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Alerus Financial Corporation Reports Fourth Quarter 2021 Net Income of $12.7 Million and Record Annual Net Income of $52.7 Million

Alerus Financial Corporation (Nasdaq: ALRS) reported net income of $12.7 million for the fourth quarter of 2021, or $0.72 per diluted common share, compared to net income of $13.1 million, or $0.74 per diluted common share, for the third quarter of 2021, and net income of $10.2 million, or $0.57 per diluted common share, for the fourth quarter of 2020.

CEO Comments

President and Chief Executive Officer Katie Lorenson said, “Alerus continues to be a purpose-driven company, focused on its business model, strategy and culture. Our talented Alerus team members executed at exceptional levels, resulting in a strong finish to the fourth quarter and another record setting year for Alerus with annual net income of $52.7 million. Our team is focused on serving clients holistically and with their best interests in mind. This advice-based approach coupled with our diversified business model resulted in our highest annual levels of new business in nearly every product offering of the Company. Our company continues to be agile in meeting client needs, serving more clients than ever through digital channels, all while managing our expense base. The overall quality of our credit portfolio remained strong with a significant recovery during the quarter leading to a $1.5 million reversal of provision expense. The company continues to maintain robust capital levels which we believe will position Alerus for ongoing organic and in-organic growth. We continued to execute our acquisition strategy and announced in early December our proposed acquisition of MPB BHC, Inc. and it’s wholly-owned banking subsidiary, Metro Phoenix Bank. Assuming the consummation of the transactions, this will be our twenty-fifth acquisition since 2000. We look forward to welcoming the clients and employees of the high performing Metro Phoenix Bank, a commercial focused community bank headquartered in the strong and growing Phoenix market. We are proud of our company’s performance, ability to focus on long-term growth for shareholders through our diversified business model, solid financial foundation and, strategic focus on serving clients holistically.”

Quarterly Highlights

  • Return on average total assets of 1.50%, compared to 1.62% for the third quarter of 2021
  • Return on average tangible common equity(1) of 17.36%, compared to 18.13% for the third quarter of 2021
  • Net interest margin (tax-equivalent)(1) was 2.84%, compared to 2.78% for the third quarter of 2021
  • Allowance for loan losses to total loans, excluding PPP loans was 1.83%, compared to 2.00% as of December 31, 2020
  • Efficiency ratio(1) of 71.06%, compared to 71.49% for the third quarter of 2021
  • Noninterest income for the fourth quarter of 2021 was 59.67% of total revenue, compared to 63.04% for the third quarter of 2021
  • Mortgage originations totaled $356.8 million, a 14.2% decrease from the third quarter of 2021
  • Investment securities increased $613.4 million, or 103.5%, since December 31, 2020
  • Loans held for sale decreased $76.0 million, or 62.0%, since December 31, 2020
  • Loans held for investment decreased $221.4 million, or 11.2%, since December 31, 2020; excluding Paycheck Protection Program, or PPP, loans, loans held for investment increased $13.5 million, or 0.8%, since December 31, 2020
  • Deposits increased $348.6 million, or 13.6%, since December 31, 2020

Full Year 2021 Highlights

  • Net income of $52.7 million, an increase of $8.0 million, or 17.9%, compared to $44.7 million in 2020
  • Diluted earnings per share, or EPS, of $2.97, compared to $2.52 in 2020
  • Return on average total assets of 1.66%, compared to 1.61% in 2020
  • Return on average tangible common equity(1) of 18.89%, compared to 17.74% in 2020
  • Revenue of $234.5 million, an increase of $1.3 million, or 0.5%, compared to $233.2 million in 2020
    • Net interest income was $87.1 million, an increase of $3.3 million, or 3.9%, compared to $83.8 million in 2020
    • Noninterest income was $147.4 million, a decrease of $2.0 million, or 1.3%, compared to $149.4 million in 2020
  • Noninterest expense of $168.9 million, an increase of $5.1 million, or 3.1%, compared to $163.8 million in 2020
  • Provision for loan losses expense reversed $3.5 million, a decrease of $14.4 million from 2020
  • Average loans of $1.9 billion, a decrease of $86.9 million, or 4.5%, from 2020
  • Average deposits of $2.7 billion, an increase of $372.6 million, or 15.9%, from 2020

(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)

 

2021

 

2021

 

2020

 

2021

 

2020

 

Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average total assets

 

 

1.50

%

 

1.62

%

 

1.34

%

 

1.66

%

 

1.61

%

Return on average common equity

 

 

14.12

%

 

14.68

%

 

12.30

%

 

15.22

%

 

14.40

%

Return on average tangible common equity (1)

 

 

17.36

%

 

18.13

%

 

15.13

%

 

18.89

%

 

17.74

%

Noninterest income as a % of revenue

 

 

59.67

%

 

63.04

%

 

62.57

%

 

62.86

%

 

64.05

%

Net interest margin (tax-equivalent) (1)

 

 

2.84

%

 

2.78

%

 

3.23

%

 

2.90

%

 

3.22

%

Efficiency ratio (1)

 

 

71.06

%

 

71.49

%

 

74.44

%

 

70.02

%

 

68.40

%

Net charge-offs/(recoveries) to average loans

 

 

(0.22)

%

 

(0.06)

%

 

(0.30)

%

 

(0.04)

%

 

0.03

%

Dividend payout ratio

 

 

22.22

%

 

21.62

%

 

26.32

%

 

21.21

%

 

23.81

%

Per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - basic

 

