Dividend and Stockholder Information - The Company reported a quarterly cash dividend of $0.20 per common share, paid on July 12, 2024, to stockholders of record as of June 14, 2024[216]. Acquisition and Merger Activities - The Company incurred $0.6 million in pre-tax acquisition expenses related to the planned acquisition of HMNF during the three and six months ended June 30, 2024[215]. - The Company announced a merger agreement to acquire HMNF, with HMNF stockholders receiving 1.25 shares of the Company's common stock for each share of HMNF common stock, subject to potential adjustments[214]. - The Company is focused on organic and acquisition growth strategies, including the integration of Metro Phoenix Bank acquired in 2022 and the pending acquisition of HMNF[206]. Financial Performance and Revenue - The Company generates a majority of its revenue from noninterest income, primarily from retirement and benefit services, wealth management, and mortgage business lines[210]. - The Company’s revenue consists of net interest income from traditional banking products and services, alongside significant noninterest income[210]. - The Company’s business model has established a loyal client base and a dedicated employee culture, contributing to strong financial performance[210]. - The company reported a net income of $6,208 for the three months ended June 30, 2024, compared to $9,104 for the same period last year, reflecting a decrease of 31.5%[223]. - Net income for Q2 2024 was $6.2 million, a decrease of 31.8% from $9.1 million in Q2 2023, primarily due to a $4.5 million increase in provision for credit losses[231]. - Net income for the first six months of 2024 was $12.6 million, down 26.9% from $17.3 million in the same period of 2023, attributed to a $3.9 million increase in provision for credit losses[232]. Asset and Loan Growth - As of June 30, 2024, total assets reached $4,297,294, an increase from $3,785,487 a year earlier, representing a growth of 13.5%[221]. - Loans increased to $2,837,232 from $2,482,413 year-over-year, reflecting a growth of 14.3%[221]. - Retirement and benefit services assets under administration/management increased to $39,389,533 from $35,052,652 year-over-year, representing a growth of 12.9%[221]. - Total loans amounted to $2,915,792 thousand, up from $2,533,522 thousand in the previous period[293]. Interest Income and Margin - Net interest income for the three months ended June 30, 2024, was $24,001, compared to $22,234 for the same period last year, marking an increase of 7.9%[223]. - Net interest income for Q2 2024 was $24.0 million, an increase of 7.9% from $22.2 million in Q2 2023, driven by a $12.7 million increase in interest income[234]. - Adjusted net interest margin (tax-equivalent) for Q2 2024 was 2.57%, compared to 2.44% in Q1 2024[229]. - Net interest margin (on a tax-equivalent basis) for Q2 2024 was 2.39%, down from 2.52% in Q2 2023, primarily due to higher earning assets at lower yields[236]. - The company expects net interest income and adjusted net interest margin to recover as interest earning assets reprice at higher rates and deposit cost increases slow[237]. Credit Quality and Provision for Losses - The company recorded a provision for credit losses of $4.5 million for Q2 2024, compared to no provision in Q2 2023, primarily due to loan growth and a $21.5 million construction loan moving to nonaccrual status[248]. - The provision for loan losses was $4.3 million for Q2 2024, compared to $0.2 million in Q2 2023, indicating a significant increase in credit risk[247]. - Nonperforming loans totaled $27,618 thousand as of June 30, 2024, up from $8,596 thousand on December 31, 2023, indicating a significant increase in credit quality issues[286]. - The allowance for credit losses (ACL) is maintained at a level deemed sufficient to absorb expected losses, with management performing ongoing evaluations[288]. Noninterest Income and Expenses - Total noninterest income for Q2 2024 was $27.4 million, a $1.6 million, or 6.2% increase from $25.8 million in Q2 2023, driven by a $0.9 million increase in wealth management revenue[249]. - Total noninterest expense for the three months ended June 30, 2024 was $38.8 million, a $2.4 million, or 6.5%, increase compared to $36.4 million for the same period in 2023[254]. - Total noninterest expense for the six months ended June 30, 2024 was $77.8 million, a $3.5 million, or 4.8%, increase compared to $74.2 million for the same period in 2023[255]. Risk Management and Compliance - The Company is subject to various risks, including interest rate risk, credit risk management, and competition from non-bank financial service providers[205]. - Management continuously enhances internal controls and risk management processes to mitigate operational risk, which includes human behavior and external influences[333]. - Compliance risk includes potential regulatory sanctions and reputational damage due to non-compliance with banking regulations and practices[334]. - Strategic risk involves the potential loss of reputation and failure to execute business plans effectively, which the Company aims to mitigate through better risk understanding[335]. Capital and Liquidity - Total common stockholders' equity as of June 30, 2024, was $373.226 million, up from $371.635 million as of March 31, 2024[227]. - The tangible common equity to tangible assets ratio was 7.26% as of June 30, 2024, slightly up from 7.23% as of March 31, 2024[227]. - On balance sheet liquidity was $678.0 million as of June 30, 2024, compared to $668.2 million as of December 31, 2023[319]. - Off balance sheet liquidity increased to $1.9 billion as of June 30, 2024, from $1.6 billion as of December 31, 2023[319].

