8-K/A
ALERUS FINANCIAL CORP (ALRS)
8-K/A
2021-05-03
For: 2021-04-28
View Original
Added on
April 04, 2026
United States
Securities And Exchange Commission Washington, DC 20549
FORM 8-K/A
Current Report Pursuant to Section 13 or 15( d ) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 28, 2021
Alerus Financial Corporation (Exact Name of Registrant as Specified in Charter)
| Delaware | 001-39036 | 45-0375407 |
|---|---|---|
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
401 Demers Avenue Grand Forks , North Dakota **** 58201 (Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (701) 795-3200
N/A
(Former Name or Former Address, if Changed Since Last Report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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, $1.00 par value per share | | ALRS | | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b–2 of the Securities Exchange Act of 1934 (§ 240.12b–2 of this chapter).
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. ☐
Explanatory Note
This Amendment No. 1 on Form 8-K/A amends item 7.01 of the Current Report on Form 8-K filed by Alerus Financial Corporation, or the Company, on April 28, 2021, or the Original 8-K, solely to correct the amounts that appear on page 35 of the Investor Presentation of the Company, furnished as Exhibit 99.2 to the Original 8-K. No other changes have been made to the Original 8-K.
Item 7.01. Regulation FD Disclosure.
On April 28, 2021, the Company posted a presentation to the Company’s investor relations website, located at investors.alerus.com. The presentation is also attached hereto as Exhibit 99.2.
The information in Item 7.01 of this Current Report on Form 8-K/A, and the related Exhibit 99.2, attached hereto is being “furnished” and will not, except to the extent required by applicable law or regulation, be deemed “filed” by the Company for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor will any of such information or exhibits be deemed incorporated by reference to any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| | | |
|---|---|---|
| Exhibit No. | **** | Description |
| 99.2 | | Investor Presentation of Alerus Financial Corporation |
| 104 | | Cover Page Interactive Data File (embedded within the Inline XBLR document) |
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 hereunto duly authorized.
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|---|---|---|
| Date: May 3, 2021 | Alerus Financial Corporation | |
| | | |
| | | |
| | By: | /s/ Randy L. Newman |
| | Name: | Randy L. Newman |
| | Title: | Chairman, Chief Executive Officer and President |
| | |
Exhibit 99.2
| INVESTOR PRESENTATION<br>APRIL 2021<br>Alerus |
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| 1<br>Forward-Looking Statements<br>This presentation contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements<br>include, without limitation, statements concerning plans, estimates, calculations, forecasts and projections with respect to the anticipated future performance of Alerus Financial Corporation. These<br>statements are often, but not always, identified by words such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”, “continue”, “will”, “anticipate”, “seek”, “estimate”,<br>“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<br>forward-looking statements include, among others, statements we make regarding our projected growth, anticipated future financial performance, financial condition, credit quality, management’s<br>long-term performance goals and the future plans and prospects of Alerus Financial Corporation.<br>Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the<br>future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future,<br>they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition<br>may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our<br>actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: the effects of the COVID-19 pandemic,<br>including its effects on the economic environment, our clients and our operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with the<br>pandemic; our ability to successfully manage credit risk and maintain an adequate level of allowance for loan losses; new or revised accounting standards, including as a result of the future<br>implementation of the new Current Expected Credit Loss Standard; business and economic conditions generally and in the financial services industry, nationally and within our market areas; the<br>overall health of the local and national real estate market; concentrations within our loan portfolio; the level of nonperforming assets on our balance sheet; our ability to implement our organic and<br>acquisition growth strategies; the impact of economic or market conditions on our fee-based services; our ability to continue to grow our retirement and benefit services business; our ability to<br>continue to originate a sufficient volume of residential mortgages; the occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity related incidents;<br>interruptions involving our information technology and telecommunications systems or third-party servicers; potential losses incurred in connection with mortgage loan repurchases; the<br>composition of our executive management team and our ability to attract and retain key personnel; rapid technological change in the financial services industry; increased competition in the<br>financial services industry; our ability to successfully manage liquidity risk; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal<br>proceedings and regulatory actions against us or to which we may become subject; potential impairment to the goodwill we recorded in connection with our past acquisitions; the extensive<br>regulatory framework that applies to us; the