United States

Securities And Exchange Commission
Washington, DC 20549

FORM 8-K

Current Report Pursuant to
Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): July 24, 2024

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. 


Item 2.02.     Results of Operations and Financial Condition.

On July 24, 2024, Alerus Financial Corporation (the “Company”) issued a press release announcing its financial results for the three and six months ended June 30, 2024. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

The information in Item 2.02 of this Current Report on Form 8-K, and the related Exhibit 99.1, 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 Securities Exchange Act of 1934, as amended (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 7.01.     Regulation FD Disclosure.

On July 24, 2024, 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, 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

99.1

Press Release of Alerus Financial Corporation, dated July 24, 2024

99.2

104

Investor Presentation of Alerus Financial Corporation

Cover Page Interactive Data File (embedded within the Inline XBRL 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.

Date: July 24, 2024

Alerus Financial Corporation

By:

/s/ Katie A. Lorenson

Name:

Katie A. Lorenson

Title:

President and Chief Executive Officer


Exhibit 99.1

Graphic

FOR RELEASE (07.24.2024)

Alan A. Villalon, Chief Financial Officer

952.417.3733 (Office)

ALERUS FINANCIAL CORPORATION REPORTS

SECOND QUARTER 2024 NET INCOME OF $6.2 MILLION

MINNEAPOLIS, MN (July 24, 2024) – Alerus Financial Corporation (Nasdaq: ALRS), or the Company, reported net income of $6.2 million for the second quarter of 2024, or $0.31 per diluted common share, compared to net income of $6.4 million, or $0.32 per diluted common share, for the first quarter of 2024, and net income of $9.1 million, or $0.45 per diluted common share, for the second quarter of 2023.

CEO Comments

President and Chief Executive Officer Katie Lorenson said, “We continued to see improvement in our underlying core business during the second quarter of 2024. Overall revenues grew 8% sequentially from the prior quarter as both our spread based and fee based revenues grew at a similar rate. A continued rebound in our net interest margin coupled with strong balance sheet growth in loans and deposits, including noninterest bearing deposits, propelled our spread income higher. Fee based revenues benefitted from an improvement in both asset based and non-market based fees from our wealth and retirement businesses. In addition, operating leverage improved with continued prudent expense management, which drove overall expenses down slightly during the quarter. These strong core underlying trends led to sequential improvement of over 48% in pre-provision net revenue from the prior quarter. Provision expense for the quarter was $4.5 million which was driven by loan growth and moving one previously identified commercial real estate loan to nonperforming. Overall classified asset levels improved during the quarter and credit quality is strong relative to historical standards. Reserve and capital levels remain robust with an allowance of 1.31% to total loans, CET1 ratio of 11.67%, while tangible book value per common share grew more than 8% over the past year.

I want to thank all the Alerus team members for their efforts in driving continuous improvement, their expertise and commitment to our clients, communities and shareholders to make Alerus better every day.”

Second Quarter Highlights

Total deposits were $3.3 billion as of June 30, 2024, an increase of $203.0 million, or 6.6%, from December 31, 2023
Total loans were $2.9 billion as of June 30, 2024, an increase of $156.2 million, or 5.7%, from December 31, 2023
The loan to deposit ratio as of June 30, 2024 was 88.4%, compared to 89.1% as of December 31, 2023; brokered deposits remained at $0
Net interest margin (on a tax equivalent basis) was 2.39% in the second quarter of 2024, compared to 2.30% in the first quarter of 2024. Adjusted net interest margin (on a tax-equivalent basis) (non-GAAP) increased 13 basis points from 2.44% in the first quarter of 2024 to 2.57% in the second quarter of 2024
Net interest income was $24.0 million in the second quarter of 2024, an increase of 8.0% from $22.2 million in the first quarter of 2024
Noninterest income, which represented 53.3% of total revenues, was $27.4 million in the second quarter of 2024, an increase of 8.1% from $25.3 million in the first quarter of 2024
Noninterest expense was $38.8 million in the second quarter of 2024, a decrease of 0.7%, from $39.0 million in the first quarter of 2024
Total assets under administration/management at June 30, 2024 were $43.6 billion, a 1.9% increase from March 31, 2024
Increased quarterly dividend by 5.26% over the first quarter of 2024 to $0.20 per share
Allowance for credit losses to total loans remained stable at 1.31% as of June 30, 2024 and March 31, 2024
Tangible book value per common share (non-GAAP) was $15.77 as of June 30, 2024, a 0.9% increase from March 31, 2024
Common equity tier 1 capital to risk weighted assets as of June 30, 2024 was 11.67% and continues to be well above the minimum threshold to be “well capitalized” of 6.50%

Continued to hold cash of $355.0 million from the Bank Term Funding Program (“BTFP”), earning 52 basis points of risk free return resulting in $0.5 million in net interest income for the second quarter of 2024

Selected Financial Data (unaudited)

As of and for the

Three months ended

Six months ended

June 30, 

March 31, 

June 30, 

June 30, 

June 30, 

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

    

2024

    

2024

    

2023

    

2024

    

2023

    

Performance Ratios

 

  

 

  

 

  

 

  

 

  

Return on average total assets

 

0.58

%  

 

0.63

%  

 

0.96

%  

 

0.60

%  

 

0.92

%  

Return on average common equity

 

6.76

%  

 

7.04

%  

 

10.14

%  

 

6.90

%  

 

9.66

%  

Return on average tangible common equity (1)

 

9.40

%  

 

9.78

%  

 

13.71

%  

 

9.58

%  

 

13.15

%  

Noninterest income as a % of revenue

 

53.28

%  

 

53.26

%  

 

53.69

%  

 

53.27

%  

 

52.65

%  

Net interest margin (tax-equivalent)

 

2.39

%  

 

2.30

%  

 

2.52

%  

 

2.35

%  

 

2.61

%  

Adjusted net interest margin (tax-equivalent) (1)

2.57

%  

2.44

%  

2.52

%  

2.50

%  

2.61

%  

Efficiency ratio (1)

 

72.50

%  

 

78.88

%  

 

72.79

%  

 

75.56

%  

 

73.67

%  

Net charge-offs/(recoveries) to average loans

0.36

%  

 

0.01

%  

 

(0.07)

%  

 

0.19

%  

 

(0.02)

%  

Dividend payout ratio

 

64.52

%  

 

59.38

%  

 

42.22

%  

61.90

%  

43.53

%  

Per Common Share

 

  

 

  

 

  

 

  

 

  

Earnings per common share - basic

$

0.31

$

0.32

$

0.45

$

0.64

$

0.86

Earnings per common share - diluted

$

0.31

$

0.32

$

0.45

$

0.63

$

0.85

Dividends declared per common share

$

0.20

$

0.19

$

0.19

$

0.39

$

0.37

Book value per common share

$

18.87

$

18.79

$

17.96

Tangible book value per common share (1)

$

15.77

$

15.63

$

14.60

Average common shares outstanding - basic

 

19,777

 

19,739

 

20,033

 

19,758

 

20,030

Average common shares outstanding - diluted

 

20,050

 

19,986

 

20,241

 

20,018

 

20,243

Other Data

 

  

 

  

 

  

Retirement and benefit services assets under administration/management

$

39,389,533

$

38,488,523

$

35,052,652

Wealth management assets under administration/management

$

4,172,290

$

4,242,408

$

3,857,710

 

Mortgage originations

$

109,254

$

54,101

$

111,261

$

163,355

$

188,989


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

Results of Operations

Net Interest Income

Net interest income for the second quarter of 2024 was $24.0 million, a $1.8 million, or 8.0%, increase from the first quarter of 2024. The increase was due to interest income on increased loan balances and higher average cash balances related to the Bank Term Funding Program (“BTFP”) arbitrage trade. The increase was partially offset by an increase in interest expense on deposits, driven by higher average deposit and BTFP borrowing balances and higher deposit rates.

Net interest income increased $1.8 million, or 7.9%, from $22.2 million for the second quarter of 2023. Interest income increased $12.7 million, or 31.4%, from the second quarter of 2023, primarily driven by higher yields on new loans and strong organic loan growth, in addition to interest income on higher cash balances due to the BTFP arbitrage trade. The increase in interest income was partially offset by a $10.9 million, or 60.3%, increase in interest expense, due to both an increase in rates paid on interest-bearing deposits and higher deposit and short-term borrowing balances.

Net interest margin (on a tax-equivalent basis) was 2.39% for the second quarter of 2024, a 9 basis point increase from 2.30% for the first quarter of 2024, and a 13 basis point decrease from 2.52% for the second quarter of 2023. The increase in net interest margin (on a tax-equivalent basis) was mainly attributable to higher yields on loans and strong loan growth, partially offset by the higher cost of funds from continued growth in average interest-bearing deposit balances. Adjusted net interest margin (on a tax-equivalent basis) (non-GAAP), which excludes BTFP borrowings, was 2.57% for the second quarter of 2024, a 13 basis point increase from 2.44% for the first quarter of 2024, and a 5 basis point increase from 2.52% for the second quarter of 2023.

Noninterest Income

Noninterest income for the second quarter of 2024 was $27.4 million, a $2.0 million increase from the first quarter of 2024. The quarter over quarter increase was primarily driven by improvement across all fee-based businesses. Mortgage banking saw a $0.9

2


million increase in revenue with mortgage originations of $109.3 million in the second quarter of 2024, compared to originations of $54.1 million in the first quarter of 2024. Retirement and benefit services revenue increased $0.4 million for the second quarter of 2024, a 2.7% increase from first quarter of 2024 results, primarily due to the growth in asset-based revenue. Assets under administration/management in retirement and benefit services increased 2.3% from March 31, 2024, due to improved equity and bond markets. Wealth management revenues increased $0.2 million during the second quarter of 2024, a 4.0% increase from the first quarter of 2024, primarily due to fee schedule increases. Additionally, other noninterest income increased $0.4 million during the second quarter of 2024, a 29.0% increase from the first quarter of 2024, primarily due to client swap fees.

Noninterest income for the second quarter of 2024 was $27.4 million, an increase of $1.6 million, or 6.2%, from the second quarter of 2023. Wealth management revenues increased $0.9 million, or 16.7%, in the second quarter of 2024, as assets under administration/management increased 8.2% during that same period. Other noninterest income increased $0.7 million, or 57.2% in the second quarter of 2024 compared to the second quarter of 2023, primarily due to client swap fees. Partially offsetting this increase, mortgage revenue decreased $0.4 million, or 12.1%, from $2.9 million in the second quarter of 2023, primarily driven by timing differences related to the mortgage pipeline hedging.

Noninterest Expense

Noninterest expense for the second quarter of 2024 was $38.8 million, a $0.3 million, or 0.7%, decrease from the first quarter of 2024. Employee taxes and benefits expense decreased $1.1 million for the second quarter of 2024, a 17.0% decrease from the first quarter of 2024, primarily due to seasonality. Business services, software and technology expense decreased $0.7 million, or 14.0%, from the first quarter of 2024, primarily driven by reduced core processing and data processing expenses. The decrease in noninterest expense was partially offset by an increase in compensation and professional fees and assessments. Compensation expenses increased $0.9 million, or 4.8%, from the first quarter of 2024, primarily driven by an increase in mortgage incentive compensation. Professional fees and assessments increased $0.4 million, or 19.1%, from the first quarter of 2024, primarily driven by increased merger-related expenses of $0.5 million in connection with the pending acquisition of HMN Financial, Inc.

Noninterest expense for the second quarter of 2024 increased $2.4 million, or 6.5%, from $36.4 million in the second quarter of 2023. The increase was primarily driven by compensation expenses and professional fees and assessments. Compensation expenses increased primarily due to increased labor costs. Professional fees and assessments increased primarily due to increased merger-related expenses of $0.6 million in connection with the pending acquisition of HMN Financial, Inc. and an increase in Federal Deposit Insurance Corporation (“FDIC”) assessments.

Financial Condition

Total assets were $4.4 billion as of June 30, 2024, an increase of $450.9 million, or 11.5%, from December 31, 2023. The increase was primarily due to a $308.2 million increase in cash and cash equivalents and a $156.2 million increase in loans, partially offset by a decrease of $37.5 million in investment securities. The increase in cash and cash equivalents was primarily driven by the proceeds from BTFP borrowings.

Loans

Total loans were $2.9 billion as of June 30, 2024, an increase of $156.2 million, or 5.7%, from December 31, 2023. The increase was primarily driven by a $78.4 million increase in non-owner occupied commercial real estate (“CRE”) loans, a $37.7 million increase in construction, land and development CRE loans, and a $29.6 million increase in commercial and industrial loans, partially offset by $11.6 million and $6.4 million decreases in residential real estate first lien and construction loans, respectively.

