INVESTOR PRESENTATION
3Q 2026
OCTOBER 28, 2026
NASDAQ: ALRS COMPANY PROFILE Alerus is a Leading Commercial Wealth Bank and a National Retirement Plan Provider Diversified Revenue(1)Last Twelve Months Ended September 30, 2026
Net Interest Income:
$184.5 million 59.1% of revenue
Adjusted Noninterest Income(1):
$127.8 million
40.9% of revenue
Net Interest Income 59.1%
Retirement & Benefits Revenue 22.3%
Retirement and Benefit Services
Retirement Services Benefit Services
Plan administration Health savings accounts
Trust and custodial offerings Flexible spending accounts
Record keeping COBRA
$40.7
$44.9 $44.9
$36.7
$36.7
AUA / AUM(3):
$ in billions
$32.1
2021 2022 2023 2024 2025 3Q 2026
Wealth Advisory Revenue
9.7%
Banking Fees & Other Revenue (1)/(2)
8.9%
2025 3Q 2026
2024
2023
2022
2021
$3.9
$3.8
$3.4
Assets:
$ in billions
$5.4
$5.2
$5.3
Consumer Services
Private banking
Savings, money markets, CDs
Mortgage services
Business Services
Commercial and small business offerings
Treasury management services
CRE and SBA Lending
Banking Services
Wealth Advisory Services
Financial Planning: Retirement | Tax | Estate planning
Investment Management: Managed investments | Brokerage
Trust and Fiduciary: Estate administration | Corporate trusteeship
AUA / AUM:
$ in billions
$4.0
$4.6
$4.9
$5.2
$3.6
$4.0
2021 2022 2023 2024 2025 3Q 2026
Excludes net losses on investment securities, net gains on sale of loans, and net losses on sale/disposal of fixed assets. See "Non-GAAP Disclosure Reconciliation."
Banking fees and other revenue consists of service charges on deposit accounts, mortgage income, interchange income and other noninterest income.
2 3. Data is approximate based on the data available at the time of release.
COMPANY FOOTPRINT AND SCALERetirement and Benefit
Services
AUA / AUM(1): $44,944
Arizona
Synergistic(3)
4.6% 13.8%
9.8%
14.2%
10.1%
71.5%
76.0%
Legend:
($ in millions)
North Dakota
Minnesota
Wisconsin and Iowa
National
Wealth Advisory
Services
AUA / AUM: $5,164
40.5%
3.2%
54.2%
6.1%
28.1%
22.1%
24.6%
5.1%
16.1%
Deposits: $4,303
Loans: $4,185
Banking
Market Distribution and Client Base(1)55,200 Consumer clients(2)
17,900 Commercial clients(2)
11,600 Wealth clients
5,500 Employer-sponsored retirement plans
330,500 Employer-sponsored retirement participant accounts
132,800 Health and welfare benefit participant accounts
25 Full-Service Banking OfficesGrand Forks, ND: 4 offices
Fargo, ND: 2 offices
Minneapolis / St. Paul (MSA), MN: 6 offices
Rochester, MN: 3 offices
Southern MN, WI and IA: 8 offices
Phoenix (MSA), AZ: 2 offices
Retirement and Benefit ServicesRetirement plan service clients in all 50 states
Client base data is approximate based on the data available at the time of release and rounded to the nearest hundred.
Includes applicable clients from our Banking, Wealth Advisory, and Retirement and Benefit segments.
3 3. Synergistic deposits are sourced from the Retirement and Benefit Services and Wealth Advisory Services segments. Data as of 9/30/2026.
STRATEGIC GROWTH To supplement our organic growth, we have executed 26 acquisitions throughout the history of our company including: 16 in Banking and 10 in Retirement and Benefit Services.Rebranded to Alerus
Expanded to Arizona Market
Acquired Metro Phoenix Bank
1879
2007
2019
2024
2000
2009
2022
Began as the Bank
of Grand Forks
Expanded to
Minnesota Market
Completed Initial Public
Offering (IPO)
Acquired HMN
Financial, Inc.
2003: Acquired Pension Solutions, Inc.
Transformed Alerus into a national competitor, increasing scale and growth potential
2016: Acquired Alliance Benefit Group North Central States, Inc.
Expanded service offerings with complementary health and welfare services and valuable HSA deposits
2020: Acquired Retirement Planning Services, Inc.
Expanded into the Colorado market
Deposit Balances(1) (% by Year Client Account Opened) Retirement and Benefit Services Acquisition Highlights
2022-2026
35%
Pre-2017
39%
2017-2021
26%
4 1. Data as of 9/30/2026.
COMPANY PERFORMANCE
Return on Average Assets Return on Average Tangible Common Equity(3)
1.66%
(1)
1.35%
1.45%
1.32%
1.13%
1.14%
0.39%
0.82%(1)
18.89%
19.50%
(1)
17.35%
16.98%
14.47%
15.09%
11.95%(1)
7.14%
2021 2022 2023 2024 2025 3Q 2026
2021 2022 2023 2024 2025 3Q 2026
ALRS
(2)
(2)
ALRS KRX Median (5-Yr Avg)(2) (2)
KRX Median (5-Yr Avg) KRX Top Quartile (5-Yr Avg)
Tangible Book Value Per Common Share(3)
KRX Top Quartile (5-Yr Avg)
Dividends Declared Per Common Share
Alerus has a decades-long history of consistently paying quarterly dividends.
$ per Share $ per Share
$17.87
$18.74
$17.55
$15.46
$14.37
$14.44
IPO
$0.70
$0.75
$0.79
$0.83
$0.63
$0.57
$0.60
$0.22
2019
2020
2021
2022
2023
2024
2025 3Q 2026
2021 2022 2023 2024 2025 3Q 2026
Excludes net losses on investment securities (after-tax) of $19.5 million in 2023 and of $54.0 million in 2025. Represents a non-GAAP financial measure. See "Non-GAAP Disclosure Reconciliation."
5 2. Source S&P Capital IQ.
Represents a non-GAAP financial measure. See "Non-GAAP Disclosure Reconciliation."
STRATEGIC INITIATIVES Our Purpose is to Help Our Clients Achieve Theirs.Organic Growth
Employer of Choice
New client acquisition,
Recruiting and retaining top
retention, and deepening
talent with deep industry
existing relationships
expertise
Diversified business model
Fostering a purpose-driven
brings value to clients
culture that attracts high
through advice and specialty
performers
solutions
Leveraging growth synergies
Accelerating growth in existing and new mid-market
unavailable to traditional
C&I banking markets and
banking organizations
specialty niches with talent
and team lift-outs
Organic Growth
Employer of Choice
One AlerusProductivity and Efficiency
Strategic AcquisitionsProven acquiror of choice: complementary business models, culture, and growth opportunities
Targeting retirement and benefit service providers, wealth management firms, and banks
Productivity and EfficiencySecure, reliable technology meeting evolving client expectations
Integrating our full offerings through fast-follower technology strategy
Streamlining operations and automating workflows to drive scalable growth
Strategic Acquisitions
Our Purpose Powers Our Culture. Our Core Values Put It into Action.Passion for Excellence: Act with accountability and sense of urgency to best serve clients and achieve exceptional results
Success is Never Final: Embrace opportunities to adapt and grow with our industry and our clients
Do the Right Thing: Lead with integrity and provide valued advice and guidance
One Alerus: Work together to provide purpose-driven products and services for our clients
6
OFFICERS AND DIRECTORSAl Villalon
Executive Vice President and Chief Financial Officer
4 years with Alerus
Karin Taylor
Executive Vice President and Chief Operating Officer
Forrest Wilson
Executive Vice President and Chief Retirement Services Officer 2 years with Alerus
Executive Management
8 years with Alerus Missy Keney
Executive Vice President and Chief Engagement Officer
Katie O'Neill Lorenson Director, President and Chief Executive Officer 9 years with Alerus
Jim Collins
Executive Vice President and
Chief Banking and Revenue Officer
4 years with Alerus
21 years with Alerus
Board of Directors
Dan Coughlin
Since 2016
Chairman, Alerus Financial Corp.
Former MD & Co-Head - Fin'l Services Inv. Banking, Raymond James; Former Chairman & CEO, Howe Barnes Hoefer & Arnett
7
Randy Newman
Since 1988
Former President and CEO, Alerus
Galen Vetter
Since 2013
Former Global CFO, Franklin Templeton Investments; Former Partner-in-Charge, Upper Midwest Region, RSM
Janet Estep
Since 2021
Former President and CEO, Nacha;
Former EVP, US Bank Transaction Division; Former VP, Pace Analytical Services
Mary Zimmer
Since 2021
Former Director of Diverse Client Segments and Former Northern Regional President, Wells Fargo Advisors;
Former Head of Intl. Wealth USA, Royal Bank of Canada U.S. Wealth Mgmt.
John Uribe
Since 2023
Chief Financial Officer
Blue Cross and Blue Shield of Minnesota
Nikki Sorum
Since 2023
Former Head of Sales and Distribution, Thrivent; Former SVP, Private Client Group,
RBC Wealth Management
Former Partner, McKinsey & Company
Jeffrey Bolton
Since 2024
Former Chief Administrative Officer and Chief Financial Officer, Mayo Clinic
Third Quarter Highlights
Office in Minnetonka, Minnesota
3Q 2026 HIGHLIGHTS Success is Never FinalROAA:
1.45%
1.37% Adjusted(1)
ROTCE(1):
17.35%
16.43% Adjusted(1)
Diversified Returns
Net interest income was $46.7 million, and net interest margin (on a tax-equivalent basis)(1) was 3.84% in the third quarter of 2026.
