株探米国株
英語
エドガーで原本を確認する
0000903419 ALERUS FINANCIAL CORP false --12-31 Q1 2026 528,357 516,737 220,425 228,009 118 123 1 1 2,000,000 2,000,000 0 0 0 0 1 1 60,000,000 60,000,000 25,214,146 25,214,146 25,406,278 25,406,278 0 0 0 0 0 0 0 0 0 0 0 3.00 0.26 3.10 June 26, 2033 June 26, 2008 http://fasb.org/us-gaap/2026#SecuredOvernightFinancingRateSofrMember 0.26 1.80 September 15, 2036 September 15, 2011 March 30, 2031 March 31, 2026 0.26 3.10 June 26, 2033 June 26, 2008 http://fasb.org/us-gaap/2026#SecuredOvernightFinancingRateSofrMember 0.26 1.80 September 15, 2036 September 15, 2011 0 3 3 0 0 false false false false There were no discounts taken on the collateral that comprises the balance of foreclosed assets as of December 31, 2024. The Company maintains a master netting agreement with each counterparty and settles collateral on a net basis for all interest rate swaps with counterparty banks. Reclassified into interest expense on short-term borrowings on the consolidated statements of income. Refer to “NOTE 25 Derivative Instruments” for further details. Derivative assets are included in other assets on the Company’s consolidated balance sheet. Reclassified into taxable and/or exempt from federal income taxes interest income on investment securities on the consolidated statements of income. Refer to “NOTE 5 Investment Securities” for further details. The difference in the credit loss expense reported herein compared to the consolidated statements of income is associated with the credit loss expense of ($31) thousand related to off-balance sheet credit exposure and ($76) thousand related to HTM investment securities. Excludes assets held for sale. All of the tax benefits recognized were included in income tax expense. The Company manages its net exposure on its customer loan swaps by obtaining collateral as part of the normal loan policy and underwriting practices. The Company does not post collateral to its customers as part of its contract. The amortization expense for low income housing tax credits were included in income tax expense. All amounts net of tax. Derivative liabilities are included in accrued expenses and other liabilities on the Company’s consolidated balance sheet. “Minimum to be Well Capitalized Under Prompt Corrective Action” is not formally defined under applicable banking regulations for bank holding companies. Reported fair values include accrued interest receivable and payable. 00009034192026-01-012026-03-31 xbrli:shares 00009034192026-04-28 iso4217:USD 00009034192026-03-31 00009034192025-12-31 0000903419us-gaap:MortgageReceivablesMember2026-03-31 0000903419us-gaap:MortgageReceivablesMember2025-12-31 iso4217:USDxbrli:shares 00009034192025-01-012025-03-31 0000903419alrs:RetirementAndBenefitServicesMember2026-01-012026-03-31 0000903419alrs:RetirementAndBenefitServicesMember2025-01-012025-03-31 0000903419alrs:WealthManagementMember2026-01-012026-03-31 0000903419alrs:WealthManagementMember2025-01-012025-03-31 0000903419us-gaap:MortgageBankingMember2026-01-012026-03-31 0000903419us-gaap:MortgageBankingMember2025-01-012025-03-31 0000903419us-gaap:DepositAccountMember2026-01-012026-03-31 0000903419us-gaap:DepositAccountMember2025-01-012025-03-31 0000903419us-gaap:CommonStockMember2024-12-31 0000903419us-gaap:AdditionalPaidInCapitalMember2024-12-31 0000903419us-gaap:RetainedEarningsMember2024-12-31 0000903419us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-12-31 00009034192024-12-31 0000903419us-gaap:CommonStockMember2025-01-012025-03-31 0000903419us-gaap:AdditionalPaidInCapitalMember2025-01-012025-03-31 0000903419us-gaap:RetainedEarningsMember2025-01-012025-03-31 0000903419us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-01-012025-03-31 0000903419us-gaap:CommonStockMember2025-03-31 0000903419us-gaap:AdditionalPaidInCapitalMember2025-03-31 0000903419us-gaap:RetainedEarningsMember2025-03-31 0000903419us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-03-31 00009034192025-03-31 0000903419srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:CommonStockMember2025-12-31 0000903419srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:AdditionalPaidInCapitalMember2025-12-31 0000903419srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:RetainedEarningsMember2025-12-31 0000903419srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2025-12-31 0000903419srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2025-12-31 0000903419us-gaap:CommonStockMember2026-01-012026-03-31 0000903419us-gaap:AdditionalPaidInCapitalMember2026-01-012026-03-31 0000903419us-gaap:RetainedEarningsMember2026-01-012026-03-31 0000903419us-gaap:AccumulatedOtherComprehensiveIncomeMember2026-01-012026-03-31 0000903419srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:CommonStockMember2026-03-31 0000903419srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:AdditionalPaidInCapitalMember2026-03-31 0000903419srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:RetainedEarningsMember2026-03-31 0000903419srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2026-03-31 0000903419srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2026-03-31 0000903419us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:USTreasurySecuritiesMember2026-03-31 0000903419us-gaap:USTreasurySecuritiesMember2026-03-31 0000903419us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2026-03-31 0000903419us-gaap:ResidentialMortgageBackedSecuritiesMember2026-03-31 0000903419us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:AssetBackedSecuritiesMember2026-03-31 0000903419us-gaap:AssetBackedSecuritiesMember2026-03-31 0000903419us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:CorporateBondSecuritiesMember2026-03-31 0000903419us-gaap:CorporateBondSecuritiesMember2026-03-31 0000903419us-gaap:CarryingReportedAmountFairValueDisclosureMember2026-03-31 0000903419us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2026-03-31 0000903419us-gaap:USStatesAndPoliticalSubdivisionsMember2026-03-31 0000903419us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:USTreasurySecuritiesMember2025-12-31 0000903419us-gaap:USTreasurySecuritiesMember2025-12-31 0000903419us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2025-12-31 0000903419us-gaap:ResidentialMortgageBackedSecuritiesMember2025-12-31 0000903419us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:AssetBackedSecuritiesMember2025-12-31 0000903419us-gaap:AssetBackedSecuritiesMember2025-12-31 0000903419us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:CorporateBondSecuritiesMember2025-12-31 0000903419us-gaap:CorporateBondSecuritiesMember2025-12-31 0000903419us-gaap:CarryingReportedAmountFairValueDisclosureMember2025-12-31 0000903419us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2025-12-31 0000903419us-gaap:USStatesAndPoliticalSubdivisionsMember2025-12-31 xbrli:pure 0000903419us-gaap:FinancialAssetPastDueMember2026-03-31 0000903419us-gaap:FinancialAssetPastDueMember2025-12-31 0000903419us-gaap:AssetPledgedAsCollateralMemberus-gaap:DepositsMember2026-03-31 0000903419us-gaap:AssetPledgedAsCollateralMemberus-gaap:DepositsMember2025-12-31 0000903419us-gaap:PreferredClassBMemberalrs:VisaMember2026-03-31 0000903419us-gaap:PreferredClassAMemberalrs:VisaMember2026-03-31 0000903419us-gaap:PreferredClassBMemberalrs:VisaMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMember2025-12-31 0000903419us-gaap:CommercialRealEstatePortfolioSegmentMember2026-03-31 0000903419us-gaap:CommercialRealEstatePortfolioSegmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMember2026-03-31 0000903419us-gaap:CommercialBorrowerMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMember2025-12-31 0000903419alrs:MetroPhoenixBankAndHmnFinancialIncMember2026-03-31 0000903419alrs:MetroPhoenixBankAndHmnFinancialIncMember2025-12-31 0000903419us-gaap:LoansReceivableMember2026-03-31 0000903419us-gaap:LoansReceivableMember2025-12-31 0000903419us-gaap:AssetPledgedAsCollateralMemberalrs:FhlbBorrowingsDepositsAndOtherMember2026-03-31 0000903419us-gaap:AssetPledgedAsCollateralMemberalrs:FhlbBorrowingsDepositsAndOtherMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMember2026-01-012026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMember2026-01-012026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMember2026-01-012026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMember2026-01-012026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMember2026-01-012026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMember2026-01-012026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2026-01-012026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMember2026-01-012026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMember2026-01-012026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMember2026-01-012026-03-31 0000903419us-gaap:CommercialBorrowerMember2026-01-012026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2026-01-012026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2026-01-012026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2026-01-012026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2026-01-012026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMember2026-01-012026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2026-01-012026-03-31 0000903419us-gaap:ConsumerBorrowerMember2026-01-012026-03-31 0000903419us-gaap:ConsumerBorrowerMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMember2024-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMember2025-01-012025-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMember2025-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMember2024-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMember2025-01-012025-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMember2025-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMember2024-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMember2025-01-012025-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMember2025-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMember2024-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMember2025-01-012025-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMember2025-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMember2024-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMember2025-01-012025-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMember2025-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMember2024-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMember2025-01-012025-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMember2025-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2024-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2025-01-012025-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2025-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMember2024-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMember2025-01-012025-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMember2025-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMember2024-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMember2025-01-012025-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMember2025-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMember2024-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMember2025-01-012025-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMember2025-03-31 0000903419us-gaap:CommercialBorrowerMember2024-12-31 0000903419us-gaap:CommercialBorrowerMember2025-01-012025-03-31 0000903419us-gaap:CommercialBorrowerMember2025-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2024-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2025-01-012025-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2025-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2024-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2025-01-012025-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2025-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2024-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2025-01-012025-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2025-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2024-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2025-01-012025-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2025-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMember2024-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMember2025-01-012025-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMember2025-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2024-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2025-01-012025-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2025-03-31 0000903419us-gaap:ConsumerBorrowerMember2024-12-31 0000903419us-gaap:ConsumerBorrowerMember2025-01-012025-03-31 0000903419us-gaap:ConsumerBorrowerMember2025-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMemberus-gaap:PassMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMemberus-gaap:SpecialMentionMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMemberus-gaap:SubstandardMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMemberus-gaap:DoubtfulMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMemberus-gaap:PassMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMemberus-gaap:SpecialMentionMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMemberus-gaap:SubstandardMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMemberus-gaap:DoubtfulMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMemberus-gaap:PassMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMemberus-gaap:SpecialMentionMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMemberus-gaap:SubstandardMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMemberus-gaap:DoubtfulMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMemberus-gaap:PassMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMemberus-gaap:SpecialMentionMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMemberus-gaap:SubstandardMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMemberus-gaap:DoubtfulMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMemberus-gaap:PassMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMemberus-gaap:SpecialMentionMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMemberus-gaap:SubstandardMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMemberus-gaap:DoubtfulMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMemberus-gaap:PassMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMemberus-gaap:SpecialMentionMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMemberus-gaap:SubstandardMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMemberus-gaap:DoubtfulMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMemberus-gaap:PassMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMemberus-gaap:SpecialMentionMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMemberus-gaap:SubstandardMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMemberus-gaap:DoubtfulMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:NonperformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:NonperformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:NonperformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:NonperformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:NonperformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMemberus-gaap:PassMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMemberus-gaap:SpecialMentionMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMemberus-gaap:SubstandardMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMemberus-gaap:DoubtfulMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMember2025-01-012025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMemberus-gaap:PassMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMemberus-gaap:SpecialMentionMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMemberus-gaap:SubstandardMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMemberus-gaap:DoubtfulMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMember2025-01-012025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMemberus-gaap:PassMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMemberus-gaap:SpecialMentionMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMemberus-gaap:SubstandardMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMemberus-gaap:DoubtfulMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMember2025-01-012025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMemberus-gaap:PassMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMemberus-gaap:SpecialMentionMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMemberus-gaap:SubstandardMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMemberus-gaap:DoubtfulMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMember2025-01-012025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMemberus-gaap:PassMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMemberus-gaap:SpecialMentionMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMemberus-gaap:SubstandardMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMemberus-gaap:DoubtfulMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMember2025-01-012025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMemberus-gaap:PassMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMemberus-gaap:SpecialMentionMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMemberus-gaap:SubstandardMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMemberus-gaap:DoubtfulMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMember2025-01-012025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMemberus-gaap:PassMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMemberus-gaap:SpecialMentionMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMemberus-gaap:SubstandardMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMemberus-gaap:DoubtfulMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMember2025-01-012025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:NonperformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2025-01-012025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:NonperformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2025-01-012025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:NonperformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2025-01-012025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:NonperformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2025-01-012025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:NonperformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2025-01-012025-12-31 00009034192025-01-012025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMemberus-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMemberus-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMemberus-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMemberus-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMemberus-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMemberus-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMemberus-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMemberus-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMemberus-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMemberus-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMemberus-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMemberus-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:FinancialAssetNotPastDueMember2026-03-31 0000903419us-gaap:FinancingReceivables30To59DaysPastDueMember2026-03-31 0000903419us-gaap:FinancingReceivables60To89DaysPastDueMember2026-03-31 0000903419us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMemberus-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMemberus-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMemberus-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMemberus-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMemberus-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMemberus-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMemberus-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMemberus-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMemberus-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMemberus-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMemberus-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMemberus-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:ConsumerPortfolioSegmentMember2025-12-31 0000903419us-gaap:FinancialAssetNotPastDueMember2025-12-31 0000903419us-gaap:FinancingReceivables30To59DaysPastDueMember2025-12-31 0000903419us-gaap:FinancingReceivables60To89DaysPastDueMember2025-12-31 0000903419us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberus-gaap:CommercialPortfolioSegmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberus-gaap:CommercialPortfolioSegmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberus-gaap:CommercialPortfolioSegmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:CommercialPortfolioSegmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberalrs:AgriculturalRealEstatePortfolioSegmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberalrs:AgriculturalRealEstatePortfolioSegmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberalrs:AgriculturalRealEstatePortfolioSegmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberalrs:AgriculturalRealEstatePortfolioSegmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:RealEstateMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:EquipmentMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberalrs:CollateralOtherMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:RealEstateMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:EquipmentMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberalrs:CollateralOtherMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:RealEstateMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:EquipmentMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberalrs:CollateralOtherMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:RealEstateMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:EquipmentMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberalrs:CollateralOtherMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:RealEstateMemberus-gaap:ResidentialPortfolioSegmentMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:EquipmentMemberus-gaap:ResidentialPortfolioSegmentMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberalrs:CollateralOtherMemberus-gaap:ResidentialPortfolioSegmentMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:ResidentialPortfolioSegmentMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:RealEstateMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:EquipmentMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberalrs:CollateralOtherMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:RealEstateMemberus-gaap:ConsumerPortfolioSegmentMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:EquipmentMemberus-gaap:ConsumerPortfolioSegmentMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberalrs:CollateralOtherMemberus-gaap:ConsumerPortfolioSegmentMember2026-03-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:ConsumerPortfolioSegmentMember2026-03-31 0000903419us-gaap:RealEstateMember2026-03-31 0000903419us-gaap:EquipmentMember2026-03-31 0000903419alrs:CollateralOtherMember2026-03-31 0000903419us-gaap:CollateralPledgedMember2026-03-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:CommercialPortfolioSegmentMemberalrs:CommercialAndIndustrialPortfolioSegmentsMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:CommercialPortfolioSegmentMemberalrs:OwnerOccupiedLoansMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberus-gaap:CommercialPortfolioSegmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberus-gaap:CommercialPortfolioSegmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberus-gaap:CommercialPortfolioSegmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:CommercialPortfolioSegmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:ConstructionLandAndDevelopmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:MultifamilyLoanMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberalrs:NonownerOccupiedMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberus-gaap:LandMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberalrs:AgriculturalRealEstatePortfolioSegmentMemberalrs:ProductionLoansMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMemberalrs:AgriculturalRealEstatePortfolioSegmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMemberalrs:AgriculturalRealEstatePortfolioSegmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMemberalrs:AgriculturalRealEstatePortfolioSegmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMemberalrs:AgriculturalRealEstatePortfolioSegmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:RealEstateMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:EquipmentMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberalrs:CollateralOtherMember2025-12-31 0000903419us-gaap:CommercialBorrowerMemberus-gaap:CollateralPledgedMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:RealEstateMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:EquipmentMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberalrs:CollateralOtherMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateFirstLienMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:RealEstateMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:EquipmentMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberalrs:CollateralOtherMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:ConstructionLoansMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:RealEstateMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:EquipmentMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberalrs:CollateralOtherMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:RealEstateMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:EquipmentMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberalrs:CollateralOtherMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:ResidentialPortfolioSegmentMemberalrs:RealEstateJuniorLienMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:RealEstateMemberus-gaap:ResidentialPortfolioSegmentMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:EquipmentMemberus-gaap:ResidentialPortfolioSegmentMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberalrs:CollateralOtherMemberus-gaap:ResidentialPortfolioSegmentMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:ResidentialPortfolioSegmentMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:RealEstateMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:EquipmentMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberalrs:CollateralOtherMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:ConsumerOtherMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:RealEstateMemberus-gaap:ConsumerPortfolioSegmentMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:EquipmentMemberus-gaap:ConsumerPortfolioSegmentMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberalrs:CollateralOtherMemberus-gaap:ConsumerPortfolioSegmentMember2025-12-31 0000903419us-gaap:ConsumerBorrowerMemberus-gaap:CollateralPledgedMemberus-gaap:ConsumerPortfolioSegmentMember2025-12-31 0000903419us-gaap:RealEstateMember2025-12-31 0000903419us-gaap:EquipmentMember2025-12-31 0000903419alrs:CollateralOtherMember2025-12-31 0000903419us-gaap:CollateralPledgedMember2025-12-31 0000903419us-gaap:LandMember2026-03-31 0000903419us-gaap:LandMember2025-12-31 0000903419us-gaap:BuildingAndBuildingImprovementsMember2026-03-31 0000903419us-gaap:BuildingAndBuildingImprovementsMember2025-12-31 0000903419us-gaap:LeaseholdImprovementsMember2026-03-31 0000903419us-gaap:LeaseholdImprovementsMember2025-12-31 0000903419us-gaap:FurnitureAndFixturesMember2026-03-31 0000903419us-gaap:FurnitureAndFixturesMember2025-12-31 0000903419us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMemberalrs:PurchaseAgreementToSellBranchInWestFargoNorthDakotaMember2026-03-31 0000903419us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMemberalrs:CrossroadsBranchInRochesterMinnesotaMember2026-03-31 0000903419alrs:BankingSegmentMember2026-03-31 0000903419alrs:BankingSegmentMember2025-12-31 0000903419alrs:RetirementAndBenefitServicesSegmentMember2026-03-31 0000903419alrs:RetirementAndBenefitServicesSegmentMember2025-12-31 0000903419us-gaap:CustomerRelatedIntangibleAssetsMember2026-03-31 0000903419us-gaap:CustomerRelatedIntangibleAssetsMember2025-12-31 0000903419us-gaap:CoreDepositsMember2026-03-31 0000903419us-gaap:CoreDepositsMember2025-12-31 utr:Y 0000903419us-gaap:FederalFundsPurchasedMember2026-03-31 0000903419us-gaap:FederalFundsPurchasedMember2025-12-31 0000903419us-gaap:FederalHomeLoanBankAdvancesMember2026-03-31 0000903419us-gaap:FederalHomeLoanBankAdvancesMember2025-12-31 0000903419alrs:SubordinatedNotesPayableMember2026-03-31 0000903419alrs:SubordinatedNotesPayableMember2026-01-012026-03-31 0000903419alrs:JuniorSubordinatedDebentureTrustIMember2026-03-31 0000903419alrs:JuniorSubordinatedDebentureTrustIMember2026-01-012026-03-31 thunderdome:item 0000903419alrs:JuniorSubordinatedDebentureTrustIiMember2026-03-31 0000903419alrs:JuniorSubordinatedDebentureTrustIiMember2026-01-012026-03-31 0000903419alrs:SubordinatedNotesPayableMember2024-12-31 0000903419alrs:SubordinatedNotesPayableMember2024-01-012024-12-31 0000903419alrs:JuniorSubordinatedDebentureTrustIMember2024-12-31 0000903419alrs:JuniorSubordinatedDebentureTrustIMember2024-01-012024-12-31 0000903419alrs:JuniorSubordinatedDebentureTrustIiMember2024-12-31 00009034192024-01-012024-12-31 0000903419alrs:JuniorSubordinatedDebentureTrustIiMember2024-01-012024-12-31 0000903419us-gaap:CommitmentsToExtendCreditMember2026-03-31 0000903419us-gaap:CommitmentsToExtendCreditMember2025-12-31 0000903419us-gaap:StandbyLettersOfCreditMember2026-03-31 0000903419us-gaap:StandbyLettersOfCreditMember2025-12-31 0000903419us-gaap:UnfundedLoanCommitmentMember2026-03-31 0000903419us-gaap:UnfundedLoanCommitmentMember2025-12-31 0000903419us-gaap:UnfundedLoanCommitmentMember2026-01-012026-03-31 0000903419us-gaap:UnfundedLoanCommitmentMember2025-01-012025-03-31 0000903419srt:FederalHomeLoanBankOfDesMoinesMember2026-03-31 0000903419srt:FederalHomeLoanBankOfDesMoinesMember2025-12-31 0000903419alrs:BankOfNorthDakotaMember2026-03-31 0000903419alrs:BankOfNorthDakotaMember2025-12-31 0000903419us-gaap:LineOfCreditMemberalrs:BankOfNorthDakotaMember2026-03-31 0000903419us-gaap:LineOfCreditMemberalrs:BankOfNorthDakotaMember2025-12-31 0000903419alrs:EquityIncentivePlan2019Member2019-05-06 0000903419alrs:EquityIncentivePlan2019Member2026-03-31 0000903419alrs:EquityIncentivePlan2019Member2026-01-012026-03-31 0000903419alrs:EquityIncentivePlan2019Member2025-01-012025-03-31 0000903419alrs:RestrictedStockAndRestrictedStockUnitsMember2025-12-31 0000903419alrs:RestrictedStockAndRestrictedStockUnitsMember2024-12-31 0000903419alrs:RestrictedStockAndRestrictedStockUnitsMember2026-01-012026-03-31 0000903419alrs:RestrictedStockAndRestrictedStockUnitsMember2025-01-012025-03-31 0000903419alrs:RestrictedStockAndRestrictedStockUnitsMember2026-03-31 0000903419alrs:RestrictedStockAndRestrictedStockUnitsMember2025-03-31 0000903419alrs:QualifiedAffordableHousingProjectsMemberus-gaap:InvestmentCreditMember2026-03-31 0000903419alrs:QualifiedAffordableHousingProjectsMemberus-gaap:InvestmentCreditMember2025-03-31 0000903419alrs:QualifiedAffordableHousingProjectsMemberus-gaap:InvestmentCreditMember2026-01-012026-03-31 0000903419alrs:QualifiedAffordableHousingProjectsMemberus-gaap:InvestmentCreditMember2025-01-012025-03-31 0000903419us-gaap:OperatingSegmentsMemberalrs:BankingSegmentMember2026-01-012026-03-31 0000903419us-gaap:OperatingSegmentsMemberalrs:RetirementAndBenefitServicesSegmentMember2026-01-012026-03-31 0000903419us-gaap:OperatingSegmentsMemberalrs:WealthManagementSegmentMember2026-01-012026-03-31 0000903419us-gaap:CorporateNonSegmentMember2026-01-012026-03-31 0000903419us-gaap:OperatingSegmentsMemberalrs:OtherNoninterestMemberalrs:BankingSegmentMember2026-01-012026-03-31 0000903419us-gaap:OperatingSegmentsMemberalrs:OtherNoninterestMemberalrs:RetirementAndBenefitServicesSegmentMember2026-01-012026-03-31 0000903419us-gaap:OperatingSegmentsMemberalrs:OtherNoninterestMemberalrs:WealthManagementSegmentMember2026-01-012026-03-31 0000903419us-gaap:CorporateNonSegmentMemberalrs:OtherNoninterestMember2026-01-012026-03-31 0000903419alrs:OtherNoninterestMember2026-01-012026-03-31 0000903419us-gaap:OperatingSegmentsMemberalrs:BankingSegmentMember2026-03-31 0000903419us-gaap:OperatingSegmentsMemberalrs:RetirementAndBenefitServicesSegmentMember2026-03-31 0000903419us-gaap:OperatingSegmentsMemberalrs:WealthManagementSegmentMember2026-03-31 0000903419us-gaap:CorporateNonSegmentMember2026-03-31 0000903419us-gaap:OperatingSegmentsMemberalrs:BankingSegmentMember2025-01-012025-03-31 0000903419us-gaap:OperatingSegmentsMemberalrs:RetirementAndBenefitServicesSegmentMember2025-01-012025-03-31 0000903419us-gaap:OperatingSegmentsMemberalrs:WealthManagementSegmentMember2025-01-012025-03-31 0000903419us-gaap:CorporateNonSegmentMember2025-01-012025-03-31 0000903419us-gaap:OperatingSegmentsMemberalrs:OtherNoninterestMemberalrs:BankingSegmentMember2025-01-012025-03-31 0000903419us-gaap:OperatingSegmentsMemberalrs:OtherNoninterestMemberalrs:RetirementAndBenefitServicesSegmentMember2025-01-012025-03-31 0000903419us-gaap:OperatingSegmentsMemberalrs:OtherNoninterestMemberalrs:WealthManagementSegmentMember2025-01-012025-03-31 0000903419us-gaap:CorporateNonSegmentMemberalrs:OtherNoninterestMember2025-01-012025-03-31 0000903419alrs:OtherNoninterestMember2025-01-012025-03-31 0000903419us-gaap:OperatingSegmentsMemberalrs:BankingSegmentMember2025-03-31 0000903419us-gaap:OperatingSegmentsMemberalrs:RetirementAndBenefitServicesSegmentMember2025-03-31 0000903419us-gaap:OperatingSegmentsMemberalrs:WealthManagementSegmentMember2025-03-31 0000903419us-gaap:CorporateNonSegmentMember2025-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2026-03-31 0000903419us-gaap:DesignatedAsHedgingInstrumentMember2026-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:NotDesignatedAsHedgingInstrumentTradingMember2026-03-31 0000903419us-gaap:InterestRateLockCommitmentsMemberus-gaap:NotDesignatedAsHedgingInstrumentTradingMember2026-03-31 0000903419alrs:ForwardLoanSalesCommitmentsMemberus-gaap:NotDesignatedAsHedgingInstrumentTradingMember2026-03-31 0000903419alrs:TobeannouncedMortgageBackedSecuritiesMemberus-gaap:NotDesignatedAsHedgingInstrumentTradingMember2026-03-31 0000903419us-gaap:NotDesignatedAsHedgingInstrumentTradingMember2026-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2025-12-31 0000903419us-gaap:DesignatedAsHedgingInstrumentMember2025-12-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:NotDesignatedAsHedgingInstrumentTradingMember2025-12-31 0000903419us-gaap:InterestRateLockCommitmentsMemberus-gaap:NotDesignatedAsHedgingInstrumentTradingMember2025-12-31 0000903419alrs:ForwardLoanSalesCommitmentsMemberus-gaap:NotDesignatedAsHedgingInstrumentTradingMember2025-12-31 0000903419alrs:TobeannouncedMortgageBackedSecuritiesMemberus-gaap:NotDesignatedAsHedgingInstrumentTradingMember2025-12-31 0000903419us-gaap:NotDesignatedAsHedgingInstrumentTradingMember2025-12-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2026-01-012026-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2025-01-012025-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2025-01-012025-03-01 0000903419us-gaap:DesignatedAsHedgingInstrumentMember2026-01-012026-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberalrs:InterestAndFeeIncomeLoansAndLeasesMember2026-01-012026-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberalrs:InterestIncomeSecuritiesOperatingTaxableMember2026-01-012026-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberalrs:InterestExpenseShorttermBorrowingsMember2026-01-012026-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberalrs:InterestAndFeeIncomeLoansAndLeasesMember2026-01-012026-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberalrs:InterestIncomeSecuritiesOperatingTaxableMember2026-01-012026-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberalrs:InterestExpenseShorttermBorrowingsMember2026-01-012026-03-31 0000903419us-gaap:DesignatedAsHedgingInstrumentMember2025-01-012025-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberalrs:InterestAndFeeIncomeLoansAndLeasesMember2025-01-012025-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberalrs:InterestIncomeSecuritiesOperatingTaxableMember2025-01-012025-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberalrs:InterestExpenseShorttermBorrowingsMember2025-01-012025-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberalrs:InterestAndFeeIncomeLoansAndLeasesMember2025-01-012025-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberalrs:InterestIncomeSecuritiesOperatingTaxableMember2025-01-012025-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberalrs:InterestExpenseShorttermBorrowingsMember2025-01-012025-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:NotDesignatedAsHedgingInstrumentTradingMember2026-01-012026-03-31 0000903419us-gaap:InterestRateSwapMemberus-gaap:NotDesignatedAsHedgingInstrumentTradingMember2025-01-012025-03-31 0000903419alrs:MortgageInterestRateSwapMemberus-gaap:NotDesignatedAsHedgingInstrumentTradingMember2026-01-012026-03-31 0000903419alrs:MortgageInterestRateSwapMemberus-gaap:NotDesignatedAsHedgingInstrumentTradingMember2025-01-012025-03-31 0000903419us-gaap:InterestRateLockCommitmentsMemberus-gaap:NotDesignatedAsHedgingInstrumentTradingMember2026-01-012026-03-31 0000903419us-gaap:InterestRateLockCommitmentsMemberus-gaap:NotDesignatedAsHedgingInstrumentTradingMember2025-01-012025-03-31 0000903419alrs:ForwardLoanSalesCommitmentsMemberus-gaap:NotDesignatedAsHedgingInstrumentTradingMember2026-01-012026-03-31 0000903419alrs:ForwardLoanSalesCommitmentsMemberus-gaap:NotDesignatedAsHedgingInstrumentTradingMember2025-01-012025-03-31 0000903419alrs:TobeannouncedMortgageBackedSecuritiesMemberus-gaap:NotDesignatedAsHedgingInstrumentTradingMember2026-01-012026-03-31 0000903419alrs:TobeannouncedMortgageBackedSecuritiesMemberus-gaap:NotDesignatedAsHedgingInstrumentTradingMember2025-01-012025-03-31 0000903419us-gaap:NotDesignatedAsHedgingInstrumentTradingMember2026-01-012026-03-31 0000903419us-gaap:NotDesignatedAsHedgingInstrumentTradingMember2025-01-012025-03-31 0000903419alrs:InterestRateSwapByCompanyMember2026-03-31 0000903419alrs:InterestRateSwapByDealerBankMember2026-03-31 0000903419alrs:InterestRateSwapByCustomerMember2026-03-31 0000903419alrs:TobeannouncedMortgageBackedSecuritiesMember2026-03-31 0000903419alrs:InterestRateSwapByCompanyMember2025-12-31 0000903419alrs:InterestRateSwapByDealerBankMember2025-12-31 0000903419alrs:InterestRateSwapByCustomerMember2025-12-31 0000903419alrs:TobeannouncedMortgageBackedSecuritiesMember2025-12-31 0000903419srt:SubsidiariesMember2026-03-31 0000903419srt:SubsidiariesMember2025-12-31 0000903419us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2025-12-31 0000903419us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2025-12-31 0000903419us-gaap:AociDerivativeQualifyingAsHedgeExcludedComponentParentMember2025-12-31 0000903419us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-12-31 0000903419us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2026-01-012026-03-31 0000903419us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2026-01-012026-03-31 0000903419us-gaap:AociDerivativeQualifyingAsHedgeExcludedComponentParentMember2026-01-012026-03-31 0000903419us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2026-03-31 0000903419us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2026-03-31 0000903419us-gaap:AociDerivativeQualifyingAsHedgeExcludedComponentParentMember2026-03-31 0000903419us-gaap:AccumulatedOtherComprehensiveIncomeMember2026-03-31 0000903419us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2024-12-31 0000903419us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-12-31 0000903419us-gaap:AociDerivativeQualifyingAsHedgeExcludedComponentParentMember2024-12-31 0000903419us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2025-01-012025-03-31 0000903419us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2025-01-012025-03-31 0000903419us-gaap:AociDerivativeQualifyingAsHedgeExcludedComponentParentMember2025-01-012025-03-31 0000903419us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2025-03-31 0000903419us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2025-03-31 0000903419us-gaap:AociDerivativeQualifyingAsHedgeExcludedComponentParentMember2025-03-31 0000903419alrs:NewStockRepurchaseProgramMember2023-12-12 0000903419alrs:NewStockRepurchaseProgramMember2026-01-012026-03-31 0000903419us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2026-03-31 0000903419us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2026-03-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2026-03-31 0000903419us-gaap:FairValueMeasurementsRecurringMember2026-03-31 0000903419us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2026-03-31 0000903419us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2026-03-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2026-03-31 0000903419us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2026-03-31 0000903419us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2026-03-31 0000903419us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2026-03-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2026-03-31 0000903419us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2026-03-31 0000903419us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2026-03-31 0000903419us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2026-03-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2026-03-31 0000903419us-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2026-03-31 0000903419us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2026-03-31 0000903419us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2026-03-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2026-03-31 0000903419us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2026-03-31 0000903419us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2025-12-31 0000903419us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2025-12-31 0000903419us-gaap:FairValueMeasurementsRecurringMember2025-12-31 0000903419us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2025-12-31 0000903419us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2025-12-31 0000903419us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2025-12-31 0000903419us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2025-12-31 0000903419us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2025-12-31 0000903419us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2025-12-31 0000903419us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2025-12-31 0000903419us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2025-12-31 0000903419us-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2025-12-31 0000903419us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2025-12-31 0000903419us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2025-12-31 0000903419us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2025-12-31 0000903419us-gaap:CollateralPledgedMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMember2026-03-31 0000903419us-gaap:CollateralPledgedMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMember2026-03-31 0000903419us-gaap:CollateralPledgedMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMember2026-03-31 0000903419us-gaap:CollateralPledgedMemberus-gaap:FairValueMeasurementsNonrecurringMember2026-03-31 0000903419us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMember2026-03-31 0000903419us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMember2026-03-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMember2026-03-31 0000903419us-gaap:FairValueMeasurementsNonrecurringMember2026-03-31 0000903419us-gaap:CollateralPledgedMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMember2025-12-31 0000903419us-gaap:CollateralPledgedMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMember2025-12-31 0000903419us-gaap:CollateralPledgedMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMember2025-12-31 0000903419us-gaap:CollateralPledgedMemberus-gaap:FairValueMeasurementsNonrecurringMember2025-12-31 0000903419us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMember2025-12-31 0000903419us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMember2025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMember2025-12-31 0000903419us-gaap:FairValueMeasurementsNonrecurringMember2025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputComparabilityAdjustmentMemberus-gaap:MarketApproachValuationTechniqueMember2026-03-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:MinimumMemberus-gaap:MarketApproachValuationTechniqueMember2026-03-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:MaximumMemberus-gaap:MarketApproachValuationTechniqueMember2026-03-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:WeightedAverageMemberus-gaap:MarketApproachValuationTechniqueMember2026-03-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputComparabilityAdjustmentMemberus-gaap:MarketApproachValuationTechniqueMember2026-01-012026-03-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:WeightedAverageMemberus-gaap:MarketApproachValuationTechniqueMember2026-01-012026-03-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputPrepaymentRateMember2026-03-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputPrepaymentRateMembersrt:WeightedAverageMember2026-03-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMember2026-03-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMembersrt:WeightedAverageMember2026-03-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputComparabilityAdjustmentMemberus-gaap:MarketApproachValuationTechniqueMember2025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:MinimumMemberus-gaap:MarketApproachValuationTechniqueMember2025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:MaximumMemberus-gaap:MarketApproachValuationTechniqueMember2025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:WeightedAverageMemberus-gaap:MarketApproachValuationTechniqueMember2025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputComparabilityAdjustmentMemberus-gaap:MarketApproachValuationTechniqueMember2025-01-012025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:WeightedAverageMemberus-gaap:MarketApproachValuationTechniqueMember2025-01-012025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputPrepaymentRateMember2025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputPrepaymentRateMembersrt:MinimumMember2025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputPrepaymentRateMembersrt:MaximumMember2025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputPrepaymentRateMembersrt:WeightedAverageMember2025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMember2025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMembersrt:WeightedAverageMember2025-12-31 0000903419us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2026-03-31 0000903419us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2026-03-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2026-03-31 0000903419us-gaap:EstimateOfFairValueFairValueDisclosureMember2026-03-31 0000903419us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2025-12-31 0000903419us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2025-12-31 0000903419us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2025-12-31 0000903419us-gaap:EstimateOfFairValueFairValueDisclosureMember2025-12-31
 