3


The following table presents the composition of our loan portfolio as of the dates indicated:

June 30, 

March 31, 

December 31, 

September 30, 

June 30, 

(dollars in thousands)

    

2024

2024

2023

2023

2023

Commercial

 

  

 

  

 

  

 

  

 

  

Commercial and industrial

$

591,779

$

575,259

$

562,180

$

547,644

$

521,427

Commercial real estate

Construction, land and development

 

161,751

 

125,966

 

124,034

 

97,742

 

78,428

Multifamily

242,041

260,609

245,103

214,148

210,902

Non-owner occupied

647,776

565,979

569,354

504,827

500,334

Owner occupied

283,356

285,211

271,623

264,458

251,981

Total commercial real estate

1,334,924

1,237,765

1,210,114

1,081,175

1,041,645

Agricultural

 

Land

41,410

41,149

40,832

41,581

40,603

Production

40,549

36,436

36,141

34,743

30,435

Total agricultural

81,959

77,585

76,973

76,324

71,038

Total commercial

 

2,008,662

 

1,890,609

 

1,849,267

 

1,705,143

 

1,634,110

Consumer

 

  

 

  

 

  

 

  

 

  

Residential real estate

First lien

 

686,286

 

703,726

 

697,900

 

680,634

 

672,441

Construction

22,573

18,425

28,979

37,159

35,189

HELOC

126,211

120,501

118,315

116,296

121,474

Junior lien

 

36,323

 

36,381

 

35,819

 

36,381

 

35,757

Total residential real estate

871,393

879,033

881,013

870,470

864,861

Other consumer

 

35,737

 

29,833

 

29,303

 

30,817

 

34,552

Total consumer

 

907,130

 

908,866

 

910,316

 

901,287

 

899,413

Total loans

$

2,915,792

$

2,799,475

$

2,759,583

$

2,606,430

$

2,533,523

Deposits

Total deposits were $3.3 billion as of June 30, 2024, an increase of $203.0 million, or 6.6%, from December 31, 2023. Interest-bearing deposits increased $229.6 million, while noninterest-bearing deposits decreased $26.7 million, from December 31, 2023. The increase in total deposits was due to both expanded and new commercial deposit relationships, along with time deposit and synergistic deposit growth. Synergistic deposits were $874.8 million as of June 30, 2024, an increase of $23.2 million, or 2.7%, from December 31, 2023. The Company continued to have $0 of brokered deposits as of June 30, 2024.

The following table presents the composition of the Company’s deposit portfolio as of the dates indicated:

June 30, 

March 31, 

December 31, 

September 30, 

June 30, 

(dollars in thousands)

    

2024

    

2024

    

2023

    

2023

    

2023

Noninterest-bearing demand

$

701,428

$

692,500

$

728,082

$

717,990

$

715,534

Interest-bearing

 

  

 

  

 

  

 

  

 

  

Interest-bearing demand

 

1,003,585

 

938,751

 

840,711

 

759,812

 

753,194

Savings accounts

 

79,747

 

82,727

 

82,485

 

88,341

 

93,557

Money market savings

 

1,022,470

 

1,114,262

 

1,032,771

 

959,106

 

986,403

Time deposits

 

491,345

 

456,729

 

411,562

 

346,935

 

304,167

Total interest-bearing

 

2,597,147

 

2,592,469

 

2,367,529

 

2,154,194

 

2,137,321

Total deposits

$

3,298,575

$

3,284,969

$

3,095,611

$

2,872,184

$

2,852,855

Asset Quality

Total nonperforming assets were $27.6 million as of June 30, 2024, an increase of $18.9 million from December 31, 2023. The increase was driven by one previously identified construction, land and development loan of $21.5 million moving to nonaccrual status.

As of June 30, 2024, the allowance for credit losses on loans was $38.3 million, or 1.31% of total loans, compared to $35.8 million, or 1.30% of total loans, as of December 31, 2023.

4


The following table presents selected asset quality data as of and for the periods indicated:

As of and for the three months ended

June 30, 

March 31, 

December 31, 

September 30, 

June 30, 

(dollars in thousands)

    

2024

    

2024

    

2023

    

2023

    

2023

    

Nonaccrual loans

$

27,618

$

7,345

$

8,596

$

9,007

$

2,233

Accruing loans 90+ days past due

 

 

 

139

 

347

Total nonperforming loans

 

27,618

 

7,345

 

8,735

 

9,007

 

2,580

OREO and repossessed assets

 

 

3

 

32

 

3

 

Total nonperforming assets

$

27,618

$

7,348

$

8,767

$

9,010

$

2,580

Net charge-offs/(recoveries)

2,522

58

(238)

(594)

(403)

Net charge-offs/(recoveries) to average loans

0.36

%  

0.01

%  

(0.04)

%  

(0.09)

%  

(0.07)

%  

Nonperforming loans to total loans

0.95

%  

0.26

%  

0.32

%  

0.35

%  

0.10

%  

Nonperforming assets to total assets

0.63

%  

0.17

%  

0.22

%  

0.23

%  

0.07

%  

Allowance for credit losses on loans to total loans

1.31

%  

1.31

%  

1.30

%  

1.39

%  

1.41

%  

Allowance for credit losses on loans to nonperforming loans

139

%  

498

%  

410

%  

403

%  

1,384

%  

For the second quarter of 2024, the Company had net charge-offs of $2.5 million, compared to net charge-offs of $58 thousand for the first quarter of 2024 and net recoveries of $403 thousand for the second quarter of 2023. The increase in net charge-offs was driven by a $2.6 million charge-off of one commercial and industrial loan that had an individual reserve of $2.3 million in the first quarter of 2024.

The Company recorded a provision for credit losses of $4.5 million for the second quarter of 2024, compared to no provision for each of the first quarter of 2024 and the second quarter of 2023. The increase in the provision for credit losses was primarily driven by loan growth, as well as an increased reserve related to the previously identified $21.5 million construction, land and development loan which moved to nonaccrual status during the second quarter of 2024.

The unearned fair value adjustments on the acquired Metro Phoenix Bank loan portfolio were $4.1 million as of June 30, 2024, $5.2 million as of December 31, 2023, and $6.2 million as of June 30, 2023.

Capital

Total stockholders’ equity was $373.2 million as of June 30, 2024, an increase of $4.1 million from December 31, 2023. This change was primarily driven by an increase in retained earnings of $4.9 million. Tangible book value per common share (non-GAAP) increased to $15.77 as of June 30, 2024, from $15.46 as of December 31, 2023. Tangible common equity to tangible assets (non-GAAP) decreased to 7.26% as of June 30, 2024, from 7.94% as of December 31, 2023. Common equity tier 1 capital to risk weighted assets decreased to 11.67% as of June 30, 2024, from 11.82% as of December 31, 2023.

The following table presents our capital ratios as of the dates indicated:

    

June 30, 

    

December 31, 

    

June 30, 

    

2024

    

2023

    

2023

Capital Ratios(1)

Alerus Financial Corporation Consolidated

Common equity tier 1 capital to risk weighted assets

11.67

%  

11.82

%  

13.30

%  

Tier 1 capital to risk weighted assets

11.94

%  

12.10

%  

13.60

%  

Total capital to risk weighted assets

14.70

%  

14.76

%  

16.49

%  

Tier 1 capital to average assets

9.60

%  

10.57

%  

11.15

%  

Tangible common equity / tangible assets (2)

 

7.26

%  

 

7.94

%  

 

7.72

%  

Alerus Financial, N.A.

Common equity tier 1 capital to risk weighted assets

11.23

%  

11.40

%  

12.93

%  

Tier 1 capital to risk weighted assets

11.23

%  

11.40

%  

12.93

%  

Total capital to risk weighted assets

12.48

%  

12.51

%  

14.14

%  

Tier 1 capital to average assets

9.05

%  

9.92

%  

10.59

%  


(1)Capital ratios for the current quarter are to be considered preliminary until the Call Report for Alerus Financial, N.A. is filed.
(2)Represents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.”

5


Conference Call

The Company will host a conference call at 11:00 a.m. Central Time on Thursday, July 25, 2024, to discuss its financial results. Attendees are encouraged to register ahead of time for the call at investors.alerus.com. The call can also be accessed via telephone at 1 (833) 470-1428, using access code 287487. A recording of the call and transcript will be available on the Company’s investor relations website at investors.alerus.com following the call.

About Alerus Financial Corporation

Alerus Financial Corporation (Nasdaq: ALRS) is a commercial wealth bank and national retirement services provider with corporate offices in Grand Forks, North Dakota, and the Minneapolis-St. Paul, Minnesota metropolitan area. Through its subsidiary, Alerus Financial, National Association, Alerus provides diversified and comprehensive financial solutions to business and consumer clients, including banking, wealth services, and retirement and benefit plans and services. Alerus provides clients with a primary point of contact to help fully understand the unique needs and delivery channel preferences of each client. Clients are provided with competitive products, valuable insight, and sound advice supported by digital solutions designed to meet the clients’ needs. Alerus has banking and wealth offices in Grand Forks and Fargo, North Dakota, the Minneapolis-St. Paul, Minnesota metropolitan area, and Phoenix and Scottsdale, Arizona. Alerus Retirement and Benefit serves advisors, brokers, employers, and plan participants across the United States.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized by U.S. Generally Accepted Accounting Principles, or GAAP. These non-GAAP financial measures include the ratio of tangible common equity to tangible assets, adjusted tangible common equity to tangible assets, tangible book value per common share, return on average tangible common equity, efficiency ratio, pre-provision net revenue, net interest margin (tax-equivalent), and adjusted net interest margin (tax-equivalent). Management uses these non-GAAP financial measures 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. Reconciliations of non-GAAP disclosures used in this press release to the comparable GAAP measures are provided in the accompanying tables. 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.

These non-GAAP financial measures should not be considered in isolation or as a substitute for total stockholders’ equity, total assets, book value per share, return on average assets, return on average equity, or any other measure calculated in accordance with GAAP. Moreover, the manner in which the Company calculates these non-GAAP financial measures may differ from that of other companies reporting measures with similar names.

Forward-Looking Statements

This press release 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 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 our 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.

6


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 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, 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 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 our actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, the following: interest rate risk, including the effects of sustained high interest rates; our ability to successfully manage credit risk and maintain an adequate level of allowance for credit losses; new or revised accounting standards; business and economic conditions generally and in the financial services industry, nationally and within our market areas, including high rates of inflation and possible recession; the effects of recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short-period of time that resulted in recent bank failures; the 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 acquisition growth strategies, including the integration of Metro Phoenix Bank which the Company acquired in 2022 and the pending acquisition of HMN Financial, Inc.; 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 continue to originate a sufficient volume of residential mortgages; the occurrence of fraudulent activity, breaches or failures of our or our third party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools; interruptions involving our information technology and telecommunications systems or third-party servicers; potential losses incurred in connection with mortgage loan repurchases; the 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 financial services industry from non-banks such as credit unions and Fintech companies, including digital asset service providers; our ability to successfully manage liquidity risk, including our 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, who have balances above current FDIC insurance limits; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal proceedings and regulatory actions against us or to which the Company may become subject; potential impairment to the goodwill the Company recorded in connection with our past acquisitions, including the acquisition of Metro Phoenix Bank and the pending acquisition of HMN Financial, Inc.; the extensive regulatory framework that applies to us; the impact of recent and future legislative and regulatory changes, including in response to recent bank failures; fluctuations in the values of the securities held in our 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 our customers and their businesses; severe weather, natural disasters, widespread disease or pandemics; acts of war or terrorism, including the ongoing Israeli-Palestinian conflict and the Russian invasion of Ukraine, or other adverse external events; any material weaknesses in our internal control over financial reporting; changes to U.S. or state tax laws, regulations and guidance; potential changes in federal policy and at regulatory agencies as a result of the upcoming 2024 presidential election; talent and labor shortages and employee turnover; our success at 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 Commission.

Any forward-looking statement made by us in this press release is based only on information currently available to us 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.

Additional Information and Where to Find It

The Company filed a Registration Statement on Form S-4 (Registration Statement No. 333-280815) with the SEC on July 15, 2024, in connection with a proposed transaction between the Company and HMN Financial, Inc. (“HMNF”). The registration statement includes a joint proxy statement of the Company and HMNF that also constitutes a prospectus of the Company, which will be sent to the stockholders of the Company and HMNF after the SEC declares the registration statement effective.

Before making any voting decision, the stockholders of the Company and HMNF are advised to read the joint proxy statement/prospectus, because it contains important information about the Company, HMNF and the proposed transaction.