impact of recent and future legislative and regulatory changes; interest rate risks associated with our business; fluctuations in the values of the<br>securities held in our securities portfolio; governmental monetary, trade and fiscal policies; severe weather, natural disasters, widespread disease or pandemics, such as the COVID-19 global<br>pandemic, acts of war or terrorism or other adverse external events; any material weaknesses in our internal control over financial reporting; developments and uncertainty related to the future<br>use and availability of some reference rates, such as the London Interbank Offered Rate, as well as other alternative rates; changes to U.S. tax laws, regulations and guidance; our success at<br>managing the risks involved in the foregoing items; and any other risks described in the “Risk Factors” sections of the reports filed by Alerus Financial Corporation with the Securities and Exchange<br>Commission.<br>Any forward-looking statement made by us in this presentation is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation<br>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.<br>Non-GAAP Financial Measures<br>This presentation includes certain ratios and amounts that do not conform to U.S. Generally Accepted Accounting Principles, or GAAP. Management uses certain non-GAAP financial measures to<br>evaluate financial performance and business trends from period to period and believes that disclosure of these non-GAAP financial measures will help investors, rating agencies and analysts<br>evaluate the financial performance and condition of Alerus Financial Corporation. This presentation includes a reconciliation of each non-GAAP financial measure to the most comparable GAAP<br>equivalent.<br>Miscellaneous<br>Except as otherwise indicated, this presentation speaks as of the date hereof. The delivery of this presentation shall not, under any circumstances, create any implication that there has been no<br>change in the affairs of Alerus Financial Corporation after the date hereof. Certain of the information contained herein may be derived from information provided by industry sources. We believe<br>that such information is accurate and that the sources from which it has been obtained are reliable. We cannot guarantee the accuracy of such information, however, and we have not independently<br>verified such information.<br>DISCLAIMERS |
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| 2<br>COVID-19 RESPONSE |
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| 3<br>.. Activated Business Continuity Planning team and Pandemic Policy; frequent meetings with key leadership teams<br>.. Response guided by safety of employees and clients; being a good corporate citizen; and encouraging digital use<br>.. Benefit of past crisis experience; 1997 historic Flood and Fire in Grand Forks, ND<br>.. Early adoption and continuation of self-quarantine recommendations and restricting non-essential business travel<br>.. 82% of staff transitioned to working remote in 1 week; 85% remain working remote<br>.. Established On-Site Pay for staff in offices; introduced Relief Pay for office closures or daycare/school closures<br>.. Frequent all employee virtual calls hosted by C*Suite; shifted from biweekly in 2020 to monthly in 2021<br>.. Built integrated access between client documents and CRM, allowing team to quickly access client information<br>.. Robotic Process Automation: continue to add robots to automate operational processes<br>.. Leveraged DocuSign to develop pre-filled, dynamic Paycheck Protection Program Forgiveness Application<br>.. Simplified client experience, moving various loan, wealth management, and investment documents to DocuSign<br>.. Built upon holistic financial picture for consumer clients by integrating wealth management and brokerage<br>accounts held with Alerus into My Alerus, simplifying the online account experience down to one login<br>.. Moved all retirement statements and confirmations to electronic format as the default, further driving online<br>engagement<br>.. Paycheck Protection Program: helped over 2,289 new and existing clients secure ~ $447 million in funding relief<br>.. Ongoing virtual webinars to provide guidance and help clients with their financial issues on various topics<br>.. Waived fees on loan extensions, loan payment deferrals, or early CD withdrawals due to COVID-19 related hardship<br>.. Proactively helping participants navigate retirement distributions or other lending options<br>.. Continue to encourage virtual business; reopening approach is guided by market conditions<br>.. ND: lobbies closed in mid-March 2020, open by appointment only in early June 2020, lobbies reopened in mid-June<br>2020, markets were never subject to stay at home order and markets are widely open for business<br>.. MN: lobbies closed in mid-March 2020, open by appointment only in August, continued progress of state’s four-<br>phases approach to businesses reopening with certain lobbies opened in April 2020<br>.. AZ: lobbies closed in mid-March, drive-up remained open, open by appointment only in September 2020<br>COVID-19 RESPONSE SUMMARY<br>PROACTIVELY RESPONDING WITH AGILITY AND SUPPORT<br>LEADING DURING THE<br>PANDEMIC CRISIS<br>TAKING CARE OF<br>EMPLOYEES<br>LEVERAGING<br>INFRASTRUCTURE<br>INVESTMENTS<br>INCREASED DIGITAL<br>ENGAGEMENT<br>SERVING IN<br>THE BEST INTEREST<br>OF CLIENTS<br>THE NEW NORMAL |
