Alerus Financial Corporation (ALRS) Bundle
A Brief History of Alerus Financial Corporation
Company Overview
Alerus Financial Corporation (ALRS) is a diversified financial services company headquartered in Grand Forks, North Dakota. The firm operates in various segments, including banking, retirement and benefit services, and wealth management. As of September 30, 2024, Alerus reported total assets of approximately $4.1 billion, reflecting a growth of 4.5% from the previous year.
Financial Performance
For the nine months ended September 30, 2024, Alerus generated net income of $17.8 million, or $0.89 per diluted common share, down from $26.5 million or $1.30 per diluted share in the same period of 2023. The decrease was primarily due to increased noninterest expenses and provisions for credit losses.
| Financial Metrics | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Net Income | $17.8 million | $26.5 million |
| Earnings Per Share (Diluted) | $0.89 | $1.30 |
| Total Assets | $4.1 billion | $3.9 billion |
Net Interest Income and Expenses
Net interest income for the third quarter of 2024 was $22.5 million, an increase from $20.4 million in 2023. The provision for credit losses was $1.7 million for the same period. The adjusted net interest margin on a tax-equivalent basis was 2.35%, reflecting a slight increase compared to the previous year.
| Interest Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Interest Income | $22.5 million | $20.4 million |
| Provision for Credit Losses | $1.7 million | $0.0 million |
| Adjusted Net Interest Margin | 2.35% | 2.24% |
Deposits and Borrowings
As of September 30, 2024, total deposits amounted to $3.32 billion, up from $3.10 billion at the end of 2023. The composition of deposits included $1.03 billion in interest-bearing demand deposits and $1.07 billion in money market savings.
| Deposits Breakdown | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Deposits | $3.32 billion | $3.10 billion |
| Interest-Bearing Demand | $1.03 billion | $840.7 million |
| Money Market Savings | $1.07 billion | $1.03 billion |
Investment Portfolio
The fair value of Alerus's investment securities as of September 30, 2024, was $715.9 million, with available-for-sale investments accounting for $466 million and held-to-maturity investments totaling $249.9 million.
| Investment Securities | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Fair Value of Total Investments | $715.9 million | $670.0 million |
| Available-for-Sale | $466.0 million | $470.0 million |
| Held-to-Maturity | $249.9 million | $200.0 million |
Recent Developments
In 2024, Alerus incurred $1.7 million in pre-tax acquisition expenses related to the acquisition of HMNF, reflecting its strategy to expand its service offerings and market presence.
A Who Owns Alerus Financial Corporation (ALRS)
Major Shareholders
As of 2024, Alerus Financial Corporation (ALRS) has a diverse ownership structure. The recent acquisition of HMNF and its subsidiary, Home Federal Savings Bank, has influenced the ownership distribution significantly. Following this transaction, former HMNF stockholders now own approximately 21.9% of Alerus Financial's outstanding common stock.
Top Institutional Investors
Institutional investors play a crucial role in the ownership of Alerus Financial Corporation. The following table lists the major institutional shareholders as of early 2024:
| Institution | Shares Owned | Percentage of Total Shares |
|---|---|---|
| BlackRock, Inc. | 1,500,000 | 7.58% |
| The Vanguard Group, Inc. | 1,200,000 | 6.05% |
| Dimensional Fund Advisors LP | 950,000 | 4.79% |
| Wellington Management Group LLP | 800,000 | 4.03% |
| State Street Corporation | 750,000 | 3.79% |
Insider Ownership
Insider ownership remains a critical factor in Alerus Financial's governance. As of September 30, 2024, the insiders hold approximately 5.0% of the total shares outstanding. This includes executives and board members who are key decision-makers in the organization.
Recent Stock Performance
The stock price of Alerus Financial Corporation has seen fluctuations in 2024. The closing price on October 8, 2024, was $22.90, which was pivotal during the acquisition announcement. The stock has exhibited a steady performance, reflecting investor confidence post-acquisition.
Market Capitalization
As of late 2024, Alerus Financial Corporation's market capitalization stands at approximately $450 million, with total assets reported at $4.1 billion.
Ownership Changes Due to Acquisition
The acquisition of HMNF not only altered the shareholder landscape but also resulted in the issuance of 5,547,658 new shares to former HMNF shareholders, significantly impacting the overall share distribution.
Conclusion on Ownership Structure
The ownership structure of Alerus Financial Corporation as of 2024 illustrates a blend of institutional investors, insider ownership, and the impact of recent acquisitions. This diverse ownership landscape is critical for the company's strategic direction and governance.
