tiprankstipranks
Trending News
More News >
Alerus Financial Corporation (ALRS)
:ALRS

Alerus Financial (ALRS) AI Stock Analysis

Compare
49 Followers

Top Page

AL

Alerus Financial

(NASDAQ:ALRS)

Rating:71Outperform
Price Target:
$23.00
▲(9.06%Upside)
Alerus Financial's overall stock score is driven by solid financial performance, positive technical indicators, and strategic corporate events. The company's strong revenue growth and cost management are offset by cash flow challenges. Technical analysis shows a bullish trend, while valuation metrics suggest balanced growth potential. Positive earnings call highlights and corporate actions further enhance the stock's attractiveness.

Alerus Financial (ALRS) vs. SPDR S&P 500 ETF (SPY)

Alerus Financial Business Overview & Revenue Model

Company DescriptionAlerus 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 MoneyAlerus Financial makes money through a diversified revenue model comprising several key streams. The company earns income from interest on loans and investments in its banking segment, which is a primary source of revenue. Additionally, Alerus generates fee-based income through its wealth management and retirement services divisions, where it provides advisory services and manages client assets. The mortgage segment contributes to revenue through origination fees and interest from mortgage loans. Furthermore, Alerus leverages strategic partnerships with other financial institutions and service providers to enhance its offerings and expand market reach, which also supports its earnings.

Alerus Financial Earnings Call Summary

Earnings Call Date:Apr 28, 2025
(Q1-2025)
|
% Change Since: 18.75%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Positive
The earnings call presented strong financial metrics with improvements in adjusted ROA, loan and deposit growth, and record net interest income. However, there were challenges with decreased non-interest income and tough market conditions affecting asset management. Overall, the highlights slightly outweigh the lowlights, indicating a cautiously optimistic outlook.
Q1-2025 Updates
Positive Updates
Improved Adjusted ROA
Adjusted ROA improved by 25 basis points to 1.1% from last quarter.
Loan and Deposit Growth
Strong quarter of loans and deposit growth, with organic loan growth at 2.3% over the prior quarter and deposits growing 2.4%.
Record Net Interest Income
Net interest income increased to a record $41.2 million, with a non-interest margin of 3.41%.
Wealth Management and Retirement Growth
Wealth Management revenues increased by 13% year-over-year, and the National Retirement and Benefits business grew organically by 3%.
Non-Performing Loans Decrease
Non-performing loans decreased with a full payoff of a large non-accrual loan.
Negative Updates
Decrease in Non-Interest Income
Non-interest income decreased by 18.4% from the prior quarter, mainly due to a seasonal decline in Mortgage originations.
Decreased Fee Income in Banking
Overall non-interest income from Banking declined by $2.3 million on an adjusted basis, with a $1.8 million decrease in Mortgage revenues.
Challenging Market Conditions
Assets Under Administration and Management decreased by about 2% due to market performance, and non-interest income excluding building gains and MSR adjustments was down 9.2% from the prior quarter.
Company Guidance
During the Alerus Financial Corporation earnings call for the first quarter of 2025, several key metrics were discussed that highlight the company's financial performance and strategic direction. The adjusted return on assets (ROA) improved to 1.1%, a 25-basis-point increase from the previous quarter, reflecting enhanced profitability. The net interest margin also reached a new record level of 3.41%, up 21 basis points, driven by disciplined pricing and organic loan growth of 2.3% over the prior quarter. Non-performing loans decreased significantly, with a full payoff of a large non-accrual loan, and the allowance for credit losses increased to 1.52% of total loans. The company's unique business model generated strong non-interest income, accounting for 40% of total revenues, with Wealth Management revenues increasing by 13% year-over-year. The adjusted efficiency ratio improved to 66.9%, and capital levels were strengthened, with the tangible common equity ratio rising by 30 basis points to 7.43%. The guidance for 2025 includes expectations for mid-single-digit loan growth, low-single-digit deposit growth, and a net interest margin between 3.2% and 3.3%. Overall, Alerus Financial remains focused on organic growth, maintaining a well-diversified balance sheet, and enhancing shareholder value through strategic initiatives.