$

0.73

 

$

0.75

 

$

0.58

 

$

3.02

 

$

2.57

 

Earnings per common share - diluted

 

$

0.72

 

$

0.74

 

$

0.57

 

$

2.97

 

$

2.52

 

Dividends declared per common share

 

$

0.16

 

$

0.16

 

$

0.15

 

$

0.63

 

$

0.60

 

Tangible book value per common share (1)

 

$

17.87

 

$

17.46

 

$

16.00

 

 

 

 

 

 

 

Average common shares outstanding - basic

 

 

17,210

 

 

17,205

 

 

17,122

 

 

17,189

 

 

17,106

 

Average common shares outstanding - diluted

 

 

17,480

 

 

17,499

 

 

17,450

 

 

17,486

 

 

17,438

 

Other Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retirement and benefit services assets under administration/management

 

$

36,732,938

 

$

36,202,553

 

$

34,199,954

 

 

 

 

 

 

 

Wealth management assets under administration/management

 

$

4,039,931

 

$

3,865,062

 

$

3,338,594

 

 

 

 

 

 

 

Mortgage originations

 

$

356,821

 

$

415,792

 

$

607,166

 

$

1,836,064

 

$

1,778,977

 

 

(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 2021 was $22.8 million, a $1.7 million, or 7.8%, increase from the third quarter of 2021. Net interest income decreased $364 thousand, or 1.6%, from $23.2 million for the fourth quarter of 2020. During the fourth quarter of 2021, average interest earning assets increased $158.7 million, primarily due to an increase of $249.9 million in investment securities, partially offset by decreases of $49.1 million in interest-bearing deposits with banks and $38.2 million in loans held for investment. The change in the balance sheet mix resulted in a 6 basis point increase in the average earning asset yield. Net interest income earned from PPP loans during the fourth quarter of 2021 totaled $2.2 million, an increase of $160 thousand, from the $2.0 million earned during the third quarter. The cost of interest-bearing liabilities had a modest decrease of 1 basis point from the third quarter of 2021.

Net interest margin (tax-equivalent), a non-GAAP financial measure, was 2.84% for the fourth quarter of 2021, a 6 basis point increase from 2.78% for the third quarter of 2021, and a 39 basis point decrease from 3.23% in the fourth quarter of 2020. The linked quarter increase was primarily due to higher yields on interest earning assets. Excluding PPP loans, net interest margin was 2.62% for the fourth quarter of 2021, unchanged from the third quarter of 2021. The year over year decrease was primarily attributable to the historically low and flat yield curve and a more liquid balance sheet mix which resulted in a 49 basis point decrease in interest earning asset yields. The decrease in earning asset yield was offset by a 16 basis point decrease in the average rate paid on interest-bearing liabilities.

Noninterest Income

Noninterest income for the fourth quarter of 2021 was $33.7 million, a $2.3 million, or 6.4%, decrease from the third quarter of 2021. The decrease was primarily driven by a $3.1 million decrease in mortgage banking revenue, a result of a $59.0 million decrease in mortgage originations. The decrease in mortgage banking revenue was partially offset by increases of $521 thousand in retirement and benefit services revenue and $338 thousand in wealth management revenue.

Noninterest income for the fourth quarter of 2021 decreased $5.0 million, or 12.9%, from $38.7 million in the fourth quarter of 2020. This decrease was primarily due to an $8.8 million decrease in mortgage banking revenue, a result of a $250.3 million decrease in mortgage originations, as well as a 28 basis point decrease in the gain on sale margin. Partially offsetting this decrease was a $2.6 million increase in retirement and benefit services income, primarily driven by the December 2020 acquisition of Retirement Planning Services, Inc. and a $544 thousand increase in document restatement fees. In addition, wealth management revenue increased $826 thousand, or 17.2%, primarily driven by organic growth and market increases in assets under management.

Noninterest Expense

Noninterest expense for the fourth quarter of 2021 was $41.3 million, a decrease of $765 thousand, or 1.8%, compared to the third quarter of 2021. The decrease was primarily due to decreases of $1.2 million in compensation expense, $743 thousand in mortgage and lending expense, partially offset by increases of $532 thousand in employee taxes and benefits expense, $350 thousand in other noninterest expense, and $305 thousand in professional fees and assessments. The decreases in compensation expense as well as mortgage and lending expense were primarily attributable to the $59.0 million decrease in mortgage originations from the previous quarter. Mortgage and lending expense was also positively impacted by a $314 thousand change in the valuation of mortgage servicing rights. The increase in employee taxes and benefits expense was primarily a result of an increase in incentive awards due to the Company’s record financial performance. The $330 thousand increase in other noninterest expense was primarily attributable to an operating charge-off of $134 thousand in the fourth quarter compared to a $250 thousand recovery in the third quarter. The increase in professional fees and assessments was due to expenses related to the announced acquisition of Metro Phoenix Bank.

Noninterest expense for the fourth quarter of 2021 decreased $5.8 million, or 12.4%, from $47.1 million in the fourth quarter of 2020. The decrease was primarily attributable to decreases in compensation expense, mortgage and lending expense, and occupancy and equipment expense, partially offset by increased employee taxes and benefits expense. The decline in mortgage originations in the fourth quarter of 2021 drove the decreases of compensation expense, as well as mortgage and lending expense. Employee taxes and benefits expense increased as a result of increased health insurance expenses. Occupancy and equipment expense decreased due to the closure of certain offices in 2021 and to the transition of many of our employees to a hybrid work environment.