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| 4<br>PAYMENT DEFERRALS, MATURITY EXTENSIONS, AND PAYMENT MODIFICATIONS<br>COVID-19 RELIEF PROGRAMS<br>March 31, 2021<br>Loan Group<br>Number<br>Of<br>Loans<br>Granted<br>Deferral<br>($ in 000’s)<br>Still on Initial<br>Deferral<br>($ in 000’s)<br>Additional<br>Deferral<br>($ in 000's)<br>Returned<br>to Normal<br>($ in 000’s)<br>Consumer 177 $ 2,451 $ 31 $ 25 $ 2,395<br>Residential Real Estate<br>Serviced 62 26,939 373 7,434 19,132<br>Residential Real Estate<br>Non-serviced 77 10,550 — 32 10,518<br>Commercial Real Estate 79 80,763 —— 80,763<br>Commercial & Industrial 187 33,335 362 126 32,847<br>Total 582 $ 154,038 $ 766 $ 7,617 $ 145,655<br>Consumer<br>2%<br>Residential Real<br>Estate Serviced<br>82%<br>Residential Real<br>Estate Non-<br>serviced<br>1%<br>Commercial &<br>Industrial<br>15% |
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| 5<br>Retail Trade<br>15%<br>Professional, Scientific,<br>and Technical Services<br>11%<br>Construction<br>11%<br>Manufacturing<br>11%<br>Wholesale<br>Trade<br>5%<br>Health Care and Social<br>Assistance<br>10%<br>Other Services (except Public<br>Administration)<br>5%<br>Administrative and Support and<br>Waste Management and<br>Remediation Services<br>3%<br>Transportation and<br>Warehousing<br>3%<br>Accommodation and Food<br>Services<br>4%<br>Other<br>22%<br>SBA PAYCHECK PROTECTION PROGRAM (PPP)<br>COVID-19 RELIEF PROGRAMS<br>As of 3/31/2021.<br>As of March 31, 2021, 1,101 loans totaling $194.2 million have been approved for forgiveness by the SBA.<br>Loan Amount Group # of Loans<br>$ Originated<br>(in 000’s)<br>$150M or less 1,682 $ 72,092<br>$150M to $2MM 581 296,475<br>$2MM+ 26 78,624<br>Total 2,289 $ 447,191<br>INDUSTRY BREAKDOWN OF PPP LOANS MADE TO BORROWERS<br>THROUGH 03/31/2021 SECURED SBA FINANCING OF 2,289 LOANS FOR APPROXIMATELY $447MM |
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| 6<br>12.2% 12.9%<br>16.7% 16.8% 17.5%<br>0.0%<br>2.0%<br>4.0%<br>6.0%<br>8.0%<br>10.0%<br>12.0%<br>14.0%<br>16.0%<br>18.0%<br>20.0%<br>2017 2018 2019 2020 Q1 2021<br>7.1% 7.5%<br>11.1%<br>9.2%<br>14.2%<br>8.3% 8.9%<br>12.9% 13.2% 13.9%<br>0.0%<br>2.0%<br>4.0%<br>6.0%<br>8.0%<br>10.0%<br>12.0%<br>14.0%<br>16.0%<br>2017 2018 2019 2020 Q1 2021<br>Tier 1 Leverage Tier 1 Capital<br>6.0%<br>6.9%<br>10.4%<br>9.3% 8.9%<br>0.0%<br>2.0%<br>4.0%<br>6.0%<br>8.0%<br>10.0%<br>12.0%<br>2017 2018 2019 2020 Q1 2021<br>STRONG CAPITAL AND SOURCES OF LIQUIDITY<br>TANGIBLE COMMON EQUITY/TANGIBLE ASSETS TIER 1 CAPITAL/TIER 1 LEVERAGE RATIOS<br>PRIMARY AND SECONDARY SOURCES OF LIQUIDITY TOTAL RISK BASED CAPITAL<br>Basel III Regulatory Capital Minimum to be considered well capitalized<br>Cash and cash equivalents $190,217<br>Unencumbered securities 617,606<br>FHLB borrowing availability 647,984<br>Brokered CD capacity 630,351<br>Fed funds lines 102,000<br>Total as of 3/31/2021 $2,188,158<br>Tier 1<br>Capital<br>Leverage<br>Excluding PPP, Tangible Common Equity/Tangible Assets at March 31, 2021 was 9.66% Basel III Regulatory Capital Minimum to be considered well capitalized |
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| 7<br>ASSET QUALITY AND RESERVE LEVELS<br>OVERVIEW NPAS / ASSETS (%)<br>RESERVES / LOANS (%) RESERVES / NPLS (%)<br>.. Solid asset quality<br>.. Strong reserve levels<br>.. Proactive approach to classification of assets and<br>management of loan problems<br>Excluding PPP loans, NPAs/Assets as of March 31, 2021 was 0.17%<br>Excluding PPP loans, Reserves/Loans as of March 31, 2021 was 2.01%<br>0.30% 0.33% 0.33%<br>0.17% 0.16%<br>0.00%<br>0.20%<br>0.40%<br>0.60%<br>0.80%<br>2017 2018 2019 2020 Q1 2021<br>1.05%<br>1.30% 1.39%<br>1.73% 1.74%<br>0.00%<br>0.40%<br>0.80%<br>1.20%<br>1.60%<br>2.00%<br>2017 2018 2019 2020 Q1 2021<br>282% 318% 306%<br>674% 710%<br>0.00%<br>100.00%<br>200.00%<br>300.00%<br>400.00%<br>500.00%<br>600.00%<br>700.00%<br>800.00%<br>2017 2018 2019 2020 Q1 2021 |
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| 8<br>BY OUTSTANDING BALANCES<br>WELL DIVERSIFIED LOAN PORTFOLIO<br>As of 3/31/2021.<br>1-4 Residential 1st<br>20%<br>1-4 Residential Construction<br>1%<br>1-4 Residential Jr Lien 2%<br>HELOC 5%<br>RE Loans to be Sold 4%<br>C&I 19%<br>PPP 13% Ag Production 2%<br>Other CRE 14%<br>Owner Occupied<br>CRE 10%<br>Ag Land 1%<br>Multifamily 4%<br>Retail Indirect 2% Other Consumer<br>1% RE Construction 2% |
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| 9<br>BY TOTAL COMMITMENT INCLUDING UNFUNDED COMMITMENT<br>WELL DIVERSIFIED LOAN PORTFOLIO<br>As of 3/31/2021.<br>1-4 Residential 1st<br>17%<br>1-4 Residential<br>Construction 1%<br>1-4 Residential Jr<br>Lien 1%<br>HELOC 10%<br>RE Loans to be Sold<br>3%<br>C&I 26%<br>PPP 10%<br>Ag Production 2%<br>Other CRE 11%<br>Owner Occupied CRE 8%<br>Ag Land 1%<br>Multifamily 3%<br>Retail Indirect 2% Other Consumer 2% RE Construction 3% |
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| 10<br>FIRST QUARTER HIGHLIGHTS |
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| 11<br>INCOME STATEMENT<br>Q1 2021 FINANCIAL HIGHLIGHTS<br>1 – Represents a non-GAAP Financial measure. See “Non-GAAP Disclosure Reconciliation.”<br>2 – Net interest margin (tax-equivalent) excluding PPP loans for the three months ended March 31, 2021 was 2.95%. |
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| 12<br>STRONG CORE FUNDING MIX<br>.. Commercial transaction accounts totaled $1.2 billion and<br>increased 12.2% in Q1. Consumer transaction accounts totaled<br>$668.5 million and increased 3.8%<br>.. Synergistic deposits, including HSA deposits and those sourced<br>through retirement plans and participants, totaled $569.0<br>million, with a cost of 0.03%<br>.. CD portfolio is primarily 6 month flex CD with over 50% held<br>by clients for 10+ years<br>.. Stable deposit relationships with 22 year average tenure on 10<br>largest depositors<br>As of March 31, 2021, core deposits totaled $2.7<br>billion or 97.6% of our total deposits<br>OVERVIEW AS OF MARCH 31, 2021 MARCH 31, 2021 DEPOSIT FUNDING ($2,718MM)<br>LOW COST OF FUNDS<br>Data YTD as of 3/31/2021.<br>Non-Interest Bearing<br>Deposits<br>28.5%<br>Money<br>Market &<br>Savings<br>Deposits<br>38.8%<br>Interest Bearing<br>Demand Deposits<br>20.1%<br>Time<br>Deposits<br>7.8%<br>HSA Deposits<br>4.8%<br>0.15% 0.21%<br>0.20%<br>0.00%<br>0.20%<br>0.40%<br>0.60%<br>0.80%<br>1.00%<br>1.20%<br>1.40%<br>Cost of Total<br> Deposits<br>Cost of Interest<br>Bearing Deposits<br>Total Cost of Funds<br>2018 2019 2020 Q1 2021 |
