Alerus Financial Corporation Reports Second Quarter 2023 Net Income of $9.1 Million

About this update from Alerus Financial Corporation

[{"type":"text","content":" MINNEAPOLIS --(BUSINESS WIRE)--\n Alerus Financial Corporation (Nasdaq: ALRS), or the Company, reported net income of $9.1 million for the second quarter of 2023, or $0.45 per diluted common share, compared to net income of $8.2 million , or $0.40 per diluted common share, for the first quarter of 2023, and net income of $9.3 million , or $0.52 per diluted common share, for the second quarter of 2022.\n\n \n CEO Comments \n\n \nPresident and Chief Executive Officer Katie Lorenson said, “During the second quarter, we continued to evolve Alerus into a high performing commercial wealth bank and a national retirement and benefits provider through strategic talent acquisitions and infrastructure optimization. The foundational strength and unique business model of our Company allowed us to continue to attract experienced professionals who will continue to build our commercial banking segment in addition to doubling the size of our treasury management team. More recently, we lifted out a highly regarded and seasoned team to lead the launch of our private banking franchise. We believe that the addition of these professionals coupled with our tenured talent will drive continued new client acquisition and existing client expansion throughout our growing markets.\n\n \nWhile the macroeconomic environment remains uncertain, our diversified business model shined in the second quarter as fee income represented 53.7% of total revenues, an industry leading standard, driven primarily by our nationally scaled retirement services and growing wealth management business.\n\n \nDuring the quarter, we continued to execute on prudent expense management as noninterest expenses declined 4% from the prior quarter. Our focus on a client-centric organizational structure has resulted in efficiency improvements across the organization. As of July, these improvements have allowed us to reduce total headcount by 10% over the past 12 months, even after taking account of the acquisition of Metro Phoenix Bank .\n\n \nDespite ongoing industry and economic challenges, we believe Alerus is positioned to emerge stronger than ever. Our unique business model is anchored by durable and highly recurring fee income and our balance sheet is characterized by superior capital and reserves, a highly diversified loan and deposit portfolio, and a long history of strong credit performance. We remain optimistic about our continued ability to attract and retain the best talent and are seeing the benefits of our ongoing implementation of infrastructure optimization.\n\n \nWe are grateful for our Alerus team members whose ongoing collaboration and client focus are continuing to position the company’s future for top tier shareholder returns and performance.”\n\n \n Second Quarter Highlights \n\n \n \nReturn on average tangible common equity(1) of 13.71%, compared to 12.58% for the first quarter of 2023\n\n \n \nReturn on average common equity of 10.14%, compared to 9.17% for the first quarter of 2023\n\n \n \nReturn on average total assets of 0.96%, compared to 0.88% for the first quarter of 2023\n\n \n \nRepurchased $3.0 million of the Company’s outstanding stock, reducing common shares outstanding by 170,046 at quarter end\n\n \n \nIncreased quarterly dividend by 5.6% to $0.19 per share\n\n \n \nLoan to deposit ratio as of June 30, 2023 was 88.8%, compared to 83.8% as of December 31, 2022 \n\n \n \nCommon equity tier 1 capital to risk weighted assets as of June 30, 2023 was 13.30%, compared to 13.39% as of December 31, 2022 \n\n \n \nNoninterest expense was $36.4 million , compared to $37.9 million for the first quarter of 2023\n\n \n \nEfficiency ratio improved to 72.79% compared to 74.53% for the first quarter of 2023\n\n \n \nNoninterest income was 53.69% of total revenue, compared to 51.63% for the first quarter of 2023\n\n \n \nAllowance for credit losses to total loans was 1.41% compared to 1.27% as of December 31, 2022 \n\n \n \nNet recoveries to average loans of 0.07% compared to net charge-offs to average loans of 0.03% for the first quarter of 2023\n\n \n \n \n \n \n\n \n\n \n(1) Represents 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 \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\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 Six 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 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 June 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 June 30 , \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 \n0.96\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n0.88\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\n \n\n \n\n \n0.92\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n1.20\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 \n10.14\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n9.17\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n11.93\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n9.66\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n11.85\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 \n13.71\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n12.58\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n15.25\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n13.15\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n14.97\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 \n53.69\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n51.63\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n56.20\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n52.65\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n56.91\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 \n2.52\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n2.70\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n2.98\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n2.61\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n2.91\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 \n72.79\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n74.53\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n74.72\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n73.67\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n73.50\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(0.07\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 \n0.03\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 \n(0.02\n\n \n\n \n\n \n)\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n0.02\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 \n42.22\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n45.00\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n34.62\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n43.53\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n30.91\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 \n0.45\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.41\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.53\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.86\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1.11\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$\n\n \n\n \n\n \n0.45\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.40\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.52\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.85\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1.10\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nDividends declared per common share\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\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 \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 \n0.18\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.37\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.34\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$\n\n \n\n \n\n \n17.96\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n17.90\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n17.75\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTangible book value per common share (1)\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n14.60\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n14.50\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n14.93\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\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 \n20,033\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,028\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,297\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,030\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,271\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 \n20,241\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,246\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,532\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,243\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,517\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$\n\n \n\n \n\n \n35,052,652\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n33,404,342\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n31,749,157\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nWealth management assets under administration/management\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,857,710\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,675,684\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n4,147,763\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\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$\n\n \n\n \n\n \n111,261\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n77,728\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n269,397\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n188,989\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n456,159\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(1) Represents 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 second quarter of 2023 was $22.2 million , a $1.4 million , or 6.0%, decrease from the first quarter of 2023. Net interest income decreased $542.0 thousand , or 2.4%, from $22.8 million for the second quarter of 2022. Interest income increased $2.5 million , or 6.7% from the first quarter of 2023, primarily driven by a 24 basis point increase in yield on interest earning assets. Contributing factors to higher asset yields were higher new loan yields and accretion of fair value marks from the Metro Phoenix Bank transaction. The increase in interest income was more than offset by a $4.0 million increase in interest expense, primarily due to an increase in rates paid on interest-bearing deposits. The increase in interest expense paid on deposits was 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 (tax-equivalent), was 2.52% for the second quarter of 2023, an 18 basis point decrease from 2.70% for the first quarter of 2023, and a 46 basis point decrease from 2.98% for the second quarter of 2022. The decrease in net interest margin from the prior quarter reflected the impact of rising interest rates on our interest-bearing liabilities partially offset by slightly higher yields on new loans and accretion of fair value marks from the Metro Phoenix Bank transaction.\n\n \n Noninterest Income \n\n \nNoninterest income for the second quarter of 2023 was $25.8 million , a $525.0 thousand , or 2.1%, increase from the first quarter of 2023. The quarter over quarter increase was primarily driven by improvement across all fee-based business segments. Mortgage saw a $1.2 million , or 69.2%, increase in mortgage banking revenue due to a seasonal rebound in originations as mortgage originations grew 43% from the prior quarter. Retirement and benefit services revenue increased $408 thousand , or 2.6%, mainly due to increased administration, recordkeeping, and asset-based fees. Assets under management/administration grew due to improved equity markets and organic growth in plans and participants. Wealth management revenue increased $256 thousand , or 4.9%, as assets under management/administration grew due to improved equity markets and organic net inflows from new and existing relationships.\n\n \nNoninterest income for the second quarter of 2023 decreased $3.4 million , or 11.8%, from $29.2 million in the second quarter of 2022. The year over year decrease was primarily driven by a $3.1 million decrease in mortgage revenue due to a $158.1 million decrease in mortgage originations as higher interest rates dramatically impacted demand. Retirement and benefit services decreased $403 thousand mainly from the exit of the payroll services business and one-time document restatement fees recognized in 2022.\n\n \n Noninterest Expense \n\n \nNoninterest expense for the second quarter of 2023 was $36.4 million , a $1.5 million , or 4.0% decrease from the first quarter of 2023. The quarter over quarter decrease was primarily driven by a $1.1 million decrease in employee taxes and benefits resulting from lower headcount and lower group insurance costs. Compensation expense decreased $311 thousand from the first quarter of 2023 due to a reduction in severance costs and salaries, offset by increased mortgage incentive compensation. Offsetting the improvement in compensation and benefits expense, professional fees and assessments increased $378 thousand due to higher Federal Deposit Insurance Corporation (FDIC) assessment fees.\n\n \nNoninterest expense for the second quarter of 2023 decreased $3.6 million , or 9.0%, from $40.0 million in the second quarter of 2022. The year over year decrease was primarily due to a $2.4 million decrease in compensation, $1.1 million decrease in employee taxes and benefits, and $716 thousand decrease in professional fees and assessments. Compensation decreased primarily due to a decrease in mortgage related incentive compensation from lower mortgage originations. The decrease in employee taxes and benefits resulted from lower group insurance claims, reduced headcount, and lower compensation costs.\n\n \n Financial Condition \n\n \nTotal assets were $3.8 billion as of June 30, 2023 , an increase of $53.3 million , or 1.4%, from December 31, 2022 . The increase was primarily due to an $89.5 million increase in loans, an $11.4 million increase in loans held for sale and a $7.2 million increase in cash and cash equivalents, offset by a decrease of $53.4 million in investment securities.\n\n \n Loans \n\n \nTotal loans were $2.5 billion as of June 30, 2023 , an increase of $89.5 million , or 3.7%, from December 31, 2022 . The increase was primarily driven by a $122.2 million increase in commercial real estate and a $34.8 million increase in residential real estate loans, offset by a $32.0 million decrease in commercial and industrial, a $19.4 million decrease in real estate construction and a $16.1 million decrease in other consumer revolving and installment loans.