Financial Data and Key Metrics Changes - The adjusted return on assets (ROA) improved to 1.1%, a 25 basis point increase from the previous quarter [4] - Net interest income increased by 7.5% over the prior quarter, reaching a record level of $41.2 million, while fee income decreased by 18.4% [12][14] - The net interest margin rose by 21 basis points to 3.41% [14] Business Line Data and Key Metrics Changes - Organic loan growth was 2.3% over the prior quarter, with commercial loans now comprising over 70% of total loans [17] - Non-interest income from banking was $4.6 million for the first quarter, with a decline in mortgage revenues due to a 20% decrease in overall mortgage originations [20] - The wealth management group generated revenues 13% higher than a year ago, despite a 1.5% decrease in revenues on a linked quarter basis [7][23] Market Data and Key Metrics Changes - The company experienced a 2.4% organic growth in deposits from the prior quarter, with a loan-to-deposit ratio remaining steady at 91.1% [18] - Synergistic deposits in the retirement business grew 8.8% over the prior quarter [23] Company Strategy and Development Direction - The company is focused on enhancing its commercial bank by targeting mid-market and business banking clients, aiming for organic growth and maintaining a diversified balance sheet [5] - The "One Aleris" strategy emphasizes a unified approach to leverage a diversified business model for growth [4] - The company is engaging a consultant to optimize processes and improve efficiency as part of its ongoing integration efforts [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future success, highlighting the importance of proactive risk management and maintaining robust reserves [7][10] - The guidance for 2025 includes expectations for mid-single-digit loan growth and low-single-digit deposit growth, with a net interest margin forecast of 3.2% to 3.3% [28][30] Other Important Information - The adjusted efficiency ratio improved to 66.9%, reflecting ongoing expense management efforts [9] - The company remains well-capitalized, with a common equity Tier 1 capital ratio of 10% [27] Q&A Session Summary Question: Margin expectations - Management expects core margin to improve from the current level of 2.94%, driven by strong loan growth and favorable spreads [35][36] Question: Update on non-accrual loans - Progress on a non-accrual construction loan is positive, with the borrower ahead of benchmarks and expected to list the project for sale soon [38][39] Question: Fee income timing - Approximately 40% of retirement assets are market-sensitive, assessed on an average daily balance, while wealth fees are built at quarter-end [40] Question: Opportunities in growth areas - The company is focusing on commercial C&I growth, particularly in Arizona, Minnesota, and North Dakota, while being cautious about investor CRE [43][44] Question: Capital deployment and M&A appetite - The company is prioritizing organic growth and selective acquisitions in the retirement space, alongside maintaining dividends [46] Question: Credit quality and provision levels - Credit quality is normalized with no significant risk of loss, and provision levels are expected to be in the $1 million to $2 million range [62]

Financial Performance Highlights - Net interest income for Q1 2025 was $412 million, a 75% increase compared to Q4 2024[51] - Net interest margin increased by 21 basis points to 341% in Q1 2025 from 320% in Q4 2024[51] - Adjusted earnings per share increased to $056 in Q1 2025, up $011 from Q4 2024[38] - Adjusted return on average assets was 110% in Q1 2025, a 25 basis points increase from Q4 2024[38] - Adjusted return on average tangible common equity was 1761% in Q1 2025, a 27% increase from Q4 2024[38] Balance Sheet Strength - Total loans increased by $93 million, or 23%, from December 31, 2024, reaching $41 billion[38, 60] - Total deposits increased by $107 million, or 24%, from December 31, 2024, reaching $45 billion[38, 67] - The loan-to-deposit ratio was 911% as of March 31, 2025[38, 67] Asset Quality and Capital Adequacy - The ratio of reserves to total loans was 152% as of March 31, 2025, an increase of 2 basis points from December 31, 2024[38, 96] - Common Equity Tier 1 (CET1) ratio was 101%, exceeding regulatory requirements[38] Segment Performance - Banking services noninterest income decreased 555% from Q4 2024, primarily due to a gain on the sale of fixed assets in the previous quarter[75] - Retirement and Benefit Services revenue decreased 23% compared to Q4 2024, driven by a decrease in asset-based and other fees[80] - Wealth advisory services revenue decreased 15% from Q4 2024[83]

