Alerus Financial Corporation · NASDAQ:ALRS
Alerus Financial — Q3 2025 Earnings Presentation
36 slides from Alerus Financial's earnings presentation, 2025
Slide 1: Investor Presentation 3Q 2025
INVESTOR PRESENTATION 3Q 2025 NASDAQ: ALRS
Slide 2: Disclaimers
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
Slide 3: Company Profile
COMPANY PROFILE Alerus is a leading commercial wealth bank and a national retirement plan provider DIVERSIFIED REVENUE RETIREMENT AND BENEFIT SERVICES Last Twelve Months Ended September 30, 2025 Retirement & Retirement Services Benefit Services Benefits ▪ Plan administration ▪ Health savings account
Slide 4: Franchise Footprint
FRANCHISE FOOTPRINT 28 FULL-SERVICE BANKING OFFICES ▪ Grand Forks, ND: 4 offices ▪ Fargo, ND: 2 offices ▪ Twin Cities, MN: 7 offices ▪ Rochester, MN: 4 offices ▪ Southern MN, WI and IA: 9 offices ▪ La Crosse, WI: 1 loan production office ▪ Phoenix, AZ: 2 offices RETIREMENT AND BENEFIT SERVICES ▪ Off
Slide 5: Strategic Growth
STRATEGIC GROWTH To supplement our organic growth, we have executed 26 acquisitions throughout the history of our company including: 16 in Banking and 10 in Retirement and Benefits. Rebranded to Expanded to Acquired Metro Alerus Arizona Market Phoenix Bank 1879 2007 2019 2024 2000 2009 2022 Began as
Slide 6: Strategic Initiatives
STRATEGIC INITIATIVES One Alerus = Working Better Together to Grow Client ORGANIC GROWTH Oriented ▪ Collaborative leadership team focused on new client acquisition, retention, and deepening relationships with existing clients Reinvention Diversified ▪ Diversified business model focused on bringing v
Slide 7: Officers and Directors
OFFICERS AND DIRECTORS AL VILLALON Executive Vice President and Chief Financial Officer 3 years with Alerus FORREST WILSON Executive Vice President and Chief Retirement Services Officer 1 year with Alerus KARIN TAYLOR Executive Vice President and Chief Operating Officer EXECUTIVE MANAGEMENT 7 years
Slide 8: Third Quarter Highlights
THIRD QUARTER HIGHLIGHTS Office in Minnetonka, Minnesota
Slide 9: 3Q 2025 Highlights
3Q 2025 HIGHLIGHTS Success is Never Final Adjusted EPS(1): NII: Fee Income: Adjusted ROAA(1): EARNINGS $0.66 $43.1 million $29.4 million 1.28% $0.65 Reported 3.50% NIM 40.6% of revenue 1.27% Reported Loans: Deposits: Synergistic L/D Ratio: BALANCE $4.1 billion $4.4 billion Deposits(2): 93.0% SHEET +
Slide 10: 3Q 2025 Results
3Q 2025 RESULTS Income Statement Three months ended Nine months ended September 30, June 30, September 30, September 30, September 30, 2025 2025 2024 2025 2024 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (dollars and shares in thousands, except per share data) Net Interest Income $ 4
Slide 11: Performance Ratios
PERFORMANCE RATIOS Adjusted Return on Average Adjusted Return on Average Tangible Book Value per Share(2) Assets(1)/(2) Tangible Common Equity(1)/(2) 1.41% $16.90 1.28% 21.02% $16.50 $16.11 18.55% 0.57% 9.04% 3Q 2024 2Q 2025 3Q 2025 3Q 2024 2Q 2025 3Q 2025 3Q 2024 2Q 2025 3Q 2025 10 | 1. Rates have
Slide 12: Key Revenue Items
KEY REVENUE ITEMS Net Interest Income Noninterest Income $ in thousands $ in thousands | % of noninterest income Retirement & Benefit Services Wealth Advisory (1) (2) Banking Fees and Other One-time Items $31,763 $2,031 $29,430 $28,363 $43,032 $43,136 6.4% $476 1.7% $6,345 $6,409 $5,059 20.0% 21.8%
Slide 13: Net Interest Income
NET INTEREST INCOME YIELDS AND RATES NII AND NIM(1) WALK Earning Assets $ in Thousands $469 $636 $(192) $43,136 6.31% 6.31% $43,032 $(356) 5.73% 5.71% 5.70% $(453) 5.12% 2.55% 2.69% 2.64% Liability Asset Rate Liability 3Q 2024 2Q 2025 3Q 2025 Volume/Mix & PAA Rate 2Q 2025 Accrual Asset 3Q 2025 Inves
Slide 14: Earning Assets
