Core Insights - Alerus reported a revenue of $72.16 million for the quarter ended December 2024, marking a 53.6% increase year-over-year, with an EPS of $0.44 compared to $0.24 in the previous year [1] - The revenue exceeded the Zacks Consensus Estimate of $62.55 million by 15.36%, and the EPS also surpassed the consensus estimate of $0.39 by 12.82% [1] Financial Performance Metrics - Net charge-offs to average loans remained stable at 0.1%, matching the analysts' estimate [4] - The efficiency ratio was reported at 73.4%, better than the average estimate of 76.9% [4] - The net interest margin was 3.2%, exceeding the analysts' average estimate of 2.7% [4] - Total interest-earning assets averaged $4.81 billion, slightly below the analysts' estimate of $5 billion [4] - Tax-equivalent net interest income was $33.98 million, surpassing the estimate of $33.41 million [4] - Retirement and benefit services revenue was $16.49 million, above the estimate of $16.15 million [4] - Net interest income reached $38.28 million, compared to the average estimate of $31.36 million [4] - Wealth management revenue was $7.01 million, exceeding the estimate of $6.80 million [4] - Other income was reported at $6.06 million, significantly higher than the estimate of $2.93 million [4] - Service charges on deposit accounts were $0.64 million, below the estimate of $1.34 million [4] - Mortgage banking revenue was $3.67 million, above the average estimate of $2 million [4] - Total noninterest income was $33.87 million, exceeding the estimate of $29.31 million [4] Stock Performance - Alerus shares have returned +6.3% over the past month, outperforming the Zacks S&P 500 composite's +0.8% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [3]

分组1 - Alerus reported quarterly earnings of $0.44 per share, exceeding the Zacks Consensus Estimate of $0.39 per share, and showing an increase from $0.24 per share a year ago, resulting in an earnings surprise of 12.82% [1] - The company achieved revenues of $72.16 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 15.36%, compared to $46.99 million in the same quarter last year [2] - Alerus shares have increased approximately 5.1% since the beginning of the year, outperforming the S&P 500's gain of 2.2% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.41 on revenues of $63.15 million, and for the current fiscal year, it is $1.96 on revenues of $264.1 million [7] - The Financial - Miscellaneous Services industry, to which Alerus belongs, is currently ranked in the bottom 49% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Performance - Alerus Financial Corporation reported a net income of $3.2 million for Q4 2024, a decrease of 38.5% from $5.2 million in Q3 2024, and a significant improvement from a net loss of $14.8 million in Q4 2023[2]. - Adjusted earnings per common share increased by 41.9% to $0.44 in Q4 2024 from $0.31 in Q3 2024[8]. - Net income for Q4 2024 was $3,222,000, down from $5,207,000 in Q3 2024 and a loss of $14,754,000 in Q4 2023, showing recovery from previous losses[44]. - Adjusted net income for the year ended December 31, 2024, was $30,769,000, compared to $29,235,000 for the year ended December 31, 2023, reflecting a growth of 5.3%[48]. - Adjusted earnings per common share (diluted) for the year ended December 31, 2024, was $1.44, compared to $1.45 for the year ended December 31, 2023[49]. Revenue and Income Sources - Net interest income surged to $38.3 million in Q4 2024, a 69.8% increase from $22.5 million in Q3 2024[12]. - Noninterest income for Q4 2024 was $33.9 million, representing 46.9% of total revenues, and increased by 19.4% from $28.4 million in Q3 2024[8]. - Noninterest income reached $33,874,000 in Q4 2024, up 19.4% from $28,363,000 in Q3 2024 and significantly higher than $791,000 in Q4 2023[44]. - Year-over-year, noninterest income increased by $33.1 million from Q4 2023, with mortgage banking revenue up $2.4 million, or 184.6%[18]. Loans and Deposits - Total loans reached $4.0 billion as of December 31, 2024, marking an increase of $1.0 billion, or 31.7%, from September 30, 2024[8]. - Total deposits also increased to $4.4 billion, up $1.1 billion, or 31.7%, from September 30, 2024[8]. - Total loans increased to $4.0 billion as of December 31, 2024, a $1.2 billion, or 44.7%, increase from December 31, 2023[22]. - Total deposits increased to $4.4 billion as of December 31, 2024, up $1.3 billion or 41.4% from December 31, 2023[25]. Efficiency and Expenses - The adjusted efficiency ratio improved to 69.0% in Q4 2024, down from 77.7% in Q3 2024[8]. - Noninterest expense for Q4 2024 was $56.0 million, a $13.6 million, or 32.0%, increase from Q3 2024, primarily due to the acquisition of HMNF[19]. - The efficiency ratio improved to 73.36% in Q4 2024 from 80.29% in Q3 2024, indicating better cost management[45]. - Adjusted noninterest expense for the year ended December 31, 2024, was $167,794,000, compared to $148,260,000 in 2023, indicating an increase of 13.2%[47]. Credit Quality and Allowance - The allowance for credit losses on loans increased to 1.50% of total loans as of December 31, 2024, up 21 basis points from 1.29% as of September 30, 2024[8]. - The provision for credit losses for Q4 2024 was $12.0 million, up from $1.7 million in Q3 2024 and $1.5 million in Q4 2023[30][31]. - Total nonperforming assets reached $62.9 million as of December 31, 2024, an increase of $54.1 million from December 31, 2023[27]. - Nonperforming loans to total loans ratio was 1.58% as of December 31, 2024, unchanged from the previous quarter[29]. Assets and Capital - Total assets as of December 31, 2024, were $5.3 billion, an increase of $1.4 billion, or 34.7%, from December 31, 2023[21]. - Total common stockholders' equity increased to $498,699,000 in Q4 2024 from $386,486,000 in Q3 2024, reflecting strong capital growth[45]. - Tangible book value per common share decreased to $14.49 as of December 31, 2024, from $15.46 as of December 31, 2023[32]. - Common equity tier 1 capital to risk-weighted assets decreased to 9.98% as of December 31, 2024, down from 11.82% as of December 31, 2023[33]. Strategic Developments - Alerus Financial Corporation completed the acquisition of HMN Financial, Inc., marking the largest acquisition in the company's history[3]. - The company emphasizes the importance of managing credit risk and maintaining an adequate level of allowance for credit losses[41]. - The company will host a conference call on January 29, 2024, to discuss its financial results[34].