Financial Condition

Total assets were $3.4 billion as of December 31, 2021, an increase of $378.9 million, or 12.6%, from December 31, 2020. The overall increase in total assets included an increase of $613.4 million in investment securities, partially offset by a $221.4 million decrease in loans held for investment and a $76.0 million decrease in loans held for sale. The decrease in loans held for investment was primarily due to PPP loan balances decreasing by $234.9 million from December 31, 2020.

Loans

Total loans were $1.8 billion as of December 31, 2021, a decrease of $221.4 million, or 11.2%, from December 31, 2020. The decrease was primarily due to a $255.1 million decrease in the commercial and industrial loan portfolio, primarily attributable to a $234.9 million decrease in PPP loans. Excluding PPP loans, total loans increased $13.5 million, or 0.8%, in 2021. This increase was primarily due to a $47.3 million increase in residential real estate first mortgages and a $35.9 million increase in commercial real estate, partially offset by a $27.9 million decrease in consumer revolving and installment loans, a $20.2 million decrease in commercial and industrial loans, and a $17.7 million decrease in residential real estate junior liens.

The following table presents the composition of our loan portfolio as of the dates indicated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

(dollars in thousands)

 

2021

 

2021

 

2021

 

2021

 

2020

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial (1)

 

$

436,761

 

$

506,599

 

$

572,734

 

$

678,029

 

$

691,858

Real estate construction

 

 

40,619

 

 

37,751

 

 

36,549

 

 

40,473

 

 

44,451

Commercial real estate

 

 

598,893

 

 

573,518

 

 

567,987

 

 

569,451

 

 

563,007

Total commercial

 

 

1,076,273

 

 

1,117,868

 

 

1,177,270

 

 

1,287,953

 

 

1,299,316

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential real estate first mortgage

 

 

510,716

 

 

501,339

 

 

470,822

 

 

454,958

 

 

463,370

Residential real estate junior lien

 

 

125,668

 

 

130,243

 

 

130,180

 

 

130,299

 

 

143,416

Other revolving and installment

 

 

45,363

 

 

50,936

 

 

57,040

 

 

64,135

 

 

73,273

Total consumer

 

 

681,747

 

 

682,518

 

 

658,042

 

 

649,392

 

 

680,059

Total loans

 

$

1,758,020

 

$

1,800,386

 

$

1,835,312

 

$

1,937,345

 

$

1,979,375

 

(1)

Includes PPP loans of $33.6 million at December 31, 2021, $103.5 million at September 30, 2021, $165.0 million at June 30, 2021, $256.8 million at March 31, 2021 and $268.4 million at December 31, 2020.

Deposits

Total deposits were $2.9 billion as of December 31, 2021, an increase of $348.6 million, or 13.6%, from December 31, 2020. Interest-bearing deposits increased $164.4 million, while noninterest-bearing deposits increased $184.1 million in 2021. Key drivers of the increase included new deposit production, ongoing higher depositor balances due to the uncertain economic environment and volatile financial markets. Synergistic deposits increased $73.4 million to $669.0 million as of December 31, 2021. Excluding synergistic deposits, commercial transaction deposits increased $156.3 million, or 14.1%, while consumer transaction deposits increased $95.0 million, or 14.8%, since December 31, 2020. Noninterest-bearing deposits as a percentage of total deposits were 32.1% as of December 31, 2021, compared to 29.3% as of December 31, 2020.

The following table presents the composition of our deposit portfolio as of the dates indicated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

(dollars in thousands)

 

2021

 

2021

 

2021

 

2021

 

2020

Noninterest-bearing demand

 

$

938,840

 

$

797,062

 

$

758,820

 

$

775,434

 

$

754,716

Interest-bearing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand

 

 

714,669

 

 

673,916

 

 

736,043

 

 

674,466

 

 

618,900

Savings accounts

 

 

96,825

 

 

92,632

 

 

89,437

 

 

87,492

 

 

79,902

Money market savings

 

 

937,305

 

 

924,678

 

 

920,831

 

 

967,273

 

 

909,137

Time deposits

 

 

232,912

 

 

224,800

 

 

205,809

 

 

212,908

 

 

209,338

Total interest-bearing

 

 

1,981,711

 

 

1,916,026

 

 

1,952,120

 

 

1,942,139

 

 

1,817,277

Total deposits

 

$

2,920,551

 

$

2,713,088

 

$

2,710,940

 

$

2,717,573

 

$

2,571,993

Asset Quality

Total nonperforming assets were $3.1 million as of December 31, 2021, a decrease of $2.1 million, or 42.1%, from December 31, 2020. As of December 31, 2021, the allowance for loan losses was $31.6 million, or 1.80% of total loans, compared to $34.2 million, or 1.73% of total loans, as of December 31, 2020. Excluding PPP loans, the ratio of allowance for loan losses to total loans was 1.83% at December 31, 2021, compared to 2.00% as of December 31, 2020.

