Q - ALERUS FINANCIAL
For the period ended Jun 30, 2025. Filed Aug 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 5, 2025
ALRS$33.81-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-06.
0001437749-25-014641
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-05.
0001437749-25-024880
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 130 previous paragraphs and 136 current paragraphs.
102 unchanged; 26 reworded; 6 added; 2 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 80 previous and 85 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
Net income for the six months ended June 30, 2025, was $33.6 million, or $1.30 per diluted common share, a $20.9 million, or 165.6%, increase compared to $12.6 million, or $0.63 per diluted common share, for the six months ended June 30, 2024. Earnings for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 increased primarily due to a $38.0 million increase in net interest income and a $6.7 million increase in noninterest income. This positive result was partially offset by a $21.0 million increase in noninterest expense.
Current report
Net interest income for the six months ended June 30, 2025 was $84.2 million, an increase of $38.0 million, or 82.1%, compared to $46.2 million for the six months ended June 30, 2024. Net interest income for the six months ended June 30, 2025 increased compared to the six months ended June 30, 2024 primarily due to a $36.5 million increase in interest income as average earning assets increased $1.1 billion while the average interest earning asset yield increased 49 basis points. Additionally, interest expense decreased $1.4 million due primarily to a 78 basis point decline in the average rate paid on interest-bearing liabilities partially offset by a $760.9 million increase in the average balance of interest-bearing liabilities. The increase in interest earning assets and interest-bearing liabilities balances was primarily due to assets and liabilities acquired in the HMNF transaction and organic loan and deposit growth. The increase in interest earning asset yields was primarily due to organic loan growth at higher yields and purchase accounting accretion. The decrease in average rate paid on interest-bearing liabilities was due to the impact of the HMNF transaction as well as lower rates paid on interest-bearing deposits following rate cuts in 2024.
Current report
The Company recorded a provision for credit losses of $0.0 million for the second quarter of 2025, compared to a provision for credit losses of $4.5 million for the second quarter of 2024. The decrease in the provision for credit losses was primarily driven by the change in net loans, and the decrease in provision for credit losses on unfunded commitments was primarily driven by a decrease in the required reserve for unfunded commitments.
Current report
Total noninterest income for the three months ended June 30, 2025 was $31.8 million, an increase of $4.4 million, or 16.0%, from the three months ended June 30, 2024. The increase in noninterest income was primarily driven by a $2.1 million gain on the sale of a PCD hospitality loan during the second quarter of 2025. Wealth revenue increased $1.0 million, or 15.8%, in the second quarter of 2025 compared to the second quarter of 2024, primarily driven by an increase in assets under administration/management during that same period as a result of improved bond and equity markets as well as the HMNF transaction. Mortgage banking revenue increased $1.1 million, or 43.0%, in the second quarter of 2025 compared to the second quarter of 2024, primarily driven by a higher gain on sale rate and increased mortgage servicing revenue driven by the HMNF transaction.
Current report
Total noninterest income for the six months ended June 30, 2025 was $59.4 million, an increase of $6.7 million, or 12.7%, from the six months ended June 30, 2024. The increase in noninterest income was primarily driven by a $2.1 million gain on the sale of a PCD hospitality loan during the second quarter of 2025. Wealth revenue increased $1.8 million, or 14.3%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily driven by an increase in assets under administration/management during that same period as a result of improved bond and equity markets as well as the HMNF transaction. Mortgage banking revenue increased $1.1 million, or 27.2%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily driven by a higher gain on sale rate and increased mortgage servicing revenue driven by the HMNF transaction.
Current report
Total deposits were $4.3 billion as of June 30, 2025, a decrease of $40.9 million, or 0.9%, from December 31, 2024. Interest-bearing deposits increased $72.2 million during this period, while noninterest-bearing deposits decreased $113.2 million. The decrease in total deposits was due primarily to seasonal outflows from public funds depositors as well as a decrease in clearing and synergistic deposits. The decrease was partially offset by an increase in brokered deposit balances as callable brokered certificates of deposit were raised to diversify the funding structure while retaining optionality.
Removed paragraphs (2)
Previous report
Total noninterest income for the three months ended March 31, 2025 was $27.6 million, an increase of $2.3 million, or 9.1%, from the three months ended March 31, 2024. The increase in noninterest income was primarily driven by an increase of $0.8 million in wealth revenue, driven by new client growth and assets under administration/management growth. Retirement and benefit services revenue increased $0.5 million, driven by assets under administration/management growth. Other noninterest income increased $1.0 million, driven by increased swap fee income generated from commercial loan originations and increased fee income resulting from the HMNF transaction.
