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    Alerus Financial Corporation Announces Fourth Quarter 2025 Results, Including Balance Sheet Repositioning

    1/28/26 4:30:00 PM ET
    $ALRS
    Major Banks
    Finance
    Get the next $ALRS alert in real time by email

    MINNEAPOLIS, Jan. 28, 2026 (GLOBE NEWSWIRE) -- Alerus Financial Corporation (NASDAQ:ALRS), or the Company, reported a net loss of $33.1 million for the fourth quarter of 2025, or $(1.27) per diluted common share, compared to net income of $16.9 million, or $0.65 per diluted common share, for the third quarter of 2025, and a net loss of $0.1 million, or $0.00 per diluted common share, for the fourth quarter of 2024. 

    During the fourth quarter of 2025, the Company sold $360.1 million of available-for-sale securities as part of a strategic balance sheet repositioning. The sale resulted in a one-time pre-tax net loss of $68.4 million. Proceeds from the sale were reinvested into new, higher yielding investment securities. Adjusted pre-provision net revenue (non-GAAP)(1) was $25.3 million, compared to $22.1 million for the third quarter 2025. 

    CEO Comments

    President and Chief Executive Officer Katie O'Neill Lorenson said, "2025 was a defining year for Alerus. In our first full year integrating the HMN Financial, Inc. ("HMNF") acquisition, we exceeded our financial performance expectations with an adjusted return on average assets ("ROAA") (non-GAAP)(1) of 1.35% and adjusted efficiency ratio (non-GAAP)(1) of 64.45% for the year ended December 31, 2025. We demonstrated our capabilities as a high-quality consolidator with strong retention of team members and clients throughout the transaction and integration process. 

    We also took decisive strategic action to position the company for the next stage of growth. Our strategic balance sheet repositioning removed the drag of legacy low-yielding securities, and positions Alerus for higher profitability in 2026 and beyond. In parallel, we de-risked the loan portfolio by reducing commercial real estate ("CRE") concentrations, completing targeted loan sales, and managing renewals with greater selectivity, all while achieving strong commercial and industrial ("C&I") loan growth. These actions strengthened our capital and risk profile, with tangible common equity to tangible assets rising to 8.72% and reserves ending at 1.53% of loans. 

    Strong banking operating results were bolstered by differentiated and durable fee-based revenue, where Alerus maintained our position as an industry leader with adjusted noninterest income as a percentage of revenue (non-GAAP)(1) of 40.77%. Adjusted non-interest income (non-GAAP)(1) increased 7.0% year over year, driven by sustained organic growth across our retirement and wealth segments, as assets under administration and management expanded to a combined $49.8 billion. Throughout 2025, we strengthened our operating foundation by implementing new core systems and processes to support client and advisor growth. While we will continue to invest in people and technology, we are very focused on delivering positive operating leverage to drive returns and tangible book value growth higher. 

    Our disciplined focus on shareholder value translated into tangible book value growth of 21.54% from the prior year, supported by a fourth quarter adjusted return on average tangible equity (non-GAAP)(1) of 21.05%. As we enter 2026, our commitment is clear - drive superior returns, strengthen long-term shareholder value, and execute with the discipline and vision enabled by our diversified business model and exceptional team." 

    Fourth Quarter Highlights

    • Diluted earnings (loss) per common share of $(1.27); adjusted diluted earnings per common share (non-GAAP)(1) of $0.85, versus $0.66 in the third quarter of 2025.
    • Return on average total assets of (2.50)%; adjusted return on average total assets (non-GAAP)(1) of 1.62%, versus 1.28% in the third quarter of 2025.
    • Return on average tangible common equity of (28.15)%; adjusted return on average tangible common equity (non-GAAP)(1) of 21.05%, versus 18.55% in the third quarter of 2025.
    • Net interest income was $45.2 million, an increase of 4.7% from $43.1 million in the third quarter of 2025.
    • Net interest margin was 3.69%, an increase compared to 3.50% in the third quarter of 2025. 
    • Retirement and benefit services income was $17.3 million, an increase of 4.6% from $16.5 million in the third quarter of 2025. Assets under administration grew 2.1% over the prior quarter.
    • Wealth management income was $7.4 million, an increase of 13.4% from $6.6 million in the third quarter of 2025. Assets under management grew 0.8% over the prior quarter.
    • Efficiency ratio of 557.48%; adjusted efficiency ratio (non-GAAP)(1) of 63.55%, versus 65.22% in the third quarter of 2025.
    • Pre-provision net revenue of $(43.7) million; adjusted pre-provision net revenue (non-GAAP)(1) of $25.3, an increase of 14.3% from $22.1 in the third quarter of 2025.
    • Net charge-offs (recoveries) to average loans was (0.03)%.
    • Tangible book value per common share (non-GAAP)(1) was $17.55 as of December 31, 2025, an increase of 3.8% from $16.90 as of September 30, 2025.
    • Tangible common equity to tangible assets ratio (non-GAAP)(1) was 8.72% as of December 31, 2025, an increase from 8.24% as of September 30, 2025. 