Core Viewpoint - Investors in Alerus Financial Corporation (ALRS) should closely monitor the stock due to significant implied volatility in the options market, particularly for the Oct 18, 2024 $20 Put option [1] Company Analysis - Alerus Financial is currently rated as Zacks Rank 3 (Hold) within the Financial-Miscellaneous Services industry, which ranks in the top 37% of the Zacks Industry Rank [3] - Over the past 60 days, two analysts have raised their earnings estimates for the current quarter, while no analysts have decreased their estimates, resulting in an increase of the Zacks Consensus Estimate from 41 cents per share to 44 cents per share [3] Options Market Insights - The high implied volatility suggests that options traders are anticipating a significant price movement for Alerus Financial shares, indicating potential trading opportunities [4] - Seasoned options traders often seek out options with high implied volatility to sell premium, aiming to benefit from the decay of the option's value if the underlying stock does not move as much as expected [4]

Financial Data and Key Metrics Changes - The company reported net income of $6.2 million, or $0.31 per share, with pre-provision net revenue (PPNR) improving by 48% on a linked quarter basis [5][24] - Net interest income increased by approximately 8%, with adjusted net interest margin expanding by 13 basis points during the quarter [8][24] - Total fee income rose by 8.1%, contributing over 53% of total revenues [9][24] Business Line Data and Key Metrics Changes - Loans grew by 4.2%, with a loan-to-deposit ratio ending at 88% [7][24] - The retirement business saw total revenue increase by 2.7%, driven by asset-based and non-market-based fees [20] - Wealth management revenues increased by 4%, while assets under management decreased by 1.7% [21] Market Data and Key Metrics Changes - Deposits increased by 0.4% from the prior quarter, with non-interest bearing deposits growing by 1.3% [18][24] - The company experienced seasonal outflows from public funds but managed to drive organic deposit growth to offset these outflows [18][24] Company Strategy and Development Direction - The company is focused on building its commercial wealth bank and diversifying its loan portfolio, with a target loan mix of 30% commercial and industrial (C&I), 30% consumer and residential, and the remainder in commercial real estate [12] - Alerus is progressing with the acquisition of HMN Financial, targeting a closing in the fourth quarter of the year [14][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the credit environment, noting a gradual normalization towards historical levels and proactive measures in credit management [11][66] - The company anticipates continued improvement in net interest margin and strong organic loan growth, positioning itself for sustainable growth and increasing profitability [24][66] Other Important Information - The company raised its dividend by 5.3%, maintaining its status as a dividend aristocrat [13] - The allowance for loan losses remained at 1.31%, consistent with prior quarters [11] Q&A Session Summary Question: Inquiry about the construction credit that migrated - Management indicated that 25% is reserved against the credit, which is 80% complete, and they believe feasible options exist to complete the project [26][27] Question: Clarification on margin outlook - The company expects a few basis points of margin expansion next quarter, with a return to liability sensitivity as swaps roll off [28][30] Question: Equipment finance team integration and growth potential - The equipment finance team is expected to drive growth by leveraging relationships with mid-market companies, aiming for a 30% deposit capture from equipment notes [36][38] Question: Update on the HMN Financial acquisition - Integration is progressing well, with positive feedback from employees and customers, and the company is on track for a fourth-quarter close [55][56] Question: Expectations for charge-off levels - Management noted that charge-offs are expected to normalize, with the current quarter being somewhat idiosyncratic due to specific loans [48][49]

ALERUS INVESTOR PRESENTATION 2Q 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 ...

Alerus (ALRS) reported $51.37 million in revenue for the quarter ended June 2024, representing a year-over-year increase of 7%. EPS of $0.31 for the same period compares to $0.45 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $49.2 million, representing a surprise of +4.42%. The company delivered an EPS surprise of -16.22%, with the consensus EPS estimate being $0.37.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expe ...

