Alerus Financial Corporation (ALRS)
NASDAQ:ALRS
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Alerus Financial
(NASDAQ:ALRS)
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Rating:61Neutral
Price Target:
$26.00
â–²(7.48% Upside)
Action:DowngradedDate: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.
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.
Read all positive and negative factors
Positive Factors
Negative 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.
Read all positive factors
Alerus Financial (ALRS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$613.69M
Dividend Yield3.71%
Average Volume (3M)86.42K
Price to Earnings (P/E)32.8
Beta (1Y)0.95
Revenue Growth42.22%
EPS Growth1207.84%
CountryUS
Employees846
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.85
Shares Outstanding25,401,161
10 Day Avg. Volume80,477
30 Day Avg. Volume86,419
Financial Highlights & Ratios
PEG Ratio-1.84
Price to Book (P/B)1.01
Price to Sales (P/S)1.74
P/FCF Ratio9.72
Enterprise Value/Market Cap1.61
Enterprise Value/Revenue3.01
Enterprise Value/Gross Profit4.48
Enterprise Value/Ebitda24.75
Forecast
1Y Price Target
$26.33Price Target Upside8.85% Upside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)2.61
Revenue Forecast (FY)$305.39M
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 ...
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 fr...
Alerus Financial Earnings Call Summary
Earnings Call Date:Jan 28, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call emphasized strong execution on integration, diversified fee revenue growth, margin improvement, and strengthened capital/liquidity after deliberate balance sheet repositioning. Management provided constructive 2026 guidance (mid-single-digit revenue growth, disciplined expense outlook, and ROA >1.2%) while acknowledging isolated credit issues (specific multifamily NPLs already well reserved) and intentional loan/deposit optimizations. Competitive deposit markets and reduced purchase accounting accretion are transitional challenges but are being managed proactively. Overall, positives around profitability, fee diversification, capital strength, and strategic momentum outweigh the contained lowlights.Positive Updates
Strong profitability and efficiency
Reported core ROA of 1.62% this quarter; delivered an adjusted ROA of 1.35% for the first full year post-acquisition and an adjusted efficiency ratio of 64.45%. Management also cited record adjusted earnings and over 21% adjusted return on tangible equity for 2025.
Negative Updates
Increase in nonperforming assets and specific credit exposures
Nonperforming assets rose to 1.27% of assets (+14 bps QoQ). Largest NPL exposure is a Twin Cities multifamily loan with ~ $32M book balance reserved ~17% (property 74% leased) and expected resolution by midyear. An acquired purchase participation multifamily loan also migrated to nonperforming with a 15% reserve.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong profitability and efficiency
Reported core ROA of 1.62% this quarter; delivered an adjusted ROA of 1.35% for the first full year post-acquisition and an adjusted efficiency ratio of 64.45%. Management also cited record adjusted earnings and over 21% adjusted return on tangible equity for 2025.
Read all positive updates
Company Guidance
Alerus guided for 2026 with mid-single-digit loan growth and low-single-digit deposit growth (targeting a loan-to-deposit ratio around 95–96% and citing ~$2.8B of liquidity), and expects NIM of 3.5–3.6% (which includes ~16 bps / just over $8M of purchase accounting accretion vs. roughly $20M in 2025), net interest income to grow low-to-mid single digits, adjusted noninterest income to grow mid-single digits, net revenue mid-single digits, and noninterest expense to rise low-single digits to drive positive operating leverage; management expects ROA to exceed 1.2% for the year, assumes no further Fed cuts (noting each 25 bps cut would change NIM by ~5 bps), and reiterated strong balance sheet and credit/capital metrics including CET1 10.28%, TCE 8.72%, allowance ~1.53% of loans, NPAs ~1.27%, deposit retention ~95%, HSA deposits >$203M, retirement/wealth AUM near $50B, fee income >40% of revenues, and an exit core NIM starting from ~3.17% in Q4.Alerus Financial Financial Statement Overview
Summary
Income Statement
46
Neutral
Balance Sheet
58
Neutral
Cash Flow
62
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 327.86M | 338.29M | 243.26M | 224.58M | 235.79M |
| Gross Profit | 220.16M | 205.61M | 164.16M | 208.77M | 233.74M |
| EBITDA | 39.88M | 38.04M | 24.36M | 60.42M | 77.89M |
| Net Income | 17.44M | 17.78M | 11.70M | 40.01M | 52.68M |
Balance Sheet | |||||
| Total Assets | 5.23B | 5.26B | 3.91B | 3.78B | 3.39B |
| Cash, Cash Equivalents and Short-Term Investments | 68.95M | 652.60M | 616.63M | 775.57M | 1.10B |
| Total Debt | 440.55M | 317.02M | 378.88M | 442.82M | 63.21M |
| Total Liabilities | 4.67B | 4.77B | 3.54B | 3.42B | 3.03B |
| Stockholders Equity | 564.93M | 495.41M | 369.13M | 356.87M | 359.40M |
Cash Flow | |||||
| Free Cash Flow | 58.83M | 16.59M | 25.71M | 101.18M | 148.13M |
| Operating Cash Flow | 67.53M | 28.96M | 28.98M | 102.97M | 149.83M |
| Investing Cash Flow | 76.55M | -330.03M | -51.99M | -292.62M | -417.66M |
| Financing Cash Flow | -138.13M | 232.42M | 94.76M | 5.59M | 337.18M |
Alerus Financial Technical Analysis
Positive
24.19
Price Trends
24.40
Negative
23.23
Positive
22.38
Positive
Market Momentum
-0.13
Negative
51.99
Neutral
79.98
Neutral
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 24.19 is above the 20-day moving average (MA) of 23.87, below the 50-day MA of 24.40, and above the 200-day MA of 22.38, indicating a neutral trend. The MACD of -0.13 indicates Negative momentum. The RSI at 51.99 is Neutral, neither overbought nor oversold. The STOCH value of 79.98 is Neutral, 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 76 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $631.56M | 8.80 | 9.83% | 7.17% | -27.82% | -159.63% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
64 Neutral | $613.22M | 9.30 | 10.25% | 2.66% | 6.01% | 38.05% | |
62 Neutral | $599.09M | 11.36 | 11.96% | 0.84% | 8.26% | 94.53% | |
61 Neutral | $613.69M | 32.77 | 11.37% | 3.71% | 42.22% | 1207.84% |
* Financial Sector Average
ALRS
Alerus Financial
24.16
5.98
32.91%
HIFS
Hingham Institution For Savings
274.78
33.53
13.90%
SHBI
Shore Bancshares
18.35
4.85
35.94%
WASH
Washington Bancorp
33.17
4.03
13.84%
Alerus Financial Corporate Events
Dividends
Alerus Financial Raises Quarterly Dividend, Signals Ongoing Confidence
Positive
Feb 26, 2026
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 divide...
Business Operations and StrategyFinancial Disclosures
Alerus Financial Posts Q4 Loss Amid Strategic Repositioning
Positive
Jan 28, 2026
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 a...
Business Operations and StrategyFinancial Disclosures
Alerus Financial Restructures Securities Portfolio To Boost Margins
Positive
Dec 29, 2025
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 ...
Dividends
Alerus Financial Announces 5% Dividend Increase
Positive
Dec 5, 2025
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 ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.