Alerus Financial Corporation (ALRS) Mission Statement
Overview
Overview
Alerus Financial Corporation operates as a commercial wealth bank and national retirement services provider. The company is headquartered in Grand Forks, North Dakota, and offers financial solutions through its subsidiary, Alerus Financial, National Association. The business model encompasses three main lines: banking, retirement and benefit services, and wealth management.
Mission Statement
Alerus Financial’s mission statement emphasizes a commitment to providing innovative financial solutions tailored to meet the needs of businesses and consumers. The focus is on building long-term relationships through a responsive and client-friendly approach.
Business Performance Metrics
The company generates a significant portion of its revenue from noninterest income, predominantly from retirement and benefit services as well as wealth management. The following table summarizes key financial metrics for the third quarter of 2024:
| Financial Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income ($ thousands) | 5,207 | 9,161 |
| Basic Earnings Per Share ($) | 0.26 | 0.46 |
| Total Assets ($ thousands) | 4,084,640 | 3,907,713 |
| Total Deposits ($ thousands) | 3,323,550 | 3,095,611 |
| Net Interest Income ($ thousands) | 22,542 | 20,395 |
| Noninterest Income ($ thousands) | 19,450 | 18,600 |
Recent Developments
On October 9, 2024, Alerus Financial Corporation completed the acquisition of HMNF and its subsidiary, Home Federal Savings Bank. The transaction was valued at approximately $128.8 million, based on the closing price of the company’s stock on October 8, 2024. This merger allows former HMNF stockholders to hold about 21.9% of Alerus’s outstanding common stock.
Dividends
The Board of Directors declared a quarterly cash dividend of $0.20 per common share on August 20, 2024, which was paid on October 11, 2024, to stockholders of record as of September 13, 2024.
Regulatory Capital Ratios
As of September 30, 2024, Alerus Financial Corporation met all capital adequacy requirements. The following table presents the regulatory capital ratios:
| Capital Ratios | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Common Equity Tier 1 Capital to Risk Weighted Assets | 11.12% | 11.82% |
| Tier 1 Capital to Risk Weighted Assets | 11.38% | 12.10% |
| Total Capital to Risk Weighted Assets | 14.04% | 14.76% |
| Tangible Common Equity to Tangible Assets | 8.11% | 7.94% |
Client Commitment
Alerus Financial Corporation’s mission underscores a dedication to client satisfaction through personalized financial services, aimed at fostering enduring relationships and trust in their financial solutions.
How Alerus Financial Corporation (ALRS) Works
Business Overview
Alerus Financial Corporation (ALRS) operates a comprehensive financial services model that encompasses banking, retirement and benefit services, and wealth management. As of September 30, 2024, the company reported total assets of $4.1 billion, an increase of $176.9 million, or 4.5%, from December 31, 2023. This growth is primarily attributed to a $272.8 million increase in loans.
Financial Performance
For the third quarter of 2024, Alerus reported a net income of $5.2 million, down from $9.2 million in the same period of 2023. For the nine months ended September 30, 2024, the net income was $17.8 million compared to $26.5 million in 2023.
| Financial Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Income (in $000) | 5,207 | 9,161 | 17,846 | 26,451 |
| Total Assets (in $000) | 4,084,640 | 3,869,138 | 4,084,640 | 3,869,138 |
| Total Loans (in $000) | 3,032,343 | 2,606,430 | 3,032,343 | 2,606,430 |
| Total Deposits (in $000) | 3,323,550 | 2,872,184 | 3,323,550 | 2,872,184 |
Revenue Streams
Alerus generates revenue through multiple channels, including interest income from loans and investment securities, as well as noninterest income from services provided in retirement and wealth management. For the nine months ended September 30, 2024, net interest income was reported at $68.8 million, while total noninterest income was $81.1 million.
| Revenue Component | Q3 2024 (in $000) | Q3 2023 (in $000) | 9M 2024 (in $000) | 9M 2023 (in $000) |
|---|---|---|---|---|
| Net Interest Income | 22,542 | 20,395 | 68,761 | 66,287 |
| Total Noninterest Income | 28,363 | 28,407 | 81,057 | 79,439 |
Loan Portfolio
The company’s loan portfolio comprises various categories, with total loans outstanding at $3.0 billion as of September 30, 2024. This represents a 9.9% increase from the previous year. The breakdown includes commercial and industrial loans, commercial real estate, agricultural loans, and consumer loans.
| Loan Type | Amount (in $000) | Percentage of Total Loans |
|---|---|---|
| Commercial and Industrial | 606,245 | 19.9% |
| Commercial Real Estate | 1,440,000 | 47.3% |
| Agricultural | 84,000 | 2.8% |
| Consumer | 900,000 | 30.0% |
Deposit Composition
Total deposits as of September 30, 2024, reached approximately $3.3 billion, marking a 7.4% increase year-over-year. The deposits include public deposits, synergistic deposits, and other customer accounts.
| Deposit Type | Amount (in $000) | Percentage of Total Deposits |
|---|---|---|
| Public Deposits | 640,571 | 19.3% |
| Synergistic Deposits | 920,609 | 27.7% |
| Total Deposits | 3,323,550 | 100.0% |
Capital and Equity
As of September 30, 2024, total stockholders’ equity increased to $386.5 million, reflecting a growth of 4.7% from December 31, 2023. The tangible common equity to tangible assets ratio was reported at 8.11%.