This document and other documents relating to the proposed transaction filed by the Company can be obtained free of charge from the SEC’s website at www.sec.gov. These documents also can be obtained free of charge by accessing the Company’s website at www.alerus.com under the link “Investors Relations” and then under “SEC Filings” and HMNF’s website at www.justcallhome.com/HMNFinancial under “SEC Filings.” Alternatively, these documents can be obtained free of charge from the Company upon written request to Alerus Financial Corporation, Corporate Secretary, 401 Demers Avenue, Grand Forks, North

7


Dakota 58201 or by calling (701) 795-3200, or from HMNF upon written request to HMN Financial, Inc., Corporate Secretary, 1016 Civic Center Drive NW, Rochester, Minnesota 55901 or by calling (507) 535-1200. The contents of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the joint proxy statement/prospectus.

Participants in the Solicitation

This press release does not constitute a solicitation of proxy, an offer to purchase or a solicitation of an offer to sell any securities. The Company, HMNF, and certain of their directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the stockholders of the Company and HMNF in connection with the proposed transaction under SEC rules. Information about the directors and executive officers of the Company and HMNF is included in the joint proxy statement/prospectus for the proposed transaction filed with the SEC. This document may be obtained free of charge in the manner described above under “Additional Information and Where to Find It.”

8


Alerus Financial Corporation and Subsidiaries

Consolidated Balance Sheets

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

    

June 30, 

    

December 31, 

    

2024

    

2023

Assets

 

(Unaudited)

 

Cash and cash equivalents

$

438,141

$

129,893

Investment securities

 

  

 

  

Trading, at fair value

 

2,868

 

Available-for-sale, at fair value

 

459,345

 

486,736

Held-to-maturity, at amortized cost (with an allowance for credit losses on investments of $151 and $207, respectively)

 

286,532

 

299,515

Loans held for sale

 

38,158

 

11,497

Loans

 

2,915,792

 

2,759,583

Allowance for credit losses on loans

 

(38,332)

 

(35,843)

Net loans

 

2,877,460

 

2,723,740

Land, premises and equipment, net

 

21,167

 

17,940

Operating lease right-of-use assets

 

4,871

 

5,436

Accrued interest receivable

 

16,877

 

15,700

Bank-owned life insurance

 

35,508

 

33,236

Goodwill

 

46,783

 

46,783

Other intangible assets

 

14,510

 

17,158

Servicing rights

 

1,963

 

2,052

Deferred income taxes, net

 

35,732

 

34,595

Other assets

 

78,708

 

83,432

Total assets

$

4,358,623

$

3,907,713

Liabilities and Stockholders’ Equity

 

  

 

  

Deposits

 

  

 

  

Noninterest-bearing

$

701,428

$

728,082

Interest-bearing

 

2,597,147

 

2,367,529

Total deposits

 

3,298,575

 

3,095,611

Short-term borrowings

 

555,000

 

314,170

Long-term debt

 

59,013

 

58,956

Operating lease liabilities

 

5,197

 

5,751

Accrued expenses and other liabilities

 

67,612

 

64,098

Total liabilities

 

3,985,397

 

3,538,586

Stockholders’ equity

 

  

 

  

Preferred stock, $1 par value, 2,000,000 shares authorized: 0 issued and outstanding

Common stock, $1 par value, 30,000,000 shares authorized: 19,777,796 and 19,734,077 issued and outstanding

 

19,778

 

19,734

Additional paid-in capital

 

150,857

 

150,343

Retained earnings

 

277,620

 

272,705

Accumulated other comprehensive loss

 

(75,029)

 

(73,655)

Total stockholders’ equity

 

373,226

 

369,127

Total liabilities and stockholders’ equity

$

4,358,623

$

3,907,713

9


Alerus Financial Corporation and Subsidiaries

Consolidated Statements of Income

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

Three months ended

Six months ended

June 30, 

March 31, 

June 30, 

June 30, 

June 30, 

    

2024

    

2024

    

2023

    

2024

    

2023

Interest Income

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Loans, including fees

$

41,663

$

39,294

$

33,267

$

80,958

$

64,200

Investment securities

 

  

 

  

 

  

 

  

 

  

Taxable

 

4,845

 

4,568

 

6,125

 

9,413

 

12,076

Exempt from federal income taxes

 

170

 

174

 

186

 

343

 

376

Other

 

6,344

 

5,002

 

762

 

11,346

 

1,497

Total interest income

 

53,022

 

49,038

 

40,340

 

102,060

 

78,149

Interest Expense

 

  

 

  

 

  

 

  

 

  

Deposits

 

21,284

 

20,152

 

12,678

 

41,436

 

21,782

Short-term borrowings

 

7,053

 

5,989

 

4,763

 

13,042

 

9,156

Long-term debt

 

684

 

678

 

665

 

1,362

 

1,319

Total interest expense

 

29,021

 

26,819

 

18,106

 

55,840

 

32,257

Net interest income

 

24,001

 

22,219

 

22,234

 

46,220

 

45,892

Provision for credit losses

 

4,489

 

 

 

4,489

 

550

Net interest income after provision for credit losses

 

19,512

 

22,219

 

22,234

 

41,731

 

45,342

Noninterest Income

 

  

 

  

 

  

 

  

 

  

Retirement and benefit services

 

16,078

 

15,655

 

15,890

 

31,733

 

31,372

Wealth management

 

6,360

 

6,118

 

5,449

 

12,477

 

10,644

Mortgage banking

 

2,554

 

1,670

 

2,905

 

4,224

 

4,622

Service charges on deposit accounts

 

456

 

389

 

311

 

845

 

612

Other

 

1,923

 

1,491

 

1,223

 

3,415

 

3,781

Total noninterest income

 

27,371

 

25,323

 

25,778

 

52,694

 

51,031

Noninterest Expense

 

  

 

  

 

  

 

  

 

  

Compensation

 

20,265

 

19,332

 

18,847

 

39,597

 

38,005

Employee taxes and benefits

 

5,134

 

6,188

 

4,724

 

11,322

 

10,577

Occupancy and equipment expense

 

1,815

 

1,906

 

1,837

 

3,722

 

3,736

Business services, software and technology expense

 

4,599

 

5,345

 

5,269

 

9,944

 

10,593

Intangible amortization expense

 

1,324

 

1,324

 

1,324

 

2,648

 

2,648

Professional fees and assessments

 

2,373

 

1,993

 

1,530

 

4,366

 

2,682

Marketing and business development

 

651

 

785

 

665

 

1,436

 

1,389

Supplies and postage

 

370

 

528

 

406

 

898

 

866

Travel

 

332

 

292

 

306

 

624

 

554

Mortgage and lending expenses

 

467

 

441

 

215

 

908

 

712

Other

 

1,422

 

885

 

1,250

 

2,306

 

2,480

Total noninterest expense

 

38,752

 

39,019

 

36,373

 

77,771

 

74,242

Income before income tax expense

 

8,131

 

8,523

 

11,639

 

16,654

 

22,131

Income tax expense

 

1,923

 

2,091

 

2,535

 

4,014

 

4,841

Net income

$

6,208

$

6,432

$

9,104

$

12,640

$

17,290

Per Common Share Data

Earnings per common share

$

0.31

$

0.32

$

0.45

$

0.64

$

0.86

Diluted earnings per common share

$

0.31

$

0.32

$

0.45

$

0.63

$

0.85

Dividends declared per common share

$

0.20

$

0.19

$

0.19

$

0.39

$

0.37

Average common shares outstanding

 

19,777

 

19,739

 

20,033

 

19,758

 

20,030

Diluted average common shares outstanding

 

20,050

 

19,986

 

20,241

 

20,018

 

20,243

10


Alerus Financial Corporation and Subsidiaries

Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures (unaudited)

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

    

June 30, 

March 31, 

December 31, 

June 30, 

    

2024

    

2024

    

2023

    

2023

Tangible Common Equity to Tangible Assets

 

Total common stockholders’ equity

$

373,226

$

371,635

$

369,127

$

357,685

Less: Goodwill

 

46,783

 

46,783

 

46,783

 

47,087

Less: Other intangible assets

 

14,510

 

15,834

 

17,158

 

19,806

Tangible common equity (a)

 

311,933

 

309,018

 

305,186

 

290,792

Total assets

 

4,358,623

 

4,338,094

 

3,907,713

 

3,832,978

Less: Goodwill

 

46,783

 

46,783

 

46,783

 

47,087

Less: Other intangible assets

 

14,510

 

15,834

 

17,158

 

19,806

Tangible assets (b)

 

4,297,330

 

4,275,477

 

3,843,772

 

3,766,085

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

 

7.26

%  

 

7.23

%  

 

7.94

%  

 

7.72

%  

Adjusted Tangible Common Equity to Tangible Assets

Tangible assets (b)

$

4,297,330

$

4,275,477

$

3,843,772

$

3,766,085

Less: Cash proceeds from BTFP

355,000

355,000

Adjusted tangible assets (c)

3,942,330

3,920,477

3,843,772

3,766,085

Adjusted tangible common equity to tangible assets (a)/(c)

 

7.91

%  

 

7.88

%  

 

7.94

%  

 

7.72

%  

Tangible Book Value Per Common Share

Total common stockholders’ equity

$

373,226

$

371,635

$

369,127

$

357,685

Less: Goodwill

 

46,783

 

46,783

 

46,783

47,087

Less: Other intangible assets

 

14,510

 

15,834

 

17,158

 

19,806

Tangible common equity (d)

 

311,933

 

309,018

 

305,186

 

290,792

Total common shares issued and outstanding (e)

 

19,778

 

19,777

 

19,734

 

19,915

Tangible book value per common share (d)/(e)

$

15.77

$

15.63

$

15.46

$

14.60

Three months ended

Six months ended

June 30, 

March 31, 

June 30, 

June 30, 

June 30, 

2024

    

2024

    

2023

2024

    

2023

Return on Average Tangible Common Equity

Net income

$

6,208

$

6,432

$

9,104

$

12,640

$

17,290

Add: Intangible amortization expense (net of tax)

 

1,046

 

1,046

 

1,046

 

2,092

 

2,092

Net income, excluding intangible amortization (f)

 

7,254

 

7,478

 

10,150

 

14,732

 

19,382

Average total equity

 

369,216

 

367,249

 

360,216

 

368,501

 

361,032

Less: Average goodwill

 

46,783

 

46,783

 

47,087

 

46,783

 

47,087

Less: Average other intangible assets (net of tax)

 

11,969

 

13,018

 

16,153

 

12,494

 

16,678

Average tangible common equity (g)

 

310,464

 

307,448

 

296,976

 

309,224

 

297,267

Return on average tangible common equity (f)/(g)

 

9.40

%  

 

9.78

%  

 

13.71

%  

 

9.58

%  

 

13.15

%  

Efficiency Ratio

 

  

 

  

 

  

 

  

 

  

Noninterest expense

$

38,752

$

39,019

$

36,373

$

77,771

$

74,242

Less: Intangible amortization expense

 

1,324

 

1,324

 

1,324

 

2,648

 

2,648

Adjusted noninterest expense (h)

 

37,428

 

37,695

 

35,049

 

75,123

 

71,594

Net interest income

 

24,001

 

22,219

 

22,234

 

46,220

 

45,892

Noninterest income

 

27,371

 

25,323

 

25,778

 

52,694

 

51,031

Tax-equivalent adjustment

 

255

 

247

 

141

 

502

 

264

Total tax-equivalent revenue (i)

 

51,627

 

47,789

 

48,153

 

99,416

 

97,187

Efficiency ratio (h)/(i)

 

72.50

%  

 

78.88

%  

 

72.79

%  

 

75.56

%  

 

73.67

%  

11


Alerus Financial Corporation and Subsidiaries

Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures (unaudited)

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

Three months ended

Six months ended

June 30, 

March 31, 

June 30, 

June 30, 

June 30, 

2024

    

2024

    

2023

2024

    

2023

Pre-Provision Net Revenue

Income (loss) before taxes

$

8,131

$

8,523

$

11,639

$

16,654

$

22,131

Add: Provision for credit losses

4,489

4,489

550

Pre-provision net revenue

$

12,620

$

8,523

$

11,639

$

21,143

$

22,681

Adjusted Net Interest Margin (Tax-Equivalent)

Net interest income

$

24,001

$

22,219

$

22,234

$

46,220

$

45,892

Less: BTFP cash interest income

4,766

3,615

8,381

Add: BTFP interest expense

4,307

3,266

7,573

Net interest income excluding BTFP impact

23,542

21,870

22,234

45,412

45,892

Add: Tax equivalent adjustment for loans and securities

255

247

141

502

264

Adjusted net interest income (j)