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)

 

2021

 

2021

 

2021

 

2021

 

2020

 

Nonaccrual loans

 

$

2,076

 

$

6,229

 

$

6,960

 

$

4,756

 

$

5,050

 

Accruing loans 90+ days past due

 

 

121

 

 

 

 

 

 

 

 

30

 

Total nonperforming loans

 

 

2,197

 

 

6,229

 

 

6,960

 

 

4,756

 

 

5,080

 

OREO and repossessed assets

 

 

885

 

 

862

 

 

858

 

 

139

 

 

63

 

Total nonperforming assets

 

$

3,082

 

$

7,091

 

$

7,818

 

$

4,895

 

$

5,143

 

Net charge-offs/(recoveries)

 

 

(1,006)

 

 

(302)

 

 

(6)

 

 

488

 

 

(1,509)

 

Net charge-offs/(recoveries) to average loans

 

 

(0.22)

%

 

(0.06)

%

 

%

 

0.10

%

 

(0.30)

%

Nonperforming loans to total loans

 

 

0.12

%

 

0.35

%

 

0.38

%

 

0.25

%

 

0.26

%

Nonperforming assets to total assets

 

 

0.09

%

 

0.22

%

 

0.25

%

 

0.16

%

 

0.17

%

Allowance for loan losses to total loans

 

 

1.80

%

 

1.78

%

 

1.84

%

 

1.74

%

 

1.73

%

Allowance for loan losses to nonperforming loans

 

 

1,437

%

 

515

%

 

485

%

 

710

%

 

674

%

For the fourth quarter of 2021, we had net recoveries of $1.0 million compared to net recoveries of $302 thousand for the third quarter of 2021 and $1.5 million of net recoveries for the fourth quarter of 2020. The $1.0 million recovery was the result of a payoff on a commercial real estate loan that was previously charged off.

There was a $1.5 million reversal of provision for loan losses recorded in the fourth quarter of 2021, a $500 thousand increase from the third quarter of 2021, and a decrease of $2.9 million from the fourth quarter of 2020. The negative provision in the fourth quarter of 2021 was driven by net recoveries in four of the last five quarters and improvement of credit quality indicators.

Capital

Total stockholders’ equity was $359.4 million as of December 31, 2021, an increase of $29.2 million, or 8.9%, from December 31, 2020. Tangible book value per common share, a non-GAAP financial measure, increased to $17.87 as of December 31, 2021, from $16.00 as of December 31, 2020. Tangible common equity to tangible assets, a non-GAAP financial measure, decreased to 9.21% as of December 31, 2021, from 9.27% as of December 31, 2020.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

December 31,

 

 

 

2021

 

2021

 

2020

 

Capital Ratios(1)

 

 

 

 

 

 

 

 

 

 

Alerus Financial Corporation Consolidated

 

 

 

 

 

 

 

 

 

 

Common equity tier 1 capital to risk weighted assets

 

 

14.65

%

 

14.52

%

 

12.75

%

Tier 1 capital to risk weighted assets

 

 

15.06

%

 

14.93

%

 

13.15

%

Total capital to risk weighted assets

 

 

18.64

%

 

18.58

%

 

16.79

%

Tier 1 capital to average assets

 

 

9.79

%

 

9.88

%

 

9.24

%

Tangible common equity / tangible assets (2)

 

 

9.21

%

 

9.62

%

 

9.27

%

 

 

 

 

 

 

 

 

 

 

 

Alerus Financial, N.A.

 

 

 

 

 

 

 

 

 

 

Common equity tier 1 capital to risk weighted assets

 

 

13.87

%

 

13.77

%

 

12.10

%

Tier 1 capital to risk weighted assets

 

 

13.87

%

 

13.77

%

 

12.10

%

Total capital to risk weighted assets

 

 

15.12

%

 

15.03

%

 

13.36

%

Tier 1 capital to average assets

 

 

9.01

%

 

9.11

%

 

8.50

%

(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 9:00 a.m. Central Time on Thursday, January 27, 2022, to discuss its financial results. The call can be accessed via telephone at (888) 317-6016. A recording of the call and transcript will be available on the Company’s investor relations website at investors.alerus.com following the call.

About Alerus Financial Corporation

Alerus Financial Corporation is a diversified financial services company headquartered in Grand Forks, ND. Through its subsidiary, Alerus Financial, N.A., Alerus provides innovative and comprehensive financial solutions to business and consumer clients through four distinct business segments—banking, retirement and benefit services, wealth management, and mortgage. Alerus provides clients with a primary point of contact to help fully understand the unique needs and delivery channel preferences of each client. Clients are provided with competitive products, valuable insight and sound advice supported by digital solutions designed to meet the clients’ needs. Alerus Financial banking and wealth management offices are located in Grand Forks and Fargo, ND, the Minneapolis-St. Paul, MN metropolitan area, and Scottsdale and Mesa, AZ. Alerus Retirement and Benefits plan administration offices are located in St. Paul, MN, East Lansing, MI, and Littleton, CO.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized by U.S. Generally Accepted Accounting Principles, or GAAP. These non-GAAP financial measures include the ratio of tangible common equity to tangible assets, tangible common equity per share, return on average tangible common equity, net interest margin (tax-equivalent), and the efficiency ratio. Management uses these non-GAAP financial measures in its analysis of its performance, and believes financial analysts and investors frequently use these measures, and other similar measures, to evaluate capital adequacy and financial performance. Reconciliations of non-GAAP disclosures used in this press release to the comparable GAAP measures are provided in the accompanying tables. Management, banking regulators, many financial analysts and other investors use these measures in conjunction with more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, which typically stem from the use of the purchase accounting method of accounting for mergers and acquisitions.

These non-GAAP financial measures should not be considered in isolation or as a substitute for total stockholders’ equity, total assets, book value per share, return on average assets, return on average equity, or any other measure calculated in accordance with GAAP. Moreover, the manner in which we calculate 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 we make regarding our projected growth, anticipated future financial performance, financial condition, credit quality, management’s long-term performance goals and the future plans and prospects of Alerus Financial Corporation.