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| 13<br>0.65%<br>0.97%<br>0.51%<br>0.20%<br>1.83%<br>2.16%<br>0.45%<br>0.08%<br>3.84%<br>3.65%<br>3.22% 3.12%<br>4.81% 4.97%<br>4.35% 4.21%<br>0.00%<br>1.00%<br>2.00%<br>3.00%<br>4.00%<br>5.00%<br>6.00%<br>2018 2019 2020 Q1 2021<br>NET INTEREST MARGIN (NIM)<br>1 – Rates have been annualized for interim periods.<br>Source: Alerus Financial Corporation; Federal Reserve<br>Note: Net interest margin (FTE) is a non-GAAP financial measure; See “Non-GAAP Disclosure Reconciliation” in the Appendix to this presentation<br>Loan Yield<br>Net Interest Margin (fully-taxable equivalent “FTE”)<br>Average Effective Fed Funds Rate<br>Cost of Funds<br>1<br>1<br>1<br>1 |
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| 14<br>22,181 ( 1,262 )<br>( 606 )( 13 )<br>23,284<br>228<br>550<br>20,000<br>21,000<br>22,000<br>23,000<br>24,000<br>Decrease Increase<br>NIM AND LOAN FLOORS<br>VARIABLE RATE FLOORS BY INDEX VARIABLE RATE FLOORS<br>COMMENTS<br>$ in Millions Balance % of Total<br>Balance<br>Cumulative % of<br>Total Balance<br>No Floors $ 291 41.7% 41.7%<br>Floors Reached 285 40.8% 82.5%<br>0-50 bps to reach floor 115 16.5% 99.0%<br>>50bps to reach floor 7 1.0% 100.0%<br>Total $ 698 100.0%<br>Quarter over quarter highlights:<br>.. Decreased asset yields driven by lower investment yields of<br>23bps as portfolio increased on average $113 million<br>.. Lower loan yields of 9bps due to lower C&I yields as loan<br>renewals were repriced at lower rates<br>.. Other borrowings yield decreased 113bps as sub debt was<br>refinanced during the quarter at a new yield of 3.5% down<br>from 5.75%<br>$ in Millions<br>Index<br>In the<br>Money<br>Out of<br>the Money No Floor Total Total %<br>Prime $ 233 $ 36 $ 15 $ 284 40.7%<br>1 Month LIBOR 5 2 161 168 24.1%<br>12 Month LIBOR – 72 100 172 24.6%<br>FHLB 5 Year 24 11 10 45 6.4%<br>Other 24 – 5 29 4.2%<br>Total $ 286 $ 121 $ 291 $ 698 100.0%<br>Percent of Total 41.0% 17.3% 41.7% 100.0%<br>1 – NIM excluding PPP for the three months ended March 31, 2021 was 2.95%<br>NET INTEREST INCOME |
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| 15<br>A BIG COMPANY MODEL WITH SMALL COMPANY EXECUTION<br>OUR DIVERSE BUSINESS LINES<br>Revenue data LTM as of 3/31/2021.<br>TRUSTED<br>ADVISOR<br>BANKING<br>WEALTH<br>MANAGEMENT<br>• Residential mortgage lending<br>• Purchasing or refinancing<br>• Residential construction lending<br>• Home equity/second mortgages<br>• Advisory services<br>• Trust and fiduciary services<br>• Investment management<br>• Insurance planning<br>• Financial planning<br>• Education planning<br>• Retirement plan<br>administration<br>• Retirement plan<br>investment advisory<br>• ESOP fiduciary services<br>• Payroll administration<br>services<br>• HSA/FSA/HRA<br>administration<br>• COBRA<br>BUSINESS BANKING<br>• Commercial and commercial<br>real estate lending<br>• Agriculture lending<br>• Treasury management<br>• Deposit services<br>CONSUMER BANKING<br>• Deposit products<br>and services<br>• Consumer lending<br>• Private banking<br>MORTGAGE RETIREMENT<br>AND BENEFITS<br>25% of Revenue 30% of Revenue<br>7% of Revenue<br>38% of Revenue |
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| 16<br>Asset Based Retirement<br>29%<br>Trust, Custody &<br>Advisory<br>10%<br>Record<br>Keeping<br>17%<br>Administration<br>13%<br>Health &<br>Welfare<br>11%<br>Payroll Servicing<br>3%<br>ESOP<br>7%<br>Other<br>10%<br>$26,902 $28,404 $25,720<br>$7,143<br>$63,316 $63,811 $60,956<br>$17,255<br>$0<br>$20,000<br>$40,000<br>$60,000<br>$80,000<br>2018 2019 2020 Q1 2021<br>Net Income Revenue<br>$27,812 $31,905 $34,200 $34,775<br> 345,000<br> 350,000<br> 355,000<br> 360,000<br> 365,000<br> 370,000<br> 375,000<br> 380,000<br>$0<br>$5,000<br>$10,000<br>$15,000<br>$20,000<br>$25,000<br>$30,000<br>$35,000<br>2018 2019 2020 Q1 2021<br>AUA/AUM Participants<br>RETIREMENT AND BENEFITS<br>OVERVIEW-7,600 PLANS- NATIONAL FOOTPRINT ASSETS UNDER ADMINISTRATION/MANAGEMENT<br>PROFIT MARGIN REVENUE MIX<br>MARKET<br>SENSITIVE<br>REVENUE:<br>40%<br>1<br>1 Net Income before Tax and Indirect Allocations.<br>.. RETIREMENT - Provide recordkeeping and administration<br>services to qualified retirement plans<br>.. ADVISORY SERVICES - Provide investment fiduciary services to<br>retirement plans<br>.. HEALTH AND WELFARE - Provide HSA, FSA, COBRA<br>recordkeeping and administration services to employers<br>.. ESOP - Provide trustee, recordkeeping and administration to<br>employee stock ownership plans<br>.. PAYROLL - Provide payroll and HRIS services for employers<br>.. ONE ALERUS SYNERGIES<br>• IRA rollovers $75.9 million YTD 3/31/2021<br>• Deposits - HSA deposits, 401(k) Money Market Funds,<br>Emergency Savings, Terminated Participants<br>• Managed accounts<br>($ in Millions)<br>($000s)<br>Profit Margin: 42.5% 44.5% 42.2% 41.4% |
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| 17<br>Profit Margin: 54.4% 53.6% 52.5% 53.2%<br>$8,138 $8,314 $9,162<br>$2,651<br>$14,962 $15,502<br>$17,451<br>$4,986<br>$0<br>$6,000<br>$12,000<br>$18,000<br>2018 2019 2020 Q1 2021<br>Net Income Revenue<br>WEALTH MANAGEMENT SERVICES<br>OVERVIEW OF SERVICES ASSETS UNDER ADMINISTRATION/MANAGEMENT<br>PROFIT MARGIN REVENUE MIX<br>1 Net Income before Tax and Indirect Allocations.<br>.. ADVISORY AND PLANNING SERVICES<br>• Retirement Planning, Tax Planning, Insurance Planning,<br>Wealth Transfer Planning and Business Transition Planning<br>.. ASSET MANAGEMENT<br>• Personalized SMA strategies, Tax Management and Global<br>Perspective<br>.. FIDUCIARY SERVICES<br>• IRA, Agency and Personal Trust<br>.. ONE ALERUS SYNERGIES<br>• IRA rollovers<br>• 401(k) managed accounts<br>1<br>($ in Millions)<br>($000s)<br>$2,627<br>$3,103 $3,339 $3,358<br>$0<br>$1,000<br>$2,000<br>$3,000<br>2018 2019 2020 Q1 2021<br>Asset<br>Management<br>84%<br>Brokerage<br>10%<br>Insurance &<br>Advisory<br>6% |
