MINNEAPOLIS, Jan. 06, 2026 (GLOBE NEWSWIRE) -- Alerus Financial Corporation (Nasdaq: ALRS) announced that it will issue its fourth quarter financial results on Wednesday, January 28, 2026. Alerus Financial Corporation will also host a conference call at 11:00 a.m. Central Time on Thursday, January 29, 2026, to discuss its financial results. Analysts and institutional investors may participate in the question-and-answer session. Attendees are encouraged to register ahead of time for the call. Conference Call ...

Among the eight companies in the Diversified Financial Services industry that are scored by Seeking Alpha’s Quant rating, Alerus Financial Corporation ( ALRS ) is currently ranked at the top. The North Dakota-based firm is also one of the smallest, as one ofI have been involved in the financial world for over 20 years with experience as an advisor, teacher, and writer. I am a full believer in the free-market system and that financial markets are efficient with most stocks reflecting their real current value ...

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Financial Performance - For the three months ended September 30, 2025, the return on average total assets was 1.27%, compared to 0.48% for the same period in 2024[200]. - The Company reported a diluted earnings per common share of $0.65 for the three months ended September 30, 2025, compared to $0.26 for the same period in 2024[200]. - Net income for the three months ended September 30, 2025, was $16,924 thousand, down from $20,252 thousand in the same period in 2024, a decrease of 16.3%[202]. - Net income for Q3 2025 was $16.9 million, a 225.0% increase from $5.2 million in Q3 2024, resulting in $0.65 per diluted share[209]. - For the nine months ended September 30, 2025, net income reached $50.5 million, up 182.9% from $17.8 million in the same period of 2024, translating to $1.95 per diluted share[210]. Revenue and Income Sources - Noninterest income as a percentage of revenue was 40.56% for the three months ended September 30, 2025, down from 55.72% in the same period of 2024[200]. - Noninterest income for the nine months ended September 30, 2025, was $88,824 thousand, up from $81,057 thousand in the same period of 2024, indicating a rise of 9.5%[202]. - Total noninterest income for the three months ended September 30, 2025 was $29.4 million, an increase of $1.1 million, or 3.8%, from the same period in 2024[225]. - Mortgage banking revenue for the three months ended September 30, 2025 increased by $0.9 million, or 35.0%, compared to the same period in 2024[225]. Asset and Loan Growth - Total assets reached $5,330,573 thousand as of September 30, 2025, compared to $4,084,640 thousand a year prior, marking a growth of 30.5%[202]. - Loans increased to $4,102,075 thousand as of September 30, 2025, up from $3,032,343 thousand a year earlier, representing a growth of 35.4%[202]. - Total loans for the nine months ended September 30, 2025 amounted to $52.1 million, an increase of $14.5 million, or 38.5%, compared to the same period in 2024[222]. - Total loans outstanding reached $4.1 billion as of September 30, 2025, an increase of $109.5 million, or 2.7%, from December 31, 2024[248]. Equity and Capital - Total stockholders' equity increased to $550,688 thousand as of September 30, 2025, from $386,486 thousand a year earlier, a growth of 42.4%[202]. - Tangible common equity to tangible assets ratio improved to 8.24% as of September 30, 2025, compared to 7.13% a year earlier[204]. - Stockholders' equity increased by $55.3 million, or 11.2%, to $550.7 million as of September 30, 2025[284]. - Common equity tier 1 capital to risk-weighted assets increased to 10.84% as of September 30, 2025, from 9.91% as of December 31, 2024[288]. Interest Income and Margin - Net interest income for the three months ended September 30, 2025, was $43,136 thousand, compared to $22,542 thousand for the same period in 2024, reflecting an increase of 91.2%[202]. - The net interest margin (taxable-equivalent basis) for the three months ended September 30, 2025, was 3.50%, compared to 2.23% for the same period in 2024[200]. - Total interest income for the three months ended September 30, 2025 was $11.9 million, an increase of $6.9 million, or 138.5%, compared to the same period in 2024[222]. - The net interest margin for Q3 2025 was 3.50%, compared to 2.23% in Q3 2024, driven by higher rates on interest-earning assets and lower rates paid on deposits[216]. Expenses and Efficiency - The efficiency ratio for the three months ended September 30, 2025, was 65.34%, compared to 80.29% for the same period