\n\n \nThe following table presents the composition of our loan portfolio as of the dates indicated:\n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n June 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n March 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n September 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n June 30 , \n\n \n\n \n\n \n \n \n(dollars in thousands)\n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n \n Commercial \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nCommercial and industrial\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \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\n \n\n \n\n \n$\n\n \n\n \n\n \n564,655\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n484,426\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 \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\n \n\n \n\n \n \n\n \n\n \n\n \n89,215\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n48,870\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 \n1,003,821\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\n \n\n \n\n \n \n\n \n\n \n\n \n819,068\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n599,737\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 \n1,634,109\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 \n\n \n\n \n \n\n \n\n \n\n \n1,472,938\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,133,033\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 \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\n \n\n \n\n \n \n\n \n\n \n\n \n649,818\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n568,571\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 \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\n \n\n \n\n \n \n\n \n\n \n\n \n143,681\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n135,255\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 \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\n \n\n \n\n \n \n\n \n\n \n\n \n51,794\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n53,384\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 \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\n \n\n \n\n \n \n\n \n\n \n\n \n845,293\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n757,210\n\n \n\n \n\n \n \n \nTotal loans\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,533,522\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,486,625\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,443,994\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,318,231\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1,890,243\n\n \n\n \n\n \n \n Deposits \n\n \nTotal deposits were $2.9 billion as of June 30, 2023 , a decrease of $62.6 million , or 2.1%, from December 31, 2022 . Interest-bearing deposits increased $82.8 million , while noninterest-bearing deposits decreased $145.5 million from December 31, 2022 . The decrease in total deposits was due to both public unit depositor seasonality and clients using excess liquidity and paying down revolving debt. Noninterest-bearing deposits decreased from 29.5% of total deposits to 25.1% as higher interest rates continued a migration to interest-bearing accounts. Time deposit balances increased as higher short-term CD rates attracted both internal transfers of current deposits as well as new clients and deposits to the Company.\n\n \nThe following table presents the composition of our deposit portfolio as of the dates indicated:\n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n June 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n March 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n September 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n June 30 , \n\n \n\n \n\n \n \n \n(dollars in thousands)\n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n \nNoninterest-bearing demand\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \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\n \n\n \n\n \n$\n\n \n\n \n\n \n905,228\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n764,808\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 \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\n \n\n \n\n \n \n\n \n\n \n\n \n653,216\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n642,641\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 \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\n \n\n \n\n \n \n\n \n\n \n\n \n101,820\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n97,227\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 \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\n \n\n \n\n \n \n\n \n\n \n\n \n1,079,520\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n914,423\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 \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\n \n\n \n\n \n \n\n \n\n \n\n \n222,027\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n200,451\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 \n2,137,321\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\n \n\n \n\n \n \n\n \n\n \n\n \n2,056,583\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,854,742\n\n \n\n \n\n \n \n \nTotal deposits\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,852,855\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,031,978\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,915,484\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,961,811\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,619,550\n\n \n\n \n\n \n \n Asset Quality \n\n \nTotal nonperforming assets were $2.6 million as of June 30, 2023 , a decrease of $1.2 million , or 32.5%, from December 31, 2022 . As of June 30, 2023 , the allowance for credit losses on loans was $35.7 million , or 1.41% of total loans, compared to $31.1 million , or 1.27% of total loans, as of December 31, 2022 .\n\n \nThe following table presents selected asset quality data as of and for the periods indicated:\n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n As of and for the three months ended \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n June 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n March 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n December 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n September 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n June 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n(dollars in thousands)\n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNonaccrual loans\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,233\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,118\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,794\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n4,303\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n4,370\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 \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\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,000\n\n \n\n \n\n \n \n\n \n\n \n\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 \n2,580\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,118\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\n \n\n \n\n \n \n\n \n\n \n\n \n5,303\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,370\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 \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\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\n \n\n \n\n \n \n\n \n\n \n\n \n904\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n860\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$\n\n \n\n \n\n \n2,580\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n2,118\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,824\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n6,207\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n5,230\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(403\n\n \n\n \n\n \n)\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\n \n\n \n\n \n \n\n \n\n \n\n \n405\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n340\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(0.07\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 \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\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 \n0.07\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 \n0.10\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n0.09\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\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 \n0.23\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 \n0.07\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 \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\n \n\n \n\n \n \n\n \n\n \n\n \n0.17\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 \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 \n1.41\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n1.41\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\n \n\n \n\n \n \n\n \n\n \n\n \n1.34\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n1.66\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 \n1,384\n\n \n\n \n\n \n \n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n1,657\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%\n\n \n\n \n\n \n \n\n \n\n \n\n \n584\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n718\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \nFor the second quarter of 2023, the Company had net recoveries of $403 thousand compared to net charge-offs of $170 thousand for the first quarter of 2023 and $340 thousand of net charge-offs for the second quarter of 2022.