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

About this update from Alerus Financial Corporation

[{"type":"text","content":" MINNEAPOLIS --(BUSINESS WIRE)--\n Alerus Financial Corporation (Nasdaq: ALRS), or the Company, reported net loss of $14.8 million for the fourth quarter of 2023, or ( $0.73 ) per diluted common share, compared to net income of $9.2 million , or $0.45 per diluted common share, for the third quarter of 2023, and net income of $10.9 million , or $0.53 per diluted common share, for the fourth quarter of 2022.\n\n \nDuring the fourth quarter of 2023, the Company sold $172.3 million of available-for-sale (AFS) securities in a balance sheet repositioning. The sale resulted in a one-time pre-tax net loss of $24.6 million . Proceeds from the sale were reinvested into loans to new and existing clients throughout the communities the Company serves, in addition to paying down borrowings. Adjusted pre-provision net revenue (see non-GAAP reconciliation) was $9.0 million , compared to $8.9 million for the third quarter 2023.\n\n \n CEO Comments \n\n \nPresident and Chief Executive Officer Katie Lorenson said, “2023 was an extraordinary year that brought both challenges and opportunities. During the year, we completed several restructurings and added over 120 new team members to our organization while reducing overall headcount. The resulting transformation of our commercial wealth bank is evident, with exceptional deposit growth supporting high quality loan growth during the quarter. In addition, the well-executed balance sheet repositioning in December has provided the Company with continued momentum to improve financial performance heading into 2024 and beyond.\n\n \nThe ongoing successful execution of our One Alerus strategy resulted in new and expanded client relationships in all our diversified business lines. Our net interest margin expanded during the quarter and fee income remained a differentiator in the industry with a robust contribution of 54% of total revenues. Returning financial performance to top tier profitability levels through ongoing expense management remains a priority, and we continued to prudently manage credit quality while maintaining healthy reserves, capital, and liquidity levels.\n\n \nWe are focused on continued value creation for our shareholders, our clients, and our communities. During the quarter, we grew tangible book value per share 8.0% and returned over $5.8 million to shareholders through dividends and our expanded share buyback program. I want to thank our Alerus team members for building on our solid foundation and all that was accomplished in 2023.”\n\n \n Fourth Quarter Highlights \n\n \n \nTotal deposits were $3.1 billion as of December 31, 2023 , an increase of $223.4 million , or 7.8%, from September 30, 2023 \n\n \n \nTotal loans were $2.8 billion as of December 31, 2023 , an increase of $149.7 million , or 5.7%, from September 30, 2023 \n\n \n \nThe loan to deposit ratio as of December 31, 2023 was 89.0%, compared to 90.7% as of September 30, 2023 , brokered deposits remained at $0 \n\n \n \nNet interest margin expanded 10 basis points from 2.27% in the third quarter to 2.37% in the fourth quarter of 2023\n\n \n \nNet interest income increased 5.7%, from $20.4 million in the third quarter to $21.6 million in the fourth quarter of 2023\n\n \n \nTotal assets under administration/management were $40.7 billion , a 6.3% increase from the third quarter of 2023\n\n \n \nNet recoveries to average loans of 0.04%, compared to net recoveries to average loans of 0.09% for the third quarter of 2023\n\n \n \nRepurchased $2.1 million of the Company’s outstanding stock at an average purchase price of $17.65 , reducing common shares outstanding by 118,000 at quarter end, along with recent board approval to repurchase up to a total of 1 million shares of common stock\n\n \n \nTangible book value per common share (non-GAAP) was $15.46 , an 8.0% increase from the third quarter of 2023\n\n \n \nCommon equity tier 1 capital to risk weighted assets as of December 31, 2023 was 11.82%, compared to 13.01% as of September 30, 2023 , and continues to be well above the minimum threshold to be well capitalized of 6.50%\n\n \n \nTangible common equity to tangible assets (non-GAAP) was 7.96% as of December 31, 2023 , compared to 7.47% as of September 30, 2023 \n\n \n \n Full Year 2023 Highlights \n\n \n \nNoninterest expense of $150.2 million , a decrease of $8.6 million , or 5.4%, compared to $158.8 million in 2022\n\n \n \nAverage loans of $2.5 billion , an increase of $475.6 million , or 23.1%, from 2022\n\n \n \nAverage deposits of $2.9 billion , an increase of $48.6 million , or 1.69%, from 2022\n\n \n \nTotal deposits increased $180.1 million to $3.1 billion as of December 31, 2023 , compared to $2.9 billion as of December 31, 2022 \n\n \n \nLoan to deposit ratio as of December 31, 2023 was 89.0%, compared to 83.8% as of December 31, 2022 , brokered deposits remained at $0 \n\n \n \nYield on interest earning assets increased 109 basis points from 3.52% for the year ended December 31, 2022 to 4.61% for the year ended December 31, 2023 \n\n \n \nTotal assets under administration/management were $40.7 billion , a 14.0% increase from December 31, 2022 \n\n \n \nNet recoveries to average loans of 0.04%, compared to net charge-offs to average loans of 0.03% for the year ended December 31, 2022 \n\n \n \nDividends paid per common share increased from $0.70 for the year ended December 31, 2022 to $0.75 for the year ended December 31, 2023 \n\n \n \nRepurchased $6.2 million of the Company’s outstanding stock at an average purchase price of $17.48 , reducing common shares outstanding by 356,474 for the year ended December 31, 2023 \n\n \n \nTangible book value per common share (non-GAAP) was $15.46 as of December 31, 2023 , compared to $14.37 as of December 31, 2022 \n\n \n \nTangible common equity to tangible assets (non-GAAP) was 7.96% as of December 31, 2023 , compared to 7.74% as of December 31, 2022 \n\n \n \n Selected Financial Data (unaudited) \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n As of and for the \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n Three months ended \n\n \n\n \n\n \n \n\n \n\n \n\n \n Year ended \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n September 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n(dollars and shares in thousands, except per share data)\n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Performance Ratios \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nReturn on average total assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(1.51)\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n0.95\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n1.17\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n0.31\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n1.14\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nReturn on average common equity\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(16.75)\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n10.05\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n12.37\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.26\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n11.55\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nReturn on average tangible common equity (1)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(18.85)\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n13.51\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n16.63\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n5.37\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n15.09\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nNoninterest income as a % of revenue\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3.54\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n58.21\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n48.62\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n47.74\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n52.72\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nNet interest margin (tax-equivalent)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2.37\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n2.27\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.09\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n2.46\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.04\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nEfficiency ratio (1)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n165.40\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n73.37\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n69.62\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n85.85\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n72.86\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nAdjusted efficiency ratio (1)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n79.07\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n73.37\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n69.62\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n74.91\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n72.86\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nNet charge-offs/(recoveries) to average loans\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(0.04)\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n(0.09)\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n(0.03)\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n(0.04)\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n0.02\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nDividend payout ratio\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(26.03)\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n42.22\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n33.96\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n129.31\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n33.33\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \n Per Common Share \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nEarnings per common share - basic\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(0.74)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.46\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.54\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.59\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2.12\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nEarnings