Noninterest income was $34.4 million in the third quarter of 2026, an increase of 4.3% from the second quarter of 2026.
Loans:
$4.2 billion
+$0.2 billion vs. 2Q 2026
Deposits:
$4.3 billion
+$0.1 billion vs. 2Q 2026
Noninterest income represented 42.4% of total revenue in the third quarter of 2026, an increase of 152 basis points from the second quarter of 2026.
Robust Balance Sheet Growth
Total loans were $4.2 billion as of September 30, 2026, an increase of
$150.5 million, or 3.7%, from June 30, 2026.
Total deposits were $4.3 billion as of September 30, 2026, an increase of
$111.2 million, or 2.7% from June 30, 2026.
CET1(2):
10.5%
Well above bank regulatory requirements
ACL to Total Loans:
1.23%
+3 bps vs. 2Q 2026
Favorable Credit Quality and Robust Capital
Net recoveries to average loans(1) of 0.10% during the third quarter.
Tangible common equity to tangible assets(1) was 8.77% at September 30, 2026.
Value Creation
Diluted EPS:
$0.76
$0.71 Adjusted(1)
TBV Per Share(1):
$18.74
+$0.01 vs. 2Q 2026
Repurchased $8.2 million of the Company's outstanding common stock, reducing common shares outstanding by 250,000 shares at quarter-end.
Dividends of $0.22 per share, or $5.4 million of stockholders' equity, in the third quarter of 2026.
In the first nine months of 2026, the Company has returned $37.2 million to shareholders in the form of dividends and share repurchases.
9 1. Represents a non-GAAP financial measure. See "Non-GAAP Disclosure Reconciliation."
Capital ratios for the current quarter are to be considered preliminary until the Call Report for Alerus Financial, N.A. is filed.
Adjusted Return on Average Assets(1) Adjusted Return on Average Equity(1)
1.79%
1.62%
1.58%
1.28%
1.37%
16.53%
14.32%
12.86%
12.32%
15.39%
3Q 2025 | 4Q 2025 | 1Q 2026 | 2Q 2026 | 3Q 2026 | 3Q 2025 | 4Q 2025 | 1Q 2026 | 2Q 2026 | 3Q 2026 | |||
Reported: | 1.27% | (2.50)% | 1.79% | 1.60% | 1.45% | Reported: | 12.80% | (23.75)% | 16.44% | 14.56% | 13.07% |
Adjusted Return on Average TCE(1) Adjusted Diluted EPS(1)
$0.80
$0.71
$0.66
21.05% 21.96% $0.85 $0.89
18.55%
19.04%
16.43%
3Q 2025 4Q 2025 1Q 2026 2Q 2026 3Q 2026 3Q 2025 4Q 2025 1Q 2026 2Q 2026 3Q 2026
Reported(1): 18.48% (28.15)% 21.85% 19.33% 17.35%
Reported: $0.65 $(1.27) $0.89 $0.81 $0.76
10 1. Represents a non-GAAP financial measure. See "Non-GAAP Disclosure Reconciliation."
KEY INCOME STATEMENT ITEMSNet Interest Income & Net Interest Margin(1)/(2) Adjusted Noninterest Income(1) & as a % of Adjusted Revenue(1)
$47,712
$46,723
$45,174
$44,912
$43,136
3.97%
3.77%
3.69%
3.50%
3.84%
$ in thousands
$ in thousands
Adjusted Noninterest Income (1)
as a Percent of Adjusted Revenue(1)
$29,465
40.6%
$31,899
41.4%
$30,868
40.7%
$32,292 $32,796
41.2%
40.4%
3Q 2025 4Q 2025 1Q 2026 2Q 2026 3Q 2026
Net Interest Income NIM(1)
3Q 2025 4Q 2025 1Q 2026 2Q 2026 3Q 2026
Reported
Noninterest Income:
$29,430
$(36,949)
$30,847
$32,945
$34,350
Adjusted PPNR(1) & as a % of Total Average Assets(1) Adjusted Noninterest Expense(1) & Adjusted Efficiency Ratio(1)
$ in thousands
$27,343
$ in thousands
$52,661
$51,781
$50,480
$50,259
65.2%
63.6%
63.2%
62.8%
64.4%
Adjusted Noninterest Expense(1)
$53,709
$25,292
$25,521
$25,810
2.10%
$22,121
1.98%
1.91%
1.66%
1.95%
Adjusted Efficiency Ratio(1)
3Q 2025 4Q 2025 1Q 2026 2Q 2026 3Q 2026
3Q 2025 4Q 2025 1Q 2026 2Q 2026 3Q 2026
(1)
Adjusted PPNR
as a % of Average Assets(1)
Reported Noninterest Expense: | $50,541 | $51,881 | $50,392 | $52,883 | $53,868 |
Reported Efficiency Ratio(1): | 65.3% | 557.5% | 63.4% | 62.5% | 63.4% |
Represents a non-GAAP financial measure. See "Non-GAAP Disclosure Reconciliation."
11 2. Tax-equivalent net interest margin.
KEY BALANCE SHEET ITEMSLoans & Quarterly Average Yield Investment Securities & Quarterly Average Yield
$ in thousands $ in thousands
$4,102,076
$4,048,022 $4,034,744 $4,034,244
6.31%
6.35%
6.24%
5.94%
6.10%
$4,184,760
$791,776 $770,424 $771,414 $777,323 $783,501
3.84%
3.86%
3.91%
2.64%
2.45%
Total Loans
Quarterly Average Loan Yield
9/30/2025 12/31/2025 3/31/2026 6/30/2026 9/30/2026
9/30/2025 12/31/2025 3/31/2026 6/30/2026 9/30/2026
Total Investment Securities Quarterly Average Investment Yield
Deposits & Quarterly Average Cost Synergistic Deposits (1)
$ in thousands $ in thousands
$978,196
$973,286
$937,788
$949,094
$949,800
23.3%
22.4%
22.6%
22.1%
21.3%
$4,412,653
$4,347,882
$4,192,003
$4,191,897
$4,303,177
2.20%
2.03%
1.82%
1.82%
1.84%
Total Deposits
Quarterly Average Deposit Cost
9/30/2025 12/31/2025 3/31/2026 6/30/2026 9/30/2026
9/30/2025 12/31/2025 3/31/2026 6/30/2026 9/30/2026
Loan to deposit
ratio:
93.0%
96.6%
92.8%
96.2%
97.2%
(1)
Synergistic Deposits as a % of Total Deposits
12 1. Synergistic deposits are sourced from the Retirement and Benefit Services and Wealth Advisory Services segments.
Third Quarter Details
Office in Fargo, North Dakota
3Q 2026 RESULTS | ||
Income Statement | ||
Quarterly | ||
($ in thousands, except per share data) 3Q 2025 | 2Q 2026 | 3Q 2026 |
Income Statement Net Interest Income $ 43,136 | $ 47,712 | $ 46,723 |
Provision for (Recovery of) Credit Losses - | 495 | 2,199 |
Net Interest Income After Provision for Credit Losses 43,136 | 47,217 | 44,524 |
Noninterest Income 29,430 | 32,945 | 34,350 |
Noninterest Expense 50,541 | 52,883 | 53,868 |
Income Before Income Tax Expense 22,025 | 27,279 | 25,006 |
Income Tax Expense 5,101 | 6,414 | 5,806 |
Net Income $ 16,924 | $ 20,865 | $ 19,200 |
Adjusted Net Income (1) 17,000 | 20,524 | 18,098 |
Pre-Provision Net Revenue(1) $ 22,025 | $ 27,774 | $ 27,205 |
Adjusted Pre-Provision Net Revenue (1) 22,121 | 27,343 | 25,810 |
Per Common Share Data | ||
Earnings Per Common Share - Diluted $ 0.65 | $ 0.81 | $ 0.76 |
Adjusted Earnings Per Common Share - Diluted (1) 0.66 | 0.80 | 0.71 |
Diluted Average Common Shares Outstanding 25,713 | 25,395 | 25,161 |
14 1. Represents a non-GAAP financial measure. See "Non-GAAP Disclosure Reconciliation."
3Q 2026 RESULTS Balance Sheet, Capital, Credit Quality & OtherQuarterly | ||||||
($ in thousands) | 3Q 2025 | 2Q 2026 | 3Q 2026 | |||
Balance Sheet | ||||||
Total Assets | $ 5,330,573 | $ 5,288,718 | $ 5,403,103 | |||
Total Loans | 4,102,076 | 4,034,244 | 4,184,760 | |||
Total Deposits | 4,412,653 | 4,191,897 | 4,303,177 | |||
Tangible Common Equity(1) | 429,301 | 468,087 | 463,768 | |||
Capital Ratios Common Equity Tier 1 Capital Ratio (%)(2) | 10.84 | % | 10.81 | % | 10.52 | % |
Tang. Cmn. Equity/Tang. Assets (%)(1) | 8.24 | % | 9.05 | % | 8.77 | % |
Loans/Deposits (%) | 92.96 | % | 96.24 | % | 97.25 | % |
Credit Quality Ratios | ||||||
NPLs/Loans (%) | 1.45 | % | 0.19 | % | 0.17 | % |
NPAs/Assets (%) | 1.13 | % | 0.32 | % | 0.30 | % |
Criticized Loans/Loans (%) | 4.66 | % | 2.06 | % | 1.96 | % |
Allowance/NPLs (%) | 104.16 | % | 641.31 | % | 742.40 | % |
Allowance/Loans (%) | 1.51 | % | 1.20 | % | 1.23 | % |
NCOs/Average Loans (%)(1) | (0.17) | % | 0.26 | % | (0.10) | % |
Other Data | ||||||
Retirement and Benefit Services AUA/AUM(3) | $ 44,005,277 | $ 45,163,767 | $ 44,944,011 | |||
Wealth Advisory Services AUA/AUM | 4,812,250 | 5,195,511 | 5,163,688 | |||
Mortgage Originations | 142,768 | 113,450 | 126,728 | |||
1. Represents a non-GAAP financial measure. See "Non-GAAP Disclosure Reconciliation."
15 2. Capital ratios for the current quarter are to be considered preliminary until the Call Report for Alerus Financial, N.A. is filed.