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| 18<br>$213.5<br>$393.1 $462.0<br>$564.0<br>$474.1 $15.0<br>$38.6<br>$49.6<br>$43.2<br>$43.9<br>$228.5<br>$431.7<br>$511.6<br>$607.2<br>$518.0<br>$0.0<br>$250.0<br>$500.0<br>$750.0<br>Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021<br>Sale Portfolio<br>MORTGAGE BANKING<br>OVERVIEW OF SERVICES MORTGAGE ORIGINATIONS<br>GAIN ON SALE MARGIN<br>($000s)<br>REVENUE SUMMARY<br>.. 1st and 2nd mortgage product offerings through centralized<br>mortgage operations in Minnesota<br>.. Our Twin Cities originators averaged $42+ million in annual<br>volume over the last three years<br>.. YTD 1,699 loans closed, approximately 31% purchase<br>originations, with approximately 69% sourced from the Twin<br>Cities MSA<br>.. Q1 94.7% pull through on secondary market<br>.. ONE ALERUS SYNERGIES<br>• Through enhanced technology, digital applications exceed<br>80%. Paperless environment eliminated nearly 200,000+<br>pages printed on a monthly basis<br>• As of March 31, 2021, residential real estate first<br>mortgages excluding construction mortgages totaled $439<br>million<br>1 Net Income before Tax and Indirect Allocations.<br>($000s)<br>Q1<br>2020<br>Q2<br>2020<br>Q3<br>2020<br>Q4<br>2020<br>Q1<br>2021<br>Origination<br>and Sale $ 5,926 $ 11,516 $ 16,289 $ 19,071 $ 16,421<br>Fair Value<br>Changes (881) 6,030 5,980 (2,290) 711<br>Total $ 5,045 $ 17,546 $ 22,269 $ 16,781 $ 17,132<br>Net<br>income (1) $ (126) $ 10,056 $ 13,113 $ 4,367 $ 6,725<br>Profit<br>Margin (2.4%) 55.6% 57.3% 25.0% 28.3%<br>3.2% 3.3%<br>3.6% 3.5%<br>3.2%<br>2.0%<br>3.0%<br>4.0%<br>Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021<br>Purchase % 50.9% 37.7% 52.8% 42.1% 31.3%<br>Refinance % 49.1% 62.3% 47.2% 57.9% 68.7% |
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| 19<br>LOAN PORTFOLIO AND CREDIT QUALITY |
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| 20<br>Transportation and<br>Warehousing<br>3%<br>Health Care and Social<br>Assistance<br>6%<br>Professional, Scientific and Technical<br>Services<br>7%<br>Manufacturing<br>10%<br>Real Estate and<br>Rental and Leasing<br>8%<br>Wholesale Trade<br>11%<br>Construction<br>15%<br>Finance and Insurance<br>14%<br>Other<br>10%<br>0<br>%<br>Motor Vehicle and Parts Dealers<br>8%<br>Food and<br>Beverage Stores<br>2%<br>Electronics and<br>Appliance Stores<br>2% Heath and Personal Care<br>Services<br>1%<br>Building Material and<br>Garden Equipment and<br>Supplies Dealers<br>1%<br>Nonstore Retailers<br>1%<br>Other Retail<br>Trade<br>1%<br>Retail Trade<br>16%<br>SUMMARY BY INDUSTRY TYPE<br>TOTAL COMMITMENT COMMERCIAL & INDUSTRIAL1<br>1 – Commercial and industrial loans includes C & I, Loans to Public Entities, and Other Loans. It Excludes PPP and Ag Production loans<br>“Other” includes to the following industries (1) Nonclassifiable establishments, (2) Management of Companies and Enterprises, (3) Administrative and Support and Waste Management and Remediation Services, (4)<br>Accommodation and Food Services, (5) Educational Services, (6) Other Services (except Public Administration), (7) Information, (8) Arts, Entertainment, and Recreation, (9) Agriculture Forestry, Fishing, and Hunting,<br>(10) Public Administration), (11) Mining Quarrying, and Oil and Gas Extraction, and (12) Utilities<br>“Other Retail Trade” includes to the following sub-industries within Retail Trade: (1) Miscellaneous Store Retailers, (2) Furniture and Home Furnishings Stores, (3) Sporting Goods, Hobby, Musical Instrument, and Book<br>Stores, (4) Clothing and Clothing Accessories Stores, and (5) General Merchandise Stores |
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| 21<br>Office<br>16%<br>Retail<br>18%<br>Warehouse<br>19%<br>Manufacturing<br>1%<br>Residential<br>Development<br>1%<br>Mixed<br>Residential/Commercial<br>1%<br>Mixed<br>Commercial<br>6%<br>Apartments<br>15%<br>Hotel<br>1%<br>Medical Or<br>Nursing Facilities<br>8%<br>Commercial/Land<br>Development<br>12%<br>Ag Land<br>2%<br>LOANS SECURED BY REAL ESTATE<br>TOTAL COMMITMENT<br>COMMERCIAL REAL ESTATE1<br>1 – Loans secured by commercial real estate include Multifamily loans, Ag land, Other CRE, Owner Occupied CRE, and Ag production<br>Portfolio Avg FICO Avg LTV<br>Serviced 757 56%<br>Non-Serviced 793 33%<br>Junior 753 77%<br>HELOC 793 76%<br>TOTAL COMMITMENT<br>RESIDENTIAL REAL ESTATE<br>Serviced 48%<br>1-4 1st Non-Serviced<br>4%<br>1-4 Family Jr Liens<br>4%<br>1-4 Family Revolving<br>32%<br>1-4 Family Construction 3%<br>Held for Sale<br>9% |
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| 22<br>Impacted industries,<br>8%<br>All Other Loans, 92%<br>COMMERCIAL AND INDUSTRIAL AND COMMERCIAL REAL ESTATE<br>INDUSTRIES DIRECTLY IMPACTED BY COVID-19<br>As of 3/31/2021.<br>C&I<br>Total<br>Commitment<br>($ in 000's) % of Total<br>Accommodation and Food Services $ 10,314 0.74%<br>Arts, Entertainment, and Recreation 3,164 0.23%<br>Oil and Gas 553 0.04%<br>Other Retail Trade 3,787 0.27%<br>Total $ 17,818 1.27%<br>CRE<br>Total<br>Commitment<br>($ in 000's) % of Total<br>Retail $ 118,217 8.45%<br>Medical or Nursing Facilities 54,176 3.87%<br>Hotel 5,292 0.38%<br>Total $ 177,685 12.70% |