    Full Year 2025 Highlights

    • Diluted earnings per common share of $0.68; adjusted diluted earnings per common share (non-GAAP)(1) of $2.78, versus $1.45 for the full year 2024.
    • Return on average total assets of 0.33%; adjusted return on average total assets (non-GAAP)(1) of 1.35%, versus 0.69% for the full year 2024.
    • Return on average tangible common equity of 6.29%; adjusted return on average tangible common equity (non-GAAP)(1) of 19.48%, versus 11.22% in the full year 2024.
    • Net interest income was $172.5 million, an increase of 61.1% from $107.0 million for the year ended December 31, 2024.
    • Net interest margin was 3.53%, an increase of 97 basis points from 2.56% for the year ended December 31, 2024.
    • Total loans at the end of 2025 grew 1.4% over the prior year.
    • Noninterest income was $51.9 million; adjusted noninterest income (non-GAAP)(1) was $118.7 million, an increase of 7.0% compared to $111.0 million for the year ended December 31, 2024. 
    • Retirement and benefit services income was $65.9 million, an increase of 2.4% from $64.4 million for the year ended December 31, 2024. Assets under administration grew 10.3% over the prior year end.
    • Wealth management income was $28.3 million, an increase of 8.0% from $26.2 million for the year ended December 31, 2024. Assets under management grew 5.9% over the prior year end.
    • Mortgage originations were $484.8 million, an increase of 54.4% from $334.3 million for the year ended December 31, 2024.
    • Efficiency ratio of 84.10%; adjusted efficiency ratio (non-GAAP)(1) of 64.45%, versus 73.45% for the full year 2024.
    • Pre-provision net revenue of $23.1 million; adjusted pre-provision net revenue (non-GAAP)(1) of $91.5 million, an increase of 82.0% from $50.2 million for the full year 2024.
    • Net charge-offs to average loans of 0.05%; adjusted net recoveries to average loans (non-GAAP)(1) of (0.02)%, versus adjusted net charge-offs to average loans (non-GAAP)(1) of 0.13% for the full year 2024.
    • Tangible book value per common share (non-GAAP)(1) was $17.55, compared to $14.44 as of December 31, 2024.
    • Tangible common equity to tangible assets ratio (non-GAAP)(1) was 8.72%, an increase from 7.13% as of December 31, 2024.

    _______________

    (1) Represents a non-GAAP financial measure. See "Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures."

    Selected Financial Data (unaudited)

      As of and for the 
      Three months ended  Year ended 
      December 31,  September 30,  December 31,  December 31,  December 31, 
    (dollars and shares in thousands, except per share data) 2025  2025  2024  2025  2024 
    Performance Ratios                    
    Return on average total assets  (2.50)%  1.27%  (0.00)%  0.33%  0.39%
    Adjusted return on average total assets (1)  1.62%  1.28%  0.85%  1.35%  0.69%
    Return on average common equity  (23.75)%  12.80%  (0.05)%  3.32%  4.47%
    Return on average tangible common equity (1)  (28.15)%  18.48%  2.38%  6.29%  7.14%
    Adjusted return on average tangible common equity (1)  21.05%  18.55%  14.89%  19.48%  11.22%
    Noninterest (loss) income as a % of revenue  (449.23)%  40.56%  46.94%  23.12%  51.78%
    Adjusted noninterest (loss) income as a % of revenue (1)  41.39%  40.58%  44.27%  40.77%  50.90%
    Net interest margin (tax-equivalent)  3.69%  3.50%  3.20%  3.53%  2.56%
    Efficiency ratio (1)  557.48%  65.34%  79.47%  84.10%  77.92%
    Adjusted efficiency ratio (1)  63.55%  65.22%  68.97%  64.45%  73.45%
    Net charge-offs (recoveries) to average loans  (0.03)%  (0.17)%  0.13%  0.05%  0.13%
    Adjusted net charge-offs (recoveries) to average loans (1)  (0.03)%  (0.17)%  0.13%  (0.02)%  0.13%
    Dividend payout ratio  (16.54)%  32.31%  —%  122.06%  95.18%
    Per Common Share                    
    Earnings (loss) per common share - basic $(1.28) $0.66  $—  $0.69  $0.84 
    Earnings (loss) per common share - diluted $(1.27) $0.65  $—  $0.68  $0.83 
    Adjusted earnings per common share - diluted (1) $0.85  $0.66  $0.45  $2.78  $1.45 
    Dividends declared per common share $0.21  $0.21  $0.20  $0.83  $0.79 
    Book value per common share $22.24  $21.68  $19.55         
    Tangible book value per common share (1) $17.55  $16.90  $14.44         
    Average common shares outstanding - basic  25,398   25,395   24,857   25,380   21,047 
    Average common shares outstanding - diluted  25,710   25,713   25,144   25,697   21,321 
    Other Data                    
    Retirement and benefit services assets under administration/management $44,925,311  $44,005,277  $40,728,699         
    Wealth management assets under administration/management $4,850,600  $4,812,250  $4,579,189         
    Mortgage originations $136,780  $142,768  $88,576  $484,775  $334,318 

    _______________

    (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 fourth quarter of 2025 was $45.2 million, a $2.0 million, or 4.7%, increase from the third quarter of 2025. The increase was primarily due to lower cost of funds and a one-time $2.4 million adjustment related to a sold loan participation. Interest expense decreased $2.3 million, or 8.3%, from the third quarter of 2025, as the average rates paid on deposits and borrowings declined. 

    Net interest income increased $6.9 million, or 18.0%, from $38.3 million for the fourth quarter of 2024. Interest income increased $3.1 million, or 4.6%, from the fourth quarter of 2024, primarily driven by earning assets acquired in the HMNF acquisition, organic loan growth at higher yields, and purchase accounting accretion. Interest expense decreased $3.8 million, or 13.1%, from the fourth quarter of 2024, as the average rates paid on deposits and borrowings declined, which more than offset the increase in interest-bearing deposits and borrowing balances.

    Net interest margin (on a tax-equivalent basis) was 3.69% for the fourth quarter of 2025, a 19 basis point increase from 3.50% for the third quarter of 2025, and a 49 basis point increase from 3.20% for the fourth quarter of 2024. The quarter over quarter increase was mainly attributable to lower cost of funds and a one-time adjustment related to a sold loan participation, offset by less purchase accounting accretion. The increase from the fourth quarter of 2024 was primarily driven by lower cost of funds and higher rates on interest-earning assets, offset by less purchase accounting accretion. 