$

23,797

$

22,117

$

22,375

$

45,914

$

46,156

Interest earning assets

4,075,003

3,921,530

3,564,883

3,998,265

3,566,136

Less: Average cash proceeds balance from BTFP

355,000

269,176

312,088

Adjusted interest earning assets (k)

$

3,720,003

$

3,652,354

$

3,564,883

$

3,686,177

$

3,566,136

Adjusted net interest margin (tax-equivalent) (j)/(k)

2.57

%

2.44

%

2.52

%

2.50

%

2.61

%

12


Alerus Financial Corporation and Subsidiaries

Analysis of Average Balances, Yields, and Rates (unaudited)

(dollars in thousands)

Three months ended

Six months ended

June 30, 2024

March 31, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Average

Average

Average

Average

Average

Average

Yield/

Average

Yield/

Average

Yield/

Average

Yield/

Average

Yield/

    

Balance

    

Rate

    

Balance

    

Rate

    

Balance

    

Rate

    

Balance

    

Rate

    

Balance

    

Rate

Interest Earning Assets

Interest-bearing deposits with banks

$

448,245

5.38

%  

$

352,038

5.33

%

$

36,418

 

4.00

%

$

400,141

5.36

%

$

39,167

3.59

%

Investment securities (1)

 

756,413

2.69

 

775,305

2.48

 

1,007,792

 

2.53

 

765,859

2.59

 

1,020,967

2.48

Loans held for sale

 

16,473

8.91

 

9,014

5.67

 

14,536

 

5.22

 

12,743

7.76

 

12,452

5.12

Loans

 

  

  

 

  

  

 

  

 

  

 

  

  

 

  

  

Commercial and industrial

 

578,544

7.39

 

564,125

6.96

 

516,943

 

6.92

 

571,334

7.18

 

524,500

6.50

CRE − Construction, land and development

 

126,744

8.01

 

127,587

8.04

 

87,905

 

7.43

 

127,165

8.02

 

95,460

6.96

CRE − Multifamily

243,076

5.52

250,513

5.56

191,100

5.15

246,794

5.54

151,740

5.14

CRE − Non-owner occupied

 

617,338

5.90

 

564,553

5.75

 

473,728

 

5.19

 

590,946

5.83

 

492,174

5.05

CRE − Owner occupied

 

283,754

5.47

 

279,165

5.36

 

252,320

 

4.90

 

281,459

5.41

 

251,669

4.94

Agricultural − Land

40,932

4.72

40,310

4.75

 

39,679

 

4.84

 

40,621

4.73

 

38,773

4.72

Agricultural − Production

 

38,004

6.69

 

35,331

6.39

 

28,415

 

6.47

 

36,668

6.54

 

27,848

6.26

RRE − First lien

 

694,866

4.07

 

701,756

4.01

 

665,519

 

3.71

 

698,311

4.04

 

659,636

3.70

RRE − Construction

 

21,225

5.38

 

21,559

5.20

 

32,769

 

4.81

 

21,392

5.30

 

33,911

4.91

RRE − HELOC

 

123,233

8.30

 

118,957

8.30

 

120,344

 

7.97

 

121,095

8.30

 

118,459

7.83

RRE − Junior lien

 

36,181

6.60

 

35,824

6.38

 

35,932

 

5.69

 

36,003

6.49

 

34,557

5.60

Other consumer

 

33,335

6.67

 

28,835

6.43

 

37,759

 

6.03

 

31,085

6.57

 

41,126

5.94

Total loans (1)

 

2,837,232

5.88

 

2,768,515

5.72

 

2,482,413

 

5.36

 

2,802,873

5.80

 

2,469,853

5.23

Federal Reserve/FHLB stock

 

16,640

8.53

 

16,658

8.14

 

23,724

 

6.75

 

16,649

8.33

 

23,697

6.82

Total interest earning assets

 

4,075,003

5.26

 

3,921,530

5.05

 

3,564,883

 

4.55

 

3,998,265

5.16

 

3,566,136

4.43

Noninterest earning assets

222,290

217,524

220,604

220,178

222,358

Total assets

$

4,297,293

  

$

4,139,054

  

$

3,785,487

 

  

$

4,218,443

  

$

3,788,494

  

Interest-Bearing Liabilities

 

  

  

 

  

  

 

  

 

  

 

  

  

 

  

  

Interest-bearing demand deposits

$

959,119

2.24

%  

$

869,060

1.97

%

$

775,818

 

1.26

%

$

914,090

2.11

%

$

761,319

1.07

%

Money market and savings deposits

 

1,147,525

3.79

 

1,186,900

3.77

 

1,145,335

 

2.81

 

1,167,213

3.78

 

1,155,247

2.49

Time deposits

 

458,125

4.50

 

431,679

4.46

 

270,121

 

3.29

 

444,902

4.48

 

251,145

2.80

Fed funds purchased and Bank Term Funding Program

 

366,186

4.90

 

282,614

4.99

 

360,033

 

5.31

 

324,400

4.94

 

325,303

5.10

FHLB short-term advances

200,000

5.21

 

200,000

4.99

 

 

 

200,000

5.10

 

39,779

4.69

Long-term debt

 

58,999

4.66

 

58,971

4.62

 

58,886

 

4.53

 

58,985

4.64

 

58,872

4.51

Total interest-bearing liabilities

 

3,189,954

3.66

 

3,029,224

3.56

 

2,610,193

 

2.78

 

3,109,590

3.61

 

2,591,665

2.51

Noninterest-Bearing Liabilities and Stockholders' Equity

Noninterest-bearing deposits

 

665,930

  

 

675,926

  

 

748,942

 

  

 

670,928

  

 

768,927

  

Other noninterest-bearing liabilities

72,193

66,655

66,136

69,424

66,870

Stockholders’ equity

 

369,216

 

367,249

  

 

360,216

 

  

 

368,501

  

 

361,032

  

Total liabilities and stockholders’ equity

$

4,297,293

  

$

4,139,054

  

$

3,785,487

 

  

$

4,218,443

  

$

3,788,494

  

Net interest income (1)

  

 

  

  

 

  

 

  

 

  

  

 

  

  

Net interest rate spread

 

1.60

%  

 

  

1.49

%

 

  

 

1.77

%

 

  

1.55

%

 

  

1.92

%

Net interest margin, tax-equivalent (1)

 

2.39

%  

 

  

2.30

%

 

  

 

2.52

%

 

  

2.35

%

 

  

2.61

%


(1)Taxable-equivalent adjustment was calculated utilizing a marginal income tax rate of 21.0%.

13


Exhibit 99.2

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INVESTOR PRESENTATION 2Q 2024 NASDAQ: ALRS

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DISCLAIMERS Forward-Looking Statements 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 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 we make regarding our 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 our current beliefs, expectations and assumptions regarding 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, 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 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 our actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, the following: interest rate risk, including the effects of sustained high interest rates; our ability to successfully manage credit risk and maintain an adequate level of allowance for credit losses; new or revised accounting standards; business and economic conditions generally and in the financial services industry, nationally and within our market areas, including high rates of inflation and possible recession; the effects of recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short-period of time that resulted in recent bank failures; the 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 acquisition growth strategies, including the integration of Metro Phoenix Bank which we acquired in 2022 and the pending acquisition of HMN Financial, Inc.; 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 continue to originate a sufficient volume of residential mortgages; the occurrence of fraudulent activity, breaches or failures of our or our third-party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools; interruptions involving our information technology and telecommunications systems or third-party servicers; potential losses incurred in connection with mortgage loan repurchases; the 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 financial services industry from non-banks such as credit unions and Fintech companies, including digital asset service providers; our ability to successfully manage liquidity risk, including our 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, who have balances above current Federal Deposit Insurance Corporation (“FDIC”) insurance limits; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal 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, including the acquisition of Metro Phoenix Bank and the pending acquisition of HMN Financial, Inc.; the extensive regulatory framework that applies to us; the impact of recent and future legislative and regulatory changes, including in response to the recent bank failures; fluctuations in the values of the securities held in our 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 our customers and their businesses; severe weather, natural disasters, widespread disease or pandemics; acts of war or terrorism, including the ongoing Israeli-Palestinian conflict and the Russian invasion of Ukraine, or other adverse external events; any material weaknesses in our internal control over financial reporting; changes to U.S. or state tax laws, regulations and guidance; potential changes in federal policy and at regulatory agencies as a result of the upcoming 2024 presidential election; talent and labor shortages and employee turnover; our success at 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 Commission. 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 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. Non-GAAP Financial Measures 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 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 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 equivalent. Miscellaneous 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 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 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 verified such information. 1

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DISCLAIMERS (CONTINUED) Additional Information and Where to Find It Alerus Financial Corporation (the "Company") filed a Registration Statement on Form S-4 (Registration Statement No. 333-280815) with the Securities and Exchange Commission (the "SEC") on July 15, 2024, in connection with a proposed transaction between the Company and HMN Financial, Inc. (“HMNF”). The registration statement includes a joint proxy statement of the Company and HMNF that also constitutes a prospectus of the Company, which will be sent to the stockholders of the Company and HMNF after the SEC declares the registration statement effective. Before making any voting decision, the stockholders of the Company and HMNF are advised to read the joint proxy statement/prospectus, because it contains important information about the Company, HMNF and the proposed transaction. This document and other documents relating to the proposed transaction filed by the Company can be obtained free of charge from the SEC’s website at www.sec.gov. These documents also can be obtained free of charge by accessing the Company’s website at www.alerus.com under the link “Investors Relations” and then under “SEC Filings” and HMNF’s website at www.justcallhome.com/HMNFinancial under “SEC Filings.” Alternatively, these documents can be obtained free of charge from the Company upon written request to Alerus Financial Corporation, Corporate Secretary, 401 Demers Avenue, Grand Forks, North Dakota 58201 or by calling (701) 795-3200, or from HMNF upon written request to HMN Financial, Inc., Corporate Secretary, 1016 Civic Center Drive NW, Rochester, Minnesota 55901 or by calling (507) 535-1200. The contents of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the joint proxy statement/prospectus. Participants in the Solicitation This presentation does not constitute a solicitation of proxy, an offer to purchase or a solicitation of an offer to sell any securities. The Company, HMNF, and certain of their directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the stockholders of the Company and HMNF in connection with the proposed transaction under SEC rules. Information about the directors and executive officers of the Company and HMNF is included in the joint proxy statement/prospectus for the proposed transaction filed with the SEC. This document may be obtained free of charge in the manner described above under “Additional Information and Where to Find It.” 2

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Retirement & Benefits Revenue 33.7% Wealth Advisory Revenue Banking Fees & 12.2% Other Revenue 8.8% Net Interest Income 45.3% COMPANY PROFILE Alerus is a commercial wealth bank and a national retirement plan provider DIVERSIFIED REVENUE(1) Net Interest Income: $88.2 million 45.3% of revenue Noninterest Income: $106.5 million 54.7% of revenue BANKING Business Services ▪ Commercial and small business offerings ▪ Treasury Management services ▪ SBA & CRE Lending Consumer Services ▪ Private banking ▪ Savings, money markets, CDs ▪ Mortgage services Assets: $ in billions WEALTH ADVISORY RETIREMENT AND BENEFITS AUA / AUM: $ in billions Retirement ▪ Plan administration ▪ Trust and custodial offerings ▪ Record keeping Benefits ▪ Health savings accounts ▪ Flexible spending accounts ▪ COBRA ▪ Financial Planning: Retirement | Tax | Estate planning ▪ Investment Management: Managed investments | Brokerage ▪ Trust and Fiduciary: Estate Administration | Corporate Trusteeship AUA / AUM: $ in billions 3 | 1. Excludes net losses on investment securities of $24.6 million in 4Q 2023. See “Non-GAAP Disclosure Reconciliation.” 2. Banking and other revenue consists of service charges on deposit accounts, mortgage income, interchange income and other noninterest income. Last Twelve Months Ended June 30, 2024 (2) $31.9 $34.2 $36.7 $32.1 $36.7 $39.4 2019 2020 2021 2022 2023 2Q 2024 $3.1 $3.3 $4.0 $3.6 $4.0 $4.2 2019 2020 2021 2022 2023 2Q 2024 $2.4 $3.0 $3.4 $3.8 $3.9 $4.4 2019 2020 2021 2022 2023 2Q 2024

