Alerus Financial Corporation (Nasdaq: ALRS), or the Company,
reported net income of $9.2 million for the third quarter of 2023,
or $0.45 per diluted common share, compared to net income of $9.1
million, or $0.45 per diluted common share, for the second quarter
of 2023, and net income of $9.6 million, or $0.47 per diluted
common share, for the third quarter of 2022.
CEO Comments
President and Chief Executive Officer Katie Lorenson said,
“Alerus’ fundamental execution of key strategic initiatives
continued during the third quarter with strong deposit retention
and acquisition while maintaining noninterest-bearing deposits at
25% and a loan to deposit ratio of 90% without the utilization of
brokered deposits. We remain focused on building a valuable
commercial wealth bank and continued to attract high-performing
revenue producers while prudently managing expenses. In our
National Retirement Services division, we exited the ESOP trustee
business to invest in our scaled key service lines where Alerus is
currently ranked as a top 25 provider in the country. Throughout
the Company our teams continued to work together with urgency on
process improvement with a constant focus on speed and
responsiveness to deliver an exceptional client experience while
driving increased capacity and resulting efficiencies.
As the industry continues to face headwinds, we believe Alerus
is well positioned for the future. We have a best in class
diversified business model that is non-spread dependent with over
half of our revenues derived from retirement and wealth management
which deliver durable, recurring, and annuitized revenues on
minimal capital allocation. We have strong capital, reserves and
liquidity levels allowing us to be strategic and opportunistic
while holding steadfast to our financial disciplines. In addition,
we have a dedicated and loyal team who is focused on adding value
to our clients. We thank our team members for their hard work as we
continue to build upon our strong foundation.”
Third Quarter Highlights
- Total deposits were stable at $2.9 billion compared to the end
of the second quarter and as of December 31, 2022
- Noninterest-bearing deposits remained constant at 25% of total
deposits from the second quarter to the third quarter of 2023
- Loan to deposit ratio as of September 30, 2023 was 90.7%,
compared to 83.8% as of December 31, 2022, with no brokered
deposits utilized
- Noninterest income was 58.21% of total revenue, compared to
53.69% for the second quarter of 2023
- Yield on interest earning assets increased 11 basis points from
4.55% in the second quarter to 4.66% in the third quarter of
2023
- Noninterest income increased $2.6 million, or 10.2%, driven by
a $2.8 million gain related to the sale of the ESOP trustee
business in the retirement and benefit services division in the
third quarter of 2023. Excluding the ESOP trustee business,
noninterest income was up $0.4 million, or 1.6%, when compared to
the second quarter of 2023
- Core retirement and benefit services revenue, excluding the
ESOP trustee business, increased $0.5 million, or 3.3%, when
compared to the second quarter of 2023
- Net recoveries to average loans of 0.09%, compared to net
recoveries to average loans of 0.07% for the second quarter of
2023
- Allowance for credit losses to total loans was 1.39% as of
September 30, 2023, compared to 1.27% as of December 31, 2022
- Repurchased $1.2 million of the Company’s outstanding stock at
an average purchase price of $17.98, reducing common shares
outstanding by 68,428 at quarter end
- Common equity tier 1 capital to risk weighted assets as of
September 30, 2023 was 13.01%, compared to 13.39% as of December
31, 2022
Selected Financial Data (unaudited)
As of and for the
Three months ended
Nine months ended
September 30,
June 30,
September 30,
September 30,
September 30,
(dollars and shares in thousands, except
per share data)
2023
2023
2022
2023
2022
Performance Ratios
Return on average total assets
0.95
%
0.96
%
1.02
%
0.93
%
1.13
%
Return on average common equity
10.05
%
10.14
%
10.25
%
9.79
%
11.27
%
Return on average tangible common equity
(1)
13.51
%
13.71
%
13.89
%
13.27
%
14.59
%
Noninterest income as a % of revenue
58.21
%
53.69
%
48.82
%
54.51
%
54.08
%
Net interest margin (tax-equivalent)
2.27
%
2.52
%
3.21
%
2.50
%
3.02
%
Efficiency ratio (1)
73.37
%
72.79
%
74.76
%
73.57
%
73.94
%