    Noninterest (Loss) Income

    Noninterest (loss) income for the fourth quarter of 2025 was $(36.9) million, a $66.4 million, or 225.5%, decrease from the third quarter of 2025. The quarter over quarter decrease was driven by the previously announced strategic balance sheet repositioning, which resulted in a $68.4 million loss on the sale of investment securities in the fourth quarter of 2025. Adjusted noninterest income (non-GAAP)(1) was $31.9 million in the fourth quarter of 2025, an increase of 8.3% compared to $29.5 million in the third quarter of 2025. Wealth management revenue increased $0.9 million, or 13.4%, from the third quarter of 2025, primarily driven by asset-based fees. Retirement and benefit services revenue increased $0.8 million, or 4.6%, from the third quarter of 2025, primarily driven by both asset-based and transaction-based fees. Other noninterest income increased $0.6 million, or 26.3%, from the third quarter of 2025, primarily driven by increased swap fee revenue. 

    Noninterest income for the fourth quarter of 2025 decreased by $70.8 million, or 209.1%, from the fourth quarter of 2024. This decrease was driven by the previously announced strategic balance sheet repositioning recognized in the fourth quarter of 2025. Adjusted noninterest income (non-GAAP)(1) was $31.9 million in the fourth quarter of 2025, an increase of 4.9% compared to $30.4 million in the fourth quarter of 2024. Other interest income decreased $3.6 million, or 56.3%, in the fourth quarter of 2025 compared to the fourth quarter of 2024, primarily due to a gain on the sale of fixed assets related to the sale of a Fargo, North Dakota office in the fourth quarter of 2024. Retirement and benefit services revenue increased $0.8 million, or 4.7%, in the fourth quarter of 2025 compared to the fourth quarter of 2024, primarily driven by asset-based fees, due to a 10.3% increase in assets under administration/management during that same period. 

    _______________

    (1) Represents a non-GAAP financial measure. See "Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures."

    Noninterest Expense

    Noninterest expense for the fourth quarter of 2025 was $51.9 million, a $1.3 million, or 2.7%, increase from the third quarter of 2025. Occupancy and equipment expense increased $0.8 million, or 28.4%, from the third quarter of 2025, primarily driven by the opening of a new facility in our Fargo, North Dakota market. Business services, software and technology expense increased $0.5 million, or 8.1%, from the third quarter of 2025, primarily due to data processing expenses. Professional fees and assessments increased $0.4 million, or 15.4%, from the third quarter of 2025, primarily driven by an increase in fees related to the balance sheet repositioning in the fourth quarter of 2025. Mortgage and lending expenses decreased $0.4 million, or 38.9%, from the third quarter of 2025, primarily driven by a decrease in reimbursable loan expenses. 

    Noninterest expense for the fourth quarter of 2025 decreased $8.6 million, or 14.2%, from $60.5 million in the fourth quarter of 2024. The decrease was primarily driven by decreases in professional fees and assessments, compensation expense, and intangible amortization expense, offset by an increase in occupancy and equipment expense. In the fourth quarter of 2025, professional fees and assessments decreased $7.9 million, or 71.8%, from the fourth quarter of 2024, primarily due to acquisition-related expenses in connection with the HMNF acquisition incurred in 2024. Compensation expense decreased $1.5 million, or 5.6% compared to the fourth quarter of 2024 primarily due to lower headcount. Intangible amortization expense decreased $0.4 million, or 15.0%, in the fourth quarter of 2025, primarily due to the annual reset of the $33.5 million core deposit intangible recorded in connection with the HMNF acquisition. Occupancy and equipment expense increased $1.7 million, or 86.3%, from the fourth quarter of 2024, primarily driven by facility upgrades. 

    Financial Condition

    Total assets were $5.2 billion as of December 31, 2025, a decrease of $31.6 million, or 0.6%, from December 31, 2024. The decrease was primarily due to a $74.0 million decrease in available-for-sale investment securities and a $21.1 million decrease in held-to-maturity investment securities, partially offset by an increase of $55.5 million in loans held for investment and an increase of $15.3 million in operating lease right-of-use assets. 

    Loans Held for Investment

    Total loans held for investment were $4.0 billion as of December 31, 2025, an increase of $55.5 million, or 1.4%, from December 31, 2024. The increase was primarily driven by a $45.8 million increase in consumer loans and a $9.7 million increase in commercial loans. 

    The following table presents the composition of our loans held for investment portfolio as of the dates indicated: 

      December 31,  September 30,  June 30,  March 31,  December 31, 
    (dollars in thousands) 2025  2025  2025  2025  2024 
    Commercial                    
    Commercial and industrial $736,833  $702,135  $675,892  $658,446  $666,727 
    Commercial real estate                    
    Construction, land and development  246,238   349,768   352,749   360,024   294,677 
    Multifamily  383,505   374,761   333,307   353,060   363,123 
    Non-owner occupied  875,862   865,785   887,643   951,559   967,025 
    Owner occupied  427,260   435,320   440,170   424,880   371,418 
    Total commercial real estate  1,932,865   2,025,634   2,013,869   2,089,523   1,996,243 
    Agricultural                    
    Land  64,799   65,900   66,395   68,894   61,299 
    Production  62,500   63,051   67,931   64,240   63,008 
    Total agricultural  127,299   128,951   134,326   133,134   124,307 
    Total commercial  2,796,997   2,856,720   2,824,087   2,881,103   2,787,277 
    Consumer                    
    Residential real estate                    
    First lien  874,737   894,402   901,738   907,534   921,019 
    Construction  33,703   34,124   35,754   38,553   33,547 
    HELOC  260,883   234,681   200,624   175,600   162,509 
    Junior lien  36,844   40,434   41,450   43,740   44,060 
    Total residential real estate  1,206,167   1,203,641   1,179,566   1,165,427   1,161,135 
    Other consumer  44,858   41,715   41,003   38,955   44,122 
    Total consumer  1,251,025   1,245,356   1,220,569   1,204,382   1,205,257 
    Total loans $4,048,022  $4,102,076  $4,044,656  $4,085,485  $3,992,534 
                         

    Deposits

    Total deposits were $4.2 billion as of December 31, 2025, a decrease of $186.4 million, or 4.3%, from December 31, 2024. Noninterest-bearing deposits decreased $95.6 million and interest-bearing deposits decreased $90.8 million from December 31, 2024. The decrease was primarily driven by a decrease in high-cost time deposits, which included $22.2 million of brokered CDs that matured in 2025 and were not renewed. 