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Market Distribution and Client Base FRANCHISE FOOTPRINT FULL-SERVICE BANKING ▪ Grand Forks, ND: 4 offices ▪ Fargo, ND: 3 offices ▪ Twin Cities, MN: 6 offices ▪ Phoenix, AZ: 2 offices RETIREMENT AND BENEFIT SERVICES ▪ Offices in Minnesota, North Dakota, Michigan, and Colorado ▪ Retirement plan service clients in all 50 states BANKING LEGEND: North Dakota Minnesota Arizona National Synergistic WEALTH ADVISORY RETIREMENT AND BENEFITS | ($ in millions) 4 | ▪ 485,000 Employer-sponsored retirement and benefit plan participants and health savings account participants ▪ 34,100 Flexible spending account and health reimbursement arrangement participants ▪ 37,300 Consumer banking clients ▪ 16,700 Commercial banking clients ▪ 8,400 Employer-sponsored retirement plans ▪ 10,900 Wealth clients Data as of 6/30/2024. DEPOSITS: $3,299 9.3% 13.1% 77.6% AUA / AUM: $39,390 75.3% 8.8% 4.3% 11.6% AUA / AUM: $4,172 28.2% 57.4% 14.4% LOANS: $2,916 39.2% 24.4% 9.9% 26.5%

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STRATEGIC GROWTH To supplement our organic growth, we have executed 25 acquisitions throughout the history of our company including: 15 in Banking, 10 in Retirement and Benefits. HMN Financial, Inc. will be our 26th acquisition. 5 | 1. Source S&P Capital IQ. 2. Excludes net losses on investment securities (after-tax) of $19.2 million in 4Q 2023. See “Non-GAAP Disclosure Reconciliation.” (2) (2) 1.08% 1.28% 1.31% KBW Regional Bank Index (Average) KBW Regional Bank Index (Top Quartile) Alerus Financial ROA(1) (5 Year History: 2019 - 2023) 9.2% 11.2% 12.5% KBW Regional Bank Index (Average) KBW Regional Bank Index (Top Quartile) Alerus Financial ROE(1) (5 Year History: 2019 - 2023) 1879 2022 2019 2009 2007 2000 Began as the Bank of Grand Forks Rebranded to Alerus Expanded to Minnesota Market Expanded to Arizona Market Completed Initial Public Offering (IPO) Acquired Metro Phoenix Bank 2024 Announced acquisition of HMN Financial, Inc.

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HMN FINANCIAL, INC. ACQUISITION HIGHLIGHTS Natural Expansion of the Alerus Franchise 1. Data as of 6/30/2024. 2. Metrics disclosed with deal announcement on 5/15/2024. Metrics based on ALRS closing price of $20.69 on 5/14/2024. 3. No rate mark scenario assumes no loan interest rate mark, AOCI mark, MSR mark or time deposit mark 6 | Strategic Expansion Financially Attractive(2) Low Risk Benefits of additional scale $4.4 $1.1 $5.5 Assets $2.9 $0.9 $3.8 Loans $3.3 $1.0 $4.3 Deposits Complementary mission and values with a strong corporate and credit culture ALRS HMNF Franchise-enhancing strategic expansion into the vibrant Rochester, Minnesota, MSA Strong pro forma capital ratios; creation of capacity for continued growth Proven ability to create revenue synergies across Alerus’ diverse business lines Pro-forma (not modeled) Deal Value Per Share / TBVPS 107% TBV Earnback 2.2 years TBV Earnback (Excl. int. rate markets & AOCI)(3) Accretive Core Deposit Premium 0.9% ’25 EPS Accretion 45%+ Internal Rate of Return 25%+ ’25 ROAA 1.15%+ ’25 ROAE 12.5%+ ’25 Efficiency Ratio Improvement 615+ bps Pro Forma Loans / Deposits (MRQ) 85% High-quality, granular and long tenured loans and core deposit base Excellent credit discipline and asset quality Seamless integration of straight-forward business lines Leverages management’s transaction and integration expertise Extensive operational and credit due diligence $ in Billions (1) (1) (1)

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▪ Providing secure and reliable technology that meets evolving client expectations ▪ Integrating our full product and service offerings through our fast-follower technology strategy STRATEGIC INITIATIVES One Alerus = Working Better Together to Grow ORGANIC GROWTH TALENT ACQUISITIONS STRATEGIC ACQUISITION PRODUCTIVITY AND EFFICIENCY ▪ Collaborative leadership team focused on new client acquisition, retention, and deepening relationships with existing clients ▪ Diversified business model focused on bringing value to clients through advice and specialty solutions to help clients grow ▪ Leveraging product synergies unavailable to traditional banking organizations ▪ Recruiting top talent in mid-market C&I banking and specialty niches to accelerate growth in our existing markets ▪ Jumpstarting our entrance into new markets with new talent ▪ Proactively positioning ourselves as an acquirer and employer of choice ▪ Capitalizing on strategic opportunities to grow in our existing markets or new markets ▪ Acquisition targets include banks and nationwide fee income companies with complementary business models, cultural similarities, and synergy and growth opportunities 7 Our Purpose Powers our Culture Do the Right Thing Lead with integrity and provide valued advice and guidance One Alerus Work together to provide purpose-driven products and services for our clients Passion for Excellence Act with accountability and sense of urgency to best serve clients and achieve exceptional results Success is Never Final Embrace opportunities to adapt and growth with our industry and our clients One Alerus Client Oriented Diversified Services Synergistic Growth Tailored Advice Technology Investment Reinvention of Processes

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OFFICERS AND DIRECTORS DAN COUGHLIN Since 2016 Chairman, Alerus Financial Corp. Former MD & Co-Head – Fin’l Services Inv. Banking, Raymond James; Former Chairman & CEO, Howe Barnes Hoefer & Arnett MARY ZIMMER Since 2021 Former Director of Diverse Client Segments and Former Northern Regional President, Wells Fargo Advisors; Former Head of Intl. Wealth USA, Royal Bank of Canada U.S. Wealth Mgmt. JANET ESTEP Since 2021 Former President and CEO, Nacha; Former EVP, US Bank Transaction Division; Former VP, Pace Analytical Services RANDY NEWMAN Since 1987 Former President and CEO, Alerus JON HENDRY Executive Vice President and Chief Technology Officer 40 years with Alerus KARIN TAYLOR Executive Vice President and Chief Risk Officer and Operating Officer 6 years with Alerus GALEN VETTER Since 2013 Former Global CFO, Franklin Templeton Investments; Former Partner-in-Charge, Upper Midwest Region, RSM EXECUTIVE MANAGEMENT BOARD OF DIRECTORS KATIE LORENSON Director, President and Chief Executive Officer 7 years with Alerus MISSY KENEY Executive Vice President and Chief Engagement Officer 19 years with Alerus AL VILLALON Executive Vice President and Chief Financial Officer 2 years with Alerus JIM COLLINS Executive Vice President and Chief Banking and Revenue Officer 2 years with Alerus NIKKI SORUM Since 2023 Former Head of Sales and Distribution, Thrivent; Former SVP, Private Client Group, RBC Wealth Management JOHN URIBE Since 2023 Chief Financial Officer Blue Cross and Blue Shield of Minnesota 8 FORREST WILSON Executive Vice President and Chief Retirement Services Officer Joined Alerus in 2024

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SECOND QUARTER HIGHLIGHTS Office in Excelsior, Minnesota

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2Q 2024 HIGHLIGHTS Success is Never Final NII: $24.0 million +8.0% vs. 1Q24 NIM: 2.57% Adjusted(1) +13 bps vs. 1Q24 Fee Income: $27.4 million +8.1% vs. 1Q24 53.3% of revenue in 2Q24 Noninterest Expense: $38.8 million -0.7% vs. 1Q24 1. Excludes impact of Bank Term Funding Program (BTFP) arbitrage trade. See “Non-GAAP Disclosure Reconciliation.” 2. Represents a non-GAAP Financial measure. See “Non-GAAP Disclosure Reconciliation.” EARNINGS BALANCE SHEET ASSET & CAPITAL STRENGTH VALUE CREATION AUA / AUM: $43.6 billion +1.9% vs. 1Q24 Loans: $2.9 billion +4.2% vs. 1Q24 Deposits: $3.3 billion +0.4% vs. 1Q24 L/D Ratio: 88% +3.2% vs. 1Q24 TCE / TA: 7.91% Adjusted(1) +3 bps vs. 1Q24 ACL: 1.31% Stable vs. 1Q24 CET1: 11.7% 6.5% “well capitalized” minimum TBV(2): $15.77 +$0.14 vs. 1Q24 Increased Dividend Per Share 5.3% to $0.20 $4.0 million returned to stockholders in dividends Added Equipment Finance Team Strategically expands our specialty lending capabilities Announced Acquisition of HMN Financial, Inc. A natural expansion for our premier Midwest franchise 10 |

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2Q 2024 RESULTS 1. Represents a non-GAAP Financial measure. See “Non-GAAP Disclosure Reconciliation.” Income Statement 11 | (dollars and shares in thousands, except per share data) Net Interest Income $ 24,001 $ 22,219 $ 22,234 $ 46,220 $ 45,892 Provision for Credit Losses 4,489 — — 4,489 550 Net Interest Income After Provision for Credit Losses 19,512 22,219 22,234 41,731 45,342 Noninterest Income 27,371 25,323 25,778 52,694 51,031 Noninterest Expense 38,752 39,019 36,373 77,771 74,242 Income Before Income Taxes 8,131 8,523 11,639 16,654 22,131 Income Tax Expense 1,923 2,091 2,535 4,014 4,841 Net Income $ 6,208 $ 6,432 $ 9,104 $ 12,640 $ 17,290 Pre-Provision Net Revenue(1) $ 12,620 $ 8,523 $ 11,639 $ 21,143 $ 22,681 Per Common Share Data Earnings Per Common Share - Diluted $ 0.31 $ 0.32 $ 0.45 $ 0.63 $ 0.85 Diluted Average Common Shares Outstanding 20,050 19,986 20,241 20,018 20,243 Performance Ratios Return on Average Total Assets 0.58 % 0.63 % 0.96 % 0.60 % 0.92 % Return on Average Tangible Common Equity (1) 9.40 % 9.78 % 13.71 % 9.58 % 13.15 % Noninterest Income as a % of Revenue 53.28 % 53.26 % 53.69 % 53.27 % 52.65 % Net Interest Margin (Tax-Equivalent) 2.39 % 2.30 % 2.52 % 2.35 % 2.61 % Efficiency Ratio (1) 72.50 % 78.88 % 72.79 % 75.56 % 73.67 % June 30, 2024 June 30, 2023 Three months ended Six months ended 2024 June 30, March 31, 2024 June 30, 2023

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PERFORMANCE RATIOS 1. Rates have been annualized. 2. Represents a non-GAAP Financial measure. See “Non-GAAP Disclosure Reconciliation.” 12 | $14.60 $15.63 $15.77 2Q 2023 1Q 2024 2Q 2024 Tangible Book Value per Share(1) 0.96% 0.63% 0.58% 2Q 2023 1Q 2024 2Q 2024 Return on Average Assets(1) 13.71% 9.78% 9.40% 2Q 2023 1Q 2024 2Q 2024 Return on Average Tangible Common Equity(1)/(2)

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$15,890 $15,655 $16,078 $5,449 $6,118 $6,360 $4,439 $3,550 $4,933 $25,778 $25,323 $27,371 2Q 2023 1Q 2024 2Q 2024 Noninterest Income Retirement & Benefit Services Wealth Advisory Services Banking Fees and Other KEY REVENUE ITEMS 13 | 1. Banking fees and other consists of service charges on deposit accounts, mortgage income, interchange income and other noninterest income. $ in thousands $ in thousands | % of noninterest income Net Interest Income: +8.0% Linked Quarter +7.9% Year-over-year Noninterest Income: +8.1% Linked Quarter +6.2% Year-over-year (1) $22,234 $22,219 $24,001 2Q 2023 1Q 2024 2Q 2024 Net Interest Income 17.2% 14.0% 18.0% 23.2% 21.1% 24.2% 61.7% 61.8% 58.8%