in 2024[200]. - Total noninterest expense for the three months ended September 30, 2025 was $50.5 million, an increase of $8.1 million, or 19.1%, compared to $42.4 million for the same period in 2024[228]. - The company experienced a $29.1 million increase in noninterest expenses for the nine months ended September 30, 2025, impacting overall earnings[211]. - Adjusted efficiency ratio improved to 65.22% for the three months ended September 30, 2025, from 62.35% in the previous quarter[207]. Credit Quality and Risk Management - The provision for credit losses was $1,661 thousand for the three months ended September 30, 2025, compared to $863 thousand for the same period in 2024, reflecting an increase of 92.5%[202]. - Nonperforming loans increased from $62,886 thousand as of December 31, 2024 to $59,644 thousand as of September 30, 2025, with nonperforming loans to total loans ratio at 1.45%[265]. - The allowance for credit losses (ACL) on loans increased from $39,142 thousand as of September 30, 2024 to $62,127 thousand as of September 30, 2025, reflecting a rise of approximately 58.7%[269]. - The company employs a centralized credit risk management strategy, focusing on diversification across geographic, industry, and client levels[262]. Liquidity and Funding - Total deposits increased to $4.4 billion as of September 30, 2025, up $34.2 million, or 0.8%, from December 31, 2024[275]. - On-balance sheet liquidity was $566.9 million as of September 30, 2025, compared to $579.0 million as of December 31, 2024[292]. - Off-balance sheet liquidity decreased to $2.2 billion as of September 30, 2025, down from $2.3 billion as of December 31, 2024[293]. - The Company can accept wholesale deposits up to 20.0% of total assets, equating to $1.1 billion, as of September 30, 2025[295]. Operational and Strategic Risk - Operational risk management focuses on strengthening internal controls and enterprise risk management to mitigate potential losses[309]. - Compliance risk includes potential regulatory sanctions and reputational impacts related to various banking regulations[310]. - Strategic risk is mitigated through initiatives aimed at understanding and reporting on various risks, including new product development[311].

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Financial Data and Key Metrics Changes - Net interest income increased by 0.2% over the prior quarter, while fee income decreased by 7.3% [17][18] - Net interest income reached $43.1 million with a stable net interest margin of 3.5% [19] - Non-performing assets to total assets increased to 1.13%, up 15 basis points from the prior quarter [28] Business Line Data and Key Metrics Changes - Retirement business revenue increased to $16.5 million, a 2.9% increase over the prior quarter, driven by asset-based fees [25] - Wealth management revenues decreased to $6.6 million, with assets under management increasing by 4.3% due to market performance [27] - Non-interest income for the banking segment was $6.4 million, excluding one-time items [24] Market Data and Key Metrics Changes - Total deposits grew by 1.7%, primarily driven by the expansion of full commercial relationships [22] - HSA deposits grew almost 2% over the prior quarter, reaching over $202 million [26] - The loan mix is approximately 50% fixed and 50% floating, with loans growing by 1.4% over the previous quarter [21] Company Strategy and Development Direction - The company aims to deepen client relationships and expand in growth markets while leveraging technology and AI for efficiency [15] - A focus on organic and inorganic growth in the retirement business, which is the 25th largest in the country [13] - The company has strategically divested non-core business lines and retained a number one market share in its hometown market [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and the opportunities ahead, emphasizing a solid foundation and energized team [16][80] - The company expects loan growth to continue at a mid-single-digit rate, with potential upside if rates decrease [39][40] - Management highlighted the importance of proactive risk management and capital allocation to support future growth [10][15] Other Important Information - The company returned $5.3 million to shareholders through dividends [10] - The tangible common equity ratio improved to 8.24%, indicating a strong capital position [29] Q&A Session Summary Question: On provisioning levels and recovery - Management noted that the lack of provision was driven by recoveries and a decrease in the requirement for pool loans [36] Question: Outlook on loan