\n\n \nThe Company did not record a provision for credit losses for the second quarter of 2023 due to strong credit quality indicators and net recoveries for the quarter. The allowance for credit losses on loans to total loans increased from 1.27% at December 31, 2022 to 1.41% at June 30, 2023 . Beginning on January 1, 2023 the allowance for credit losses on loans is computed under the current expected credit loss, or CECL, accounting standard and 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 $6.2 million and $7.1 million , as of June 30, 2023 and December 31, 2022 , respectively.\n\n \n Capital \n\n \nTotal stockholders’ equity was $357.7 million as of June 30, 2023 , an increase of $813 thousand from December 31, 2022 . Tangible book value per common share, a non-GAAP financial measure, increased to $14.60 as of June 30, 2023 , from $14.37 as of December 31, 2022 . Tangible common equity to tangible assets, a non-GAAP financial measure, decreased to 7.72% as of June 30, 2023 , from 7.74% as of December 31, 2022 . Common equity tier 1 capital to risk weighted assets decreased to 13.30% as of June 30, 2023 , from 13.39% as of December 31, 2022 .\n\n \nDuring the second quarter of 2023, the Company repurchased approximately $3.0 million of its outstanding stock, which reduced common shares outstanding by 170,046 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 June 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 June 30 , \n\n \n\n \n\n \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 2022 \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 \n13.30\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\n \n\n \n\n \n14.19\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 \n13.60\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\n \n\n \n\n \n14.56\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 \n16.49\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\n \n\n \n\n \n17.95\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 \n11.15\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\n \n\n \n\n \n10.80\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 \n7.72\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 \n7.96\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \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 \n12.93\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\n \n\n \n\n \n13.64\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 \n12.93\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\n \n\n \n\n \n13.64\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 \n14.14\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\n \n\n \n\n \n14.89\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 \n10.59\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\n \n10.12\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(1) 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 \n\n \n \n \n(2) Represents 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, July 27, 2023 , to discuss its financial results. The call can be accessed via telephone at (833) 470-1428, using access code 067281. 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), and the efficiency ratio. 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 we make 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 the future of 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 risks associated with our business, including the effects of recent and anticipated 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, including as a result of the implementation of the new Current Expected Credit Loss Standard; 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 we 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 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 third-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 we may become subject; potential impairment to the goodwill we 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; 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, such as the COVID-19 global pandemic; acts of war or terrorism, including 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; 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. We undertake 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\n \n \n \n Consolidated Balance Sheets \n\n \n\n \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 June 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 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 \n65,471\n\n \n\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 \n677,454\n\n \n\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 $218 at June 30, 2023 )\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n308,416\n\n \n\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 \n20,893\n\n \n\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 \n2,533,522\n\n \n\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(35,696\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 \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 \n2,497,826\n\n \n\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 \n17,488\n\n \n\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 \n6,440\n\n \n\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 \n13,587\n\n \n\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 \n32,793\n\n \n\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 \n47,087\n\n \n\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 \n19,806\n\n \n\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 \n2,351\n\n \n\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 \n43,709\n\n \n\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 \n79,657\n\n \n\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 \n3,832,978\n\n \n\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 \n715,534\n\n \n\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 \n2,137,321\n\n \n\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 \n2,852,855\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 \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 \n492,060\n\n \n\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 \n58,900\n\n \n\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 \n6,746\n\n \n\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 \n64,732\n\n \n\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 \n3,475,293\n\n \n\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, $1 par value, 30,000,000 shares authorized: 19,914,884 and 19,991,681 issued and outstanding\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,915\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,992\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAdditional paid-in capital\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n152,673\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n155,095\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nRetained