    The following table presents the composition of the Company's deposit portfolio as of the dates indicated: 

      December 31,  September 30,  June 30,  March 31,  December 31, 
    (dollars in thousands) 2025  2025  2025  2025  2024 
    Noninterest-bearing demand $807,896  $776,791  $790,300  $889,270  $903,466 
    Interest-bearing                    
    Interest-bearing demand  1,296,315   1,256,687   1,214,597   1,283,031   1,220,173 
    Savings accounts  173,759   174,113   175,586   177,341   165,882 
    Money market savings  1,337,491   1,460,006   1,358,516   1,472,127   1,381,924 
    Time deposits  576,542   745,056   798,469   663,522   706,965 
    Total interest-bearing  3,384,107   3,635,862   3,547,168   3,596,021   3,474,944 
    Total deposits $4,192,003  $4,412,653  $4,337,468  $4,485,291  $4,378,410 
                         

    Asset Quality

    Total nonperforming assets were $66.5 million as of December 31, 2025, increase of $3.6 million, or 5.7%, from December 31, 2024. As of December 31, 2025, the allowance for credit losses on loans was $61.9 million, or 1.53% of total loans, compared to $59.9 million, or 1.50% of total loans, as of December 31, 2024. 

    The following table presents selected asset quality data as of and for the periods indicated: 

      As of and for the three months ended 
      December 31,  September 30,  June 30,  March 31,  December 31, 
    (dollars in thousands) 2025  2025  2025  2025  2024 
    Nonaccrual loans $66,148  $59,644  $51,276  $50,517  $54,433 
    Accruing loans 90+ days past due  —   —   202   —   8,453 
    Total nonperforming loans  66,148   59,644   51,478   50,517   62,886 
    OREO and repossessed assets  308   467   751   493   — 
    Total nonperforming assets $66,456  $60,111  $52,229  $51,010  $62,886 
    Net charge-offs (recoveries)  (311)  (1,715)  3,767   407   1,258 
    Net charge-offs (recoveries) to average loans  (0.03)%  (0.17)%  0.37%  0.04%  0.13%
    Nonperforming loans to total loans  1.63%  1.45%  1.27%  1.24%  1.58%
    Nonperforming assets to total assets  1.27%  1.13%  0.98%  0.96%  1.20%
    Allowance for credit losses on loans to total loans  1.53%  1.51%  1.47%  1.52%  1.50%
    Allowance for credit losses on loans to nonperforming loans  94%  104%  115%  123%  95%
                         

    For the fourth quarter of 2025, the Company had net recoveries of $0.3 million, compared to net recoveries of $1.7 million for the third quarter of 2025 and net charge-offs of $1.3 million for the fourth quarter of 2024. The quarter over quarter decrease in net recoveries was primarily due to a $1.9 million recovery on a commercial and industrial loan in the third quarter of 2025. 

    The Company recorded a provision release of $0.3 million for the fourth quarter of 2025, and no provision for credit losses for the third quarter of 2025, compared to a provision for credit losses of $12.0 million for the fourth quarter of 2024. The provision for credit losses for the fourth quarter of 2024 was primarily driven by a $7.8 million day-one provision for credit losses and unfunded commitment reserve related to the HMNF acquisition. 

    The unearned fair value adjustments on acquired loan portfolios were $43.8 million and $70.6 million as of December 31, 2025 and 2024, respectively.

    Capital

    Total stockholders' equity was $564.9 million as of December 31, 2025, an increase of $69.5 million from December 31, 2024. The change was primarily driven by an increase in accumulated other comprehensive income of $71.2 million. Tangible book value per common share (non-GAAP)(1) increased to $17.55 as of December 31, 2025, from $14.44 as of December 31, 2024. Tangible common equity to tangible assets (non-GAAP)(1) increased to 8.72% as of December 31, 2025, from 7.13% as of December 31, 2024. Common equity tier 1 capital to risk weighted assets increased to 10.28% as of December 31, 2025, from 9.91% as of December 31, 2024. 

    The following table presents our capital ratios as of the dates indicated: 

      December 31,  September 30,  December 31, 
      2025  2025  2024 
    Capital Ratios(1)            
    Alerus Financial Corporation Consolidated            
    Common equity tier 1 capital to risk weighted assets  10.28%  10.84%  9.91%
    Tier 1 capital to risk weighted assets  10.48%  11.05%  10.12%
    Total capital to risk weighted assets  12.87%  13.41%  12.49%
    Tier 1 capital to average assets  8.86%  9.49%  8.65%
    Tangible common equity / tangible assets(2)  8.72%  8.24%  7.13%
                 
    Alerus Financial, N.A.            
    Common equity tier 1 capital to risk weighted assets  10.41%  11.00%  10.18%
    Tier 1 capital to risk weighted assets  10.41%  11.00%  10.18%
    Total capital to risk weighted assets  11.66%  12.25%  11.43%
    Tier 1 capital to average assets  8.62%  9.31%  8.69%

    _______________

    (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, January 29, 2026, to discuss its financial results. Attendees are encouraged to register ahead of time for the call at investors.alerus.com. 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 (NASDAQ:ALRS) is a commercial wealth bank and national retirement services provider with corporate offices in Grand Forks, North Dakota, and the Minneapolis-St. Paul, Minnesota metropolitan area. Through its subsidiary, Alerus Financial, National Association (the "Bank"), Alerus provides diversified and comprehensive financial solutions to business and consumer clients, including banking, wealth services, and retirement and benefit plans and services. Alerus provides clients with a primary point of contact to help fully understand their unique needs and delivery channel preferences. Clients are provided with competitive products, valuable insight, and sound advice supported by digital solutions designed to meet their needs. 