Net charge-offs/(recoveries) to average
loans
(0.09)
%
(0.07)
%
0.07
%
(0.04)
%
0.04
%
Dividend payout ratio
42.22
%
42.22
%
38.30
%
43.08
%
33.33
%
Per Common Share
Earnings per common share - basic
$
0.46
$
0.45
$
0.48
$
1.31
$
1.58
Earnings per common share - diluted
$
0.45
$
0.45
$
0.47
$
1.30
$
1.56
Dividends declared per common share
$
0.19
$
0.19
$
0.18
$
0.56
$
0.52
Book value per common share
$
17.60
$
17.96
$
17.25
Tangible book value per common share
(1)
$
14.32
$
14.60
$
13.76
Average common shares outstanding -
basic
19,872
20,033
19,987
19,977
18,186
Average common shares outstanding -
diluted
20,095
20,241
20,230
20,193
18,431
Other Data
Retirement and benefit services assets
under administration/management
$
34,552,569
$
35,052,652
$
30,545,694
Wealth management assets under
administration/management
$
3,724,091
$
3,857,710
$
3,435,786
Mortgage originations
$
109,637
$
111,261
$
229,901
$
298,626
$
686,060
(1) Represents a non-GAAP financial measure. See “Non-GAAP
to GAAP Reconciliations and Calculation of Non-GAAP Financial
Measures.”
Results of Operations
Net Interest Income
Net interest income for the third quarter of 2023 was $20.4
million, a $1.8 million, or 8.3%, decrease from the second quarter
of 2023. Net interest income decreased $7.9 million, or 28.0%, from
$28.3 million from the third quarter of 2022. Interest income
increased $1.7 million, or 4.2%, from the second quarter of 2023,
primarily driven by an 11 basis point increase in yield on interest
earning assets mostly attributable to higher yields on new loans.
The increase in interest income was more than offset by a $3.5
million increase in interest expense, primarily due to an increase
in rates paid on interest-bearing deposits and an increase in the
average short-term borrowings balance. 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.
Net interest margin (tax-equivalent), was 2.27% for the third
quarter of 2023, a 25 basis point decrease from 2.52% for the
second quarter of 2023, and a 94 basis point decrease from 3.21%
for the third 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
higher yields on new loans and accretion of fair value marks from
the Metro Phoenix Bank transaction.
Noninterest Income
Noninterest income for the third quarter of 2023 was $28.4
million, a $2.6 million, or 10.2%, increase from the second quarter
of 2023. The quarter over quarter increase was driven by the
divestiture of the ESOP trustee business where a $2.8 million gain
was recognized in the quarter. Excluding the ESOP trustee business,
core retirement and benefit services revenue increased $0.5
million, or 3.3%, when compared to the second quarter of 2023.
Mortgage saw a $0.4 million decrease in mortgage banking revenue
with mortgage originations of $109.6 million for the third quarter
of 2023, compared to originations of $111.3 million in the second
quarter of 2023. Retirement and benefit services revenue increased
$2.7 million, or 17.1%, mainly due to the gain on sale as a result
of the sale of the ESOP trustee business. Assets under
administration/management decreased due to challenged equity and
bond market returns. Similarly, wealth management revenue decreased
$0.2 million, remaining mostly stable despite assets under
administration/management decreasing due to challenging equity and
bond markets.
Noninterest income for the third quarter of 2023 increased $1.4
million, or 5.2%, from $27.0 million in the third quarter of 2022.
The year over year increase was primarily driven by a $2.0 million
increase in Retirement and Benefit services revenue due to the
divestiture of the ESOP trustee business and increased assets under
administration/management. Assets under administration/management
were higher due to an increase in overall plans and participants
coupled with improved equity and bond markets. The increase in
revenues was partially offset by a $0.2 million decrease related to
the exit of the payroll business in 2022. In addition, mortgage
revenue decreased $1.3 million due to decreased origination volume
resulting from higher interest rates. Wealth management revenue
increased $0.4 million driven by an increase in assets under
administration/management over the prior year. Assets under
administration/management increased over the prior year due to
continued success in client acquisition coupled with improved
equity and bond markets.