 

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2026

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number: 001-39036

 

ALERUS FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

45-0375407

(State or other jurisdiction of incorporation or

(I.R.S. Employer Identification No.)

organization)

  
   

401 Demers Avenue

  

Grand Forks, ND

58201

(Address of principal executive offices)

(Zip Code)

 

(701) 795‑3200

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to section 12(b) of the Act:

 

Title of each class

  

Trading symbol

  

Name of each exchange on which registered

Common Stock, par value $1.00 per share

  

ALRS

  

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒   No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

 

Large accelerated filer ☐

Accelerated filer ☒

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Act). Yes ☐  No ☒

 

The number of shares of the registrant’s common stock outstanding at April 28, 2026 was 25,128,646. 

 
Table of Contents
 

Alerus Financial Corporation and Subsidiaries

 

Table of Contents

 

   

Page

Part I:

FINANCIAL INFORMATION

  

Item 1.

Consolidated Financial Statements

1
 

Consolidated Balance Sheets

1
 

Consolidated Statements of Income

2
 

Consolidated Statements of Comprehensive Income

3
 

Consolidated Statements of Changes in Stockholders’ Equity

4
 

Consolidated Statements of Cash Flows

5
 

Notes to Consolidated Financial Statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

39

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

60

Item 4.

Controls and Procedures

61
     

Part II:

OTHER INFORMATION

  

Item 1.

Legal Proceedings

62

Item 1A.

Risk Factors

62

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

62

Item 3.

Defaults Upon Senior Securities

62

Item 4.

Mine Safety Disclosures

62

Item 5.

Other Information

62

Item 6.

Exhibits

63
     

Signatures

  

64

 

 
Table of Contents
 

PART I. FINANCIAL INFORMATION

 

Item 1 - Consolidated Financial Statements

 

Alerus Financial Corporation and Subsidiaries

 

Consolidated Balance Sheets (Unaudited)

 

   

March 31,

    

December 31,

  

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

  

2026

    

2025

  

Assets

                

Cash and cash equivalents

   $ 128,826     $ 67,192  

Investment securities

                

Trading

     1,758       1,758  

Available-for-sale, at fair value (amortized cost of $528,357 and $516,737, respectively)

     522,101       514,095  

Held-to-maturity, at amortized cost (fair value of $220,425 and $228,009, respectively, with an allowance for credit losses on investments of $118 and $123, respectively)

     247,437       254,448  

Loans held for sale

     22,345       21,934  

Loans

     4,034,744       4,048,022  

Allowance for credit losses on loans

     (50,505 )     (61,915 )

Net loans

     3,984,239       3,986,107  

Land, premises and equipment, net

     43,978       43,253  

Operating lease right-of-use assets

     32,573       28,761  

Accrued interest receivable

     20,469       21,742  

Bank-owned life insurance

     39,475       39,307  

Goodwill

     85,634       85,634  

Other intangible assets, net

     31,397       33,371  

Servicing rights

     6,615       6,383  

Deferred income taxes, net

     20,863       23,080  

Other assets

     100,261       103,019  

Total assets

   $ 5,287,971     $ 5,230,084  

Liabilities and Stockholders’ Equity

                

Liabilities

                

Deposits

                

Noninterest-bearing

   $ 857,625     $ 807,896  

Interest-bearing

     3,490,257       3,384,107  

Total deposits

     4,347,882       4,192,003  

Short-term borrowings

     200,000       308,800  

Long-term debt

     59,211       59,182  

Operating lease liabilities

     42,590       36,282  

Accrued expenses and other liabilities

     63,595       68,883  

Total liabilities

     4,713,278       4,665,150  

Commitments and contingencies (Note 12)

                  

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 60,000,000 shares authorized: 25,214,146 and 25,406,278 issued and outstanding

     25,214       25,406  

Additional paid-in capital

     266,016       271,609  

Retained earnings

     287,700       270,075  

Accumulated other comprehensive income (loss)

     (4,237 )     (2,156 )

Total stockholders’ equity

     574,693       564,934  

Total liabilities and stockholders’ equity

   $ 5,287,971     $ 5,230,084  

 

 

See accompanying notes to consolidated financial statements (unaudited)

 

1
Table of Contents
 

Alerus Financial Corporation and Subsidiaries

 

Consolidated Statements of Income (Unaudited)

 

   

Three months ended

  
   

March 31,

  

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

  

2026

    

2025

  

Interest Income

                

Loans, including fees

   $ 58,621     $ 61,495  

Investment securities

                

Taxable

     7,104       5,707  

Exempt from federal income taxes

     158       160  

Other

     1,094       819  

Total interest income

     66,977       68,181  

Interest Expense

                

Deposits

     19,074       23,535  

Short-term borrowings

     2,357       2,839  

Long-term debt

     634       650  

Total interest expense

     22,065       27,024  

Net interest income

     44,912       41,157  

Provision for (recovery of) credit losses

     (4,883 )     863  

Net interest income after provision for (recovery of) credit losses

     49,795       40,294  

Noninterest Income

                

Retirement and benefit services

     17,406       16,106  

Wealth advisory services

     7,237       6,905  

Mortgage banking

     3,535       1,527  

Service charges on deposit accounts

     933       651  

Other

     1,736       2,443  

Total noninterest income

     30,847       27,632  

Noninterest Expense

                

Compensation

     24,087       22,961  

Employee taxes and benefits

     6,640       7,762  

Occupancy and equipment expense

     3,427       2,907  

Business services, software and technology expense

     5,839       5,752  

Intangible amortization expense

     1,974       2,710  

Professional fees and assessments

     3,800       2,996  

Marketing and business development

     861       965  

Supplies and postage

     607       630  

Travel

     361       287  

Mortgage and lending expenses

     710       536  

Other

     2,086       2,859  

Total noninterest expense

     50,392       50,365  

Income before income taxes

     30,250       17,561  

Income tax expense

     7,279       4,246  

Net income

   $ 22,971     $ 13,315  

Per Common Share Data

                

Basic earnings per common share

   $ 0.90     $ 0.52  
                 

Diluted earnings per common share

   $ 0.89     $ 0.52  

Dividends declared per common share

   $ 0.21     $ 0.20  

Average common shares outstanding

     25,380       25,359  

Diluted average common shares outstanding

     25,679       25,653  

 

See accompanying notes to consolidated financial statements (unaudited)

 

2
Table of Contents
 

Alerus Financial Corporation and Subsidiaries

 

Consolidated Statements of Comprehensive Income (Unaudited)

 

   

Three months ended

  
   

March 31,

  

(dollars in thousands)

  

2026

    

2025

  

Net Income

   $ 22,971     $ 13,315  

Other Comprehensive Income (Loss), Net of Tax

                

Net change in unrealized gains (losses) on debt securities

     (3,634 )     14,174  

Net change in unrealized gain (losses) on cash flow hedging derivatives

     787       (441 )

Net change in unrealized gain (losses) on other derivatives

     —       (232 )

Total other comprehensive income (loss), before tax

     (2,847 )     13,501  

Income tax expense (benefit) related to items of other comprehensive income (loss)

     (766 )     3,389  

Other comprehensive income (loss), net of tax

     (2,081 )     10,112  

Total comprehensive income

   $ 20,890     $ 23,427  

 

See accompanying notes to consolidated financial statements (unaudited)

 

3
Table of Contents
 

Alerus Financial Corporation and Subsidiaries

 

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

 

   

Three months ended

  
                           

Accumulated

          
           

Additional

            

Other

          
   

Common

    

Paid-in

    

Retained

    

Comprehensive

          

(dollars and shares in thousands)

  

Stock

    

Capital

    

Earnings

    

Income (Loss)

    

Total

  

Balance as of December 31, 2024

     25,345     $ 269,708     $ 273,723     $ (73,366 )   $ 495,410  

Net income

     —       —       13,315       —       13,315  

Other comprehensive income (loss)

     —       —       —       10,112       10,112  

Common stock repurchased

     (6 )     (121 )     —       —       (127 )

Common stock dividends

     —       —       (5,077 )     —       (5,077 )

Share‑based compensation expense

     —       599       —       —       599  

Vesting of restricted stock

     27       (27 )     —       —       —  

Balance as of March 31, 2025

     25,366     $ 270,159     $ 281,961     $ (63,254 )   $ 514,232  
                                         

Balance as of December 31, 2025

     25,406     $ 271,609     $ 270,075     $ (2,156 )   $ 564,934  

Net income

     —       —       22,971       —       22,971  

Other comprehensive income (loss)

     —       —       —       (2,081 )     (2,081 )

Common stock repurchased

     (258 )     (6,278 )     —       —       (6,536 )

Common stock dividends

     —       —       (5,346 )     —       (5,346 )

Share‑based compensation expense

     —       751       —       —       751  

Vesting of restricted stock

     66       (66 )     —       —       —  

Balance as of March 31, 2026

     25,214     $ 266,016     $ 287,700     $ (4,237 )   $ 574,693  

 

See accompanying notes to consolidated financial statements (unaudited)

 

4
Table of Contents
 

Alerus Financial Corporation and Subsidiaries

 

Consolidated Statements of Cash Flows (Unaudited)

 

   

Three months ended

  
   

March 31,

  

(dollars in thousands)

  

2026

    

2025

  

Operating Activities

                

Net income

   $ 22,971     $ 13,315  

Adjustments to reconcile net income to net cash provided (used) by operating activities

                

Deferred income taxes

     2,983       4,334  

Provision for (recovery of) credit losses

     (4,883 )     863  

Depreciation and amortization

     3,283       3,839  

Amortization and accretion of premiums/discounts on investment securities

     26       185  

Amortization of operating lease right-of-use assets

     2,496       (21 )

Share‑based compensation expense

     751       599  

Purchase accounting accretion, net

     (3,019 )     (5,074 )

Originations of loans held for sale

     (94,434 )     (64,866 )

Proceeds on loans held for sale

     96,373       70,108  

Realized loss (gain) on mortgage loans sold

     (2,359 )     (1,645 )

Servicing rights capitalized upon sale of mortgage loans

     (11 )     (54 )

(Increase) in value of bank-owned life insurance

     (168 )     (221 )

Realized loss (gain) on sale of premises and equipment

     21       —  

Realized loss (gain) on derivative instruments

     (261 )     (289 )

Realized loss (gain) on sale of foreclosed assets

     23       19  

Change in fair value of mortgage servicing rights

     (221 )     621  

Net change in:

                

Accrued interest receivable

     1,273       (430 )

Other assets

     5,074       (4,900 )

Accrued expenses and other liabilities

     (2,105 )     (8,668 )

Net cash provided (used) by operating activities

     27,813       7,715  

Investing Activities

                

Proceeds from sales of trading investment securities

     926       3,377  

Purchases of trading investment securities

     (1,011 )     (3,145 )

Proceeds from sales or calls of investment securities available-for-sale

     —       10,000  

Proceeds from maturities of investment securities available-for-sale

     15,890       24,563  

Purchases of investment securities available-for-sale

     (27,370 )     —  

Proceeds from calls of investment securities held-to-maturity

     340       146  

Proceeds from maturities and paydowns of investment securities held-to-maturity

     6,490       6,562  

Net (increase) decrease in loans

     9,271       (88,793 )

Purchases of FHLB stock

     (146,149 )     (72,762 )

Sales of FHLB stock

     141,837       73,548  

Purchases of BOLI

     —       (138 )

Purchases of premises and equipment

     (2,027 )     (2,054 )

Proceeds from sales of foreclosed assets

     159       —  

Net cash provided (used) by investing activities

     (1,644 )     (48,696 )

Financing Activities

                

Net increase (decrease) in deposits

     155,879       106,881  

Net increase (decrease) in short-term borrowings with maturities of three months or less

     (108,800 )     (38,960 )

Cash dividends paid on common stock

     (5,078 )     (5,073 )

Repurchase of common stock

     (6,536 )     (127 )

Net cash provided (used) by financing activities

     35,465       62,721  

Net change in cash and cash equivalents

     61,634       21,740  

Cash and cash equivalents at beginning of period

     67,192       61,239  

Cash and cash equivalents at end of period

   $ 128,826     $ 82,979  

 

See accompanying notes to consolidated financial statements (unaudited)

 

5
Table of Contents

 

   

Three months ended

  
   

March 31,

  
   

2026

    

2025

  

Supplemental Cash Flow Disclosures

                

Interest paid

   $ 23,704     $ 29,227  

Income taxes paid

     (47 )     1  

Cash dividends declared, not paid

     5,346       5,078  

Supplemental Disclosures of Noncash Investing and Financing Activities

                

Loan collateral transferred to foreclosed assets

     —       (511 )

Right-of-use assets obtained in exchange for new operating lease liabilities, net

     4,739       22  

 

See accompanying notes to consolidated financial statements (unaudited)

 

6
Table of Contents

 

Alerus Financial Corporation and Subsidiaries

 

Notes to Consolidated Financial Statements (Unaudited)

 

 

NOTE 1 Basis of Presentation

 

The accompanying unaudited consolidated interim financial statements and notes thereto of the Company have been prepared in accordance with instructions for Form 10-Q and, therefore, do not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for complete presentation of financial statements. In the opinion of management, the consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the consolidated balance sheets of Alerus Financial Corporation (“the Company”) as of  March 31, 2026 and December 31, 2025, the consolidated statements of income for the three months ended March 31, 2026 and 2025, the consolidated statements of comprehensive income (loss) for the three months ended March 31, 2026 and 2025, the consolidated statements of changes in stockholders’ equity for the three months ended March 31, 2026 and 2025, and the consolidated statements of cash flows for the three months ended March 31, 2026 and 2025.

 

The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Company’s principal operating subsidiary is Alerus Financial, National Association (the “Bank”). Certain items previously reported have been reclassified to conform to the current period’s reporting format. Such reclassifications did not affect net income or stockholders’ equity. The results of operations for the interim periods are not necessarily indicative of the results for the full year or any other period. The Company has also evaluated all subsequent events for potential recognition and disclosure through the date of the filing of this Quarterly Report on Form 10-Q. These interim unaudited financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 4, 2026.

 

NOTE 2 Recent Accounting Pronouncements

 

The following Financial Accounting Standards Board (“FASB”) Accounting Standards Updates (“ASUs”) are divided into pronouncements which have been adopted by the Company since January 1, 2026, and those which are not yet effective and have been evaluated or are currently being evaluated by management as of March 31, 2026.

 

Adopted Pronouncements

 

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements (“ASU 2025-09”). ASU 2025-09 amends existing hedge accounting guidance to improve the alignment of financial reporting with the economics of an entity's risk management activities. ASU 202-09 is effective for annual reporting periods beginning after December 15, 2026, including interim periods within those annual reporting periods. Early adoption is permitted. The amendments in this update apply to any entity that elects to apply hedge accounting in accordance with Topic 815 and generally are to be adopted on a prospective basis, with an election available to apply the guidance to existing hedging relationships as of the adoption date. The Company adopted ASU 2025-09 on January 1, 2026 on a prospective basis. The adoption did not have a material impact on the Company's consolidated financial statements. 

 

Pronouncements Not Yet Effective

 

There are no ASUs that are not yet effective to the Company since January 1, 2026. 

 

NOTE 3 Investment Securities

 

Trading securities are reported on the Company’s consolidated balance sheet at fair value. The fair value of the Company’s trading securities was $1.8 million as of both  March 31, 2026 and  December 31, 2025. Changes in the fair value of trading securities are recorded in other noninterest income on the Company’s consolidated statements of income. 

 

The following tables present amortized cost, gross unrealized gains and losses, allowance for credit losses (“ACL”) and fair value of available-for-sale (“AFS”) investment securities and the amortized cost, gross unrealized gains and losses and fair value of held-to-maturity (“HTM”) securities as of March 31, 2026 and December 31, 2025:

 

   

March 31, 2026

  
   

Amortized

    

Unrealized

    

Unrealized

    

Allowance for

    

Fair

  

(dollars in thousands)

  

Cost

    

Gains

    

Losses

    

Credit Losses

    

Value

  

Available-for-sale

                                        

U.S. Treasury and agencies

   $ 4,140     $ 2     $ (1 )   $ —     $ 4,141  

Mortgage backed securities

                                        

Residential agency

     484,220       251       (3,844 )     —       480,627  

Asset backed securities

     14       —       —       —       14  

Corporate bonds

     39,983       1       (2,665 )     —       37,319  

Total available-for-sale investment securities

     528,357       254       (6,510 )     —       522,101  

Held-to-maturity

                                        

Obligations of state and political agencies

     107,666       —       (6,672 )     69       100,994  

Mortgage backed securities

                                        

Residential agency

     139,889       —       (20,458 )     49       119,431  

Total held-to-maturity investment securities

     247,555       —       (27,130 )     118       220,425  

Total investment securities

   $ 775,912     $ 254     $ (33,640 )   $ 118     $ 742,526  

 

7
Table of Contents
 
   

December 31, 2025

  
   

Amortized

    

Unrealized

    

Unrealized

    

Allowance for

    

Fair

  

(dollars in thousands)

  

Cost

    

Gains

    

Losses

    

Credit Losses

    

Value

  

Available-for-sale

                                        

U.S. Treasury and agencies

   $ 406     $ —     $ (1 )     —     $ 405  

Mortgage backed securities

                                        

Residential agency

     476,334       988       (576 )     —       476,746  

Asset backed securities

     15       —       —       —       15  

Corporate bonds

     39,982       —       (3,053 )     —       36,929  

Total available-for-sale investment securities

     516,737       988       (3,630 )     —       514,095  

Held-to-maturity

                                        

Obligations of state and political agencies

     111,866       1       (6,462 )     72       105,405  

Mortgage backed securities

                                        

Residential agency

     142,705       —       (20,101 )     51       122,604  

Total held-to-maturity investment securities

     254,571       1       (26,563 )     123       228,009  

Total investment securities

   $ 771,308     $ 989     $ (30,193 )   $ 123     $ 742,104  

 

The adequacy of the ACL on investment securities is assessed at the end of each quarter. The Company does not believe that the AFS debt securities that were in an unrealized loss position as of March 31, 2026 represented a credit loss impairment. As of both March 31, 2026 and December 31, 2025, the gross unrealized loss positions were primarily related to mortgage-backed securities issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government, are widely recognized as “risk free,” and have a long history of zero credit loss. Additionally, there were corporate bonds in gross unrealized loss positions as of both March 31, 2026 and December 31, 2025; however, all such bonds had an investment grade rating as of both March 31, 2026 and December 31, 2025. Total gross unrealized losses were attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. It is not likely that the Company will be required to sell the investment securities before recovery of their amortized cost basis, which may be at maturity. 

 

The ACL on HTM debt securities is estimated using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Using a probability of default and loss given default analysis, the ACL on HTM debt securities was $118 thousand and $123 thousand as of March 31, 2026 and December 31, 2025, respectively. The change in the ACL on HTM debt securities was due to a change in the provision for credit losses, with no charge-offs or recoveries for the three months ended March 31, 2026. 

 

Accrued interest receivable on AFS investment securities and HTM investment securities is recorded in accrued interest receivable and is excluded from the estimate of credit losses. As of March 31, 2026, the accrued interest receivable on AFS investment securities and HTM investment securities totaled $2.1 million and $0.8 million, respectively. As of December 31, 2025, the accrued interest receivable on AFS investment securities and HTM investment securities totaled $1.9 million and $1.2 million, respectively. 

 

The Company had no sales of AFS investment securities for the three months ended March 31, 2026 and 2025. The Company had no calls of AFS investment securities for the three months ended March 31, 2026, and had calls of AFS investment securities with proceeds of $10.0 million for the three months ended March 31, 2025. 

 

The Company had no sales of HTM investment securities for the three months ended March 31, 2026 and 2025. 

 

The following tables present investment securities with gross unrealized losses, for which an ACL was not recorded at March 31, 2026 and December 31, 2025, aggregated by investment category and length of time that individual investment securities have been in a continuous loss position: 

 

           

March 31, 2026

  
           

Less than 12 Months

    

Over 12 Months

    

Total

  
   

Number of

    

Unrealized

    

Fair

    

Unrealized

    

Fair

    

Unrealized

    

Fair

  

(dollars in thousands)

  

Holdings

    

Losses

    

Value

    

Losses

    

Value

    

Losses

    

Value

  

Available-for-sale

                                                        

U.S. Treasury and agencies

     2     $ —     $ —     $ (1 )   $ 358     $ (1 )   $ 358  

Mortgage backed securities

                                                        

Residential agency

     50       (3,820 )     444,994       (24 )     1,672       (3,844 )     446,666  

Asset backed securities

     2       —       —       —       2       —       2  

Corporate bonds

     7       —       —       (2,665 )     36,836       (2,665 )     36,836  

Total available-for-sale investment securities

     61     $ (3,820 )   $ 444,994     $ (2,690 )   $ 38,868     $ (6,510 )   $ 483,862  

 

 

           

December 31, 2025

  
           

Less than 12 Months

    

Over 12 Months

    

Total

  
   

Number of

    

Unrealized

    

Fair

    

Unrealized

    

Fair

    

Unrealized

    

Fair

  

(dollars in thousands)

  

Holdings

    

Losses

    

Value

    

Losses

    

Value

    

Losses

    

Value

  

Available-for-sale

                                                        

U.S. Treasury and agencies

     2     $ (1 )   $ 198     $ —     $ 199     $ (1 )   $ 397  

Mortgage backed securities

                                                        

Residential agency

     39       (541 )     317,084       (35 )     4,908       (576 )     321,992  

Asset backed securities

     1       —       —       —       1       —       1  

Corporate bonds

     8       (4 )     478       (3,049 )     36,452       (3,053 )     36,930  

Total available-for-sale investment securities

     50     $ (546 )   $ 317,760     $ (3,084 )   $ 41,560     $ (3,630 )   $ 359,320  

 

8
Table of Contents
 

As of March 31, 2026 and December 31, 2025, none of the Company’s HTM debt securities were past due or on nonaccrual status. The Company did not recognize any interest income on nonaccrual HTM debt securities during the three months ended March 31, 2026 and 2025.

 

The following table presents the carrying value and fair value of HTM investment securities and the amortized cost and fair value of AFS investment securities as of March 31, 2026, by contractual maturity:

 

   

Held-to-maturity

    

Available-for-sale

  
   

Carrying

    

Fair

    

Amortized

    

Fair

  

(dollars in thousands)

  

Value

    

Value

    

Cost

    

Value

  

Due within one year or less

   $ 12,821     $ 12,701     $ —     $ —  

Due after one year through five years

     55,571       52,675       168       167  

Due after five years through ten years

     34,048       30,970       41,731       39,068  

Due after 10 years

     5,226       4,648       2,238       2,239  
      107,666       100,994       44,137       41,474  

Mortgage-backed securities

                                

Residential agency

     139,889       119,431       484,220       480,627  

Total investment securities

   $ 247,555     $ 220,425     $ 528,357     $ 522,101  

 

Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

Investment securities with a total carrying value of $306.1 million and $115.1 million were pledged as of March 31, 2026 and December 31, 2025, respectively, to secure public deposits and for other purposes required or permitted by law.

 

As of March 31, 2026 and December 31, 2025, the carrying value of the Company’s Federal Reserve stock and Federal Home Loan Bank of Des Moines (“FHLB”) stock was as follows:

 

   

March 31,

    

December 31,

  

(dollars in thousands)

  

2026

    

2025

  

Federal Reserve

   $ 8,631     $ 8,631  

FHLB

     13,053       17,968  

 

These securities can only be redeemed or sold at their par value and only to the respective issuing institution or to another member institution. The Company records these non-marketable equity securities as a component of other assets and periodically evaluates these securities for impairment. Management considers these non-marketable equity securities to be long-term investments. Accordingly, when evaluating these securities for impairment, management considers the ultimate recoverability of the par value rather than recognizing temporary declines in value.

 

Visa Class B Restricted Shares

 

In 2008, the Company received Visa Class B restricted shares as part of Visa’s initial public offering. These shares are transferable only under limited circumstances until they can be converted into the publicly traded Class A common shares. This conversion will not occur until the settlement of certain litigation which will be indemnified by Visa members, including the Company. Visa funded an escrow account from its initial public offering to settle these litigation claims. Should this escrow account be insufficient to cover these litigation claims, Visa is entitled to fund additional amounts to the escrow account by reducing each member bank’s Class B conversion ratio to unrestricted Class A shares. As of March 31, 2026, the conversion ratio was 1.5475. Based on the existing transfer restriction and the uncertainty of the outcome of the Visa litigation mentioned above, the 6,924 Class B shares (10,715 Class A equivalents) that the Company owned as of March 31, 2026 and December 31, 2025, were carried at a zero cost basis.

 

9
Table of Contents
 

NOTE 4 Loans and Allowance for Credit Losses

 

The following table presents total loans outstanding, by portfolio segment, as of March 31, 2026 and December 31, 2025:

 

   

March 31,

    

December 31,

  

(dollars in thousands)

  

2026

    

2025

  

Commercial

                

Commercial and business lending

                

Commercial and industrial

   $ 747,447     $ 736,833  

Commercial real estate − Owner occupied

     444,276       427,260  

Total commercial and business lending

     1,191,723       1,164,093  

Investor commercial real estate

                

Construction, land and development

     146,897       246,238  

Multifamily

     392,097       383,505  

Non-owner occupied

     976,339       875,862  

Total investor commercial real estate

     1,515,333       1,505,605  

Agricultural

                

Land

     54,028       64,799  

Production

     50,983       62,500  

Total agricultural

     105,011       127,299  

Total commercial

     2,812,067       2,796,997  

Consumer

                

Residential real estate

                

First lien

     851,551       874,737  

Construction

     32,872       33,703  

HELOC

     262,131       260,883  

Junior lien

     35,783       36,844  

Total residential real estate

     1,182,337       1,206,167  

Other consumer

     40,340       44,858  

Total consumer

     1,222,677       1,251,025  

Total loans

   $ 4,034,744     $ 4,048,022  

 

Total loans included net deferred loan fees and costs of $3.4 million and $0.1 million at March 31, 2026 and December 31, 2025, respectively. Unearned discounts associated with bank acquisitions totaled $40.7 million and $43.7 million as of March 31, 2026 and December 31, 2025, respectively. 