Previous report
Total deposits were $4.5 billion as of March 31, 2025, an increase of $106.9 million, or 2.4%, from December 31, 2024. Interest-bearing deposits increased $121.1 million during this period, while noninterest-bearing deposits decreased $14.2 million. The increase in total deposits was due to both expanded and new commercial deposit relationships along with synergistic deposit growth. Noninterest-bearing deposits decreased from 20.6% of total deposits as of December 31, 2024 to 19.8% as of March 31, 2025, as higher yields on interest-bearing accounts and other investment alternatives, such as U.S. treasuries, attracted such funds.
Reworded paragraphs (26)
Previous wording
The following discussion explains the Company’s financial condition and results of operations as of and for the three months ended March 31, 2025 and 2024*. Annualized results for this interim period may not be indicative of results for the full year or future periods. The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes presented elsewhere in this report and the Company*’s Annual Report on Form 10-K for the year ended December 31, 2024*, filed with the SEC on March 14, 2025.*
Current wording
The following discussion explains the Company’s financial condition and results of operations as of and for the three and six months ended June 30, 2025 and 2024*. Annualized results for this interim period may not be indicative of results for the full year or future periods. The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes presented elsewhere in this report and the Company*’s Annual Report on Form 10-K for the year ended December 31, 2024*, filed with the SEC on March 14, 2025.*
Previous wording
Critical accounting policies are defined as those that are reflective of significant judgements and uncertainties and could potentially result in materially different results under different assumptions and conditions. In preparing the Company’s consolidated financial statements, management is required to make significant estimates and assumptions that affect assets, liabilities, revenues, and expenses reported. Actual results could differ materially from our current estimates as a result of changing conditions and future events. Several estimates are particularly critical and are susceptible to significant near term change, including (i) the ACL, including the ACL on investment securities, loans, and unfunded commitments; (ii) goodwill impairment; and (iii) fair value of loans acquired in business combinations.
Current wording
Critical accounting policies are defined as those that are reflective of significant judgements and uncertainties and could potentially result in materially different results under different assumptions and conditions. In preparing the Company’s consolidated financial statements, management is required to make significant estimates and assumptions that affect assets, liabilities, revenues, and expenses reported. Actual results could differ materially from our current estimates as a result of changing conditions and future events. Several estimates are particularly critical and are susceptible to significant near term change, including (i) the ACL on loans; (ii) goodwill impairment; and (iii) fair value of loans acquired in business combinations.
Previous wording
On February 26, 2025, the Board of Directors of the Company declared a quarterly cash dividend of $0.20 per common share. This dividend was paid on April 11, 2025, to stockholders of record at the close of business on March 14, 2025.
Current wording
On May 22, 2025, the Board of Directors of the Company declared a quarterly cash dividend of $0.21 per common share. This dividend was paid on July 11, 2025, to stockholders of record at the close of business on June 27, 2025.
Previous wording
Net income for the three months ended March 31, 2025, was $13.3 million, or $0.52 per diluted common share, a $6.9 million, or 107.0%, increase compared to $6.4 million, or $0.32 per diluted common share, for the three months ended March 31, 2024. Earnings for the first quarter of 2025 compared to the first quarter of 2024 increased primarily due to an $18.9 million increase in net interest income and a $2.3 million increase in noninterest income. This positive result was partially offset by an $11.3 million increase in noninterest expense.
Current wording
Net income for the three months ended June 30, 2025, was $20.3 million, or $0.78 per diluted common share, a $14.0 million, or 226.2%, increase compared to $6.2 million, or $0.31 per diluted common share, for the three months ended June 30, 2024. Earnings for the second quarter of 2025 compared to the second quarter of 2024 increased primarily due to a $19.0 million increase in net interest income and a $4.4 million increase in noninterest income. This positive result was partially offset by a $9.6 million increase in noninterest expense.
Previous wording
Net interest income is the difference between interest income and yield related fees earned on assets and interest expense paid on liabilities. Net interest margin is the difference between the yield on interest earning assets and the cost of interest-bearing liabilities as a percentage of interest earning assets. Net interest margin is presented on a tax-equivalent basis, which means that tax-free interest income has been adjusted to a pre-tax-equivalent income, assuming a federal income tax rate of 21% for the three months ended March 31, 2025 and 2024.
