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.Analysts' growing optimism on the earnings prospects of this company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-t ...

Alerus EARNINGS PRESENTATION Q4 2023 NASDAQ: ALRS DISCLAIMERS Forward-Looking Statements Thispresentation 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 a ...

Financial Data and Key Metrics Changes - Net interest income increased by 5.7% on a linked-quarter basis, driven by strong organic loan and deposit growth [11] - Net interest margin improved to 2.37%, an increase of 10 basis points from the prior quarter [12] - Tangible common equity (TCE) stood at 7.96% and common equity tier 1 (CET1) at 11.81% [9] - Tangible book value grew by 8% [9] Business Line Data and Key Metrics Changes - Total loans grew by 5.7% from the prior quarter, with significant contributions from commercial real estate, C&I, and residential real estate [13] - Deposits increased by 7.8% from the prior quarter, with non-interest-bearing deposits representing 24% of total deposits [14] - Mortgage revenues decreased by 49% from the prior quarter due to a seasonal decline in originations [18] Market Data and Key Metrics Changes - Synergistic deposits from Wealth and Retirement businesses grew by 23% year-over-year and 11.5% from the prior quarter, now accounting for over 27% of total deposits [15] - The Retirement business saw a 1.6% increase in revenues, with assets under management and administration rising by 6.2% [17] - Wealth Management revenues increased by 12.7% on a linked-quarter basis, with assets under management up by 7.9% [18] Company Strategy and Development Direction - The company is focused on prudent and disciplined organic growth while being opportunistic with strategic acquisitions in both Commercial Wealth and Retirement sectors [35] - The "One Alerus" strategy aims to enhance collaboration across business lines, leading to improved client service and market share [4][6] - The company is committed to optimizing its infrastructure to return to a history of strong profitability and tangible book value growth [63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining momentum from Q4 2023 into 2024, highlighting a strong and diversified business model [63] - The company anticipates modest loan growth for 2024, driven by newly onboarded talent and streamlined processes [41][42] - Credit quality remains strong, with expectations of normalization in charge-off activity but no significant issues on the horizon [54] Other Important Information - Non-interest expense increased by 3.7%, primarily due to inflationary pressures [19] - The company returned $5.8 million to shareholders through dividends and share repurchases [9] - The company is actively searching for a Chief Retirement Services Officer to enhance its Retirement business [7] Q&A Session Summary Question: Insights on loan and deposit growth - Management confirmed that the strong growth was not pulled forward and is expected to continue into 2024, driven by newly acquired talent [24][25] Question: Margin improvement and rate cuts - Management indicated that net interest margins are expected to improve, with potential rate cuts further enhancing this trajectory [29][30] Question: Capital and M&A appetite - The company remains focused on organic growth but is open to strategic acquisitions in the Retirement sector [35] Question: Loan growth outlook - Management expects modest loan growth, supported by strong deposit growth and talent acquisition [41][42] Question: Credit quality outlook - Management anticipates some level of charge-off activity as credit normalizes but sees no significant issues on the horizon [54]

Alerus (ALRS) reported $46.99 million in revenue for the quarter ended December 2023, representing a year-over-year decline of 10.5%. EPS of $0.24 for the same period compares to $0.53 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $45 million, representing a surprise of +4.41%. The company delivered an EPS surprise of -17.24%, with the consensus EPS estimate being $0.29.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how t ...

Alerus (ALRS) came out with quarterly earnings of $0.24 per share, missing the Zacks Consensus Estimate of $0.29 per share. This compares to earnings of $0.53 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -17.24%. A quarter ago, it was expected that this company would post earnings of $0.34 per share when it actually produced earnings of $0.45, delivering a surprise of 32.35%.Over the last four quarters, the company has surp ...

Core Insights - Alerus Financial Corporation reported a net loss of $14.8 million for Q4 2023, a significant decline from net income of $9.2 million in Q3 2023 and $10.9 million in Q4 2022 [1] - The company executed a balance sheet repositioning, selling $172.3 million in available-for-sale securities, resulting in a one-time pre-tax net loss of $24.6 million [1][4] - Adjusted pre-provision net revenue for Q4 2023 was $9.0 million, slightly up from $8.9 million in Q3 2023 [1] Financial Performance - Total deposits reached $3.1 billion as of December 31, 2023, marking a 7.8% increase from $2.9 billion in Q3 2023 [4] - Total loans increased to $2.8 billion, a 5.7% rise from Q3 2023 [4] - Net interest margin improved to 2.37%, up 10 basis points from 2.27% in Q3 2023 [4][9] - Net interest income rose by 5.7% to $21.6 million compared to $20.4 million in Q3 2023 [4][8] Operational Highlights - The company added over 120 new team members while reducing overall headcount, indicating a restructuring effort [2] - Noninterest income for Q4 2023 was $0.8 million, a 97.2% decrease from Q3 2023, primarily due to the loss on the sale of investment securities [10] - The efficiency ratio for Q4 2023 was 165.40%, significantly higher than 73.37% in Q3 2023, reflecting increased noninterest expenses [7] Asset Quality - Total nonperforming assets increased to $8.8 million, a 129.3% rise from $3.8 million in Q4 2022 [20] - The allowance for credit losses on loans was $35.8 million, or 1.30% of total loans, compared to $31.1 million, or 1.27%, in the previous year [20][22] Capital and Shareholder Returns - Tangible book value per common share increased by 8.0% to $15.46 as of December 31, 2023, from $14.37 a year earlier [6][23] - The company repurchased $2.1 million of its outstanding stock at an average price of $17.65, reducing common shares outstanding by 118,000 [23]