 

Accrued interest receivable on loans is recorded within accrued interest receivable, and totaled $16.8 million at March 31, 2026 and $18.1 million at December 31, 2025. 

 

The Company manages its loan portfolio proactively to effectively identify problem credits and assess trends early, implement effective work-out strategies, and take charge-offs as promptly as practical. In addition, the Company continuously reassesses its underwriting standards in response to credit risk posed by changes in economic conditions. The Company monitors and manages credit risk through the following governance structure: 

 

 

●

The Credit Risk team, Collection and Special Assets team and the Credit Governance Committee, which is an internal management committee comprised of various executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Collections and Special Assets, Risk, and Commercial and Retail Banking, oversee the Company’s systems and procedures to monitor the credit quality of its loan portfolio, conduct a loan review program, and maintain the integrity of the loan rating system.

 

 

●

The Loan Committee is responsible for reviewing and approving all credit requests that exceed individual limits that have not been countersigned by an individual with sufficient assigned authority. This committee has full authority to commit the Bank to any request that fits within its assigned approval authority.

 

 

●

The adequacy of the ACL is overseen by the ACL Governance Committee, which is an internal management committee comprised of various Company executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Collections and Special Assets, Risk, and Commercial and Retail Banking. The ACL Governance Committee supports the oversight efforts of the Bank’s Board of Directors.

 

 

●

The Bank’s Board of Directors has approval authority and responsibility for all matters regarding loan policy, reviews all loans approved or declined by the Loan Committee, approves lending authority and monitors asset quality and concentration levels.

 

 

●

The ACL Governance Committee and Bank Board of Directors has approval authority and oversight responsibility for the ACL adequacy and methodology.

 

Loans with a carrying value of $2.4 billion as of March 31, 2026 and $2.6 billion as of December 31, 2025, were pledged to secure public deposits, and for other purposes required or permitted by law.

 

10
Table of Contents
 

ACL on Loans

 

The following tables present, by loan portfolio segment, a summary of the changes in the ACL on loans for the three months ended March 31, 2026 and 2025: 

 

   

Three months ended March 31, 2026

  

Beginning

  

Provision for (Recovery

    

Loan

    

Loan

    

Ending

        

(dollars in thousands)

  

Balance

    

of) Credit Losses(1)

    

Charge-offs

    

Recoveries

    

Balance

  

Commercial

                                        

Commercial and business lending

                                        

Commercial and industrial

   $ 16,216     $ 1,791     $ (6,565 )   $ 186     $ 11,628  

Commercial real estate − Owner occupied

     3,097       496       —       11       3,604  

Total commercial and business lending

     19,313       2,287       (6,565 )     197       15,232  

Investor commercial real estate

                                        

Construction, land and development

     13,210       (6,469 )     —       —       6,741  

Multifamily

     4,380       (125 )     (556 )     —       3,699  

Non-owner occupied

     11,006       (77 )     —       —       10,929  

Total investor commercial real estate

     28,596       (6,671 )     (556 )     —       21,369  

Agricultural

                                        

Land

     959       (107 )     —       —       852  

Production

     623       (299 )     —       194       518  

Total agricultural

     1,582       (406 )     —       194       1,370  

Total commercial

     49,491       (4,790 )     (7,121 )     391       37,971  

Consumer

                                        

Residential real estate

                                        

First lien

     9,358       (236 )     —       —       9,122  

Construction

     274       23       —       —       297  

HELOC

     1,787       343       —       —       2,130  

Junior lien

     395       224       (212 )     —       407  

Total residential real estate

     11,814       354       (212 )     —       11,956  

Other consumer

     610       52       (113 )     29       578  

Total consumer

     12,424       406       (325 )     29       12,534  

Total

   $ 61,915     $ (4,384 )   $ (7,446 )   $ 420     $ 50,505  

(1)

The difference in the credit loss expense reported herein compared to the consolidated statements of income is associated with the credit loss expense of $0.5 million related to off-balance sheet credit exposure and $5.0 thousand related to HTM investment securities. 

 

11
Table of Contents
 
   

Three months ended March 31, 2025

  
   

Beginning

    

Provision for (Recovery

    

Loan

    

Loan

    

Ending

  

(dollars in thousands)

  

Balance

    

of) Credit Losses(1)

    

Charge-offs

    

Recoveries

    

Balance

  

Commercial

                                        

Commercial and business lending

                                        

Commercial and industrial

   $ 8,170     $ (311 )   $ (169 )   $ 270     $ 7,960  

Commercial real estate − Owner occupied

     3,226       275       —       11       3,512  

Total commercial and business lending

     11,396       (36 )     (169 )     281       11,472  

Investor commercial real estate

                                        

Construction, land and development

     16,277       2,092       —       —       18,369  

Multifamily

     4,716       33       —       —       4,749  

Non-owner occupied

     16,513       (171 )     —       —       16,342  

Total investor commercial real estate

     37,506       1,954       —       —       39,460  

Agricultural

                                        

Land

     597       6       —       —       603  

Production

     631       270       —       12       913  

Total agricultural

     1,228       276       —       12       1,516  

Total commercial

     50,130       2,194       (169 )     293       52,448  

Consumer

                                        

Residential real estate

                                        

First lien

     6,921       175       (54 )     —       7,042  

Construction

     357       110       —       —       467  

HELOC

     1,339       91       (250 )     —       1,180  

Junior lien

     742       (3 )     (300 )     —       439  

Total residential real estate

     9,359       373       (604 )     —       9,128  

Other consumer

     440       (160 )     (39 )     112       353  

Total consumer

     9,799       213       (643 )     112       9,481  

Total

   $ 59,929     $ 2,407     $ (812 )   $ 405     $ 61,929  

(1)

 The difference in the credit loss expense reported herein compared to the consolidated statements of income is associated with the credit loss expense of ($1.5) million related to off-balance sheet credit exposure and ($2.0) thousand related to HTM investment securities. 
 

The ACL on loans at March 31, 2026 was $50.5 million, a decrease of $11.4 million, or 18.4%, from December 31, 2025. The decrease was primarily due to a decrease in nonperforming loans. 

 

12
Table of Contents
 

Credit Concentrations 

 

The Company focuses on maintaining a well-balanced and diversified loan portfolio. Despite such efforts, it is recognized that credit concentrations may occasionally emerge as a result of economic conditions, changes in local demand, natural loan growth and runoff. To identify credit concentrations effectively, all commercial and industrial and owner occupied real estate loans are assigned Standard Industrial Classification codes, North American Industry Classification System codes and state and county codes. Property type coding is used for investment real estate. There were no industry concentrations exceeding 10% of the Company’s total loan portfolio as of March 31, 2026.

 

Credit Quality Indicators 

 

The Company’s consumer loan portfolio is primarily comprised of secured loans that are evaluated at origination on a centralized basis against standardized underwriting criteria. The Company generally does not risk rate consumer loans unless a default event such as bankruptcy or extended nonperformance takes place. Credit quality for the consumer loan portfolio is measured by delinquency rates, nonaccrual amounts and actual losses incurred. These loans are rated as either performing or nonperforming.

 

The Company assigns a risk rating to all commercial loans, except pools of homogeneous loans, and performs detailed internal and external reviews of risk rated loans over a certain threshold to identify credit risks and to assess the overall collectability of the portfolio. These risk ratings are also subject to examination by the Company’s regulators. During the internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which the borrowers operate and the estimated fair values of collateral securing the loans. These credit quality indicators are used to assign a risk rating to each individual loan.

 

The Company’s ratings are aligned to pass and criticized categories. The criticized category includes special mention, substandard, and doubtful risk ratings. The risk ratings are defined as follows:

 

 

●

Pass: A pass loan is a credit with no existing or known potential weaknesses deserving of management’s close attention.

 

 

●

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects for the loan or in the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

 

 

●

Substandard: Loans classified as substandard are not adequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Loans so classified have a well‑defined weakness, or weaknesses that jeopardize the repayment of the debt. Well-defined weaknesses include a borrower’s lack of marketability, inadequate cash flow or collateral support, failure to complete construction on time, or the failure to fulfill expectations. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

 

 

●

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

 

 

●

Loss: Loans classified as loss are considered uncollectible and charged off immediately.

 

13
Table of Contents
 

The following tables set forth the amortized cost basis of loans by credit quality indicator and vintage based on the most recent analysis performed, as of March 31, 2026 and December 31, 2025:

 

                                                   

Revolving

          

(dollars in thousands)

  

Term Loans Amortized Cost Basis by Origination Year

    

Loans Amortized

          

As of March 31, 2026

  

2026 YTD

    

2025

    

2024

    

2023

    

2022

    

Prior

    

Cost Basis

    

Total

  

Commercial and industrial

                                                                

Pass

   $ 59,104     $ 234,415     $ 117,060     $ 61,187     $ 36,186     $ 65,155     $ 142,226     $ 715,333  

Special mention

     —       310       691       21       150       102       —       1,274  

Substandard

     —       673       27       3,619       2,886       7,744       11,414       26,363  

Doubtful

     —       610       3,413       454       —       —       —       4,477  

Subtotal

   $ 59,104     $ 236,008     $ 121,191     $ 65,281     $ 39,222     $ 73,001     $ 153,640     $ 747,447  

Gross charge-offs

   $ —     $ 632     $ 4,346     $ 1,188     $ 242     $ 157     $ —     $ 6,565  

CRE − Owner occupied

                                                                

Pass

   $ 22,981     $ 40,688     $ 91,420     $ 51,908     $ 60,745     $ 161,837     $ 960     $ 430,539  

Special mention

     —       —       448       —       —       1,634       555       2,637  

Substandard

     —       —       —       1,399       2,827       6,874       —       11,100  

Doubtful

     —       —       —       —       —       —       —       —  

Subtotal

   $ 22,981     $ 40,688     $ 91,868     $ 53,307     $ 63,572     $ 170,345     $ 1,515     $ 444,276  

Gross charge-offs

   $ —     $ —     $ —     $ —     $ —     $ —     $ —     $ —  

CRE − Construction, land and development

                                                                

Pass

   $ —     $ 33,405     $ 51,929     $ 19,352     $ 1,221     $ 1,441     $ 5,997     $ 113,345  

Special mention

     —       —       —       —       —       —       —       —  

Substandard

     —       —       11,144       —       22,408       —       —       33,552  

Doubtful

     —       —       —       —       —       —       —       —  

Subtotal

   $ —     $ 33,405     $ 63,073     $ 19,352     $ 23,629     $ 1,441     $ 5,997     $ 146,897  

Gross charge-offs

   $ —     $ —     $ —     $ —     $ —     $ —     $ —     $ —  

CRE − Multifamily

                                                                

Pass

   $ 6,197     $ 6,309     $ 48,959     $ 116,644     $ 106,559     $ 84,459     $ —     $ 369,127  

Special mention

     —       —       —       —       —       835       —       835  

Substandard

     —       —       —       —       —       12,434       —       12,434  

Doubtful

     —       —       5,751       3,950       —       —       —       9,701  

Subtotal

   $ 6,197     $ 6,309     $ 54,710     $ 120,594     $ 106,559     $ 97,728     $ —     $ 392,097  

Gross charge-offs

   $ —     $ —     $ —     $ —     $ —     $ 556     $ —     $ 556  

CRE − Non-owner occupied

                                                                

Pass

   $ 34,324     $ 104,950     $ 269,189     $ 131,934     $ 176,285     $ 248,255     $ 1,838     $ 966,775  

Special mention

     —       —       —       —       —       1,027       —       1,027  

Substandard

     —       —       300       4,494       —       3,743       —       8,537  

Doubtful

     —       —       —       —       —       —       —       —  

Subtotal

   $ 34,324     $ 104,950     $ 269,489     $ 136,428     $ 176,285     $ 253,025     $ 1,838     $ 976,339  

Gross charge-offs

   $ —     $ —     $ —     $ —     $ —     $ —     $ —     $ —  

Agricultural − Land

                                                                

Pass

   $ 609     $ 3,326     $ 7,766     $ 6,500     $ 15,301     $ 15,476     $ 29     $ 49,007  

Special mention

     —       2,985       —       —       —       —       —       2,985  

Substandard

     —       469       —       —       448       1,119       —       2,036  

Doubtful

     —       —       —       —       —       —       —       —  

Subtotal

   $ 609     $ 6,780     $ 7,766     $ 6,500     $ 15,749     $ 16,595     $ 29     $ 54,028  

Gross charge-offs

   $ —     $ —     $ —     $ —     $ —     $ —     $ —     $ —  

Agricultural − Production

                                                                

Pass

   $ 2,175     $ 2,958     $ 5,037     $ 4,153     $ 2,838     $ 980     $ 26,666     $ 44,807  

Special mention

     —       475       498       135       —       —       1,800       2,908  

Substandard

     —       —       19       601       —       316       2,332       3,268  

Doubtful

     —       —       —       —       —       —       —       —  

Subtotal

   $ 2,175     $ 3,433     $ 5,554     $ 4,889     $ 2,838     $ 1,296     $ 30,798     $ 50,983  

Gross charge-offs

   $ —     $ —     $ —     $ —     $ —     $ —     $ —     $ —  

Residential real estate − First lien

                                                                

Performing

   $ 5,622     $ 51,214     $ 35,183     $ 115,617     $ 205,336     $ 436,444     $ 146     $ 849,562  

Nonperforming

     —       —       —       —       —       1,989       —       1,989  

Subtotal

   $ 5,622     $ 51,214     $ 35,183     $ 115,617     $ 205,336     $ 438,433     $ 146     $ 851,551  

Gross charge-offs

   $ —     $ —     $ —     $ —     $ —     $ —     $ —     $ —  

Residential real estate − Construction

                                                                

Performing

   $ 1,685     $ 18,107     $ 7,916     $ —     $ —     $ 484     $ —     $ 28,192  

Nonperforming

     —       —       —       —       4,680       —       —       4,680  

Subtotal

   $ 1,685     $ 18,107     $ 7,916     $ —     $ 4,680     $ 484     $ —     $ 32,872  

Gross charge-offs

   $ —     $ —     $ —     $ —     $ —     $ —     $ —     $ —  

Residential real estate − HELOC

                                                                

Performing

   $ 258     $ 740     $ 2,000     $ 4,065     $ 4,622     $ 7,028     $ 243,260     $ 261,973  

Nonperforming

     —       —       —       25       50       83       —       158  

Subtotal

   $ 258     $ 740     $ 2,000     $ 4,090     $ 4,672     $ 7,111     $ 243,260     $ 262,131  

Gross charge-offs

   $ —     $ —     $ —     $ —     $ —     $ —     $ —     $ —  

Residential real estate − Junior lien

                                                                

Performing

   $ 1,492     $ 4,391     $ 4,570     $ 8,279     $ 6,304     $ 8,514     $ 50     $ 33,600  

Nonperforming

     —       —       1,775       —       —       408       —       2,183  

Subtotal

   $ 1,492     $ 4,391     $ 6,345     $ 8,279     $ 6,304     $ 8,922     $ 50     $ 35,783  

Gross charge-offs for the year ended

   $ —     $ —     $ —     $ —     $ —     $ 212     $ —     $ 212  

Other consumer

                                                                

Performing

   $ 626     $ 4,915     $ 2,025     $ 2,194     $ 2,702     $ 3,300     $ 24,263     $ 40,025  

Nonperforming

     —       —       296       —       —       19       —       315  

Subtotal

   $ 626     $ 4,915     $ 2,321     $ 2,194     $ 2,702     $ 3,319     $ 24,263     $ 40,340  

Gross charge-offs

   $ —     $ —     $ 2     $ 100     $ 11     $ —     $ —     $ 113  

Total loans

   $ 135,073     $ 510,940     $ 667,416     $ 536,531     $ 651,548     $ 1,071,700     $ 461,536     $ 4,034,744  

Gross charge-offs

   $ —     $ 632     $ 4,348     $ 1,288     $ 253     $ 925     $ —     $ 7,446  

 

14
Table of Contents
 
                                                   

Revolving

          

(dollars in thousands)

  

Term Loans Amortized Cost Basis by Origination Year

    

Loans Amortized

          

As of December 31, 2025

  

2025

    

2024

    

2023

    

2022

    

2021

    

Prior

    

Cost Basis

    

Total

  

Commercial and industrial

                                                                

Pass

   $ 242,893     $ 131,308     $ 67,934     $ 43,513     $ 21,143     $ 51,586     $ 145,133     $ 703,510  

Special mention

     316       10       560       —       —       28       —       914  

Substandard

     35       26       2,701       2,970       1,072       6,459       7,115       20,378  

Doubtful

     1,218       8,638       1,763       298       114       —       —       12,031  

Subtotal

   $ 244,462     $ 139,982     $ 72,958     $ 46,781     $ 22,329     $ 58,073     $ 152,248     $ 736,833  

Gross charge-offs

   $ —     $ 407     $ 152     $ 10     $ 5     $ 342     $ —     $ 916  

CRE − Owner occupied

                                                                

Pass

   $ 42,468     $ 86,030     $ 55,069     $ 61,790     $ 39,654     $ 126,951     $ 1,240     $ 413,202  

Special mention

     —       449       —       —       —       1,465       769       2,683  

Substandard

     —       —       1,402       2,867       2,342       4,764       —       11,375  

Doubtful

     —       —       —       —       —       —       —       —  

Subtotal

   $ 42,468     $ 86,479     $ 56,471     $ 64,657     $ 41,996     $ 133,180     $ 2,009     $ 427,260  

Gross charge-offs

   $ —     $ —     $ 6     $ —     $ —     $ —     $ —     $ 6  

CRE − Construction, land and development

                                                                

Pass

   $ 26,108     $ 148,261     $ 18,056     $ 9,738     $ 650     $ 995     $ 8,229     $ 212,037  

Special mention

     —       —       —       178       —       —       —       178  

Substandard

     —       11,178       —       22,685       —       160       —       34,023  

Doubtful

     —       —       —       —       —       —       —       —  

Subtotal

   $ 26,108     $ 159,439     $ 18,056     $ 32,601     $ 650     $ 1,155     $ 8,229     $ 246,238  

Gross charge-offs

   $ —     $ —     $ —     $ —     $ —     $ —     $ —     $ —  

CRE − Multifamily

                                                                

Pass

   $ 6,338     $ 26,236     $ 115,983     $ 115,403     $ 30,191     $ 60,813     $ —     $ 354,964  

Special mention

     —       —       —       —       831       —       —       831  

Substandard

     —       5,751       3,972       —       —       17,987       —       27,710  

Doubtful

     —       —       —       —       —       —       —       —  

Subtotal

   $ 6,338     $ 31,987     $ 119,955     $ 115,403     $ 31,022     $ 78,800     $ —     $ 383,505  

Gross charge-offs

   $ —     $ —     $ —     $ —     $ —     $ —     $ —     $ —  

CRE − Non-owner occupied

                                                                

Pass

   $ 102,426     $ 196,932     $ 134,443     $ 169,100     $ 86,273     $ 168,082     $ 1,015     $ 858,271  

Special mention

     —       —       —       —       —       1,040       —       1,040  

Substandard

     —       —       5,344       7,489       2,729       989       —       16,551  

Doubtful

     —       —       —       —       —       —       —       —  

Subtotal

   $ 102,426     $ 196,932     $ 139,787     $ 176,589     $ 89,002     $ 170,111     $ 1,015     $ 875,862  

Gross charge-offs

   $ —     $ —     $ —     $ 632     $ 775     $ 1,994     $ —     $ 3,401  

Agricultural − Land

                                                                

Pass

   $ 8,201     $ 8,285     $ 8,410     $ 12,363     $ 5,202     $ 12,221     $ 2,464     $ 57,146  

Special mention

     233       —       —       3,315       —       —       —       3,548  

Substandard

     —       —       303       3,583       —       219       —       4,105  

Doubtful

     —       —       —       —       —       —       —       —  

Subtotal

   $ 8,434     $ 8,285     $ 8,713     $ 19,261     $ 5,202     $ 12,440     $ 2,464     $ 64,799  

Gross charge-offs

   $ —     $ —     $ —     $ —     $ —     $ —     $ —     $ —  

Agricultural − Production

                                                                

Pass

   $ 4,778     $ 6,219     $ 4,652     $ 3,154     $ 370     $ 720     $ 38,945     $ 58,838  

Special mention

     —       48       112       —       —       —       213       373  

Substandard

     —       21       553       1,237       29       342       1,107       3,289  

Doubtful

     —       —       —       —       —       —       —       —  

Subtotal

   $ 4,778     $ 6,288     $ 5,317     $ 4,391     $ 399     $ 1,062     $ 40,265     $ 62,500  

Gross charge-offs

   $ —     $ —     $ —     $ 384     $ —     $ —     $ —     $ 384  

Residential real estate − First lien

                                                                

Performing

   $ 53,688     $ 37,893     $ 122,651     $ 210,228     $ 234,461     $ 213,214     $ —     $ 872,135  

Nonperforming

     —       —       499       —       642       1,461       —       2,602  

Subtotal

   $ 53,688     $ 37,893     $ 123,150     $ 210,228     $ 235,103     $ 214,675     $ —     $ 874,737  

Gross charge-offs

   $ —     $ —     $ —     $ —     $ 7     $ 48     $ —     $ 55  

Residential real estate − Construction

                                                                

Performing

   $ 18,097     $ 10,459     $ —     $ —     $ 467     $ —     $ —     $ 29,023  

Nonperforming

     —       —       —       4,680       —       —       —       4,680  

Subtotal

   $ 18,097     $ 10,459     $ —     $ 4,680     $ 467     $ —     $ —     $ 33,703  

Gross charge-offs

   $ —     $ —     $ —     $ —     $ —     $ —     $ —     $ —  

Residential real estate − HELOC

                                                                

Performing

   $ 757     $ 2,121     $ 3,716     $ 5,252     $ 975     $ 5,649     $ 242,285     $ 260,755  

Nonperforming

     —       —       25       50       —       53       —       128  

Subtotal

   $ 757     $ 2,121     $ 3,741     $ 5,302     $ 975     $ 5,702     $ 242,285     $ 260,883  

Gross charge-offs

   $ —     $ 100     $ 10     $ 438     $ —     $ —     $ —     $ 548  

Residential real estate − Junior lien

                                                                

Performing

   $ 4,753     $ 4,995     $ 8,609     $ 7,090     $ 3,977     $ 4,995     $ 50     $ 34,469  

Nonperforming

     —       1,775       —       —       —       600       —       2,375  

Subtotal

   $ 4,753     $ 6,770     $ 8,609     $ 7,090     $ 3,977     $ 5,595     $ 50     $ 36,844  

Gross charge-offs

   $ —     $ —     $ —     $ 300     $ —     $ —     $ —     $ 300  

Other consumer

                                                                

Performing

   $ 5,330     $ 2,318     $ 3,016     $ 3,056     $ 157     $ 3,651     $ 26,982     $ 44,510  

Nonperforming

     —       319       —       —       —       29       —       348  

Subtotal

   $ 5,330     $ 2,637     $ 3,016     $ 3,056     $ 157     $ 3,680     $ 26,982     $ 44,858  

Gross charge-offs

   $ —     $ 16     $ 31     $ 22     $ —     $ 69     $ —     $ 138  

Total loans

   $ 517,639     $ 689,272     $ 559,773     $ 690,039     $ 431,279     $ 684,473     $ 475,547     $ 4,048,022  

Gross charge-offs

   $ —     $ 523     $ 199     $ 1,786     $ 787     $ 2,453     $ —     $ 5,748  

 

15
Table of Contents
 

Past Due and Nonaccrual Loans

 

The Company closely monitors the performance of its loan portfolio. A loan is placed on nonaccrual status when the financial condition of the borrower is deteriorating, payment in full of both principal and interest is not expected as scheduled or principal or interest has been in default for 90 days or more. Exceptions may be made if the asset is secured by collateral sufficient to satisfy both the principal and accrued interest in full and collection is reasonably assured. When one loan to a borrower is placed on nonaccrual status, all other loans to the borrower are re-evaluated to determine if they should also be placed on nonaccrual status. All previously accrued and unpaid interest is reversed at that time. A loan will return to accrual when collection of principal and interest is assured and the borrower has demonstrated timely payments of principal and interest for a reasonable period, generally at least six months.

 

The following tables present a past due aging analysis of total loans outstanding, by portfolio segment, as of March 31, 2026 and December 31, 2025:

 

   

March 31, 2026

  
                           

90 Days

                  
   

Accruing

    

30 - 59 Days

    

60 - 89 Days

    

or More

            

Total

  

(dollars in thousands)

  

Current

    

Past Due

    

Past Due

    

Past Due

    

Nonaccrual

    

Loans

  

Commercial

                                                

Commercial and business lending

                                                

Commercial and industrial

   $ 737,762     $ 3,542     $ 610     $ —     $ 5,533     $ 747,447  

Commercial real estate − Owner occupied

     442,877       1,260       —       —       139       444,276  

Total commercial and business lending

     1,180,639       4,802       610       —       5,672       1,191,723  

Investor commercial real estate

                                                

Construction, land and development

     113,344       —       —       —       33,553       146,897  

Multifamily

     387,386       —       —       —       4,711       392,097  

Non-owner occupied

     975,494       689       —       —       156       976,339  

Total investor commercial real estate

     1,476,224       689       —       —       38,420       1,515,333  

Agricultural

                                                

Land

     53,650       229       —       —       149       54,028  

Production

     50,493       79       95       —       316       50,983  

Total agricultural

     104,143       308       95       —       465       105,011  

Total commercial

     2,761,006       5,799       705       —       44,557       2,812,067  

Consumer

                                                

Residential real estate

                                                

First lien

     848,330       1,232       —       —       1,989       851,551  

Construction

     28,192       —       —       —       4,680       32,872  

HELOC

     261,220       707       46       —       158       262,131  

Junior lien

     33,594       7       —       —       2,182       35,783  

Total residential real estate

     1,171,336       1,946       46       —       9,009       1,182,337  

Other consumer

     39,949       57       19       —       315       40,340  

Total consumer

     1,211,285       2,003       65       —       9,324       1,222,677  

Total

   $ 3,972,291     $ 7,802     $ 770     $ —     $ 53,881     $ 4,034,744  

 

   

December 31, 2025

  
                           

90 Days

                  
   

Accruing

    

30 - 59 Days

    

60 - 89 Days

    

or More

            

Total

  

(dollars in thousands)

  

Current

    

Past Due

    

Past Due

    

Past Due

    

Nonaccrual

    

Loans

  

Commercial

                                                

Commercial and business lending

                                                

Commercial and industrial

   $ 723,436     $ 689     $ —     $ —     $ 12,708     $ 736,833  

Commercial real estate − Owner occupied

     426,803       —       314       —       143       427,260  

Total commercial and business lending

     1,150,239       689       314       —       12,851       1,164,093  

Investor commercial real estate

                                                

Construction, land and development

     212,515       —       —       —       33,723       246,238  

Multifamily

     373,308       —       —       —       10,197       383,505  

Non-owner occupied

     874,042       163       —       —       1,657       875,862  

Total investor commercial real estate

     1,459,865       163       —       —       45,577       1,505,605  

Agricultural

                                                

Land

     63,961       674       —       —       164       64,799  

Production

     62,105       53       —       —       342       62,500  

Total agricultural

     126,066       727       —       —       506       127,299  

Total commercial

     2,736,170       1,579       314       —       58,934       2,796,997  

Consumer

                                                

Residential real estate

                                                

First lien

     869,291       2,051       794       —       2,601       874,737  

Construction

     29,023       —       —       —       4,680       33,703  

HELOC

     260,467       287       —       —       129       260,883  

Junior lien

     34,362       107       —       —       2,375       36,844  

Total residential real estate

     1,193,143       2,445       794       —       9,785       1,206,167  

Other consumer

     44,471       37       4       —       346       44,858  

Total consumer

     1,237,614       2,482       798       —       10,131       1,251,025  

Total

   $ 3,973,784     $ 4,061     $ 1,112     $ —     $ 69,065     $ 4,048,022  

 

16
Table of Contents
 

In calculating expected credit losses, the Company includes loans on nonaccrual status and loans 90 days or more past due and still accruing. The following tables present the amortized cost basis on nonaccrual status loans and loans 90 days or more past due and still accruing as of March 31, 2026 and December 31, 2025: 

 

   

As of March 31, 2026

  
                   

90 Days

  
   

Nonaccrual

            

or More

  
   

with no Allowance

            

Past Due

  

(dollars in thousands)

  

for Credit Losses

    

Nonaccrual

    

and Accruing

  

Commercial

                        

Commercial and business lending

                        

Commercial and industrial

   $ 401     $ 5,533     $ —  

Commercial real estate − Owner occupied

     —       139       —  

Total commercial and business lending

     401       5,672       —  

Investor commercial real estate

                        

Construction, land and development

     25,983       33,553       —  

Multifamily

     4,711       4,711       —  

Non-owner occupied

     156       156       —  

Total investor commercial real estate

     30,850       38,420       —  

Agricultural

                        

Land

     149       149       —  

Production

     —       316       —  

Total agricultural

     149       465       —  

Total commercial

     31,400       44,557       —  

Consumer

                        

Residential real estate

                        

First lien

     1,934       1,989       —  

Construction

     4,680       4,680       —  

HELOC

     —       158       —  

Junior lien

     2,105       2,182       —  

Total residential real estate

     8,719       9,009       —  

Other consumer

     —       315       —  

Total consumer

     8,719       9,324       —  

Total

   $ 40,119     $ 53,881     $ —  

 

   

December 31, 2025

  
                   

90 Days

  
   

Nonaccrual

            

or More

  
   

with no Allowance

            

Past Due

  

(dollars in thousands)

  

for Credit Losses

    

Nonaccrual

    

and Accruing

  

Commercial

                        

Commercial and business lending

                        

Commercial and industrial

   $ —     $ 12,708     $ —  

Commercial real estate − Owner occupied

     89       143       —  

Total commercial and business lending

     89       12,851       —  

Investor commercial real estate

                        

Construction, land and development

     26,475       33,723       —  

Multifamily

     4,733       10,197       —  

Non-owner occupied

     1,657       1,657       —  

Total investor commercial real estate

     32,865       45,577       —  

Agricultural

                        

Land

     164       164       —  

Production

     —       342       —  

Total agricultural

     164       506       —  

Total commercial

     33,118       58,934       —  

Consumer

                        

Residential real estate

                        

First lien

     2,298       2,601       —  

Construction

     4,680       4,680       —  

HELOC

     —       129       —  

Junior lien

     2,305       2,375       —  

Total residential real estate

     9,283       9,785       —  

Other consumer

     —       346       —  

Total consumer

     9,283       10,131       —  

Total

   $ 42,401     $ 69,065     $ —  

 

Interest income that would have been recognized if loans on nonaccrual status had been current in accordance with their original terms for the three months ended March 31, 2026 and 2025, is estimated to have been $1.0 million and $1.1 million, respectively. 

