Alerus Financial Corporation Announces Fourth Quarter 2023 Results, Including Balance Sheet Repositioning

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]