3. Data is approximate based on the data available at the time of release.
EARNING ASSETSSeptember 30, 2026 Loan Portfolio(1)
Other consumer,
$ in millions
3Q 2026 Loan Portfolio(1) Changes
$375
$(4)
$(56)
$4,185
$(238)
$4,034
$70 $3 $1
1.1%
Commercial and industrial, 20.6%
Residential real estate, 27.6%
CRE - Owner
occupied, 16.4% CRE - Construction,
land
and development, 2.1%
CRE - Multifamily, 7.9%
Originations
(2)
PAA
Revolving LOCs, (Net)
Payoffs
Agriculture, 2.6%
CRE - Non-owner occupied, 21.7%
2Q26
Total
Advances
Net Recoveries
Amortized Payments / Other
3Q26
Total
$ in thousands
Investment Portfolio
Quarterly Highlights
AFS
HTM
Trading Securities
1,411
501
0.1%
Total loans increased $150.5 million, or 3.7%, from June 30, 2026.
The quarter-over-quarter increase was driven by a $160.9 million increase in commercial loans, partially offset by a $10.4 million decrease in consumer loans.
Total investor commercial real estate and residential real estate construction loans to total Bank risk-based capital(3) was 253% as of September 30, 2026.
The investment portfolio increased $6.2 million, or 0.8%, from June 30, 2026, as paydowns and maturities were replaced with the purchase of new investments.
$791,776 | $777,323 | $783,501 | ||
67.1% | 68.7% | 70.1% | ||
531,014 | 534,191 | 549,584 | ||
32.7% 259,351 | 0.2% | 31.2% 242,631 | 0.1% | 29.8% 233,099 |
818
9/30/2025 6/30/2026 9/30/2026
Average Period Yield | 2.64% | 3.86% | 3.91% |
% of Earning Assets: | 15.9% | 15.7% | 15.5% |
AOCI: | $(54,338) | $(4,979) | $(17,474) |
Additional loan portfolio breakdown available in the Appendix.
Purchase accounting accretion ("PAA") from acquired loans.
16 3. Bank total risk-based capital was $537 million as of September 30, 2026. Capital ratios for the current quarter are to be considered preliminary until the Call Report for Alerus
Financial, N.A. is filed.
DEPOSIT CHARACTERISTICSSeptember 30, 2026 Deposit Portfolio (by Category)
HSA deposits, 5.2%
$ in millions
3Q 2026 Deposit Portfolio Changes
Time
deposits, 13.5%
Noninterest-
bearing, 18.9%
Money market
and savings, 34.3%
Interest-bearing
demand, 28.1%
$54
$(2)
$4,192
$51 $6 $2
$4,303
2Q26
Total
Noninterest-bearing
Money market and savings
Time deposits
HSA
deposits
Interest-bearing demand
3Q26
Total
Synergistic deposits(1)
grew 1.3% from
September 30, 2025
September 30, 2026 Deposit Portfolio (by Client Segment)
Quarterly Highlights
Public
Total deposits increased $111.2 million, or 2.7%, from June 30, 2026.
The quarter-over-quarter increase in total deposits was primarily driven by growth in commercial deposits.
Noninterest bearing deposits grew $53.9 million, or 7.1%, from June 30, 2026.
The loan to deposits ratio was 97.2% as of September 30, 2026, an increase from 96.2% at June 30, 2026.
5.5%
Synergistic(1)
22.1%
Consumer
35.1%
Commercial
37.3%
17 1. Synergistic deposits are sourced from the Retirement and Benefit Services and Wealth Advisory Services segments.
NET INTEREST INCOMEYields and Rates NII and NIM(1) Walk
Net Interest Margin(1)
3.50%
3.97% 3.84%
$ in thousands
$47,712
$281
$508
$(45) $(254)
$(1,479)
$46,723
3Q 2025 2Q 2026 | 3Q 2026 | 2Q 2026 | Accrual Days | Asset Volume/Mix | Liability Volume/Mix | Liability Rate | Asset Rate & PAA | 3Q 2026 | |
Earning Assets | ( NIM: | 1) 3.97% | 0.00% | 0.02% | (0.01)% | (0.02)% | (0.12)% | 3.84% |
2.64%
6.31% 5.70%
3.86%
6.24% 5.85%
3.91%
6.10% 5.73%
Quarterly Highlights
Net interest income for the third quarter of 2026 was $46.7 million, a $1.0 million, or 2.1%, decrease from the second quarter of 2026.
The decrease was primarily due to lower interest income on loans from a one-time $1.6 million interest income recovery on a nonaccrual loan resolution in the second quarter, less purchase accounting accretion, and higher interest expense, as average rates paid on deposits and borrowings increased slightly, mainly driven by the recent increase by the Federal Reserve in the federal funds benchmark rate. These factors were partially offset by higher loan and investment yields.
Net interest margin (on a tax-equivalent basis)(1) decreased 13 bps to 3.84%, from 3.97% for the second quarter of 2026.
The decrease was mainly attributable to a one-time $1.6 million interest income recovery on a nonaccrual loan resolution in the second quarter and less purchase accounting accretion, partially offset by higher loan and investment yields.
Net interest margin (on a tax-equivalent basis)(1) was impacted by 28 bps of purchase accounting accretion in the third quarter of 2026.
3Q 2025 2Q 2026 3Q 2026
Investment Securities Yield
2.20% 2.69% 2.34%
Loan Yield Total Earning Asset Yield
Cost of Funds
2.24% 2.26%
1.82%
2.02%
1.84%
2.05%
3Q 2025 2Q 2026 3Q 2026
Cost of Total Deposits
Cost of Interest Bearing Deposits
Total Cost of Funds
18 1. Net Interest Margin (on a tax-equivalent basis). Represents a non-GAAP financial measure. See "Non-GAAP Disclosure Reconciliation." Yields and rates have been annualized.
NONINTEREST INCOME Adjusted Noninterest Income(1) Represents over 40% of Adjusted Revenue(1)$ in thousands
Adjusted Noninterest Income(1)
Quarterly Highlights
Adjusted Banking Fees & Other (1)
Wealth Advisory Services
$29,465
$32,292 $32,796
Retirement & Benefit Services
55.9%
$16,496
53.9%
$17,664
53.7%
$17,347
22.3%
$6,560
24.4%
$8,001
23.9%
$7,705
21.8%
$6,409
21.7%
$7,131
22.4%
$7,240
3Q 2025 2Q 2026 3Q 2026
Reported: $29,430 $32,945 $34,350
Adjusted Noninterest Income(1): +1.6% Linked quarter
+11.3% Year-over-year
Year-Over-Year Highlights
Wealth Advisory Services revenue increased $1.4 million, or 22.0%, from the third quarter of 2025, driven by an increase in both asset-based fees and transaction-based fees.
Retirement and Benefit Services revenue increased $1.2 million, or 7.1%, compared to the third quarter of 2025, primarily driven by recurring annual income.
Adjusted banking fees & other income(1) increased $0.7 million, or 11.3%, from the third quarter of 2025, primarily driven by increases in swap fee income and deposit service charges, partially offset by a decrease in mortgage banking revenue driven by lower mortgage originations and gain on sale margins.
Retirement and Benefit Services revenue increased $0.3 million, or 1.8%, from the second quarter of 2026, primarily driven by an increase in recurring annual income.
Wealth Advisory Services revenue increased $0.3 million, or 3.8%, from the second quarter of 2026, primarily driven by an increase in transaction-based fees and a slight increase in asset-based revenues.
Adjusted banking fees & other income(1) decreased $0.1 million, or 1.5%, from the second quarter of 2026, primarily driven by a decrease in mutual fund investment gains related to the underlying assets of the deferred compensation plans; swap fee income also decreased on the quarter.
These decreases were partially offset by an increase in mortgage banking revenue driven by higher mortgage originations and gain on sale margins.
19 1. Excludes net losses on investment securities, net gains on sale of loans, and net gains/losses on sale/disposal of fixed assets. See "Non-GAAP Disclosure Reconciliation."