 

The Company’s policy is to reverse previously recorded interest income when a loan is placed on nonaccrual status. As a result, the Company did not record any interest income on its nonaccrual loans for the three months ended March 31, 2026 or 2025. At March 31, 2026 and December 31, 2025, total accrued interest receivable on loans, which had been excluded from reported amortized cost basis on loans, was $16.8 million and $18.1 million, respectively, and was reported within accrued interest receivable on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date. 

 

17
Table of Contents
 

The following tables present the amortized cost basis of collateral dependent loans, by the primary collateral type, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans, as of March 31, 2026 and December 31, 2025: 

 

   

As of March 31, 2026

  
   

Primary Type of Collateral

  
                                   

Allowance for

  

(dollars in thousands)

  

Real estate

    

Equipment

    

Other

    

Total

    

Credit Losses

  

Commercial

                                        

Commercial and business lending

                                        

Commercial and industrial

   $ —     $ 4,476     $ 924     $ 5,400     $ 3,510  

Commercial real estate − Owner occupied

     139       —       —       139       30  

Total commercial and business lending

     139       4,476       924       5,539       3,540  

Investor commercial real estate

                                        

Construction, land and development

     33,553       —       —       33,553       3,079  

Multifamily

     4,711       —       —       4,711       —  

Non-owner occupied

     156       —       —       156       —  

Total investor commercial real estate

     38,420       —       —       38,420       3,079  

Agricultural

                                        

Land

     149       —       —       149       —  

Production

     —       —       316       316       37  

Total agricultural

     149       —       316       465       37  

Total commercial

     38,708       4,476       1,240       44,424       6,656  

Consumer

                                        

Residential real estate

                                        

First lien

     1,934       —       —       1,934       —  

Construction

     4,680       —       —       4,680       —  

HELOC

     —       —       —       —       —  

Junior lien

     2,105       —       —       2,105       —  

Total residential real estate

     8,719       —       —       8,719       —  

Other consumer

     —       —       296       296       296  

Total consumer

     8,719       —       296       9,015       296  

Total

   $ 47,427     $ 4,476     $ 1,536     $ 53,439     $ 6,952  

 

   

As of December 31, 2025

  
   

Primary Type of Collateral

  
                                   

Allowance for

  

(dollars in thousands)

  

Real estate

    

Equipment

    

Other

    

Total

    

Credit Losses

  

Commercial

                                        

Commercial and business lending

                                        

Commercial and industrial

   $ 651     $ —     $ —     $ 651     $ 43  

Commercial real estate − Owner occupied

     142       —       —       142       4  

Total commercial and business lending

     793       —       —       793       47  

Investor commercial real estate

                                        

Construction, land and development

     33,723       —       —       33,723       5,635  

Multifamily

     10,197       —       —       10,197       865  

Non-owner occupied

     1,657       —       —       1,657       —  

Total investor commercial real estate

     45,577       —       —       45,577       6,500  

Agricultural

                                        

Land

     164       —       —       164       —  

Production

     —       —       342       342       42  

Total agricultural

     164       —       342       506       42  

Total commercial

     46,534       —       342       46,876       6,589  

Consumer

                                        

Residential real estate

                                        

First lien

     2,528       —       —       2,528       229  

Construction

     4,680       —       —       4,680       —  

HELOC

     —       —       —       —       —  

Junior lien

     2,304       —       —       2,304       —  

Total residential real estate

     9,512       —       —       9,512       229  

Other consumer

     —       —       319       319       319  

Total consumer

     9,512       —       319       9,831       548  

Total

   $ 56,046     $ —     $ 661     $ 56,707     $ 7,137  

 

Collateral dependent loans are loans for which the repayment is expected to be provided substantially by the underlying collateral when there are no other available and reliable sources of repayment. 

 

18
Table of Contents
 

NOTE 5 Land, Premises and Equipment, Net

 

Components of land, premises and equipment, net at March 31, 2026 and December 31, 2025 were as follows: 

 

   

March 31,

    

December 31,

  

(dollars in thousands)

  

2026

    

2025

  

Land (1)

   $ 6,425     $ 6,425  

Buildings and improvements (1)

     41,000       39,979  

Leasehold improvements

     2,657       2,657  

Furniture, fixtures, and equipment

     43,906       42,933  
      93,988       91,994  

Less accumulated depreciation

     (50,010 )     (48,741 )

Total

   $ 43,978     $ 43,253  

(1)

Excludes assets held for sale.

 

Depreciation expense was $1.3 million and $1.1 million for the three months ended March 31, 2026 and 2025, respectively. 

 

The Company’s West Fargo, North Dakota branch is listed for sale for $3.8 million and is expected to sell within the next 12 months. At  March 31, 2026, the facility had a carrying value of approximately $0.4 million. The Company expects to record a gain on the sale upon closing, as the expected sale price is greater than the property’s carrying value. Total assets associated with this location held for sale by the Company at  March 31, 2026 were $0.4 million and were included in other assets on the Company’s consolidated balance sheet and not included in the table above. 

 

The Company's Crossroads branch in Rochester, Minnesota is listed for sale for $1.5 million and is expected to sell within the next 12 months. At  March 31, 2026, the facility had a carrying value of approximately $1.0 million. The Company expects to record a gain on the sale upon closing, as the expected sale price is greater than the property’s carrying value. Total assets associated with this location held for sale by the Company at  March 31, 2026 were $1.0 million and were included in other assets on the Company’s consolidated balance sheet and not included in the table above. 

 

 

NOTE 6 Goodwill and Other Intangible Assets

 

The following table summarizes the carrying amount of goodwill, by segment, as of March 31, 2026 and December 31, 2025: 

 

   

March 31,

    

December 31,

  

(dollars in thousands)

  

2026

    

2025

  

Banking

   $ 74,111     $ 74,111  

Retirement and benefit services

     11,523       11,523  

Total goodwill

   $ 85,634     $ 85,634  

 

Goodwill is evaluated for impairment on an annual basis, at a minimum, and more frequently when the economic environment or specific circumstances warrant. The Company determined that there was no goodwill impairment as of March 31, 2026. 

 

The gross carrying amount and accumulated amortization for each type of identifiable intangible asset, as of March 31, 2026 and December 31, 2025, were as follows: 

 

   

March 31, 2026

    

December 31, 2025

  

(dollars in thousands)

  

Gross Carrying Amount

    

Accumulated Amortization

    

Total

    

Gross Carrying Amount

    

Accumulated Amortization

    

Total

  

Identifiable customer intangibles

   $ 27,504     $ (22,709 )   $ 4,795     $ 27,504     $ (22,456 )   $ 5,048  

Core deposit intangible assets

     41,092       (14,490 )     26,602       41,092       (12,769 )     28,323  

Total intangible assets

   $ 68,596     $ (37,199 )   $ 31,397     $ 68,596     $ (35,225 )   $ 33,371  

 

Amortization of total intangible assets was $2.0 million and $2.7 million for the three months ended March 31, 2026 and 2025, respectively. 

 

19
Table of Contents
 

NOTE 7 Loan Servicing

 

Loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of loans serviced for others totaled $640.7 million and $660.7 million as of March 31, 2026 and December 31, 2025, respectively. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and collection and foreclosure processing. Loan servicing income is recorded on an accrual basis and includes servicing fees from investors and certain charges collected from borrowers, such as late payment fees, and is net of fair value adjustments to capitalized mortgage servicing rights. As of and for the year ended December 31, 2024, the Company elected to subsequently measure mortgage servicing rights (“MSRs”) at fair value. The Company accounted for MSRs at the lower of amortized cost or fair value for all periods prior to December 31, 2023. 

 

The following table presents the changes in fair value of the Company’s MSR portfolio for the three months ended March 31, 2026 and 2025: 

 

   

Three months ended

  
   

March 31,

  

(dollars in thousands)

  

2026

    

2025

  

Balance at beginning of period

   $ 6,383     $ 7,918  

Additions from loans sold with servicing rights retained

     11       54  

Change in fair value

     221       (621 )

Balance at end of period

   $ 6,615     $ 7,351  

 

The following is a summary of key data and assumptions used in the valuation of servicing rights as of March 31, 2026 and December 31, 2025. Increases or decreases in any one of these assumptions would result in lower or higher fair value measurements. 

   

March 31,

    

December 31,

  

(dollars in thousands)

  

2026

    

2025

  

Fair value of servicing rights

   $ 6,615     $ 7,351  

Weighted-average remaining term, years

     21.5       21.5  

Prepayment speeds

     12.3 %     14.4 %

Discount rate

     10.0 %     10.0 %

 

20
Table of Contents
 

NOTE 8 Leases

 

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of an identified property, plant or equipment for a period of time in exchange for consideration. Substantially all of the leases in which the Company is the lessee are comprised of real property for offices and office equipment rentals with terms extending through 2045. Substantially all of the Company’s leases are classified as operating leases. The Company has no existing finance leases. 

 

The Company elected not to include short-term leases (i.e., leases with initial terms of twelve months or less), or equipment leases (deemed immaterial) on the consolidated financial statements. The following table presents the classification of the Company’s right-of-use (“ROU”) assets and lease liabilities on the consolidated financial statements as of March 31, 2026 and December 31, 2025: 

 

     

March 31,

    

December 31,

  

(dollars in thousands)

    

2026

    

2025

  

Lease Right-of-Use Assets

Classification

                

Operating lease right-of-use assets

Operating lease right-of-use assets

   $ 32,573     $ 28,761  

Lease Liabilities

                  

Operating lease liabilities

Operating lease liabilities

   $ 42,590     $ 36,282  

 

The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. The Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term for the discount rate. 

 

   

March 31,

    

December 31,

  
   

2026

    

2025

  

Weighted-average remaining lease term, years

                

Operating leases

     16.0       16.9  

Weighted-average discount rate

                

Operating leases

     5.0 %     5.1 %

 

As the Company elected, for all classes of underlying assets, not to separate lease and non‑lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as common area maintenance and utilities. Variable lease cost also includes payments for usage or maintenance of those capitalized equipment operating leases. 

 

The following table presents lease costs and other lease information for the three months ended March 31, 2026 and 2025: 

 

   

Three months ended

  
   

March 31,

  

(dollars in thousands)

  

2026

    

2025

  

Lease costs

                

Operating lease cost

   $ 700     $ 619  

Variable lease cost

     191       58  

Short-term lease cost

     111       290  

Sublease income

     (17 )     (41 )

Net lease cost

   $ 985     $ 926  

Other information

                

Cash paid for amounts included in the measurement of lease liabilities operating cash flows from operating leases

   $ 700     $ 598  

Right-of-use assets obtained in exchange for new operating lease liabilities

     4,739       22  

 

Future minimum payments for finance and operating leases with initial or remaining terms of one year or more as of March 31, 2026 were as follows: 

 

   

Operating

  

(dollars in thousands)

  

Leases

  

Twelve months ended

        

December 31, 2026

   $ 3,570  

December 31, 2027

     3,508  

December 31, 2028

     3,821  

December 31, 2029

     3,841  

December 31, 2030

     3,931  

Thereafter

     47,442  

Total future minimum lease payments

   $ 66,113  

Amounts representing interest

     (23,523 )

Total operating lease liabilities

   $ 42,590  

 

21
Table of Contents
 

NOTE 9 Deposits

 

The components of deposits in the consolidated balance sheets as of March 31, 2026 and December 31, 2025 were as follows: 

 

   

March 31,

    

December 31,

  

(dollars in thousands)

  

2026

    

2025

  

Noninterest-bearing

   $ 857,625     $ 807,896  

Interest-bearing

                

Interest-bearing demand

     1,449,156       1,296,315  

Savings accounts

     178,347       173,759  

Money market savings

     1,291,794       1,337,491  

Time deposits

     570,960       576,542  

Total interest-bearing

     3,490,257       3,384,107  

Total deposits

   $ 4,347,882     $ 4,192,003  

 

Certificates of deposit in excess of $250,000 totaled $190.7 million and $190.5 million at March 31, 2026 and December 31, 2025, respectively. 

 

 

NOTE 10 Short‑Term Borrowings

 

Short-term borrowings at March 31, 2026 and December 31, 2025 consisted of the following: 

 

   

March 31,

    

December 31,

  

(dollars in thousands)

  

2026

    

2025

  

Fed funds purchased

   $ —     $ 58,800  

FHLB short-term advances

     200,000       250,000  

Total

   $ 200,000     $ 308,800  

 

 

NOTE 11 Long‑Term Debt

 

Long‑term debt as of March 31, 2026 and December 31, 2025 consisted of the following: 

 

   

March 31, 2026
                       

Period End

          
   

Face

    

Carrying

        

Interest

    

Maturity

    

(dollars in thousands)

  

Value

    

Value

    

Interest Rate

  

Rate

    

Date

  

Call Date

Subordinated notes payable

   $ 50,000     $ 50,000    

Fixed for first 5 years, then repriced at the FHLB rate + 3.00%

     6.75 %  

3/30/2036

  

3/30/2031

Junior subordinated debenture (Trust I)

     4,124       3,684    

Three-month CME SOFR + 0.26% + 3.10%

     7.07 %  

6/26/2033

  

6/26/2008

Junior subordinated debenture (Trust II)

     6,186       5,527    

Three-month CME SOFR + 0.26% + 1.80%

     5.74 %  

9/15/2036

  

9/15/2011

Total long-term debt

   $ 60,310     $ 59,211                      

 

   

December 31, 2025
                       

Period End

          
   

Face

    

Carrying

        

Interest

    

Maturity

    

(dollars in thousands)

  

Value

    

Value

    

Interest Rate

  

Rate

    

Date

  

Call Date

Subordinated notes payable

   $ 50,000     $ 50,000    

Fixed

     3.50 %  

3/30/2031

  

3/31/2026

Junior subordinated debenture (Trust I)

     4,124       3,673    

Three-month CME SOFR + 0.26% + 3.10%

     7.05 %  

6/26/2033

  

6/26/2008

Junior subordinated debenture (Trust II)

     6,186       5,509    

Three-month CME SOFR + 0.26% + 1.80%

     5.78 %  

9/15/2036

  

9/15/2011

Total long-term debt

   $ 60,310     $ 59,182                      

 

22
Table of Contents
 

NOTE 12 Commitments and Contingencies 

 

Commitments

 

In the normal course of business, the Company has outstanding commitments and contingent liabilities, such as commitments to extend credit and standby letters of credit, which are not included in the accompanying consolidated financial statements. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. The Company uses the same credit policies in making such commitments as it does for instruments that are included in the statements of financial condition. 

 

A summary of the contractual amounts of the Company’s exposure to off-balance sheet risk as of March 31, 2026 and December 31, 2025, respectively, was as follows: 

 

   

March 31,

    

December 31,

  

(dollars in thousands)

  

2026

    

2025

  

Commitments to extend credit

   $ 1,004,955     $ 1,038,347  

Standby letters of credit

     14,447       14,393  

Total

   $ 1,019,401     $ 1,052,740  

 

The Company establishes an ACL on unfunded commitments, except those that are unconditionally cancellable by the Company. As of  March 31, 2026 and December 31, 2025, the ACL on unfunded commitments was $3.4 million and $3.9 million, respectively. The ACL on unfunded commitments was presented within accrued expenses and other liabilities on the consolidated balance sheets. For the three months ended March 31, 2026 and 2025, the provision (recovery) for credit losses on unfunded commitments was ($0.5) million and ($1.5) million, respectively. 

 

Commitments to extend credit are agreements to lend to a client as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses, and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each client’s creditworthiness on a case by case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation. Collateral held varies but may include accounts receivable, inventory, property and equipment, and income producing commercial properties.

 

The Company was not required to perform on any financial guarantees and did not incur any losses on its commitments during the past two years. 

 

The Company utilizes standby letters of credit issued by either the FHLB or the Bank of North Dakota to secure public unit deposits. The Company had letters of credit outstanding with the FHLB in the amount of $30.1 million as of March 31, 2026 and $33.6 million as of  December 31, 2025. With the Bank of North Dakota, the Company had no letters of credit outstanding as of  March 31, 2026 and $126.0 million of letters of credit outstanding as of  December 31, 2025. Letters of credit with the Bank of North Dakota were collateralized by loans pledged to the Bank of North Dakota in the amount of $541.7 million and $549.0 million as of March 31, 2026 and December 31, 2025, respectively. 

 

Legal Contingencies

 

In the normal course of business, including in connection with business combinations pursued by the Company, the Company and its subsidiaries are subject to pending and threatened litigation, claims investigations and legal and administrative cases and proceedings. 

 

Under applicable accounting standards, reserves are established for legal claims only when losses associated with the claims are judged to be probable, and the loss can be reasonably estimated. When a material loss contingency is reasonably possible, but not probable, the Company does not record a liability, but instead discloses the nature of the matter and an estimate of the loss or range of losses, to the extent such estimate can be made. Significant judgment is required in both the determination of possibility or probability, and whether the loss or range of losses is reasonably estimable. The Company’s judgments are subjective and based on the status of the legal or regulatory proceedings, the merits of the Company’s defenses and consultation with in-house and outside legal counsel. Because of uncertainties related to these matters, accruals are based on the best information available to the Company and its advisors at the time, including, among other information, settlement agreements. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation and  may revise its estimates accordingly. Due to the inherent uncertainties of the legal and regulatory processes, such judgments  may be materially different than the actual outcomes. Legal costs such as outside counsel fees are expensed in the period in which the services are rendered.

 

Assessments of litigation exposure are difficult because they involve inherently unpredictable factors including, but not limited to: whether the proceeding is in the early stages; whether damages are unspecified, unsupported or uncertain; whether there is a potential for punitive or other pecuniary damages; whether the matter involves legal uncertainties, including novel issues of law; whether the matter involves multiple parties and/or jurisdictions; whether discovery has begun or is not complete; whether meaningful settlement discussions have commenced; and whether the proceeding involves class allegations. In many lawsuits and arbitrations, it is not possible to determine whether a liability will be incurred, or to estimate the ultimate or minimum amount of that liability, until the matter is close to resolution, in which case a reserve will not be recognized until that time. As a result, the Company  may be unable to estimate reasonably possible losses with respect to litigation matters it faces. 

 

In 2023, the Company sold its ESOP fiduciary services business but currently remains subject to two pending lawsuits related to the sold business, including one brought by the DOL.

 

In  November 2023, the DOL brought suit against several defendants, including the Bank, alleging that the Bank, in its capacity as trustee to an ESOP, (1) breached certain of its fiduciary duties in connection with a transaction which allegedly caused the ESOP to pay more than fair market value to acquire stock, and (2) engaged in a prohibited transaction by causing the ESOP to acquire the stock from an existing company shareholder for more than adequate consideration. The Bank continues to dispute the allegations made by the DOL and intends to continue to defend itself vigorously.

 

23
Table of Contents
 

The Company believes a material loss contingency related to the DOL complaint is reasonably possible, but not probable, based on currently-available information. However, the Company is unable to estimate the ultimate or minimum loss or range of losses, if any, at this time due to a number of uncertainties, including, but not limited to: (1) the current early stages of the proceedings, (2) the absence of specificity as to alleged damages, and (3) the lack of resolution of significant factual and legal issues. 

 

As of March 31, 2026 and December 31, 2025, the Company did not have any accrued liabilities recorded for loss contingencies that were required to be disclosed. 

 

 

NOTE 13 Share-Based Compensation

 

On May 6, 2019, the Company’s stockholders approved the Alerus Financial Corporation 2019 Equity Incentive Plan. This plan allows the compensation committee of the Board of Directors of the Company the ability to grant a wide variety of equity awards, including stock options, stock appreciation rights, stock awards, and cash incentive awards in such forms and amounts as it deems appropriate to accomplish the goals of the plan. Since inception, all awards issued under the plan have been restricted stock and restricted stock units. Any shares subject to an award that is cancelled, forfeited, or expires prior to exercise or realization, either in full or in part, shall again become available for issuance under the plan. However, shares subject to an award shall not again be made available for issuance or delivery under the plan if such shares are (a) tendered in payment of the exercise price of a stock option, (b) delivered to, or withheld by, the Company to satisfy any tax withholding obligation, or (c) covered by a stock-settled stock appreciation right or other awards that were not issued upon the settlement of the award. Restricted stock units issued do not participate in dividends and recipients are not entitled to vote these restricted stock units until shares of the Company’s common stock are delivered after vesting of the restricted stock units. Shares vest, become exercisable and contain such other terms and conditions as determined by the compensation committee and set forth in individual agreements with the participant receiving the award. Awards issued to Company directors vest on the earlier of the first anniversary of the grant date and the next annual meeting of stockholders. The plan authorizes the issuance of up to 1,100,000 shares of common stock. As of March 31, 2026, 491,787 shares of common stock were still available for issuance under the plan. 

 

The compensation expense relating to awards under these plans was $0.8 million and $0.6 million for the three months ended March 31, 2026 and 2025, respectively. 

 

The following table presents the activity in the stock plans for the three months ended March 31, 2026 and 2025:

 

   

Three months ended March 31,

  
   

2026

    

2025

  
           

Weighted-

            

Weighted-

  
           

Average Grant

            

Average Grant

  
   

Awards

    

Date Fair Value

    

Awards

    

Date Fair Value

  

Restricted Stock and Restricted Stock Unit Awards

                                

Outstanding at beginning of period

     296,468     $ 20.61       289,549     $ 22.00  

Granted

     80,670       24.75       86,317       20.49  

Vested

     (55,691 )     20.85       (27,260 )     26.11  

Forfeited or cancelled

     (9,631 )     20.36       (20,516 )     28.07  

Outstanding at end of period

     311,816     $ 21.65       328,090     $ 20.83  

 

As of March 31, 2026, there was $4.3 million of unrecognized compensation expense related to non-vested awards granted under the plans. The expense is expected to be recognized over a weighted-average period of 2.4 years. 

 

 

NOTE 14 Income Taxes

 

The components of income tax expense (benefit) for the three months ended March 31, 2026 and 2025 were as follows:

 

   

Three months ended March 31,

  
   

2026

    

2025

  
           

Percent of

            

Percent of

  

(dollars in thousands)

  

Amount

    

Pretax Income

    

Amount

    

Pretax Income

  

Taxes at statutory federal income tax rate

   $ 6,353       21.0 %   $ 3,688       21.0 %

Tax effect of:

                                

Tax exempt income

     (525 )     (1.7 )%     (457 )     (2.6 )%

State income taxes, net of federal benefits

     1,480       4.9 %     852       4.9 %

Nondeductible items and other

     (29 )     (0.1 )%     163       0.9 %

Applicable income taxes

   $ 7,279       24.1 %   $ 4,246       24.2 %

 

24
Table of Contents
 

It is the opinion of management that, as of March 31, 2026, the Company had no significant uncertain tax positions that would be subject to change upon examination. 

 

 

NOTE 15 Tax Credit Investments

 

The Company invests in qualified affordable housing projects for the purpose of community reinvestment and obtaining tax credits. The Company’s tax credit investments are limited to existing lending relationships with well-known developers and projects within the Company’s market area.

 

The following table presents a summary of the Company’s investments in qualified affordable housing project tax credits as of March 31, 2026 and December 31, 2025:

 

     

March 31, 2026

    

December 31, 2025

  

(dollars in thousands)

    

Investment

    

Unfunded Commitment

    

Investment

    

Unfunded Commitment

  

Investment

Accounting Method

                                

Low income housing tax credit

Proportional amortization

   $ 32,906     $ 12,785     $ 22,906     $ 5,082  

 

The following table presents a summary of the amortization expense and tax benefit recognized for the Company’s qualified affordable housing projects for the three months ended March 31, 2026 and 2025:

 

   

Three months ended March 31,

  
   

2026

    

2025

  
   

Amortization

    

Tax Benefit

    

Amortization

    

Tax Benefit

  

(dollars in thousands)

  

Expense (1)

    

Recognized (2)

    

Expense (1)

    

Recognized (2)

  

Low income housing tax credit

   $ 576     $ (754 )   $ 459     $ (353 )

(1)

The amortization expense for low income housing tax credits was included in the income tax expense.

(2)

All of the tax benefits recognized were included in income tax expense.

 

 

NOTE 16 Segment Reporting

 

Beginning with the annual period ended  December 31, 2024, the Company adopted the guidance within ASU 2023-07, Segment Reporting (Topic 280), which expanded disclosure requirements for significant segment expenses and other segment items. In connection with this guidance, compensation, employee taxes and benefits, business services, software and technology expense, and merger and acquisition expense are presented separately as these expenses were previously included within total noninterest expense. Financial information for prior periods were recast to conform to the current presentation.

 

Operating segments are components of an enterprise, which are evaluated regularly by the “chief operating decision maker” in deciding how to allocate resources and assess performance. The Company’s chief operating decision maker is the President and Chief Executive Officer of the Company, and assesses overall segment performance based on net income (loss) before taxes and uses this metric to allocate resources for each segment, focusing on budgeting and forecasting.

 

Reportable segments are determined based on the services offered, the significance of the services offered, the significance of those services to the Company’s financial statements, and management’s regular review of the operating results of those services. The Company currently operates through three operating segments: banking, retirement and benefit services, and wealth advisory services. 

 

The Company’s reportable segments include the following:

 

 

●

Banking: Offers a complete line of loan, deposit, cash management, and treasury services through 26 offices in North Dakota, Minnesota, Wisconsin, Iowa, and Arizona. These products and services are supported through web and mobile based applications. The majority of the Company’s assets and liabilities are in the Banking segment’s balance sheet.
     
  ● Retirement and Benefit Services: Provides the following services nationally: record-keeping and administration services to qualified and other types of retirement plans, investment fiduciary services to retirement plans, health savings accounts, flexible spending accounts, and COBRA recordkeeping and administration services. The division serves clients nationally, including within the Company's banking markets, through a geographically dispersed workforce, and maintains an office in Lakewood, Colorado. 
     
  ● Wealth Advisory Services: Provides advisory and planning services, investment management, and trust and fiduciary services to clients across the Company’s footprint.

 

The Company’s segment reporting process begins with the assignment of income and expenses directly to the applicable segments based on different cost centers within the Company. The net income (loss) before taxes for each reportable segment is further derived by the use of expense allocations. Certain expenses not directly attributable to a specific segment are allocated across all segments based on key metrics, such as number of employees and time spent working in each segment. These types of expenses include business services, software and technology expense, human resources, accounting and finance, risk management, legal, and marketing. 

 

25
Table of Contents
 

The financial information presented for each segment includes net interest income, provision for credit losses, noninterest income, and direct and indirect noninterest expense. As discussed above, noninterest expense is broken out between significant noninterest expenses and other noninterest expense. Other noninterest expense consists of occupancy and equipment expense, intangible amortization expense, professional fees and assessments (less merger and acquisition expenses which are included within this expense item on the consolidated statements of income), marketing and business development, supplies and postage, travel, mortgage and lending expenses, and other noninterest expenses. Corporate administration includes all remaining income and expenses not allocated to the three operating segments, including all merger and acquisition expenses.

 

The assignment and allocation methodologies used in the segment reporting process discussed above change from time to time as systems are enhanced, methods for evaluating segment performance or product lines change or as business segments are realigned.

 

The following tables present key metrics related to the Company’s segments for the periods presented:

 

   

As of and for the three months ended March 31, 2026

  
          Retirement and     Wealth Advisory     Corporate        

(dollars in thousands)

  

Banking

    

Benefit Services

    

Services

    

Administration

    

Consolidated

  

Net interest income (loss)

   $ 45,545     $ —     $ —     $ (633 )   $ 44,912  

Provision for credit losses

     (4,883 )     —       —       —       (4,883 )

Noninterest income (loss)

     6,348       17,406       7,237       (144 )     30,847  

Noninterest expense

                                        

Compensation

     11,711       7,716       3,031       1,629       24,087  

Employee taxes and benefits

     3,127       2,138       746       629       6,640  

Business services, software and technology expense

     2,737       1,867       1,097       138       5,839  

Merger and acquisition expense

     —       —       —       (34 )     (34 )

Other noninterest expense

     9,818       2,888       853       301       13,860  

Total noninterest expense

     27,393       14,609       5,727       2,663       50,392  

Net income (loss) before taxes

   $ 29,383     $ 2,797     $ 1,510     $ (3,440 )   $ 30,250  

Total assets

   $ 5,183,113     $ 30,825     $ 5,948     $ 68,085     $ 5,287,971  

 

   

As of and for the three months ended March 31, 2025

  
           

Retirement and

    

Wealth Advisory

    

Corporate

          

(dollars in thousands)

  

Banking

    

Benefit Services

    

Services

    

Administration

    

Consolidated

  

Net interest income (loss)

   $ 41,807     $ —     $ —     $ (650 )   $ 41,157  

Provision for credit losses

     863       —       —       —       863  

Noninterest income

     4,647       16,106       6,905       (26 )     27,632  

Noninterest expense

                                        

Compensation

     11,636       7,216       3,052       1,057       22,961  

Employee taxes and benefits

     3,880       2,311       741       830       7,762  

Business services, software and technology expense

     2,964       1,994       618       176       5,752  

Merger and acquisition expense

     —       —       —       286       286  

Other noninterest expense

     10,731       2,096       426       351       13,604  

Total noninterest expense

     29,211       13,617       4,837       2,700       50,365  

Net income (loss) before taxes

   $ 16,380     $ 2,489     $ 2,068     $ (3,376 )   $ 17,561  

Total assets

   $ 5,257,508     $ 31,302     $ 5,471     $ 45,339     $ 5,339,620  

 

26
Table of Contents
 

NOTE 17 Earnings Per Share

 

The calculations of basic and diluted earnings per share using the two-class method for the three months ended March 31, 2026 and 2025 are presented below:

 

   

Three months ended

  
   

March 31,

  

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

  

2026

    

2025

  

Net income

   $ 22,971     $ 13,315  

Dividends and undistributed earnings allocated to participating securities

     206       99  

Net income available to common stockholders

   $ 22,765     $ 13,216  

Weighted-average common shares outstanding for basic earnings per share

     25,380       25,359  

Dilutive effect of stock-based awards

     299       294  

Weighted-average common shares outstanding for diluted earnings per share

     25,679       25,653  

Earnings per common share:

                

Basic earnings per common share

   $ 0.90     $ 0.52  

Diluted earnings per common share

   $ 0.89     $ 0.52  

 

There were no antidilutive shares for the three months ended March 31, 2026 and 2025.

 

 

NOTE 18 Derivative Instruments

 

The Company uses a variety of derivative instruments to mitigate exposure to both market and credit risks inherent in its business activities. The Company manages these risks as part of its overall asset and liability management process and through its policies and procedures. Derivatives represent contracts between parties that usually require little or no initial net investment and result in one party delivering cash or another type of asset to the other party based on a notional amount and an underlying as specified in the contract.

 

Derivatives are often measured in terms of notional amount, but this amount is generally not exchanged, and it is not recorded on the Company’s consolidated balance sheet. The notional amount is the basis to which the underlying is applied to determine required payments under the derivative contract. The underlying is a referenced interest rate, security price, credit spread, or other index. Residential and commercial real estate (“CRE”) loan commitments associated with loans to be sold also qualify as derivative instruments.

 

Derivatives Designated as Hedging Instruments

 

The Company uses derivative instruments to hedge its exposure to economic risks, including interest rate, liquidity and credit risk. Certain hedging relationships are formally designated and qualify for hedge accounting under GAAP. On the date the Company enters into a derivative contract designated as a hedging instrument, the derivative is designated as either a fair value hedge, cash flow hedge, or a net investment hedge. When a derivative is designated as a fair value, cash flow, or net investment hedge, the Company performs an assessment, at inception and, at a minimum, quarterly thereafter, to determine the effectiveness of the derivative in offsetting changes in the value or cash flows of the hedged item(s). As of March 31, 2026, the Company only used fair value and cash flow hedges.