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2.44% 2.57% 2.52% 2.30% 2.39% 2Q 2023 1Q 2024 2Q 2024 NIM Adjusted NIM NIM 2.53% 2.48% 2.69% 5.36% 5.72% 5.88% 4.55% 5.05% 5.26% 2Q 2023 1Q 2024 2Q 2024 Earning Assets Investment Securities Yield Loan Yield Earning Asset Yield NET INTEREST INCOME $ in Thousands NIM: 2.30% 0.16% 0.16% 0.00% (0.05%) (0.18%) 2.39% 0.18% 2.57% QUARTERLY HIGHLIGHTS ▪ Net interest income for the second quarter of 2024 increased 8.0% from the first quarter of 2024. ▪ Larger loan balances, along with higher average cash balances related to the BTFP arbitrage trade, drove net interest income higher. This was partially offset by an increase in interest expense due to higher average deposits and deposit rates, along with higher BTFP borrowing balances. ▪ Continued to hold cash of $355.0 million from the BTFP, earning 52 basis points of risk-free return resulting in $0.5 million in net interest income for the second quarter of 2024. YIELDS AND RATES NII AND NIM(1) WALK 14 | 1. Tax-equivalent net interest margin. 2. Adjusted for BTFP arbitrage trade. Represents a non-GAAP Financial measure. See “Non-GAAP Disclosure Reconciliation.” Yields and rates have been annualized. (2) (2) (2) (1) (2) 1.73% 2.56% 2.65% 2.32% 3.26% 3.34% 2.16% 2.91% 3.03% 2Q 2023 1Q 2024 2Q 2024 Cost of Funds Cost of Total Deposits Cost of Interest Bearing Deposits Total Cost of Funds

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Chart As of As of As of Change Change Legend Category 6/30/2023 3/31/2024 6/30/2024 QoQ YoY Commercial and industrial $ 521,427 $ 575,259 $ 591,779 2.9% 13.5% CRE - Construction, land and development 78,428 125,966 161,751 28.4% 106.2% CRE - Multifamily 210,902 260,609 242,041 -7.1% 14.8% CRE - Non-owner occupied 500,334 565,979 647,776 14.5% 29.5% CRE - Owner occupied 251,981 285,211 283,356 -0.7% 12.5% Agriculture 71,037 77,585 81,959 5.6% 15.4% Residential real estate 864,861 879,033 871,393 -0.9% 0.8% Other consumer 34,552 29,833 35,737 19.8% 3.4% Total $ 2,533,522 $ 2,799,475 $ 2,915,792 4.2% 15.1% EARNING ASSETS QUARTERLY HIGHLIGHTS ▪ Total loans grew 4.2% from March 31, 2024. ▪ Quarter over quarter growth was driven by an increase in total CRE loans, which increased 7.8%, and an increase in C&I loans which grew 2.9%, from the first quarter of 2024. ▪ Residential real estate loans decreased 0.9% quarter over quarter given focused allocation of portfolio capital. ▪ Total Non-owner occupied and Multifamily CRE loans, to total Bank risk-based capital(3) was 213% as of June 30, 2024. ▪ The investment portfolio decreased 2.6% from March 31, 2024 as prepayment rates increased. LOAN PORTFOLIO(1) CHANGES INVESTMENT PORTFOLIO JUNE 30, 2024 LOAN PORTFOLIO(1) Held-to-Maturity: 31.3% 38.0% 38.3% Available-for-Sale: 68.7% 61.4% 61.3% Trading Securities(2): 0.0% 0.6% 0.4% % of Earning Assets: 27.4% 18.7% 18.2% AOCI: $(100,742) $(74,256) $(75,029) 15 | $ in thousands $ in thousands 1. Additional loan portfolio breakdown available in appendix 2. Trading securities consist of mutual funds held for deferred compensation. 3. Alerus Financial, N.A. (Bank) total risk-based capital was $417 million as of June 30, 2024. 20.3% 5.6% 8.3% 9.7% 22.2% 2.8% 29.9% 1.2% 35.3% 34.9% 34.6% 0.3% 0.1% 0.1% 45.5% 41.8% 41.8% 5.6% 6.4% 6.6% 13.3% 16.3% 16.5% 0.6% 0.4% $986,088 $768,964 $748,896 6/30/2023 3/31/2024 6/30/2024 Trading Securities Municipals Corporate Debt Corporate ABS & CMO Agency Non-MBS Agency MBS

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Chart As of As of As of Change Change Legend Category 6/30/2023 3/31/2024 6/30/2024 QoQ YoY Noninterest-bearing $ 715,534 $ 692,500 $ 701,428 1.3% -2.0% Interest-bearing demand 753,194 938,751 1,003,585 6.9% 33.2% Money market and savings 906,461 1,013,983 918,598 -9.4% 1.3% Time deposits 304,167 456,729 491,345 7.6% 61.5% HSA deposits 173,499 183,006 183,619 0.3% 5.8% Total $ 2,852,855 $ 3,284,969 $ 3,298,575 0.4% 15.6% Loan to deposits ratio 88.8% 85.2% 88.4% 21.3% 30.4% 27.8% 14.9% 5.6% DEPOSIT CHARACTERISTICS QUARTERLY HIGHLIGHTS ▪ Total deposits increased 0.4% from March 31, 2024. ▪ Noninterest-bearing deposits increased 1.3% from the prior quarter. ▪ The increase in total deposits was due to both expanded and new commercial deposit relationships, along with time deposit and synergistic deposit growth. This was partially offset by seasonal outflows of public funds. ▪ The Company continued to have $0 of brokered deposits as of June 30, 2024. JUNE 30, 2024 DEPOSIT PORTFOLIO (BY CATEGORY) DEPOSIT PORTFOLIO CHANGES JUNE 30, 2024 DEPOSIT PORTFOLIO (BY CLIENT SEGMENT) Synergistic(1) deposits grew +17.7% from June 30, 2023. 16 | $ in thousands Interest-bearing: 78.7% 1. Synergistic deposits are sourced from the Retirement and Benefits Services and Wealth Advisory Services segments. (1) Noninterest-bearing: Synergistic 26.7% Commercial 39.5% Consumer 27.8% Public 6.2%

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$2,905 $1,670 $2,554 $311 $389 $456 $514 $565 $502 $709 $926 $1,421 $4,439 $3,550 $4,933 2Q 2023 1Q 2024 2Q 2024 Mortgage Service Charges Debit Card Interchange Other BANKING SERVICES BANKING SERVICES QUARTERLY HIGHLIGHTS ▪ Mortgage income increased $884 thousand quarter over quarter driven by a seasonal increase in mortgage originations. ▪ Service charges increased $67 thousand quarter over quarter. ▪ Other fee income increased $495 thousand quarter over quarter, driven by client swap fees. DIVISIONAL(1) INCOME STATEMENT NONINTEREST INCOME BREAKDOWN MORTGAGE HIGHLIGHTS $ in millions $ in thousands 17 | $ in thousands Purchase: 98.2% 94.8% 97.2% Refinance: 1.8% 5.2% 2.8% Fair Value Change: $474 $306 $234 1. Includes Corporate Administration income. 2. Banking noninterest income consists of service charges on deposit accounts, mortgage income, interchange income and other noninterest income. (2) $ in thousands $90 $52 $102 $21 $2 $12 $111 $54 $114 2Q 2023 1Q 2024 2Q 2024 Portfolio Sale 2Q 2024 1Q 2024 2Q 2023 Net interest income $ 24,001 $ 22,219 $ 22,234 Provision for loan losses 4,489 - - Noninterest income 4,933 3,550 4,439 Total revenue 24,445 25,769 26,673 Noninterest expense 19,165 18,666 19,301 Net income before taxes: $ 5,280 $ 7,103 $ 7,372

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$230,498 $202,330 $195,617 $233,082 $247,842 $126,518 $153,224 $166,171 $176,729 $183,619 $136,946 $170,224 $167,796 $188,349 $195,023 $493,962 $525,778 $529,584 $598,160 $626,484 2020 2021 2022 2023 2Q 2024 Money Market HSA Other RETIREMENT AND BENEFIT SERVICES QUARTERLY HIGHLIGHTS ▪ Retirement and Benefit Services revenue increased 2.7% compared to the first quarter of 2024. ▪ AUA / AUM grew 2.3% from March 31, 2024. ▪ 39% of Retirement and Benefit Services revenue is market sensitive. ▪ 51.1% of Retirement and Benefit Services synergistic deposits are indexed. DIVISIONAL(1) INCOME STATEMENT AUA / AUM AND PARTICIPANTS SYNERGISTIC DEPOSITS 18 | $ in thousands $ in millions $ in thousands 1. Excludes funds transfer pricing credit on synergistic deposits. $34,200 $36,733 $32,123 $36,682 $39,390 423,156 447,564 453,757 473,692 485,269 2020 2021 2022 2023 2Q 2024 AUA/AUM Participants 2Q 2024 1Q 2024 2Q 2023 Recurring annual income $ 12,664 $ 12,480 $ 13,111 Transactional income 3,414 3,175 2,779 Total noninterest income 16,078 15,655 15,890 Noninterest expense 13,649 14,189 12,651 Net income before taxes: $ 2,429 $ 1,466 $ 3,239

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WEALTH ADVISORY SERVICES QUARTERLY HIGHLIGHTS ▪ Wealth advisory services revenue increased 4.0% from the first quarter of 2024. ▪ Synergistic deposits have grown 18.0% compared to June 30, 2023. ▪ AUA / AUM has increased 8.2% since June 30, 2023. ▪ 94.5% of Wealth Advisory Services synergistic deposits are indexed. DIVISIONAL(1) INCOME STATEMENT AUA / AUM SYNERGISTIC DEPOSITS 19 | $ in thousands $ in millions $ in thousands 1. Excludes funds transfer pricing credit on synergistic deposits. $3,339 $4,040 $3,583 $4,019 $4,172 2020 2021 2022 2023 2Q 2024 $101,621 $143,183 $161,973 $253,384 $248,274 2020 2021 2022 2023 2Q 2024 2Q 2024 1Q 2024 2Q 2023 Asset management $ 5,564 $ 5,256 $ 4,781 Brokerage 439 366 389 Insurance and advisory 357 496 279 Total noninterest income 6,360 6,118 5,449 Noninterest expense 3,953 3,750 2,990 Net income before taxes: $ 2,407 $ 2,368 $ 2,459

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NONINTEREST EXPENSE $ in Thousands YEAR-OVER-YEAR HIGHLIGHTS ▪ Noninterest expense increased $2.4 million, or 6.5%, compared to the second quarter of 2023. ▪ The increase was primarily driven by higher Compensation and Benefits expenses due to increased labor costs, along with higher Professional Fees and Assessments expenses due to an increase in FDIC assessments and expenses related to the pending acquisition of HMN Financial, Inc. QUARTERLY HIGHLIGHTS ▪ Noninterest expense decreased $0.3 million, or 0.7%, compared to the first quarter of 2024. ▪ The second quarter of 2024 included $0.6 million of expenses in Professional Fees and Assessments related to the pending acquisition of HMN Financial, Inc. The quarter also included $0.3 million of expenses related to severance and signing bonuses in Compensation and Benefits. ▪ Employee taxes and benefits decreased $1.1 million from the first quarter of 2024, primarily due to seasonality. This was offset by a $0.9 million increase in compensation primarily due to an increase in mortgage incentives. ▪ Business services, software and technology expenses decreased $0.7 million from the prior quarter primarily driven by reduced data and core processing expenses. 20 | Compensation and Benefits Professional Fees and Assessments Other(1) Occupancy and Equipment Business Services, Software and Technology Noninterest Expense: (0.7%) Linked Quarter +6.5% Year-over-year 1. Other noninterest expense consists of intangible amortization, marketing and business development, supplies and postage, travel, mortgage and lending, and other noninterest expense. $23,571 $25,520 $25,399 $1,837 $1,906 $1,815 $5,269 $5,345 $4,599 $1,530 $1,993 $2,373 $4,166 $4,255 $4,566 $36,373 $39,019 $38,752 2Q 2023 1Q 2024 2Q 2024

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ASSET QUALITY AND RESERVE LEVELS HIGHLIGHTS ▪ Reserves to total loans remained stable at 1.31% as of both June 30, 2024, and March 31, 2024. ▪ Nonperforming assets increased $20.3 million compared to March 31, 2024. The increase was driven by a previously identified construction, land and development loan of $21.5 million moving to nonaccrual status. ▪ The increase in net charge-offs to average loans was driven by a $2.6 million charge-off of one commercial and industrial loan that had an individual reserve of $2.3 million in the first quarter of 2024. NCO/ Avg Loans 0.03% (0.04%) 0.02% (0.04%) 0.36% NPA / ASSETS % RESERVES OVER NPL % RESERVES / LOANS % 21 1.73% 1.80% 1.27% 1.30% 1.31% 2020 2021 2022 2023 2Q 2024 0.17% 0.09% 0.10% 0.22% 0.63% 2020 2021 2022 2023 2Q 2024 674% 1,437% 821% 410% 139% 2020 2021 2022 2023 2Q 2024