EARNING ASSETS SEPTEMBER 30, 2025 LOAN PORTFOLIO(1) LOAN PORTFOLIO(1) CHANGES $ in thousands Chart As of As of As of Change Change 1.0% Legend Category 9/30/2024 6/30/2025 9/30/2025 QoQ YoY Commercial and industrial $ 606,245 $ 675,892 $ 702,135 3.9% 15.8% CRE - Construction, land 173,629 352,749 34
Slide 15: Deposit Characteristics
DEPOSIT CHARACTERISTICS SEPTEMBER 30, 2025 DEPOSIT PORTFOLIO (BY CATEGORY) DEPOSIT PORTFOLIO CHANGES $ in thousands 4.6% Chart As of As of As of Change Change Legend Category 9/30/2024 6/30/2025 9/30/2025 QoQ YoY Noninterest-bearing $ 657,547 $ 790,300 $ 776,791 -1.7% 18.1% Noninterest- Interest-bea
Slide 16: Banking Services
BANKING SERVICES DIVISIONAL(1) INCOME STATEMENT NONINTEREST INCOME(2) BREAKDOWN $ in thousands $ in thousands 3Q 2025 2Q 2025 3Q 2024 $8,376 $9,000 Net interest income $ 43,136 $ 43,032 $ 22,542 $7,000 $2,031 $6,374 Provision for credit losses - - 1,661 $5,535 $1,073 $1,354 $5,000 $476 Noninterest i
Slide 17: Retirement and Benefit Services
RETIREMENT AND BENEFIT SERVICES DIVISIONAL(1) INCOME STATEMENT AUA / AUM AND PARTICIPANT ACCOUNTS $ in thousands $ in millions 3Q 2025 2Q 2025 3Q 2024 $44,005 $40,729 Recurring annual income $ 13,391 $ 12,772 $ 12,918 $36,733 $36,682 Transactional income 3,105 3,252 3,226 $32,123 500,164 Total nonin
Slide 18: Wealth Advisory Services
WEALTH ADVISORY SERVICES DIVISIONAL(1) INCOME STATEMENT AUA / AUM $ in thousands $ in millions $4,812 3Q 2025 2Q 2025 3Q 2024 $4,579 Asset management $ 5,698 $ 6,314 $ 5,972 $4,040 $4,019 Brokerage 372 417 365 Insurance and other 490 632 347 $3,583 Total noninterest income 6,560 7,363 6,684 Noninter
Slide 19: Noninterest Expense
NONINTEREST EXPENSE $ in thousands QUARTERLY HIGHLIGHTS $50,541 $48,438 $61 ▪ Noninterest expense increased $2.1 million, or 4.3%, compared to the second quarter of 2025. $7,653 $42,447 $6,697 ▪ The quarter-over-quarter increase was primarily driven by an $1,692 $2,719 $2,328 increase in compensatio
Slide 20: Asset Quality and Reserve Levels
ASSET QUALITY AND RESERVE LEVELS NPA / ASSETS % RESERVES OVER NPL % $ in thousands 1.20% 1.13% 1,437% 821% 410% 95% 104% 0.22% 0.09% 0.10% 2021 2022 2023 2024 3Q 2025 2021 2022 2023 2024 3Q 2025 Nonaccrual loans $2,076 $3,794 $8,596 $54,433 $59,644 NCO/ Accruing loans (0.04)% 0.02% (0.04)% 0.13% (0.
Slide 21: Capital and Sources of Liquidity
CAPITAL AND SOURCES OF LIQUIDITY COMMON EQUITY TIER 1 TIER 1 CAPITAL/TIER 1 LEVERAGE RATIOS 14.7% 15.1% 13.4% 13.7% 11.8% 12.1% 10.8% 11.3% 11.0% 9.9% 10.6% 10.1% 9.8% 9.5% 8.7% Tier 1 Capital 6% 4% Leverage 2021 2022 2023 2024 3Q 2025 2021 2022 2023 2024 3Q 2025 Tier 1 Leverage Tier 1 Capital Regul
Slide 22: Outlook
OUTLOOK FY 2025 FY 2026 Preliminary Guidance Guidance Loans Up mid-single $4.1-4.2b End of period digits Deposits Up low- single $4.3-4.4b End of period digits NIM 3.35-3.40% 3.35-3.45% Adjusted Up mid-single Noninterest ~ $115m Income1 digits Adjusted Up low to mid- PPNR1 ~ $85-86m single digits Ad
Slide 23: Key Takeaways
KEY TAKEAWAYS A solid quarter on our continued path to top tier performance Our diversified business model continues to drive earnings EARNINGS ▪ Stable net interest income compared to the second quarter of 2025 ▪ Noninterest income of $29.4 million representing 40.6% of revenue ▪ Adjusted EPS(1) of
Slide 24: Appendix
APPENDIX Office in Excelsior, Minnesota
Slide 25: Divisional Income Statement
DIVISIONAL INCOME STATEMENT ($ dollars in thousands) Quarter ended September 30, 2025 Retirement and Wealth Corporate Banking Services Benefit Services Advisory Services Administration Consolidated Net interest income $ 43,788 $ - $ - $ (652) $ 43,136 Provision for loan losses - - - - - (1) Noninter
Slide 26: Loan Portfolio Breakdown