growth with potential lower rates - If rates decrease, loan growth could approach 10-12%, focusing on full C&I relationship growth [39][40] Question: Drivers of margin outlook and core margin improvement - The expectation for margin improvement is based on good spreads on loans and deposits, with a new business margin exceeding 350 basis points [45][46] Question: Fee income growth and market assumptions - Fee income growth is expected to be under pressure, particularly in the mortgage sector, with conservative modeling for market growth [48] Question: Drivers of attrition and capture rates in wealth and retirement - Trends in attrition and capture rates are consistent, with successful recruitment of advisors and improved technology enhancing client experiences [50] Question: Impact of M&A disruptions on growth - The company is opportunistic in talent acquisition and is finding success in attracting clients from disrupted banks [52][53] Question: Legacy expense growth and budgeting process - The budgeting process is ongoing, with evaluations for reinvestment and cost-saving opportunities [55] Question: Technology expenses and future expectations - Technology expenses are expected to see a slight uptick due to contract escalators [58]

Financial Performance - Net interest income for 3Q 2025 was $43.1 million, a 0.2% increase from 2Q 2025[35, 38, 54] - Noninterest income was $29.4 million, representing 40.6% of revenue[35, 38, 118] - Adjusted EPS was $0.66 and adjusted ROAA was 1.28%[35, 118] - Tangible book value per share was $16.90, an increase of $0.79 from the prior quarter[35, 40, 118] Balance Sheet - Total loans reached $4.1 billion, a 1.4% increase from June 30, 2025[15, 35, 61, 118] - Total deposits amounted to $4.4 billion, a 1.7% increase from June 30, 2025[15, 35, 68, 118] - The loan to deposit ratio was 93.0%, a 0.2% decrease from the previous quarter[35, 68, 71, 118] Asset Quality and Capital Strength - Total reserves to loans were 1.51%[35, 100, 104, 118] - CET1 was 10.8%, well above bank regulatory requirements[35, 106, 118] - Net recoveries to average loans were (0.17)% for the quarter[35, 98, 104] Divisional Performance - Banking services noninterest income decreased 23.9% from 2Q 2025, primarily due to a $2.1 million gain on sale of a purchased credit deteriorated hospitality loan in 2Q 2025[75, 80] - Retirement and Benefit Services revenue increased 2.9% compared to 2Q 2025, driven by an increase in asset-based fees[85] - Wealth Advisory Services revenue decreased 10.9% from 2Q 2025, primarily due to the timing of the wealth management platform conversion and a decrease in brokerage and insurance commissions[90]

Core Insights - Alerus reported a revenue of $73.2 million for the quarter ended September 2025, marking a 43.8% increase year-over-year, with an EPS of $0.66 compared to $0.26 in the previous year [1] - The revenue exceeded the Zacks Consensus Estimate of $71.55 million by 2.31%, and the EPS surpassed the consensus estimate of $0.59 by 11.86% [1] Financial Performance Metrics - Net charge-offs to average loans were -0.2%, better than the average estimate of 0.1% from two analysts [4] - The efficiency ratio was reported at 65.3%, outperforming the average estimate of 69.2% [4] - The net interest margin was 3.5%, exceeding the estimated 3.3% [4] - Average balance of total interest-earning assets was $4.97 billion, slightly below the $5 billion estimate [4] - Net interest income reached $43.14 million, surpassing the average estimate of $40.73 million [4] - Total noninterest income was $29.43 million, slightly below the average estimate of $30.03 million [4] - Wealth management income was $6.56 million, below the average estimate of $7.24 million [4] - Service charges on deposit accounts were $0.7 million, significantly lower than the $1.18 million estimate [4] - Mortgage banking income was $3.47 million, above the average estimate of $3.05 million [4] - Other income was reported at $2.23 million, slightly above the average estimate of $2.01 million [4] Stock Performance - Alerus shares have returned -4% over the past month, while the Zacks S&P 500 composite has increased by 3.6% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Insights - Alerus (ALRS) reported quarterly earnings of $0.66 per share, exceeding the Zacks Consensus Estimate of $0.59 per share, and showing significant growth from $0.26 per share a year ago, resulting in an earnings surprise of +11.86% [1] - The company achieved revenues of $73.2 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.31% and increasing from $50.9 million year-over-year [2] - Alerus has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The sustainability of Alerus's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.58 on revenues of $71.45 million, and for the current fiscal year, it is $2.44 on revenues of $285.3 million [7] Industry Context - Alerus operates within the Zacks Financial - Miscellaneous Services industry, which is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable industry outlook [8] - The correlation between near-term stock movements and earnings estimate revisions suggests that tracking these revisions can provide insights into stock performance [5][6]