Core Insights - Alerus reported a revenue of $69 million for Q1 2025, marking a 45.1% increase year-over-year, with EPS at $0.56 compared to $0.32 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $65.45 million by 5.42%, and the EPS surpassed the consensus estimate of $0.43 by 30.23% [1] Financial Performance Metrics - Net charge-offs to average loans stood at 0%, better than the 0.1% average estimate [4] - The efficiency ratio was reported at 68.8%, significantly lower than the average estimate of 75.6% [4] - The net interest margin was 3.4%, exceeding the average estimate of 3.1% [4] - Total interest-earning assets averaged $4.95 billion, slightly above the estimated $4.88 billion [4] - Tax-equivalent net interest income was $41.68 million, compared to the estimated $37.56 million [4] - Retirement and benefit services revenue reached $16.11 million, above the average estimate of $15.90 million [4] - Total noninterest income was $27.63 million, slightly below the average estimate of $28.10 million [4] - Wealth management revenue was $6.91 million, compared to the average estimate of $6.82 million [4] - Service charges on deposit accounts were $0.65 million, below the average estimate of $1.13 million [4] - Mortgage banking revenue was $1.53 million, significantly lower than the average estimate of $2.70 million [4] - Other income was reported at $2.44 million, exceeding the average estimate of $1.55 million [4] Stock Performance - Alerus shares returned -3.2% over the past month, compared to a -4.3% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Core Viewpoint - Alerus (ALRS) reported quarterly earnings of $0.56 per share, exceeding the Zacks Consensus Estimate of $0.43 per share, and showing a year-over-year increase from $0.32 per share [1] Group 1: Earnings Performance - The earnings surprise for the recent quarter was 30.23%, with a previous quarter's surprise of 12.82% [1][2] - Over the last four quarters, Alerus has surpassed consensus EPS estimates two times [2] - The company posted revenues of $69 million for the quarter, surpassing the Zacks Consensus Estimate by 5.42%, compared to $47.54 million in the same quarter last year [2] Group 2: Stock Performance and Outlook - Alerus shares have declined approximately 7.9% since the beginning of the year, while the S&P 500 has decreased by 6.1% [3] - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimates at $0.51 for the next quarter and $2.06 for the current fiscal year [4][7] Group 3: Industry Context - The Financial - Miscellaneous Services industry, to which Alerus belongs, is currently ranked in the top 38% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Alerus's stock performance [5]