Core Insights - Alerus (ALRS) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ending December 2024, with the consensus outlook indicating a significant impact on the stock price based on actual results compared to estimates [1][3] Earnings Expectations - The consensus estimate for Alerus's quarterly earnings is projected at $0.01 per share, reflecting a year-over-year decrease of 95.8%, while revenues are expected to reach $61.8 million, marking a 31.5% increase from the previous year [3] Estimate Revisions - Over the past 30 days, the consensus EPS estimate has been revised down by 9.33%, indicating a collective reassessment by analysts regarding the company's earnings prospects [4] Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for Alerus is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -200%, which indicates a bearish outlook from analysts [10][11] Historical Performance - In the last reported quarter, Alerus was expected to post earnings of $0.44 per share but only achieved $0.26, resulting in a surprise of -40.91%. Over the last four quarters, the company has only beaten consensus EPS estimates once [12][13] Investment Considerations - Alerus does not appear to be a strong candidate for an earnings beat, and investors are advised to consider other factors when making investment decisions regarding this stock ahead of its earnings release [16]

Stocks Added to Zacks Rank 5 (Strong Sell) List - Anglo American (NGLOY), a mining company operating globally, has seen a 20 2% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Advanced Drainage Systems (WMS), a manufacturer of thermoplastic corrugated pipe and water management products, has experienced a 5 9% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - Alerus Financial (ALRS), a financial services company, has had its Zacks Consensus Estimate for current year earnings revised downward by almost 5 2% over the last 60 days [3]

ALERUS INVESTOR PRESENTATION 3Q 2024 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 ...