 

Fair value hedges: These derivatives are interest rate swaps the Company uses to hedge the change in fair value related to interest rate changes of its underlying mortgage-backed investment securities and mortgage loan pools. The interest rate swaps are carried on the Company’s Consolidated Balance Sheet at their fair value in other assets (when the fair value is positive) or in accrued expenses and other liabilities (when the fair value is negative). The changes in fair value of the interest rate swaps are recorded in interest income. The unrealized gains or losses due to changes in fair value of the interest rate swaps due to changes in benchmark interest rates are recorded as an adjustment to the hedged instruments and offset in the same interest income line items.

 

27
Table of Contents
 

Cash flow hedges: These derivatives are interest rate swaps the Company uses to hedge the variability of expected future cash flows due to market interest changes. The interest rate swap is carried on the Company’s consolidated balance sheet at its fair value in other assets (when the fair value is positive) or in accrued expenses and other liabilities (when the fair value is negative). Changes in fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income (loss) (“OCI”) until the cash flows of the hedged items are realized. If a derivative designated as a cash flow hedge is terminated or ceases to be highly effective, the gain or loss in OCI is amortized to earnings over the period the forecasted hedged transactions impact earnings. If a hedged forecasted transaction is no longer probable, hedge accounting is ceased and any gain or loss included in OCI is reported in earnings immediately, unless the forecasted transaction is at least reasonably possible of occurring, whereby the amounts remain within accumulated other comprehensive income (loss) (“AOCI”). The Company estimates that no additional amounts will be reclassified as an increase to interest expense over the next 12 months. All cash flow hedges were highly effective for the three months ended March 31, 2026. As of March 31, 2026, the maximum length of time over which forecasted transactions are hedged was 41 months. 

 

Derivatives Not Designated as Hedging Instruments

 

Interest rate swaps: The Company periodically enters into commercial loan interest rate swap agreements in order to provide commercial loan customers with the ability to convert from variable to fixed interest rates. These derivative contracts relate to transactions in which the Company enters into an interest rate swap with a customer, while simultaneously entering into an offsetting interest rate swap with an institutional counterparty.

 

Interest rate lock commitments, forward loan sales commitments and to be announced mortgage backed securities: The Company enters into forward delivery contracts to sell mortgage loans at specific prices and dates in order to hedge the interest rate risk in its portfolio of mortgage loans held for sale and its residential mortgage interest rate lock commitments.

 

The following table presents the total notional amounts and gross fair values of the Company’s derivatives as of March 31, 2026 and December 31, 2025:

 

   

Derivative Assets (1)

    

Derivative Liabilities (2)

  
   

Notional

    

Fair

    

Notional

    

Fair

  

(dollars in thousands)

  

Amount

    

Value

    

Amount

    

Value

  

March 31, 2026

                                

Designated as hedging instruments:

                                

Cash flow hedges:

                                

Interest rate swaps

     200,000       768       —       —  

Total derivatives designated as hedging instruments

   $ 200,000     $ 768     $ —     $ —  

Not designated as hedging instruments:

                                

Interest rate swaps (1)

   $ 517,251     $ 8,390     $ 533,251     $ 8,492  

Interest rate lock commitments

     31,789       214       —       —  

Forward loan sales commitments

     8,720       90       —       —  

To-be-announced mortgage backed securities

     42,250       362       —       —  

Total asset derivatives not designated as hedging instruments

   $ 600,010     $ 9,056     $ 533,251     $ 8,492  

December 31, 2025

                                

Designated as hedging instruments:

                                

Cash flow hedges:

                                

Interest rate swaps

     —       —       200,000       19  

Total derivatives designated as hedging instruments

   $ —     $ —     $ 200,000     $ 19  

Not designated as hedging instruments:

                                

Interest rate swaps (3)

   $ 490,341     $ 10,454     $ 507,341     $ 10,603  

Interest rate lock commitments

     17,985       256       —       —  

Forward loan sales commitments

     12,082       248       —       —  

To-be-announced mortgage backed securities

     —       —       30,500       60  

Total asset derivatives not designated as hedging instruments

   $ 520,408     $ 10,958     $ 537,841     $ 10,663  

(1)

Derivative assets are included in other assets on the Company’s consolidated balance sheet. 

(2)

Derivative liabilities are included in accrued expenses and other liabilities on the Company’s consolidated balance sheet. 

(3)

Reported fair values include accrued interest receivable and payable. 

 

28
Table of Contents
 

The following table shows the effective portion of the gains (losses) recognized in OCI and the gains (losses), before tax, reclassified from OCI into earnings for the periods indicated:

 

           

Gains (Losses)

  
   

Gains (Losses)

    

Reclassified

  
   

Recognized in

    

from OCI

  

(dollars in thousands)

  

OCI

    

into Earnings

  

Derivatives designated as hedging instruments

                

For the three months ended March 31, 2026

                

Cash flow hedges:

                

Interest rate swaps

   $ 787     $ —  
                 

For the three months ended March 31, 2025

                

Cash flow hedges:

                

Interest rate swaps

   $ (463 )   $ (22 )

 

The following table shows the effect of fair value and cash flow hedge accounting on derivatives designated as hedging instruments in the Consolidated Statements of Income for the periods indicated:

 

   

Location and Amount of Gains (Losses) Recognized in Income

  
   

Interest Income

    

Interest Expense

  
   

Loans,

    

Investment

          
   

including

    

securities -

    

Short-term

  

(dollars in thousands)

  

fees

    

Taxable

    

borrowings

  

For the three months ended March 31, 2026

                        

Total amounts in the Consolidated Statements of Income

   $ 58,621     $ 7,104     $ 2,357  

Fair value hedges:

                        

Interest rate swaps

     —       (10 )     —  

Cash flow hedges:

                        

Interest rate swaps

     —       —       —  

For the three months ended March 31, 2025

                        

Total amounts in the Consolidated Statements of Income

   $ 61,495     $ 5,707     $ 2,839  

Fair value hedges:

                        

Interest rate swaps

     —       147       —  

Cash flow hedges:

                        

Interest rate swaps

     —       —       (22 )

 

29
Table of Contents
 

The gain (loss) recognized on derivatives not designated as hedging relationships for the three months ended March 31, 2026 and 2025 was as follows:

 

(dollars in thousands)

    

Three months ended March 31,

  

Derivatives not designated as hedging instruments

Consolidated Statements of Income Location

  

2026

    

2025

  

Interest rate swaps

Other noninterest income

   $ —     $ —  

Interest rate swaps

Mortgage banking

     46       187  

Interest rate lock commitments

Mortgage banking

     (51 )     322  

Forward loan sales commitments

Mortgage banking

     (158 )     (7 )

To-be-announced mortgage backed securities

Mortgage banking

     466       (286 )

Total gain (loss) from derivatives not designated as hedging instruments

   $ 303     $ 216  

 

The Company has third party agreements that require a minimum dollar transfer amount upon a margin call. These requirements are dependent on certain specified credit measures. There was no collateral posted with third parties at either  March 31, 2026 or  December 31, 2025. If any, the amount of collateral posted with third parties would be deemed to be sufficient as of those dates to collateralize both the fair market value change as well as any additional amounts that may be required as a result of a change in the specified credit measures. 

 

Credit Risk-Related Contingent Features

 

By using derivatives, the Company is exposed to credit risk to the extent that counterparties to the derivative contracts do not perform as required. Should a counterparty fail to perform under the terms of a derivative contract, the Company’s credit exposure on interest rate swaps is limited to the net positive fair value and accrued interest of all swaps with each counterparty. The Company seeks to minimize counterparty credit risk through credit approvals, limits, monitoring procedures, and obtaining collateral, where appropriate. As such, management believes the risk of incurring credit losses on derivative contracts with institutional counterparties is remote. 

 

The Company has agreements with its derivative counterparties that contain a provision where, if the Company defaults on any of its indebtedness, including defaults where repayment of the indebtedness has not been accelerated by the lender, the Company could also be declared in default on its derivative obligations. In addition, the Company also has agreements with certain of its derivative counterparties that contain a provision where, if the Company fails to maintain its status as a well-capitalized institution, the counterparty could terminate the derivative position(s) and the Company could be required to settle its obligations under the agreements. 

 

As of March 31, 2026 and December 31, 2025, the fair value of derivatives in a net liability position, which included accrued interest but excluded any adjustment for non-performance risk, related to these agreements was $8.5 million and $10.6 million, respectively. As of March 31, 2026 and December 31, 2025, the Company had minimum collateral posting thresholds with certain of its derivative counterparties and did not have any posted cash collateral. If the Company had breached any of these provisions at March 31, 2026 or December 31, 2025, it could have been required to settle its obligations under the agreements at their termination value of $8.5 million and $10.6 million, respectively. 

 

30
Table of Contents
 

Balance Sheet Offsetting

 

The following tables present the Company’s derivative positions and the potential effect of netting arrangements on its financial position as of the dates indicated:

 

                           

Gross Amount

          
                           

Not Offset in the

          
                           

Consolidated

          
                           

Balance Sheets

          
   

Gross Amount

    

Gross Amount

    

Net Amount

                  
   

Recognized in the

    

Offset in the

    

Presented in the

                  
   

Consolidated

    

Consolidated

    

Consolidated

    

Cash Collateral

          

(dollars in thousands)

  

Balance Sheets

    

Balance Sheets

    

Balance Sheets

    

Pledged (Received)

    

Net Amount

  

March 31, 2026

                                        

Derivative assets:

                                        

Interest rate swaps − Company (1)

   $ 768     $ —     $ 768     $ 769     $ 1,537  

Interest rate swaps − dealer bank (1)

     2,917       —       2,917       (2,429 )     488  

Interest rate swaps − customer (2)

     5,473       —       5,473       —       5,473  

To-be-announced mortgage backed securities

     362       —       362       —       362  

Total

   $ 9,520     $ —     $ 9,520     $ (1,660 )   $ 7,860  

Derivative liabilities:

                                        

Interest rate swaps − Company (1)

   $ —     $ —     $ —     $ —     $ —  

Interest rate swaps − dealer bank (1)

     5,441       —       5,441       —       5,441  

Interest rate swaps − customer (2)

     3,051       —       3,051       —       3,051  

To-be-announced mortgage backed securities

     —       —       —       —       —  

Total

   $ 8,492     $ —     $ 8,492     $ —     $ 8,492  

(1)

The Company maintains a master netting agreement with each counterparty and settles collateral on a net basis for all interest rate swaps with counterparty banks. 

(2)

The Company manages its net exposure on its customer loan swaps by obtaining collateral as part of the normal loan policy and underwriting practices. The Company does not post collateral to its customers as part of its contract. 

 

                           

Gross Amount

          
                           

Not Offset in the

          
                           

Consolidated

          
                           

Balance Sheets

          
   

Gross Amount

    

Gross Amount

    

Net Amount

                  
   

Recognized in the

    

Offset in the

    

Presented in the

                  
   

Consolidated

    

Consolidated

    

Consolidated

    

Cash Collateral

          

(dollars in thousands)

  

Balance Sheets

    

Balance Sheets

    

Balance Sheets

    

Pledged (Received)

    

Net Amount

  

December 31, 2025

                                        

Derivative assets:

                                        

Interest rate swaps − Company (1)

   $ —     $ —     $ —     $ —     $ —  

Interest rate swaps − dealer bank (1)

     2,902       —       2,902       (5,710 )     (2,808 )

Interest rate swaps − customer (2)

     7,552       —       7,552             7,552  

To-be-announced mortgage backed securities

     —       —       —       —       —  

Total

   $ 10,454     $ —     $ 10,454     $ (5,710 )   $ 4,744  

Derivative liabilities:

                                        

Interest rate swaps − Company (1)

   $ 19     $ —     $ 19     $ 34     $ (15 )

Interest rate swaps − dealer bank (1)

     7,567       —       7,567       (34 )     7,601  

Interest rate swaps − customer (2)

     3,036     $ —       3,036       —       3,036  

To-be-announced mortgage backed securities

     60       —       60       —       60  

Total

   $ 10,682     $ —     $ 10,682     $ —     $ 10,682  

(1)

The Company maintains a master netting agreement with each counterparty and settles collateral on a net basis for all interest rate swaps with counterparty banks. 

(2)

The Company manages its net exposure on its customer loan swaps by obtaining collateral as part of the normal loan policy and underwriting practices. The Company does not post collateral to its customers as part of its contract. 

 

31
Table of Contents
 

NOTE 19 Regulatory Matters

 

The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements.

 

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the following table) of common equity tier 1, tier 1, and total capital (as defined in the regulations) to risk weighted assets (as defined) and of tier 1 capital (as defined) to average assets (as defined). Management believes that, at March 31, 2026 and December 31, 2025, each of the Company and the Bank had met all of the capital adequacy requirements to which it was subject.

 

The following tables present the Company’s and the Bank’s actual capital amounts and ratios as of March 31, 2026 and December 31, 2025:

 

   

March 31, 2026

  
                                   

Minimum to be

  
                   

Minimum Required

    

Well Capitalized

  
                   

for Capital

    

Under Prompt

  
   

Actual

    

Adequacy Purposes

    

Corrective Action (1)

  

(dollars in thousands)

  

Amount

    

Ratio

    

Amount

    

Ratio

    

Amount

    

Ratio

  

Common equity tier 1 capital to risk weighted assets

                                                

Consolidated (1)

   $ 465,850       10.60 %   $ 197,839       4.50 %     N/A       N/A  

Bank

     464,346       10.75 %     194,353       4.50 %     280,732       6.50 %

Tier 1 capital to risk weighted assets

                                                

Consolidated (1)

     475,061       10.81 %     263,786       6.00 %     N/A       N/A  

Bank

     464,346       10.75 %     259,137       6.00 %     345,516       8.00 %

Total capital to risk weighted assets

                                                

Consolidated (1)

     579,075       13.17 %     351,714       8.00 %     N/A       N/A  

Bank

     518,333       12.00 %     345,516       8.00 %     431,895       10.00 %

Tier 1 capital to average assets

                                                

Consolidated (1)

     475,061       9.30 %     204,278       4.00 %     N/A       N/A  

Bank

     464,346       9.11 %     203,858       4.00 %     254,823       5.00 %

(1)

“Minimum to be Well Capitalized Under Prompt Corrective Action” is not formally defined under applicable banking regulations for bank holding companies.

 

   

December 31, 2025

  
                                   

Minimum to be

  
                   

Minimum Required

    

Well Capitalized

  
                   

for Capital

    

Under Prompt

  
   

Actual

    

Adequacy Purposes

    

Corrective Action (1)

  

(dollars in thousands)

  

Amount

    

Ratio

    

Amount

    

Ratio

    

Amount

    

Ratio

  

Common equity tier 1 capital to risk weighted assets

                                                

Consolidated (1)

   $ 452,125       10.28 %   $ 198,002       4.50 %     N/A       N/A  

Bank

     448,675       10.41 %     194,009       4.50 %     280,235       6.50 %

Tier 1 capital to risk weighted assets

                                                

Consolidated (1)

     461,307       10.48 %     264,002       6.00 %     N/A       N/A  

Bank

     448,675       10.41 %     258,679       6.00 %     344,905       8.00 %

Total capital to risk weighted assets

                                                

Consolidated (1)

     566,443       12.87 %     352,003       8.00 %     N/A       N/A  

Bank

     502,714       11.66 %     344,905       8.00 %     431,131       10.00 %

Tier 1 capital to average assets

                                                

Consolidated (1)

     461,307       8.86 %     208,235       4.00 %     N/A       N/A  

Bank

     448,675       8.62 %     208,160       4.00 %     260,200       5.00 %

(1)

“Minimum to be Well Capitalized Under Prompt Corrective Action” is not formally defined under applicable banking regulations for bank holding companies.

 

The Bank is subject to certain restrictions on the amount of dividends that it may pay without prior regulatory approval, including rules requiring a 2.5 percent capital conservation buffer that is added to the minimum requirements for capital adequacy purposes. A banking organization with a conservation buffer of less than the required amount will be subject to the limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers. As of March 31, 2026, the capital ratios for the Company and the Bank were sufficient to meet the conservation buffer. In addition, the Company must adhere to various U.S. Department of Housing and Urban Development (“HUD”) regulatory guidelines including required minimum capital and liquidity to maintain their Federal Housing Administration approval status. Failure to comply with the HUD guidelines could result in withdrawal of this certification. As of March 31, 2026 and December 31, 2025, the Company was in compliance with the aforementioned guidelines. 

 

32
Table of Contents
 

NOTE 20 Other Comprehensive Income (Loss)

 

The following tables present a reconciliation of the changes in the components of other comprehensive income and loss for the periods indicated, including the amount of tax (expense) benefit allocated to each component: 

 

   

For the three months ended

  
   

March 31, 2026

    

March 31, 2025

  
           

Tax

                    

Tax

          
   

Pre-Tax

    

(Expense)

    

After-Tax

    

Pre-Tax

    

(Expense)

    

After-Tax

  

(dollars in thousands)

  

Amount

    

Benefit

    

Amount

    

Amount

    

Benefit

    

Amount

  

Debt Securities:

                                                

Change in fair value

   $ (3,613 )   $ 963     $ (2,650 )   $ 14,227     $ (3,571 )   $ 10,656  

Less: reclassification adjustment from amortization of securities transferred from AFS to HTM (1)

     21       (7 )     14       53       (13 )     40  

Net change

     (3,634 )     970       (2,664 )     14,174       (3,558 )     10,616  

Cash Flow Hedges:

                                                

Change in fair value

     787       (204 )     583       (463 )     117       (346 )

Less: reclassified AOCI gain (loss) into interest expense (3)

     —       —       —       (22 )     6       (16 )

Net change

     787       (204 )     583       (441 )     111       (330 )

Other Derivatives:

                                                

Change in fair value

     —       —       —       (232 )     58       (174 )

Other comprehensive income (loss)

   $ (2,847 )   $ 766     $ (2,081 )   $ 13,501     $ (3,389 )   $ 10,112  

(1)

Reclassified into taxable and/or exempt from federal income taxes interest income on investment securities on the consolidated statements of income. Refer to “NOTE 3 Investment Securities” for further details. 

(2)

Reclassified into net gains (losses) on investment securities in the consolidated statements of income. Refer to “NOTE 3 Investment Securities” for further details. 

(3)

Reclassified into interest expense on short-term borrowings on the consolidated statements of income. Refer to “NOTE 18 Derivative Instruments” for further details. 

(4)

Reclassified into interest income on loans, including fees and/or interest income on taxable investment securities on the consolidated statements of income. Refer to “NOTE 18 Derivative Instruments” for further details. 

 

33
Table of Contents
 
           

Net Unrealized

    

Net Unrealized

          
   

Net Unrealized

    

Gains (Losses) on

    

Gains (Losses)

          
   

Gains (Losses) on

    

Cash Flow

    

on Other

          

(dollars in thousands)

  

Debt Securities (1)

    

Hedges (1)

    

Derivatives (1)

    

AOCI (1)

  

For the Three Months Ended March 31, 2026

                                

Balance at December 31, 2025

   $ (2,046 )   $ (29 )   $ (81 )   $ (2,156 )

Other comprehensive income (loss) before reclassifications

     (2,650 )     583       —       (2,067 )

Less: Amounts reclassified from AOCI

     14       —       —       14  

Less: reclassification adjustment for net realized losses

     —       —       —       —  

Other comprehensive income (loss)

     (2,664 )     583       —       (2,081 )

Balance at March 31, 2026

   $ (4,710 )     554       (81 )     (4,237 )
                                 

For the Three Months Ended March 31, 2025

                                

Balance at December 31, 2024

   $ (73,724 )   $ 327     $ 31     $ (73,366 )

Other comprehensive income (loss) before reclassifications

     10,656       (346 )     (174 )     10,136  

Less: Amounts reclassified from AOCI

     40       (16 )     —       24  

Other comprehensive income (loss)

     10,616       (330 )     (174 )     10,112  

Balance at March 31, 2025

   $ (63,108 )     (3 )     (143 )     (63,254 )

(1)

All amounts net of tax.
 

NOTE 21 Stock Repurchase Program

 

On December 12, 2023, the Board of Directors of the Company approved a stock repurchase program (the “Program”) which authorizes the Company to repurchase up to 1,000,000 shares of its common stock subject to certain limitations and conditions. The Program became effective on February 18, 2024, replacing and superseding a prior stock repurchase program, and will expire on  February 18, 2027. 

 

The Program does not obligate the Company to repurchase any shares of its common stock, and other than repurchases that have been completed to date, there is no assurance that the Company will do so or that the Company will repurchase shares at favorable prices. The Program may be suspended or terminated at any time and, even if fully implemented, the Program may not enhance long-term stockholder value. For the three months ended March 31, 2026, the Company repurchased 250,000 shares of common stock under the Program. The Company also repurchases shares to pay withholding taxes on the vesting of restricted stock awards and units. 

 

34
Table of Contents
 

NOTE 22 Fair Value of Assets and Liabilities

 

The Company categorizes its assets and liabilities measured at estimated fair value into a three level hierarchy based on the priority of the inputs to the valuation technique used to determine estimated fair value. The estimated fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used in the determination of the estimated fair value measurement fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the estimated fair value measurement. Assets and liabilities valued at estimated fair value are categorized based on the following inputs to the valuation techniques as follows: 

 

Level 1—Inputs that utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that an entity has the ability to access. 

 

Level 2—Inputs that include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Estimated fair values for these instruments are estimated using pricing models, quoted prices of investment securities with similar characteristics, or discounted cash flows. 

 

Level 3—Inputs that are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. Subsequent to initial recognition, the Company may re‑measure the carrying value of assets and liabilities measured on a nonrecurring basis to estimated fair value. Adjustments to estimated fair value usually result when certain assets are impaired. Such assets are written down from their carrying amounts to their estimated fair value. 

 

Professional standards allow entities the irrevocable option to elect to measure certain financial instruments and other items at estimated fair value for the initial and subsequent measurement on an instrument‑by‑instrument basis. The Company adopted the policy to value certain financial instruments at estimated fair value. The Company has not elected to measure any existing financial instruments at estimated fair value; however, it may elect to measure newly acquired financial instruments at estimated fair value in the future. 

 

Recurring Basis

 

The Company uses estimated fair value measurements to record estimated fair value adjustments to certain assets and liabilities and to determine estimated fair value disclosures. 

 

The following tables present the balances of the assets and liabilities measured at estimated fair value on a recurring basis as of March 31, 2026 and December 31, 2025: 

 

   

March 31, 2026

  

(dollars in thousands)

  

Level 1

    

Level 2

    

Level 3

    

Total

  

Trading

   $ 1,758     $ —     $ —     $ 1,758  

Available-for-sale

                                

U.S. treasury and government agencies

     —       4,141       —       4,141  

Mortgage backed securities

                                

Residential agency

     —       480,627       —       480,627  

Asset backed securities

     —       14       —       14  

Corporate bonds

     —       37,319       —       37,319  

Total available-for-sale investment securities

   $ —     $ 522,101     $ —     $ 522,101  

Servicing rights (1)

   $ —     $ —     $ 6,615     $ 6,615  

Other assets

                                

Derivatives

   $ —     $ 9,824     $ —     $ 9,824  

Other liabilities

                                

Derivatives

   $ —     $ 8,492     $ —     $ 8,492  

(1)

See Note 7 Loan Servicing for more information on mortgage servicing rights (MSR).

 

   

December 31, 2025

  

(dollars in thousands)

  

Level 1

    

Level 2

    

Level 3

    

Total

  

Trading

   $ 1,758     $ —     $ —     $ 1,758  

Available-for-sale

                                

U.S. treasury and government agencies

     —       405       —       405  

Mortgage backed securities

                                

Residential agency

     —       476,746       —       476,746  

Asset backed securities

     —       15       —       15  

Corporate bonds

     —       36,929       —       36,929  

Total available-for-sale investment securities

   $ —     $ 514,095     $ —     $ 514,095  

Servicing rights (1)

   $ —     $ —     $ 6,383     $ 6,383  

Other assets

                                

Derivatives

   $ —     $ 10,958     $ —     $ 10,958  

Other liabilities

                                

Derivatives

   $ —     $ 10,682     $ —     $ 10,682  

(1)

See Note 7 Loan Servicing for more information on mortgage servicing rights (MSR).

 

35
Table of Contents
 

The following is a description of the valuation methodologies used for instruments measured at estimated fair value on a recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy. 

 

Investment Securities, Trading for Deferred Compensation

 

The fair value of trading securities for deferred compensation is reported using market quoted prices as such securities and underlying securities are actively traded and no valuation adjustments have been applied and therefore are classified as Level 1. 

 

Investment Securities, Available-for-Sale

 

Generally, debt securities are valued using pricing for similar securities, recently executed transactions, and other pricing models utilizing observable inputs and therefore are classified as Level 2. 

 

Derivatives

 

All of the Company’s derivatives are traded in over‑the‑counter markets where quoted market prices are not readily available. For these derivatives, estimated fair value is measured using internally developed models that use primarily market observable inputs, such as yield curves and option volatilities, and accordingly, classify as Level 2. Examples of Level 2 derivatives are basic interest rate swaps and forward contracts.

 

Servicing Rights

 

Servicing rights are measured based on valuation techniques using Level 3 inputs. The Company uses a discounted cash flow model that incorporates assumptions market participants would use in estimating the fair value of servicing rights, including, but not limited to, conditional prepayment rate utilizing the Public Securities Association (PSA) convention, servicing fee rate, ancillary fees, and cost to service. 

 

Nonrecurring Basis

 

Certain assets are measured at estimated fair value on a nonrecurring basis. These assets are not measured at estimated fair value on an ongoing basis; however, they are subject to estimated fair value adjustments in certain circumstances, such as when there is evidence of impairment or a change in the amount of previously recognized impairment.

 

The estimated fair value of certain assets on a nonrecurring basis as of March 31, 2026 and December 31, 2025 consisted of the following:

 

   

March 31, 2026

  

(dollars in thousands)

  

Level 1

    

Level 2

    

Level 3

    

Total

  

Collateral dependent loans

     —       —       32,531       32,531  

Foreclosed assets

     —       —       126       126  

 

   

December 31, 2025

  

(dollars in thousands)

  

Level 1

    

Level 2

    

Level 3

    

Total

  

Collateral dependent loans

   $ —     $ —     $ 33,484     $ 33,484  

Foreclosed assets

     —       —       308       308  

 

Loans Held for Sale

 

Loans originated and held for sale are carried at the lower of cost or estimated fair value. The Company obtains quotes or bids on these loans directly from purchasing financial institutions. Typically, these quotes include a premium on the sale and thus these quotes indicate estimated fair value of the held for sale loans is greater than cost.

 

Impairment losses for loans held for sale that are carried at the lower of cost or estimated fair value represent additional net write‑downs during the period to record these loans at the lower of cost or estimated fair value, subsequent to their initial classification as loans held for sale.

 

Collateral Dependent Loans

 

The estimated fair value of collateral dependent loans is based on fair value, less estimated cost to sell. Collateral dependent impaired loans are classified within Level 3 of the fair value hierarchy. 

 

The Company considers appraisal analysis as the starting point for determining fair value, and then considers other factors and events in the environment that may affect fair value. Values of the collateral underlying collateral dependent loans are obtained when the loan is determined to be collateral dependent, and subsequently as deemed necessary by management. Values are reviewed for accuracy and consistency by management. The ultimate collateral values are reduced by discounts to consider lack of marketability and estimated cost to sell if repayment or satisfaction of the loan is dependent on the sale of the collateral. 

 

Foreclosed Assets

 

Assets acquired through loan foreclosure are included in other assets and are initially recorded at estimated fair value less estimated selling costs. The estimated fair value of foreclosed assets is evaluated regularly and any decreases in value along with holding costs, such as taxes, insurance and utilities, are reported in noninterest expense. 

 

36
Table of Contents
 

The valuation techniques and significant unobservable inputs used to measure Level 3 estimated fair values as of March 31, 2026 and December 31, 2025, were as follows:

 

       

March 31, 2026

  

(dollars in thousands)

                      

Weighted

  

Asset Type

Valuation Technique

Unobservable Input

  

Fair Value

    

Range

    

Average

  

Collateral dependent loans

Appraisal value

Property specific adjustment

     32,531       10 - 35 %     31.2 %

Foreclosed assets

Appraisal value

Property specific adjustment

     126       10.0 %     10.0 %

Servicing rights

Discounted cash flows

Prepayment speed assumptions

     6,615       111 -562       205  
   

Discount rate

             10.0 %     10.0 %

 

       

December 31, 2025

  

(dollars in thousands)

                      

Weighted

  

Asset Type

Valuation Technique

Unobservable Input

  

Fair Value

    

Range

    

Average

  

Collateral dependent loans

Appraisal value

Property specific adjustment

   $ 33,484       10 - 35 %     30.7 %

Foreclosed assets

Appraisal value

Property specific adjustment (1)

     308       10.0 %     10.0 %

Servicing rights

Discounted cash flows

Prepayment speed assumptions

     6,383       130 - 730       239  
   

Discount rate

             10.0 %     10.0 %

 

Disclosure of estimated fair value information about financial instruments, for which it is practicable to estimate that value, is required whether or not recognized in the consolidated balance sheets. In cases in which quoted market prices are not available, estimated fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimate of future cash flows. In that regard, the derived estimated fair value estimates cannot be substantiated by comparison to independent markets and, in many cases could not be realized in immediate settlement of the instruments. Certain financial instruments, with an estimated fair value that is not practicable to estimate and all non‑financial instruments, are excluded from the disclosure requirements. Accordingly, the aggregate estimated fair value amounts presented do not necessarily represent the underlying value of the Company.

 

The following disclosures represent financial instruments for which the ending balances, as of March 31, 2026 and December 31, 2025, were not carried at estimated fair value in their entirety on the consolidated balance sheets.

 

Cash and Cash Equivalents and Accrued Interest

 

The carrying amounts reported in the consolidated balance sheets approximate those assets and liabilities estimated fair values.

 

Investment Securities, Held-to-Maturity

 

The fair values of debt securities held-to-maturity are based on quoted market prices for the same or similar securities, recently executed transactions and pricing models.

 

Loans

 

For variable‑rate loans that reprice frequently and with no significant change in credit risk, estimated fair values are based on carrying values. The estimated fair values of other loans are estimated using discounted cash flow analysis, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality.

 

Bank‑Owned Life Insurance

 

Bank‑owned life insurance is carried at the amount due upon surrender of the policy, which is also the estimated fair value. This amount was provided by the insurance companies based on the terms of the underlying insurance contract.

 

Deposits

 

The estimated fair values of demand deposits are, by definition, equal to the amount payable on demand at the consolidated balance sheet date. The estimated fair values of fixed‑rate certificates of deposit are estimated using a discounted cash flow calculation that applies current incremental interest rates being offered on certificates of deposit to a schedule of aggregated expected monthly maturities of the outstanding certificates of deposit.