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 the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the 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 the forward-looking statements include, among others, the following: the negative effects of the ongoing COVID-19 pandemic, including its effects on the economic environment, our clients, and our operations, including due to supply chain disruptions, as well as any changes to federal, state, or local government laws, regulations, or orders in response to the pandemic; our ability to successfully manage credit risk and maintain an adequate level of allowance for loan losses; new or revised accounting standards, including as a result of the implementation of the new Current Expected Credit Loss Standard; business and economic conditions generally and in the financial services industry, nationally and within our market areas, including rising rates of inflation; the overall health of the local and national real estate market; concentrations within our loan portfolio; the level of nonperforming assets on our balance sheet; our ability to implement our organic and acquisition growth strategies; the impact of economic or market conditions on our fee-based services; our ability to continue to grow our retirement and benefit services business; our ability to continue to originate a sufficient volume of residential mortgages; the occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents; interruptions involving our information technology and telecommunications systems or third-party servicers; potential losses incurred in connection with mortgage loan repurchases; the composition of our executive management team and our ability to attract and retain key personnel; rapid technological change in the financial services industry; increased competition in the financial services industry from non-banks such as credit unions and other Fintech companies; our ability to successfully manage liquidity risk, especially in light of recent excess liquidity at the Bank; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal proceedings and regulatory actions against us or to which we may become subject; potential impairment to the goodwill we recorded in connection with our past acquisitions; the extensive regulatory framework that applies to us; the impact of recent and future legislative and regulatory changes; interest rate risks associated with our business, including the effects of anticipated rate increases by the Federal Reserve; fluctuations in the values of the securities held in our securities portfolio; governmental monetary, trade and fiscal policies; severe weather, natural disasters, widespread disease or pandemics, such as the COVID-19 global pandemic, acts of war or terrorism or other adverse external events; any material weaknesses in our internal control over financial reporting; developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate, as well as other alternative rates; changes to U.S. or state tax laws, regulations and guidance, including recent proposals to increase the federal corporate tax rate; talent and labor shortages and employee turnover; possible federal mask and vaccine mandates; our success at managing the risks involved in the foregoing items; and any other risks described in the “Risk Factors” sections of the reports filed by Alerus Financial Corporation with the Securities and Exchange Commission.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

 

Alerus Financial Corporation and Subsidiaries

Consolidated Balance Sheets

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

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

 

2021

 

2020

Assets

 

(Unaudited)

 

(Audited)

Cash and cash equivalents

 

$

242,311

 

 

$

172,962

 

Investment securities

 

 

 

 

 

 

Available-for-sale, at fair value

 

 

853,649

 

 

 

592,342

 

Held-to-maturity, at carrying value

 

 

352,061

 

 

 

 

Loans held for sale

 

 

46,490

 

 

 

122,440

 

Loans

 

 

1,758,020

 

 

 

1,979,375

 

Allowance for loan losses

 

 

(31,572

)

 

 

(34,246

)

Net loans

 

 

1,726,448

 

 

 

1,945,129

 

Land, premises and equipment, net

 

 

18,370

 

 

 

20,289

 

Operating lease right-of-use assets

 

 

3,727

 

 

 

6,918

 

Accrued interest receivable

 

 

8,537

 

 

 

9,662

 

Bank-owned life insurance

 

 

33,156

 

 

 

32,363

 

Goodwill

 

 

31,490

 

 

 

30,201

 

Other intangible assets

 

 

20,250

 

 

 

25,919

 

Servicing rights

 

 

1,880

 

 

 

1,987

 

Deferred income taxes, net

 

 

11,614

 

 

 

9,409

 

Other assets

 

 

42,708

 

 

 

44,150

 

Total assets

 

$

3,392,691

 

 

$

3,013,771

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

Noninterest-bearing

 

$

938,840

 

 

$

754,716

 

Interest-bearing

 

 

1,981,711

 

 

 

1,817,277

 

Total deposits

 

 

2,920,551

 

 

 

2,571,993

 

Long-term debt

 

 

58,933

 

 

 

58,735

 

Operating lease liabilities

 

 

4,275

 

 

 

7,861

 

Accrued expenses and other liabilities

 

 

49,529

 

 

 

45,019

 

Total liabilities

 

 

3,033,288

 

 

 

2,683,608

 

Stockholders’ equity

 

 

 

 

 

 

Preferred stock, $1 par value, 2,000,000 shares authorized: 0 issued and outstanding

 

 

 

 

 

 

Common stock, $1 par value, 30,000,000 shares authorized: 17,212,588 and 17,125,270 issued and outstanding

 

 

17,213

 

 

 

17,125

 

Additional paid-in capital

 

 

92,878

 

 

 

90,237

 

Retained earnings

 

 

253,567

 

 

 

212,163

 

Accumulated other comprehensive income (loss)

 

 

(4,255

)

 

 

10,638

 

Total stockholders’ equity

 

 

359,403

 

 

 

330,163

 

Total liabilities and stockholders’ equity

 

$

3,392,691

 

 

$

3,013,771

 

 

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,

 

 

2021

 

2021

 

2020

 

2021

 

2020

Interest Income

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Audited)

Loans, including fees

 

$

19,354

 

 

$

18,888

 

 

$

22,549

 

$

78,133

 

 

$

86,425

Investment securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

4,454

 

 

 

3,249

 

 

 

2,301

 

 