earnings\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n285,839\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n280,426\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nAccumulated other comprehensive income (loss)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(100,742\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n(98,641\n\n \n\n \n\n \n)\n\n \n\n \n\n \n \n \nTotal stockholders’ equity\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n357,685\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n356,872\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nTotal liabilities and stockholders’ equity\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,832,978\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n3,779,637\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n Alerus Financial Corporation and Subsidiaries \n\n \n\n \n\n \n \n \n Consolidated Statements of Income \n\n \n\n \n\n \n \n \n(dollars and shares in thousands, except per share data)\n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n Three months ended \n\n \n\n \n\n \n \n\n \n\n \n\n \n Six months ended \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n June 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n March 31 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n June 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n June 30 , \n\n \n\n \n\n \n \n\n \n\n \n\n \n June 30 , \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n 2022 \n\n \n\n \n\n \n \n \n Interest Income \n\n \n\n \n\n \n \n\n \n\n \n\n \n(Unaudited)\n\n \n\n \n\n \n \n\n \n\n \n\n \n(Unaudited)\n\n \n\n \n\n \n \n\n \n\n \n\n \n(Unaudited)\n\n \n\n \n\n \n \n\n \n\n \n\n \n(Unaudited)\n\n \n\n \n\n \n \n\n \n\n \n\n \n(Unaudited)\n\n \n\n \n\n \n \n \nLoans, including fees\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n33,267\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n30,933\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n17,988\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n64,200\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n35,280\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 \n6,125\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,951\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n6,068\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n12,076\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n11,508\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 \n186\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n190\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n213\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n376\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 \nOther\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n762\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n735\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n157\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,497\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n273\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 \n40,340\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n37,809\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n24,426\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n78,149\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n47,490\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 \n12,678\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n9,104\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n813\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n21,782\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,642\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 \n4,763\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,393\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n278\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n9,156\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n278\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 \n665\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n654\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n559\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,319\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,121\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 \n18,106\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n14,151\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,650\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n32,257\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,041\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 \n22,234\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n23,658\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n22,776\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n45,892\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n44,449\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 \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n550\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n—\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n550\n\n \n\n \n\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 \n22,234\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n23,108\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n22,776\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n45,342\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n44,449\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 \n15,890\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n15,482\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n16,293\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n31,372\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n33,939\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 \n5,450\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,194\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,548\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n10,644\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n10,874\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 \n2,905\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,717\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n6,038\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,622\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n10,969\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 \n311\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n301\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n412\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n612\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n775\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 \n1,222\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,559\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n935\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,781\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,139\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 \n25,778\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n25,253\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n29,226\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n51,031\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n58,696\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 \n18,847\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,158\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n21,248\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n38,005\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n40,299\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 \n4,724\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,853\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,787\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n10,577\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n11,949\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 \n1,837\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,899\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,737\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,736\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,788\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 \n5,269\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,324\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,785\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n10,593\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n9,709\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 \n1,324\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,053\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,648\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,106\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 \n1,530\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,152\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,246\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,682\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,787\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 \n648\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n686\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n814\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,334\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,414\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 \n406\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n460\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n572\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n866\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,218\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 \n306\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n248\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 \n554\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n535\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 \n215\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n497\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n482\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n712\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,168\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 \n1,267\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,268\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n904\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,535\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,082\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 \n36,373\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n37,869\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n39,984\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n74,242\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n78,055\n\n \n\n \n\n \n \n \nIncome before income taxes\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n11,639\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n10,492\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n12,018\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n22,131\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n25,090\n\n \n\n \n\n \n \n \nIncome tax expense\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,535\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,306\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,725\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n4,841\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n5,613\n\n \n\n \n\n \n \n \nNet income\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n9,104\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n8,186\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n9,293\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n17,290\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n19,477\n\n \n\n \n\n \n \n \n Per Common Share Data \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nEarnings per common share\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.45\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.41\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.53\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.86\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1.11\n\n \n\n \n\n \n \n \nDiluted earnings per common share\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 \n0.40\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.52\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.85\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n1.10\n\n \n\n \n\n \n \n \nDividends declared per common share\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.19\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.18\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.18\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.37\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n0.34\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 \n20,033\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,028\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,297\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,030\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,271\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 \n20,241\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,246\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,532\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,243\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,517\n\n \n\n \n\n \n \n \n \n Alerus Financial Corporation and Subsidiaries \n\n \n\n \n\n \n \n \n Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures (unaudited) \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\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \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 June 30 , \n\n \n\n \n\n \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 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\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$\n\n \n\n \n\n \n357,685\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n359,118\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\n \n\n \n\n \n307,158\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 \n47,087\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\n \n\n \n\n \n47,087\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n31,337\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 \n19,806\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n21,131\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\n \n\n \n\n \n17,511\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 \n290,792\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n290,900\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\n \n\n \n\n \n258,310\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 \n3,832,978\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,886,773\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\n \n\n \n3,295,065\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 \n47,087\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\n \n\n \n\n \n47,087\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n31,337\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 \n19,806\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n21,131\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\n \n\n \n\n \n17,511\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 \n3,766,085\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n3,818,555\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\n \n\n \n\n \n3,246,217\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 \n7.72\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n7.62\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 \n7.96\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\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$\n\n \n\n \n\n \n357,685\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n359,118\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\n \n\n \n\n \n307,158\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 \n47,087\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\n \n\n \n\n \n47,087\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n31,337\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 \n19,806\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n21,131\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\n \n\n \n\n \n17,511\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 \n290,792\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n290,900\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\n \n\n \n\n \n258,310\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 \n19,915\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n20,067\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\n \n\n \n\n \n17,306\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$\n\n \n\n \n\n \n14.60\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n14.50\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 \n14.93\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \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 Six 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 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 June 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 June 30 , \n\n \n\n \n\n \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\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n9,104\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n8,186\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n9,293\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n17,290\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n19,477\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 \n1,046\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n832\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,092\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,664\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n \nNet income, excluding intangible amortization (e) \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n10,150\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n9,232\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n10,125\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n19,382\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n21,141\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 \n360,216\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n361,857\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n312,515\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n361,032\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n331,425\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 \n47,087\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\n \n\n \n\n \n31,488\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\n \n\n \n\n \n31,489\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 \n16,153\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n17,209\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n14,737\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n16,678\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n15,151\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 \n296,976\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n297,561\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n266,290\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n297,267\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n284,785\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 \n13.71\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n12.58\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n15.25\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n13.15\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n14.97\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 \n36,373\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n37,869\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n39,984\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n74,242\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n78,055\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 \n1,324\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,053\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,648\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,106\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 \n35,049\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n36,545\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n38,931\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n71,594\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n75,949\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 \n22,234\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n23,658\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n22,776\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n45,892\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n44,449\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 \n25,778\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n25,253\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n29,226\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n51,031\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n58,696\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 \n140\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 \n100\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n264\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n194\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 \n48,152\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n49,035\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n52,102\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n97,187\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n103,339\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 \n72.79\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n74.53\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n74.72\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n73.67\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n73.50\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\n \n \n \n Analysis of Average Balances, Yields, and Rates (unaudited) \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\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \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 Six 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 June 30, 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n March 31, 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n June 30, 2022 \n\n \n\n \n\n \n \n\n \n\n \n\n \n June 30, 2023 \n\n \n\n \n\n \n \n\n \n\n \n\n \n June 30, 2022 \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n Average \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n Average \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n Average \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n Average \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n Average \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n Average \n\n \n\n \n\n \n \n\n \n\n \n\n \n Yield/ \n\n \n\n \n\n \n \n\n \n\n \n\n \n Average \n\n \n\n \n\n \n \n\n \n\n \n\n \n Yield/ \n\n \n\n \n\n \n \n\n \n\n \n\n \n Average \n\n \n\n \n\n \n \n\n \n\n \n\n \n Yield/ \n\n \n\n \n\n \n \n\n \n\n \n\n \n Average \n\n \n\n \n\n \n \n\n \n\n \n\n \n Yield/ \n\n \n\n \n\n \n \n\n \n\n \n\n \n Average \n\n \n\n \n\n \n \n\n \n\n \n\n \n Yield/ \n\n \n\n \n\n \n \n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n Balance \n\n \n\n \n\n \n \n\n \n\n \n\n \n Rate \n\n \n\n \n\n \n \n\n \n\n \n\n \n Balance \n\n \n\n \n\n \n \n\n \n\n \n\n \n Rate \n\n \n\n \n\n \n \n\n \n\n \n\n \n Balance \n\n \n\n \n\n \n \n\n \n\n \n\n \n Rate \n\n \n\n \n\n \n \n\n \n\n \n\n \n Balance \n\n \n\n \n\n \n \n\n \n\n \n\n \n Rate \n\n \n\n \n\n \n \n\n \n\n \n\n \n Balance \n\n \n\n \n\n \n \n\n \n\n \n\n \n Rate \n\n \n\n \n\n \n \n \n Interest Earning 