 

Short‑Term Borrowings and Long‑Term Debt

 

For variable‑rate borrowings that reprice frequently, estimated fair values are based on carrying values. The estimated fair values of fixed‑rate borrowings are estimated using discounted cash flow analysis, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements.

 

37
Table of Contents
 

Off‑Balance Sheet Credit‑Related Commitments

 

Off‑balance sheet credit related commitments are generally of short‑term nature. The contract amount of such commitments approximates their estimated fair value since the commitments are comprised primarily of unfunded loan commitments which are generally priced at market at the time of funding.

 

The estimated fair values, and related carrying or notional amounts, of the Company’s financial instruments at the dates indicated were as follows:

 

   

March 31, 2026

  
   

Carrying

    

Estimated Fair Value

  

(dollars in thousands)

  

Amount

    

Level 1

    

Level 2

    

Level 3

    

Total

  

Financial Assets

                                        

Cash and cash equivalents

   $ 128,826     $ 128,826     $ —     $ —     $ 128,826  

Investment securities held-to-maturity

     247,437       —       220,425       —       220,425  

Loans, net

     3,984,239       —       —       3,908,918       3,908,918  

Accrued interest receivable

     20,469       —       20,469       —       20,469  

Bank-owned life insurance

     39,475       —       39,475       —       39,475  

Servicing rights

     6,615       —       —       6,615       6,615  

Financial Liabilities

                                        

Noninterest-bearing deposits

   $ 857,625     $ —     $ 857,625     $ —     $ 857,625  

Interest-bearing deposits

     2,919,297       —       2,919,297       —       2,919,297  

Time deposits

     570,960       —       574,374       —       574,374  

Short-term borrowings

     200,000       —       200,000       —       200,000  

Long-term debt

     59,211       —       63,759       —       63,759  

Accrued interest payable

     6,485       —       6,485       —       6,485  

 

   

December 31, 2025

  
   

Carrying

    

Estimated Fair Value

  

(dollars in thousands)

  

Amount

    

Level 1

    

Level 2

    

Level 3

    

Total

  

Financial Assets

                                        

Cash and cash equivalents

   $ 67,192     $ 67,192     $ —     $ —     $ 67,192  

Investment securities held-to-maturity

     254,448       —       228,009       —       228,009  

Loans, net

     3,986,107       —       —       3,956,517       3,956,517  

Accrued interest receivable

     21,742       —       21,742       —       21,742  

Bank-owned life insurance

     39,307       —       39,307       —       39,307  

Servicing rights

     6,383       —       —       6,383       6,383  

Financial Liabilities

                                        

Noninterest-bearing deposits

   $ 807,896     $ —     $ 807,896     $ —     $ 807,896  

Interest-bearing deposits

     2,807,565       —       2,807,565       —       2,807,565  

Time deposits

     576,542       —       580,473       —       580,473  

Short-term borrowings

     308,800       —       308,800       —       308,800  

Long-term debt

     59,182       —       59,911       —       59,911  

Accrued interest payable

     8,124       —       8,124       —       8,124  

 

38
Table of Contents
 

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

General

 

The following discussion explains the Company’s financial condition and results of operations as of and for the three months ended March 31, 2026 and 2025. Annualized results for this interim period may not be indicative of results for the full year or future periods. The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes presented elsewhere in this report and the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 4, 2026. 

 

Forward-Looking Statements

 

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by 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 the Company’s 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 the Company’s current beliefs, expectations and assumptions regarding the Company’s 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 known and unknown uncertainties, risks, changes in circumstances, and other factors that are difficult to predict and many of which are outside of the Company’s control. The Company’s 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 the Company’s 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 Board of Governors of the Federal Reserve System (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, executive orders, and changes in foreign policy; 

 

 

●

disruptions to the global supply chain, including as a result of domestic or foreign policies;

 

 

●

the Company’s ability to successfully manage credit risk, including in the CRE 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 the Company’s market areas, including the level and impact of inflation rates and possible recession;

 

  ● the Company’s ability to raise additional capital to implement its business plan;

 

 

●

credit risks and risks from concentrations (including by type of borrower, geographic area, collateral, and industry) within the Company’s loan portfolio;

 

  ● the concentration of large loans to certain borrowers (including CRE loans);

 

 

●

the level of nonperforming assets on the Company’s balance sheet;

 

 

●

the Company’s ability to implement organic and acquisition growth strategies;

 

 

●

the commencement, cost, and outcome of litigation and other legal proceedings and regulatory actions against the Company or to which the Company may become subject, including with respect to pending actions relating to the Company’s previous ESOP fiduciary services commenced by government and private parties;

 

 

●

the impact of economic or market conditions on the Company’s fee-based services;

 

 

●

the Company’s ability to continue to grow the retirement and benefit services business;

 

 

●

the Company’s ability to continue to originate a sufficient volume of residential mortgages;

 

 

●

the occurrence of fraudulent activity, breaches or failures of the Company’s or its 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;

 

39
Table of Contents

 

 

●

interruptions involving the Company’s information technology and telecommunications systems or third-party servicers;

 

 

●

potential losses incurred in connection with mortgage loan repurchases;

 

 

●

the composition of the Company’s executive management team and the Company’s ability to attract and retain key personnel;

 

 

●

rapid and expensive technological changes implemented by the Company 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, financial technology companies and digital asset service providers;

 

 

●

the Company’s ability to successfully manage liquidity risk, including the Company’s 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 (“FDIC”) insurance limits;

 

 

●

the effectiveness of the Company’s risk management framework;

 

 

●

potential impairment to the goodwill the Company recorded in connection with the Company’s past acquisitions, including the acquisitions of Metro Phoenix Bank and HMN Financial, Inc. (“HMNF”);

 

 

●

the extensive regulatory framework that applies to the Company;

 

 

●

the ability of the Bank to pay dividends to the Company, and the Company's ability to pay dividends to its stockholders;

 

 

●

new or revised accounting standards, as may be adopted by state and federal regulatory agencies, the FASB, the SEC or the Public Company Accounting Oversight Board;

 

 

●

fluctuations in the values of the securities held in the Company’s 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 the Company’s customers and their businesses;

 

 

●

severe weather, natural disasters, and widespread disease or pandemics;

 

 

●

acts of war, military conflicts, or terrorism, including the wars in Iran and Ukraine, ongoing conflicts in the Middle East, and other international military conflicts, or other adverse external events and changes in foreign relations;

 

 

●

the impact of the current partial shutdown of the federal government and possible future shutdowns;

 

 

●

any material weaknesses in the Company’s internal control over financial reporting;

 

 

●

the Company’s success at managing and responding to the risks involved in the foregoing items; and

 

 

●

any other risks described in the “Risk Factors” section of this report and in other reports filed by Alerus Financial Corporation with the SEC. 

 

Any forward-looking statement made by the Company in this report is based only on information currently available to the Company 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. 

 

Overview

 

The Company is a commercial wealth advisory services bank and national retirement and benefit services provider headquartered in Grand Forks, North Dakota. Through the Company’s subsidiary, Alerus Financial, National Association, the Company provides financial solutions to businesses and consumers through three distinct business lines—banking, retirement and benefit services, and wealth advisory services. These solutions are delivered through a relationship‑oriented primary point of contact along with responsive and client‑friendly technology. 

 

The Company’s business model produces strong financial performance and a diversified revenue stream, which has helped the Company establish a brand and culture yielding both a loyal client base and passionate and dedicated employees. The Company generates a majority of overall revenue from noninterest income, which is driven primarily by the Company’s retirement and benefit services and wealth advisory services business lines. The remainder of the Company’s revenue consists of net interest income, which the Company derives from offering traditional banking products and services. 

 

40
Table of Contents

 

Critical Accounting Policies

 

Critical accounting policies are defined as those that are reflective of significant judgements and uncertainties and could potentially result in materially different results under different assumptions and conditions. In preparing the Company’s consolidated financial statements, management is required to make significant estimates and assumptions that affect assets, liabilities, revenues, and expenses reported. Actual results could differ materially from our current estimates as a result of changing conditions and future events. Several estimates are particularly critical and are susceptible to significant near term change, including (i) the ACL on loans; (ii) goodwill impairment; and (iii) fair value of loans acquired in business combinations. 

 

The Company’s Annual Report on Form 10-K for the year ended December 31, 2025 includes a discussion of the Company’s critical accounting policies. There have been no material changes to the Company’s critical accounting policies from those disclosed within its Annual Report on Form 10-K for the year ended December 31, 2025. 

 

Refer to “NOTE 2 Recent Accounting Pronouncements” of the consolidated financial statements included in this report for a discussion of accounting pronouncements issued but yet to be adopted and implemented. 

 

Recent Developments

 

Stockholder Dividend

 

On February 25, 2026, the Board of Directors of the Company declared a quarterly cash dividend of $0.21 per share of common stock. This dividend was paid on April 10, 2026, to stockholders of record at the close of business on March 27, 2026. 

 

Property Sales

 

The Company’s West Fargo, North Dakota branch is listed for sale for $3.8 million and is expected to sell within the next 12 months. At March 31, 2026, the facility had a carrying value of approximately $0.4 million. The Company expects to record a gain on the sale upon closing, as the expected sale price is greater than the property’s carrying value. 

 

The Company’s Crossroads branch in Rochester, Minnesota is listed for sale for $1.5 million and is expected to sell within the next 12 months. At March 31, 2026, the facility had a carrying value of approximately $1.0 million. The Company expects to record a gain on the sale upon closing, as the expected sale price is greater than the property’s carrying value. 

 

Operating Results Overview

 

The following table summarizes key financial results as of and for the periods indicated: 

 

   

Three months ended

  
   

March 31,

    

December 31,

    

March 31,

  

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

  

2026

    

2025

    

2025

  

Performance Ratios

                        

Return on average total assets

     1.79 %     (2.50 )%     1.02 %

Adjusted return on average total assets (1)

     1.79 %     1.62 %     1.10 %

Return on average common equity

     16.44 %     (23.75 )%     10.82 %

Return on average tangible common equity (1)

     21.85 %     (28.15 )%     16.50 %

Adjusted return on average tangible common equity (1)

     21.96 %     21.05 %     17.61 %

Noninterest income as a % of revenue

     40.72 %     (449.23 )%     40.17 %

Adjusted noninterest (loss) income as a % of revenue (1)

     40.73 %     41.39 %     40.17 %

Net interest margin (taxable-equivalent basis) (1)

     3.77 %     3.69 %     3.41 %

Efficiency ratio (1)

     63.39 %     557.48 %     68.76 %

Adjusted efficiency ratio (1)

     63.20 %     63.55 %     66.86 %

Net charge-offs (recoveries) to average loans (1)

     0.71 %     (0.03 )%     0.04 %

Dividend payout ratio

     23.60 %     (16.54 )%     38.46 %

Per Common Share

                        

Earnings per common share − basic

   $ 0.90     $ (1.28 )   $ 0.52  

Earnings per common share − diluted

   $ 0.89     $ (1.27 )   $ 0.52  

Adjusted earnings per common share − diluted (1)

   $ 0.89     $ 0.85     $ 0.56  

Dividends declared per common share

   $ 0.21     $ 0.21     $ 0.20  

Book value per common share

   $ 22.79     $ 22.24     $ 20.27  

Tangible book value per common share (1)

   $ 18.15     $ 17.55     $ 15.27  

Average common shares outstanding − basic

     25,380       25,398       25,359  

Average common shares outstanding − diluted

     25,679       25,710       25,653  

Other Data

                        

Retirement and benefit services assets under administration/management

   $ 42,273,839     $ 44,925,311     $ 39,925,596  

Wealth advisory services assets under administration/management

   $ 4,792,609     $ 4,850,600     $ 4,500,852  

Mortgage originations

   $ 94,434     $ 136,780     $ 70,593  

(1)

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

 

41
Table of Contents

 

Selected Financial Data

 

The following tables summarize selected financial data as of and for the periods indicated:

 

   

Three months ended

  
   

March 31,

    

December 31,

    

March 31,

  

(dollars in thousands)

  

2026

    

2025

    

2025

  

Selected Average Balance Sheet Data

                        

Loans

   $ 4,029,719     $ 4,049,081     $ 4,022,863  

Investment securities

     771,885       775,091       859,696  

Assets

     5,218,515       5,252,046       5,272,319  

Deposits

     4,238,712       4,297,027       4,376,597  

Fed funds purchased and Bank Term Funding Program

     35,628       35,617       49,834  

FHLB short-term advances

     204,444       207,065       200,000  

Long-term debt

     59,195       59,169       59,084  

Stockholders’ equity

     566,563       552,106       499,224  

 

   

March 31,

    

December 31,

    

March 31,

  

(dollars in thousands)

  

2026

    

2025

    

2025

  

Selected Period End Balance Sheet Data

                        

Loans

   $ 4,034,744     $ 4,048,022     $ 4,102,075  

Allowance for credit losses on loans

     (50,505 )     (61,915 )     (62,127 )

Investment securities

     771,296       770,302       791,650  

Assets

     5,287,971       5,230,084       5,330,572  

Deposits

     4,347,882       4,192,003       4,412,653  

Long-term debt

     59,211       59,182       59,154  

Total stockholders’ equity

     574,693       564,934       550,687  

 

   

Three months ended

  
   

March 31,

    

December 31,

    

March 31,

  

(dollars in thousands)

  

2026

    

2025

    

2025

  

Selected Income Statement Data

                        

Net interest income

   $ 44,912     $ 45,174     $ 41,157  

Provision for (recovery of) credit losses

     (4,883 )     (308 )     863  

Noninterest income

     30,847       (36,949 )     27,632  

Noninterest expense

     50,392       51,882       50,365  

Income before income taxes

     30,250       (43,349 )     17,561  

Income tax expense

     7,279       (10,298 )     4,246  

Net income

   $ 22,971     $ (33,051 )   $ 13,315  

 

Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures

 

In addition to the results presented in accordance with GAAP, the Company routinely supplements its evaluation with an analysis of certain non-GAAP financial measures. Management uses the non-GAAP financial measures presented in the tables below 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. 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. 

 

The following tables present these non-GAAP financial measures along with the most directly comparable financial measures calculated in accordance with GAAP as of and for the periods indicated: 

 

   

March 31,

    

December 31,

    

March 31,

  

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

  

2026

    

2025

    

2025

  

Tangible common equity to tangible assets

                     .  

Total common stockholders’ equity

   $ 574,693     $ 564,934     $ 533,155  

Less: Goodwill

     85,634       85,634       85,634  

Less: Other intangible assets

     31,397       33,371       38,462  

Tangible common equity (a)

     457,662       445,929       409,059  

Total assets

     5,287,971       5,230,084       5,323,822  

Less: Goodwill

     85,634       85,634       85,634  

Less: Other intangible assets

     31,397       33,371       38,462  

Tangible assets (b)

     5,170,940       5,111,079       5,199,726  

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

     8.85 %     8.72 %     7.87 %

Tangible book value per common share

                        

Tangible common equity (a)

     457,662       445,929       409,059  

Total common shares issued and outstanding (c)

     25,214       25,406       25,389  

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

   $ 18.15     $ 17.55     $ 16.11  

 

42
Table of Contents

 

   

Three months ended

  
   

March 31,

    

December 31,

    

March 31,

  

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

  

2026

    

2025

    

2025

  

Return on Average Tangible Common Equity

                        

Net income

   $ 22,971     $ (33,050 )   $ 13,315  

Add: Intangible amortization expense (net of tax) (1)

     1,560       1,882       2,141  

Net income, excluding intangible amortization (d)

     24,531       (31,168 )     15,456  

Average total equity

     566,563       552,106       499,224  

Less: Average goodwill

     85,634       85,634       85,634  

Less: Average other intangible assets (net of tax) (1)

     25,664       27,270       33,718  

Average tangible common equity (e)

     455,265       439,202       379,872  

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

     21.85 %     (28.15 )%     16.50 %

Efficiency ratio

                        

Noninterest expense

   $ 50,392     $ 51,881     $ 50,365  

Less: Intangible amortization expense

     1,974       2,382       2,710  

Adjusted noninterest expense (f)

     48,418       49,499       47,655  

Net interest income (v)

     44,912       45,174       41,157  

Noninterest income

     30,847       (36,949 )     27,632  

Tax-equivalent adjustment

     619       654       520  

Total tax-equivalent revenue (g)

     76,378       8,879       69,309  

Efficiency ratio (f)/(g)

     63.39 %     557.48 %     68.76 %

Pre-Provision Net Revenue

                        

Net interest income

   $ 44,912     $ 45,174     $ 41,157  

Add: Noninterest income

     30,847       (36,949 )     27,632  

Less: Noninterest expense

     50,392       51,881       50,365  

Pre-provision net revenue

   $ 25,367     $ (43,656 )   $ 18,424  

Adjusted Noninterest Income

                        

Noninterest income

   $ 30,847     $ (36,949 )   $ 27,632  

Less: Adjusted noninterest income items

                        

Net gains (losses) on investment securities

     —       (68,403 )     —  

Net gain on sale of premises and equipment

     (21 )     (445 )     —  

Total adjusted noninterest income items (h)

     (21 )     (68,848 )     —  

Adjusted noninterest income (i)

   $ 30,868     $ 31,899     $ 27,632  

Adjusted Noninterest (Loss) Income as a Percentage of Revenue

                        

Adjusted noninterest income (i)

   $ 30,868       31,899       27,632  

Net interest income (v)

     44,912       45,174       41,157  

Adjusted revenue (w)

     75,780       77,073       68,789  

Adjusted noninterest (loss) income as a percentage of revenue (i)/(w)

   $ 40.73 %     41.39 %     40.17 %

Adjusted Noninterest Expense

                        

Noninterest expense

   $ 50,392     $ 51,881     $ 50,365  

Less: Adjusted noninterest expense items

                        

HMNF merger- and acquisition-related expenses

     (34 )     (112 )     286  

Severance and signing bonus expense

     167       212       1,027  

Total adjusted noninterest expense items (j)

     133       100       1,313  

Adjusted noninterest expense (k)

   $ 50,259     $ 51,781     $ 49,052  

Adjusted Pre-Provision Net Revenue

                        

Net interest income

   $ 44,912     $ 45,174     $ 41,157  

Add: Adjusted noninterest income (i)

     30,868       31,899       27,632  

Less: Adjusted noninterest expense (k)

     50,259       51,781       49,052  

Adjusted pre-provision net revenue

   $ 25,521     $ 25,292     $ 19,737  

(1)

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

 

43
Table of Contents

 

   

Three months ended

  
   

March 31,

    

December 31,

    

March 31,

  

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

  

2026

    

2025

    

2025

  

Adjusted Efficiency Ratio

                        

Adjusted noninterest expense (k)

   $ 50,259     $ 51,781     $ 49,052  

Less: Intangible amortization expense

     1,974       2,382       2,710  

Adjusted noninterest expense for efficiency ratio (l)

     48,285       49,399       46,342  

Tax-equivalent revenue

                        

Net interest income

     44,912       45,174       41,157  

Add: Adjusted noninterest income (i)

     30,868       31,899       27,632  

Add: Tax-equivalent adjustment

     619       654       520  

Total tax-equivalent revenue (m)

     76,399       77,727       69,309  

Adjusted efficiency ratio (l)/(m)

     63.20 %     63.55 %     66.86 %

Adjusted Net Income

                        

Net income

   $ 22,971     $ (33,050 )   $ 13,315  

Less: Adjusted noninterest income items (net of tax) (1) (h)

     (17 )     (54,390 )     —  

Add: Adjusted noninterest expense items (net of tax) (1) (j)

     105       79       1,037  

Adjusted net income (n)

   $ 23,093     $ 21,420     $ 14,352  

Adjusted Return on Average Total Assets

                        

Average total assets (o)

   $ 5,218,515     $ 5,252,046     $ 5,272,319  

Adjusted return on average total assets (n)/(o)

     1.79 %     1.62 %     1.10 %

Adjusted Return on Average Tangible Common Equity

                        

Adjusted net income (n)

   $ 23,093     $ 21,420     $ 14,352  

Add: Intangible amortization expense (net of tax) (1)

     1,560       1,882       2,141  

Adjusted net income, excluding intangible amortization (p)

     24,653       23,302       16,493  

Average total equity

     566,563       552,106       499,224  

Less: Average goodwill

     85,634       85,634       85,634  

Less: Average other intangible assets (net of tax) (1)

     25,664       27,270       33,718  

Average tangible common equity (q)

     455,265       439,202       379,872  

Adjusted return on average tangible common equity (p)/(q)

     21.96 %     21.05 %     17.61 %

Adjusted Earnings Per Common Share − Diluted

                        

Adjusted net income (n)

   $ 23,093     $ 21,420     $ 14,352  

Less: Dividends and undistributed earnings allocated to participating securities

     206       (462 )     46  

Adjusted net income available to common stockholders (r)

     22,887       21,882       14,306  

Weighted-average common shares outstanding for diluted earnings per share (s)

     25,679       25,710       25,653  

Adjusted earnings per common share − diluted (r)/(s)

   $ 0.89     $ 0.85     $ 0.56  

Net Charge-Offs (Recoveries) to Average Loans

                        

Net charge-offs (recoveries) (t)

   $ 7,027     $ (311 )   $ 407  

Average total loans (u)

   $ 4,029,719     $ 4,079,084     $ 4,022,863  

Net charge-offs (recoveries) to average loans (t)/(u)

     0.71 %     (0.03 )%     0.04 %

Net Interest Margin (on a Tax-Equivalent Basis)

                        

Net interest income (v)

   $ 44,912     $ 45,174     $ 41,157  

Add: Tax equivalent adjustment for loans and securities

     619       654       520  

Net interest income (on a tax-equivalent basis) (1) (w)

   $ 45,531     $ 45,828     $ 41,677  

Interest earning assets (x)

     4,901,399       4,926,530       4,949,729  

Net interest margin (on a tax-equivalent basis) (1) (w)/(x)

     3.77 %     3.69 %     3.41 %

(1)

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

 

Discussion and Analysis of Results of Operations

 

Net Income

 

Net income for the three months ended March 31, 2026, was $23.0 million, or $0.89 per diluted common share, a $9.7 million, or 72.5%, increase compared to $13.3 million, or $0.52 per diluted common share, for the three months ended March 31, 2025. Earnings for the first quarter of 2026 compared to the first quarter of 2025 increased primarily due to an increase in net interest income of $3.8 million and a decrease in the provision for (recovery of) credit losses of $5.7 million. 

 

Net Interest Income

 

Net interest income is the difference between interest income and yield related fees earned on assets and interest expense paid on liabilities. Net interest margin is the difference between the yield on interest earning assets and the cost of interest-bearing liabilities as a percentage of interest earning assets. Net interest margin is presented on a tax-equivalent basis, which means that tax-free interest income has been adjusted to a pre-tax-equivalent income, assuming a federal income tax rate of 21% for the three months ended March 31, 2026 and 2025. 

 

Net interest income for the three months ended March 31, 2026 was $44.9 million, an increase of $3.8 million, or 9.1%, compared to $41.2 million for the three months ended March 31, 2025. The increase in net interest income for the first quarter of 2026 compared to the first quarter of 2025 was primarily due to higher interest income on investment securities following the strategic balance sheet repositioning in the fourth quarter of 2025, partially offset by less purchase accounting accretion. Interest expense decreased $5.0 million, or 18.4%, from the first quarter of 2025, as the average rates paid on deposits and borrowings declined. 

 

44
Table of Contents

 

Net interest margin (on a tax-equivalent basis), a non-GAAP financial measure, for the three months ended March 31, 2026 was 3.77%, compared to 3.41% for the same period in 2025. The increase was mainly attributable to lower cost of funds and higher yields on investment securities. 

 

The following table presents average balance sheet information, interest income, interest expense and the corresponding average yields on assets, average yields earned, and rates paid for the three months ended March 31, 2026 and 2025. The Company derived these yields and rates by dividing income or expense by the average balance of the corresponding assets or liabilities. The Company derived average balances from the daily balances throughout the periods indicated. Average loan balances include loans that have been placed on nonaccrual status, while interest previously accrued on these loans is reversed against interest income. In these tables, adjustments are made to the yields on tax‑exempt assets in order to present tax‑exempt income and fully taxable income on a fully taxable equivalent (“FTE”) basis. 

 

   

Three months ended March 31,

  
   

2026

    

2025

  
           

Interest

    

Average

            

Interest

    

Average

  
   

Average

    

Income/

    

Yield/

    

Average

    

Income/

    

Yield/

  

(dollars in thousands)

  

Balance

    

Expense

    

Rate

    

Balance

    

Expense

    

Rate

  

Interest-Earning Assets

                                                

Interest-bearing deposits with banks

   $ 60,675     $ 638       4.26 %   $ 33,425     $ 391       4.74 %

Investment securities (1)

     771,885       7,304       3.84       859,696       5,910       2.79  

Loans held for sale

     15,617       181       4.70       11,348       149       5.32  

Loans

                                                

Commercial and industrial

     723,803       12,678       7.10       657,838       11,860       7.31  

CRE − Owner occupied

     430,332       6,511       6.14       379,948       5,802       6.19  

CRE − Construction, land and development

     211,754       2,699       5.17       342,718       4,933       5.84  

CRE − Multifamily

     393,412       5,626       5.80       364,247       5,691       6.34  

CRE − Non-owner occupied

     914,642       13,471       5.97       960,152       15,772       6.66  

Agricultural − Land

     59,787       884       6.00       67,228       969       5.85  

Agricultural − Production

     58,833       1,012       6.98       60,933       1,094       7.28  

RRE − First lien

     865,077       10,523       4.93       899,835       10,600       4.78  

RRE − Construction

     32,906       510       6.29       36,913       765       8.40  

RRE − HELOC

     261,586       3,888       6.03       168,599       2,958       7.12  

RRE − Junior lien

     36,306       575       6.42       44,096       679       6.24  

Other consumer

     41,281       642       6.31       40,356       699       7.02  

Total loans (1)

     4,029,719       59,019       5.94       4,022,863       61,822       6.23  

Federal Reserve/FHLB Stock

     23,503       456       7.87       22,397       429       7.77  

Total interest-earning assets

     4,901,399       67,598       5.59       4,949,729       68,701       5.63  

Noninterest-earning assets

     317,116                       322,590                  

Total assets

   $ 5,218,515                     $ 5,272,319                  

Interest-Bearing Liabilities

                                                

Interest-bearing demand deposits

   $ 1,367,270     $ 5,515       1.64 %   $ 1,247,725     $ 5,564       1.81 %

Money market and savings deposits

     1,503,798       8,783       2.37       1,590,616       11,332       2.89  

Time deposits

     569,065       4,776       3.40       688,569       6,639       3.91  

Fed funds purchased

     35,628       352       4.01       49,834       576       4.69  

FHLB short-term advances

     204,444       2,005       3.98       200,000       2,262       4.59  

Long-term debt

     59,195       634       4.34       59,084       650       4.46  

Total interest-bearing liabilities

     3,739,400       22,065       2.39       3,835,828       27,023       2.86  

Noninterest-Bearing Liabilities and Stockholders' Equity

                                                

Noninterest-bearing deposits

     798,579                       849,687                  

Operating lease liabilities

     38,453                       18,829                  

Accrued expenses and other liabilities

     75,520                       68,751                  

Other noninterest-bearing liabilities

     113,973                       87,580                  

Stockholders’ equity

     566,563                       499,224                  

Total liabilities and stockholders’ equity

   $ 5,218,515                     $ 5,272,319                  

Net interest income on FTE basis (1)

           $ 45,533                     $ 41,678          

Net interest rate spread on FTE basis (1)

                     3.20 %                     2.77 %

Net interest margin on FTE basis (1)

                     3.77 %                     3.41 %

(1)

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

 

45
Table of Contents

 

Interest Rates and Operating Interest Differential 

 

Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest earning assets and interest-bearing liabilities, as well as changes in average interest rates. The following table shows the effect that these factors had on the interest earned on interest earning assets and the interest incurred on interest-bearing liabilities. The effect of changes in volume is determined by multiplying the change in volume by the previous period’s average rate. Similarly, the effect of rate changes is calculated by multiplying the change in average rate by the previous period’s volume. 

 

   

Three months ended March 31, 2026

  
   

Compared with

  
   

Three months ended March 31, 2025

  
   

Change due to:

    

Interest

  

(tax-equivalent basis, dollars in thousands)

  

Volume

    

Rate

    

Variance

  

Interest-earning assets

                        

Interest-bearing deposits with banks

   $ 318     $ (71 )   $ 247  

Investment securities (1)

     (604 )     1,998       1,394  

Loans held for sale

     56       (24 )     32  

Loans

                        

Commercial and industrial

     1,189       (371 )     818  

CRE − Construction, land and development

     (1,886 )     (348 )     (2,234 )

CRE − Multifamily

     456       (521 )     (65 )

CRE − Non-owner occupied

     (747 )     (1,554 )     (2,301 )

CRE − Owner occupied

     769       (60 )     709  

Agricultural − Land

     (107 )     22       (85 )

Agricultural − Production

     (38 )     (44 )     (82 )

RRE − First lien

     (410 )     333       (77 )

RRE − Construction

     (83 )     (172 )     (255 )

RRE − HELOC

     1,632       (702 )     930  

RRE − Junior lien

     (120 )     16       (104 )

Other consumer

     16       (73 )     (57 )

Total loans (1)

     671       (3,474 )     (2,803 )

Federal Reserve/FHLB Stock

     21       6       27  

Total interest income

     462       (1,565 )     (1,103 )

Interest-bearing liabilities

                        

Interest-bearing demand deposits

     534       (583 )     (49 )

Money market and savings deposits

     (619 )     (1,930 )     (2,549 )

Time deposits

     (1,152 )     (711 )     (1,863 )

Fed funds purchased

     (164 )     (60 )     (224 )

FHLB short-term advances

     50       (308 )     (258 )

Long-term debt

     1       (17 )     (16 )

Total interest expense

     (1,350 )     (3,609 )     (4,959 )

Change in net interest income

   $ 1,812     $ 2,044     $ 3,856  

 

46
Table of Contents

 

Provision for Credit Losses

 

The provision for credit losses was comprised of the following components for the periods presented: 

 

   

Three months ended

  
   

March 31,

  

(dollars in thousands)

  

2026

    

2025

  

Provision (recovery) for credit losses on loans

   $ (4,384 )   $ 2,407  

Provision (recovery) for credit losses on unfunded commitments

     (499 )     (1,542 )

Provision (recovery) for HTM debt securities

     (5 )     (2 )

Provision for credit losses

   $ (4,888 )   $ 863  

 

The Company recorded a provision release of $4.9 million for the first quarter of 2026, compared to a provision for credit losses of $0.9 million for the first quarter of 2025. The provision release in the first quarter of 2026 was primarily driven by changes to loan balances and loan mix, largely due to decreases in balances in the commercial real estate construction, land and development pool, which is reserved at a higher rate than most other loan pools, in addition to decreases in reserves on individually evaluated loans. 

 

Noninterest Income

 

The Company’s noninterest income is generated from retirement and benefit services, wealth advisory services, mortgage banking, and other general banking services. 