    Alerus operates 27 banking and commercial wealth offices, with locations in Grand Forks and Fargo, North Dakota; the Minneapolis-St. Paul, Minnesota metropolitan area; Rochester, Minnesota; Southern Minnesota; Marshalltown, Iowa; Pewaukee, Wisconsin; and Phoenix and Scottsdale, Arizona. The Alerus Retirement and Benefit business serves advisors, brokers, employers, and plan participants across the United States. 

    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 book value per common share, return on average tangible common equity, efficiency ratio, pre-provision net revenue, adjusted noninterest income, adjusted noninterest expense, adjusted pre-provision net revenue, adjusted efficiency ratio, adjusted net income, adjusted return on average total assets, adjusted return on average tangible common equity, net interest margin (tax-equivalent), adjusted earnings per common share - diluted, and adjusted net charge-offs to average loans. 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: the strength of the local, state, national and international economies and financial markets (including effects of inflationary pressures and future monetary policies of the Federal Reserve and executive orders in response thereto); interest rate risk, including the effects of changes in interest rates; effects on the U.S. economy resulting from actions taken by the federal government, including the threat or implementation of tariffs, immigration enforcement and changes in foreign policy; disruptions to the global supply chain, including as a result of domestic or foreign policies; our ability to successfully manage credit risk, including in the commercial real estate portfolio, and maintain an adequate level of allowance for credit losses; business and economic conditions generally and in the financial services industry, nationally and within our market areas, including the level and impact of inflation rates and possible recession; our ability to raise additional capital to implement our business plan; credit risks and risks from concentrations (including by type of borrower, geographic area, collateral, and industry) within our loan portfolio; the concentration of large loans to certain borrowers (including commercial real estate loans); the level of nonperforming assets on our balance sheet; our ability to implement organic and acquisition growth strategies; the commencement, cost, and outcome of litigation and other legal proceedings and regulatory actions against us or to which the Company may become subject, including with respect to pending actions relating to the Company's previous employee stock ownership program fiduciary services commenced by government and private parties; the impact of economic or market conditions on our fee-based services; our ability to continue to grow our retirement and benefit services business; our ability to continue to originate a sufficient volume of residential mortgages; the occurrence of fraudulent activity, breaches or failures of our or our third-party vendors' information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud; 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 and expensive technological changes implemented by us and other parties in the financial services industry, including third-party vendors, which may be more difficult to implement or more expensive than anticipated or which may have unforeseen consequences to us and our customers, including the development and implementation of tools incorporating artificial intelligence; increased competition in the financial services industry, including from non-banks such as credit unions, Fintech companies and 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, including those who have balances above current Federal Deposit Insurance Corporation insurance limits; the effectiveness of our risk management framework; potential impairment to the goodwill the Company recorded in connection with our past acquisitions, including the acquisitions of Metro Phoenix Bank and HMNF; the extensive regulatory framework that applies to us; the ability of the Bank to pay dividends to us and our ability to pay dividends to our stockholders; new or revised accounting standards, as may be adopted by state and federal regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission (the "SEC") or the Public Company Accounting Oversight Board; 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 and natural disasters, and widespread disease or pandemics; acts of war, military conflicts, or terrorism, including ongoing conflicts in the Middle East, the Russian invasion of Ukraine and the recent military actions in Venezuela, or other adverse external events and changes in foreign relations; any material weaknesses in our internal control over financial reporting; our success at managing and responding to 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 SEC. 

    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)

      December 31, December 31,
      2025 2024
    Assets (Unaudited)

        
    Cash and cash equivalents $67,192  $61,239 
    Investment securities        
    Trading, at fair value  1,758   3,309 
    Available-for-sale, at fair value  514,095   588,053 
    Held-to-maturity, at amortized cost (with an allowance for credit losses on investments of $123 and $131, respectively)  254,448   275,585 
    Loans held for sale  21,934   16,518 
    Loans held for investment  4,048,022   3,992,534 
    Allowance for credit losses on loans  (61,915)  (59,929)
    Net loans  3,986,107   3,932,605 
    Land, premises and equipment, net  43,253   39,780 
    Operating lease right-of-use assets  28,761   13,438 
    Accrued interest receivable  21,742   20,075 
    Bank-owned life insurance  39,307   36,033 
    Goodwill  85,634   85,634 
    Other intangible assets  33,371   43,882 
    Servicing rights  6,383   7,918 
    Deferred income taxes, net  23,080   52,885 
    Other assets  103,019   84,719 
    Total assets $5,230,084  $5,261,673 
    Liabilities and Stockholders' Equity        
    Deposits        
    Noninterest-bearing $807,896  $903,466 
    Interest-bearing  3,384,107   3,474,944 
    Total deposits  4,192,003   4,378,410 
    Short-term borrowings  308,800   238,960 
    Long-term debt  59,182   59,069 
    Operating lease liabilities  36,282   18,991 
    Accrued expenses and other liabilities  68,883   70,833 
    Total liabilities  4,665,150   4,766,263 
    Stockholders' equity        
    Preferred stock, $1 par value, 2,000,000 shares authorized: 0 issued and outstanding  —   — 
    Common stock, $1 par value, 60,000,000 and 30,000,000 shares authorized: 25,406,278 and 25,344,803 issued and outstanding  25,406   25,345 
    Additional paid-in capital  271,609   269,708 
    Retained earnings  270,075   273,723 
    Accumulated other comprehensive loss  (2,156)  (73,366)
    Total stockholders' equity  564,934   495,410 
    Total liabilities and stockholders' equity $5,230,084  $5,261,673 
             

    Alerus Financial Corporation and Subsidiaries

    Consolidated Statements of Income

    (dollars and shares in thousands, except per share data)

      Three months ended Year ended
      December 31, September 30, December 31, December 31, December 31,
      2025 2025 2024 2025 2024
    Interest Income (Unaudited)

     (Unaudited)

     (Unaudited)

     (Unaudited)