分组1 - Alerus reported quarterly earnings of $0.31 per share, missing the Zacks Consensus Estimate of $0.37 per share, and down from $0.45 per share a year ago, representing an earnings surprise of -16.22% [1] - The company posted revenues of $51.37 million for the quarter ended June 2024, exceeding the Zacks Consensus Estimate by 4.42%, and up from $48.01 million year-over-year [1] - Over the last four quarters, Alerus has surpassed consensus revenue estimates four times [1] 分组2 - The current consensus EPS estimate for the coming quarter is $0.41 on revenues of $50.55 million, and for the current fiscal year, it is $1.37 on revenues of $209.35 million [4] - Alerus has a Zacks Rank of 3 (Hold), indicating expected performance in line with the market in the near future [4] - The Financial - Miscellaneous Services industry is currently in the top 42% of Zacks industries, suggesting a favorable outlook compared to the bottom 50% [5]

Exhibit 99.1 ◾ Alan A. Villalon, Chief Financial Officer 952.417.3733 (Office) FOR RELEASE (07.24.2024) ALERUS FINANCIAL CORPORATION REPORTS SECOND QUARTER 2024 NET INCOME OF $6.2 MILLION MINNEAPOLIS, MN (July 24, 2024) – Alerus Financial Corporation (Nasdaq: ALRS), or the Company, reported net income of $6.2 million for the second quarter of 2024, or $0.31 per diluted common share, compared to net income of $6.4 million, or $0.32 per diluted common share, for the first quarter of 2024, and net income of $9 ...

Second Quarter Summary Net income of $1.0 million, down $0.4 million, from $1.4 million for second quarter of 2023Diluted earnings per share of $0.22, down $0.10, from $0.32 for second quarter of 2023Net interest income of $7.5 million, down $0.2 million, from $7.7 million for second quarter of 2023Gain on sales of loans of $0.6 million, up $0.3 million, from $0.3 million for second quarter of 2023Net interest margin of 2.70%, down 20 basis points, from 2.90% for second quarter of 2023Goodwill impairment of ...

Core Insights - The article highlights upcoming dividend increases from ten companies, with an average increase of 7.7% and a median of 7.6% [1] - The investment strategy focuses on acquiring companies that consistently raise dividends and outperform benchmarks [1] Group 1: Dividend Increases - The list includes companies with a history of at least five years of consistent dividend growth [2] - The companies featured have a range of dividend increase percentages, with notable increases from Victory Capital Holdings, Inc. at 10.45% and Hawthorn Bancshares, Inc. at 11.76% [7][10] - The ex-dividend dates for these companies are primarily in June 2024, with Travelers Companies, Inc. and CNO Financial Group, Inc. both set for June 10, 2024 [7] Group 2: Company Metrics - The forward yield for the companies ranges from 1.38% for Chubb Limited to 4.15% for Alerus Financial Corporation [7][8] - Current prices for the companies vary, with Travelers Companies, Inc. priced at $208.41 and CNO Financial Group, Inc. at $28.20 [12] - The historical performance of SCHD shows a return of about 181% over the past decade, with NDAQ, CB, and CPK outperforming this benchmark [20] Group 3: Investment Strategy - The investment approach emphasizes identifying stocks that consistently outperform the market while increasing dividends [19] - The analysis includes a focus on companies that have shown strong dividend growth, with NASDAQ being highlighted for its performance [21] - The article suggests a cautious approach to investing in companies that may have had rapid price increases followed by declines, as seen with NASDAQ [21]

Core Viewpoint - Alerus Financial has agreed to acquire HMN Financial in an all-stock deal valued at $116.4 million, marking its 26th acquisition since 2000, with expectations for closure in Q4 2024 [1][2]. Group 1: Acquisition Details - The acquisition will see HMN Financial shareholders receive 1.25 shares of Alerus Financial for each share they own [2]. - HMN Financial, through its subsidiary Home Federal Savings Bank, operates 12 branches in Minnesota and additional branches in Iowa and Wisconsin, with total assets of $1.2 billion as of March 31, 2024 [2]. - Post-acquisition, the combined entity will have nearly $5.5 billion in total assets, $3.7 billion in loans, and $4.3 billion in deposits, operating through 29 locations across the Midwest and Arizona [2]. Group 2: Financial Impact - The transaction is expected to be immediately accretive to Alerus Financial's 2025 earnings by 45%, excluding one-time expenses [3]. - The deal will yield 30% cost savings on HMN Financial's non-interest expenses, with one-time pre-tax charges of $21.7 million anticipated [3]. Group 3: Strategic Implications - This acquisition aligns with Alerus Financial's strategy of combining organic growth with inorganic expansion, diversifying its loan portfolio and enhancing market share in Rochester and other Minnesota markets [4]. - Over the past year, Alerus Financial's shares have increased by 34.7%, outperforming the industry average of 24.4% [4].