per common share - diluted\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(0.73)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.45\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.53\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.58\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2.10\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nDividends declared per common share\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.19\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.19\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.18\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.75\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.70\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nBook value per common share\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n18.71\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n17.60\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n17.85\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTangible book value per common share (1)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n15.46\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n14.32\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n14.37\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAverage common shares outstanding - basic\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,761\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,872\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,988\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,922\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n18,640\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAverage common shares outstanding - diluted\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,996\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,095\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,232\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,143\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n18,884\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Other Data \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nRetirement and benefit services assets under administration/management\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n36,682,425\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n34,552,569\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n32,122,520\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nWealth management assets under administration/management\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n4,018,846\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,724,091\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,582,648\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nMortgage originations\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n65,488\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n109,637\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n126,254\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n364,114\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n812,314\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n____________________\n \n \n (1) \n \n \nRepresents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.”\n\n \n\n \n\n \n \n Results of Operations \n\n \n Net Interest Income \n\n \nNet interest income for the fourth quarter of 2023 was $21.6 million , a $1.2 million , or 5.7%, increase from the third quarter of 2023 due to interest income growth and stabilizing interest expense resulting from slowing deposit cost increases and lower short-term borrowings due to strong deposit growth. Net interest income decreased $5.4 million , or 20.1%, from $27.0 million for the fourth quarter of 2022 due to heightened deposit competition, the impact of rising short-term interest rates on indexed money market deposits, and clients moving deposits out of noninterest bearing products into interest-bearing products. Interest income increased $2.7 million , or 6.3%, from the third quarter of 2023, primarily driven by a 23 basis point increase in yield on interest earning assets mostly attributable to higher yields on new loans and strong organic loan growth. The increase in interest income was offset by a $1.5 million increase in interest expense, primarily due to an increase in rates paid on interest-bearing deposits. While the increase was the lowest quarterly increase in 2023, interest expense paid on deposits was still impacted due to heightened deposit competition, the impact of rising short-term interest rates on indexed money market deposits, and clients moving deposits out of noninterest bearing products into interest-bearing products.\n\n \nNet interest margin (on a tax-equivalent basis), was 2.37% for the fourth quarter of 2023, a 10 basis point increase from 2.27% for the third quarter of 2023, and a 72 basis point decrease from 3.09% for the fourth quarter of 2022. The increase in net interest margin from the prior quarter reflected higher yields on new loans, partially offset by the impact of rising interest rates on our interest-bearing liabilities.\n\n \n Noninterest Income \n\n \nNoninterest income for the fourth quarter of 2023 was $0.8 million , a $27.6 million , or 97.2%, decrease from the third quarter of 2023. The quarter over quarter decrease was driven by the previously announced balance sheet repositioning, as a result of which a $24.6 million loss on the sale of investment securities was recognized in the fourth quarter of 2023. Adjusted non-interest income (non-GAAP) for the fourth quarter of 2023 was $25.4 million , a 0.8% decrease from the third quarter of 2023. Retirement and benefit services revenue decreased to $15.3 million , a 17.7% decrease from third quarter results mainly due to a $2.8 million gain recognized on the divestiture of the ESOP trustee business in the third quarter of 2023. Assets under administration/management in retirement and benefit services grew 6.2% due to improved equity and bond markets. Wealth management revenues grew $0.7 million , a 12.7% increase from the third quarter of 2023 as assets under administration/management grew 7.9% during that same period. Mortgage saw a $1.2 million seasonal decrease in mortgage banking revenue with mortgage originations of $65.5 million for the fourth quarter of 2023, compared to originations of $109.6 million in the third quarter of 2023.\n\n \nAdjusted noninterest income (non-GAAP) for the fourth quarter of 2023 was $25.4 million , a decrease of $0.1 million , or 0.3%, from $25.5 million in the fourth quarter of 2022. While overall noninterest income was stable year over year, mortgage banking revenues declined $0.9 million , or 41.1%, from $2.2 million in the fourth quarter of 2022 as mortgage originations declined 48.1% during that time period due to the impact of higher interest rates. Offsetting this decline, wealth management revenues grew $0.8 million , or 15.5%, from $5.1 million in the fourth quarter of 2022 as assets under administration/management grew 12.2% during that time period.\n\n \n Noninterest Expense \n\n \nNoninterest expense for the fourth quarter of 2023 was $38.7 million , a $1.4 million , or 3.7%, increase from the third quarter of 2023. Compensation expense for the fourth quarter of 2023 was $19.2 million , which included severance expense of $0.4 million . Business services, software and technology expense was $5.7 million for the fourth quarter of 2023, a $0.9 million increase from the third quarter of 2023. The increase was driven by seasonally higher contract renewals due to inflationary pressures and equipment purchases. Professional fees and assessments expense was $2.3 million , a $0.6 million increase from the third quarter of 2023 driven primarily by higher fees resulting from increased audit, examination, and other professional fees. Marketing and advertising expense was $1.0 million for the fourth quarter of 2023, a $0.3 million increase from the third quarter of 2023 due to a one-time donation resulting in future tax credits.\n\n \nNoninterest expense for the fourth quarter of 2023 increased $0.7 million , or 1.9%, from $37.9 million in the fourth quarter of 2022. The increase was primarily driven by inflationary pressures in business services, software and technology expense and higher professional fees and assessments due to higher auditing fees and an increase in Federal Deposit Insurance Corporation (“FDIC”) assessments.\n\n \n Financial Condition \n\n \nTotal assets were $3.9 billion as of December 31, 2023 , an increase of $117.2 million , or 3.1%, from December 31, 2022 . The increase was primarily due to a $312.1 million increase in loans and a $64.2 million increase in cash and cash equivalents, partially offset by a decrease of $253.0 million in investment securities.\n\n \n Loans \n\n \nTotal loans were $2.8 billion as of December 31, 2023 , an increase of $312.1 million , or 12.8%, from December 31, 2022 . The increase was primarily driven by a $245.2 million increase in commercial real estate loans, a $47.3 million increase in residential real estate loans, a $26.2 million increase in real estate construction loans, and an $11.0 million increase in commercial and industrial loans, offset by a $21.3 million decrease in other consumer revolving and installment loans.