BANKING SERVICESQuarterly
($ in thousands)
3Q 2025
2Q 2026
$116
3Q 2026
$116
$10
$11
$103
$27
Divisional(1) Income Statement Noninterest Income(2)/(3) Breakdown
$ in thousands
$2,133
$653
$7,893
$1,221
$849
$1,733
$1,554
$8,685
$3,474
$703
$878
$1,106
Net interest income
$ 43,136 $
47,712 $
46,723
One-time
Items(4) Other
$6,374
Provision for (recovery of) credit losses - 495 2,199
(2)
$1,354
Debit Card
Noninterest income
6,374 7,893 8,685
Interchange
$806
Total revenue 49,510 55,110 53,209
Noninterest expense(3) 28,697 28,257 29,854
Service Charges
$3,328
Net income before taxes:
$ 20,813 $ 26,853 $ 23,355
Mortgage
$3,195
$(35)
3Q 2025 2Q 2026 3Q 2026
$ in millions
Portfolio
Sale
Mortgage Origination Highlights
$143
$113
$127
Quarterly Highlights
Banking services noninterest income increased $0.8 million, or 10.0%, from the second quarter of 2026.
Mortgage revenue for the third quarter of 2026 increased $0.1 million, or 4.2%, from the second quarter of 2026. The increase was primarily driven by higher mortgage originations and gain on sale margins.
Other income for the third quarter of 2026 decreased $0.4 million, or 18.8%, from the second quarter of 2026, primarily driven by lower mutual fund investment gains related to the underlying assets of the deferred compensation plans; swap fee income also decreased in the quarter.
3Q 2025 2Q 2026 3Q 2026
Purchase: | 86.8% | 86.3% | 90.3% |
Refinance: | 13.2% | 13.7% | 9.7% |
Includes corporate administration income.
Banking noninterest income consists of service charges on deposit accounts, mortgage income, interchange income and other noninterest income.
20 3. Excludes non-personnel HMNF acquisition-related expenses.
4. One-time items include net gains on the sale/disposal of premises and equipment of $1.6 million in 3Q 2026 and of $653 thousand in 2Q 2026, and net losses on sale of loans of $(35) thousand in 3Q 2025.
RETIREMENT AND BENEFIT SERVICESDivisional(1) Income Statement AUA / AUM (2) and Participant Accounts (2)
$44,925
$44,944
384,800
397,000
$40,729
$36,682
411,600
406,700
330,500
$32,123
133,000
134,700
144,700
145,900
132,800
$ in millions
Quarterly
($ in thousands)
3Q 2025
2Q 2026
3Q 2026
Recurring annual income
$ 14,683 $
15,135 $
15,566
AUA/AUM
Transactional income 1,813 2,212 2,098
Total noninterest income 16,496 17,347 17,664
Noninterest expense 13,394 15,077 15,019
Retirement Participant Accounts
Net income before taxes:
$ 3,102 $ 2,270 $ 2,645
H&W Benefit Participant Accounts(3)
2022 2023 2024 2025 3Q 2026
Number of
Retirement Plans(2):
8,100
8,300
8,600
8,800
5,500
$ in thousands
Synergistic Deposits(4)
Quarterly Highlights
$233,082
$195,617
$683,149
$725,618
$741,578
$598,160
$529,584
$296,046
$280,891
$302,367
$166,171
$176,729
$190,270
$203,404
$221,769
$167,796
$188,349
$211,988
$217,442
$226,168
Retirement and Benefit Services revenue increased $0.3 million, or 1.8%,
from the second quarter of 2026, primarily driven by an increase in recurring annual income.
▪
▪
AUA / AUM were stable from June 30, 2026.
63% of Retirement and Benefit Services revenue is tied to plans,
participants, and activity. 37% of revenue is market sensitive.
▪
▪
55% of Retirement and Benefit Services synergistic deposits(4) are indexed.
HSA synergistic deposits(4) have increased 9.0% from December 31, 2025,
and had an average cost of funds of 10 bps in the third quarter of 2026.
2022 2023 2024 2025 3Q 2026
Money Market HSA Other
Excludes funds transfer pricing credit on synergistic deposits.
Data is approximate based on the data available at the time of release and rounded to the nearest hundred.
21 3. Refers to health and welfare benefit participant accounts.
Synergistic deposits include deposits sourced from the Retirement and Benefit Services segment.
Divisional(1) Income Statement AUA / AUM
($ in thousands)
3Q 2025
Quarterly
2Q 2026
3Q 2026
$ in millions
Asset management | $ 5,698 | $ 6,831 | $ 6,885 |
Brokerage | 372 | 410 | 622 |
Insurance and other | 490 | 464 | 494 |
Total noninterest income | 6,560 | 7,705 | 8,001 |
Noninterest expense | 5,883 | 6,374 | 6,162 |
Net income before taxes: | $ 677 | $ 1,331 | $ 1,839 |
$5,164
$4,851
$4,579
$4,019
$3,583
2022 2023 2024 2025 3Q 2026
Synergistic Deposits(2)
Quarterly Highlights
$ in thousands
$290,411
$253,384
$252,578
$208,222
$161,973
2022
2023
2024
2025
3Q 2026
Wealth Advisory Services revenue increased $0.3 million, or 3.8%, from the second quarter of 2026, primarily driven by an increase in transaction-based fees and a slight increase in asset-based revenues.
AUA / AUM increased 7.3% from September 30, 2025.
Wealth Advisory Services synergistic deposits(2) represented 4.8% of total deposits as of September 30, 2026.
99% of Wealth Advisory Services synergistic deposits(2) are indexed.
1. Excludes funds transfer pricing credit on synergistic deposits.
22 2. Synergistic deposits include deposits sourced from the Wealth Advisory Services segment.
NONINTEREST EXPENSE$ in thousands
Other(2)
Professional Fees and Assessments
Business Services, Software and Technology
Occupancy and Equipment
Adjusted Noninterest Expense(1)
$52,661 $53,709
$7,617
$50,480
$7,259
$3,775
$3,781
$5,440
$5,457
$3,493
$3,525
Quarterly Highlights
Year-Over-Year Highlights
Compensation and benefits expenses increased $2.4 million, or 7.6%, from the third quarter of 2025, primarily due to annual merit increases and an increase in employees, as well as an increase in self-funded group insurance costs.
Professional fees and assessments increased $1.1 million, or 39.1%, from the third quarter of 2025, primarily due to the reclassification of consulting services and other third-party vendor expenses from business services, software, and technology expense to professional fees and assessments.
Occupancy and equipment expenses increased $0.7 million, or 23.7%, from the third quarter of 2025, primarily driven by facility investments and the strategic realignment of locations from owned to leased space.
Compensation and benefits expenses increased $0.6 million, or 1.9%, from the second quarter of 2026, primarily due to an increase in benefits expenses related to self-funded group insurance costs.
Other expenses increased $0.4 million, or 4.9%, from the second quarter of 2026, primarily due to an increase in marketing and business development expense related to seasonal advertising campaigns.
Occupancy and equipment, business services, software and technology, along with professional fees and assessment expenses, all remained relatively stable quarter-over-quarter.
$30,974
$2,849
$6,285
$2,719
$7,653
$33,329
$32,694
Compensation and Benefits
3Q 2025 2Q 2026 3Q 2026
Reported: $50,541 $52,883 $53,868
+2.0% Linked quarter
Adjusted Noninterest Expense(1): +6.4% Year-over-year
Excludes HMNF acquisition-related expenses and severance and signing bonus expenses. See "Total adjusted noninterest expense items" in the "Non-GAAP Disclosure Reconciliation."
23 2. Consists of intangible amortization, marketing and business development, supplies and postage, travel, mortgage and lending, and other noninterest expense.
ASSET QUALITY AND RESERVE LEVELSNPAs / Assets % Reserves / Loans & Reserves / NPLs (%)
1.33%
1.50%
1.53%
1.27%
1.30%
1.23%
821%
410%
95%
90%
742%
1.20%
0.30%
0.10%
0.22%
Reserves/Loans Reserves/NPLs
2022 2023 2024 2025 3Q 2026
$ in thousands
2022 2023 2024 2025 3Q 2026
NCO/
Avg Loans(1)
0.02%
(0.04)%
0.13%
0.05%
(0.10)%
Nonaccrual loans | $3,794 | $8,596 | $54,433 | $69,065 | $6,909 |
Accruing loans 90+ days past due | - | 139 | 8,453 | - | 21 |
Total NPLs | $3,794 | $8,735 | $62,886 | $69,065 | $6,930 |
Criticized Loans
Highlights
$ in thousands
$198,281
$149,162
4.97%
$61,563
3.68%
$81,830
$35,285
2.23%
2022
2023
2024
2025
3Q 2026
Criticized Loans
Criticized Loans to Total Loans
24
1. Represents a non-GAAP financial measure. See "Non-GAAP Disclosure Reconciliation."
1.96%
1.44%
Net recoveries of $1.0 million in the third quarter of 2026 resulted in net recoveries to average loans(1) of 10 bps.
The quarter-over-quarter decrease in net charge-offs (recoveries) was primarily due to a $1.1 million recovery related to one long-term commercial and industrial client relationship on nonaccrual which was charged-off in the second quarter of 2026. As of September 30, 2026, the relationship had a remaining reserve of $0.9 million, which represented approximately 60.6% of the book balance as of that date.
Reserves to total loans ratio was 1.23% on September 30, 2026, an increase of 3 bps from June 30, 2026.
Total nonperforming assets were $16.4 million as of September 30, 2026, a decrease of $0.7 million from June 30, 2026.
Recorded a provision for credit losses of $2.2 million for the third quarter of 2026.
