Alerus Financial Corporation (NASDAQ:ALRS) Q1 2021 Earnings Conference Call April 29, 2021 10:00 AM ET Company Participants Randy Newman – Chairman, President and Chief Executive Officer Katie Lorenson – Chief Financial Officer Karin Taylor – Chief Risk Officer Conference Call Participants Jeff Rulis – D.A. Davidson Nate Race – Piper Sandler William Wallace – Raymond James Operator Good morning, and welcome to the Alerus Financial Corporation Earnings Conference Call. [Operator instructions] Please note tha ...

Financial Performance - As of December 31, 2020, Alerus Financial Corporation had total assets of $3.0 billion, total loans of $2.0 billion, and total deposits of $2.6 billion[21]. - The company reported $1.8 billion in mortgage originations for the year ended December 31, 2020[21]. - Noninterest income accounted for approximately 64.1% of total revenue for the year ended December 31, 2020, highlighting the company's reliance on fee-based services[177]. - The retirement and benefit services division experienced outflows of $6.8 billion in 2020, partially offset by inflows of $4.8 billion, indicating significant client turnover and market volatility[177]. - The company's 10 largest client relationships contributed approximately 11.6% of revenue in the retirement and benefit services business, emphasizing the risk of revenue loss if any major client terminates their relationship[193]. Assets and Loans - Core deposits totaled $2.5 billion, representing 97.5% of total deposits as of December 31, 2020[32]. - The company had mortgage loans held for sale amounting to $122.4 million as of December 31, 2020[36]. - Retirement and benefit services assets under administration/management totaled $25.0 billion as of December 31, 2020, representing approximately 76.0% of total retirement and benefit services assets[44]. - Approximately 61.3% of the total loan portfolio consisted of loans with real estate as a primary or secondary component of collateral, making the repayment highly dependent on real estate market conditions[152]. - Nonperforming loans totaled $5.1 million, or 0.26% of the total loan portfolio, as of December 31, 2020, which could negatively impact net interest income[162]. Capital and Regulatory Compliance - The Company and the Bank are subject to the Basel III Rule, which requires a minimum Common Equity Tier 1 Capital ratio of 4.5% of total risk-weighted assets[71]. - As of December 31, 2020, the Bank was well-capitalized, meeting all regulatory capital requirements and maintaining a capital conservation buffer of 2.5%[77]. - The Basel III Rule increased the required minimum capital ratios, with a total capital requirement of 8% of risk-weighted assets[71]. - The Company must maintain a Common Equity Tier 1 Capital ratio of 6.5% or more to be considered well-capitalized[76]. - The Federal Reserve requires bank holding companies to be well-capitalized and well-managed to effect interstate mergers or acquisitions[83]. Risk Management - The Bank's ability to manage credit risk is critical, with potential adverse effects on financial condition if credit risk is not effectively managed[139]. - The Bank is subject to the Community Reinvestment Act (CRA), which requires it to meet the credit needs of the entire community, including low- and moderate-income neighborhoods[121]. - The Bank's operational risk includes potential cybersecurity incidents and the effectiveness of its information security controls[134]. - The company is susceptible to fraudulent activity and cybersecurity-related incidents, which could result in financial losses and damage to reputation[200]. - Adverse economic conditions in the company's market areas could materially affect business, financial condition, and growth prospects[147]. Business Strategy and Growth - Alerus Financial Corporation's business model generates a majority of revenue from noninterest income, primarily from retirement and benefit services, wealth management, and mortgage segments[22]. - The "One Alerus" initiative aims to provide a cohesive client experience and enhance technology investments[25]. - The company plans to pursue organic growth by increasing loans, deposits, AUM, and AUA, but faces risks related to execution and market conditions[181]. - The company intends to expand through acquisitions of banks and financial services companies, but may encounter challenges in identifying suitable targets and securing regulatory approvals[182]. - The success of the company's growth strategies is contingent upon maintaining sufficient regulatory capital levels and favorable economic conditions in primary market areas[181]. Employee and Workforce - The company employs a total of 851 employees, with 794 being full-time and 57 part-time[46]. - The company has a diverse workforce, with 561 female employees and 290 male employees[46]. - The company’s compensation programs are designed to align employee compensation with company performance, including base salary and performance bonuses[51]. Market Presence - The company targets businesses with sales between $2.0 million and $100.0 million, focusing on specific high-priority industries[24]. - As of December 31, 2020, 93.5% of the loans in the loan portfolio were made to borrowers in North Dakota, Minnesota, and Arizona, indicating a high concentration risk in these states[148]. - The Twin Cities MSA had total deposits of $218.0 billion as of June 30, 2020, ranking as the 14th largest metropolitan statistical area in the U.S.[40]. - The Phoenix MSA had total deposits of $134.8 billion as of June 30, 2020, ranking as the 21st largest metropolitan statistical area in the U.S.[43].