Noninterest Expense
Noninterest expense for the third quarter of 2023 was $37.2
million, a $0.9 million, or 2.4%, increase from the second quarter
of 2023. Compensation and employee taxes and benefits expenses
increased $0.4 million from the second quarter of 2023, mainly due
to severance costs of $0.3 million and $0.3 million of talent
acquisition costs, offset by decreased salaries and mortgage
incentive compensation as overall headcount declined. Net of the
$0.6 million severance and talent acquisition costs, compensation
and employee taxes and benefits expenses decreased $0.2 million in
the third quarter of 2023.
Noninterest expense for the third quarter of 2023 decreased $5.5
million, or 12.9%, from $42.8 million in the third quarter of 2022.
The year over year decrease was primarily due to a $2.1 million
decrease in compensation and a $1.4 million decrease in
professional fees and assessments. Compensation decreased primarily
due to a decrease in overall headcount and due to lower
mortgage-related incentive compensation due to lower mortgage
originations. The decrease in professional fees and assessments was
due to merger-related expenses incurred in the third quarter of
2022, in connection with the acquisition of Metro Phoenix Bank.
Financial Condition
Total assets were $3.9 billion as of September 30, 2023, an
increase of $89.5 million, or 2.4%, from December 31, 2022. The
increase was primarily due to a $162.4 million increase in loans, a
$6.9 million increase in loans held for sale and a $6.5 million
increase in cash and cash equivalents, partially offset by a
decrease of $96.0 million in investment securities.
Loans
Total loans were $2.6 billion as of September 30, 2023, an
increase of $162.4 million, or 6.6%, from December 31, 2022. The
increase was primarily driven by a $143.3 million increase in
commercial real estate loans and a $38.2 million increase in
residential real estate loans, offset by a $1.5 million decrease in
commercial and industrial loans, a $0.1 million decrease in real
estate construction loans and a $19.8 million decrease in other
consumer revolving and installment loans.
The following table presents the composition of our loan
portfolio as of the dates indicated:
September 30,
June 30,
March 31,
December 31,
September 30,
(dollars in thousands)
2023
2023
2023
2022
2022
Commercial
Commercial and industrial
$
582,387
$
551,860
$
553,578
$
583,876
$
564,655
Real estate construction
97,742
78,428
108,776
97,810
89,215
Commercial real estate
1,025,014
1,003,821
934,324
881,670
819,068
Total commercial
1,705,143
1,634,109
1,596,678
1,563,356
1,472,938
Consumer
Residential real estate first mortgage
717,793
707,630
698,002
679,551
649,818
Residential real estate junior lien
152,677
157,231
152,281
150,479
143,681
Other revolving and installment
30,817
34,552
39,664
50,608
51,794
Total consumer
901,287
899,413
889,947
880,638
845,293
Total loans
$
2,606,430
$
2,533,522
$
2,486,625
$
2,443,994
$
2,318,231
Deposits
Total deposits were $2.9 billion as of September 30, 2023, a
decrease of $43.3 million, or 1.5%, from December 31, 2022.
Interest-bearing deposits increased $99.7 million, while
noninterest-bearing deposits decreased $143.0 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 remained stable at 25% of total deposits. Time deposit
balances increased as higher short-term CD rates attracted
primarily new deposits to the Company with some internal transfers
of money from current customers. The Company continued to have $0
of brokered deposits as of September 30, 2023.
The following table presents the composition of our deposit
portfolio as of the dates indicated:
September 30,
June 30,
March 31,
December 31,
September 30,
(dollars in thousands)
2023
2023
2023
2022
2022
Noninterest-bearing demand
$
717,990
$
715,534
$
792,977
$
860,987
$
905,228
Interest-bearing
Interest-bearing demand
759,812
753,194
817,675
706,275
653,216
Savings accounts
88,341
93,557
99,742
99,882
101,820
Money market savings
959,106
986,403
1,076,166
1,035,981
1,079,520
Time deposits
346,935
304,167
245,418
212,359
222,027
Total interest-bearing
2,154,194
2,137,321
2,239,001
2,054,497
2,056,583
Total deposits
$
2,872,184
$
2,852,855
$
3,031,978
$
2,915,484
$
2,961,811
Asset Quality
Total nonperforming assets were $9.0 million as of September 30,
2023, an increase of $5.2 million, or 135.6%, from December 31,
2022. This increase was primarily driven by one borrower
relationship. As of September 30, 2023, the allowance for credit
losses on loans was $36.3 million, or 1.39% of total loans,
compared to $31.1 million, or 1.27% of total loans, as of December
31, 2022.