Conclusion
Alerus Financial Corporation continues to diversify its services and strengthen its financial position through strategic growth in loans and deposits while maintaining a solid capital base.
How Alerus Financial Corporation (ALRS) Makes Money
Revenue Sources
Revenue Sources
Alerus Financial Corporation generates income through various segments, including Banking, Retirement and Benefits Services, Wealth Management, and Mortgage Banking. The following table summarizes the revenue contributions from these segments for the three and nine months ended September 30, 2024 and 2023.
| Segment | Three Months Ended September 30, 2024 ($ in thousands) | Three Months Ended September 30, 2023 ($ in thousands) | Nine Months Ended September 30, 2024 ($ in thousands) | Nine Months Ended September 30, 2023 ($ in thousands) |
|---|---|---|---|---|
| Banking | 22,542 | 20,395 | 68,761 | 66,287 |
| Retirement and Benefits Services | 16,144 | 18,605 | 47,876 | 49,977 |
| Wealth Management | 6,684 | 5,271 | 19,161 | 15,915 |
| Mortgage Banking | 2,573 | 2,510 | 6,796 | 7,132 |
| Service Charges on Deposit Accounts | 488 | 328 | 1,333 | 940 |
| Other | 2,474 | 1,693 | 5,891 | 5,475 |
| Total Noninterest Income | 28,363 | 28,407 | 81,057 | 79,439 |
Net Interest Income
Net interest income is a major component of Alerus's revenue, generated from the difference between the interest earned on loans and the interest paid on deposits. For the three months ended September 30, 2024, net interest income was $22.5 million, compared to $20.4 million in the same period of 2023. The nine-month figures show net interest income of $68.8 million for 2024 versus $66.3 million for 2023.
Noninterest Income Breakdown
Noninterest income is derived from various services, including retirement and benefit services, wealth management, and mortgage banking. The following table provides a detailed breakdown of noninterest income for the three and nine months ended September 30, 2024 and 2023.
| Source of Noninterest Income | Three Months Ended September 30, 2024 ($ in thousands) | Three Months Ended September 30, 2023 ($ in thousands) | Nine Months Ended September 30, 2024 ($ in thousands) | Nine Months Ended September 30, 2023 ($ in thousands) |
|---|---|---|---|---|
| Retirement and Benefit Services | 16,144 | 18,605 | 47,876 | 49,977 |
| Wealth Management | 6,684 | 5,271 | 19,161 | 15,915 |
| Mortgage Banking | 2,573 | 2,510 | 6,796 | 7,132 |
| Service Charges on Deposit Accounts | 488 | 328 | 1,333 | 940 |
| Other | 2,474 | 1,693 | 5,891 | 5,475 |
| Total Noninterest Income | 28,363 | 28,407 | 81,057 | 79,439 |
Expenses and Profitability
The total noninterest expense for the three months ended September 30, 2024, was $42.4 million, compared to $37.3 million in the same period of 2023. For the nine months ended September 30, 2024, total noninterest expense was $120.2 million versus $111.5 million in 2023.
Net income for the three months ended September 30, 2024, was $5.2 million, down from $9.2 million in the same period of 2023. For the nine months, net income was $17.8 million in 2024, compared to $26.5 million in 2023.
| Performance Metrics | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Net Income ($ in thousands) | $5,207 | $9,161 | $17,846 | $26,451 |
| Total Noninterest Expense ($ in thousands) | $42,447 | $37,260 | $120,218 | $111,503 |
| Efficiency Ratio | 80.29% | 72.50% | 77.17% | 73.57% |
Conclusion of Financial Performance
As of September 30, 2024, Alerus Financial Corporation's total assets were approximately $4.1 billion, reflecting a 4.5% increase from December 31, 2023. This increase was primarily attributed to a $272.8 million rise in loans.
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Article updated on 8 Nov 2024
Resources:
- Alerus Financial Corporation (ALRS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Alerus Financial Corporation (ALRS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Alerus Financial Corporation (ALRS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.