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16.8% 18.6% 16.5% 14.8% 14.7% 2020 2021 2022 2023 2Q 2024 9.2% 9.8% 11.3% 10.6% 9.6% 13.2% 15.1% 13.7% 12.1% 11.9% 2020 2021 2022 2023 2Q 2024 Tier 1 Leverage Tier 1 Capital CAPITAL AND SOURCES OF LIQUIDITY LIQUIDITY COMMON EQUITY TIER 1 TIER 1 CAPITAL/TIER 1 LEVERAGE RATIOS TOTAL RISK BASED CAPITAL 22 $ in Thousands 8% Regulatory Capital Minimum to be considered adequately capitalized. 6% Regulatory Capital Minimum to be considered adequately capitalized. 4% Tier 1 Capital Leverage 12.8% 14.7% 13.4% 11.8% 11.7% 2020 2021 2022 2023 2Q 2024 Total Assets $ 4,358,623 Cash and cash equivalents 438,141 Unencumbered Securities (at Market Value) 212,085 Total On Balance Sheet Liquidity 650,226 FHLB Borrowing Capacity 878,282 Fed Funds Lines 107,000 Brokered CD Capacity 871,725 Total Off Balance Sheet Liquidity 1,857,007 Total Liquidity as of 6/30/2024 $ 2,507,233 Total Liquidity (Ex-brokered CD Capacity) $ 1,635,508

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KEY TAKEAWAYS Our diversified business model fostered a robust second quarter EARNINGS BALANCE SHEET ASSET & CAPITAL STRENGTH VALUE CREATION Robust spread and fee income drove revenue growth in the quarter ▪ Net interest income and noninterest income growth of +8% compared to 1Q 2024 ▪ Adjusted(1) NIM expansion of 13 bps compared to the prior quarter ▪ 53.3% of noninterest income to total revenue Our strong talent acquisition and retention is continuing to payoff ▪ 4.2% growth in loans compared to March 31, 2024 ▪ 0.4% increase in deposits compared to March 31, 2024 ▪ 88.4% loan to deposit ratio Healthy credit and capital reserves keep us well positioned ▪ Total reserves to loans of 1.31% ▪ 11.7% CET1 (5.2% over “well capitalized” 6.5% minimum) ▪ 7.91% adjusted(1) tangible common equity to tangible assets We remain focused on the long-term success of the company ▪ Announced acquisition of HMN Financial, Inc. and Equipment Finance team lift out ▪ Increased dividend 5.3%, returning $4.0 million to stockholders through dividends ▪ Continued progress in returning the company to top tier performance 23 | 1. Adjusted for BTFP arbitrage trade. Represents a non-GAAP Financial measure. See “Non-GAAP Disclosure Reconciliation.”

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APPENDIX Office in Downtown Minneapolis, Minnesota

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DIVISIONAL INCOME STATEMENT 25 | 1. Banking noninterest income consists of service charges on deposit accounts, mortgage income, interchange income and other noninterest income. ($ dollars in thousands) Banking Services Retirement and Benefit Services Wealth Advisory Services Corporate Administration Consolidated Net interest income $ 24,684 $ - $ - $ (683) $ 24,001 Provision for loan losses 4,489 - - - 4,489 Noninterest income(1) 4,999 16,078 6,360 (66) 27,371 Noninterest expense 19,165 13,649 3,953 1,985 38,752 Net income before taxes $ 6,029 $ 2,429 $ 2,407 $ (2,734) $ 8,131 Banking Services Retirement and Benefit Services Wealth Advisory Services Corporate Administration Consolidated Net interest income $ 22,897 $ - $ - $ (678) $ 22,219 Provision for loan losses - - - - - Noninterest income(1)/(2) 3,490 15,655 6,118 60 25,323 Noninterest expense 18,666 14,189 3,750 2,414 39,019 Net income before taxes $ 7,721 $ 1,466 $ 2,368 $ (3,032) $ 8,523 Banking Services Retirement and Benefit Services Wealth Advisory Services Corporate Administration Consolidated Net interest income $ 22,899 $ - $ - $ (665) $ 22,234 Provision for loan losses - - - - - Noninterest income(1) 4,242 15,890 5,449 197 25,778 Noninterest expense 19,301 12,651 2,990 1,431 36,373 Net income before taxes $ 7,840 $ 3,239 $ 2,459 $ (1,899) $ 11,639 Quarter ended June 30, 2024 Quarter ended June 30, 2023 Quarter ended March 31, 2024

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LOAN PORTFOLIO BREAKDOWN 26 ($ in thousands) Balance Percent of Portfolio Balance Percent of Portfolio Commercial and industrial: General business $ 288,752 10.0% $ 258,008 9.3% Services 140,562 4.8% 146,318 5.3% Retail trade 91,173 3.1% 91,216 3.3% Manufacturing 71,292 2.4% 66,638 2.4% Total commercial and industrial 591,779 20.3% 562,180 20.3% Commercial real estate: Construction, land and development 161,751 5.5% 124,034 4.5% Multifamily 242,041 8.3% 245,103 8.9% Non-owner occupied Office 108,082 3.7% 124,684 4.5% Industrial 111,603 3.8% 104,241 3.8% Retail 112,626 3.9% 96,578 3.5% Hotel 112,081 3.8% 80,576 2.9% Medical Office 110,736 3.8% 63,788 2.3% Medical or nursing facility 46,215 1.6% 47,625 1.7% Other commercial real estate 46,433 1.7% 51,862 1.9% Total non-owner occupied 647,776 22.3% 569,354 20.6% Owner Occupied 283,356 9.7% 271,623 9.8% Total commercial real estate 1,334,924 45.8% 1,210,114 43.8% Agricultural: Land 41,410 1.4% 40,832 1.5% Production 40,549 1.4% 36,141 1.3% Total agricultural 81,959 2.8% 76,973 2.8% Consumer Residential real estate first lien 686,286 23.6% 697,900 25.3% Residential real estate construction 22,573 0.8% 28,979 1.1% Residential real estate HELOC 126,211 4.3% 118,315 4.3% Residential real estate junior lien 36,323 1.2% 35,819 1.3% Other Consumer 35,737 1.2% 29,303 1.1% Total consumer 907,130 31.1% 910,316 33.1% Total loans $ 2,915,792 100.0% $ 2,759,583 100.0% June 30, 2024 December 31, 2023

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0% 10% 20% 30% 40% 50% 60% - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 2019 2020 2021 2022 2023 2Q 2023 3Q 2023 4Q 2023 1Q 2024 2Q 2024 Home Equity Lines of Credit Funded Unfunded Funded % LINE OF CREDIT UTILIZATION 27 | Commercial and industrial loans includes revolving C&I loans and other loans. It excludes non-revolving C&I loans, ag production, and loans to public entities. 0% 10% 20% 30% 40% 50% 60% - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 2019 2020 2021 2022 2023 2Q 2023 3Q 2023 4Q 2023 1Q 2024 2Q 2024 C&I Funded Unfunded Funded %

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ALLOWANCE FOR CREDIT LOSSES ON LOANS Changes in the ACL for Loans by Portfolio Segment 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 $275 thousand related to 28 off-balance sheet credit exposure and ($56) thousand related to held-to-maturity investment securities. | ($ in thousands) Commercial: Commercial and industrial $ 9,508 $ (663) $ (2,730) $ 119 $ 6,234 Commercial real estate Construction, land and development 5,922 4,898 — — 10,820 Multifamily 2,148 282 — — 2,430 Non-owner occupied 8,104 668 — — 8,772 Owner occupied 2,461 (190) — 9 2,280 Total commercial real estate 18,635 5,658 — 9 24,302 Agricultural Land 248 11 — — 259 Production 219 (34) — — 185 Total Agriculture 467 (23) — — 444 Total commercial 28,610 4,972 (2,730) 128 30,980 Consumer: Residential real estate First lien 6,152 (786) — — 5,366 Construction 489 (31) — — 458 HELOC 864 22 — — 886 Junior lien 284 (41) (3) 74 314 Total residential real estate 7,789 (836) (3) 74 7,024 Other consumer 185 134 (1) 10 328 Total Consumer 7,974 (702) (4) 84 7,352 Total $ 36,584 $ 4,270 $ (2,734) $ 212 $ 38,332 Ending Balance Three months ended June 30, 2024 Loan Charge-offs Loan Recoveries Beginning Balance Provision for Credit Losses(1)

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($ in thousands) Commercial and industrial $ 6,234 1.05% $ 9,705 1.73% CRE - Construction, land and development 10,820 6.69% 6,135 4.95% CRE - Multifamily 2,430 1.00% 1,776 0.72% CRE - Non-owner occupied 8,772 1.35% 7,726 1.36% CRE - Owner occupied 2,280 0.80% 2,449 0.90% Agricultural - Land 259 0.63% 96 0.24% Agricultural - Production 185 0.46% 84 0.23% Residential real estate first lien 5,366 0.78% 6,087 0.87% Residential real estate construction 458 2.03% 485 1.67% Residential real estate HELOC 886 0.70% 835 0.71% Residential real estate junior lien 314 0.86% 264 0.74% Other Consumer 328 0.92% 201 0.69% Total loans $ 38,332 1.31% $ 35,843 1.30% to segment loans June 30, 2024 December 31, 2023 Allocated segment allowance Allowance to segment loans Allocated Allowance segment allowance Percentage of Percentage of ALLOWANCE FOR CREDIT LOSSES ON LOANS Allocation by Loan Portfolio Segment 29

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FINANCIAL HIGHLIGHTS 30 | 1. Represents a non-GAAP financial measure. See “Non-GAAP Disclosure Reconciliation.” ($ in thousands, except where otherwise noted) 2Q 2023 3Q 2023 4Q 2023 1Q 2024 2Q 2024 June 30, 2024 June 30, 2023 Total Assets $ 3,832,978 $ 3,869,138 $ 3,907,713 $ 4,338,093 $ 4,358,623 $ 4,358,623 $ 3,832,978 Total Loans 2,533,522 2,606,430 2,759,583 2,799,475 2,915,792 2,915,792 2,533,522 Total Deposits 2,852,855 2,872,184 3,095,611 3,284,969 3,298,575 3,298,575 2,852,855 Tangible Common Equity1 290,792 284,137 305,186 309,018 311,933 311,933 290,792 Net Income $ 9,104 $ 9,161 $ (14,754) $ 6,432 $ 6,208 $ 12,640 $ 17,290 ROAA (%) 0.96 0.95 (1.51) 0.62 0.58 0.60 0.92 ROATCE(%)1 13.71 13.51 (18.85) 9.78 9.40 9.58 13.15 Net Interest Margin (FTE) (%) 2.52 2.27 2.37 2.30 2.39 2.35 2.61 Efficiency Ratio (FTE) (%)1 72.79 73.37 165.40 78.88 72.50 75.56 73.67 Non-Int. Income/Op. Rev. (%) 53.69 58.21 3.54 53.26 53.28 53.27 52.65 Earnings per common share - diluted $ 0.45 $ 0.45 $ (0.73) $ 0.32 $ 0.31 $ 0.63 $ 0.85 Total Equity/Total Assets (%) 9.33 9.03 9.45 8.57 8.56 8.56 9.33 Tang. Cmn. Equity/Tang. Assets (%)1 7.72 7.47 7.94 7.23 7.26 7.26 7.72 Loans/Deposits (%) 88.81 90.75 89.15 85.22 88.40 88.40 88.81 NPLs/Loans (%) 0.10 0.35 0.32 0.26 0.95 0.95 0.10 NPAs/Assets (%) 0.07 0.23 0.22 0.17 0.63 0.63 0.07 Allowance/NPLs (%) 1,383.57 402.91 410.34 498.08 138.79 138.79 1,383.57 Allowance/Loans (%) 1.41 1.39 1.30 1.31 1.31 1.31 1.41 NCOs/Average Loans (%) (0.07) (0.09) (0.04) 0.01 0.36 0.19 (0.02) Quarterly Six months ended