\n\n \nThe following table presents the composition of our loan portfolio as of the dates indicated:\n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n September 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n June 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n March 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n \n(dollars in thousands)\n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n \n Commercial \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nCommercial and industrial\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n594,827\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n582,387\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n551,860\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n553,578\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n583,876\n\n \n\n \n\n \n \n \nReal estate construction\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n124,034\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n97,742\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n78,428\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n108,776\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n97,810\n\n \n\n \n\n \n \n \nCommercial real estate\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,126,912\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,025,014\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,003,821\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n934,324\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n881,670\n\n \n\n \n\n \n \n \nTotal commercial\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,845,773\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,705,143\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,634,109\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,596,678\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,563,356\n\n \n\n \n\n \n \n \n Consumer \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nResidential real estate first mortgage\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n726,879\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n717,793\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n707,630\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n698,002\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n679,551\n\n \n\n \n\n \n \n \nResidential real estate junior lien\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n154,134\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n152,677\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n157,231\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n152,281\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n150,479\n\n \n\n \n\n \n \n \nOther revolving and installment\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n29,302\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n30,817\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n34,552\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n39,664\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n50,608\n\n \n\n \n\n \n \n \nTotal consumer\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n910,315\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n901,287\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n899,413\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n889,947\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n880,638\n\n \n\n \n\n \n \n \nTotal loans\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,756,088\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,606,430\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,533,522\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,486,625\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,443,994\n\n \n\n \n\n \n \n Deposits \n\n \nTotal deposits were $3.1 billion as of December 31, 2023 , an increase of $180.1 million , or 6.2%, from December 31, 2022 . Interest-bearing deposits increased $313.0 million , while noninterest-bearing deposits decreased $132.9 million , from December 31, 2022 . The increase in total deposits was due to new and expanded commercial deposit relationships along with time deposit and synergistic deposit growth. Time deposit balances increased as higher short-term CD rates attracted primarily new deposits to the Company. The Company continued to have $0 of brokered deposits as of December 31, 2023 .\n\n \nThe following table presents the composition of our deposit portfolio as of the dates indicated:\n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n September 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n June 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n March 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n \n(dollars in thousands)\n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n \nNoninterest-bearing demand\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n728,082\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n717,990\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n715,534\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n792,977\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n860,987\n\n \n\n \n\n \n \n \nInterest-bearing\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nInterest-bearing demand\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n840,711\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n759,812\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n753,194\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n817,675\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n706,275\n\n \n\n \n\n \n \n \nSavings accounts\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n82,485\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n88,341\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n93,557\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n99,742\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n99,882\n\n \n\n \n\n \n \n \nMoney market savings\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,032,771\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n959,106\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n986,403\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,076,166\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,035,981\n\n \n\n \n\n \n \n \nTime deposits\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n411,562\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n346,935\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n304,167\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n245,418\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n212,359\n\n \n\n \n\n \n \n \nTotal interest-bearing\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,367,529\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,154,194\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,137,321\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,239,001\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,054,497\n\n \n\n \n\n \n \n \nTotal deposits\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,095,611\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,872,184\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,852,855\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,031,978\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,915,484\n\n \n\n \n\n \n \n Asset Quality \n\n \nTotal nonperforming assets were $8.8 million as of December 31, 2023 , an increase of $4.9 million , or 129.3%, from December 31, 2022 . This increase was primarily driven by one loan. As of December 31, 2023 , the allowance for credit losses on loans was $35.8 million , or 1.30% of total loans, compared to $31.1 million , or 1.27% of total loans, as of December 31, 2022 .\n\n \nThe following table presents selected asset quality data as of and for the periods indicated:\n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n As of and for the three months ended \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n September 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n June 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n March 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n(dollars in thousands)\n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNonaccrual loans\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n8,596\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n9,007\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,233\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,118\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,794\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAccruing loans 90+ days past due\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n139\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n347\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal nonperforming loans\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n8,735\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n9,007\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,580\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,118\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,794\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOREO and repossessed assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n32\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n30\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal nonperforming assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n8,767\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n9,010\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,580\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,118\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,824\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNet charge-offs/(recoveries)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(238)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(594)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(403)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n170\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(178)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNet charge-offs/(recoveries) to average loans\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(0.04)\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n(0.09)\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n(0.07)\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n0.03\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n(0.03)\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nNonperforming loans to total loans\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.32\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n0.35\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n0.10\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n0.09\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n0.16\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nNonperforming assets to total assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n0.22\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n0.23\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n0.07\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n0.05\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n0.10\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nAllowance for credit losses on loans to total loans\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1.30\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n1.39\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n1.41\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n1.41\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n1.27\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nAllowance for credit losses on loans to nonperforming loans\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n410\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n403\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n1,384\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n1,657\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n821\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \nFor the fourth quarter of 2023, the Company had net recoveries of $238 thousand , compared to net recoveries of $594 thousand for the third quarter of 2023 and $178 thousand for the fourth quarter of 2022.