Capital Ratios(1)
CET1 $ per share
Tangible Book Value(2) & Book Value
13.4%
11.8%
9.9%
10.3%
10.5%
4.5%
$22.24
$23.31
$17.85
$18.71
$19.55
$18.74
$17.55
$14.37
$15.46
$14.44
2022 2023 2024 2025 3Q 2026
Total Risk Based Capital
14.8% 12.5% 12.9% | 13.0% | ||||||||||
8% | |||||||||||
16.5%
2022 2023 2024 2025 3Q 2026
TBV per Share BV per Share
Liquidity
2022 2023 2024 2025 3Q 2026
$ in thousands
Total assets
$ 5,403,103
11.3%
13.7%
Tier 1 Capital & Tier 1 Leverage
12.1%
Cash and cash equivalents 65,756
Unencumbered securities AFS 337,564
Overcollateralized securities pledging positions - AFS 18,595
Total On Balance Sheet Liquidity(3) 421,915
10.6%
6%
4%
10.1% 10.5%
8.7% 8.9%
10.7%
9.6%
Tier 1 Capital
Leverage
FHLB borrowing capacity 995,140
FRB Discount Window Capacity 290,958
Fed funds lines 145,000
Brokered CD capacity(4) 1,080,621
Total Off Balance Sheet Liquidity 2,511,719
2022 2023 2024 2025 3Q 2026
Tier 1 Leverage Tier 1 Capital
Regulatory Capital Minimum to be considered adequately capitalized.
Total Liquidity as of September 30, 2026
Total Liquidity (Ex-brokered CD Capacity)
$ 2,933,634
$ 1,853,013
Capital ratios for the current quarter are to be considered preliminary until the Call Report for Alerus Financial, N.A. is filed.
Represents a non-GAAP financial measure. See "Non-GAAP Disclosure Reconciliation."
25 3. Excludes unencumbered HTM securities with a market value of $150.1 million.
4. The Company had no brokered deposits as of September 30, 2026.
OUTLOOK Full Year Comparison FY 2026 Guidance(1)Loans
End of period
$4.0b
12/31/2025
Up mid-single
digits
Deposits
End of period
$4.2b
12/31/2025
Up low-single
digits
NIM(2)/(3)
3.53%
2025
3.75 - 3.85%
Adjusted
Noninterest Income(3)
$119m
2025
Up mid-single
digits
Adjusted
Revenue(3)
$291m
2025
Up mid-single
digits
Adjusted
Noninterest Expense(3)
$200m
2025
Up low-to-mid
single digits
Adjusted ROA(3)
1.35%
2025
>1.25%
1. The guidance, as shown, uses the assumption that the Federal funds rate remains static as of 9/30/2026 through 12/31/2026.
26 2. Tax-equivalent net interest margin.
Represents a non-GAAP financial measure. See "Non-GAAP Disclosure Reconciliation."
EARNINGS
Strong net interest income and noninterest income, as we continue to deliver balanced results.BALANCE SHEET
Core loan and deposit relationship growth continues to bolster our diverse banking franchise.ASSET & CAPITAL STRENGTH
Our disciplined focus on credit quality and our robust capital levels allows us to have a strong foundation to grow.VALUE CREATION
We remain committed to continued execution to deliver top-tier performance.27
Appendix
Office in Grand Forks, North Dakota
DIVISIONAL INCOME STATEMENT($ dollars in thousands)
Quarter ended September 30, 2026
Banking Services
Retirement and Benefit Services
Wealth Advisory Services
Corporate
Administration Consolidated
Net interest income | $ 47,768 $ - $ - $ (1,045) $ 46,723 | ||||
Provision for (recovery of) credit losses | 2,199 - - - 2,199 | ||||
Noninterest income (loss)(1) | 7,164 17,664 8,001 1,521 34,350 | ||||
Noninterest expense | 29,854 15,019 6,162 2,833 53,868 | ||||
Net income (loss) before taxes | $ 22,879 $ 2,645 $ 1,839 $ (2,357) $ 25,006 | ||||
Quarter ended June 30, 2026 Retirement and Wealth Corporate Banking Services Benefit Services Advisory Services Administration Consolidated | |||||
Net interest income | $ 48,753 $ - $ - $ (1,041) $ 47,712 | ||||
Provision for (recovery of) credit losses | 495 - - - 495 | ||||
Noninterest income (loss)(1) | 7,039 17,347 7,705 854 32,945 | ||||
Noninterest expense | 28,257 15,077 6,374 3,175 52,883 | ||||
Net income (loss) before taxes | $ 27,040 $ 2,270 $ 1,331 $ (3,362) $ 27,279 | ||||
Quarter ended September 30, 2025 | |||||
Banking Services | Retirement and Benefit Services | Wealth Advisory Services | Corporate Administration | Consolidated | |
Net interest income | $ 43,788 | $ - | $ - | $ (652) | $ 43,136 |
Provision for (recovery of) credit losses | - | - | - | - | - |
Noninterest income (loss)(1) | 6,216 | 16,496 | 6,560 | 158 | 29,430 |
Noninterest expense | 28,697 | 13,394 | 5,883 | 2,567 | 50,541 |
Net income (loss) before taxes | $ 21,307 | $ 3,102 | $ 677 | $ (3,061) | $ 22,025 |
29 1. Banking noninterest income (loss) consists of service charges on deposit accounts, mortgage income, interchange income and other noninterest income.
LOAN PORTFOLIO BREAKDOWNDecember 31, 2025
June 30, 2026
September 30, 2026
Percent of | Percent of | Percent of | ||||||||
($ in thousands) Balance Portfolio | Balance Portfolio | Balance Portfolio | ||||||||
Commercial and business lending: | ||||||||||
General business | $ 290,008 | 7.2% | $ 376,716 | 9.3% | $ 420,873 | 10.1% | ||||
Services | 237,966 | 5.9% | 200,109 | 5.0% | 234,004 | 5.6% | ||||
Retail trade | 101,374 | 2.5% | 72,351 | 1.8% | 101,076 | 2.4% | ||||
Manufacturing | 107,485 | 2.7% | 110,783 | 2.7% | 105,182 | 2.5% | ||||
CRE - Owner Occupied | 427,260 10.6% | 622,241 15.4% 690,988 16.4% | ||||||||
Total commercial and business lending | 1,164,093 | 28.9% | 1,382,200 | 34.2% | 1,552,123 | 37.0% | ||||
Investor commercial real estate: Construction, land and development | 246,238 | 6.1% | 79,850 | 2.0% | 87,615 | 2.1% | ||||
Multifamily | 383,505 | 9.5% | 361,875 | 9.0% | 332,535 | 7.9% | ||||
Non-owner occupied | ||||||||||
Office | 142,095 | 3.5% | 127,943 | 3.2% | 122,866 | 2.9% | ||||
Industrial | 193,041 | 4.8% | 199,353 | 4.9% | 234,877 | 5.6% | ||||
Retail | 116,735 | 2.9% | 108,160 | 2.7% | 111,524 | 2.7% | ||||
Hotel | 110,022 | 2.7% | 83,440 | 2.1% | 82,902 | 2.0% | ||||
Medical Office | 174,891 | 4.3% | 193,737 | 4.8% | 183,189 | 4.4% | ||||
Medical or nursing facility | 85,918 | 2.1% | 105,371 | 2.6% | 98,622 | 2.4% | ||||
Other commercial real estate | 53,160 1.3% | 75,363 1.9% | 71,190 1.7% | |||||||
Total non-owner occupied | 875,862 21.6% | 893,367 22.2% | 905,170 21.7% | |||||||
Total investor commercial real estate | 1,505,605 | 37.2% | 1,335,092 | 33.2% | 1,325,320 | 31.7% | ||||
Agricultural: | ||||||||||
Land | 64,799 | 1.6% | 54,202 | 1.3% | 53,725 | 1.3% | ||||
Production | 62,500 1.5% | 53,367 1.3% 54,597 1.3% | ||||||||
Total agricultural | 127,299 | 3.1% | 107,569 | 2.6% | 108,322 | 2.6% | ||||
Consumer | ||||||||||
Residential real estate first lien | 874,737 | 21.6% | 828,936 | 20.5% | 809,835 | 19.3% | ||||
Residential real estate construction | 33,703 | 0.8% | 31,202 | 0.8% | 32,620 | 0.8% | ||||
Residential real estate HELOC | 260,883 | 6.4% | 273,124 | 6.8% | 280,771 | 6.7% | ||||
Residential real estate junior lien | 36,844 | 0.9% | 31,941 | 0.8% | 31,566 | 0.8% | ||||
Other Consumer | 44,858 1.1% | 44,180 1.1% | 44,203 1.1% | |||||||
Total consumer | 1,251,025 | 30.8% | 1,209,383 | 30.0% | 1,198,995 | 28.7% | ||||
Total loans | $ 4,048,022 | 100.0% | $ 4,034,244 | 100.0% | $ 4,184,760 100.0% | |||||
30 | ||||||||||
$600,000
C&I60%
$500,000 50%
$400,000 40%
$300,000 30%
$200,000 20%
$100,000 10%
$0
$ in thousands
2022 2023 2024 2025 3Q
2025
4Q
2025
1Q
2026
2Q
2026
0%
3Q
2026
Funded Unfunded Funded %
$700,000
Home Equity Lines of Credit60%
$600,000
50%
$500,000
$400,000
$300,000
$200,000
$100,000
40%
30%
20%
10%
$0
$ in thousands
2022 2023 2024 2025 3Q
2025
4Q
2025
1Q
2026
2Q
2026
0%
3Q
2026
Funded Unfunded Funded %
31 Commercial and industrial loans includes revolving C&I loans and other loans. It excludes non-revolving C&I loans, and ag production.