Financial Data and Key Metrics Changes - Net income decreased by 6.1% compared to the prior quarter, while fee income grew by 3.6% [30] - Net interest income decreased to $22.5 million, impacted by lower purchase accounting accretion and higher interest expenses [31] - The net interest margin (NIM) was affected by non-accrual loans and pricing pressure on deposits, with a long-term guidance of reaching 3% [20][32] Business Line Data and Key Metrics Changes - The Banking segment, including Mortgage, saw non-interest income increase by over 12% from the prior quarter, primarily due to a gain from the sale of an office [35] - Retirement business revenue increased by 0.4%, with assets under management rising by 4.7% [36] - Wealth Management revenues increased by 5.1%, with assets under management also up by 5.4% [37] Market Data and Key Metrics Changes - Deposit growth for the year exceeded 7%, with deposits remaining flat despite seasonal outflows [14] - Non-interest-bearing deposits decreased to 19.8% of total deposits, down from 21.3% in the prior quarter [34] - Loan growth was robust, primarily driven by market share gains from established companies [15] Company Strategy and Development Direction - The company is focused on building a premier Commercial Wealth Bank, diversifying its loan portfolio, and executing strategic acquisitions [8][12] - A commitment to maintaining a fortress balance sheet and delivering dividends to shareholders remains a priority [29] - The company is investing in technology upgrades to improve client experience and advisor processes in Wealth Management [23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a tough quarter but emphasized ongoing progress in long-term strategic initiatives [6][10] - The competitive environment remains challenging, but the company is focused on long-term retention and growth [20][21] - Management expressed confidence in the ability to achieve superior returns over time despite current challenges [104] Other Important Information - The company closed its acquisition of Home Federal, marking its 26th acquisition in the past 20 years [12][13] - Non-interest expenses increased by 9.5%, influenced by merger-related costs and professional fees [38] - The company is committed to achieving 30% cost savings from the Home Federal acquisition [40] Q&A Session Summary Question: On the larger credit and non-accrual loans - Management is evaluating options for a particular credit that went non-accrual due to delayed equity injections, with completion expected in early 2025 [45][46] Question: On expense trends and normalization - Management expects professional fees to normalize, with a commitment to reducing core expenses despite merger-related costs [49][50] Question: On loan growth and market share - Loan growth is attributed to market share gains, with management noting that the overall market is stable but not experiencing robust growth [54][56] Question: On margin outlook and deposit betas - Management anticipates a slower realization of deposit betas on the way down, with a core margin expected to improve in the back half of the year [66][67] Question: On Retirement and Wealth business profitability - Management expects margins to improve through efficiency and new partnerships, with steady growth anticipated over time [70] Question: On the impact of Home Federal acquisition - Management is considering loan sales and securities portfolio restructuring to optimize the balance sheet post-acquisition [80] Question: On criticized classified loan trends - Management noted an increase in criticized classified loans, but overall levels are consistent with pre-pandemic figures [82] Question: On managing excess capital - The company remains focused on organic growth and is open to selective acquisitions in the Retirement and Wealth sectors [86]