\n\n \nThe Company recorded a provision for credit losses of $1.5 million for the fourth quarter of 2023, primarily driven by strong loan growth and unfunded commitments. Beginning on January 1, 2023 , the allowance for credit losses on loans is computed under the current expected credit loss, or CECL, accounting standard; prior to that, the allowance for credit losses was computed using the incurred loss method. The unearned fair value adjustments on the acquired Metro Phoenix Bank loan portfolio were $5.2 million and $7.1 million , as of December 31, 2023 and 2022, respectively.\n\n \n Capital \n\n \nTotal stockholders’ equity was $369.1 million as of December 31, 2023 , an increase of $12.3 million from December 31, 2022 . This change was driven by a decrease in accumulated other comprehensive loss of $25.0 million . Tangible book value per common share, a non-GAAP financial measure, increased to $15.46 as of December 31, 2023 , from $14.37 as of December 31, 2022 . Tangible common equity to tangible assets, a non-GAAP financial measure, increased to 7.96% as of December 31, 2023 , from 7.74% as of December 31, 2022 . Common equity tier 1 capital to risk weighted assets decreased to 11.85% as of December 31, 2023 , from 13.39% as of December 31, 2022 .\n\n \nDuring the fourth quarter of 2023, the Company repurchased approximately $2.1 million of its outstanding stock at an average purchase price of $17.65 , which reduced common shares outstanding by 118,000 at quarter end.\n\n \nThe following table presents our capital ratios as of the dates indicated:\n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n September 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Capital Ratios(1) \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAlerus Financial Corporation Consolidated\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nCommon equity tier 1 capital to risk weighted assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n11.82\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n13.01\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n13.39\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nTier 1 capital to risk weighted assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n12.10\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n13.30\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n13.69\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nTotal capital to risk weighted assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n14.76\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n16.10\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n16.48\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nTier 1 capital to average assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n10.57\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n11.14\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n11.25\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nTangible common equity / tangible assets (2)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n7.96\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n7.47\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n7.74\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Alerus Financial, N.A. \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nCommon equity tier 1 capital to risk weighted assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n11.40\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n12.68\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n12.76\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nTier 1 capital to risk weighted assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n11.40\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n12.68\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n12.76\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nTotal capital to risk weighted assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n12.51\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n13.86\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n13.83\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nTier 1 capital to average assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n9.92\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n10.72\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n10.48\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n____________________\n \n \n \n(1)\n\n \n\n \n\n \n Capital ratios for the current quarter are to be considered preliminary until the Call Report for Alerus Financial, N.A. is filed. \n \n \n \n(2)\n\n \n\n \n\n \n \nRepresents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.”\n\n \n\n \n\n \n \n Conference Call \n\n \nThe Company will host a conference call at 11:00 a.m. Central Time on Thursday, January 25, 2024 , to discuss its financial results. The call can be accessed via telephone at (844) 200-6205, using access code 454002. A recording of the call and transcript will be available on the Company’s investor relations website at investors.alerus.com following the call.\n\n \n About Alerus Financial Corporation \n\n \n Alerus Financial Corporation is a diversified financial services company with corporate offices in Grand Forks, North Dakota , and the Minneapolis-St. Paul, Minnesota metropolitan area. Through its subsidiary, Alerus Financial, N.A. , the Company provides innovative and comprehensive financial solutions to business and consumer clients through four distinct business segments—banking, retirement and benefit services, wealth management, and mortgage. The Company provides clients with a primary point of contact to help fully understand the unique needs and delivery channel preferences of each client. Clients are provided with competitive products, valuable insight and sound advice supported by digital solutions designed to meet the clients’ needs. The Company has banking, mortgage, and wealth management offices in Grand Forks and Fargo, North Dakota , the Minneapolis-St. Paul, Minnesota metropolitan area, and Phoenix , Scottsdale , and Mesa Arizona . Alerus retirement and benefit services plan administration hubs are located in Minnesota , Michigan , and Colorado .\n\n \n Non-GAAP Financial Measures \n\n \nSome of the financial measures included in this press release are not measures of financial performance recognized by U.S. Generally Accepted Accounting Principles, or GAAP. These non-GAAP financial measures include the ratio of tangible common equity to tangible assets, tangible common equity per share, return on average tangible common equity, net interest margin (tax-equivalent), efficiency ratio, adjusted efficiency ratio, pre-provision net revenue, adjusted pre-provision net revenue, and adjusted noninterest income. Management uses these non-GAAP financial measures in its analysis of its performance, and believes financial analysts and investors frequently use these measures, and other similar measures, to evaluate capital adequacy and financial performance. Reconciliations of non-GAAP disclosures used in this press release to the comparable GAAP measures are provided in the accompanying tables. Management, banking regulators, many financial analysts and other investors use these measures in conjunction with more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, which typically stem from the use of the purchase accounting method of accounting for mergers and acquisitions.\n\n \nThese non-GAAP financial measures should not be considered in isolation or as a substitute for total stockholders’ equity, total assets, book value per share, return on average assets, return on average equity, or any other measure calculated in accordance with GAAP. Moreover, the manner in which the Company calculates these non-GAAP financial measures may differ from that of other companies reporting measures with similar names.\n\n \n Forward-Looking Statements \n\n \nThis press release 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, identified by words such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”, “continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized”, “target” and “outlook”, or the negative version of those words or other comparable words of a future or forward-looking nature. Examples of forward-looking statements include, among others, statements the Company makes regarding our projected growth, anticipated future financial performance, financial condition, credit quality, management’s long-term performance goals and the future plans and prospects of Alerus Financial Corporation .