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| 23<br>LINE OF CREDIT UTILIZATION<br>C&I AND HOME EQUITY LINES OF CREDIT<br>0%<br>5%<br>10%<br>15%<br>20%<br>25%<br>30%<br>35%<br>40%<br>45%<br> -<br> 50,000<br> 100,000<br> 150,000<br> 200,000<br> 250,000<br> 300,000<br> 350,000<br> 400,000<br> 450,000<br> 500,000<br>Q2<br>2018<br>Q3<br>2018<br>Q4<br>2018<br>Q1<br>2019<br>Q2<br>2019<br>Q3<br>2019<br>Q4<br>2019<br>Q1<br>2020<br>Q2<br>2020<br>Q3<br>2020<br>Q4<br>2020<br>Q1<br>2021<br>C&I<br>Funded Unfunded Funded%<br>0%<br>10%<br>20%<br>30%<br>40%<br>50%<br>60%<br> -<br> 50,000<br> 100,000<br> 150,000<br> 200,000<br> 250,000<br> 300,000<br>Q2<br>2018<br>Q3<br>2018<br>Q4<br>2018<br>Q1<br>2019<br>Q2<br>2019<br>Q3<br>2019<br>Q4<br>2019<br>Q1<br>2020<br>Q2<br>2020<br>Q3<br>2020<br>Q4<br>2020<br>Q1<br>2021<br>Home Equity Lines of Credit<br>Funded Unfunded Funded% |
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| 24<br>CHANGES IN THE ALLL BY PORTFOLIO SEGMENT<br>ALLOWANCE FOR LOAN LOSSES<br>Three months ended March 31, 2021<br>(dollars in thousands)<br>Beginning<br>Balance<br>Provision for<br>Loan Losses<br>Loan<br>Charge-offs<br>Loan<br>Recoveries<br>Ending<br>Balance<br>Commercial<br>Commercial and industrial $ 10,205 $ 316 $ (204) $ 170 $ 10,487<br>Real estate construction 658 (60) —— 598<br>Commercial real estate 14,105 277 (536) 3 13,849<br>Total commercial 24,968 533 (740) 173 24,934<br>Consumer<br>Residential real estate first mortgage 5,774 190 — 83 6,047<br>Residential real estate junior lien 1,373 (85) —— 1,288<br>Other revolving and installment 753 (83) (44) 40 666<br>Total consumer 7,900 22 (44) 123 8,001<br>Unallocated 1,378 (555) —— 823<br>Total $ 34,246 $ — $ (784) $ 296 $ 33,758 |
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| 25<br>ALLOCATION BY PORTFOLIO SEGMENT<br>ALLOWANCE FOR LOAN LOSSES<br>March 31, 2021 December 31, 2020<br>(dollars in thousands)<br>Allocated<br>Allowance<br>Percentage<br>of loans to<br>total loans<br>Allocated<br>Allowance<br>Percentage<br>of loans to<br>total loans<br>Commercial and industrial $ 10,487 35.0% $ 10,205 35.0%<br>Real estate construction 598 2.1% 658 2.2%<br>Commercial real estate 13,849 29.4% 14,105 28.4%<br>Residential real estate first mortgage 6,047 23.5% 5,774 23.4%<br>Residential real estate junior lien 1,288 6.7% 1,373 7.2%<br>Other revolving and installment 666 3.3% 753 3.7%<br>Unallocated 823 —% 1,378 —%<br>Total loans $ 33,758 100.0% $ 34,246 100.0% |
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| 26<br>Risk Level Total Loans<br>Unguaranteed<br>Balance1<br>Reserve<br>Amount<br>Reserve /<br>Unguaranteed<br>Loans<br>Reserve/Total<br>Loans<br>Pass $ 1,881,248 $ 1,619,738 $ 27,280 1.68% 1.45%<br>Special Mention 10,674 10,369 427 4.12% 4.00%<br>Substandard 37,282 36,739 4,226 11.50% 11.34%<br>Total Loans Evaluated Collectively 1,929,204 1,666,846 31,933 1.92% 1.66%<br>Total Loans Evaluated Individually 8,141 7,852 1,002 12.76% 12.31%<br>Unallocated –– 823 ––<br>Total $ 1,937,345 $ 1,674,698 $ 33,758 2.02% 1.74%<br>ALLOCATION BY RISK SEGMENT ($ IN 000’S)<br>ALLOWANCE FOR LOAN LOSSES<br>As of 03/31/2021.<br>1 - Unguaranteed balances exclude PPP loans as well as loans that are guaranteed by another government agency. |
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| 27<br>APPENDIX |
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| 28<br>Retirement<br>and Benefit<br>Revenue<br>24.8%<br>Wealth<br>Management<br>Revenue<br>7.4%<br>Mortgage<br>Revenue<br>29.5%<br>Banking<br>Fees<br>3.6%<br>Net<br>Interest<br>Income<br>34.7%<br>FOR THE TWELVE MONTHS ENDED MARCH 31, 2021<br>Noninterest income:<br>$163.1 million<br>Net interest income:<br>$87.0 million<br>$29.4 $27.8 $31.9 $34.2 $34.8<br>2017 2018 2019 2020 Q1 2021<br>OUR MISSION<br>.. To positively impact our clients’ financial potential-through holistic guidance, unparalleled service, and engaging<br>technology.<br>COMPANY PROFILE<br>Data as of 03/31/2021.<br>DIVERSIFIED REVENUE STREAM ASSET GROWTH (IN BILLIONS)<br>$2.1 $2.2 $2.4 $3.0 $3.2<br>2017 2018 2019 2020 Q1 2021<br>Banking Assets<br>Retirement and Benefit Services AUA/AUM<br>Wealth Management AUA/AUM<br>$2.7 $2.6 $3.1 $3.3 $3.4<br>2017 2018 2019 2020 Q1 2021<br>NONINTEREST<br>INCOME AS A %<br>OF REVENUE:<br>65%<br>DIVERSIFIED FINANCIAL SERVICES COMPANY<br>.. $3.2 billion Banking assets<br>.. $34.8 billion Retirement and Benefits AUA/AUM<br>.. $3.4 billion Wealth Management AUA/AUM<br>.. $518 thousand in Mortgage Originations<br>ALERUS BUSINESS LINES<br>.. Banking<br>.. Retirement and Benefits<br>.. Wealth Management<br>.. Mortgage |
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| 29<br>FRANCHISE FOOTPRINT<br>FULL-SERVICE BANKING OFFICES<br>Alerus offers banking, retirement and benefits, mortgage and<br>wealth management services at all full-service banking offices<br>.. Grand Forks, ND: 3 full-service banking offices<br>.. Fargo, ND: 3 full-service banking offices<br>.. Twin Cities, MN: 6 full-service banking offices<br>.. Phoenix, AZ: 2 full-service banking offices<br>RETIREMENT AND BENEFITS SERVICES OFFICES<br>.. 1 retirement and benefits office in Minnesota<br>.. 1 retirement and benefits office in Michigan<br>.. 1 retirement and benefits office in Colorado<br>.. Serve clients in all 50 states through retirement plan services<br>DIVERSIFIED CLIENT BASE<br>.. 50,400 consumers<br>.. 10,400 businesses<br>.. 7,600 employer-sponsored retirement plans<br>Data as of 03/31/2021.<br>.. 350,000 employer-sponsored retirement plan participants<br>.. 59,200 health savings account participants<br>.. 57,400 flexible spending account/health reimbursement<br>arrangement participants |