LOAN PORTFOLIO BREAKDOWN September 30, 2025 June 30, 2025 December 31, 2024 Percent of Percent of Percent of ($ in thousands) Balance Portfolio Balance Portfolio Balance Portfolio Commercial and industrial: General business $ 269,555 6.6% $ 287,886 7.1% $ 340,702 8.5% Services 217,220 5.3% 191,709 4
Slide 27: Line of Credit Utilization
LINE OF CREDIT UTILIZATION C&I 600,000 60% 500,000 50% 400,000 40% 300,000 30% 200,000 20% 100,000 10% - 0% $ in thousands 2021 2022 2023 2024 3Q 4Q 1Q 2Q 3Q 2024 2024 2025 2025 2025 Funded Unfunded Funded % Home Equity Lines of Credit 600,000 60% 500,000 50% 400,000 40% 300,000 30% 200,000 20% 100,
Slide 28: Allowance for Credit Losses on Loans
ALLOWANCE FOR CREDIT LOSSES ON LOANS Changes in the ACL for Loans by Portfolio Segment Three months ended September 30, 2025 Beginning Provision for Loan Loan Ending Balance Credit Losses(1) Charge-offs Recoveries Balance ($ in thousands) Commercial: Commercial and industrial $ 8,326 $ 3,270 $ (606)
Slide 29: Allowance for Credit Losses on Loans
ALLOWANCE FOR CREDIT LOSSES ON LOANS Allocation by Loan Portfolio Segment September 30, 2025 December 31, 2024 Percentage of Percentage of Allocated segment allowance Allocated segment allowance ($ in thousands) Allowance to segment loans Allowance to segment loans Commercial and industrial $ 13,405
Slide 30: Financial Highlights
FINANCIAL HIGHLIGHTS ($ in thousands, Quarterly Nine months ended except where otherwise noted) 3Q 2025 2Q 2025 1Q 2025 4Q 2024 3Q 2024 September 30, 2025 September 30, 2024 Total Assets $ 5,330,573 $ 5,323,822 $ 5,339,620 $ 5,261,673 $ 4,084,640 $ 5,330,573 $ 4,084,640 Total Loans 4,102,075 4,044,6
Slide 31: Financial Highlights
FINANCIAL HIGHLIGHTS ($ in thousands, Annual 20 - '24 except where otherwise noted) 2024 2023 2022 2021 2020 CAGR Total Assets $ 5,261,673 $ 3,907,713 $ 3,779,637 $ 3,392,691 $ 3,013,771 14.9% Total Loans 3,992,534 2,759,583 2,443,994 1,758,020 1,979,375 19.2% Total Deposits 4,378,410 3,095,611 2,91
Slide 32: Non-GAAP Disclosure Reconciliation
NON-GAAP DISCLOSURE RECONCILIATION ($ in thousands, except where otherwise noted) Quarterly Nine months ended 3Q 2025 2Q 2025 1Q 2025 4Q 2024 3Q 2024 September 30, 2025 September 30, 2024 Tangible common equity to tangible assets Total common stockholders' equity $ 550,688 $ 533,155 $ 514,232 $ 495,
Slide 33: Non-GAAP Disclosure Reconciliation
NON-GAAP DISCLOSURE RECONCILIATION ($ in thousands, except where otherwise noted) Annual 2024 2023 2022 2021 2020 Tangible common equity to tangible assets Total common stockholders' equity $ 495,410 $ 369,127 $ 356,872 $ 359,403 $ 330,163 Less: Goodwill 85,634 46,783 47,087 31,490 30,201 Less: Othe
Slide 34: Non-GAAP Disclosure Reconciliation
NON-GAAP DISCLOSURE RECONCILIATION ($ in thousands, except for per share data and where otherwise noted) Annual 2024 2023 2022 2021 2020 2019 Average Adjusted net income excluding net gains (losses) on investment securities Net Income $ 17,780 $ 11,696 $ 40,005 $ 52,681 $ 44,675 $ 29,540 Less: Net g
Slide 35: Non-GAAP Disclosure Reconciliation
NON-GAAP DISCLOSURE RECONCILIATION ($ in thousands, except for per share data and where otherwise noted) Quarterly Nine months ended 3Q 2025 2Q 2025 3Q 2024 September 30, 2025 September 30, 2024 Pre-provision net revenue Add: Net interest income $ 43,136 $ 43,032 $ 22,542 $ 127,325 $ 68,761 Add: Non
Slide 36: Non-GAAP Disclosure Reconciliation
NON-GAAP DISCLOSURE RECONCILIATION ($ in thousands, except for per share data and where otherwise noted) Quarterly Nine months ended Lettered items are continued from the prior slide 3Q 2025 2Q 2025 3Q 2024 September 30, 2025 September 30, 2024 Adjusted net income Net Income $ 16,924 $ 20,253 $ 5,20