10-Q · May 1, 2026
Alerus Financial Corporation reported impressive Q1 2026 results, achieving net income of $23.0 million and EPS of $0.89, significantly exceeding estimates and marking a recovery from a prior loss. Revenue rose to $75.8…
Earnings analysis · 10-Q
ALRS earnings analysis
Filed August 3, 2026 · Our reading of the company's report
The latest report
Alerus delivered solid year-over-year Q2 improvement, with $80.7 million of revenue, $20.9 million of net income and diluted EPS of $0.81, supported by net-interest-margin expansion and growth in retirement and wealth…
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Alerus delivered solid year-over-year Q2 improvement, with $80.7 million of revenue, $20.9 million of net income and diluted EPS of $0.81, supported by net-interest-margin expansion and growth in retirement and wealth fees. Credit quality improved substantially following sales of three nonperforming construction/land-development loans, while capital and operating cash generation strengthened. Offsetting factors are sequential EPS pressure, expense growth above fee-income growth, higher year-to-date charge-offs and increased FHLB funding.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.81
What stood out
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Revenue and EPS rose year over year
Q2 revenue (net interest income plus noninterest income) was $80.7 million, up 7.8% from $74.8 million a year earlier and 6.4% from $75.8 million in Q1. Diluted EPS was $0.81, up from $0.78 in Q2 2025, though down from $0.89 in Q1.
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NII and margin expanded
Net interest income increased $4.7 million, or 10.9% year over year, to $47.7 million, while tax-equivalent net interest margin expanded 46 basis points year over year to 3.97%. Management cited higher securities income following the Q4 2025 balance-sheet repositioning and lower funding costs after Federal Reserve rate cuts.
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Fee businesses continued to grow
Retirement and benefit services revenue grew $1.3 million, or 8.3%, to $17.3 million, while wealth advisory revenue rose to $7.7 million from $7.4 million. Retirement and benefit assets under administration/management reached $45.2 billion, versus $42.5 billion a year earlier.
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Credit metrics improved sharply
Asset quality improved materially: nonperforming loans fell to $7.5 million from $69.1 million at year-end, and criticized loans declined to $83.5 million from $149.2 million. The loan ACL fell $13.6 million, or 21.9%, to $48.4 million, primarily because nonperforming loans declined.
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Cash generation strengthened
Operating cash flow for the first six months was $46.4 million versus $18.4 million a year earlier. Less $2.7 million of premises-and-equipment purchases, calculated free cash flow was $43.7 million; capex represented 5.8% of operating cash flow.
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Capital ratios and buybacks improved
Capital strengthened despite $13.6 million of share repurchases in the first half: equity rose to $583.1 million from $564.9 million, and consolidated CET1 improved to 10.81% from 10.28%. The company repurchased 500,000 shares in the first half and retained authorization for 500,000 shares.
What to watch
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Expense growth outpaced fee-income growth
Quarterly noninterest expense increased $4.4 million, or 9.2%, to $52.9 million, exceeding the $1.2 million, or 3.7%, increase in noninterest income. Drivers included $1.8 million higher compensation, $1.4 million higher professional fees and assessments, and $1.5 million higher other expense.
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Charge-offs and OREO rose
Credit losses remain a consideration despite improved nonperforming balances: six-month net charge-offs were $9.6 million, versus $4.2 million a year earlier, including $7.7 million in commercial-and-industrial net charge-offs. OREO and repossessed assets increased to $9.6 million from $0.3 million at year-end.
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Funding mix and uninsured-deposit exposure
Funding mix shifted toward wholesale borrowings: FHLB short-term advances increased to $345.0 million from $250.0 million at year-end, while noninterest-bearing deposits declined $48.3 million to $759.6 million. Total uninsured deposits were approximately $1.5 billion at June 30, 2026.
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No formal risk-factor update; ESOP litigation remains
There were no material changes to the risk factors disclosed in the March 4, 2026 10-K. Separately, the company remains subject to 2 pending lawsuits related to the sold ESOP fiduciary-services business; it states a material loss is reasonably possible in the DOL matter but cannot estimate a loss range.
Management's outlook
The 10-Q contains no explicit quantitative full-year revenue or EPS outlook. Management discusses liquidity capacity and expects the West Fargo branch, listed for $3.8 million, to sell within the next 12 months, with a gain expected because its carrying value is about $0.4 million.
Earlier filings 4
10-K · March 4, 2026
Alerus positions itself as a diversified, "high tech, high touch" financial services franchise focused on banking, retirement & benefit services, and wealth management. The 10-K highlights scale in fee businesses…
10-Q · May 6, 2025
Alerus reported strong year‑over‑year Q1 results: total revenue of $95,813,000 and net income of $13,315,000 (diluted EPS $0.52) for the three months ended March 31, 2025, compared with $74,361,000 revenue and…
10-K · March 14, 2025
Alerus presents a diversified, advisor-led strategy (“One Alerus”) focused on banking, retirement & benefit services, and wealth; as of December 31, 2024 the company reported $5.3 billion of total assets, $4.0 billion…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.