Alerus Financial (ALRS) AI Stock Analysis

• Market Cap: $619.44M
• Dividend Yield: 3.71%
• Average Volume (3M): 86.42K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.97
• Revenue Growth: 42.22%
• EPS Growth: 1207.84%
• Country: US
• Employees: 846
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.85
• Shares Outstanding: 25,397,303
• 10 Day Avg. Volume: 80,477
• 30 Day Avg. Volume: 86,419
• PEG Ratio: -1.84
• Price to Book (P/B): 1.01
• Price to Sales (P/S): 1.72
• P/FCF Ratio: 8.46
• Enterprise Value/Market Cap: 1.62
• Enterprise Value/Revenue: 2.56
• Enterprise Value/Gross Profit: 3.74
• Enterprise Value/Ebitda: 11.57
• 1Y Price Target: $26.33
• Price Target Upside: 6.00% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): 2.59
• Revenue Forecast (FY): $304.79M

• Rating: 61 Neutral
• Price Target: $26.00 ▲(4.67% Upside)
• Action: Downgraded Date: 03/05/26
• Date: Action: Downgraded 03/05/26

ALRS scores as moderately attractive overall, led by a constructive earnings outlook (mid-single-digit growth targets, positive operating leverage, and ROA >1.2% guidance) and improved balance sheet/cash flow trends. The score is held back by weaker recent fundamental trajectory (notable 2025 revenue decline and compressed margins/ROE) and mostly neutral technical momentum, while the dividend supports valuation but the negative P/E adds uncertainty.

Positive Factors

Strong fee diversification / scale

Alerus's retirement and wealth businesses oversee nearly $50B in AUM and generate over 40% of revenue from fees. That asset-driven, recurring fee mix reduces interest-rate sensitivity, supports predictable cash flow, and enables durable cross-sell and client-retention economics across cycles.

Improved capital & liquidity position

Stronger CET1 and tangible capital ratios alongside roughly $2.8B of liquidity and high deposit retention provide a meaningful buffer. This foundation supports cautious loan growth, loss absorption, and optionality for M&A or strategic investments without immediate capital-raising stress.

Strategic securities repositioning to lift margins

Management executed a structural shift: selling legacy low-yield securities and reinvesting into higher-yield, shorter-duration holdings. This reduces legacy yield drag and duration sensitivity and should sustainably improve core NIM and interest income once the higher yields are realized post-repositioning.

Negative Factors

Material 2025 revenue decline

Alerus reported a significant revenue drop in 2025 (-15.5%) and materially compressed margins versus prior periods. Such top-line volatility and weaker operating profitability indicate reduced earnings power that will require sustained revenue recovery and margin improvement to restore long-term returns.

Concentrated credit / NPL exposures

NPLs increased to ~1.27% with a concentrated ~$32M multifamily exposure carrying only ~17% reserve. Concentrated CRE problem loans can drive episodic provisions, impair capital and restrict lending if property recoveries or markets deteriorate, creating lasting downside to earnings and balance sheet flexibility.

Decline in purchase-accounting accretion

Alerus will see a ~60% drop in purchase-accounting accretion year-over-year, removing a sizable nonrecurring earnings tailwind. Absent sustainable core margin gains or revenue expansion, this structural reduction will meaningfully pressure reported NIM and earnings, requiring execution to replace the shortfall.

Alerus Financial Business Overview & Revenue Model

Company Description

Alerus Financial Corporation, through its subsidiary, Alerus Financial, National Association, provides various financial services to businesses and consumers. The company operates in four segments: Banking, Retirement and Benefit Services, Wealth Management, and Mortgage. It offers various deposit products, including demand deposits, interest-bearing transaction accounts, money market accounts, time and savings deposits, checking accounts, and certificates of deposit; and treasury management products, including electronic receivables management, remote deposit capture, cash vault services, merchant services, and other cash management services. The company also provides commercial loans, business term loans, lines of credit, and commercial real estate loans, as well as construction and land development loans; consumer lending products, including residential first mortgage loans; installment loans and lines of credit; and second mortgage loans. In addition, it offers retirement plan administration and investment advisory services, employee stock ownership plan, fiduciary services, payroll, health savings accounts, and other benefit services, as well as individual retirement accounts; and financial planning, investment management, personal and corporate trust, estate administration, and custody services. Further, the company provides debit and credit cards, online banking, mobile banking/wallet, payment, private banking, payroll accounts, flex spending accounts, administration, and government health insurance program services. It offers banking services through fourteen offices in North Dakota, Minnesota, and Arizona; and retirement and benefit plans in 50 states through offices located in Michigan, Minnesota, and Colorado. The company was formerly known as First National Bank North Dakota and changed its name to Alerus Financial Corporation in 2000. Alerus Financial Corporation was founded in 1879 and is headquartered in Grand Forks, North Dakota.