ALLOWANCE FOR CREDIT LOSSES ON LOANS Changes in the ACL for Loans by Portfolio SegmentThree months ended September 30, 2026 Provision for
Beginning
(Recovery of)
Loan Loan Ending
($ in thousands)
Commercial
Commercial and business lending
Balance
Credit Losses(1)
Charge-offs Recoveries
Balance
Commercial and industrial | $ 10,477 | $ | 987 | $ (131) | $ 1,265 | $ 12,598 | |||
CRE - Owner occupied | 5,887 | 780 | - | 11 | 6,678 | ||||
Total commercial and business lending | 16,364 | 1,767 | (131) | 1,276 | 19,276 | ||||
Investor commercial real estate | |||||||||
Construction, land and development | 2,979 | (139) | - | - | 2,840 | ||||
Multifamily | 3,918 | (144) | (93) | - | 3,681 | ||||
Non-owner occupied | 10,580 | (1,399) | - | - | 9,181 | ||||
Total investor commercial real estate 17,477 Agricultural | (1,682) | (93) | - | 15,702 | |||||
Land 883 | (57) | - | - | 826 | |||||
Production | 567 | (46) | - | 30 | 551 | ||||
Total Agriculture | 1,450 | (103) | - | 30 | 1,377 | ||||
Total commercial | 35,291 | (18) | (224) | 1,306 | 36,355 | ||||
Consumer | |||||||||
Residential real estate | |||||||||
First lien | 9,366 | 1,329 | - | - | 10,695 | ||||
Construction | 366 | 40 | - | - | 406 | ||||
HELOC | 2,332 | 555 | (71) | - | 2,816 | ||||
Junior lien | 397 | 89 | - | 2 | 488 | ||||
Total residential real estate | 12,461 | 2,013 | (71) | 2 | 14,405 | ||||
Other consumer | 609 | 74 | (22) | 27 | 688 | ||||
Total Consumer | 13,070 | 2,087 | (93) | 29 | 15,093 | ||||
Total | $ 48,361 | $ 2,069 | $ (317) | $ 1,335 | $ 51,448 | ||||
1. The difference in the credit loss expense reported herein compared to the consolidated statements of income is associated with the credit loss expense of $134 thousand related to off-
32 balance sheet credit exposure and $(4) thousand related to held-to-maturity investment securities.
ALLOWANCE FOR CREDIT LOSSES ON LOANS Allocation by Loan Portfolio SegmentDecember 31, 2025
Percentage of
September 30, 2026
Percentage of
($ in thousands) | Allocated Allowance | segment allowance to segment loans | Allocated Allowance | segment allowance to segment loans |
Commercial and industrial | $ 16,216 | 2.20% | $ 12,598 | 1.46% |
CRE - Owner occupied | 3,097 | 0.72% | 6,678 | 0.97% |
CRE - Construction, land and development | 13,210 | 5.36% | 2,840 | 3.24% |
CRE - Multifamily | 4,380 | 1.14% | 3,681 | 1.11% |
CRE - Non-owner occupied | 11,006 | 1.26% | 9,181 | 1.01% |
Agricultural - Land | 959 | 1.48% | 826 | 1.54% |
Agricultural - Production | 623 | 1.00% | 551 | 1.01% |
Residential real estate first lien | 9,358 | 1.07% | 10,695 | 1.32% |
Residential real estate construction | 274 | 0.81% | 406 | 1.24% |
Residential real estate HELOC | 1,787 | 0.68% | 2,816 | 1.00% |
Residential real estate junior lien | 395 | 1.07% | 488 | 1.55% |
Other Consumer | 610 | 1.36% | 688 | 1.56% |
Total loans | $ 61,915 | 1.53% | $ 51,448 | 1.23% |
33
FINANCIAL HIGHLIGHTS($ in thousands, except where otherwise noted) | Quarterly | ||||
3Q 2025 | 4Q 2025 | 1Q 2026 | 2Q 2026 | 3Q 2026 | |
Total Assets | $ 5,330,573 | $ 5,230,084 | $ 5,287,971 | $ 5,288,718 | $ 5,403,103 |
Total Loans | 4,102,076 | 4,048,022 | 4,034,744 | 4,034,244 | 4,184,760 |
Total Deposits | 4,412,653 | 4,192,003 | 4,347,882 | 4,191,897 | 4,303,177 |
Tangible Common Equity(1) | 429,301 | 445,929 | 457,662 | 468,087 | 463,768 |
Retirement and Benefit Services AUA/AUM(2) | $ 44,005,277 | $ 44,925,311 | $ 42,273,839 | $ 45,163,767 | $ 44,944,011 |
Wealth Advisory Services AUA/AUM | 4,812,250 | 4,850,600 | 4,792,609 | 5,195,511 | 5,163,688 |
Mortgage Originations | 142,768 | 136,780 | 94,434 | 113,450 | 126,728 |
Net Income (Loss) | $ 16,924 | $ (33,050) | $ 22,971 | $ 20,865 | $ 19,200 |
ROAA (%) | 1.27 | (2.50) | 1.79 | 1.60 | 1.45 |
ROATCE(%)(1) | 18.48 | (28.15) | 21.85 | 19.33 | 17.35 |
Net Interest Margin (FTE) (%)(1) | 3.50 | 3.69 | 3.77 | 3.97 | 3.84 |
Efficiency Ratio (FTE) (%)(1) | 65.34 | 557.48 | 63.39 | 62.53 | 63.41 |
Non-Int. Income (Loss)/Op. Rev. (%) | 40.56 | (449.23) | 40.72 | 40.85 | 42.37 |
Earnings (loss) per common share - diluted | $ 0.65 | $ (1.27) | $ 0.89 | $ 0.81 | $ 0.76 |
Common Equity Tier 1 Capital Ratio (%)(3) | 10.84 | 10.28 | 10.60 | 10.81 | 10.52 |
Tang. Cmn. Equity/Tang. Assets (%)(1) | 8.24 | 8.72 | 8.85 | 9.05 | 8.77 |
Loans/Deposits (%) | 92.96 | 96.57 | 92.80 | 96.24 | 97.25 |
NPLs/Loans (%) | 1.45 | 1.71 | 1.34 | 0.19 | 0.17 |
NPAs/Assets (%) | 1.13 | 1.33 | 1.02 | 0.32 | 0.30 |
Criticized Loans/Loans (%) | 4.66 | 3.68 | 3.28 | 2.06 | 1.96 |
Allowance/NPLs (%) | 104.16 | 89.65 | 93.73 | 641.31 | 742.40 |
Allowance/Loans (%) | 1.51 | 1.53 | 1.25 | 1.20 | 1.23 |
NCOs/Average Loans (%)(1) | (0.17) | (0.03) | 0.71 | 0.26 | (0.10) |
Represents a non-GAAP financial measure. See "Non-GAAP Disclosure Reconciliation."
34 2. Data is approximate based on the data available at the time of release.
3. Capital ratios for the current quarter are to be considered preliminary until the Call Report for Alerus Financial, N.A. is filed.
Annual 21 - '25 | |||||||||||
($ in thousands, except where otherwise noted) | 2021 | 2022 | 2023 | 2024 | 2025 | CAGR | |||||
Total Assets | $ 3,392,691 | $ 3,779,637 | $ 3,907,713 | $ 5,261,673 | $ 5,230,084 | 11.4% | |||||
Total Loans | 1,758,020 | 2,443,994 | 2,759,583 | 3,992,534 | 4,048,022 | 23.2% | |||||
Total Deposits | 2,920,551 | 2,915,484 | 3,095,611 | 4,378,410 | 4,192,003 | 9.5% | |||||
Tangible Common Equity(1) | 307,663 | 287,330 | 305,186 | 365,894 | 445,929 | 9.7% | |||||
Retirement and Benefit Services AUA/AUM(2) | $ 36,732,938 | $ 32,122,520 | $ 36,682,425 | $ 40,728,699 | $ 44,925,311 | 5.2% | |||||
Wealth Advisory Services AUA/AUM | 4,039,931 | 3,582,648 | 4,018,846 | 4,579,189 | 4,850,600 | 4.7% | |||||
Mortgage Originations | 1,836,064 | 812,314 | 364,114 | 334,318 | 484,775 | ||||||
Net Income (Loss) | $ 52,681 | $ 40,005 | $ 11,696 | $ 17,780 | $ 17,439 | ||||||
ROAA (%) | 1.66 | 1.14 | 0.31 | 0.39 | 0.33 | ||||||
ROATCE(%)(1) | 18.89 | 15.09 | 5.37 | 7.14 | 6.29 | ||||||
Net Interest Margin (FTE) (%)(1) | 2.90 | 3.04 | 2.46 | 2.56 | 3.53 | ||||||
Efficiency Ratio (FTE) (%)(1) | 70.02 | 72.86 | 85.85 | 77.92 | 84.10 | ||||||
Non-Int. Income (Loss)/Op. Rev. (%) | 62.86 | 52.72 | 47.74 | 51.78 | 23.12 | ||||||
Earnings (loss) per common share - diluted | $ 2.97 | $ 2.10 | $ 0.58 | $ 0.83 | $ 0.68 | ||||||
Common Equity Tier 1 Capital Ratio (%) | 14.65 | 13.39 | 11.82 | 9.91 | 10.28 | ||||||
Tang. Cmn. Equity/Tang. Assets (%)(1) | 9.21 | 7.74 | 7.94 | 7.13 | 8.72 | ||||||
Loans/Deposits (%) | 60.19 | 83.83 | 89.15 | 91.19 | 96.57 | ||||||
NPLs/Loans (%) | 0.12 | 0.16 | 0.32 | 1.58 | 1.71 | ||||||
NPAs/Assets (%) | 0.09 | 0.10 | 0.22 | 1.20 | 1.33 | ||||||
Criticized Loans/Loans (%) | 1.21 | 1.44 | 2.23 | 4.97 | 3.68 | ||||||
Allowance/NPLs (%) | 1,437.05 | 820.93 | 410.34 | 95.30 | 89.65 | ||||||
Allowance/Loans (%) | 1.80 | 1.27 | 1.30 | 1.50 | 1.53 | ||||||
NCOs/Average Loans (%)(1) | (0.04) | 0.02 | (0.04) | 0.13 | 0.05 | ||||||
35 | 1. Represents a non-GAAP financial measure. See "Non-GAAP Disclosure Reconciliation." | ||||||||||