13,001

 

 

 

7,798

Exempt from federal income taxes

 

 

231

 

 

 

225

 

 

 

237

 

 

925

 

 

 

949

Other

 

 

166

 

 

 

185

 

 

 

114

 

 

598

 

 

 

930

Total interest income

 

 

24,205

 

 

 

22,547

 

 

 

25,201

 

 

92,657

 

 

 

96,102

Interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

880

 

 

 

880

 

 

 

1,210

 

 

3,661

 

 

 

8,843

Long-term debt

 

 

536

 

 

 

535

 

 

 

838

 

 

1,897

 

 

 

3,413

Total interest expense

 

 

1,416

 

 

 

1,415

 

 

 

2,048

 

 

5,558

 

 

 

12,256

Net interest income

 

 

22,789

 

 

 

21,132

 

 

 

23,153

 

 

87,099

 

 

 

83,846

Provision for loan losses

 

 

(1,500

)

 

 

(2,000

)

 

 

1,400

 

 

(3,500

)

 

 

10,900

Net interest income after provision for loan losses

 

 

24,289

 

 

 

23,132

 

 

 

21,753

 

 

90,599

 

 

 

72,946

Noninterest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retirement and benefit services

 

 

18,552

 

 

 

18,031

 

 

 

15,922

 

 

71,709

 

 

 

60,956

Wealth management

 

 

5,633

 

 

 

5,295

 

 

 

4,807

 

 

21,052

 

 

 

17,451

Mortgage banking

 

 

7,967

 

 

 

11,116

 

 

 

16,781

 

 

48,502

 

 

 

61,641

Service charges on deposit accounts

 

 

370

 

 

 

357

 

 

 

334

 

 

1,395

 

 

 

1,409

Net gains (losses) on investment securities

 

 

 

 

 

11

 

 

 

15

 

 

125

 

 

 

2,737

Other

 

 

1,196

 

 

 

1,230

 

 

 

837

 

 

4,604

 

 

 

5,177

Total noninterest income

 

 

33,718

 

 

 

36,040

 

 

 

38,696

 

 

147,387

 

 

 

149,371

Noninterest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation

 

 

22,088

 

 

 

23,291

 

 

 

26,522

 

 

93,386

 

 

 

89,206

Employee taxes and benefits

 

 

5,590

 

 

 

5,058

 

 

 

4,962

 

 

22,033

 

 

 

20,050

Occupancy and equipment expense

 

 

1,936

 

 

 

2,063

 

 

 

2,443

 

 

8,148

 

 

 

10,058

Business services, software and technology expense

 

 

5,220

 

 

 

5,332

 

 

 

5,634

 

 

20,486

 

 

 

19,135

Intangible amortization expense

 

 

1,053

 

 

 

1,088

 

 

 

990

 

 

4,380

 

 

 

3,961

Professional fees and assessments

 

 

1,808

 

 

 

1,503

 

 

 

1,531

 

 

6,292

 

 

 

4,834

Marketing and business development

 

 

872

 

 

 

865

 

 

 

1,045

 

 

3,182

 

 

 

3,133

Supplies and postage

 

 

778

 

 

 

549

 

 

 

544

 

 

2,361

 

 

 

2,174

Travel

 

 

206

 

 

 

174

 

 

 

21

 

 

442

 

 

 

359

Mortgage and lending expenses

 

 

488

 

 

 

1,231

 

 

 

1,791

 

 

4,250

 

 

 

5,707

Other

 

 

1,237

 

 

 

887

 

 

 

1,642

 

 

3,949

 

 

 

5,182

Total noninterest expense

 

 

41,276

 

 

 

42,041

 

 

 

47,125

 

 

168,909

 

 

 

163,799

Income before income taxes

 

 

16,731

 

 

 

17,131

 

 

 

13,324

 

 

69,077

 

 

 

58,518

Income tax expense

 

 

4,026

 

 

 

4,064

 

 

 

3,144

 

 

16,396

 

 

 

13,843

Net income

 

$

12,705

 

 

$

13,067

 

 

$

10,180

 

$

52,681

 

 

$

44,675

Per Common Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share

 

$

0.73

 

 

$

0.75

 

 

$

0.58

 

$

3.02

 

 

$

2.57

Diluted earnings per common share

 

$

0.72

 

 

$

0.74

 

 

$

0.57

 

$

2.97

 

 

$

2.52

Dividends declared per common share

 

$

0.16

 

 

$

0.16

 

 

$

0.15

 

$

0.63

 

 

$

0.60

Average common shares outstanding

 

 

17,210

 

 

 

17,205

 

 

 

17,122

 

 

17,189

 

 

 

17,106

Diluted average common shares outstanding

 

 

17,480

 

 

 

17,499

 

 

 

17,450

 

 

17,486

 

 

 

17,438

 

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,

 

 

 

2021

 

2021

 

2020

 

Tangible Common Equity to Tangible Assets

 

 

 

 

 

 

 

 

 

 

Total common stockholders’ equity

 

$

359,403

 

$

353,195

 

$

330,163

 

Less: Goodwill

 

 

31,490

 

 

30,201

 

 

30,201

 

Less: Other intangible assets

 

 

20,250

 

 

22,593

 

 

25,919

 

Tangible common equity (a)

 

 

307,663

 

 

300,401

 

 

274,043

 

Total assets

 

 

3,392,691

 

 

3,175,169

 

 

3,013,771

 

Less: Goodwill

 

 

31,490

 

 

30,201

 

