings surprise of +48.26% [1] Financial Performance - Alerus posted revenues of $63.35 million for the quarter ended December 2025, which was 10.9% below the Zacks Consensus Estimate and a decrease from $72.16 million in the same quarter last year [2] - Over the last four quarters, Alerus has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Performance - Alerus shares have increased by approximately 6.4% since the beginning of the year, outperforming the S&P 500's gain of 1.9% [3] Future Outlook - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $0.57 for the upcoming quarter and $2.52 for the current fiscal year [4][7] - The estimate revisions trend for Alerus was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Financial - Miscellaneous Services industry, to which Alerus belongs, is currently in the top 40% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8]

Financial Performance - Alerus Financial Corporation reported a net loss of $33.1 million for Q4 2025, compared to a net income of $16.9 million in Q3 2025[1]. - The company sold $360.1 million of available-for-sale securities, resulting in a one-time pre-tax net loss of $68.4 million[2]. - Adjusted return on average assets for 2025 was 1.35%, with an adjusted efficiency ratio of 64.45%[3]. - The company achieved tangible book value growth of 21.54% from the prior year, with a tangible book value per common share of $17.55[6]. - Earnings per common share for the year ended December 31, 2025, was $0.69, down from $0.84 in 2024, indicating a decrease of approximately 17.9%[42]. - Adjusted net income for Q4 2025 was $21,419 thousand, compared to $17,000 thousand in Q3 2025 and $11,245 thousand in Q4 2024, indicating a year-over-year increase of 90.7%[45]. - Adjusted earnings per common share for the year ended December 31, 2025, was $2.78, up from $1.45 in 2024, marking an increase of 91.0%[46]. Income and Expenses - Net interest income for Q4 2025 was $45.2 million, a 4.7% increase from Q3 2025[11]. - Noninterest (loss) income for Q4 2025 was $(36.9) million, a decrease of $66.4 million, or 225.5%, from Q3 2025, primarily due to a $68.4 million loss on the sale of investment securities[15]. - Noninterest expense for Q4 2025 was $51.9 million, a $1.3 million, or 2.7%, increase from Q3 2025, driven by occupancy and equipment expenses[18]. - Noninterest expense for the year ended December 31, 2025, was $201,227 thousand, up from $180,675 thousand in 2024, reflecting an increase of 11.4%[42]. Asset and Loan Growth - Assets under administration and management grew to a combined $49.8 billion, reflecting strong organic growth in retirement and wealth segments[5]. - Mortgage originations for the full year 2025 were $484.8 million, a 54.4% increase from the previous year[9]. - Total loans held for investment increased by $55.5 million, or 1.4%, to $4.0 billion as of December 31, 2025, driven by increases in consumer and commercial loans[21]. - Average total loans for the year ended December 31, 2025, were $4,047,034 thousand, compared to $3,099,015 thousand in 2024, reflecting a growth of 30.7%[46]. Asset Quality and Credit Losses - Total nonperforming assets increased by $3.6 million, or 5.7%, to $66.5 million as of December 31, 2025[26]. - The allowance for credit losses on loans was $61.9 million, or 1.53% of total loans, as of December 31, 2025, compared to $59.9 million, or 1.50%, as of December 31, 2024[26]. - The provision for credit losses was released by $0.3 million in the fourth quarter of 2025, contrasting with a provision of $12.0 million in the fourth quarter of 2024[28]. - Nonperforming loans totaled $66.1 million, an increase from $59.6 million as of September 30, 2025, and $51.5 million as of June 30, 2025[27]. Capital and Equity - Total stockholders' equity increased to $564.9 million as of December 31, 2025, up by $69.5 million from December 31, 2024, primarily due to a rise in accumulated other comprehensive income[30]. - Common equity tier 1 capital to risk-weighted assets improved to 10.28% as of December 31, 2025, up from 9.91% as of December 31, 2024[31]. - Tangible common equity increased to $445,929 thousand in December 2025 from $429,300 thousand in September 2025, representing a growth of 8.5%[43]. Operational Efficiency - The adjusted efficiency ratio improved to 63.55% in Q4 2025 from 65.22% in Q3 2025 and 68.97% in Q4 2024, indicating enhanced operational efficiency[45]. - The adjusted return on average tangible common equity for Q4 2025 was 21.05%, up from 18.55% in Q3 2025 and 14.89% in Q4 2024, showing significant improvement in profitability[45]. Future Outlook - The company will host a conference call on January 29, 2026, to discuss its financial results[32].