2. Data is approximate based on the data available at the time of release.
NON-GAAP DISCLOSURE RECONCILIATION($ in thousands, except where otherwise noted) | Quarterly | ||||
3Q 2025 | 4Q 2025 | 1Q 2026 | 2Q 2026 | 3Q 2026 | |
Tangible common equity to tangible assets | |||||
Total common stockholders' equity | $ 550,688 | $ 564,934 | $ 574,693 | $ 583,143 | $ 576,850 |
Less: Goodwill | 85,634 | 85,634 | 85,634 | 85,634 | 85,634 |
Less: Other intangible assets | 35,753 | 33,371 | 31,397 | 29,422 | 27,448 |
Tangible common equity (a) | 429,301 | 445,929 | 457,662 | 468,087 | 463,768 |
Total assets | 5,330,573 | 5,230,084 | 5,287,971 | 5,288,718 | 5,403,103 |
Less: Goodwill | 85,634 | 85,634 | 85,634 | 85,634 | 85,634 |
Less: Other intangible assets | 35,753 | 33,371 | 31,397 | 29,422 | 27,448 |
Tangible assets (b) | 5,209,186 | 5,111,079 | 5,170,940 | 5,173,662 | 5,290,021 |
Tangible common equity to tangible assets (a)/(b) | 8.24% | 8.72% | 8.85% | 9.05% | 8.77% |
Tangible book value per common share | |||||
Tangible common equity (a) | 429,301 | 445,929 | 457,662 | 468,087 | 463,768 |
Common shares issued and outstanding (c) | 25,397 | 25,406 | 25,214 | 24,986 | 24,744 |
Tangible book value per common share (a)/(c) | $ 16.90 | $ 17.55 | $ 18.15 | $ 18.73 | $ 18.74 |
Return on average tangible common equity | |||||
Net income (loss) | $ 16,924 | $ (33,050) | $ 22,971 | $ 20,865 | $ 19,200 |
Add: Intangible amortization expense (net of tax)(1) | 2,141 | 1,882 | 1,559 | 1,559 | 1,559 |
Net income (loss), excluding intangible amortization (d) | 19,065 | (31,168) | 24,530 | 22,424 | 20,759 |
Average total equity | 524,459 | 552,106 | 566,563 | 574,862 | 582,770 |
Less: Average goodwill | 85,634 | 85,634 | 85,634 | 85,634 | 85,634 |
Less: Average other intangible assets (net of tax)(1) | 29,540 | 27,270 | 25,664 | 24,003 | 22,447 |
Average tangible common equity (e) | 409,285 | 439,202 | 455,265 | 465,225 | 474,689 |
Return on average tangible common equity (d)/(e) | 18.48% | (28.15)% | 21.85% | 19.33% | 17.35% |
Efficiency ratio | |||||
Noninterest expense | $ 50,541 | $ 51,881 | $ 50,392 | $ 52,883 | $ 53,868 |
Less: Intangible amortization expense | 2,710 | 2,382 | 1,974 | 1,974 | 1,974 |
Noninterest expense excluding intangible amortization (f) | 47,831 | 49,499 | 48,418 | 50,909 | 51,894 |
Net interest income | 43,136 | 45,174 | 44,912 | 47,712 | 46,723 |
Noninterest income (loss) | 29,430 | (36,949) | 30,847 | 32,945 | 34,350 |
Tax-equivalent adjustment for loans and securities | 638 | 654 | 619 | 755 | 771 |
Total tax-equivalent revenue (g) | 73,204 | 8,879 | 76,378 | 81,412 | 81,844 |
Efficiency ratio (f)/(g) | 65.34% | 557.48% | 63.39% | 62.53% | 63.41% |
Pre-provision net revenue | |||||
Net interest income | $ 43,136 | $ 45,174 | $ 44,912 | $ 47,712 | $ 46,723 |
Add: Noninterest income (loss) | 29,430 | (36,949) | 30,847 | 32,945 | 34,350 |
Less: Noninterest expense | 50,541 | 51,881 | 50,392 | 52,883 | 53,868 |
Pre-provision net revenue (loss) | 22,025 | (43,656) | 25,367 | 27,774 | 27,205 |
36 1. Adjusted items are shown after-tax using a 21% tax rate. | |||||
($ in thousands, except for per share data and where otherwise noted) | Quarterly | ||||
3Q 2025 | 4Q 2025 | 1Q 2026 | 2Q 2026 | 3Q 2026 | |
Twelve Months Ended | |||||||
September 30, 2026 | |||||||
Adjusted noninterest income Noninterest income (loss) | $ 29,430 | $ (36,949) | $ 30,847 | $ 32,945 | $ 34,350 | $ 61,193 | |
Less: Adjusted noninterest income (loss) items | |||||||
Net gains (losses) on investment securities | - | (68,403) | - | - | - | (68,403) | |
Net gains (losses) on sale of loans | (35) | - | - | - | - | - | |
Net gains (losses) on sale/disposal of premises and equipment | - | (445) | (21) | 653 | 1,554 | 1,741 | |
Total adjusted noninterest income (loss) items (a) | (35) | (68,848) | (21) | 653 | 1,554 | (66,662) | |
Adjusted noninterest income (b) | 29,465 | 31,899 | 30,868 | 32,292 | 32,796 | 127,855 | |
Adjusted Noninterest income as a percentage of adjusted revenue Adjusted noninterest income (b) | $ 29,465 | $ 31,899 | $ 30,868 | $ 32,292 | $ 32,796 | $ 127,855 | |
Net interest income (c) | 43,136 | 45,174 | 44,912 | 47,712 | 46,723 | 184,521 | |
72,601 | 77,073 | 75,780 | 80,004 | 79,519 | 312,376 | |
40.58% | 41.39% | 40.73% | 40.36% | 41.24% | 40.93% | |
$ 6,374 | $ (61,647) | $ 6,204 | $ 7,893 | $ 8,685 | $ (38,865) | |
- | (68,403) | - | - | - | (68,403) | |
(35) | - | - | - | - | - | |
- (445) (21) 653 1,554 | 1,741 | |||||
6,409 | 7,201 | 6,225 | 7,240 | 7,131 | 27,797 | |
Adjusted revenue (b) + (c) = (d)
Adjusted noninterest income as a percentage of adjusted revenue (b)/(d)
Adjusted banking fees and other income(1)
Banking fees and other income (loss)(1)
Less: Net gains (losses) on investment securities Less: Net gains (losses) on sale of loans
Less: Net gains (losses) on sale/disposal of premises and equipment Adjusted banking fees and other income(1)(e)
Adjusted revenue (d) | $ 72,601 $ 77,073 $ 75,780 $ 80,004 $ 79,519 | 312,376 |
Adjusted banking fees and other income as a percentage of adjusted revenue (e)/(d) | 8.83% 9.34% 8.21% 9.05% 8.97% | 8.90% |
Adjusted noninterest expense | |||||
Noninterest expense | $ 50,541 | $ 51,881 | $ 50,392 | $ 52,883 | $ 53,868 |
Less: Adjusted noninterest expense items | |||||
HMNF merger- and acquisition-related expenses | (43) | (112) | (34) | 6 | 15 |
Severance and signing bonus expense(2) | 104 | 212 | 167 | 216 | 144 |
Total adjusted noninterest expense items (f) | 61 | 100 | 133 | 222 | 159 |
Adjusted noninterest expense (g) | 50,480 | 51,781 | 50,259 | 52,661 | 53,709 |
Adjusted pre-provision net revenue | |||||
Net interest income | $ 43,136 | $ 45,174 | $ 44,912 | $ 47,712 | $ 46,723 |
Add: Adjusted noninterest income (b) | 29,465 | 31,899 | 30,868 | 32,292 | 32,796 |
Less: Adjusted noninterest expense (g) | 50,480 | 51,781 | 50,259 | 52,661 | 53,709 |
Adjusted pre-provision net revenue (h) | 22,121 | 25,292 | 25,521 | 27,343 | 25,810 |
Adjusted Efficiency ratio | |||||
Adjusted noninterest expense (g) | $ 50,480 | $ 51,781 | $ 50,259 | $ 52,661 | $ 53,709 |
Less: Intangible amortization expense | 2,710 | 2,382 | 1,974 | 1,974 | 1,974 |
Adjusted noninterest expense for efficiency ratio (i) | 47,770 | 49,399 | 48,285 | 50,687 | 51,735 |
Tax-equivalent revenue | |||||
Net interest income | 43,136 | 45,174 | 44,912 | 47,712 | 46,723 |
Add: Adjusted noninterest income (b) | 29,465 | 31,899 | 30,868 | 32,292 | 32,796 |
Add: Tax-equivalent adjustment for loans and securities | 638 | 654 | 619 | 755 | 771 |
Total tax-equivalent revenue (j) | 73,239 | 77,727 | 76,399 | 80,759 | 80,290 |
Adjusted efficiency ratio (i)/(j) | 65.22% | 63.55% | 63.20% | 62.76% | 64.44% |
1. Banking fees and other revenue consists of service charges on deposit accounts, mortgage income, interchange income and other noninterest income.