Core Insights - Alerus (ALRS) is expected to report quarterly earnings of $0.29 per share, a decline of 45.3% year-over-year, with revenues forecasted at $45 million, down 14.3% from the previous year [1][2] Earnings Estimates - The consensus EPS estimate has remained unchanged over the last 30 days, indicating analysts have reevaluated their initial estimates [1] - Analysts predict 'Net interest margin, tax-equivalent' will reach 2.2%, down from 3.1% in the same quarter last year [2] - The 'Efficiency ratio' is estimated at 81.3%, compared to 69.6% a year ago [2] Key Financial Metrics - Estimated 'Total Noninterest income' is $24.91 million, down from $25.52 million in the same quarter last year [3] - 'Net interest income' is projected to be $20.13 million, a decrease from $26.96 million in the same quarter last year [3] - 'Average Balance - Total interest earning assets' is expected to reach $3.68 billion, compared to $3.47 billion in the same quarter of the previous year [2] Stock Performance - Over the past month, Alerus shares have returned -3.5%, while the Zacks S&P 500 composite has increased by +2.1% [3] - Alerus currently holds a Zacks Rank 1 (Strong Buy), suggesting potential outperformance in the near future [3]

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, 2023 ☐ 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 ...

Financial Data and Key Metrics Changes - Net interest income declined by 8.3% on a linked quarter basis, primarily due to increased funding costs, representing 41.8% of total revenues [12][13] - Non-interest income increased by 10.2% on a linked-quarter basis, driven by the divestiture of the ESOP trustee business [12] - Net interest margin was 2.27%, a decrease of 25 basis points from the prior quarter, but showed improvement towards the end of the quarter [13][14] - Total loans grew by 2.9% from the prior quarter, with strong growth in C&I, commercial real estate, and residential real estate [14] - Deposits increased by 0.7% from the prior quarter, with non-interest-bearing deposits remaining at 25% of total deposits [15] Business Line Data and Key Metrics Changes - Retirement business accounted for approximately 38% of total revenues, with revenues increasing over 17% on a linked-quarter basis due to the divestiture of the ESOP trustee business [17][18] - Wealth management revenues decreased by 3.3% on a linked-quarter basis, with assets under management also decreasing by 3.5% due to challenging market conditions [21] - Mortgage revenues decreased by 13.6% from the prior quarter, with expectations for a further decrease in the fourth quarter due to seasonality [20] Market Data and Key Metrics Changes - Synergistic deposits sourced from retirement and wealth businesses grew by 21% year-over-year and 2.7% over the prior quarter, now accounting for 26.5% of total deposits [15][16] - HSA balances grew to $175.7 million, representing over 23% of synergistic deposits, highlighting a low-cost funding source [16] Company Strategy and Development Direction - The company is focused on strategic divestitures to prioritize growth in core product lines, particularly in retirement services [6][11] - Investments are being made in key business lines while exiting non-core products, aiming to enhance client service and operational efficiency [11][21] - The company is committed to improving profitability through rightsizing infrastructure and optimizing processes [9][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges from the interest rate environment and deposit competition but expressed confidence in building a stronger franchise [4][10] - Future expectations include gradual improvement in net interest margin and stable deposit levels, with a focus on attracting new client relationships [14][15][46] - The company remains optimistic about growth in fee income from retirement and wealth management as market conditions stabilize [50][51] Other Important Information - Credit quality remains strong with low levels of past dues and non-performing loans, and the allowance for credit losses on loans remains stable at 1.39% [10][22] - Capital levels are robust, with common equity Tier 1 capital over 13%, well above regulatory minimums [22][23] Q&A Session Summary Question: Margin expectations for Q4 and 2024 - Management expects 7 to 10 basis points of margin compression in Q4 but anticipates improvement in net interest margin as the year progresses [25][26] Question: Details on non-accrual loans - The increase in non-accrual loans is attributed to a single commercial credit in the Arizona market, not indicative of broader issues [29][30] Question: Funding dynamics and deposit initiatives - The company is focused on attracting talent in deposit-rich verticals and has seen an increase in the CD book, with core deposits expected to remain stable [34][35] Question: Future loan growth and funding levels - Management is optimistic about increasing deposits and reducing reliance on wholesale funding to support loan growth [47][48] Question: Growth potential in fee income lines - Stable market conditions are expected to benefit both retirement and wealth management revenues, with ongoing initiatives to improve efficiencies [49][50]

Alerus EARNINGS PRESENTATION Q3 2023 NASDAQ: ALRS DISCLAIMERS Forward-Looking Statements Thispresentation 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 a ...