 

30,201

 

Less: Other intangible assets

 

 

20,250

 

 

22,593

 

 

25,919

 

Tangible assets (b)

 

 

3,340,951

 

 

3,122,375

 

 

2,957,651

 

Tangible common equity to tangible assets (a)/(b)

 

 

9.21

%

 

9.62

%

 

9.27

%

Tangible Book Value Per Common Share

 

 

 

 

 

 

 

 

 

 

Total common stockholders’ equity

 

$

359,403

 

$

353,195

 

$

330,163

 

Less: Goodwill

 

 

31,490

 

 

30,201

 

 

30,201

 

Less: Other intangible assets

 

 

20,250

 

 

22,593

 

 

25,919

 

Tangible common equity (c)

 

 

307,663

 

 

300,401

 

 

274,043

 

Total common shares issued and outstanding (d)

 

 

17,213

 

 

17,208

 

 

17,125

 

Tangible book value per common share (c)/(d)

 

$

17.87

 

$

17.46

 

$

16.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Year ended

 

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

 

 

 

2021

 

2021

 

2020

 

2021

 

2020

 

Return on Average Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

12,705

 

$

13,067

 

$

10,180

 

$

52,681

 

$

44,675

 

Add: Intangible amortization expense (net of tax)

 

 

832

 

 

860

 

 

782

 

 

3,460

 

 

3,129

 

Net income, excluding intangible amortization (e)

 

 

13,537

 

 

13,927

 

 

10,962

 

 

56,141

 

 

47,804

 

Average total equity

 

 

357,084

 

 

353,196

 

 

329,210

 

 

346,059

 

 

310,208

 

Less: Average goodwill

 

 

30,930

 

 

30,201

 

 

27,766

 

 

30,385

 

 

27,439

 

Less: Average other intangible assets (net of tax)

 

 

16,843

 

 

18,272

 

 

13,206

 

 

18,548

 

 

13,309

 

Average tangible common equity (f)

 

 

309,311

 

 

304,723

 

 

288,238

 

 

297,126

 

 

269,460

 

Return on average tangible common equity (e)/(f)

 

 

17.36

%

 

18.13

%

 

15.13

%

 

18.89

%

 

17.74

%

Net Interest Margin (tax-equivalent)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

22,789

 

$

21,132

 

$

23,153

 

$

87,099

 

$

83,846

 

Tax-equivalent adjustment

 

 

99

 

 

115

 

 

131

 

 

492

 

 

455

 

Tax-equivalent net interest income (g)

 

 

22,888

 

 

21,247

 

 

23,284

 

 

87,591

 

 

84,301

 

Average earning assets (h)

 

 

3,194,530

 

 

3,035,798

 

 

2,869,767

 

 

3,018,172

 

 

2,618,427

 

Net interest margin (tax-equivalent) (g)/(h)

 

 

2.84

%

 

2.78

%

 

3.23

%

 

2.90

%

 

3.22

%

Efficiency Ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

$

41,276

 

$

42,041

 

$

47,125

 

$

168,909

 

$

163,799

 

Less: Intangible amortization expense

 

 

1,053

 

 

1,088

 

 

990

 

 

4,380

 

 

3,961

 

Adjusted noninterest expense (i)

 

 

40,223

 

 

40,953

 

 

46,135

 

 

164,529

 

 

159,838

 

Net interest income

 

 

22,789

 

 

21,132

 

 

23,153

 

 

87,099

 

 

83,846

 

Noninterest income

 

 

33,718

 

 

36,040

 

 

38,696

 

 

147,387

 

 

149,371

 

Tax-equivalent adjustment

 

 

99

 

 

115

 

 

131

 

 

492

 

 

455

 

Total tax-equivalent revenue (j)

 

 

56,606

 

 

57,287

 

 

61,980

 

 

234,978

 

 

233,672

 

Efficiency ratio (i)/(j)

 

 

71.06

%

 

71.49

%

 

74.44

%

 

70.02

%

 

68.40

%

 

Alerus Financial Corporation and Subsidiaries

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

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Year ended

 

 

December 31, 2021

 

September 30, 2021

 

December 31, 2020

 

December 31, 2021

 

December 31, 2020

 

 

 

 

 

Average

 

 

 

 

Average

 

 

 

 

Average

 

 

 

 

Average

 

 

 

 

Average

 

 

Average

 

Yield/

 

Average

 

Yield/

 

Average

 

Yield/

 

Average

 

Yield/

 

Average

 

Yield/

 

 

Balance

 

Rate

 

Balance

 

Rate

 

Balance

 

Rate

 

Balance

 

Rate

 

Balance

 

Rate

Interest Earning Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits with banks

 

$

232,650

 

0.16

%

 

$

281,768

 

0.16

%

 

$

164,052

 

0.12

%

 

$

222,916

 

0.14

%

 

$

162,616

 

0.41

%

Investment securities (1)

 

 

1,119,370

 

1.68

%

 

 

869,421

 

1.61

%

 

 

549,198

 

1.88

%

 

 

864,273

 

1.64

%

 

 

425,219

 

2.12

%

Loans held for sale

 

 

53,357

 

2.33

%

 

 

57,233

 

2.40

%

 

 

122,820

 

2.18

%

 

 

65,968

 

2.26

%

 

 

79,201

 

2.46

%

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

471,262

 

5.61

%

 

 

544,811

 

4.95

%

 

 

745,415

 

4.91

%

 

 

579,002

 

4.91

%

 

 