Current wording
Net interest income is the difference between interest income and yield related fees earned on assets and interest expense paid on liabilities. Net interest margin is the difference between the yield on interest earning assets and the cost of interest-bearing liabilities as a percentage of interest earning assets. Net interest margin is presented on a tax-equivalent basis, which means that tax-free interest income has been adjusted to a pre-tax-equivalent income, assuming a federal income tax rate of 21% for the three and six months ended June 30, 2025 and 2024.
Previous wording
Net interest income for the three months ended March 31, 2025 was $41.2 million, an increase of $18.9 million, or 85.2%, compared to $22.2 million for the three months ended March 31, 2024. Net interest income for the first quarter of 2025 increased compared to the first quarter of 2024 primarily due to a $19.1 million increase in interest income, as average interest earning assets increased $1.0 billion while the average interest earning asset yield increased 58 basis points. This was partially offset by the increasing cost of interest-bearing liabilities as interest expense increased $0.2 million, mainly driven by an $806.6 million increase in the average balance of interest-bearing liabilities, which was largely offset by a 70 basis point decline in the average rate paid on interest-bearing liabilities. The increase in interest earning assets was primarily due to acquired earning assets in the HMNF transaction, strong organic loan growth at higher yields, and purchase accounting accretion. The increase in interest-bearing liabilities was due to the increase in interest-bearing deposits stemming from the acquisition of HMNF and organic deposit growth.
Current wording
Net interest income for the three months ended June 30, 2025 was $43.0 million, an increase of $19.0 million, or 79.3%, compared to $24.0 million for the three months ended June 30, 2024. Net interest income for the second quarter of 2025 increased compared to the second quarter of 2024 primarily due to a $17.4 million increase in interest income, as average earning assets increased $1.0 billion while the average interest earning asset yield increased 43 basis points. Additionally, interest expense decreased $1.6 million due primarily to an 85 basis point decline in the average rate paid on interest-bearing liabilities partially offset by a $714.9 million increase in the average balance of interest-bearing liabilities. The increase in interest earning assets and interest-bearing liabilities balances was primarily due to assets and liabilities acquired in the HMNF transaction and organic loan and deposit growth. The increase in interest earning asset yields was primarily due to organic loan growth at higher yields and purchase accounting accretion. The decrease in average rate paid on interest-bearing liabilities was due to the impact of the HMNF transaction as well as lower rates paid on interest-bearing deposits following rate cuts in 2024.
Previous wording
Net interest margin (on a tax-equivalent basis) for the three months ended March 31, 2025 was 3.41%, compared to 2.30% for the same period in 2024. The increase in net interest margin (on a tax-equivalent basis) was mainly attributable to higher rates on interest earning assets from organic loan growth and the HMNF acquisition, purchase accounting accretion, and lower rates paid on deposits.
Current wording
Net interest margin (on a tax-equivalent basis) for the three months ended June 30, 2025 was 3.51%, compared to 2.39% for the same period in 2024. The increase in net interest margin (on a tax-equivalent basis) was mainly attributable to higher rates on interest earning assets from organic loan growth and the HMNF transaction, purchase accounting accretion, and lower rates paid on deposits.
Previous wording
The following table presents average balance sheet information, interest income, interest expense and the corresponding average yields on assets, average yields earned, and rates paid for the three months ended March 31, 2025 and 2024. The Company derived these yields and rates by dividing income or expense by the average balance of the corresponding assets or liabilities. The Company derived average balances from the daily balances throughout the periods indicated. Average loan balances include loans that have been placed on nonaccrual status, while interest previously accrued on these loans is reversed against interest income. In these tables, adjustments are made to the yields on tax‑exempt assets in order to present tax‑exempt income and fully taxable income on a fully taxable equivalent (“FTE”) basis.
Current wording
The following table presents average balance sheet information, interest income, interest expense and the corresponding average yields on assets, average yields earned, and rates paid for the three and six months ended June 30, 2025 and 2024. The Company derived these yields and rates by dividing income or expense by the average balance of the corresponding assets or liabilities. The Company derived average balances from the daily balances throughout the periods indicated. Average loan balances include loans that have been placed on nonaccrual status, while interest previously accrued on these loans is reversed against interest income. In these tables, adjustments are made to the yields on tax‑exempt assets in order to present tax‑exempt income and fully taxable income on a fully taxable equivalent (“FTE”) basis.
Previous wording
The Company recorded a provision for credit losses of $0.9 million for the first quarter of 2025, compared to no provision for the first quarter of 2024. The increase in the provision for credit losses was primarily driven by loan growth.