The following table presents selected asset quality data as of
and for the periods indicated:
As of and for the three months
ended
September 30,
June 30,
March 31,
December 31,
September 30,
(dollars in thousands)
2023
2023
2023
2022
2022
Nonaccrual loans
$
9,007
$
2,233
$
2,118
$
3,794
$
4,303
Accruing loans 90+ days past due
—
347
—
—
1,000
Total nonperforming loans
9,007
2,580
2,118
3,794
5,303
OREO and repossessed assets
3
—
—
30
904
Total nonperforming assets
$
9,010
$
2,580
$
2,118
$
3,824
$
6,207
Net charge-offs/(recoveries)
(594)
(403)
170
(178)
405
Net charge-offs/(recoveries) to average
loans
(0.09)
%
(0.07)
%
0.03
%
(0.03)
%
0.07
%
Nonperforming loans to total loans
0.35
%
0.10
%
0.09
%
0.16
%
0.23
%
Nonperforming assets to total assets
0.23
%
0.07
%
0.05
%
0.10
%
0.17
%
Allowance for credit losses on loans to
total loans
1.39
%
1.41
%
1.41
%
1.27
%
1.34
%
Allowance for credit losses on loans to
nonperforming loans
403
%
1,384
%
1,657
%
821
%
584
%
For the third quarter of 2023, the Company had net recoveries of
$594 thousand, compared to net recoveries of $403 thousand for the
second quarter of 2023 and $405 thousand of net charge-offs for the
third quarter of 2022.
The Company did not record a provision for credit losses for the
third quarter of 2023 due to strong credit quality indicators and
net recoveries for the quarter. 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 $5.5 million and
$7.1 million, as of September 30, 2023 and December 31, 2022,
respectively.
Capital
Total stockholders’ equity was $349.4 million as of September
30, 2023, a decrease of $7.5 million from December 31, 2022. This
change was driven by an increase in accumulated other comprehensive
loss of $14.8 million. Tangible book value per common share, a
non-GAAP financial measure, decreased to $14.32 as of September 30,
2023, from $14.37 as of December 31, 2022. Tangible common equity
to tangible assets, a non-GAAP financial measure, decreased to
7.47% as of September 30, 2023, from 7.74% as of December 31, 2022.
Common equity tier 1 capital to risk weighted assets decreased to
13.01% as of September 30, 2023, from 13.39% as of December 31,
2022.
During the third quarter of 2023, the Company repurchased
approximately $1.2 million of its outstanding stock at an average
purchase price of $17.98, which reduced common shares outstanding
by 68,428 at quarter end.
The following table presents our capital ratios as of the dates
indicated:
September 30,
December 31,
September 30,
2023
2022
2022
Capital Ratios(1)
Alerus Financial Corporation
Consolidated
Common equity tier 1 capital to risk
weighted assets
13.01
%
13.39
%
13.63
%
Tier 1 capital to risk weighted assets
13.30
%
13.69
%
13.94
%
Total capital to risk weighted assets
16.10
%
16.48
%
16.84
%
Tier 1 capital to average assets
11.14
%
11.25
%
10.82
%
Tangible common equity / tangible assets
(2)
7.47
%
7.74
%
7.59
%
Alerus Financial, N.A.
Common equity tier 1 capital to risk
weighted assets
12.68
%
12.76
%
13.01
%
Tier 1 capital to risk weighted assets
12.68
%
12.76
%
13.01
%
Total capital to risk weighted assets
13.86
%
13.83
%
14.11
%
Tier 1 capital to average assets
10.72
%
10.48
%
11.12
%
(1) Capital ratios for the current quarter
are to be considered preliminary until the Call Report for Alerus
Financial, N.A. is filed.