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| 30<br>ONE<br>ALERUS<br>REINVENTION OF PROCESSES<br>We have aligned processes, policies, and<br>procedures throughout all departments to<br>enhance client experience and improve our<br>Company's efficiency<br>Our expectation is this initiative will continue to<br>improve our scalability and operating costs<br>TAILORED ADVICE<br>We strive to provide each<br>client with a primary point of<br>contact —a trusted advisor—<br>who deals with individual<br>needs and integrates other<br>department’s expertise when<br>necessary<br>SYNERGISTIC GROWTH<br>We have formalized our National Market which has<br>grown synergistic deposits to $569.0 million as of<br>March 31, 2021.<br>One Alerus synergies gained with the addition of<br>$518.0 million in mortgage originations for the<br>three months ended March 31, 2021.<br>TECHNOLOGY INVESTMENT<br>We have proactively invested in technology to<br>further our goal to effectively integrate all<br>departments and business lines<br>These investments allow for digital and proactive<br>engagement with clients<br>DIVERSIFIED SERVICES<br>We are able to offer<br>comprehensive product and<br>service packages to our clients<br>including banking, mortgage,<br>wealth management, retirement<br>benefits and payroll<br>administration<br>ONE ALERUS STRATEGY<br>One Alerus enables us to bring all of our product and service<br>offerings to clients in a cohesive and seamless manner. We believe<br>the One Alerus initiative will enable us to achieve future organic<br>growth by leveraging our existing client base and help us continue<br>to provide strong returns to our stockholders<br>ONE ALERUS |
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| 31<br>SKILLED ADVISORS AND FINANCIAL GUIDES<br>.. Team is organized around consumer or business; focuses on holistic needs of clients; depth and breadth of Alerus<br>service offering<br>.. Proprietary Financial Fitness Playbook delivers consistency and augments Financial Workout technology<br>.. Clients expect and value guidance from their advisor, supported by seamless technology<br>EMPOWERING CLIENTS WITH RESPONSIVE TECHNOLOGY<br>.. Omni-Channel<br>Seamless experience via desktop and mobile<br>.. Leading Account Aggregation<br>Holistic view of entire financial life<br>.. Single Sign On<br>Remove friction in being an Alerus client<br>.. Financial Wellness Score<br>Your most current financial data is used<br>to create easy, intuitive workouts<br>IMPROVING CLIENTS’ FINANCIAL WELLBEING THROUGH PEOPLE + TECHNOLOGY<br>THE PATH TO FINANCIAL CONFIDENCE<br>WORKOUTS COMPLETED BY CLIENTS SINCE LAUNCH<br> -<br> 2,000<br> 4,000<br> 6,000<br> 8,000<br> 10,000<br> 12,000<br>Debt Emergency HSA Insurance Retirement |
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| 32<br>OFFICERS AND DIRECTORS<br>OUR MOTIVATED, DEDICATED, AND ENERGETIC LEADERS KEEP US ON THE RIGHT PATH<br>SENIOR<br>EXECUTIVE<br>TEAM<br>BOARD OF<br>DIRECTORS<br>DAN COUGHLIN<br>Since 2016<br>Former MD & Co-Head – Fin’l Services Inv.<br>Banking, Raymond James; Former Chairman<br>& CEO, Howe Barnes Hoefer & Arnett<br>Chicago, IL<br>MICHAEL MATHEWS<br>Since 2019<br>CIO, Deluxe Corporation<br>Former SVP – Technology and Enterprise<br>Programs, UnitedHealth Group<br>Minneapolis, MN<br>GALEN VETTER<br>Since 2013<br>Former Global CFO, Franklin Templeton<br>Investments; Former Partner-in-Charge,<br>Upper Midwest Region, RSM<br>Minneapolis, MN<br>KATIE LORENSON<br>Executive Vice President and<br>Chief Financial Officer<br>4 years with Alerus<br>ANN MCCONN<br>Executive Vice President and<br>Chief Shared Services Officer<br>19 years with Alerus<br>RYAN GOLDBERG<br>Executive Vice President and<br>Chief Revenue Officer<br>1 year with Alerus<br>KARIN TAYLOR<br>Executive Vice President and<br>Chief Risk Officer<br>3 years with Alerus<br>SALLY SMITH<br>Since 2007<br>Former President and CEO<br>Buffalo Wild Wings, Inc.<br>Minneapolis, MN<br>LLOYD CASE<br>Since 2005 (Retiring May 2021)<br>Past President and CEO<br>Forum Communications Co.<br>Director, Forum Communications<br>Fargo, ND<br>KAREN BOHN<br>Since 1999<br>President, Galeo Group, LLC<br>Former Chief Administrative Officer<br>Piper Jaffray Co.<br>Edina, MN<br>KEVIN LEMKE<br>Since 1994<br>President<br>Virtual Systems, Inc.<br>Grand Forks, ND<br>RANDY NEWMAN<br>Chairman, President, and<br>Chief Executive Officer<br>40 years with Alerus |
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| 33<br>.. Diversified client base consists of 50,400 consumers, 10,400 businesses and over 350,000 employer-sponsored<br>retirement plan participants<br>.. Harness product synergies unavailable to traditional banking organizations<br>.. Capitalize on strategic opportunities to grow in our existing markets or new markets<br>.. Acquisition targets include banks and nationwide fee income companies with complementary business models,<br>cultural similarities, synergy and growth opportunities<br>.. Recruit top talent to accelerate growth in our existing markets or jumpstart our entrance into new markets<br>.. Market disruption caused by M&A activity provides lift-out opportunities<br>.. Proactively position ourselves as an acquirer and employer of choice<br>.. Invested in one of the leading marketing automation technologies<br>.. Provide secure and reliable technology that meets evolving client expectations<br>.. Integrate our full product and service offerings through our fast-follower strategy<br>.. Collaborative leadership team focused on growing organically by deepening relationships with existing clients<br>through our expansive services<br>.. Maintain relationship-driven business model while engaging and attracting new clients digitally and diversifying<br>the composition of our business model<br>KEY STRATEGIC INITIATIVES<br>GROWING THE ALERUS FRANCHISE<br>LEVERAGE OUR EXISTING<br>CLIENT BASE<br>EXECUTE STRATEGIC<br>ACQUISITIONS<br>PURSUE TALENT<br>ACQUISITION<br>ENHANCE BRAND<br>AWARENESS<br>STRENGTHEN AND BUILD<br>INFRASTRUCTURE<br>ORGANIC GROWTH<br>“ONE ALERUS” |