Current wording
The Company recorded a provision for credit losses of $0.9 million for the six months ended June 30, 2025 compared to a provision for credit losses of $4.5 for the six months ended June 30, 2024. The decrease in the provision for credit losses was primarily driven by the change in net loans, and the decrease in provision for credit losses on unfunded commitments was primarily driven by a decrease in the required reserve for unfunded commitments.
Previous wording
The following table presents the Company’s noninterest income for the three months ended March 31, 2025 and 2024:
Current wording
The following table presents the Company’s noninterest income for the three and six months ended June 30, 2025 and 2024:
Previous wording
The following table presents noninterest expense for the three months ended March 31, 2025 and 2024:
Current wording
The following table presents noninterest expense for the three and six months ended June 30, 2025 and 2024:
Previous wording
Total noninterest expense for the three months ended March 31, 2025 was $50.4 million, an $11.3 million, or 29.1%, increase compared to $39.0 million for the three months ended March 31, 2024. The year over year increase was primarily driven by higher compensation expense, employee taxes and benefits expense, intangible amortization expense, professional fees and assessments, and occupancy and equipment expense. Professional fees and assessments increased primarily due to increased merger-related expenses of $1.7 million in connection with the acquisition of HMNF and an increase in FDIC assessments. Compensation expense and employee taxes and benefits expense increased primarily due to increased head count resulting from the HMNF transaction and talent acquisition hires throughout 2024. Intangible amortization expense increased primarily due to the $33.5 million core deposit intangible recorded in connection with the HMNF acquisition. Occupancy and equipment expense increased primarily due to increased branch footprint resulting from the HMNF acquisition.
Current wording
Total noninterest expense for the three months ended June 30, 2025 was $48.4 million, a $9.7 million, or 25.0%, increase compared to $38.8 million for the three months ended June 30, 2024. The year over year increase was primarily driven by higher compensation expense, employee taxes and benefits expense, intangible amortization expense, and occupancy and equipment expense. Compensation expense and employee taxes and benefits expense increased primarily due to increased head count resulting from the HMNF transaction. Intangible amortization expense increased primarily due to the $33.5 million core deposit intangible recorded in connection with the HMNF transaction. Occupancy and equipment expense increased primarily due to increased branch footprint resulting from the HMNF transaction.
Previous wording
For the three months ended March 31, 2025, the Company recognized income tax expense of $4.2 million on $17.6 million of pre-tax income, resulting in an effective tax rate of 24.2%, compared to income tax expense of $2.1 million on $8.5 million of pre-tax income for the three months ended March 31, 2024, resulting in an effective tax rate of 24.5%.
Current wording
For the three months ended June 30, 2025, the Company recognized income tax expense of $6.1 million on $26.4 million of pre-tax income, resulting in an effective tax rate of 23.2%, compared to income tax expense of $1.9 million on $8.1 million of pre-tax income for the three months ended June 30, 2024, resulting in an effective tax rate of 23.7%.
Previous wording
The following table presents the banking segment income statement, net of corporate administration, for the three months ended March 31, 2025 and 2024:
Current wording
The following table presents the banking segment income statement, net of corporate administration, for the three and six months ended June 30, 2025 and 2024:
Previous wording
The following table presents the retirement and benefits services segment income statement for the three months ended March 31, 2025 and 2024:
Current wording
The following table presents the retirement and benefits services segment income statement for the three and six months ended June 30, 2025 and 2024:
Previous wording
The following table presents the wealth segment income statement for the three months ended March 31, 2025 and 2024:
Current wording
The following table presents the wealth segment income statement for the three and six months ended June 30, 2025 and 2024:
Previous wording
Total assets were $5.3 billion as of March 31, 2025, an increase of $77.9 million, or 1.5%, compared to December 31, 2024. The increase was primarily due to a $92.9 million increase in loans and an increase of $21.7 million in cash and cash equivalents, partially offset by a decrease of $20.3 million in available-for-sale investment securities and a decrease of $7.0 million in held-to-maturity investment securities.
Current wording
Total assets were $5.3 billion as of June 30, 2025, an increase of $62.1 million, or 1.2%, compared to December 31, 2024. The increase was primarily due to a $52.1 million increase in loans held for investment and a non-cash transfer of $50.2 million to non-mortgage loans held for sale, partially offset by a decrease of $46.9 million in available-for-sale investment securities and a decrease of $11.9 million in held-to-maturity investment securities.