(2) Represents a non-GAAP financial
measure. See “Non-GAAP to GAAP Reconciliations and Calculation of
Non-GAAP Financial Measures.”
Conference Call
The Company will host a conference call at 11:00 a.m. Central
Time on Thursday, October 26, 2023, to discuss its financial
results. The call can be accessed via telephone at (833) 470-1428,
using access code 328527. A recording of the call and transcript
will be available on the Company’s investor relations website at
investors.alerus.com following the call.
About Alerus Financial Corporation
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.
Non-GAAP Financial Measures
Some 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.
These 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.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include, without limitation, statements concerning
plans, estimates, calculations, forecasts and projections with
respect to the anticipated future performance of Alerus Financial
Corporation. These statements are often, but not always, identified
by words such as “may”, “might”, “should”, “could”, “predict”,
“potential”, “believe”, “expect”, “continue”, “will”, “anticipate”,
“seek”, “estimate”, “intend”, “plan”, “projection”, “would”,
“annualized”, “target” and “outlook”, or the negative version of
those words or other comparable words of a future or
forward-looking nature. Examples of forward-looking statements
include, among others, statements the Company makes regarding our
projected growth, anticipated future financial performance,
financial condition, credit quality, management’s long-term
performance goals and the future plans and prospects of Alerus
Financial Corporation.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations and assumptions regarding our
business, future plans and strategies, projections, anticipated
events and trends, the economy and other future conditions. Because
forward-looking statements relate to the future, they are subject
to inherent uncertainties, risks and changes in circumstances that
are difficult to predict and many of which are outside of our
control. Our actual results and financial condition may differ
materially from those indicated in forward-looking statements.
Therefore, you should not rely on any of these forward-looking
statements. Important factors that could cause our actual results
and financial condition to differ materially from those indicated
in forward-looking statements include, among others, the following:
interest rate risk, including the effects of recent and potential
additional rate increases by the Federal Reserve; our ability to
successfully manage credit risk and maintain an adequate level of
allowance for credit losses; new or revised accounting standards,
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 the Company acquired in
2022; the impact of economic or market conditions on our fee-based
services; our ability to continue to grow our retirement and
benefit services business; our ability to continue to originate a
sufficient volume of residential mortgages; the occurrence of
fraudulent activity, breaches or failures of our 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 the Company may
become subject; potential impairment to the goodwill the Company
recorded in connection with our past acquisitions, including the
acquisition of Metro Phoenix Bank; the extensive regulatory
framework that applies to us; the impact of recent and future
legislative and regulatory changes, including in response to the
recent failures of Silicon Valley Bank, Signature Bank and First
Republic Bank; 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
Israeli-Palestinian conflict and the Russian invasion of Ukraine,
or other adverse external events; any material weaknesses in our
internal control over financial reporting; changes to U.S. or state
tax laws, regulations and guidance, including the new 1.0% excise
tax on stock buybacks by publicly traded companies; 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.
Any forward-looking statement made by us in this press release
is based only on information currently available to us and speaks
only as of the date on which it is made. The Company undertakes no
obligation to publicly update any forward-looking statement,
whether written or oral, that may be made from time to time,
whether as a result of new information, future developments or
otherwise.