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FINANCIAL HIGHLIGHTS 31 | 1. Represents a non-GAAP financial measure. See “Non-GAAP Disclosure Reconciliation.” ($ in thousands, 19-'23 except where otherwise noted) 2019 2020 2021 2022 2023 CAGR Total Assets $ 2,356,878 $ 3,013,771 $ 3,392,691 $ 3,779,637 $ 3,907,713 13.5% Total Loans 1,721,279 1,979,375 1,758,020 2,443,994 2,759,583 12.5% Total Deposits 1,971,316 2,571,993 2,920,551 2,915,484 3,095,611 11.9% Tangible Common Equity1 240,008 274,043 307,663 287,330 305,186 6.2% Net Income $ 29,540 $ 44,675 $ 52,681 $ 40,005 $ 11,696 ROAA (%) 1.34 1.61 1.66 1.14 0.31 ROATCE(%)1 17.46 17.74 18.89 15.09 5.37 Net Interest Margin (FTE) (%) 3.65 3.22 2.90 3.04 2.46 Efficiency Ratio (FTE) (%)1 73.22 68.40 70.02 72.86 85.85 Non-Int. Income/Op. Rev. (%) 60.50 64.05 62.86 52.72 47.74 Earnings per common share - diluted 1.91 2.52 2.97 2.10 0.58 Total Equity/Total Assets (%) 12.12 10.96 10.59 9.44 9.45 Tang. Cmn. Equity/Tang. Assets (%)1 10.38 9.27 9.21 7.74 7.94 Loans/Deposits (%) 87.32 76.96 60.19 83.83 89.15 NPLs/Loans (%) 0.45 0.26 0.12 0.16 0.32 NPAs/Assets (%) 0.33 0.17 0.09 0.10 0.22 Allowance/NPLs (%) 305.66 674.13 1,437.05 820.93 410.34 Allowance/Loans (%) 1.39 1.73 1.80 1.27 1.30 NCOs/Average Loans (%) 0.33 0.03 (0.04) 0.02 (0.04) Annual

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NON-GAAP DISCLOSURE RECONCILIATION 32 ($ in thousands, except where otherwise noted) 2Q 2023 3Q 2023 4Q 2023 1Q 2024 2Q 2024 June 30, 2024 June 30, 2023 Tangible common equity to tangible assets Total common stockholders' equity $ 357,685 $ 349,402 $ 369,127 $ 371,635 $ 373,226 $ 373,226 $ 357,685 Less: Goodwill 47,087 46,783 46,783 46,783 46,783 46,783 47,087 Less: Other intangible assets 19,806 18,482 17,158 15,834 14,510 14,510 19,806 Tangible common equity (a) 290,792 284,137 305,186 309,018 311,933 311,933 290,792 Total assets 3,832,978 3,869,138 3,907,713 4,338,093 4,358,623 4,358,623 3,832,978 Less: Goodwill 47,087 46,783 46,783 46,783 46,783 46,783 47,087 Less: Other intangible assets 19,806 18,482 17,158 15,834 14,510 14,510 19,806 Tangible assets (b) 3,766,085 3,803,873 3,843,772 4,275,476 4,297,330 4,297,330 3,766,085 Tangible common equity to tangible assets (a)/(b) 7.72% 7.47% 7.94% 7.23% 7.26% 7.26% 7.72% Adjusted Tangible common equity to tangible assets Tangible assets (b) 3,766,085 3,803,873 3,843,772 4,275,476 4,297,330 4,297,330 3,766,085 Less: Cash proceeds from BTFP — — — 355,000 355,000 355,000 — Adjusted tangible assets (c) 3,766,085 3,803,873 3,843,772 3,920,476 3,942,330 3,942,330 3,766,085 Tangible common equity to adjusted tangible assets (a)/(c) 7.72% 7.47% 7.94% 7.88% 7.91% 7.91% 7.72% Tangible common equity per common share Total stockholders' equity $ 357,685 $ 349,402 $ 369,127 $ 371,635 $ 373,226 $ 373,226 $ 357,685 Less: Goodwill 47,087 46,783 46,783 46,783 46,783 46,783 47,087 Less: Other intangible assets 19,806 18,482 17,158 15,834 14,510 14,510 19,806 Tangible common equity (d) 290,792 284,137 305,186 309,018 311,933 311,933 290,792 Common shares outstanding (e) 19,915 19,848 19,734 19,777 19,778 19,778 19,915 Tangible common equity per common share (d)/(e) $ 14.60 $ 14.32 $ 15.46 $ 15.63 $ 15.77 $ 15.77 $ 14.60 Return on average tangible common equity Net income $ 9,104 $ 9,161 $ (14,754) $ 6,432 $ 6,208 $ 12,640 $ 17,290 Add: Intangible amortization expense (net of tax) 1,046 1,046 1,046 1,046 1,046 2,092 2,092 Net income, excluding intangible amortization (f) 10,150 10,207 (13,708) 7,478 7,254 14,732 19,382 Average total equity 360,216 361,735 349,382 367,248 369,217 368,499 361,032 Less: Average goodwill 47,087 46,882 46,783 46,783 46,783 46,783 47,087 Less: Average other intangible assets (net of tax) 16,153 15,109 14,067 13,018 11,969 12,494 16,678 Average tangible common equity (g) 296,976 299,744 288,532 307,447 310,465 309,222 297,267 Return on average tangible common equity (f)/(g) 13.71% 13.51% (18.85%) 9.78% 9.40% 9.58% 13.15% Efficiency ratio Noninterest expense $ 36,373 $ 37,260 $ 38,654 $ 39,019 $ 38,752 $ 77,771 $ 74,242 Less: Intangible amortization expense 1,324 1,324 1,324 1,324 1,324 2,648 2,648 Adjusted noninterest expense (j) 35,049 35,936 37,330 37,695 37,428 75,123 71,594 Net interest income 22,234 20,395 21,552 22,219 24,001 46,220 45,892 Noninterest income 25,778 28,407 791 25,323 27,371 52,694 51,031 Tax-equivalent adjustment 141 180 226 247 255 502 264 Total tax-equivalent revenue (k) 48,153 48,982 22,569 47,789 51,627 99,416 97,187 Efficiency ratio (j)/(k) 72.79% 73.37% 165.40% 78.88% 72.50% 75.56% 73.67% Quarterly Six months ended

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NON-GAAP DISCLOSURE RECONCILIATION 33 ($ in thousands, except where otherwise noted) 2019 2020 2021 2022 2023 Tangible common equity to tangible assets Total common stockholders' equity $ 285,728 $ 330,163 $ 359,403 $ 356,872 $ 369,127 Less: Goodwill 27,329 30,201 31,490 47,087 46,783 Less: Other intangible assets 18,391 25,919 20,250 22,455 17,158 Tangible common equity (a) 240,008 274,043 307,663 287,330 305,186 Total assets 2,356,878 3,013,771 3,392,691 3,779,637 3,907,713 Less: Goodwill 27,329 30,201 31,490 47,087 46,783 Less: Other intangible assets 18,391 25,919 20,250 22,455 17,158 Tangible assets (b) 2,311,158 2,957,651 3,340,951 3,710,095 3,843,772 Tangible common equity to tangible assets (a)/(b) 10.38% 9.27% 9.21% 7.74% 7.94% Tangible common equity per common share Total stockholders' equity $ 285,728 $ 330,163 $ 359,403 $ 356,872 $ 369,127 Less: Goodwill 27,329 30,201 31,490 47,087 46,783 Less: Other intangible assets 18,391 25,919 20,250 22,455 17,158 Tangible common equity (c) 240,008 274,043 307,663 287,330 305,186 Common shares outstanding (d) 17,050 17,125 17,213 19,992 19,734 Tangible common equity per common share (c)/(d) $ 14.08 $ 16.00 $ 17.87 $ 14.37 $ 15.46 Return on average tangible common equity Net income $ 29,540 $ 44,675 $ 52,681 $ 40,005 $ 11,696 Add: Intangible amortization expense (net of tax) 3,224 3,129 3,460 3,756 4,184 Net income, excluding intangible amortization (e) 32,764 47,804 56,141 43,761 15,880 Average total equity 231,084 310,208 346,059 346,355 358,268 Less: Average goodwill 27,329 27,439 30,385 39,415 46,959 Less: Average other intangible assets (net of tax) 16,101 13,309 18,548 17,018 15,624 Average tangible common equity (f) 187,654 269,460 297,126 289,922 295,685 Return on average tangible common equity (e)/(f) 17.46% 17.74% 18.89% 15.09% 5.37% Efficiency Ratio Noninterest expense $ 142,537 $ 163,799 $ 168,909 $ 158,770 $ 150,157 Less: Intangible amortization expense 4,081 3,961 4,380 4,754 5,296 Adjusted noninterest expense (i) 138,456 159,838 164,529 154,016 144,861 Net interest income 74,551 83,846 87,099 99,729 87,839 Noninterest income 114,194 149,371 147,387 111,223 80,229 Tax-equivalent adjustment 347 455 492 429 671 Total tax-equivalent revenue(j) 189,092 233,672 234,978 211,381 168,739 Efficiency ratio (i)/(j) 73.22% 68.40% 70.02% 72.86% 85.85% Annual

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Twelve Months Ended 2Q 2023 3Q 2023 4Q 2023 1Q 2024 2Q 2024 June 30, 2024 Noninterest income excluding net Losses on investment securities as a percentage of adjusted revenue Noninterest income $ 25,778 $ 28,407 $ 791 $ 25,323 $ 27,371 $ 81,892 Less: Net gains (losses) on investment securities — — (24,643) — — (24,643) Noninterest income excluding net losses on investment securities (a) 25,778 28,407 25,434 25,323 27,371 106,535 Net interest income (b) 22,234 20,395 21,552 22,219 24,001 88,167 Adjusted revenue (a) + (b) = (c) 48,012 48,802 46,986 47,542 51,372 194,702 Noninterest income excluding net losses on investment securities as a percentage of adjusted revenue (a) / (c) 53.69% 58.21% 54.13% 53.26% 53.28% 54.72% Banking revenue excluding net losses on investment securities as a percentage of adjusted revenue Banking fees and other income(1) $ 4,439 $4,531 (20,466) $3,550 $ 4,933 ($7,452) Less: Net gains (losses) on investment securities — — (24,643) — — (24,643) Banking fees and other income(1) excluding net losses on investment securities (d) 4,439 4,531 4,177 3,550 4,933 17,191 Adjusted banking revenue (d) + (b) = (e) 26,673 24,926 25,729 25,769 28,934 105,358 Banking revenue excluding net losses on investment securities as a percentage of adjusted revenue (e) / (c) 55.55% 51.08% 54.76% 54.20% 56.32% 54.11% Banking fees and other income(1) excluding net losses on investment securities as a percentage of adjusted revenue Banking fees and other income(1) excluding net losses on investment securities as a percentage of adjusted revenue (d) / (c) 9.25% 9.28% 8.89% 7.47% 9.60% 8.83% ($ in thousands, except for per share data and where otherwise noted) Five Year 2019 2020 2021 2022 2023 Average Adjusted net income Net Income $ 29,540 $ 44,675 $ 52,681 $ 40,005 $ 11,696 Less: Net gains (losses) on investment securities - - - - (19,222) Adjusted Net Income(2) (f) 29,540 44,675 52,681 40,005 30,918 Adjusted return on average equity Average total equity (g) 231,084 310,208 346,059 346,355 358,268 Adjusted return on average equity (f)/(g) 12.78% 14.40% 15.22% 11.55% 8.63% 12.52% Adjusted return on average assets Average total assets (h) 2,211,993 2,775,140 3,178,820 3,500,655 3,817,017 Adjusted return on average assets (f)/(h) 1.34% 1.61% 1.66% 1.14% 0.81% 1.31% Annual ($ in thousands, except for where otherwise noted) Quarterly NON-GAAP DISCLOSURE RECONCILIATION 1. Banking noninterest income consists of service charges on deposit accounts, mortgage income, interchange income and other noninterest income. 2. Adjusted items are shown after-tax using a 22% tax rate. 34 |

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NON-GAAP DISCLOSURE RECONCILIATION 35 2Q 2023 1Q 2024 2Q 2024 June 30, 2024 June 30, 2023 Adjusted net interest margin (tax-equivalent) Net interest income $ 22,234 $ 22,219 $ 24,001 $ 46,220 $ 45,892 Less: BTFP Cash interest income - 3,615 4,766 8,381 - Add: BTFP interest expense - 3,266 4,307 7,573 - Net interest income excluding BTFP impact (h) 22,234 21,870 23,542 45,412 45,892 Add: Tax equivalent adjustment for loans and securities (i) 141 247 255 502 264 Adjusted net interest income (h) + (i) = (j) 22,375 22,117 23,797 45,914 46,156 Average earning assets 3,564,883 3,921,529 4,075,002 3,998,264 3,566,136 Less: Average cash proceeds balance from BTFP - 269,176 355,000 312,088 - Adjusted interest earning assets (k) 3,564,883 3,652,353 3,720,002 3,686,176 3,566,136 Adjusted net interest margin (tax-equivalent) (j)/(k) 2.52% 2.44% 2.57% 2.50% 2.61% Pre-Provision Net Revenue Income (loss) before taxes $ 11,639 $ 8,523 $ 8,131 $ 16,654 $ 22,131 Add: Provision for credit losses - - 4,489 4,489 550 Pre-provision net revenue $ 11,639 $ 8,523 $ 12,620 $ 21,143 $ 22,681 ($ in thousands, except for per share data and where otherwise noted) Quarterly Six months ended


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