Alerus Financial Corporation (NASDAQ:ALRS) Q4 2020 Earnings Conference Call January 28, 2020 10:00 AM ET Company Participants Randy Newman - Chairman, President, and CEO Katie Lorenson - EVP and CFO Karin Taylor - EVP and CRO Conference Call Participants Jeff Rulis - D.A. Davidson Nathan Rice - Piper Sandler William Wallace - Raymond James Operator Good morning and welcome to the Alerus Financial Corporation Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Afte ...

COVID-19 Response and Relief Programs - Alerus helped over 1,632 new and existing clients secure approximately $364 million in Paycheck Protection Program (PPP) funding relief[10, 14] - As of December 31, 2020, $836 million of PPP loans were forgiven or repaid[15] - Payment deferrals, maturity extensions, and payment modifications were offered to consumer, residential real estate (serviced and non-serviced), commercial real estate, and commercial & industrial loan groups[12, 13] Financial Performance and Capital Strength - For the year ended December 31, 2020, net income was $44675 thousand, or $252 earnings per common share – diluted[26] - The return on average tangible common equity was 1774% for the year ended December 31, 2020[26] - As of December 31, 2020, core deposits totaled $26 billion, representing 975% of total deposits[29] - Tangible Common Equity/Tangible Assets was 104%[16] - Total liquidity as of December 31, 2020, was approximately $1940909 thousand, including cash and cash equivalents of $172962 thousand and unencumbered securities of $431513 thousand[16] Asset Quality and Loan Portfolio - As of December 31, 2020, Nonperforming Assets (NPAs) / Assets was 017%[17] - Reserves / NPLs was 678% and Reserves / Loans was 173%[19] - The loan portfolio is well-diversified by total commitment, including unfunded commitments[22] - The company's residential real estate portfolio has an average FICO score of 754 for serviced loans and 779 for non-serviced loans[69] Business Segment Revenue Mix - Wealth Management accounted for 8% of revenue[42] - Market Sensitive Revenue accounted for 42%[46]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-39036 ALERUS FINANCIAL CORPORATION (Exact name of registrant as specified in its charter) Delaware 45-0375407 (State or other jurisdiction of incorporation ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-39036 ALERUS FINANCIAL CORPORATION (Exact name of registrant as specified in its charter) Delaware 45-0375407 (State or other jurisdiction of incorporation or ( ...

Alerus Financial Corporation (NASDAQ:ALRS) Q2 2020 Earnings Conference Call July 29, 2020 10:00 AM ET Company Participants Randy Newman – Chairman, President and Chief Executive Officer Katie Lorenson – Chief Financial Officer Karin Taylor – Chief Risk Officer Conference Call Participants Jeff Rulis – D.A. Davidson William Wallace – Raymond James Bob Shone – Piper Sandler Operator Good morning, and welcome to the Alerus Financial Corporation Second Quarter 2020 Earnings Conference Call. All participants wil ...