Alerus Financial Corporation and
Subsidiaries
Consolidated Balance Sheets
(dollars in thousands, except share and
per share data)
September 30,
December 31,
2023
2022
Assets
(Unaudited)
(Audited)
Cash and cash equivalents
$
64,724
$
58,242
Investment securities
Available-for-sale, at fair value
640,001
717,324
Held-to-maturity, at carrying value
(allowance for credit losses of $218 at September 30, 2023)
303,268
321,902
Loans held for sale
16,346
9,488
Loans
2,606,430
2,443,994
Allowance for credit losses on loans
(36,290
)
(31,146
)
Net loans
2,570,140
2,412,848
Land, premises and equipment, net
17,182
17,288
Operating lease right-of-use assets
5,986
5,419
Accrued interest receivable
15,561
12,869
Bank-owned life insurance
33,012
33,991
Goodwill
46,783
47,087
Other intangible assets
18,482
22,455
Servicing rights
2,214
2,643
Deferred income taxes, net
47,978
42,369
Other assets
87,461
75,712
Total assets
$
3,869,138
$
3,779,637
Liabilities and Stockholders’
Equity
Deposits
Noninterest-bearing
$
717,990
$
860,987
Interest-bearing
2,154,194
2,054,497
Total deposits
2,872,184
2,915,484
Short-term borrowings
515,470
378,080
Long-term debt
58,928
58,843
Operating lease liabilities
6,286
5,902
Accrued expenses and other liabilities
66,868
64,456
Total liabilities
3,519,736
3,422,765
Stockholders’ equity
Preferred stock, $1 par value, 2,000,000
shares authorized: 0 issued and outstanding
—
—
Common stock, $1 par value, 30,000,000
shares authorized: 19,847,706 and 19,991,681 issued and
outstanding
19,848
19,992
Additional paid-in capital
151,875
155,095
Retained earnings
291,162
280,426
Accumulated other comprehensive loss
(113,483
)
(98,641
)
Total stockholders’ equity
349,402
356,872
Total liabilities and stockholders’
equity
$
3,869,138
$
3,779,637
Alerus Financial Corporation and
Subsidiaries
Consolidated Statements of
Income
(dollars and shares in thousands, except
per share data)
Three months ended
Nine months ended
September 30,
June 30,
September 30,
September 30,
September 30,
2023
2023
2022
2023
2022
Interest Income
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Loans, including fees
$
34,986
$
33,267
$
25,379
$
99,187
$
60,659
Investment securities
Taxable
6,146
6,125
5,939
18,222
17,447
Exempt from federal income taxes
182
186
209
558
638
Other
724
762
748
2,221
1,021
Total interest income
42,038
40,340
32,275
120,188
79,765
Interest Expense
Deposits
14,436
12,678
1,852
36,218
3,494
Short-term borrowings
6,528
4,763
1,516
15,684
1,794
Long-term debt
679
665
591
1,999
1,712
Total interest expense
21,643
18,106
3,959
53,901
7,000
Net interest income
20,395
22,234
28,316
66,287
72,765
Provision for credit losses
—
—
—
550
—
Net interest income after provision for
credit losses
20,395
22,234
28,316
65,737
72,765
Noninterest Income
Retirement and benefit services
18,605
15,890
16,597
49,977
50,536
Wealth management
5,271
5,450
4,852
15,915
15,726
Mortgage banking
2,510
2,905
3,782
7,132
14,751
Service charges on deposit accounts
328
311
377
940
1,152
Other
1,693
1,222
1,402
5,475
3,541
Total noninterest income
28,407
25,778
27,010
79,439
85,706
Noninterest Expense
Compensation
19,071
18,847
21,168
57,076
61,467
Employee taxes and benefits
4,895
4,724
5,079
15,472
17,028
Occupancy and equipment expense
1,883
1,837
1,926
5,619
5,713
Business services, software and technology
expense
4,774
5,269
5,373
15,367
15,082
Intangible amortization expense
1,324
1,324
1,324
3,972
3,430
Professional fees and assessments
1,716
1,530
3,126
4,397
6,913
Marketing and business development