How the Company Makes Money

Alerus makes money through several key revenue streams, including interest income from loans and mortgages, fees from banking services, wealth management fees, and commissions from insurance products. The company earns interest income primarily from its loan portfolio, which includes commercial, consumer, and residential mortgages. Additionally, Alerus generates non-interest income through service fees for account maintenance, transaction processing, and financial advisory services. Strategic partnerships with other financial institutions and service providers further enhance its offerings and contribute to revenue growth, while a focus on customer retention and satisfaction helps maintain a steady client base.

Alerus Financial Financial Statement Overview

Summary

Financials look stable but mixed: leverage has improved versus 2022–2023 and recent cash generation strengthened (2025 FCF up ~21% with FCF matching net income). Offsetting this, profitability and returns have compressed sharply versus 2020–2022, and 2025 revenue declined materially (-15.5%), limiting the financial performance score.

Income Statement

Revenue has been volatile: strong step-up in 2023–2024 versus prior years, but essentially flat in 2024 and down materially in 2025 (annual revenue growth of -15.5%). Profitability has compressed sharply versus 2020–2022, with net margins now ~5% in 2023–2025 (vs. ~18–22% in 2020–2021 and ~18% in 2022). Operating profitability is also much lower, with EBIT margin in the high-single-digits in 2023–2025 compared with mid-20s to ~30% earlier, pointing to weaker earnings power and/or higher expense pressure despite still-positive earnings.

Balance Sheet

Leverage looks moderate for the most recent years, with debt-to-equity improving from above 1.0x in 2022–2023 to ~0.64x in 2024, though it ticked up to ~0.78x in 2025. Equity has grown since 2023, supporting balance sheet capacity. That said, returns on equity are currently modest (~3–4% in 2023–2025) versus much stronger levels in 2020–2022, indicating weaker profitability relative to the capital base and limiting overall balance sheet quality despite improved leverage.

Cash Flow

Cash generation improved meaningfully in 2025, with free cash flow up ~21% and free cash flow matching net income (free cash flow to net income of 1.0), suggesting solid earnings quality in the latest year. 2024 and 2023 free cash flow were positive but less consistent (including a decline in 2024 and weaker conversion vs. net income), and 2020 showed negative operating and free cash flow. Overall, cash flow appears better lately but remains somewhat choppy across the cycle.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	392.24M	331.51M	330.41M	243.16M	224.58M	235.79M
Gross Profit	268.44M	223.82M	197.73M	164.06M	208.77M	233.74M
EBITDA	86.78M	22.59M	38.04M	24.36M	60.42M	77.89M
Net Income	50.42M	17.44M	17.74M	11.70M	40.01M	52.68M
Balance Sheet
Total Assets	5.33B	5.23B	5.26B	3.91B	3.78B	3.39B
Cash, Cash Equivalents and Short-Term Investments	624.47M	67.19M	652.60M	616.63M	775.57M	1.10B
Total Debt	296.07M	440.55M	317.02M	378.88M	442.82M	63.21M
Total Liabilities	4.78B	4.67B	4.77B	3.54B	3.42B	3.03B
Stockholders Equity	550.69M	564.93M	495.41M	369.13M	356.87M	359.40M
Cash Flow
Free Cash Flow	55.67M	67.53M	16.59M	25.71M	101.18M	148.13M
Operating Cash Flow	60.71M	67.53M	28.96M	28.98M	102.97M	149.83M
Investing Cash Flow	-99.32M	76.55M	-330.03M	-51.99M	-292.62M	-417.66M
Financing Cash Flow	64.68M	-138.13M	232.42M	94.76M	5.59M	337.18M

Alerus Financial Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 24.84
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALRS, the sentiment is Neutral. The current price of 24.84 is below the 20-day moving average (MA) of 25.06, above the 50-day MA of 24.05, and above the 200-day MA of 22.12, indicating a neutral trend. The MACD of 0.04 indicates Positive momentum. The RSI at 47.95 is Neutral, neither overbought nor oversold. The STOCH value of 33.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ALRS.