      
    Loans, including fees $64,477  $63,875  $60,009  $253,699  $183,560 
    Investment securities                    
    Taxable  4,592   5,091   5,737   20,699   19,745 
    Exempt from federal income taxes  160   160   166   640   679 
    Other  1,158   1,518   1,395   4,598   17,595 
    Total interest income  70,387   70,644   67,307   279,636   221,579 
    Interest Expense                    
    Deposits  21,998   24,350   25,521   92,641   89,243 
    Short-term borrowings  2,570   2,506   2,837   11,897   22,584 
    Long-term debt  645   652   665   2,599   2,707 
    Total interest expense  25,213   27,508   29,023   107,137   114,534 
    Net interest income  45,174   43,136   38,284   172,499   107,045 
    Provision for credit losses  (308)  —   11,992   556   18,141 
    Net interest income after provision for credit losses  45,482   43,136   26,292   171,943   88,904 
    Noninterest (Loss) Income                    
    Retirement and benefit services  17,260   16,496   16,488   65,885   64,365 
    Wealth management  7,438   6,560   7,010   28,265   26,171 
    Mortgage banking  3,203   3,474   3,277   11,855   10,073 
    Service charges on deposit accounts  734   703   644   2,768   1,976 
    Net gains (losses) on investment securities  (68,403)  —   —   (68,403)  — 
    Gain (loss) on sale of non-mortgage loans  —   (35)  —   2,080   — 
    Other  2,819   2,232   6,455   9,426   12,345 
    Total noninterest (loss) income  (36,949)  29,430   33,874   51,876   114,930 
    Noninterest Expense                    
    Compensation  25,169   24,984   26,657   97,457   87,311 
    Employee taxes and benefits  6,325   6,094   6,245   26,815   22,967 
    Occupancy and equipment expense  3,658   2,849   1,963   11,973   7,766 
    Business services, software and technology expense  6,794   6,285   6,935   24,699   21,758 
    Intangible amortization expense  2,382   2,710   2,804   10,511   6,776 
    Professional fees and assessments  3,089   2,676   10,964   11,100   19,597 
    Marketing and business development  1,016   1,069   1,050   3,837   3,249 
    Supplies and postage  764   569   726   2,454   2,046 
    Travel  409   385   449   1,428   1,403 
    Mortgage and lending expenses  626   1,025   571   3,127   2,162 
    Other  1,649   1,895   2,093   7,826   5,640 
    Total noninterest expense  51,881   50,541   60,457   201,227   180,675 
    (Loss) Income before income tax (benefit) expense  (43,348)  22,025   (291)  22,592   23,159 
    Income tax (benefit) expense  (10,298)  5,101   (225)  5,153   5,379 
    Net income (loss) $(33,050) $16,924  $(66) $17,439  $17,780 
    Per Common Share Data                    
    Earnings (loss) per common share $(1.28) $0.66  $—  $0.69  $0.84 
    Diluted earnings (loss) per common share $(1.27) $0.65  $—  $0.68  $0.83 
    Dividends declared per common share $0.21  $0.21  $0.20  $0.83  $0.79 
    Average common shares outstanding  25,398   25,395   24,857   25,380   21,047 
    Diluted average common shares outstanding  25,710   25,713   25,144   25,697   21,321 
                         

    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)

      December 31, September 30, December 31,
      2025 2025 2024
    Tangible Common Equity to Tangible Assets            
    Total common stockholders' equity $564,934  $550,687  $495,410 
    Less: Goodwill  85,634   85,634   85,634 
    Less: Other intangible assets  33,371   35,753   43,882 
    Tangible common equity (a)  445,929   429,300   365,894 
    Total assets  5,230,084   5,330,572   5,261,673 
    Less: Goodwill  85,634   85,634   85,634 
    Less: Other intangible assets  33,371   35,753   43,882 
    Tangible assets (b)  5,111,079   5,209,185   5,132,157 
    Tangible common equity to tangible assets (a)/(b)  8.72%  8.24%  7.13%
    Tangible Book Value Per Common Share            
    Tangible common equity (a)  445,929   429,300   365,894 
    Total common shares issued and outstanding (c)  25,406   25,397   25,345 
    Tangible book value per common share (a)/(c) $17.55  $16.90  $14.44 