Alerus Financial Financial Statement Overview

Summary
Alerus Financial displays a mixed financial performance with improved leverage and stable cash flows, but declining revenues and inconsistent profitability are concerns. The balance sheet shows strengthening equity, yet the income statement reflects volatility that could impact future performance.
Income Statement
45
Neutral
Alerus Financial shows significant volatility in its revenue trends with a decline in total revenue from $230.2M in 2021 to $166.0M in 2023. The net profit margin improved from 5.3% in 2023 to 10.7% in 2024, but this was partly due to reduced total revenue. Gross profit margins could not be calculated due to missing data for 2024.
Balance Sheet
55
Neutral
The debt-to-equity ratio improved from 1.03 in 2023 to 0.64 in 2024, indicating better leverage management. Stockholders' equity increased significantly, reflecting a stronger equity position. However, the equity ratio decreased slightly, suggesting a higher asset base with increased liabilities.
Cash Flow
50
Neutral
Free cash flow in 2024 remained stable compared to 2023, indicating consistent cash generation. The operating cash flow to net income ratio was 1.63 in 2024, showing efficient cash conversion. However, significant negative investing cash flows suggest high capital expenditure or investment outflows.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
215.87M166.01M208.77M230.24M228.18M
Gross Profit
215.87M166.17M208.77M230.24M228.18M
EBIT
0.000.0071.51M69.08M58.52M
EBITDA
38.04M0.0060.42M77.89M67.44M
Net Income Common Stockholders
17.78M11.70M40.01M52.68M44.67M
Balance SheetCash, Cash Equivalents and Short-Term Investments
61.24M28.89M775.57M1.10B765.30M
Total Assets
5.26B3.91B3.78B3.39B3.01B
Total Debt
317.02M378.88M442.82M63.21M66.60M
Net Debt
255.78M248.98M384.58M-179.10M-106.37M
Total Liabilities
4.77B3.54B3.42B63.21M66.60M
Stockholders Equity
495.41M369.13M356.87M359.40M330.16M
Cash FlowFree Cash Flow
16.59M25.81M101.18M147.41M-26.07M
Operating Cash Flow
28.96M28.98M102.97M149.12M-22.26M
Investing Cash Flow
-330.03M-52.09M-292.62M-416.94M-538.38M
Financing Cash Flow
232.42M94.76M5.59M337.18M589.60M

Alerus Financial Technical Analysis

Technical Analysis Sentiment
Positive
Last Price21.09
Price Trends
50DMA
19.07
Positive
100DMA
19.50
Positive
200DMA
20.45
Positive
Market Momentum
MACD
0.68
Positive
RSI
57.10
Neutral
STOCH
16.91
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALRS, the sentiment is Positive. The current price of 21.09 is below the 20-day moving average (MA) of 21.26, above the 50-day MA of 19.07, and above the 200-day MA of 20.45, indicating a neutral trend. The MACD of 0.68 indicates Positive momentum. The RSI at 57.10 is Neutral, neither overbought nor oversold. The STOCH value of 16.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALRS.

Alerus Financial Risk Analysis

Alerus Financial disclosed 80 risk factors in its most recent earnings report. Alerus Financial reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Alerus Financial Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$482.88M22.714.88%4.68%51.62%-34.65%
74
Outperform
$439.69M14.447.44%3.05%22.17%-15.57%
71
Outperform
$486.79M14.894.48%4.55%10.00%2.81%
71
Outperform
$534.96M17.446.27%3.85%40.06%145.33%
71
Outperform
$460.90M13.9410.62%2.39%0.13%19.68%
67
Neutral
$427.22M15.107.25%4.29%11.46%-1.07%
64
Neutral
$12.67B9.747.58%17015.08%12.21%-6.96%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ALRS
Alerus Financial
21.09
2.63
14.25%
ACNB
ACNB
42.27
11.15
35.83%
AROW
Arrow Financial
26.27
1.76
7.18%
NFBK
Northfield Bancorp
11.71
3.16
36.96%
GNTY
Guaranty Bancshares
41.70
14.08
50.98%
PFIS
Peoples Financial Services
49.67
11.47
30.03%

Alerus Financial Corporate Events

Dividends
Alerus Financial Increases Quarterly Dividend by 5%
Positive
May 22, 2025

On May 22, 2025, Alerus Financial Corporation announced a 5% increase in its quarterly cash dividend to $0.21 per common share, payable on July 11, 2025, to stockholders of record as of June 27, 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 $22.00 price target. To see the full list of analyst forecasts on Alerus Financial stock, see the ALRS Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Alerus Financial Holds Annual Meeting, Elects Directors
Neutral
May 12, 2025

Alerus Financial held its Annual Meeting on May 8, 2025, where 85.32% of the outstanding shares were represented. During the meeting, nine directors were elected, executive compensation was approved on a non-binding basis, and it was decided that advisory votes on executive compensation would continue annually until 2031. Additionally, RSM US LLP was ratified as the independent accounting firm, and an amendment to increase authorized shares was approved.

The most recent analyst rating on (ALRS) stock is a Hold with a $22.00 price target. To see the full list of analyst forecasts on Alerus Financial stock, see the ALRS Stock Forecast page.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Alerus Financial Reports Q1 2025 Net Income Growth
Positive
Apr 28, 2025

Alerus Financial Corporation reported a net income of $13.3 million for the first quarter of 2025, marking a significant improvement from the previous quarter’s net loss. The company achieved growth in loans and deposits, leading to a strengthened net interest margin, and emphasized its commitment to strategic integration following its merger with Home Federal. The company’s proactive risk management and focus on efficiency aim to deliver long-term shareholder value.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.