Acquisition and Divestitures - The acquisition of HMNF was completed on October 9, 2024, valued at approximately $128.8 million, resulting in former HMNF stockholders holding about 21.9% of the Company's outstanding common stock[223]. - During the three and nine months ended September 30, 2024, the Company incurred pre-tax acquisition expenses of $1.7 million and $2.3 million, respectively, related to the acquisition of HMNF[224]. - The Company entered into a purchase agreement to sell its South Fargo branch for $5.1 million, expecting to record a gain upon closing[226]. - The West Fargo branch is listed for sale at $3.8 million, with an expected sale within the next 12 months, also anticipating a gain on sale[226]. Financial Performance - Net income for the three months ended September 30, 2024, was $5,207,000, down from $6,208,000 in the previous quarter and $9,161,000 in the same period last year[231]. - The efficiency ratio improved to 80.29% for the three months ended September 30, 2024, compared to 72.50% in the previous quarter and 73.37% a year ago[231]. - The average return on average total assets was 0.57% for the three months ended September 30, 2024, down from 0.65% in the previous quarter and 0.75% a year ago[228]. - The company declared a dividend of $0.20 per common share for the three months ended September 30, 2024, consistent with the previous quarter and up from $0.19 a year ago[231]. - Net interest income for the three months ended September 30, 2024, was $22,542,000, compared to $24,001,000 for the previous quarter and $20,395,000 for the same period last year[231]. - Provision for credit losses was $1,661,000 for the three months ended September 30, 2024, down from $4,489,000 in the previous quarter and no provision in the same period last year[231]. - Noninterest income increased to $28,363,000 for the three months ended September 30, 2024, compared to $27,371,000 in the previous quarter and $28,407,000 in the same period last year[231]. Assets and Liabilities - Total assets as of September 30, 2024, were $4,298,080,000, slightly up from $4,297,294,000 in the previous quarter and significantly higher than $3,821,601,000 a year ago[229]. - Loans outstanding increased to $2,968,947,000 as of September 30, 2024, from $2,837,232,000 in the previous quarter and $2,544,836,000 a year ago[229]. - Deposits reached $3,264,138,000 as of September 30, 2024, compared to $3,230,699,000 in the previous quarter and $2,844,758,000 a year ago[229]. - The Company’s long-term debt stands at $58.956 million as of the latest reporting period[208]. - Total common stockholders' equity reached $386,486,000 as of September 30, 2024, an increase from $373,226,000 in June 30, 2024[234]. Revenue Streams - The Company generates a majority of its revenue from noninterest income, primarily from retirement and benefit services and wealth management[217]. - The Company’s business model is designed to produce strong financial performance and a diversified revenue stream[217]. - Total tax-equivalent revenue for the nine months ended September 30, 2024, was $150,634 thousand, up from $146,170 thousand for the same period last year, representing a growth of 3.4%[235]. - The adjusted noninterest income for the nine months ended September 30, 2024, was $80,581 thousand, compared to $75,468 thousand for the same period last year, reflecting a growth of 6.5%[236]. Credit Risk Management - The Company emphasizes the importance of managing credit risk, particularly in the commercial real estate portfolio[210]. - The Company’s strategy for credit risk management includes centralized credit policies and ongoing risk monitoring, emphasizing diversification across geographic and industry levels[297]. - The Company utilizes an internal lending division, Special Credit Services, to manage individual nonperforming loans[297]. - The total loans with fixed interest rates amount to $1,673.4 million, while loans with floating interest rates total $1,358.9 million[295]. Nonperforming Loans and Allowance for Credit Losses - Nonperforming loans rose to $48,026 thousand as of September 30, 2024, compared to $8,735 thousand on December 31, 2023, indicating a significant increase of 450%[300]. - The allowance for credit losses (ACL) on loans at the end of the period was $39,142 thousand, up from $36,290 thousand, reflecting a 5% increase[307]. - Nonperforming loans to total loans ratio increased to 1.58% as of September 30, 2024, compared to 0.32% on December 31, 2023[301]. - The ACL on loans to nonperforming loans ratio decreased to 81.50% as of September 30, 2024, down from 402.91% on December 31, 2023[307]. Deposits and Liquidity - Total deposits increased by $227.9 million, or 7.4%, to $3.3 billion as of September 30, 2024, compared to December 31, 2023[314]. - Interest-bearing deposits rose by $300.4 million, while noninterest-bearing deposits decreased by $67.9 million during the same period[314]. - The company's total uninsured deposits were approximately $1.3 billion as of September 30, 2024, up from approximately $1.1 billion as of December 31, 2023[319]. - The Company had on-balance sheet liquidity of $424.8 million as of September 30, 2024, a decrease from $668.2 million as of December 31, 2023[330]. Future Outlook - The company anticipates that net interest income and adjusted net interest margin will increase in future periods due to expected interest rate cuts lowering funding costs[245]. - The company expects mortgage revenue to increase in future periods due to recent and anticipated interest rate cuts[255]. - The company anticipates continued loan growth in the commercial and industrial and CRE loan portfolios for the remainder of 2024 due to recently added production talent[281].

Alerus (ALRS) reported $50.91 million in revenue for the quarter ended September 2024, representing a year-over-year increase of 4.3%. EPS of $0.26 for the same period compares to $0.45 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $52.3 million, representing a surprise of -2.67%. The company delivered an EPS surprise of -40.91%, with the consensus EPS estimate being $0.44.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Stre ...

Company Performance - Alerus reported quarterly earnings of $0.26 per share, missing the Zacks Consensus Estimate of $0.44 per share, and down from $0.45 per share a year ago, representing an earnings surprise of -40.91% [1] - The company posted revenues of $50.91 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 2.67%, but up from $48.8 million year-over-year [2] - Over the last four quarters, Alerus has surpassed consensus EPS estimates only once, while it has topped consensus revenue estimates three times [2] Market Comparison - Alerus shares have increased by approximately 6.7% since the beginning of the year, compared to the S&P 500's gain of 22.1% [3] - The current Zacks Rank for Alerus is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.15 on revenues of $62.45 million, and for the current fiscal year, it is $1.21 on revenues of $213.75 million [7] - The outlook for the Financial - Miscellaneous Services industry, to which Alerus belongs, is currently in the bottom 43% of over 250 Zacks industries, which may impact stock performance [8]