687,266

 

4.60

%

Real estate construction

 

 

41,573

 

3.89

%

 

 

37,743

 

3.99

%

 

 

40,009

 

4.31

%

 

 

41,751

 

4.10

%

 

 

32,804

 

4.54

%

Commercial real estate

 

 

587,542

 

3.90

%

 

 

567,696

 

3.67

%

 

 

545,432

 

3.82

%

 

 

571,326

 

3.77

%

 

 

523,219

 

4.18

%

Total commercial

 

 

1,100,377

 

4.63

%

 

 

1,150,250

 

4.29

%

 

 

1,330,856

 

4.45

%

 

 

1,192,079

 

4.34

%

 

 

1,243,289

 

4.42

%

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential real estate first mortgage

 

 

504,997

 

3.30

%

 

 

487,699

 

3.32

%

 

 

471,125

 

3.73

%

 

 

477,621

 

3.47

%

 

 

463,174

 

3.97

%

Residential real estate junior lien

 

 

129,238

 

4.52

%

 

 

129,239

 

4.57

%

 

 

149,456

 

4.72

%

 

 

131,412

 

4.64

%

 

 

159,844

 

4.81

%

Other revolving and installment

 

 

48,045

 

4.53

%

 

 

53,683

 

4.45

%

 

 

76,466

 

4.53

%

 

 

57,574

 

4.41

%

 

 

79,238

 

4.57

%

Total consumer

 

 

682,280

 

3.62

%

 

 

670,621

 

3.65

%

 

 

697,047

 

4.03

%

 

 

666,607

 

3.78

%

 

 

702,256

 

4.23

%

Total loans (1)

 

 

1,782,657

 

4.25

%

 

 

1,820,871

 

4.05

%

 

 

2,027,903

 

4.30

%

 

 

1,858,686

 

4.14

%

 

 

1,945,545

 

4.35

%

Federal Reserve/FHLB stock

 

 

6,496

 

4.34

%

 

 

6,505

 

4.33

%

 

 

5,794

 

4.46

%

 

 

6,329

 

4.36

%

 

 

5,846

 

4.55

%

Total interest earning assets

 

 

3,194,530

 

3.02

%

 

 

3,035,798

 

2.96

%

 

 

2,869,767

 

3.51

%

 

 

3,018,172

 

3.09

%

 

 

2,618,427

 

3.69

%

Noninterest earning assets

 

 

159,370

 

 

 

 

 

155,079

 

 

 

 

 

158,417

 

 

 

 

 

160,648

 

 

 

 

 

156,713

 

 

 

Total assets

 

$

3,353,900

 

 

 

 

$

3,190,877

 

 

 

 

$

3,028,184

 

 

 

 

$

3,178,820

 

 

 

 

$

2,775,140

 

 

 

Interest-Bearing Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

 

$

754,432

 

0.13

%

 

$

692,873

 

0.14

%

 

$

622,854

 

0.19

%

 

$

697,276

 

0.14

%

 

$

551,861

 

0.29

%

Money market and savings deposits

 

 

1,039,492

 

0.14

%

 

 

1,009,564

 

0.14

%

 

 

1,012,497

 

0.20

%

 

 

1,023,677

 

0.15

%

 

 

920,072

 

0.53

%

Time deposits

 

 

225,497

 

0.46

%

 

 

217,756

 

0.50

%

 

 

208,378

 

0.79

%

 

 

215,624

 

0.54

%

 

 

203,413

 

1.16

%

Short-term borrowings

 

 

 

%

 

 

10

 

%

 

 

 

%

 

 

3

 

%

 

 

80

 

%

Long-term debt

 

 

58,938

 

3.61

%

 

 

58,968

 

3.60

%

 

 

58,726

 

5.68

%

 

 

50,759

 

3.74

%

 

 

58,742

 

5.81

%

Total interest-bearing liabilities

 

 

2,078,359

 

0.27

%

 

 

1,979,171

 

0.28

%

 

 

1,902,455

 

0.43

%

 

 

1,987,339

 

0.28

%

 

 

1,734,168

 

0.71

%

Noninterest-Bearing Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

851,210

 

 

 

 

 

799,854

 

 

 

 

 

738,319

 

 

 

 

 

784,998

 

 

 

 

 

673,676

 

 

 

Other noninterest-bearing liabilities

 

 

67,247

 

 

 

 

 

58,656

 

 

 

 

 

58,200

 

 

 

 

 

60,424

 

 

 

 

 

57,088

 

 

 

Stockholders’ equity

 

 

357,084

 

 

 

 

 

353,196

 

 

 

 

 

329,210

 

 

 

 

 

346,059

 

 

 

 

 

310,208

 

 

 

Total liabilities and stockholders’ equity

 

$

3,353,900

 

 

 

 

$

3,190,877

 

 

 

 

$

3,028,184

 

 

 

 

$

3,178,820

 

 

 

 

$

2,775,140

 

 

 

Net interest rate spread

 

 

 

 

2.75

%

 

 

 

 

2.68

%

 

 

 

 

3.08

%

 

 

 

 

2.81

%

 

 

 

 

2.98

%

Net interest margin, tax-equivalent (2)

 

 

 

 

2.84

%

 

 

 

 

2.78

%

 

 

 

 

3.23

%

 

 

 

 

2.90

%

 

 

 

 

3.22

%

 

(1)

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

(2)

Represents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.”

 

Contacts

Katie A. Lorenson, Chief Executive Officer

952.417.3725 (Office)

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