 

The following table presents the Company’s noninterest income for the three months ended March 31, 2026 and 2025: 

 

   

Three months ended

  
   

March 31,

  

(dollars in thousands)

  

2026

    

2025

  

Retirement and benefit services

   $ 17,406     $ 16,106  

Wealth advisory services

     7,237       6,905  

Mortgage banking

     3,535       1,527  

Service charges on deposit accounts

     933       651  

Other

     1,736       2,443  

Total noninterest income

   $ 30,847     $ 27,632  

Noninterest income as a % of revenue

     40.72 %     40.17 %

 

Total noninterest income for the three months ended March 31, 2026 was $30.8 million, an increase of $3.2 million, or 11.6%, from the three months ended March 31, 2025. The increase was driven by an increase in mortgage banking and retirement and benefit services revenues. Mortgage banking revenue increased $2.0 million, or 131.5%, in the first quarter of 2026 compared to the first quarter of 2025, due to an increase in the mortgage servicing asset valuation, as well as increased origination volume and improved gain on sale margin. Retirement and benefit services revenue increased $1.3 million, or 8.1%, in the first quarter of 2026 compared to the first quarter of 2025, primarily driven by both asset-based and transaction-based fees. 

 

See “NOTE 16 Segment Reporting” of the consolidated financial statements and Segment Reporting section below for additional discussion regarding the Company’s business lines. 

 

47
Table of Contents

 

Noninterest Expense

 

The following table presents noninterest expense for the three months ended March 31, 2026 and 2025:

 

   

Three months ended

  
   

March 31,

  

(dollars in thousands)

  

2026

    

2025

  

Compensation

   $ 24,087     $ 22,961  

Employee taxes and benefits

     6,640       7,762  

Occupancy and equipment expense

     3,427       2,907  

Business services, software and technology expense

     5,839       5,752  

Intangible amortization expense

     1,974       2,710  

Professional fees and assessments

     3,800       2,996  

Marketing and business development

     861       965  

Supplies and postage

     607       630  

Travel

     361       287  

Mortgage and lending expenses

     710       536  

Other

     2,086       2,859  

Total noninterest expense

   $ 50,392     $ 50,365  

 

Total noninterest expense for the three months ended March 31, 2026 was $50.4 million, a $27.0 thousand, or 0.1%, increase compared to $50.4 million for the three months ended March 31, 2025. The underlying changes were driven by increases in compensation, professional fees and assessments, and occupancy and equipment expense, offset by decreases in employee taxes and benefits and intangible amortization expense. Compensation increased $1.1 million, or 4.9%, from the first quarter of 2025, primarily due to higher annual bonus expense. Professional fees and assessments increased $0.8 million, or 26.8%, from the first quarter of 2025, primarily due to a reclassification of consulting services and other third-party vendor expenses from business services, software and technology expense to professional fees and assessments. Occupancy and equipment expense increased $0.5 million, or 17.9%, from the first quarter of 2025, primarily driven by facility investments and the strategic realignment of locations from owned to leased space. In the first quarter of 2026, employee taxes and benefits decreased $1.1 million, or 14.5%, from the first quarter of 2025, primarily due to lower claims on group insurance. Intangible amortization expense decreased $0.7 million, or 27.2%, in the first quarter of 2026, primarily due to the annual reset of the $33.5 million core deposit intangible recorded in connection with the HMNF acquisition in the fourth quarter of 2024. 

 

Income Tax Expense 

 

Income tax expense is an estimate based on the amount the Company expects to owe the applicable taxing authorities, plus the impact of deferred tax items. Accrued taxes represent the net estimated amount due, or to be received from, taxing authorities. In estimating accrued taxes, management assesses the relative merits and risks of the appropriate tax treatment of transactions, taking into account statutory, judicial, and regulatory guidance in the context of the Company’s tax position. If the final resolution of taxes payable differs from the Company’s estimates due to regulatory determination or legislative or judicial actions, adjustments to tax expense may be required. 

 

For the three months ended March 31, 2026, the Company recognized income tax expense of $7.3 million on $30.3 million of pre-tax income, resulting in an effective tax rate of 24.1%, compared to income tax expense of $4.2 million on $17.6 million of pre-tax income for the three months ended March 31, 2025, resulting in an effective tax rate of 24.2%. 

 

48
Table of Contents

 

Segment Reporting

 

The Company determined reportable segments based on the significance of the services offered, the significance of those services to the Company’s financial condition and operating results, and the Company’s regular review of the operating results of those services. The Company has three operating segments—banking, retirement and benefit services, and wealth advisory services. These segments are components for which financial information is prepared and evaluated regularly by management in deciding how to allocate resources and assess performance. 

 

The selected financial information presented for each segment sets forth net interest income, provision for loan losses, noninterest income, and direct and indirect noninterest expense overhead allocations. Corporate administration includes all remaining income and expenses not allocated to the three operating segments. Certain reclassification adjustments have been made between corporate administration and the various lines of business for consistency in presentation. 

 

For additional financial information on the Company’s segments see “NOTE 16 Segment Reporting” of the Company’s consolidated financial statements. 

 

Banking

 

The banking segment offers a complete line of loan, deposit, cash management, and treasury services through 26 offices in North Dakota, Minnesota, Wisconsin, Iowa, and Arizona, including 13 banking offices acquired in the HMNF transaction. These products and services are supported through web and mobile based applications. The majority of the Company’s assets and liabilities are in the banking segment’s balance sheet. 

 

The following table presents the banking segment income statement, inclusive of corporate administration income, for the three months ended March 31, 2026 and 2025: 

 

   

Three months ended

  
   

March 31,

  

(dollars in thousands)

  

2026

    

2025

  

Net interest income

   $ 44,912     $ 41,157  

Provision for (recovery of) credit losses

     (4,883 )     863  

Noninterest income (loss)

     6,204       4,621  

Total revenue

     55,999       44,915  

Noninterest expense (1)

     27,393       29,211  

Net income before taxes

   $ 28,606     $ 15,704  

(1)

Noninterest expenses do not include corporate administration expenses. Corporate administration expenses include executive compensation, premises and fixed assets expenses, information technology expenses, and other expenses. These expenses are not specific to any specific segment. 

 

Retirement and Benefit Services

 

The retirement and benefit services segment provides the following services nationally: record-keeping and administration services to qualified and other types of retirement plans, investment fiduciary services to retirement plans, health savings accounts, flexible spending accounts, and COBRA recordkeeping and administration services. 

 

The following table presents the retirement and benefit services segment income statement for the three months ended March 31, 2026 and 2025: 

 

   

Three months ended

  
   

March 31,

  

(dollars in thousands)

  

2026

    

2025

  

Recurring annual income (1)

   $ 15,560     $ 14,408  

Transactional income (2)

     1,846       1,698  

Total noninterest income

     17,406       16,106  

Noninterest expense

     14,609       13,617  

Net income before taxes

   $ 2,797     $ 2,489  

(1)

Recurring annual income primarily includes asset-based fees, administration fees, record-keeping fees, trust/custody fees, advisory fees, and health and welfare fees. $6.8 million and $6.3 million for the three months ended March 31, 2026 and 2025, respectively, were due to movements in the market. 
(2) Transactional income primarily includes distribution fees. 

 

Wealth Advisory Services

 

The wealth advisory services segment provides advisory and planning services, investment management, and trust and fiduciary services to clients across the Company’s footprint. 

 

The following table presents the wealth advisory services segment income statement for the  three months ended March 31, 2026 and 2025: 

 

   

Three months ended

  
   

March 31,

  

(dollars in thousands)

  

2026

    

2025

  

Asset management

   $ 6,454     $ 5,760  

Brokerage

     511       534  

Insurance and advisory

     272       610  

Total noninterest income

     7,237       6,904  

Noninterest expense

     5,727       4,837  

Net income before taxes

   $ 1,510     $ 2,067  

 

49
Table of Contents

 

Financial Condition

 

Overview

 

Total assets were $5.3 billion as of March 31, 2026, an increase of $57.9 million, or 1.1%, compared to December 31, 2025. The increase was primarily due to an increase of $61.6 million in cash and cash equivalents and an increase of $8.0 million in available-for-sale investment securities, partially offset by a decrease of $13.3 million in loans held for investment. 

 

Investment Securities

 

The following table presents the fair value composition of the Company’s investment securities portfolio as of March 31, 2026 and December 31, 2025: 

 

   

March 31, 2026

    

December 31, 2025

  
           

Percent of

            

Percent of

  

(dollars in thousands)

  

Balance

    

Portfolio

    

Balance

    

Portfolio

  

Available-for-sale

                                

U.S. Treasury and agencies

   $ 4,141       0.6 %   $ 405       0.1 %

Mortgage backed securities

                                

Residential agency

     480,627       64.7       476,746       64.2  

Asset backed securities

     14       —       15       —  

Corporate bonds

     37,319       5.0       36,929       5.0  

Total available-for-sale investment securities

     522,101       70.3       514,095       69.3  

Held-to-maturity

                                

Obligations of state and political agencies

     100,994       13.6       105,405       14.2  

Mortgage backed securities

                                

Residential agency

     119,431       16.1       122,604       16.5  

Total held-to-maturity investment securities

     220,425       29.7       228,009       30.7  

Total investment securities

   $ 742,526       100.0 %   $ 742,104       100.0 %

 

The composition of the Company’s investment securities portfolio reflects the Company’s investment strategy of maintaining an appropriate level of liquidity for normal operations while providing an additional source of revenue. The investment portfolio also provides a balance to interest rate risk and credit risk in other categories of the balance sheet, while providing a vehicle for the investment of available funds, furnishing liquidity, and supplying securities to pledge as collateral.

 

The investment securities presented in the following table are reported at fair value and by contractual maturity as of March 31, 2026. Actual timing may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Additionally, residential mortgage backed securities and collateralized mortgage obligations receive monthly principal payments, which are not reflected below. The yields below are calculated on a tax-equivalent basis, assuming a 21.0% income tax rate.

 

   

Maturity as of March 31, 2026

  
   

One year or less

    

One to five years

    

Five to ten years

    

After ten years

  
   

Fair

    

Average

    

Fair

    

Average

    

Fair

    

Average

    

Fair

    

Average

  

(dollars in thousands)

  

Value

    

Yield

    

Value

    

Yield

    

Value

    

Yield

    

Value

    

Yield

  

Available-for-sale

                                                                

U.S. Treasury and agencies

   $ —       — %   $ 167       4.06 %   $ 1,734       4.45 %   $ 2,240       4.45 %

Mortgage backed securities

                                                                

Residential agency

     27       2.52       8,093       4.08       10,226       4.21       462,281       4.73  

Commercial

     —       —       —       2.40       —       —       —       —  

Asset backed securities

     —       —       —       —       14       4.75       —       —  

Corporate bonds

     —       —       —       —       37,319       3.34       —       —  

Total available-for-sale investment securities

     27       2.52       8,260       4.08       49,293       3.55       464,521       4.72  

Held-to-maturity

                                                                

Obligations of state and political agencies

     12,701       1.77       52,675       2.05       30,970       2.56       4,648       2.37  

Mortgage backed securities

                                                                

Residential agency

     —       —       —       —       —       —       119,431       2.24  

Total held-to-maturity investment securities

     12,701       1.77       52,675       2.05       30,970       2.56       124,079       2.37  

Total investment securities

   $ 12,728       1.77 %   $ 60,935       2.32 %   $ 80,263       3.17 %   $ 588,600       4.20 %

 

50
Table of Contents

 

Loans

 

The loan portfolio represents a broad range of borrowers comprised of commercial and industrial, commercial real estate, agricultural, and consumer loans. 

 

Total loans outstanding were $4.0 billion as of March 31, 2026, a decrease of $13.3 million, or 0.3%, from December 31, 2025. The decrease was primarily driven by a $28.3 million decrease in consumer loans, partially offset by a $15.1 million increase in commercial loans. 

 

The Company’s loan portfolio is diversified. The following table presents the balance and percentage of loans outstanding by segment/industry as of the dates presented: 

 

   

March 31, 2026

    

December 31, 2025

  
           

Percent of

            

Percent of

  

(dollars in thousands)

  

Balance

    

Portfolio

    

Balance

    

Portfolio

  

Commercial and business lending:

                                

General business

   $ 356,240       8.8 %   $ 290,008       7.2 %

Services

     215,487       5.3       237,966       5.9  

Retail trade

     66,439       1.6       101,374       2.5  

Manufacturing

     109,281       2.7       107,485       2.7  

Commercial real estate − Owner occupied

     444,276       11.0       427,260       10.6  

Total commercial and business lending

     1,191,723       29.4       1,164,093       28.9  

Investor commercial real estate:

                                

Construction, land and development

     146,897       3.6       246,238       6.1  

Multifamily

     392,097       9.7       383,505       9.5  

Non-owner occupied

                                

Office

     139,175       3.4       142,095       3.5  

Industrial

     199,122       4.9       193,041       4.8  

Retail

     127,003       3.1       116,735       2.9  

Hotel

     109,363       2.7       110,022       2.7  

Medical office

     208,375       5.2       174,891       4.3  

Medical or nursing facility

     137,800       3.4       85,918       2.1  

Other commercial real estate

     55,501       1.5       53,160       1.3  

Total non-owner occupied

     976,339       24.2       875,862       21.6  

Total investor commercial real estate

     1,515,333       37.5       1,505,605       37.2  

Agricultural:

                                

Land

     54,028       1.3       64,799       1.6  

Production

     50,983       1.3       62,500       1.5  

Total agricultural

     105,011       2.6       127,299       3.1  

Consumer:

                                

RRE − First lien

     851,551       21.1       874,737       21.6  

RRE − Construction

     32,872       0.9       33,703       0.8  

RRE − HELOC

     262,131       6.5       260,883       6.4  

RRE − Junior lien

     35,783       0.9       36,844       0.9  

Other consumer

     40,340       1.1       44,858       1.1  

Total consumer

     1,222,677       30.5       1,251,025       30.8  

Total loans

   $ 4,034,744       100.0 %   $ 4,048,022       100.0 %

 

Commercial and industrial loans represent loans for working capital, purchases of equipment and other needs of commercial customers primarily located within the Bank’s geographical footprint. These loans are underwritten individually and represent ongoing relationships based on a thorough knowledge of the customer, the customer’s industry and the customer’s market. While commercial loans are generally secured by the customer’s assets, including real property, inventory, accounts receivable, operating equipment and other property, and may also include personal guarantees of the owners and related parties, the primary source of repayment of the loans is the ongoing cash flow from operations of the customer’s business. In addition, revolving lines of credit are generally governed by a borrowing base. Inherent lending risks are monitored on a continuous basis through interim reporting, covenant testing and annual underwriting. 

 

CRE loans consist of term loans secured by a mortgage lien on real property and include both owner occupied CRE loans as well as non-owner occupied loans. Non-owner occupied CRE loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, multi-family, industrial, office, retail and other specific use properties as well as CRE construction loans that are offered to builders and developers generally within the Bank’s geographical footprint. The primary risk characteristics in the non-owner occupied portfolio include impacts of overall leasing rates, absorption timelines, levels of vacancy rates and operating expenses. The Company requires collateral values in excess of the loan amounts, cash flows in excess of expected debt service requirements and equity investment in the project. The expected cash flows from all significant new or renewed income producing property commitments are stress tested to reflect the risks in varying interest rates, vacancy rates and rental rates. Inherent lending risks are monitored on a continuous basis through quarterly monitoring and the Bank’s annual underwriting process, incorporating an analysis of cash flow, collateral, market conditions and guarantor liquidity, if applicable. CRE loan policies are specific to individual product types and underwriting parameters vary depending on the risk profile of each asset class. CRE loan policies are reviewed no less than semi-annually by management and approved by the Bank’s Board of Directors to ensure they align with current market conditions and the Bank’s moderate risk appetite. Construction loans are monitored monthly and includes on-site inspections. Management reviews all construction loans quarterly to ensure projects are on time and within budget. CRE concentration limits have been established by product type and are monitored quarterly by the Bank’s Credit Governance Committee and Bank Board of Directors. 

 

51
Table of Contents

 

CRE loans may be adversely affected by conditions in the real estate markets or in the general economy. The Company does not monitor the CRE portfolio for attributes such as loan-to-value ratios, occupancy rates or net operating income, as these characteristics are assessed and evaluated on an individual loan basis. Portfolio stress testing is completed based on property type and takes into consideration changes to net operating income and capitalization rates. The Company does not have exposure to the office building sector in central business districts as the office portfolio is generally diversified in suburban markets with strong occupancy levels. 

 

The following table presents the geographical markets of the collateral related to non-owner occupied and multifamily CRE loans for the periods presented: 

 

   

March 31, 2026

    

December 31, 2025

  
           

Percent of

            

Percent of

  

(dollars in thousands)

  

Balance

    

Total

    

Balance

    

Total

  

Geographical Market:

                                

Minnesota

   $ 660,575       48.3 %   $ 621,747       49.4 %

North Dakota

     227,201       16.6       212,077       16.8  

Arizona

     123,074       9.0       133,618       10.6  

Wisconsin

     115,330       8.4       88,229       7.0  

Texas

     37,074       2.7       37,113       2.9  

Illinois

     26,222       1.9       2,994       0.2  

Oregon

     25,928       1.9       17,698       1.4  

Colorado

     23,351       1.7       23,358       1.9  

Kansas

     17,005       1.2       16,656       1.3  

Missouri

     16,312       1.2       16,409       1.3  

Georgia

     14,592       1.1       14,569       1.2  

Virginia

     11,184       0.8       11,182       0.9  

Iowa

     11,077       0.8       11,155       0.9  

South Dakota

     10,362       0.8       10,415       0.8  

Other

     49,149       3.6       42,147       3.3  

Total non-owner occupied and multifamily commercial real estate loans

   $ 1,368,436       100.0 %   $ 1,259,367       100.0 %

 

The Bank does not currently monitor owner occupied CRE loans based on geographical markets, as the primary source of repayment for these loans is predicated on the cash flow from the underlying operating entity. These loans are generally located within the Company’s geographical footprint. 

 

Highly competitive conditions continue to prevail in the small- and middle-market commercial segments in which the Company primarily operates. The Company maintains a commitment to generating growth in the Company’s business portfolio in a manner that adheres to its twin goals of maintaining strong asset quality and producing profitable margins. The Company continues to invest in additional personnel, technology and business development resources to further strengthen its capabilities. 

 

Agricultural loans include loans secured by farmland and loans for agricultural production. Farmland includes purposes such as crop and livestock production. Farmland loans are typically written with amortizing payment structures. Collateral values for farmland are determined based upon appraisals and evaluations in accordance with established policy guidelines and maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines. Agricultural production loans are for the purpose of financing working capital and/or capital investment for agriculture production activities. Collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, and/or real estate in applicable. Agricultural production loans are primarily paid by the operating cash flow of the borrower. Agricultural production loans may be secured or unsecured. 

 

Residential real estate (“RRE”) loans represent loans to consumers for the purchase or refinance of a residence. These loans are generally financed over a 15- to 30-year term and, in most cases, are extended to borrowers to finance their primary residence with both fixed-rate and adjustable-rate terms. Real estate construction loans are also offered to consumers who wish to build their own homes and are often structured to be converted to permanent loans at the end of the construction phase, which is typically twelve months. RRE loans also include home equity loans and lines of credit that are secured by a first or second lien on the borrower’s residence. Home equity lines of credit (“HELOC”) consist mainly of revolving lines of credit secured by residential real estate. 

 

Other consumer loans include loans made to individuals not secured by real estate, including loans secured by automobiles or watercraft, and personal unsecured loans. 

 

The Company originates both fixed and adjustable rate residential real estate loans conforming to the underwriting guidelines of the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, as well as home equity loans and lines of credit that are secured by first or junior liens. Most of the Company’s fixed rate residential loans, along with some of the Company’s adjustable rate mortgages are sold to other financial institutions with which the Company has established a correspondent lending relationship. 

 

The Company’s RRE loans have minimal direct exposure to subprime mortgages as the loans are underwritten to conform to secondary market standards. As of March 31, 2026, the Company’s RRE portfolio was $1.2 billion, representing a $23.8 million, or 2.0%, decrease from December 31, 2025. Market interest rates, expected duration, and the Company’s overall interest rate sensitivity profile continue to be the most significant factors in determining whether the Company chooses to retain versus sell portions of new consumer mortgage originations. 

 

52
Table of Contents

 

The following table presents the maturities and types of interest rates for the loan portfolio as of March 31, 2026: 

 

   

March 31, 2026

  
           

After one

    

After five

                  
   

One year

    

but within

    

but within

    

After

          

(dollars in thousands)

  

or less

    

five years

    

fifteen years

    

fifteen years

    

Total

  

Commercial

                                        

Commercial and business lending

                                        

Commercial and industrial

   $ 168,644     $ 397,780     $ 174,419     $ 6,604     $ 747,447  

Commercial real estate − Owner occupied

     23,907       272,778       97,566       50,025       444,276  

Total commercial and business lending

     192,551       670,558       271,985       56,629       1,191,723  

Investor commercial real estate

                                        

Construction, land and development

     61,189       62,299       15,931       7,478       146,897  

Multifamily

     68,272       236,076       87,749       —       392,097  

Non-owner occupied

     129,403       631,937       151,071       63,928       976,339  

Total investor commercial real estate

     258,864       930,312       254,751       71,406       1,515,333  

Agricultural

                                        

Land

     3,492       14,116       15,539       20,881       54,028  

Production

     31,263       19,102       618       —       50,983  

Total agricultural

     34,755       33,218       16,157       20,881       105,011  

Total commercial

     486,170       1,634,088       542,893       148,916       2,812,067  

Consumer

                                        

Residential real estate

                                        

First lien

     8,177       44,661       70,267       728,446       851,551  

Construction

     21,529       3,989       —       7,354       32,872  

HELOC

     3,840       10,103       22,572       225,616       262,131  

Junior lien

     1,665       5,448       17,807       10,863       35,783  

Total residential real estate

     35,211       64,201       110,646       972,279       1,182,337  

Other consumer

     15,365       19,227       3,680       2,068       40,340  

Total consumer

     50,576       83,428       114,326       974,347       1,222,677  

Total loans

   $ 536,746     $ 1,717,516     $ 657,219     $ 1,123,263     $ 4,034,744  

Loans with fixed interest rates:

                                        

Commercial

                                        

Commercial and business lending

                                        

Commercial and industrial

   $ 25,839     $ 223,400     $ 72,664     $ —     $ 321,903  

Commercial real estate − Owner occupied

     18,894       193,839       28,538       1,159       242,430  

Total commercial and business lending

     44,733       417,239       101,202       1,159       564,333  

Investor commercial real estate

                                        

Construction, land and development

     43,301       16,897       153       —       60,351  

Multifamily

     27,232       136,325       24,371       —       187,928  

Non-owner occupied

     77,154       341,141       74,537       —       492,832  

Total investor commercial real estate

     147,687       494,363       99,061       —       741,111  

Agricultural

                                        

Land

     3,402       13,852       13,860       14,880       45,994  

Production

     823       14,776       618       —       16,217  

Total agricultural

     4,225       28,628       14,478       14,880       62,211  

Total commercial

     196,645       940,230       214,741       16,039       1,367,655  

Consumer

                                        

Residential real estate

                                        

First lien

     7,538       36,692       61,758       416,620       522,608  

Construction

     12,592       —       —       2,674       15,266  

HELOC

     93       1,091       5,519       3,270       9,973  

Junior lien

     1,349       3,462       13,382       10,282       28,475  

Total residential real estate

     21,572       41,245       80,659       432,846       576,322  

Other consumer

     670       11,416       3,680       192       15,958  

Total consumer

     22,242       52,661       84,339       433,038       592,280  

Total loans with fixed interest rates

   $ 218,887     $ 992,891     $ 299,080     $ 449,077     $ 1,959,935  

Loans with floating interest rates:

                                        

Commercial

                                        

Commercial and business lending

                                        

Commercial and industrial

   $ 142,805     $ 174,380     $ 101,755     $ 6,604     $ 425,544  

Commercial real estate − Owner occupied

     5,013       78,939       69,028       48,866       201,846  

Total commercial and business lending

     147,818       253,319       170,783       55,470       627,390  

Investor commercial real estate

                                        

Construction, land and development

     17,888       45,402       15,778       7,478       86,546  

Multifamily

     41,040       99,751       63,378       —       204,169  

Non-owner occupied

     52,249       290,796       76,534       63,928       483,507  

Total investor commercial real estate

     111,177       435,949       155,690       71,406       774,222  

Agricultural

                                        

Land

     90       264       1,679       6,001       8,034  

Production

     30,440       4,326       —       —       34,766  

Total agricultural

     30,530       4,590       1,679       6,001       42,800  

Total commercial

     289,525       693,858       328,152       132,877       1,444,412  

Consumer

                                        

Residential real estate

                                        

First lien

     639       7,969       8,509       311,826       328,943  

Construction

     8,937       3,989       —       4,680       17,606  

HELOC

     3,747       9,012       17,053       222,346       252,158  

Junior lien

     316       1,986       4,425       581       7,308  

Total residential real estate

     13,639       22,956       29,987       539,433       606,015  

Other consumer

     14,695       7,811       —       1,876       24,382  

Total consumer

     28,334       30,767       29,987       541,309       630,397  

Total loans with floating interest rates

   $ 317,859     $ 724,625     $ 358,139     $ 674,186     $ 2,074,809  

 

53
Table of Contents

 

The expected life of the Company’s loan portfolio will differ from contractual maturities because borrowers may have the right to curtail or prepay their loans with or without penalties. Consequently, the table above includes information limited to contractual maturities of the underlying loans. 

 

Asset Quality

 

The Company’s strategy for credit risk management includes well‑defined, centralized credit policies; uniform underwriting criteria; and ongoing risk monitoring and review processes for all commercial and consumer credit exposures. The strategy also emphasizes diversification on a geographic, industry, and client level; regular credit examinations; and management reviews of loans experiencing deterioration of credit quality. The Company strives to identify potential problem loans early, take necessary charge‑offs promptly, and maintain adequate reserve levels for credit losses inherent in the portfolio. Management performs ongoing, internal reviews of any problem credits and continually assesses the adequacy of the allowance. The Company utilizes an internal lending division, Special Credit Services, to develop and implement strategies for the management of individual nonperforming loans. 

 

Credit Quality Indicators

 

Loans are assigned a risk rating and grouped into categories based on relevant information about the ability of borrowers to service their debt, such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The risk ratings are aligned to pass and criticized categories. The criticized categories include special mention, substandard, and doubtful risk ratings. See “NOTE 4 Loans and Allowance for Credit Losses” of the consolidated financial statements for a definition of each of the risk ratings. 

 

The table below presents criticized loans outstanding by loan portfolio segment as of March 31, 2026 and December 31, 2025: 

 

   

March 31,

    

December 31,

  

(dollars in thousands)

  

2026

    

2025

  

Commercial

                

Commercial and business lending

                

Commercial and industrial

   $ 32,114     $ 33,323  

Commercial real estate − Owner occupied

     13,737       14,058  

Total commercial and business lending

     45,851       47,381  

Investor commercial real estate

                

Construction, land and development

     33,552       34,201  

Multifamily

     22,970       28,541  

Non-owner occupied

     9,564       17,591  

Total investor commercial real estate

     66,086       80,333  

Agricultural

                

Land

     5,021       7,653  

Production

     6,176       3,662  

Total agricultural

     11,197       11,315  

Total commercial

     123,134       139,029  

Consumer

                

Residential real estate

                

First lien

     1,989       2,602  

Construction

     4,680       4,680  

HELOC

     158       128  

Junior lien

     2,183       2,375  

Total residential real estate

     9,010       9,785  

Other consumer

     315       348  

Total consumer

     9,325       10,133  

Total criticized loans

   $ 132,459     $ 149,162  

Criticized loans as a percent of total loans

     3.28 %     3.68 %

 

The following table presents information regarding nonperforming assets as of March 31, 2026 and December 31, 2025: 

 

   

March 31,

    

December 31,

  

(dollars in thousands)

  

2026

    

2025

  

Nonaccrual loans

   $ 53,881     $ 69,065  

Accruing loans 90+ days past due

     —       —  

Total nonperforming loans

     53,881       69,065  

OREO and repossessed assets

     126       308  

Total nonperforming assets

     54,007       69,373  

Total restructured accruing loans

     —       1,436  

Total nonperforming assets and restructured accruing loans

   $ 54,007     $ 70,809  

Nonperforming loans to total loans

     1.34 %     1.71 %

Nonperforming assets to total assets

     1.02 %     1.33 %

ACL on loans to nonperforming loans

     93.73 %     89.65 %

 

Interest income lost on nonaccrual loans was approximately $1.0 million and $1.1 million for the three months ended March 31, 2026 and 2025, respectively. There was no interest income included in net interest income related to nonaccrual loans for the three months ended March 31, 2026 and 2025. 

 

54
Table of Contents

 

Allowance for Credit Losses

 

The ACL on loans is maintained at a level management believes is sufficient to absorb expected losses in the loan portfolio over the remaining estimated life of loans in the portfolio. Under the Current Expected Credit Loss accounting standard, the ACL is a valuation estimated at each balance sheet date and deducted from the amortized cost basis of loans held for investment to present the net amount expected to be collected. These evaluations are inherently subjective as they require management to make material estimates, all of which may be susceptible to significant change. The allowance is increased by provisions charged to expense and decreased by actual charge‑offs, net of recoveries. 

 

Management estimates the ACL using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical loss experience provides the basis for estimation of expected credit losses. Adjustments to historical loss information are made for differences in the current loan-specific risk characteristics such as different underwriting standards, portfolio mix, delinquency level, or life of the loan, as well as changes in environmental conditions, levels of economic activity, unemployment rates, property values and other relevant factors. The calculation also contemplates that the Company may not be able to make or obtain such forecasts for the entire life of the financial assets and requires a reversion to historical loss information. 

 

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation. The ACL on individually evaluated loans is recognized on the basis of the present value of expected future cash flows discounted at the effective interest rate, the fair value of collateral adjusted of estimated costs to sell, or observable market price as of the relevant date. 

 

The following table presents information concerning the components of the ACL for the periods presented: 

 

   

Three months ended

  
   

March 31,

  

(dollars in thousands)

  

2026

    

2025

  

ACL on loans at the beginning of the period

   $ 61,915     $ 59,929  

(Credit) provision for loan losses

     (4,384 )     2,407  

Net charge-offs (recoveries) (1)

                

Commercial and industrial

     6,379       (101 )

CRE − Owner occupied

     (11 )     (11 )

CRE − Construction, land and development

     —       —  

CRE − Multifamily

     556       —  

CRE − Non-owner occupied

     —       —  

Agricultural − Land

     —       —  

Agricultural − Production

     (194 )     (12 )

RRE − First lien

     —       54  

RRE − Construction

     —       —  

RRE − HELOC

     —       250  

RRE − Junior lien

     212       300  

Other consumer

     84       (73 )

Total net charge-offs

     7,026       407  

ACL on loans at the end of the period

     50,505       61,929  

Components of ACL:

                

ACL on HTM debt securities

     118       129  

ACL on loans

     50,505       61,929  

ACL on off-balance sheet credit exposures

     3,391       5,992  

ACL at end of the period

     54,014       68,050  

Total loans

   $ 4,034,744     $ 4,085,483  

Average total loans

     4,029,719       4,022,863  

ACL on loans to total loans

     1.25 %     1.52 %

ACL on loans to nonaccrual loans

     93.73 %     122.59 %

ACL on loans to nonperforming loans

     93.73 %     122.59 %

Net charge-offs/(recoveries) to average total loans (annualized)

     0.71 %     0.04 %
 

(1)

Additional information related to net charge-offs (recoveries) is presented in the following table for the periods indicated. 