Financial Performance - Alerus Financial Corporation reported net income of $16.9 million for Q3 2025, down from $20.3 million in Q2 2025 and up from $5.2 million in Q3 2024[2]. - Noninterest income was $29.4 million in Q3 2025, a 7.3% decrease from Q2 2025 but a 3.8% increase from Q3 2024[12][13]. - The return on average total assets was 1.27% in Q3 2025, down from 1.53% in Q2 2025[7]. - Net income for the three months ended September 30, 2025, was $16,924,000, down from $20,253,000 in the same quarter of 2024, a decrease of 16.3%[38]. - Adjusted net income for Q3 2025 was $17,000, down from $18,640 in Q2 2025, representing a decline of 8.8%[41]. - Earnings per common share for the nine months ended September 30, 2025, was $1.97, compared to $0.90 for the same period in 2024, representing a 118.9% increase[38]. Income and Expenses - Net interest income reached a record $43.1 million in Q3 2025, a 0.2% increase from Q2 2025 and a 91.4% increase from Q3 2024[4][10]. - Noninterest expense for Q3 2025 was $50.5 million, a 4.3% increase from Q2 2025[15]. - Noninterest expense for Q3 2025 increased by $8.1 million, or 19.1%, to $50.5 million, primarily due to higher compensation and technology expenses related to the HMNF acquisition[16]. - Total noninterest expense for the nine months ended September 30, 2025, was $149,344,000, up from $120,218,000 in 2024, marking a 24.2% increase[38]. Assets and Loans - Total loans increased by $109.5 million, or 2.7%, to $4.1 billion since December 31, 2024[7]. - Total assets as of September 30, 2025, were $5.3 billion, an increase of $68.9 million, or 1.3%, from December 31, 2024, driven by a $109.5 million increase in loans held for investment[17]. - Total loans held for investment reached $4.1 billion as of September 30, 2025, up $109.5 million, or 2.7%, from December 31, 2024, with commercial loans increasing by $69.4 million[18]. - Net loans amounted to $4.04 billion as of September 30, 2025, an increase from $3.93 billion as of December 31, 2024[37]. Deposits - Total deposits rose by $34.2 million, or 0.8%, to $4.4 billion since December 31, 2024[7]. - Total deposits were $4.4 billion as of September 30, 2025, an increase of $34.2 million, or 0.8%, from December 31, 2024, driven by growth in commercial deposits[21]. - Interest-bearing deposits increased by $160.9 million, while noninterest-bearing deposits decreased by $126.7 million from December 31, 2024[21]. Equity and Capital Ratios - Total stockholders' equity increased to $550.7 million as of September 30, 2025, up by $55.3 million from December 31, 2024[26]. - Tangible common equity to tangible assets (non-GAAP) improved to 8.24% as of September 30, 2025, compared to 7.13% as of December 31, 2024[27]. - Common equity tier 1 capital to risk-weighted assets increased to 10.84% as of September 30, 2025, from 9.91% as of December 31, 2024[27]. Asset Quality - Total nonperforming assets decreased by $2.8 million, or 4.4%, to $60.1 million as of September 30, 2025, with the allowance for credit losses on loans at $62.1 million, or 1.51% of total loans[23]. - The company recorded net recoveries of $1.7 million in Q3 2025, compared to net charge-offs of $3.8 million in Q2 2025, indicating improved asset quality[24]. - The provision for credit losses for the three months ended September 30, 2025, was $0, compared to $1,661,000 in the same period of 2024, indicating a significant reduction[38]. Operational Efficiency - Efficiency ratio increased to 65.34% in September 2025, compared to 60.66% in June 2025, indicating a decline in operational efficiency[39]. - Adjusted efficiency ratio for Q3 2025 was 65.22%, compared to 62.35% in Q2 2025, indicating a decline in operational efficiency[41]. Conference and Market Presence - The company will host a conference call on October 31, 2025, to discuss its financial results[28]. - Alerus operates 28 banking and commercial wealth offices across multiple states, enhancing its market presence[30].