\n\n \nForward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, the following: interest rate risk, including the effects of recent and potential additional rate increases by the Federal Reserve ; our ability to successfully manage credit risk and maintain an adequate level of allowance for credit losses; new or revised accounting standards; business and economic conditions generally and in the financial services industry, nationally and within our market areas, including continued rising rates of inflation and possible recession; the effects of recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short-period of time at Silicon Valley Bank , Signature Bank and First Republic Bank that resulted in the failure of those institutions; the overall health of the local and national real estate market; concentrations within our loan portfolio; the level of nonperforming assets on our balance sheet; our ability to implement our organic and acquisition growth strategies, including the integration of Metro Phoenix Bank which the Company acquired in 2022; the impact of economic or market conditions on our fee-based services; our ability to continue to grow our retirement and benefit services business; our ability to continue to originate a sufficient volume of residential mortgages; the occurrence of fraudulent activity, breaches or failures of our or our third party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools; interruptions involving our information technology and telecommunications systems or fourth-party servicers; potential losses incurred in connection with mortgage loan repurchases; the composition of our executive management team and our ability to attract and retain key personnel; rapid technological change in the financial services industry; increased competition in the financial services industry from non-banks such as credit unions and Fintech companies, including digital asset service providers; our ability to successfully manage liquidity risk, including our need to access higher cost sources of funds such as fed funds purchased and short-term borrowings; the concentration of large deposits from certain clients, who have balances above current FDIC insurance limits; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal proceedings and regulatory actions against us or to which the Company may become subject; potential impairment to the goodwill the Company recorded in connection with our past acquisitions, including the acquisition of Metro Phoenix Bank ; the extensive regulatory framework that applies to us; the impact of recent and future legislative and regulatory changes, including in response to the recent failures of Silicon Valley Bank , Signature Bank and First Republic Bank in 2023; fluctuations in the values of the securities held in our securities portfolio, including as a result of changes in interest rates; governmental monetary, trade and fiscal policies; risks related to climate change and the negative impact it may have on our customers and their businesses; severe weather, natural disasters, widespread disease or pandemics; acts of war or terrorism, including the Israeli-Palestinian conflict and the Russian invasion of Ukraine , or other adverse external events; any material weaknesses in our internal control over financial reporting; changes to U.S. or state tax laws, regulations and guidance, including the new 1.0% excise tax on stock buybacks by publicly traded companies; potential changes in federal policy and at regulatory agencies as a result of the upcoming 2024 presidential election; talent and labor shortages and employee turnover; our success at managing the risks involved in the foregoing items; and any other risks described in the “Risk Factors” sections of the reports filed by Alerus Financial Corporation with the Securities and Exchange Commission .\n\n \nAny forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.\n\n \n \n \n Alerus Financial Corporation and Subsidiaries \n\n \n\n \n Consolidated Balance Sheets \n\n \n\n \n(dollars in thousands, except share and per share data)\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n \n Assets \n\n \n\n \n\n \n \n\n \n\n \n\n \n(Unaudited)\n\n \n\n \n\n \n \n\n \n\n \n\n \n(Audited)\n\n \n\n \n\n \n \n \nCash and cash equivalents\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n122,485\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n58,242\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nInvestment securities\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAvailable-for-sale, at fair value\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n486,736\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n717,324\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nHeld-to-maturity, at carrying value (allowance for credit losses of $213 at December 31, 2023 )\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n299,515\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n321,902\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nLoans held for sale\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n11,497\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n9,488\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nLoans\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,756,088\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,443,994\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAllowance for credit losses on loans\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(35,843\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(31,146\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nNet loans\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,720,245\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,412,848\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nLand, premises and equipment, net\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,940\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,288\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOperating lease right-of-use assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,436\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,419\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAccrued interest receivable\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n15,700\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n12,869\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nBank-owned life insurance\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n33,236\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n33,991\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Goodwill \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n46,783\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n47,087\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOther intangible assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,158\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n22,455\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nServicing rights\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,052\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,643\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nDeferred income taxes, net\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n34,595\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n42,369\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOther assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n83,433\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n75,712\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,896,811\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,779,637\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Liabilities and Stockholders’ Equity \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nDeposits\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNoninterest-bearing\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n728,082\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n860,987\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nInterest-bearing\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,367,529\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,054,497\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal deposits\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,095,611\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,915,484\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nShort-term borrowings\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n314,170\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n378,080\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nLong-term debt\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n58,956\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n58,843\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nOperating lease liabilities\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,751\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,902\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAccrued expenses and other liabilities\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n53,196\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n64,456\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal liabilities\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,527,684\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,422,765\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nStockholders’ equity\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nPreferred stock, $1 par value, 2,000,000 shares authorized: 0 issued and outstanding\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nCommon stock, $1 par value, 30,000,000 shares authorized: 19,734,077 and 19,991,681 issued and outstanding\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,734\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,992\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAdditional paid-in capital\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n150,343\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n155,095\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nRetained earnings\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n272,705\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n280,426\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAccumulated other comprehensive loss\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(73,655\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(98,641\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nTotal stockholders’ equity\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n369,127\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n356,872\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal liabilities and stockholders’ equity\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,896,811\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,779,637\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n Alerus Financial Corporation and Subsidiaries \n\n \n\n \n Consolidated Statements of Income \n\n \n\n \n(dollars and shares in thousands, except per share data)\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n Three months ended \n\n \n\n \n\n \n \n\n \n\n \n\n \n Year ended \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n September 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n \n Interest Income \n\n \n\n \n\n \n \n\n \n\n \n\n \n(Unaudited)\n\n \n\n \n\n \n \n\n \n\n \n\n \n(Unaudited)\n\n \n\n \n\n \n \n\n \n\n \n\n \n(Unaudited)\n\n \n\n \n\n \n \n\n \n\n \n\n \n(Unaudited)\n\n \n\n \n\n \n \n\n \n\n \n\n \n(Unaudited)\n\n \n\n \n\n \n \n \nLoans, including fees\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n37,731\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n34,986\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n29,248\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n136,918\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n89,907\n\n \n\n \n\n \n \n \nInvestment securities\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTaxable\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n6,040\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n6,146\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,813\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n24,262\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n23,260\n\n \n\n \n\n \n \n \nExempt from federal income taxes\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n182\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n182\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n210\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n740\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n848\n\n \n\n \n\n \n \n \nOther\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n742\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n724\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n541\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,963\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,562\n\n \n\n \n\n \n \n \nTotal interest income\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n44,695\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n42,038\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n35,812\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n164,883\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n115,577\n\n \n\n \n\n \n \n \n Interest Expense \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nDeposits\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,169\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n14,436\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,675\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n53,387\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n9,169\n\n \n\n \n\n \n \n \nShort-term borrowings\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,292\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n6,528\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,545\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,976\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,339\n\n \n\n \n\n \n \n \nLong-term debt\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n682\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n679\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n628\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,681\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,340\n\n \n\n \n\n \n \n \nTotal interest expense\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n23,143\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n21,643\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n8,848\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n77,044\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n15,848\n\n \n\n \n\n \n \n \nNet interest income\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n21,552\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,395\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n26,964\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n87,839\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n99,729\n\n \n\n \n\n \n \n \nProvision for credit losses\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,507\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,057\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n \nNet interest income after provision for credit losses\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,045\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,395\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n26,964\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n85,782\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n99,729\n\n \n\n \n\n \n \n \n Noninterest Income \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nRetirement and benefit services\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n15,317\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n18,605\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n16,599\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n65,294\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n67,135\n\n \n\n \n\n \n \n \nWealth management\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,940\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,271\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,144\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n21,855\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,870\n\n \n\n \n\n \n \n \nMortgage banking\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,279\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,510\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,170\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n8,411\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n16,921\n\n \n\n \n\n \n \n \nService charges on deposit accounts\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n341\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n328\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n282\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,280\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,434\n\n \n\n \n\n \n \n \nNet gains (losses) on investment securities\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(24,643\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(24,643\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n \nOther\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,557\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,693\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,322\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n8,032\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,863\n\n \n\n \n\n \n \n \nTotal noninterest income\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n791\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n28,407\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n25,517\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n80,229\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n111,223\n\n \n\n \n\n \n \n \n Noninterest Expense \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nCompensation\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,214\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,071\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,189\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n76,290\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n80,656\n\n \n\n \n\n \n \n \nEmployee taxes and benefits\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,578\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,895\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,887\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,051\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n21,915\n\n \n\n \n\n \n \n \nOccupancy and equipment expense\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,858\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,883\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,892\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n7,477\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n7,605\n\n \n\n \n\n \n \n \nBusiness services, software and technology expense\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,686\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,774\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,405\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n21,053\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,487\n\n \n\n \n\n \n \n \nIntangible amortization expense\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,324\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,324\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,324\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,296\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,754\n\n \n\n \n\n \n \n \nProfessional fees and assessments\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,345\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,716\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,454\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n6,743\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n8,367\n\n \n\n \n\n \n \n \nMarketing and business development\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,002\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n692\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n950\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,027\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,254\n\n \n\n \n\n \n \n \nSupplies and postage\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n521\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n410\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n634\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,796\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,440\n\n \n\n \n\n \n \n \nTravel\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n313\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n322\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n356\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,189\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,182\n\n \n\n \n\n \n \n \nMortgage and lending expenses\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n501\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n689\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n606\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,902\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,183\n\n \n\n \n\n \n \n \nOther\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,312\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,484\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,251\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,333\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n6,927\n\n \n\n \n\n \n \n \nTotal noninterest expense\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n38,654\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n37,260\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n37,948\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n150,157\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n158,770\n\n \n\n \n\n \n \n \nIncome (loss) before income tax expense (benefit)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(17,818\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n11,542\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n14,533\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n15,854\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n52,182\n\n \n\n \n\n \n \n \nIncome tax expense (benefit)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(3,064\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,381\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,624\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,158\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n12,177\n\n \n\n \n\n \n \n \nNet income (loss)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(14,754\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n9,161\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n10,909\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n11,696\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n40,005\n\n \n\n \n\n \n \n \n Per Common Share Data \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nEarnings (loss) per common share\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(0.74\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.46\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.54\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.59\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2.12\n\n \n\n \n\n \n \n \nDiluted earnings (loss) per common share\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(0.73\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.45\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.53\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.58\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2.10\n\n \n\n \n\n \n \n \nDividends declared per common share\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.19\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.19\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.18\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.75\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.70\n\n \n\n \n\n \n \n \nAverage common shares outstanding\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,761\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,872\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,988\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,922\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n18,640\n\n \n\n \n\n \n \n \nDiluted average common shares outstanding\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,996\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,095\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,232\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,143\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n18,884\n\n \n\n \n\n \n \n \n \n Alerus Financial Corporation and Subsidiaries \n\n \n\n \n Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures (unaudited) \n\n \n\n \n(dollars and shares in thousands, except per share data)\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n September 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Tangible Common Equity to Tangible Assets \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal common stockholders’ equity\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n369,127\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n349,402\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n356,872\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nLess: Goodwill \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n46,783\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n46,783\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n47,087\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nLess: Other intangible assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,158\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n18,482\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n22,455\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTangible common equity (a) \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n305,186\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n284,137\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n287,330\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,896,811\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,869,138\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,779,637\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nLess: Goodwill \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n46,783\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n46,783\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n47,087\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nLess: Other intangible assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,158\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n18,482\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n22,455\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTangible assets (b) \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,832,870\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,803,873\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,710,095\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTangible common equity to tangible assets (a)/(b) \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n7.96\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n7.47\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n7.74\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \n Tangible Book Value Per Common Share \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal common stockholders’ equity\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n369,127\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n349,402\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n356,872\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nLess: Goodwill \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n46,783\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n46,783\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n47,087\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nLess: Other intangible assets\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,158\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n18,482\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n22,455\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTangible common equity (c) \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n305,186\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n284,137\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n287,330\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal common shares issued and outstanding (d) \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,734\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,848\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,992\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTangible book value per common share (c)/(d) \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n15.46\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n14.32\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n14.37\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n Three months ended \n\n \n\n \n\n \n \n\n \n\n \n\n \n Year ended \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n September 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n Return on Average Tangible Common Equity \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNet income (loss)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(14,754\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n9,161\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n10,909\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n11,696\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n40,005\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAdd: Intangible amortization expense (net of tax)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,046\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,046\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,046\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,184\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,756\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNet income (loss), excluding intangible amortization (e) \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(13,708\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n10,207\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n11,955\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n15,880\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n43,761\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAverage total equity\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n349,382\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n361,735\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n349,812\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n358,267\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n346,355\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nLess: Average goodwill\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n46,783\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n46,882\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n46,283\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n46,959\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n39,415\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nLess: Average other intangible assets (net of tax)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n14,067\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n15,109\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n18,243\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n15,624\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,018\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAverage tangible common equity (f) \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n288,532\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n299,744\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n285,286\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n295,684\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n289,922\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nReturn