 

55
Table of Contents

 

   

For the three months ended

  
   

March 31,

  
                                   

Net Charge-offs

  
   

Total

    

Total

    

Net Charge-offs

    

Average

    

(Recoveries) to

  

(dollars in thousands)

  

Charge-offs

    

Recoveries

    

(Recoveries)

    

Loans

    

Average Loans

  

2026:

                                        

Commercial

                                        

Commercial and business lending

                                        

Commercial and industrial

   $ 6,565     $ 186     $ 6,379     $ 723,803       3.57 %

Commercial real estate − Owner occupied

     —       11       (11 )     433,621       (0.01 )

Total commercial and business lending

     6,565       197       6,368       1,157,424       2.23  

Investor commercial real estate

                                        

Construction, land and development

     —       —       —       211,754       —  

Multifamily

     556       —       556       398,839       0.57  

Non-owner occupied (1)

     —       —       —       923,773       —  

Total investor commercial real estate

     556       —       556       1,534,366       0.15  

Agricultural

                                        

Land

     —       —       —       59,787       —  

Production

     —       194       (194 )     58,833       (1.34 )

Total agricultural

     —       194       (194 )     118,620       (0.66 )

Total commercial

     7,121       391       6,730       2,810,410       0.97  

Consumer

                                        

Residential real estate

                                        

First lien

     —       —       —       865,077       —  

Construction

     —       —       —       32,906       —  

HELOC

     —       —       —       261,586       —  

Junior lien

     212       —       212       36,306       2.37  

Total residential real estate

     212       —       212       1,195,875       0.07  

Other consumer

     113       29       84       41,281       0.83  

Total consumer

     325       29       296       1,237,156       0.10  

Total loans

   $ 7,446     $ 420     $ 7,026     $ 4,047,566       0.70 %

2025:

                                        

Commercial

                                        

Commercial and business lending

                                        

Commercial and industrial

   $ 169     $ 270     $ (101 )   $ 657,838       (0.06 )%

Commercial real estate − Owner occupied

     —       11       (11 )     386,545       (0.01 )

Total commercial and business lending

     169       281       (112 )     1,044,383       (0.04 )

Investor commercial real estate

                                        

Construction, land and development

     —       —       —       342,718       —  

Multifamily

     —       —       —       372,608       —  

Non-owner occupied

     —       —       —       981,601       —  

Total investor commercial real estate

     —       —       —       1,696,927       —  

Agricultural

                                        

Land

     —       —       —       67,228       —  

Production

     —       12       (12 )     60,933       (0.08 )

Total agricultural

     —       12       (12 )     128,161       (0.04 )

Total commercial

     169       293       (124 )     2,869,471       (0.02 )

Consumer

                                        

Residential real estate

                                        

First lien

     54       —       54       899,835       0.02  

Construction

     —       —       —       36,913       —  

HELOC

     250       —       250       168,599       0.60  

Junior lien

     300       —       300       44,096       2.76  

Total residential real estate

     604       —       604       1,149,443       0.21  

Other consumer

     39       112       (73 )     40,356       (0.73 )

Total consumer

     643       112       531       1,189,799       0.18  

Total loans

   $ 812     $ 405     $ 407     $ 4,059,270       0.04 %

 

56
Table of Contents

 

The following table presents the allocation of the ACL on loans as of the dates presented:

 

   

March 31, 2026

    

December 31, 2025

  
           

Percentage

            

Percentage

  
   

Allocated

    

of loans to

    

Allocated

    

of loans to

  

(dollars in thousands)

  

Allowance

    

total loans

    

Allowance

    

total loans

  

Commercial and industrial

   $ 11,628       18.4 %   $ 16,216       18.3 %

CRE − Owner occupied

     3,604       11.0       3,097       10.6  

CRE − Construction, land and development

     6,741       3.6       13,210       6.1  

CRE − Multifamily

     3,699       9.7       4,380       9.5  

CRE − Non-owner occupied

     10,929       24.2       11,006       21.6  

Agricultural − Land

     852       1.3       959       1.6  

Agricultural − Production

     518       1.3       623       1.5  

RRE − First lien

     9,122       21.1       9,358       21.6  

RRE − Construction

     297       0.9       274       0.8  

RRE − HELOC

     2,130       6.5       1,787       6.4  

RRE − Junior lien

     407       0.9       395       0.9  

Other consumer

     578       1.1       610       1.1  

Total loans

   $ 50,505       100.0 %   $ 61,915       100.0 %

 

In the ordinary course of business, the Company enters into commitments to extend credit, including commitments under credit arrangements, commercial letters of credit, and standby letters of credit. Such financial instruments are recorded when they are funded. An ACL on off-balance sheet credit exposures is measured using similar internal and external assumptions as the ACL on loans. This allowance is located in accrued expenses and other liabilities on the consolidated balance sheets. The ACL for unfunded commitments was $3.4 million and $6.0 million as of March 31, 2026 and 2025, respectively. 

 

Deposits

 

Deposit inflows and outflows are influenced by prevailing market interest rates, competition, local and economic conditions, and fluctuations in the Company’s customers’ own liquidity needs and may also be influenced by recent developments in the financial services industry, including the large-scale deposit withdrawals over a short period of time that resulted in bank failures. 

 

Total deposits were $4.3 billion as of March 31, 2026, an increase of $155.9 million, or 3.7%, from December 31, 2025. Interest-bearing deposits increased $106.2 million during this period, while noninterest-bearing deposits increased $49.7 million. The increase in total deposits was driven by growth in commercial deposits due to new and expanded client relationships and funding structure diversification through the utilization of callable brokered CDs. This growth was partially offset by outflows from our public funds depositors, which reached a typical seasonal low in the third quarter of 2025. 

 

The following table presents the composition of the Company’s deposit portfolio as of March 31, 2026 and December 31, 2025: 

 

   

March 31, 2026

    

December 31, 2025

                  
           

Percent of

            

Percent of

    

Change

  

(dollars in thousands)

  

Balance

    

Portfolio

    

Balance

    

Portfolio

    

Amount

    

Percent

  

Noninterest-bearing demand

   $ 857,625       19.7 %   $ 807,896       19.3 %   $ 49,729       6.2 %

Interest-bearing demand

     1,449,156       33.3       1,296,315       30.9       152,841       11.8  

Money market and savings (1)

     1,470,141       33.8       1,511,250       36.1       (41,109 )     (2.7 )

Time deposits

     570,960       13.2       576,542       13.7       (5,582 )     (1.0 )

Total deposits

   $ 4,347,882       100.0 %   $ 4,192,003       100.0 %   $ 155,879       3.7 %
 

(1)

Money market and savings deposits included health savings account deposits of $217.9 million and $203.4 million as of March 31, 2026 and December 31, 2025, respectively. 

 

The following table presents the average balances and rates of the Company’s deposit portfolio for the three months ended March 31, 2026 and 2025: 

 

   

Three months ended March 31,

  
   

2026

    

2025

  
   

Average

    

Average

    

Average

    

Average

  

(dollars in thousands)

  

Balance

    

Rate

    

Balance

    

Rate

  

Noninterest-bearing demand

   $ 798,579       — %   $ 849,687       — %

Interest-bearing demand

     1,367,270       1.64       1,247,725       1.81  

Money market and savings

     1,503,798       2.37       1,590,616       2.89  

Time deposits

     569,065       3.40       688,569       3.91  

Total deposits

   $ 4,238,712       1.82 %   $ 4,376,597       2.18 %

 

57
Table of Contents

 

The following table presents the composition of the Company’s deposit portfolio by client segment as of March 31, 2026 and December 31, 2025: 

 

   

March 31, 2026

    

December 31, 2025

                  
           

Percent of

            

Percent of

    

Change

  

(dollars in thousands)

  

Balance

    

Portfolio

    

Balance

    

Portfolio

    

Amount

    

Percent

  

Commercial

   $ 1,602,742       36.9 %   $ 1,563,239       37.3 %   $ 39,503       2.5 %

Consumer

     1,499,032       34.5       1,469,813       35.1       29,219       2.0  

Public (1)

     272,823       6.3       180,755       4.3       92,068       50.9  

Synergistic (2)

                                                

Retirement and benefit services (3)

     742,429       17.1       725,618       17.3       16,811       2.3  

Wealth advisory services (4)

     230,856       5.2       252,578       6.0       (21,722 )     (8.6 )

Total synergistic

     973,285       22.3       978,196       23.3       (4,911 )     (6.3 )

Total deposits

   $ 4,347,882       100.0 %   $ 4,192,003       100.0 %   $ 155,879       3.7 %
 

(1)

Public deposits primarily represent municipalities, school districts, and other governmental entities that receive public funding. 
  (2) Synergistic deposits represent the on-balance sheet money market balances that Alerus Retirement and Benefit Services and Alerus Wealth Advisory Services clients hold in proprietary Alerus money market products. 
  (3) $373.1 million and $395.7 million of retirement and benefit services synergistic deposits were indexed as of March 31, 2026 and December 31, 2025, respectively. 
  (4) $230.9 million and $252.6 million of wealth advisory services synergistic deposits were indexed as of March 31, 2026 and December 31, 2025, respectively. 

 

The following table presents the contractual maturity of time deposits, including certificate of deposit account registry services and IRA deposits of $250,000 and over, that were outstanding as of March 31, 2026: 

 

   

March 31,

  

(dollars in thousands)

  

2026

  

Maturing in:

        

3 months or less

   $ 80,745  

3 months to 6 months

     75,619  

6 months to 1 year

     28,135  

1 year or greater

     6,210  

Total

   $ 190,709  

 

The Company’s total uninsured deposits, which are amounts of deposit accounts that exceed the FDIC insurance limit, currently $250,000, were approximately $1.4 billion at both March 31, 2026 and December 31, 2025. These amounts were estimated based on the same methodologies used for regulatory reporting purposes. 

 

Borrowings

 

Borrowings as of March 31, 2026 and December 31, 2025 were as follows: 

 

   

March 31, 2026

    

December 31, 2025

  
           

Percent of

            

Percent of

  

(dollars in thousands)

  

Balance

    

Portfolio

    

Balance

    

Portfolio

  

Fed funds purchased

   $ —       — %   $ 58,800       16.0 %

FHLB short-term advances

     200,000       77.2       250,000       67.9  

Subordinated notes

     50,000       19.3       50,000       13.6  

Junior subordinated debentures

     9,211       3.5       9,182       2.5  

Total borrowed funds

   $ 259,211       100.0 %   $ 367,982       100.0 %

 

Capital Resources

 

Stockholders’ equity is influenced primarily by earnings, dividends, the Company’s sales and repurchases of its common stock and changes in accumulated other comprehensive income caused primarily by fluctuations in unrealized gains or losses, net of taxes, on available-for-sale securities. 

 

Stockholders’ equity increased $9.8 million, or 1.7%, to $574.7 million as of March 31, 2026, compared to $564.9 million as of December 31, 2025. Tangible common equity to tangible assets, a non-GAAP financial measure, increased to 8.85% as of March 31, 2026, from 7.43% as of December 31, 2025. Common equity tier 1 capital to risk weighted assets increased to 10.60% as of March 31, 2026, from 10.28% as of December 31, 2025. 

 

The Company strives to maintain an adequate capital base to support the Company’s activities in a safe and sound manner while at the same time attempting to maximize stockholder value. Capital adequacy is assessed against the risk inherent in the Company’s balance sheet, recognizing that unexpected loss is the common denominator of risk, and that common equity has the greatest capacity to absorb unexpected loss. 

 

The Company is subject to various regulatory capital requirements both at the Company and at the Bank level. Failure to meet minimum capital requirements could result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have an adverse material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, specific capital guidelines must be met that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting policies. The Company has consistently maintained regulatory capital ratios at or above the well-capitalized standards. 

 

58
Table of Contents

 

At March 31, 2026 and December 31, 2025, the Company met all the capital adequacy requirements to which the Company was subject. The table below presents the Company’s and the Bank’s regulatory capital ratios and the Company’s tangible common equity to tangible assets ratio as of March 31, 2026 and December 31, 2025: 

 

   

March 31,

    

December 31,

  

Capital Ratios

  

2026

    

2025

  

Alerus Financial Corporation Consolidated

                

Common equity tier 1 capital to risk weighted assets

     10.60 %     10.28 %

Tier 1 capital to risk weighted assets

     10.81 %     10.48 %

Total capital to risk weighted assets

     13.17 %     12.87 %

Tier 1 capital to average assets

     9.30 %     8.86 %

Tangible common equity to tangible assets (1)

     8.85 %     7.43 %
                 

Alerus Financial, National Association

                

Common equity tier 1 capital to risk weighted assets

     10.75 %     10.41 %

Tier 1 capital to risk weighted assets

     10.75 %     10.41 %

Total capital to risk weighted assets

     12.00 %     11.66 %

Tier 1 capital to average assets

     9.11 %     8.62 %

(1)

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

 

The regulatory capital ratios for the Company and the Bank, as of March 31, 2026, as shown in the above table, were at levels above the regulatory minimums to be considered “well capitalized.” See “NOTE 19 Regulatory Matters” of the consolidated financial statements for additional information. 

 

Off‑Balance Sheet Arrangements

 

The Company is a party to financial instruments with off‑balance sheet risk in the normal course of business to meet the financing needs of the Company’s customers. These financial instruments consist primarily of commitments to extend credit and standby letters of credit. Commitments to extend credit are agreements to lend to customers, generally having fixed expiration dates or other termination clauses that may require payment of a fee. These commitments consist principally of unused commercial and consumer credit lines. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of an underlying contract with a third party. The credit risks associated with commitments to extend credit and standby letters of credit are essentially the same as that involved with extending loans to customers and are subject to normal credit policies. Collateral may be required based on management’s assessment of the customer’s creditworthiness. The fair value of these commitments is considered immaterial for disclosure purposes. 

 

A summary of the contractual amounts of the Company’s exposure to off‑balance sheet agreements as of March 31, 2026 and December 31, 2025, was as follows: 

 

   

March 31,

    

December 31,

  

(dollars in thousands)

  

2026

    

2025

  

Commitments to extend credit

   $ 1,004,955     $ 1,038,347  

Standby letters of credit

     14,447       14,393  

Total

   $ 1,019,401     $ 1,052,740  

 

Liquidity

 

Liquidity management is the process by which the Company manages the flow of funds necessary to meet the Company’s financial commitments on a timely basis and at a reasonable cost and to take advantage of earnings enhancement opportunities. These financial commitments include withdrawals by depositors, credit commitments to borrowers, expenses of the Company’s operations, and capital expenditures. Liquidity is monitored and closely managed by the Company’s asset and liability committee (the “ALCO”), a group of senior officers from the finance, enterprise risk management, deposit, investment, treasury, and lending areas. It is the ALCO’s responsibility to ensure the Company has the necessary level of funds available for normal operations as well as maintain a contingency funding policy to ensure that potential liquidity stress events are planned for, quickly identified, and that management has plans in place to respond. The ALCO has created policies which establish limits and require measurements to monitor liquidity trends, including modeling and management reporting that identifies the amounts and costs of all available funding sources. 

 

As of March 31, 2026, the Company had on balance sheet liquidity of $413.2 million, compared to $568.8 million as of December 31, 2025. On balance sheet liquidity includes cash and cash equivalents, federal funds sold, unencumbered securities available‑for‑sale, and over collateralized securities pledging positions available-for-sale. 

 

As of March 31, 2026, the Company had off balance sheet liquidity of $2.3 billion, compared to $2.2 billion as of December 31, 2025. Off balance sheet liquidity includes FHLB borrowing capacity, federal funds lines, and brokered deposit capacity. 

 

The Bank is a member of the FHLB, which provides short‑ and long‑term funding to its members through advances collateralized by real estate related assets and other select collateral, most typically in the form of debt securities. Actual borrowing capacity is contingent on the amount of collateral available to be pledged to the FHLB. As of March 31, 2026, the Company did not have any federal funds purchased, and had $200.0 million in short-term borrowings from the FHLB. As of March 31, 2026, the Company had $2.1 billion of collateral pledged to the FHLB and, based on this collateral, the Company was eligible to borrow up to an additional $1.1 billion from the FHLB. In addition, the Company can borrow up to $127.0 million through the unsecured lines of credit the Company has established with five other correspondent banks. 

 

59
Table of Contents

 

In addition, because the Bank is “well capitalized,” the Company can accept wholesale deposits up to 20.0% of total assets based on current policy limits, or $1.1 billion, as of March 31, 2026. Management believed that the Company had adequate resources to fund all of the Company’s commitments as of March 31, 2026 and December 31, 2025. 

 

The Company’s primary sources of liquidity include liquid assets, as well as unencumbered securities that can be used to collateralize additional funding. 

 

Though remote, the possibility of a funding crisis exists at all financial institutions. Management has addressed this issue by formulating a liquidity contingency plan, which has been reviewed and approved by both the Bank’s Board of Directors and the ALCO. The plan addresses the actions that the Company would take in response to both a short‑term and long‑term funding crisis. 

 

A short‑term funding crisis would most likely result from a shock to the financial system, either internal or external, which disrupts orderly short‑term funding operations. Such a crisis would likely be temporary in nature and would not involve a change in credit ratings. A long‑term funding crisis would most likely be the result of both external and internal factors and would most likely result in drastic credit deterioration. Management believes that both potential circumstances have been fully addressed through detailed action plans and the establishment of trigger points for monitoring such events. 

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Market risk is the risk of loss arising from adverse changes in the fair value of financial instruments due to changes in interest rates. Interest rate risk is the risk to earnings and equity value arising from changes in market interest rates and arises in the normal course of business to the extent that there is a divergence between the amount of interest earning assets and the amount of interest‑bearing liabilities that are prepaid/withdrawn, re‑price, or mature in specified periods. The Company seeks to achieve consistent growth in net interest income and equity while managing volatility arising from shifts in market interest rates. The ALCO oversees market risk management, monitoring risk measures, limits, and policy guidelines for managing the amount of interest rate risk and its effect on net interest income and capital. The Bank’s Board of Directors approves policy limits with respect to interest rate risk. 

 

Interest Rate Risk 

 

Interest rate risk management is an active process that encompasses monitoring loan and deposit flows complemented by investment and funding activities. Effective interest rate risk management begins with understanding the dynamic characteristics of assets and liabilities and determining the appropriate interest rate risk position given business activities, management objectives, market expectations and ALCO policy limits and guidelines. 

 

Interest rate risk can come in a variety of forms, including repricing risk, basis risk, yield curve risk and option risk. Repricing risk is the risk of adverse consequences from a change in interest rates that arises because of differences in the timing of when those interest rate changes impact the Company’s assets and liabilities. Basis risk is the risk of adverse consequence resulting from unequal change in the spread between two or more rates for different instruments with the same maturity. Yield curve risk is the risk of adverse consequences resulting from unequal changes in the spread between two or more rates for different maturities for the same or different instruments. Option risk in financial instruments arises from embedded options such as options provided to borrowers to make unscheduled loan prepayments, options provided to debt issuers to exercise call options prior to maturity, and depositor options to make withdrawals and early redemptions. 

 

Management regularly reviews the Company’s exposure to changes in interest rates. Among the factors considered are changes in the mix of interest earning assets and interest‑bearing liabilities, interest rate spreads and repricing periods. The ALCO reviews, on at least a quarterly basis, the interest rate risk position. 

 

The interest‑rate risk position is measured and monitored at the Bank using net interest income simulation models and economic value of equity sensitivity analysis that capture both short‑term and long‑term interest‑rate risk exposure. 

 

Modeling the sensitivity of net interest income and the economic value of equity to changes in market interest rates is highly dependent on numerous assumptions incorporated into the modeling process. The models used for these measurements rely on estimates of the potential impact that changes in interest rates may have on the value and prepayment speeds on all components of the Company’s loan portfolio, investment portfolio, as well as embedded options and cash flows of other assets and liabilities. The balance sheet composition and size are assumed to remain static in the simulation modeling process. The analysis provides a framework as to what the Company’s overall sensitivity position is as of the Company’s most recent reported position and the impact that potential changes in interest rates may have on net interest income and the economic value of the Company’s equity. 

 

Net interest income simulation involves forecasting net interest income under a variety of interest rate scenarios including instantaneous shocks. 

 

The estimated impact on the Company’s net interest income as of March 31, 2026 and December 31, 2025, assuming immediate parallel moves in interest rates, is presented in the table below: 

 

   

March 31, 2026

    

December 31, 2025

  
   

Following

    

Following

    

Following

    

Following

  
   

12 months

    

24 months

    

12 months

    

24 months

  

+400 basis points

     1.1 %     15.9 %     -1.2 %     14.0 %

+300 basis points

     0.8 %     12.0 %     -0.7 %     10.7 %

+200 basis points

     0.7 %     8.3 %     -0.1 %     7.8 %

+100 basis points

     0.0 %     3.9 %     0.1 %     4.1 %

−100 basis points

     -0.1 %     -4.6 %     0.6 %     -4.2 %

−200 basis points

     0.1 %     -9.6 %     2.0 %     -7.9 %

−300 basis points

     0.1 %     -14.1 %     4.2 %     -9.5 %

−400 basis points

     -0.2 %     -14.7 %     5.4 %     -8.0 %

 

60
Table of Contents

 

Management strategies may impact future reporting periods, as actual results may differ from simulated results due to the timing, magnitude, and frequency of interest rate changes, the difference between actual experience and the characteristics assumed, as well as changes in market conditions. Market-based prepayment speeds are factored into the analysis for loan and securities portfolios. Rate sensitivity for transactional deposit accounts is modeled based on both historical experience and external industry studies. 

 

Management uses an economic value of equity sensitivity analysis to understand the impact of interest rate changes on long‑term cash flows, income, and capital. Economic value of equity is based on discounting the cash flows for all balance sheet instruments under different interest rate scenarios. Deposit premiums are based on external industry studies and utilizing historical experience. 

 

The table below presents the change in the economic value of equity as of March 31, 2026 and December 31, 2025, assuming immediate parallel shifts in interest rates: 

 

   

March 31,

    

December 31,

  
   

2026

    

2025

  

+400 basis points

     -3.7 %     -5.4 %

+300 basis points

     -2.3 %     -3.5 %

+200 basis points

     -0.5 %     -1.2 %

+100 basis points

     0.2 %     -0.1 %

−100 basis points

     -1.3 %     -1.0 %

−200 basis points

     -4.1 %     -3.6 %

−300 basis points

     -10.1 %     -9.0 %

−400 basis points

     -23.1 %     -18.4 %

 

Operational Risk

 

Operational risk is the risk of loss due to human behavior, inadequate or failed internal systems and controls, and external influences such as market conditions, fraudulent activities, disasters, and security risks. Management continuously strives to strengthen its system of internal controls, enterprise risk management, operating processes and employee awareness to assess the impact on earnings and capital and to improve the oversight of the Company’s operational risk. 

 

Compliance Risk

 

Compliance risk represents the risk of regulatory sanctions, reputational impact or financial loss resulting from failure to comply with rules and regulations issued by the various banking agencies and standards of good banking practice. Activities which may expose the Company to compliance risk include, but are not limited to, those dealing with the prevention of money laundering, privacy and data protection, community reinvestment initiatives, fair lending challenges resulting from the expansion of the Company’s banking center network, employment and tax matters. 

 

Strategic and Reputation Risk

 

Strategic and reputation risk represents the risk of loss due to impairment of reputation, failure to fully develop and execute business plans, failure to assess current and new opportunities in business, markets and products, and any other event not identified in the defined risk types mentioned previously. Mitigation of the various risk elements that represent strategic and/or reputation risk is achieved through initiatives to help management better understand and report on various risks, including those related to the development of new products and business initiatives. 

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

The Company’s management, including the President and Chief Executive Officer and the Chief Financial Officer, have evaluated the effectiveness of the Company’s “disclosure controls and procedures” (as defined in Rule 13a‑15(e) under the Securities Exchange Act of 1934, or the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, the President and Chief Executive Officer and the Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective as of that date to provide reasonable assurance that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its President and Chief Executive Officer and its Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. 

 

Changes in Internal Control over Financial Reporting

 

There has been no change in the Company's internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. 

 

61
Table of Contents

 

PART II—OTHER INFORMATION

 

Item 1 – Legal Proceedings

 

For information regarding litigation, other disputes and regulatory proceedings see the section “Legal Contingencies” in “NOTE 12 Commitments and Contingencies” of the consolidated financial statements. 

 

Item 1A – Risk Factors

 

There have been no material changes to the risk factors disclosed in the Company’s Annual Report on Form 10-K filed with the SEC on March 4, 2026. 

 

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

 

Unregistered Sales of Equity Securities

 

None. 

 

Issuer Repurchases of Equity Securities

 

The following table presents information related to repurchases of shares of the Company’s common stock for each calendar month in the first quarter of 2026: 

 

                   

Total Number of

    

Maximum Number of

  
   

Total Number

    

Average

    

Shares Purchased as

    

Shares that May

  
   

of Shares

    

Price Paid

    

Part of Publicly

    

Yet be Purchased

  

(dollars in thousands, except per share data)

  

Purchased (1)

    

per Share

    

Announced Plans

    

Under the Plan (2)

  

January 1-31, 2026

     2,900     $ 23.84       —       1,000,000  

February 1-28, 2026

     4,720       25.45       —       1,000,000  

March 1-31, 2026

     250,000       23.90       250,000       750,000  

Total

     257,620     $ 23.93       250,000       750,000  

(1)

Includes shares of the Company’s common stock purchased by the Company’s Employee Stock Ownership Plan in open market purchases and shares surrendered by employees to the Company to pay withholding taxes on the vesting of restricted stock awards. 

(2)

On December 12, 2023, the Board of Directors of the Company approved a stock repurchase program (the “Program”), which authorized the Company to repurchase up to 1,000,000 shares of its common stock, subject to certain limitations and conditions. The Program became effective on February 18, 2024, and replaced a prior stock repurchase program. The Program will expire on February 18, 2027. The Program does not obligate the Company to repurchase any shares of its common stock and there is no assurance that the Company will do so. For the three months ended March 31, 2026, the Company repurchased 250,000 shares of common stock under the Program. Does not include shares that may be purchased by the Company’s Employee Stock Ownership Plan. 

 

Use of Proceeds from Registered Securities

 

None. 

 

Item 3 – Defaults Upon Senior Securities

 

None. 

 

Item 4 – Mine Safety Disclosures

 

Not Applicable. 

 

Item 5 – Other Information

 

During the fiscal quarter ended March 31, 2026, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule10b5-1(c) or any non-Rule 10b5-1 trading arrangement. 

 

 

62
Table of Contents

 

Item 6 – Exhibits

     

Exhibit No.

  

Description
     

3.1

  

Third Amended and Restated Certificate of Incorporation of Alerus Financial Corporation (incorporated herein by reference to Exhibit 3.1 on Form S-1 filed on August 16, 2019). 
     
3.2   Amendment to Third Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 on Form 8-K filed on May 12, 2025).
     

3.3

  

Second Amended and Restated Bylaws of Alerus Financial Corporation (incorporated herein by reference to Exhibit 3.2 on Form S-1 filed on August 16, 2019). 
     
10.1   Modification Agreement by and between Alerus Financial Corporation and the Bank of North Dakota, dated March 30, 2026 (incorporated by reference to Exhibit 10.1 on Form 8-K filed on March 31, 2026.
     

31.1

  

Chief Executive Officer’s Certifications required by Rule 13(a)‑14(a) – filed herewith.
     

31.2

  

Chief Financial Officer’s Certifications required by Rule 13(a)‑14(a) – filed herewith.
     

32.1

  

Chief Executive Officer Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – filed herewith.
     

32.2

  

Chief Financial Officer Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – filed herewith.
     

101.INS

  

iXBRL Instance Document
     

101.SCH

  

iXBRL Taxonomy Extension Schema
     

101.CAL

  

iXBRL Taxonomy Extension Calculation Linkbase
     

101.DEF

  

iXBRL Taxonomy Extension Definition Linkbase
     

101.LAB

  

iXBRL Taxonomy Extension Label Linkbase
     

101.PRE

  

iXBRL Taxonomy Extension Presentation Linkbase
     

104

  

Cover Page Interactive Data File (formatted Inline XBRL and contained in Exhibits 101)

 

63
Table of Contents

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

     
 

ALERUS FINANCIAL CORPORATION
   

Date: May 1, 2026

By:

 /s/ Katie A. Lorenson
   

Name:    Katie A. Lorenson
   

Title:      President and Chief Executive Officer (Principal Executive Officer)
     

Date: May 1, 2026

By:

 /s/ Alan A. Villalon
   

Name:    Alan A. Villalon
   

Title:      Executive Vice President and Chief Financial Officer (Principal Financial Officer)

 

64
EX-31.1 2 ex_929307.htm EXHIBIT 31.1 ex_929307.htm

Exhibit 31.1

 

Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) as
Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Katie A. Lorenson, certify that:

 

1.

I have reviewed this Quarterly Report on Form 10-Q (the “Report”) of Alerus Financial Corporation (the “Registrant”);

 

2.

Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;

 

4.

The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

 

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

 

 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c)

Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

 

 

d)

Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

 

5.

The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

 

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

 

 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

 

 

Alerus Financial Corporation
   

May 1, 2026

/s/ Katie A. Lorenson
 

Katie A. Lorenson
President and Chief Executive Officer
(Principal Executive Officer)

 

 
EX-31.2 3 ex_929308.htm EXHIBIT 31.2 ex_929308.htm

Exhibit 31.2

 

Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) as
Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Alan A. Villalon, certify that:

 

1.

I have reviewed this Quarterly Report on Form 10-Q (the “Report”) of Alerus Financial Corporation (the “Registrant”);

 

2.

Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;

 

4.

The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

 

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

 

 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c)

Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

 

 

d)

Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

 

5.

The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

 

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

 

 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

 

 

Alerus Financial Corporation
   

May 1, 2026

/s/ Alan A. Villalon
 

Alan A. Villalon
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)

 

 
EX-32.1 4 ex_929309.htm EXHIBIT 32.1 ex_929309.htm

Exhibit 32.1

 

Certification of Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350 as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

I, Katie A. Lorenson, President and Chief Executive Officer of Alerus Financial Corporation (the “Company”) hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

(1)

The Quarterly Report on Form 10-Q of the Company for the quarterly period ended March 31, 2026 (the “Report”) fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Alerus Financial Corporation
   

May 1, 2026

/s/ Katie A. Lorenson
 

Katie A. Lorenson
President and Chief Executive Officer
(Principal Executive Officer)

 

 
EX-32.2 5 ex_929310.htm EXHIBIT 32.2 ex_929310.htm

Exhibit 32.2

 

Certification of Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350 as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

I, Alan A. Villalon, Executive Vice President and Chief Financial Officer of Alerus Financial Corporation (the “Company”) hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

(1)

The Quarterly Report on Form 10-Q of the Company for the quarterly period ended March 31, 2026 (the “Report”) fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Alerus Financial Corporation
   

May 1, 2026

/s/ Alan A. Villalon
 

Alan A. Villalon
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)