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| 34<br>North Dakota<br>Minnesota<br>Arizona<br>National<br>STRONG GROWTH MARKETS AND STABLE CORE FUNDING<br>MARKET DISTRIBUTION<br>DEPOSITS ($2,718) LOANS ($1,937)(1)<br>ARB ASSETS UNDER<br>ADMIN/MGMT. ($34,775)<br>WM ASSETS UNDER<br>ADMIN/MGMT. ($3,358) MORTGAGE ORIGINATIONS ($0.5)<br>($ IN MILLIONS)<br>Data as of 03/31/2021.<br>1-Loans in our national market are participant loans not sourced directly through advisors located in one of our geographical markets.<br>LEGEND<br>7.0%<br>89.5%<br>3.5%<br>9.3%<br>13.7% 0.1%<br>76.9% 72.3%<br>10.3%<br>2.3% 15.1%<br>40.2%<br>47.7%<br>9.9%<br>2.2%<br>43.8%<br>31.0%<br>4.2% 21.0% |
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| 35<br>FINANCIAL HIGHLIGHTS<br>1 Represents a non-GAAP financial measure. See “Non-GAAP Disclosure Reconciliation” in the Appendix to this presentation.<br>2 Excluding PPP loans, the following ratios were TCE/TA 10.19% NPLs/Loans 0.30%, NPAs/Assets 0.19%, Allowance/Loans 2.00%, and NCOs/Average Loans 0.03%<br>($000s, except where otherwise noted ) Annual 17-'20 Year-to-date<br>2017 2018 2019 2020 CAGR Q1 2020 Q1 2021<br>Total Assets 2,136,081 $ 2,179,070 $ 2,356,878 $ 3,013,771 $ 12.2% 2,512,078 $ 3,151,756 $<br>Total Loans 1,574,474 1,701,850 1,721,279 1,979,375 7.9% 1,758,277 1,937,345<br>Total Deposits 1,834,962 1,775,096 1,971,316 2,571,993 11.9% 2,121,514 2,717,573<br>Tangible Common Equity1 125,154 147,152 240,008 274,043 29.9% 248,878 274,265<br>Net Income 15,001 $ 25,866 $ 29,540 $ 44,675 $ 43.9% 5,363 $ 15,215 $<br>ROAA (%) 0.75 1.21 1.34 1.61 0.89 2.02<br>ROATCE (%) 18.04 21.02 17.46 17.74 9.76 23.03<br>Net Interest Margin (FTE) (%) 1 3.74 3.84 3.65 3.22 3.35 3.12<br>Efficiency Ratio (FTE) (%)1 75.36 73.80 73.22 68.40 77.47 66.43<br>Non-Int. Income / Op. Rev. (%) 60.36 57.73 60.50 64.05 59.07 64.97<br>Earnings per common share - diluted 1.07 1.84 1.91 2.52 0.30 0.86<br>Total Equity / Total Assets (%) 8.41 9.04 12.12 10.96 11.69 10.45<br>Tang. Cmn. Equity / Tang. Assets (%)1 2 6.01 6.91 10.38 9.27 10.09 8.86<br>Loans / Deposits (%) 85.80 95.87 87.32 76.96 82.88 71.29<br>NPLs / Loans (%)2 0.37 0.41 0.45 0.26 0.40 0.25<br>NPAs / Assets (%)2 0.30 0.33 0.33 0.17 0.29 0.17<br>Allowance / NPLs (%) 282.04 318.45 305.66 674.13 387.65 709.80<br>Allowance / Loans (%)2 1.05 1.30 1.39 1.73 1.54 1.74<br>NCOs / Average Loans (%)2 0.16 0.18 0.33 0.03 (0.14) 0.10 |
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| 36<br>NON-GAAP DISCLOSURE RECONCILIATION<br>($000s, except where otherwise noted ) Annual Year-to-date<br>2017 2018 2019 2020 Q1 2020 Q1 2021<br>Tangible common equity to tangible assets<br>Total common stockholders' equity $ 179,594 $ 196,954 $ 285,728 $ 330,163 $ 293,608 $ 329,234<br>Less: Goodwill 27,329 27,329 27,329 30,201 27,329 30,201<br>Less: Other intangible assets 27,111 22,473 18,391 25,919 17,401 24,768<br>Tangible common equity (a) 125,154 147,152 240,008 274,043 248,878 274,265<br>Total assets 2,136,081 2,179,070 2,356,878 3,013,771 2,512,078 3,151,756<br>Less: Goodwill 27,329 27,329 27,329 30,201 27,329 30,201<br>Less: Other intangible assets 27,111 22,473 18,391 25,919 17,401 24,768<br>Tangible assets (b) 2,081,641 2,129,268 2,311,158 2,957,651 2,467,348 3,096,787<br>Tangible common equity to tangible assets (a)/(b) 6.01 % 6.91 % 10.38 % 9.27 % 10.09 % 8.86 %<br>Tangible common equity per common share<br>Total stockholders' equity $ 179,594 $ 196,954 $ 285,728 $ 330,163 $ 293,608 $ 329,234<br>Less: Goodwill 27,329 27,329 27,329 30,201 27,329 30,201<br>Less: Other intangible assets 27,111 22,473 18,391 25,919 17,401 24,768<br>Tangible common equity (c) 125,154 147,152 240,008 274,043 248,878 274,265<br>Common shares outstanding (d) 13,699 13,775 17,050 17,125 17,106 17,190<br>Tangible common equity per common share (c)/(d) $ 9.14 $ 10.68 $ 14.08 $ 16.00 $ 14.55 $ 15.95<br>Return on average tangible common equity<br>Net income $ 15,001 $ 25,866 $ 29,540 $ 44,675 $ 5,363 $ 15,215<br>Add: Intangible amortization expense (net of tax) 3,655 3,664 3,224 3,129 782 909<br>Remeasurement due to tax reform 4,818 -----<br>Net income, excluding intangible amortization (e) 23,474 29,530 32,764 47,804 6,145 16,124<br>Average total equity 176,779 187,341 231,084 310,208 294,727 334,188<br>Less: Average goodwill 27,329 27,329 27,329 27,439 27,329 30,201<br>Less: Average other intangible assets (net of tax) 19,358 19,522 16,101 13,309 14,128 19,995<br>Average tangible common equity (f) 130,092 140,490 187,654 269,460 253,270 283,992<br>Return on average tangible common equity (e)/(f) % 18.04 % 21.02 % 17.46 % 17.74 % 9.76 % 23.03 %<br>Net interest margin (tax-equivalent)<br>Net interest income $ 67,670 $ 75,224 $ 74,551 $ 83,846 $ 18,837 $ 22,038<br>Tax equivalent adjustment 865 462 347 455 100 143<br>Tax equivalent net interest income (g) 68,535 75,686 74,898 84,301 18,937 22,181<br>Average earning assets (h) 1,833,002 1,970,004 2,052,758 2,618,427 2,271,004 2,880,255<br>Net interest margin (tax equivalent) (g)/(h) 3.74 % 3.84 % 3.65 % 3.22 % 3.35 % 3.12 %<br>Efficiency Ratio<br>Noninterest expense $ 134,920 $ 136,325 $ 142,537 $ 163,799 $ 36,726 $ 43,042<br>Less: Intangible amortization expense 5,623 4,638 4,081 3,961 990 1,151<br>Adjusted noninterest expense (i) 129,297 131,687 138,456 159,838 35,736 41,891<br>Net interest income 67,670 75,224 74,551 83,846 18,837 22,038<br>Noninterest income 103,045 102,749 114,194 149,371 27,189 40,881<br>Tax equivalent adjustment 865 462 347 455 100 143<br>Total tax equivalent revenue (j) 171,580 178,435 189,092 233,672 46,126 63,062<br>Efficiency ratio (i)/(j) 75.36 % 73.80 % 73.22 % 68.40 % 77.47 % 66.43 % |
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