      Three months ended Year ended
      December 31, September 30, December 31, December 31, December 31,
      2025 2025 2024 2025 2024
    Return on Average Tangible Common Equity                    
    Net (loss) income $(33,050) $16,924  $(66) $17,439  $17,780 
    Add: Intangible amortization expense (net of tax)(1)  1,882   2,141   2,215   8,304   5,353 
    Net income, excluding intangible amortization (d)  (31,168)  19,065   2,149   25,743   23,133 
    Average total equity  552,106   524,459   478,092   525,323   397,738 
    Less: Average goodwill  85,634   85,634   84,393   85,634   56,237 
    Less: Average other intangible assets (net of tax) (1)  27,270   29,540   34,107   30,470   17,534 
    Average tangible common equity (e)  439,202   409,285   359,592   409,219   323,967 
    Return on average tangible common equity (d)/(e)  (28.15)%  18.48%  2.38%  6.29%  7.14%
    Efficiency Ratio                    
    Noninterest expense $51,881  $50,541  $60,457  $201,227  $180,675 
    Less: Intangible amortization expense  2,382   2,710   2,804   10,511   6,776 
    Noninterest expense excluding intangible amortization (f)  49,499   47,831   57,653   190,716   173,899 
    Net interest income (v)  45,174   43,136   38,284   172,499   107,045 
    Noninterest (loss) income  (36,949)  29,430   33,874   51,876   114,930 
    Tax-equivalent adjustment  654   638   385   2,402   1,202 
    Total tax-equivalent revenue (g)  8,879   73,204   72,543   226,777   223,177 
    Efficiency ratio (f)/(g)  557.48%  65.34%  79.47%  84.10%  77.92%
    Pre-Provision Net Revenue                    
    Net interest income (v) $45,174  $43,136  $38,284  $172,499  $107,045 
    Add: Noninterest (loss) income  (36,949)  29,430   33,874   51,876   114,930 
    Less: Noninterest expense  51,881   50,541   60,457   201,227   180,675 
    Pre-provision net revenue $(43,656) $22,025  $11,701  $23,148  $41,300 
    Adjusted Noninterest Income                    
    Noninterest (loss) income $(36,949) $29,430  $33,874  $51,876  $114,930 
    Less: Adjusted noninterest (loss) income items                    
    Net gains (losses) on investment securities  (68,403)  —   —   (68,403)  — 
    Net gain (loss) on sale of loans  —   (35)  —   2,080   — 
    Net gain (loss) on sale/disposal of premises and equipment  (445)  —   3,459   (530)  3,941 
    Total adjusted noninterest (loss) income items (h)  (68,848)  (35)  3,459   (66,853)  3,941 
    Adjusted noninterest income (i) $31,899  $29,465  $30,415  $118,729  $110,989 
    Adjusted Noninterest (Loss) Income as a Percentage of Revenue                    
    Adjusted noninterest income (i) $31,899  $29,465  $30,415  $118,729  $110,989 
    Net interest income (v)  45,174   43,136   38,284   172,499   107,045 
    Adjusted revenue (w) $77,073  $72,601  $68,699  $291,228  $218,034 
    Adjusted noninterest (loss) income as a percentage of revenue (i)/(w)  41.39%  40.58%  44.27%  40.77%  50.90%
    Adjusted Noninterest Expense                    
    Noninterest expense $51,881  $50,541  $60,457  $201,227  $180,675 
    Less: Adjusted noninterest expense items                    
    HMNF merger- and acquisition-related expenses  (112)  (43)  7,729   142   9,980 
    Severance and signing bonus expense  212   104   2,276   1,319   2,901 
    Total adjusted noninterest expense items (j)  100   61   10,005   1,461   12,881 
    Adjusted noninterest expense (k) $51,781  $50,480  $50,452  $199,766  $167,794 

    _______________

    (1) Items calculated after-tax utilizing a marginal income tax rate of 21.0%.

    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)

      Three months ended Year ended
      December 31, September 30, December 31, December 31, December 31,
      2025 2025 2024 2025 2024
    Adjusted Pre-Provision Net Revenue                    
    Net interest income (v) $45,174  $43,136  $38,284  $172,499  $107,045 
    Add: Adjusted noninterest income (i)  31,899   29,465   30,415   118,729   110,989 
    Less: Adjusted noninterest expense (k)  51,781   50,480   50,452   199,766   167,794 
    Adjusted pre-provision net revenue $25,292  $22,121  $18,247  $91,462  $50,240 
    Adjusted Efficiency Ratio                    
    Adjusted noninterest expense (k) $51,781  $50,480  $50,452  $199,766  $167,794 
    Less: Intangible amortization expense  2,382   2,710   2,804   10,511   6,776 
    Adjusted noninterest expense for efficiency ratio (l)  49,399   47,770   47,648   189,255   161,018 
    Tax-equivalent revenue                    
    Net interest income (v)  45,174   43,136   38,284   172,499   107,045 
    Add: Adjusted noninterest income (i)  31,899   29,465   30,415   118,729   110,989 
    Add: Tax-equivalent adjustment  654   638   385   2,402   1,202 
    Total tax-equivalent revenue (m)  77,727   73,239   69,084   293,630   219,236 
    Adjusted efficiency ratio (l)/(m)  63.55%  65.22%  68.97%  64.45%  73.45%
    Adjusted Net Income                    
    Net (loss) income $(33,050) $16,924  $(66) $17,439  $17,780 
    Less: Adjusted noninterest (loss) income items (net of tax) (1) (h)  (54,390)  (28)  2,733   (52,814)  3,113 
    Add: HMNF day one provision for credit losses and unfunded commitments (net of tax) (1)  —   —   6,140   —   6,140 
    Add: Adjusted noninterest expense items (net of tax)(1)(j)  79   48   7,904   1,154   10,176 
    Adjusted net income (n) $21,419  $17,000  $11,245  $71,407  $30,983 
    Adjusted Return on Average Total Assets                    
    Average total assets (o) $5,252,046  $5,273,306  $5,272,777  $5,277,867  $4,503,483 
    Adjusted return on average total assets (n)/(o)  1.62%  1.28%  0.85%  1.35%  0.69%
    Adjusted Return on Average Tangible Common Equity                    
    Adjusted net income (n) $21,419  $17,000  $11,245  $71,407  $30,983 
    Add: Intangible amortization expense (net of tax)(1)  1,882   2,141   2,215   8,304   5,353 
    Adjusted net income, excluding intangible amortization (p)  23,301   19,141   13,460   79,711   36,336 
    Average total equity  552,106   524,459   478,092   525,323   397,738 
    Less: Average goodwill  85,634   85,634   84,393   85,634   56,237 
    Less: Average other intangible assets (net of tax)  27,270   29,540   34,107   30,470   17,534 
    Average tangible common equity (q)  439,202   409,285   359,592   409,219   323,967 
    Adjusted return on average tangible common equity (p)/(q)  21.05%  18.55%  14.89%  19.48%  11.22%
    Adjusted Earnings Per Common Share - Diluted                    
    Adjusted net income (n) $21,419  $17,000  $11,245  $71,407  $30,983 
    Less: Dividends and undistributed earnings allocated to participating securities  (462)  148   (54)  (29)  37 
    Adjusted net income available to common stockholders (r)  21,881   16,852   11,299   71,436   30,946 
    Weighted-average common shares outstanding for diluted earnings per share (s)  25,710   25,713   25,144   25,697   21,321 
    Adjusted earnings per common share - diluted (r)/(s) $0.85  $0.66  $0.45  $2.78  $1.45 
    Adjusted Net Charge-Offs to Average Loans                    
    Net charge-offs (recoveries) $(311) $(1,715) $1,258  $2,148  $4,154 
    Less: Charge-off of PCD reserves on loans transferred to non-mortgage loans held for sale  —   —   —   3,053   — 
    Adjusted net charge-offs (recoveries) (t)  (311)  (1,715)  1,258   (905)  4,154 
    Average total loans (u) $4,049,082  $4,036,936  $3,814,934  $4,047,034  $3,099,015 
    Adjusted net charge-offs (recoveries) to average loans (t)/(u)  (0.03)%  (0.17)%  0.13%  (0.02)%  0.13%

    _______________

    (1) Items calculated after-tax utilizing a marginal income tax rate of 21.0%.