Alerus Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WASH	70 Outperform	$654.97M	10.85	10.02%	7.17%	-27.82%	-159.63%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
HIFS	65 Neutral	$607.85M	11.36	10.23%	0.84%	8.26%	94.53%
SHBI	64 Neutral	$621.91M	9.30	10.25%	2.66%	6.01%	38.05%
ALRS	61 Neutral	$619.44M	-4.33	11.37%	3.71%	42.22%	1207.84%

Alerus Financial Corporate Events

Alerus Financial Raises Quarterly Dividend, Signals Ongoing Confidence

On February 26, 2026, Alerus Financial Corporation announced that its board of directors had declared a regular quarterly cash dividend of $0.21 per common share, authorized on February 25, 2026. The payout represents a 5% increase over the dividend distributed a year earlier, underscoring the company’s willingness to return more capital to shareholders.

The dividend is scheduled to be paid on April 10, 2026, to stockholders of record as of March 27, 2026. The move signals management’s confidence in Alerus’s financial position and earnings stability, and it may enhance the stock’s appeal to income-oriented investors within the regional banking and retirement services sector.

The most recent analyst rating on (ALRS) stock is a Hold with a $25.00 price target. To see the full list of analyst forecasts on Alerus Financial stock, see the ALRS Stock Forecast page.

Alerus Financial Posts Q4 Loss Amid Strategic Repositioning

On January 28, 2026, Alerus Financial Corporation reported a net loss of $33.1 million for the fourth quarter of 2025, driven by a one-time pre-tax loss of $68.4 million on the sale of $360.1 million of low-yielding available-for-sale securities as part of a strategic balance sheet repositioning. Despite the headline loss, adjusted metrics showed stronger performance, with adjusted diluted EPS of $0.85, adjusted ROAA of 1.62%, and adjusted return on average tangible common equity of 21.05% for the quarter, alongside improving net interest income and margin, and continued growth in retirement, wealth management, and mortgage businesses. For full-year 2025, the company delivered adjusted diluted EPS of $2.78, a sharp improvement over 2024, driven by a 61% increase in net interest income, higher fee-based revenues, and improved efficiency, while also de-risking its loan book by reducing CRE concentrations and strengthening capital, as evidenced by a 21.5% rise in tangible book value per share and an increase in the tangible common equity to tangible assets ratio to 8.72%.

The most recent analyst rating on (ALRS) stock is a Buy with a $29.00 price target. To see the full list of analyst forecasts on Alerus Financial stock, see the ALRS Stock Forecast page.

Alerus Financial Restructures Securities Portfolio To Boost Margins

On December 23, 2025, Alerus Financial Corporation sold $360 million of available-for-sale securities—more than 68% of its AFS portfolio—with a weighted average yield of 1.7% and duration of 5.1 years, realizing a one-time pre-tax net loss of $68.5 million. The company immediately reinvested the proceeds into higher-yielding securities averaging 4.7% with a shorter duration of just over three years, a move expected to lift its 2026 net interest margin above prior guidance while keeping risk-based capital ratios above regulatory and internal thresholds. Management framed the transaction as the culmination of a 2025 deleveraging and balance sheet strengthening strategy that avoided dilutive equity issuance, preserves tangible capital, and is intended to position Alerus for improved earnings, tangible book value growth, and enhanced long-term value for clients, communities, and shareholders.

The most recent analyst rating on (ALRS) stock is a Buy with a $25.00 price target. To see the full list of analyst forecasts on Alerus Financial stock, see the ALRS Stock Forecast page.

Alerus Financial Announces 5% Dividend Increase

On December 5, 2025, Alerus Financial Corporation announced a 5% increase in its regular quarterly cash dividend, now set at $0.21 per common share, payable on January 9, 2026, to shareholders recorded by December 26, 2025. This decision reflects the company’s commitment to providing value to its shareholders and may enhance its attractiveness in the financial market.

The most recent analyst rating on (ALRS) stock is a Hold with a $23.00 price target. To see the full list of analyst forecasts on Alerus Financial stock, see the ALRS Stock Forecast page.