Alerus Financial Corporation · NASDAQ:ALRS
Alerus Financial — Merger or Acquisition (December 2021)
14 slides from Alerus Financial's merger presentation, Dec 9, 2021
Slide 1: Alerus to Significantly Expand Arizona Presence with Strategic Acquisition
ALERUS TO SIGNIFICANTLY EXPAND ARIZONA PRESENCE WITH STRATEGIC ACQUISITION OF DECEMBER 2021 Alerus Financial Corporation (NASDAQ: ALRS)
Slide 2: Forward-Looking Statements
1 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
Slide 3: Transaction Highlights
2 TRANSACTION HIGHLIGHTS STRATEGIC EXPANSION OF THE ALRS FRANCHISE ▪ ALRS has agreed to acquire MPB BHC, INC . (OTCPK: MPHX), the bank holding company for Metro Phoenix Bank ▪ Metro Phoenix Bank is the largest community bank headquartered in the Phoenix MSA with over $400 million in total assets STR
Slide 4: Overview of Metro Phoenix Bank
3 Income Statement (Q3 2021) Net Income 1,927$ ROAA 1.85% ROAE 18.96% Net Interest Margin 3.72% Efficiency Ratio 50.27% Non-Int. Income / Operating Revenue 22.25% Balance Sheet (as of 9/30/2021) Total Assets 411,408$ Total Equity 41,370$ Gross Loans (Held for Investment) 282,910$ Total Deposits 366,
Slide 5: Complementary Fit with ALRS
4 Small and Medium Size Businesses Home Owner Association Services Outdoor Media Lending ▪ Phoenix MSA is a huge banking market with attractive demographic and economic trends – together , the combined company will have the resources, capital and a currency to execute on this growth opportunity METR
Slide 6: Logical Geographic Fit
5 Deposits ($MM)* % of Total Arizona 469$ 15% North Dakota 1,256$ 40% Minnesota 1,417$ 45% Total 3,142$ 100% Arizona 15% North Dakota 40% Minnesota 45% ▪ I ncreases ALRS Arizona footprint to 15 % of total deposits ▪ Average deposits per branch of ~ $ 196 million * ▪ 10 branches with deposits greater
Slide 7: Phoenix Deposit Market Share
6 Rank Total Market Community Banks Institution (State) Number of Branches Deposits in Market Deposit Growth (1-Year) Market Share 1 JPMorgan Chase & Co. (NY) 144 41,532,094$ +21.6% 25.88% 2 Wells Fargo & Co. (CA) 116 34,186,966$ +27.0% 21.30% 3 Bank of America Corporation (NC) 97 28,834,719$ +10.8%
Slide 8: Overview of Phoenix Market
7 15.08% 15.00% 14.22% 13.48% 8.68% 7.40% 4.11% 3.48% 1.73% - 0.95% -5.00% 0.00% 5.00% 10.00% 15.00% 20.00% Population Change 2010 - 2021 Rank City State 2021 2010-2021 Change 2021-2026 Change Region 1 Phoenix AZ 1,663,692 15.08% 6.11% West 2 Houston TX 2,414,313 15.00% 6.29% South 3 San Antonio TX
Slide 9: Overview of Phoenix Demographics
8 $71,092 $65,279 $67,761 $80,462 $72,568 $73,868 13.2% 11.2% 9.0% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% $- $15,000 $30,000 $45,000 $60,000 $75,000 $90,000 Phoenix MSA Arizona USA 2021 (Actual) 2026 (Projected) % Growth (Projected) 5,081,979 7,438,466 5,433,311 7,888,700 6.9% 6.1% 5.0% 5.5%
Slide 10: Pro Forma Loan and Deposit Composition
9 Construction & Development 2.2% CRE 32.8% Commercial & Industrial 27.5% Consumer 36.4% Construction & Development 12.7% 1 - 4 Family 0.4% Multifamily 0.9% CRE 42.2% Commercial & Industrial 34.6% Other 9.2% Construction & Development 3.6% Multifamily 0.1% CRE 34.0% Commercial & Industrial 28.4% Con
Slide 11: Transaction Overview
10 TRANSACTION OVERVIEW ▪ $85.3 million total transaction value including $4.3 million to option holders ▪ $81.0 million to common shareholders, or $23.26 per share – a 20.2% premium to MPHX’s current stock price TRANSACTION VALUE (1) ▪ 100% stock consideration to MPHX shareholders ▪ Fixed exchange
Slide 12: Comprehensive Due Diligence and Loan Review
11 ▪ Completed a comprehensive due diligence review with executives from ALRS and MPHX, along with advisors and consultants ▪ Conducted in - depth on - site loan review led by senior ALRS credit team DUE DILIGENCE PROCESS ▪ All credits >$2.5 million ▪ All credits with a risk rating of watch, special
Slide 13: ALRS Strategic Growth
12 2019 LAUNCHED FINANCIAL WELLNESS TECHNOLOGY COMPLETED INITIAL PUBLIC OFFERING (IPO) 2011 Acquired selected loans and deposits (in MN) and a branch (in AZ) from BNC National Bank Transaction represents the 25 th acquisition for Alerus and is a continuation of the long - term plan to supplement our
Slide 14: Strategic Expansion of the ALRS Franchise Summary
13 ▪ Opportunity to acquire a high - quality business bank which is the largest community bank in Phoenix, AZ ▪ Significantly expands ALRS presence in Phoenix, which is the fastest growing market in the U.S . ▪ Pro forma company will have the balance sheet and resources necessary to compete with lar
Alerus Financial — Merger or Acquisition (December 2021) on 6ix