692
648
890
2,026
2,304
Supplies and postage
410
406
588
1,275
1,806
Travel
322
306
291
876
826
Mortgage and lending expenses
689
215
409
1,401
1,577
Other
1,484
1,267
2,593
4,022
4,676
Total noninterest expense
37,260
36,373
42,767
111,503
120,822
Income before income taxes
11,542
11,639
12,559
33,673
37,649
Income tax expense
2,381
2,535
2,940
7,222
8,553
Net income
$
9,161
$
9,104
$
9,619
$
26,451
$
29,096
Per Common Share Data
Earnings per common share
$
0.46
$
0.45
$
0.48
$
1.31
$
1.58
Diluted earnings per common share
$
0.45
$
0.45
$
0.47
$
1.30
$
1.56
Dividends declared per common share
$
0.19
$
0.19
$
0.18
$
0.56
$
0.52
Average common shares outstanding
19,872
20,033
19,987
19,977
18,186
Diluted average common shares
outstanding
20,095
20,241
20,230
20,193
18,431
Alerus Financial Corporation and
Subsidiaries
Non-GAAP to GAAP Reconciliations and
Calculation of Non-GAAP Financial Measures (unaudited)
(dollars and shares in thousands, except
per share data)
September 30,
June 30,
December 31,
September 30,
2023
2023
2022
2022
Tangible Common Equity to Tangible
Assets
Total common stockholders’ equity
$
349,402
$
357,685
$
356,872
$
344,839
Less: Goodwill
46,783
47,087
47,087
46,060
Less: Other intangible assets
18,482
19,806
22,455
23,779
Tangible common equity (a)
284,137
290,792
287,330
275,000
Total assets
3,869,138
3,832,978
3,779,637
3,691,253
Less: Goodwill
46,783
47,087
47,087
46,060
Less: Other intangible assets
18,482
19,806
22,455
23,779
Tangible assets (b)
3,803,873
3,766,085
3,710,095
3,621,414
Tangible common equity to tangible assets
(a)/(b)
7.47
%
7.72
%
7.74
%
7.59
%
Tangible Book Value Per Common
Share
Total common stockholders’ equity
$
349,402
$
357,685
$
356,872
$
344,839
Less: Goodwill
46,783
47,087
47,087
46,060
Less: Other intangible assets
18,482
19,806
22,455
23,779
Tangible common equity (c)
284,137
290,792
287,330
275,000
Total common shares issued and outstanding
(d)
19,848
19,915
19,992
19,987
Tangible book value per common share
(c)/(d)
$
14.32
$
14.60
$
14.37
$
13.76
Three months ended
Nine months ended
September 30,
June 30,
September 30,
September 30,
September 30,
2023
2023
2022
2023
2022
Return on Average Tangible Common
Equity
Net income
$
9,161
$
9,104
$
9,619
$
26,451
$
29,096
Add: Intangible amortization expense (net
of tax)
1,046
1,046
1,046
3,138
2,710
Net income, excluding intangible
amortization (e)
10,207
10,150
10,665
29,589
31,806
Average total equity
361,735
360,216
372,274
361,260
345,192
Less: Average goodwill
46,882
47,087
48,141
47,018
37,101
Less: Average other intangible assets (net
of tax)
15,109
16,153
19,466
16,149
16,605
Average tangible common equity
(f)
299,744
296,976
304,667
298,093
291,486
Return on average tangible common equity
(e)/(f)
13.51
%
13.71
%
13.89
%
13.27
%
14.59
%
Efficiency Ratio
Noninterest expense
$
37,260
$
36,373
$
42,767
$
111,503
$
120,822
Less: Intangible amortization expense
1,324
1,324
1,324
3,972
3,430
Adjusted noninterest expense
(g)
35,936
35,049
41,443
107,531
117,392
Net interest income
20,395
22,234
28,316
66,287
72,765
Noninterest income
28,407
25,778
27,010
79,439
85,706
Tax-equivalent adjustment
180
140
112
444
306
Total tax-equivalent revenue
(h)
48,982
48,152
55,438
146,170
158,777
Efficiency ratio (g)/(h)
73.37
%
72.79
%
74.76
%
73.57
%
73.94
%
Alerus Financial Corporation and
Subsidiaries
Analysis of Average Balances, Yields,
and Rates (unaudited)
(dollars in thousands)
Three months ended
Nine months ended
September 30, 2023