Financial Performance - Alerus Financial Corporation reported net income of $13.3 million for Q1 2025, or $0.52 per diluted common share, compared to a net loss of ($0.1) million in Q4 2024[2]. - Net interest income for Q1 2025 was $41.2 million, a $2.9 million, or 7.5%, increase from Q4 2024[7]. - Noninterest income for Q1 2025 was $27.6 million, a decrease of $6.2 million from Q4 2024, primarily due to lower other noninterest income[10]. - Noninterest expense decreased to $50.4 million in Q1 2025, a reduction of $10.1 million, or 16.7%, from Q4 2024[14]. - The efficiency ratio improved to 68.8% in Q1 2025, down from 69.0% in Q4 2024[5]. - Return on average tangible common equity for Q1 2025 was 16.50%, a substantial increase from 2.38% in Q4 2024[39]. - Earnings per common share for Q1 2025 was $0.52, compared to $0.32 in Q1 2024[38]. - Adjusted net income for Q1 2025 was $14,352,000, compared to $11,245,000 in Q4 2024, marking a 27.5% increase, and up from $6,671,000 in Q1 2024[40]. - Adjusted earnings per common share - diluted for Q1 2025 was $0.56, an increase from $0.45 in Q4 2024 and $0.33 in Q1 2024[40]. Loan and Deposit Growth - Total loans increased to $4.1 billion as of March 31, 2025, reflecting a growth of $92.9 million, or 2.3%, from December 31, 2024[5]. - Total deposits rose to $4.5 billion as of March 31, 2025, an increase of $106.9 million, or 2.4%, from December 31, 2024[5]. - Total loans amounted to $4.5 billion as of March 31, 2025, an increase of $106.9 million, or 2.4%, from December 31, 2024[20]. - Total deposits were $4.5 billion as of March 31, 2025, reflecting a growth of $106.9 million, or 2.4%, from December 31, 2024[20]. - Total loans for Q1 2025 amounted to $4,022,863,000, an increase from $3,814,934,000 in Q4 2024 and $2,768,514,000 in Q1 2024[41]. Asset Quality - The ratio of nonperforming loans to total loans decreased to 1.24% as of March 31, 2025, compared to 1.58% as of December 31, 2024[5]. - Total nonperforming assets decreased to $51.0 million as of March 31, 2025, down $11.9 million from December 31, 2024[22]. - The allowance for credit losses on loans was $61.9 million, or 1.52% of total loans, as of March 31, 2025, compared to $59.9 million, or 1.50%, as of December 31, 2024[22]. - The provision for credit losses was $0.9 million for the first quarter of 2025, significantly lower than $12.0 million for the fourth quarter of 2024[24]. Capital and Equity - Tangible book value per common share increased to $15.27 as of March 31, 2025, reflecting a 5.7% rise from $14.44 as of December 31, 2024[5]. - Common equity tier 1 capital to risk-weighted assets increased to 10.10% as of March 31, 2025, from 9.91% as of December 31, 2024[26]. - Total capital to risk weighted assets rose to 12.67% as of March 31, 2025, up from 12.49% on December 31, 2024[27]. - Tangible common equity to tangible assets ratio improved to 7.43% in Q1 2025 from 7.13% in Q4 2024[39]. Interest Income and Margin - Total interest income for Q1 2025 was $68,181,000, an increase of 39.1% compared to $49,038,000 in Q1 2024[38]. - Net interest income after provision for credit losses reached $40,294,000, significantly up from $22,219,000 in the same quarter last year[38]. - The net interest margin, tax-equivalent, for Q1 2025 was 3.41%, compared to 3.20% in Q4 2024 and 2.30% in Q1 2024[41]. Operational Highlights - The company operates 29 banking and commercial wealth offices across multiple states, including North Dakota, Minnesota, Iowa, Wisconsin, and Arizona[30]. - Alerus Financial Corporation will host a conference call on April 29, 2025, to discuss its financial results[28]. - The company emphasizes the importance of non-GAAP financial measures in evaluating capital adequacy and financial performance[31]. - Forward-looking statements indicate potential growth and performance expectations, subject to various risks and uncertainties[34].

Core Viewpoint - Alerus (ALRS) shows potential as a strong investment opportunity due to significant revisions in earnings estimates, indicating an improving earnings outlook and positive stock performance [1][2]. Current-Quarter Estimate Revisions - The earnings estimate for the current quarter is $0.43 per share, reflecting a year-over-year increase of +34.38% [4]. - The Zacks Consensus Estimate for Alerus has risen by 8.02% in the last 30 days, with two estimates increasing and no negative revisions [4]. Current-Year Estimate Revisions - For the full year, Alerus is projected to earn $2.14 per share, representing a year-over-year change of +48.61% [5]. - Over the past month, three estimates have been revised upward for Alerus, leading to a 9.18% increase in the consensus estimate [5]. Favorable Zacks Rank - Alerus currently holds a Zacks Rank 2 (Buy), indicating strong potential based on favorable estimate revisions [6]. - Research indicates that stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) tend to significantly outperform the S&P 500 [6]. Bottom Line - Alerus shares have increased by 16.9% over the past four weeks, suggesting investor confidence in the company's earnings growth prospects [7].

Core Viewpoint - Alerus (ALRS) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in a company's earnings picture, which is crucial for predicting near-term stock price movements [2][4]. - Alerus's rating upgrade reflects an optimistic earnings outlook, likely leading to increased buying pressure and a rise in stock price [3][5]. Impact of Institutional Investors - Changes in earnings estimates are strongly correlated with stock price movements due to institutional investors who adjust their valuations based on these estimates [4]. - An increase in earnings estimates typically results in higher fair value for a stock, prompting institutional buying or selling, which affects stock prices [4]. Earnings Estimate Revisions for Alerus - For the fiscal year ending December 2025, Alerus is expected to earn $2.14 per share, representing a 48.6% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Alerus has risen by 5.2%, indicating a positive trend in earnings expectations [8]. Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [7]. - Alerus's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

INVESTOR PRESENTATION 4Q 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 always, ...

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]