    Alerus Financial Corporation and Subsidiaries

    Analysis of Average Balances, Yields, and Rates (unaudited)

    (dollars in thousands)

      Three months ended Year ended
      December 31, 2025 September 30, 2025 December 31, 2024 December 31, 2025 December 31, 2024
      Average

    Balance
     Average

    Yield/

    Rate
     Average

    Balance
     Average

    Yield/

    Rate
     Average

    Balance
     Average

    Yield/

    Rate
     Average

    Balance
     Average

    Yield/

    Rate
     Average

    Balance
     Average

    Yield/

    Rate
    Interest Earning Assets                                        
    Interest-bearing deposits with banks $57,008   4.68% $89,568   4.86% $74,217   5.34% $54,150   4.90% $299,666   5.39%
    Investment securities(1)  775,091   2.45   796,759   2.64   883,116   2.68   813,474   2.64   791,111   2.60 
    Loans held for sale  21,715   4.81   20,188   4.93   15,409   5.60   18,920   4.80   14,180   5.90 
    Loans                                        
    Commercial and industrial  699,982   7.35   650,787   7.51   616,356   7.28   665,635   7.42   588,269   7.23 
    CRE − Construction, land and development  322,068   9.20   363,466   5.77   250,869   6.33   341,533   6.65   172,700   6.77 
    CRE − Multifamily  371,925   6.15   340,709   6.46   351,804   6.50   356,019   6.41   272,125   5.87 
    CRE − Non-owner occupied(2)  846,558   6.16   887,935   6.26   1,002,857   6.68   912,066   6.41   712,734   6.14 
    CRE − Owner occupied  429,087   6.18   435,469   7.73   293,169   6.56   421,997   6.62   286,540   5.71 
    Agricultural − Land  65,995   6.42   66,676   5.53   59,400   5.73   66,483   5.89   45,729   5.10 
    Agricultural − Production  63,408   6.78   64,685   6.80   58,999   7.36   64,118   7.05   43,361   6.89 
    RRE − First lien  884,293   4.81   898,011   4.83   904,414   4.50   895,225   4.83   747,874   4.17 
    RRE − Construction  34,858   6.74   33,834   6.61   31,722   9.74   36,309   7.37   22,832   6.58 
    RRE − HELOC  249,844   6.38   213,232   6.82   153,344   7.60   205,287   6.79   131,617   8.02 
    RRE − Junior lien  38,167   6.47   40,997   6.40   47,041   6.25   41,406   6.37   38,982   6.24 
    Other consumer  42,897   6.53   41,135   6.94   44,959   7.19   40,956   6.87   36,252   6.81 
    Total loans(1)  4,049,082   6.35   4,036,936   6.31   3,814,934   6.27   4,047,034   6.30   3,099,015   5.93 
    Federal Reserve/FHLB stock  23,634   8.16   22,398   7.46   20,717   7.66   24,142   8.05   17,901   8.12 
    Total interest earning assets  4,926,530   5.72   4,965,849   5.70   4,808,393   5.60   4,957,720   5.69   4,221,873   5.28 
    Noninterest earning assets  325,516       307,457       464,384       320,147       281,610     
    Total assets $5,252,046      $5,273,306      $5,272,777      $5,277,867      $4,503,483     
    Interest-Bearing Liabilities                                        
    Interest-bearing demand deposits $1,305,972   1.72% $1,227,029   1.80% $1,209,674   1.98% $1,257,069   1.78% $1,010,888   2.12%
    Money market and savings deposits  1,592,569   2.72   1,587,694   2.84   1,520,616   3.15   1,583,232   2.81   1,250,939   3.60 
    Time deposits  600,966   3.57   772,345   3.81   698,358   4.24   687,320   3.76   518,826   4.39 
    Fed funds purchased and BTFP  35,617   4.20   16,636   4.94   22,012   4.93   62,618   4.60   249,180   4.95 
    FHLB short-term advances  207,065   4.20   200,000   4.56   200,000   5.10   201,781   4.47   200,000   5.12 
    Long-term debt  59,169   4.32   59,137   4.37   59,055   4.48   59,126   4.40   59,013   4.59 
    Total interest-bearing liabilities  3,801,358   2.63   3,862,841   2.83   3,709,715   3.11   3,851,146   2.78   3,288,846   3.48 
    Noninterest-Bearing Liabilities and Stockholders' Equity                                        
    Noninterest-bearing deposits  797,521       800,028       847,153       813,785       704,463     
    Other noninterest-bearing liabilities  101,061       85,978       237,817       87,613       112,436     
    Stockholders' equity  552,106       524,459       478,092       525,323       397,738     
    Total liabilities and stockholders' equity $5,252,046      $5,273,306      $5,272,777      $5,277,867      $4,503,483     
    Net interest rate spread      3.09%      2.87%      2.49%      2.91%      1.80%
    Net interest margin, tax-equivalent(1)      3.69%      3.50%      3.20%      3.53%      2.56%

    _______________

    (1) Taxable-equivalent adjustment was calculated utilizing a marginal income tax rate of 21.0%. 

    (2) Average balances and average yield/rate includes non-mortgage loans sold and held for sale for the three months ended December 31, 2025 and the year ended December 31, 2025.

    Alan A. Villalon, Chief Financial Officer

    952.417.3733 (Office)



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