37 2. Includes HMNF acquisition-related personnel expenses.
NON-GAAP DISCLOSURE RECONCILIATIONLettered items are continued from the prior slide | Quarterly | ||||
($ in thousands, except for per share data and where otherwise noted) | 3Q 2025 | 4Q 2025 | 1Q 2026 | 2Q 2026 | 3Q 2026 |
Adjusted net income | |||||
Net income (loss) | $ 16,924 | $ (33,050) | $ 22,971 | $ 20,865 | $ 19,200 |
Less: Adjusted noninterest income (loss) items (net of tax)(1) (a) | (28) | (54,390) | (17) | 516 | 1,228 |
Add: Adjusted noninterest expense items (net of tax)(1) (f) | 48 | 79 | 105 | 175 | 126 |
Adjusted net income (k) | 17,000 | 21,419 | 23,093 | 20,524 | 18,098 |
Adjusted return on average assets | |||||
Average total assets (l) | 5,273,306 | 5,252,046 | 5,218,515 | 5,226,319 | 5,255,954 |
Adjusted return on average total assets (k)/(l) | 1.28% | 1.62% | 1.79% | 1.58% | 1.37% |
Adjusted return on average total equity | |||||
Average total equity (m) | 524,459 | 552,106 | 566,563 | 574,862 | 582,770 |
Adjusted return on average total equity (k)/(m) | 12.86% | 15.39% | 16.53% | 14.32% | 12.32% |
Adjusted pre-provision net revenue as a percentage of average total assets | |||||
Adjusted pre-provision net revenue (h) | $ 22,121 | $ 25,292 | $ 25,521 | $ 27,343 | $ 25,810 |
Average total assets (l) | 5,273,306 | 5,252,046 | 5,218,515 | 5,226,319 | 5,255,954 |
Adjusted pre-provision net revenue as a percentage of average total assets (h)/(l) | 1.66% | 1.91% | 1.98% | 2.10% | 1.95% |
Adjusted return on average tangible common equity | |||||
Adjusted net income (k) | $ 17,000 | $ 21,419 | $ 23,093 | $ 20,524 | $ 18,098 |
Add: Intangible amortization expense (net of tax)(1) | 2,141 | 1,882 | 1,559 | 1,559 | 1,559 |
Adjusted net income, excluding intangible amortization (n) | 19,141 | 23,301 | 24,652 | 22,083 | 19,657 |
Average total equity (m) | 524,459 | 552,106 | 566,563 | 574,862 | 582,770 |
Less: Average goodwill | 85,634 | 85,634 | 85,634 | 85,634 | 85,634 |
Less: Average other intangible assets (net of tax)(1) | 29,540 | 27,270 | 25,664 | 24,003 | 22,447 |
Average tangible common equity (o) | 409,285 | 439,202 | 455,265 | 465,225 | 474,689 |
Adjusted return on average tangible common equity (n)/(o) | 18.55% | 21.05% | 21.96% | 19.04% | 16.43% |
Adjusted earnings per common share - diluted | |||||
Adjusted net income (k) | $ 17,000 | $ 21,419 | $ 23,093 | $ 20,524 | $ 18,098 |
Less: Dividends and undistributed earnings allocated to participating securities | 148 | (462) | 206 | 192 | 171 |
Adjusted net income available to common stockholders (p) | 16,852 | 21,881 | 22,887 | 20,332 | 17,927 |
Weighted-average common shares outstanding for diluted earnings per share (q) | 25,713 | 25,710 | 25,679 | 25,395 | 25,161 |
Adjusted earnings per common share - diluted (p)/(q) | 0.66 | 0.85 | 0.89 | 0.80 | 0.71 |
Net charge-offs (recoveries) to average loans | |||||
Net charge-offs (recoveries)(r) | $ (1,715) | $ (311) | $ 7,027 | $ 2,575 | $ (1,018) |
Average total loans (s) | 4,036,936 | 4,049,082 | 4,029,719 | 4,032,142 | 4,026,351 |
Net charge-offs (recoveries) to average loans (r)/(s) | (0.17)% | (0.03)% | 0.71% | 0.26% | (0.10)% |
Net interest margin (on a tax-equivalent basis) | |||||
Net interest income | 43,136 | 45,174 | 44,912 | 47,712 | 46,723 |
Add: Tax equivalent adjustment for loans and securities | 638 | 654 | 619 | 755 | 771 |
Net interest income (on a tax-equivalent basis)(1) (t) | 43,774 | 45,828 | 45,531 | 48,467 | 47,494 |
Average interest-earning assets (u) | 4,965,849 | 4,926,530 | 4,901,399 | 4,896,740 | 4,912,782 |
Net interest margin (on a tax-equivalent basis)(1) (t)/(u) | 3.50% | 3.69% | 3.77% | 3.97% | 3.84% |
38 1. Adjusted items are shown after-tax using a 21% tax rate.
NON-GAAP DISCLOSURE RECONCILIATION($ in thousands, except where otherwise noted) | Annual | ||||
2021 | 2022 | 2023 | 2024 | 2025 | |
Tangible common equity to tangible assets | |||||
Total common stockholders' equity | $ 359,403 | $ 356,872 | $ 369,127 | $ 495,410 | $ 564,934 |
Less: Goodwill | 31,490 | 47,087 | 46,783 | 85,634 | 85,634 |
Less: Other intangible assets | 20,250 | 22,455 | 17,158 | 43,882 | 33,371 |
Tangible common equity (a) | 307,663 | 287,330 | 305,186 | 365,894 | 445,929 |
Total assets | 3,392,691 | 3,779,637 | 3,907,713 | 5,261,673 | 5,230,084 |
Less: Goodwill | 31,490 | 47,087 | 46,783 | 85,634 | 85,634 |
Less: Other intangible assets | 20,250 | 22,455 | 17,158 | 43,882 | 33,371 |
Tangible assets (b) | 3,340,951 | 3,710,095 | 3,843,772 | 5,132,157 | 5,111,079 |
Tangible common equity to tangible assets (a)/(b) | 9.21% | 7.74% | 7.94% | 7.13% | 8.72% |
Tangible book value per common share | |||||
Tangible common equity (a) | 307,663 | 287,330 | 305,186 | 365,894 | 445,929 |
Common shares issued and outstanding (c) | 17,213 | 19,992 | 19,734 | 25,345 | 25,406 |
Tangible book value per common share (a)/(c) | $ 17.87 | $ 14.37 | $ 15.46 | $ 14.44 | $ 17.55 |
Return on average tangible common equity | |||||
Net income (loss) | $ 52,681 | $ 40,005 | $ 11,696 | $ 17,780 | $ 17,439 |
Add: Intangible amortization expense (net of tax)(1) | 3,460 | 3,756 | 4,184 | 5,353 | 8,304 |
Net income (loss), excluding intangible amortization (d) | 56,141 | 43,761 | 15,880 | 23,133 | 25,743 |
Average total equity | 346,059 | 346,355 | 358,268 | 397,738 | 525,323 |
Less: Average goodwill | 30,385 | 39,415 | 46,959 | 56,237 | 85,634 |
Less: Average other intangible assets (net of tax)(1) | 18,548 | 17,018 | 15,624 | 17,534 | 30,470 |
Average tangible common equity (e) | 297,126 | 289,922 | 295,685 | 323,967 | 409,219 |
Return on average tangible common equity (d)/(e) | 18.89% | 15.09% | 5.37% | 7.14% | 6.29% |
Efficiency Ratio | |||||
Noninterest expense | $ 168,909 | $ 158,770 | $ 150,157 | $ 180,675 | $ 201,227 |
Less: Intangible amortization expense | 4,380 | 4,754 | 5,296 | 6,776 | 10,511 |
Noninterest expense excluding intagible amortization (f) | 164,529 | 154,016 | 144,861 | 173,899 | 190,716 |
Net interest income | 87,099 | 99,729 | 87,839 | 107,045 | 172,499 |
Noninterest income (loss) | 147,387 | 111,223 | 80,229 | 114,930 | 51,876 |
Tax equivalent adjustment for loans and securities | 492 | 429 | 671 | 1,202 | 2,402 |
Total tax-equivalent revenue (g) | 234,978 | 211,381 | 168,739 | 223,177 | 226,777 |
Efficiency ratio (f)/(g) | 70.02% | 72.86% | 85.85% | 77.92% | 84.10% |
39 1. Adjusted items are shown after-tax using a 21% tax rate. | |||||
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