on average tangible common equity (e)/(f) \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(18.85\n\n \n\n \n\n \n)\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n13.51\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n16.63\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n5.37\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n15.09\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \n Efficiency Ratio \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNoninterest expense\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n38,654\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n37,260\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n37,948\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n150,157\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n158,770\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nLess: Intangible amortization expense\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,324\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,324\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,324\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,296\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,754\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAdjusted noninterest expense (g) \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n37,330\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n35,936\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n36,624\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n144,861\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n154,016\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNet interest income\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n21,552\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,395\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n26,964\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n87,839\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n99,729\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNoninterest income\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n791\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n28,407\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n25,517\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n80,229\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n111,223\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTax-equivalent adjustment\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n226\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n180\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n124\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n671\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n429\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal tax-equivalent revenue (h) \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n22,569\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n48,982\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n52,605\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n168,739\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n211,381\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nEfficiency ratio (g)/(h) \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n165.40\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n73.37\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n69.62\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n85.85\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n72.86\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \n Adjusted Efficiency Ratio \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNoninterest expense\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n38,654\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n37,260\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n37,948\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n150,157\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n158,770\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nLess: Intangible amortization expense\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,324\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,324\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,324\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,296\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,754\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAdjusted noninterest expense (i) \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n37,330\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n35,936\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n36,624\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n144,861\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n154,016\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNet interest income\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n21,552\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,395\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n26,964\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n87,839\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n99,729\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNoninterest income\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n791\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n28,407\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n25,517\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n80,229\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n111,223\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTax-equivalent adjustment\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n226\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n180\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n124\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n671\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n429\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nLess: Net gains (losses) on investment securities\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(24,643\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(24,643\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal tax-equivalent revenue (j) \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n47,212\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n48,982\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n52,605\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n193,382\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n211,381\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAdjusted efficiency ratio (i)/(j) \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n79.07\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n73.37\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n69.62\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n74.91\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n72.86\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \n \n Alerus Financial Corporation and Subsidiaries \n\n \n\n \n Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures (unaudited) \n\n \n\n \n(dollars and shares in thousands, except per share data)\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n Three months ended \n\n \n\n \n\n \n \n\n \n\n \n\n \n Year ended \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n September 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n \n Pre-Provision Net Revenue \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nIncome (loss) before taxes\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(17,818\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n11,542\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n14,533\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n15,854\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n52,182\n\n \n\n \n\n \n \n \nAdd: Provision for credit losses\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,507\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,057\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n \nPre-provision net revenue\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(16,311\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n11,542\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n14,533\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n17,911\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n52,182\n\n \n\n \n\n \n \n \n Adjusted Pre-Provision Net Revenue \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nPre-provision net revenue\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n(16,311\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n11,542\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n14,533\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n17,911\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n52,182\n\n \n\n \n\n \n \n \nAdd: Net gains (losses) on investment securities\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(24,643\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(24,643\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n \nAdd: Minnesota Housing donation\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n250\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n250\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n \nLess: Severance and signing bonus expense\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n416\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n147\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n669\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,337\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,942\n\n \n\n \n\n \n \n \nLess: Gain on sale of ESOP business\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,775\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,775\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n \nLess: BOLI mortality proceeds\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,196\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n \nAdjusted pre-provision net revenue\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n8,998\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n8,914\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n15,202\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n41,170\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n54,124\n\n \n\n \n\n \n \n \n Adjusted Noninterest Income \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n...

View stock analysis, news, and events for Alerus Financial Corporation