Alerus(US:ALRS)2023-05-07 16:00Financial Performance - For the three months ended March 31, 2023, the return on average total assets was 0.88%, down from 1.26% in the same period of 2022[197]. - The return on average common equity decreased to 9.17% from 11.78% year-over-year[197]. - Earnings per common share (diluted) for Q1 2023 was $0.40, a decrease from $0.57 in Q1 2022[197]. - Net income for the three months ended March 31, 2023, was $8.2 million, a decrease of $2.0 million, or 19.6%, compared to $10.2 million for the same period in 2022[206]. - The efficiency ratio increased to 74.53% from 72.25% in the same quarter of the previous year[197]. Income and Revenue - Noninterest income as a percentage of revenue increased to 51.63% compared to 57.62% in the prior year[197]. - Noninterest income for the three months ended March 31, 2023, was $25.3 million, a decrease from $29.5 million for the same period in 2022[206]. - Total interest income for the three months ended March 31, 2023, was $37.9 million, a $5.7 million decrease compared to $43.6 million for the same period in 2022, primarily due to a decrease in mortgage banking revenue[220]. - Noninterest income for the three months ended March 31, 2023, was $25.3 million, a 14.3% decrease from $29.5 million in the same period in 2022, driven by a $3.2 million decrease in mortgage banking revenue and a $2.2 million decrease in retirement and benefit services revenue[220]. Assets and Liabilities - Total assets as of March 31, 2023, were $3,886,773, an increase from $3,336,199 as of March 31, 2022[205]. - Loans increased to $2,486,625 as of March 31, 2023, compared to $1,818,042 as of March 31, 2022[205]. - Deposits as of March 31, 2023, were $3,886,773, up from $3,336,199 as of March 31, 2022[205]. - Total assets increased to $3.9 billion as of March 31, 2023, reflecting a growth of $107.1 million, or 2.8%, compared to December 31, 2022[226]. - Total loans outstanding reached $2.5 billion as of March 31, 2023, an increase of $42.6 million, or 1.7%, from December 31, 2022[230]. Loan and Credit Quality - The provision for credit loss expense for the three months ended March 31, 2023, was $550 thousand, an increase of $550 thousand compared to the same period in 2022, reflecting changes in forecasting assumptions[217]. - Nonperforming loans decreased to $2,118 thousand as of March 31, 2023, from $3,794 thousand as of December 31, 2022, a reduction of 44.3%[239]. - The allowance for credit losses on loans increased to $35,102 thousand as of March 31, 2023, from $31,713 thousand as of December 31, 2022, reflecting a rise of 10.0%[244]. - The ratio of nonperforming loans to total loans improved to 0.09% as of March 31, 2023, down from 0.16% as of December 31, 2022[239]. Capital and Equity - Stockholders' equity increased by $2.2 million, or 0.6%, to $359.1 million as of March 31, 2023[263]. - Common equity tier 1 capital to risk-weighted assets decreased to 13.30% as of March 31, 2023, from 13.39% as of December 31, 2022[263]. - Total capital to risk-weighted assets increased to 16.50% as of March 31, 2023, compared to 16.48% at the end of 2022[268]. Future Outlook - The company anticipates that net interest income and net interest margin will remain under pressure in future periods due to expected increases in the target federal funds interest rate[210]. - The company anticipates that noninterest income will be adversely affected in future periods due to increasing interest rates and inflationary pressures[221]. - The company anticipates that loan growth will slow down in future periods due to the increasing interest rate environment and competition in market areas[232].