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\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\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 deposits with banks\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n36,418\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.00\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n41,947\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.23\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n28,920\n\n \n\n \n\n \n \n\n \n\n \n\n \n0.39\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n$\n\n \n\n \n\n \n39,167\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.59\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 \n67,111\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 \nInvestment securities (1)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,007,792\n\n \n\n \n\n \n \n\n \n\n \n\n \n2.53\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,034,288\n\n \n\n \n\n \n \n\n \n\n \n\n \n2.43\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,164,625\n\n \n\n \n\n \n \n\n \n\n \n\n \n2.18\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,020,967\n\n \n\n \n\n \n \n\n \n\n \n\n \n2.48\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,190,298\n\n \n\n \n\n \n \n\n \n\n \n\n \n2.04\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 \n14,536\n\n \n\n \n\n \n \n\n \n\n \n\n \n5.22\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n10,345\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.98\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n31,878\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.15\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n12,452\n\n \n\n \n\n \n \n\n \n\n \n\n \n5.12\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n28,287\n\n \n\n \n\n \n \n\n \n\n \n\n \n2.90\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 \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\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:\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\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 \n545,357\n\n \n\n \n\n \n \n\n \n\n \n\n \n6.90\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n559,416\n\n \n\n \n\n \n \n\n \n\n \n\n \n6.09\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n463,215\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.38\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n552,348\n\n \n\n \n\n \n \n\n \n\n \n\n \n6.49\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n449,014\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.52\n\n \n\n \n\n \n%\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 \n87,905\n\n \n\n \n\n \n \n\n \n\n \n\n \n7.43\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n103,099\n\n \n\n \n\n \n \n\n \n\n \n\n \n6.56\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n44,627\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.04\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n95,460\n\n \n\n \n\n \n \n\n \n\n \n\n \n6.96\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n42,893\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.97\n\n \n\n \n\n \n%\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 \n956,828\n\n \n\n \n\n \n \n\n \n\n \n\n \n5.09\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n911,634\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.95\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n601,765\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.80\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n934,356\n\n \n\n \n\n \n \n\n \n\n \n\n \n5.02\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n601,397\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.72\n\n \n\n \n\n \n%\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 \n1,590,090\n\n \n\n \n\n \n \n\n \n\n \n\n \n5.84\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,574,149\n\n \n\n \n\n \n \n\n \n\n \n\n \n5.46\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,109,607\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.05\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,582,164\n\n \n\n \n\n \n \n\n \n\n \n\n \n5.65\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,093,304\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.06\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nConsumer\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\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 \n698,288\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.76\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n688,754\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.76\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n543,023\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.29\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n693,547\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.76\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n528,952\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.39\n\n \n\n \n\n \n%\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 \n156,276\n\n \n\n \n\n \n \n\n \n\n \n\n \n7.44\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n149,720\n\n \n\n \n\n \n \n\n \n\n \n\n \n7.21\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n132,082\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.64\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n153,016\n\n \n\n \n\n \n \n\n \n\n \n\n \n7.33\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n129,056\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.55\n\n \n\n \n\n \n%\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 \n37,759\n\n \n\n \n\n \n \n\n \n\n \n\n \n6.03\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n44,531\n\n \n\n \n\n \n \n\n \n\n \n\n \n5.86\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n53,919\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.40\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 \n41,126\n\n \n\n \n\n \n \n\n \n\n \n\n \n5.94\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n52,311\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.39\n\n \n\n \n\n \n%\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 \n892,323\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.50\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n883,005\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.45\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n729,024\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.62\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n887,689\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.48\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n710,319\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.67\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \nTotal loans (1)\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,482,413\n\n \n\n \n\n \n \n\n \n\n \n\n \n5.36\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,457,154\n\n \n\n \n\n \n \n\n \n\n \n\n \n5.10\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,838,631\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.88\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n2,469,853\n\n \n\n \n\n \n \n\n \n\n \n\n \n5.23\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n1,803,623\n\n \n\n \n\n \n \n\n \n\n \n\n \n3.91\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n \n Federal Reserve /FHLB stock\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n23,724\n\n \n\n \n\n \n \n\n \n\n \n\n \n6.76\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n23,668\n\n \n\n \n\n \n \n\n \n\n \n\n \n6.87\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n10,564\n\n \n\n \n\n \n \n\n \n\n \n\n \n4.90\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n23,697\n\n \n\n \n\n \n \n\n \n\n \n\n \n6.82\n\n \n\n \n\n \n%\n\n \n\n \n\n \n \n\n \n\n \n\n \n \n\n \n\n \n\n \n8,536...

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