June 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Average
Average
Average
Average
Average
Average
Yield/
Average
Yield/
Average
Yield/
Average
Yield/
Average
Yield/
Balance
Rate
Balance
Rate
Balance
Rate
Balance
Rate
Balance
Rate
Interest Earning Assets
Interest-bearing deposits with banks
$
29,450
3.09
%
$
36,418
4.00
%
$
72,157
2.02
%
$
35,892
3.45
%
$
68,811
0.86
%
Investment securities (1)
971,913
2.60
%
1,007,792
2.53
%
1,116,458
2.20
%
1,004,436
2.52
%
1,165,414
2.09
%
Fed funds sold
—
—
%
—
—
%
21,893
2.37
%
—
—
%
7,378
2.37
%
Loans held for sale
16,518
5.55
%
14,536
5.22
%
27,032
4.14
%
13,822
5.29
%
27,864
3.31
%
Loans
Commercial:
Commercial and industrial
555,649
6.61
%
545,357
6.90
%
566,987
5.41
%
553,460
6.53
%
488,771
4.87
%
Real estate construction
88,450
8.52
%
87,905
7.43
%
70,545
5.60
%
93,098
7.46
%
52,212
4.71
%
Commercial real estate
998,636
5.25
%
956,828
5.09
%
807,505
4.07
%
956,018
5.10
%
670,854
3.86
%
Total commercial
1,642,735
5.89
%
1,590,090
5.84
%
1,445,037
4.67
%
1,602,576
5.73
%
1,211,837
4.30
%
Consumer
Residential real estate first mortgage
714,874
3.89
%
698,288
3.76
%
624,826
3.54
%
700,734
3.80
%
561,261
3.45
%
Residential real estate junior lien
154,939
7.69
%
156,276
7.44
%
140,664
5.41
%
153,664
7.45
%
132,968
4.86
%
Other revolving and installment
32,288
6.11
%
37,759
6.03
%
51,834
4.98
%
38,148
5.99
%
52,150
4.59
%
Total consumer
902,101
4.62
%
892,323
4.50
%
817,324
3.96
%
892,546
4.53
%
746,379
3.78
%
Total loans(1)
2,544,836
5.44
%
2,482,413
5.36
%
2,262,361
4.41
%
2,495,122
5.30
%
1,958,216
4.10
%
Federal Reserve/FHLB stock
28,761
6.83
%
23,724
6.76
%
18,449
5.35
%
25,403
6.81
%
11,877
5.04
%
Total interest earning assets
3,591,478
4.66
%
3,564,883
4.55
%
3,518,350
3.65
%
3,574,675
4.51
%
3,239,560
3.30
%
Noninterest earning assets
230,123
220,604
224,804
224,970
191,652
Total assets
$
3,821,601
$
3,785,487
$
3,743,154
$
3,799,645
$
3,431,212
Interest-Bearing Liabilities
Interest-bearing demand deposits
$
751,455
1.34
%
$
775,818
1.26
%
$
659,696
0.13
%
$
757,995
1.16
%
$
692,310
0.12
%
Money market and savings deposits
1,073,297
3.20
%
1,145,335
2.81
%
1,180,576
0.40
%
1,127,630
2.72
%
1,089,137
0.24
%
Time deposits
327,264
3.94
%
270,121
3.29
%
234,459
0.74
%
276,797
3.26
%
224,603
0.54
%
Fed funds purchased
312,121
5.50
%
360,033
5.31
%
84,149
3.71
%
320,861
5.23
%
55,527
2.47
%
Short-term borrowings
173,913
5.02
%
—
—
%
168,750
1.71
%
84,982
4.92
%
60,073
1.71
%
Long-term debt
58,914
4.57
%
58,886
4.52
%
58,843
3.98
%
58,886
4.54
%
58,875
3.89
%
Total interest-bearing liabilities
2,696,964
3.18
%
2,610,193
2.78
%
2,386,473
0.66
%
2,627,151
2.74
%
2,180,525
0.43
%
Noninterest-Bearing Liabilities and
Stockholders' Equity
Noninterest-bearing deposits
692,742
748,942
920,340
743,253
845,375
Other noninterest-bearing liabilities
70,160
66,136
64,067
67,981
60,120
Stockholders’ equity
361,735
360,216
372,274
361,260
345,192
Total liabilities and stockholders’
equity
$
3,821,601
$
3,785,487
$
3,743,154
$
3,799,645
$
3,431,212
Net interest rate spread
1.48
%
1.77
%
2.99
%
1.77
%
2.87
%
Net interest margin, tax-equivalent(1)
2.27
%
2.52
%
3.21
%
2.50
%
3.02
%
(1) Taxable-equivalent adjustment was calculated utilizing a
marginal income tax rate of 21.0%.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231025153562/en/
Alan A. Villalon, Chief Financial Officer 952.417.3733
(Office)
Alerus Financial (NASDAQ:ALRS)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
Alerus Financial (NASDAQ:ALRS)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024