Previous wording
Total loans outstanding were $4.1 billion as of March 31, 2025, an increase of $92.9 million, or 2.3%, from December 31, 2024. The increase was primarily driven by a $93.3 million increase in CRE loans and an $8.8 million increase in agricultural loans, partially offset by $8.3 million and $0.9 million decreases in commercial and industrial loans and consumer loans, respectively.
Current wording
Total loans outstanding were $4.0 billion as of June 30, 2025, an increase of $52.1 million, or 1.3%, from December 31, 2024. The increase was primarily driven by a $17.6 million increase in CRE loans, a $15.3 million increase in consumer loans, a $10.0 million increase in agricultural loans, and a $9.2 million increase in commercial and industrial loans.
Previous wording
The Company’s RRE loans have minimal direct exposure to subprime mortgages as the loans are underwritten to conform to secondary market standards. As of March 31, 2025, the Company’s RRE portfolio was $1.2 billion, representing a $4.3 million, or 0.4%, increase from December 31, 2024. Market interest rates, expected duration, and the Company’s overall interest rate sensitivity profile continue to be the most significant factors in determining whether the Company chooses to retain versus sell portions of new consumer mortgage originations.
Current wording
The Company’s RRE loans have minimal direct exposure to subprime mortgages as the loans are underwritten to conform to secondary market standards. As of June 30, 2025, the Company’s RRE portfolio was $1.2 billion, representing a $18.4 million, or 1.6%, increase from December 31, 2024. Market interest rates, expected duration, and the Company’s overall interest rate sensitivity profile continue to be the most significant factors in determining whether the Company chooses to retain versus sell portions of new consumer mortgage originations.
Previous wording
Interest income lost on nonaccrual loans was approximately $1.1 million and $0.7 million for the three months ended March 31, 2025 and 2024, respectively. There was no interest income included in net interest income related to nonaccrual loans for the three months ended March 31, 2025 and 2024.
Current wording
Interest income lost on nonaccrual loans was approximately $2.3 million and $0.8 million for the six months ended June 30, 2025 and 2024, respectively. There was no interest income included in net interest income related to nonaccrual loans for the six months ended June 30, 2025 and 2024.
Previous wording
In the ordinary course of business, the Company enters into commitments to extend credit, including commitments under credit arrangements, commercial letters of credit, and standby letters of credit. Such financial instruments are recorded when they are funded. An ACL on off-balance sheet credit exposures is measured using similar internal and external assumptions as the ACL on loans. This allowance is located in accrued expenses and other liabilities on the consolidated balance sheets. The ACL for unfunded commitments was $6.0 million and $6.6 million as of March 31, 2025 and 2024, respectively.
Current wording
In the ordinary course of business, the Company enters into commitments to extend credit, including commitments under credit arrangements, commercial letters of credit, and standby letters of credit. Such financial instruments are recorded when they are funded. An ACL on off-balance sheet credit exposures is measured using similar internal and external assumptions as the ACL on loans. This allowance is located in accrued expenses and other liabilities on the consolidated balance sheets. The ACL for unfunded commitments was $4.8 million and $6.9 million as of June 30, 2025 and 2024, respectively.
Previous wording
The Company’s total uninsured deposits, which are amounts of deposit accounts that exceed the FDIC insurance limit, currently $250,000, were approximately $1.5 billion at both March 31, 2025 and December 31, 2024. These amounts were estimated based on the same methodologies used for regulatory reporting purposes.
Current wording
The Company’s total uninsured deposits, which are amounts of deposit accounts that exceed the FDIC insurance limit, currently $250,000, were approximately $1.4 billion at June 30, 2025 and approximately $1.5 billion at December 31, 2024. These amounts were estimated based on the same methodologies used for regulatory reporting purposes.
Previous wording
Stockholders’ equity increased $18.8 million, or 3.8%, to $514.2 million as of March 31, 2025, compared to $495.4 million as of December 31, 2024. Tangible common equity to tangible assets, a non-GAAP financial measure, increased to 7.43% as of March 31, 2025, from 7.13% as of December 31, 2024. Common equity tier 1 capital to risk weighted assets increased to 10.10% as of March 31, 2025, from 9.91% as of December 31, 2024.
Current wording
Stockholders’ equity increased $37.7 million, or 7.6%, to $533.2 million as of June 30, 2025, compared to $495.4 million as of December 31, 2024. Tangible common equity to tangible assets, a non-GAAP financial measure, increased to 7.87% as of June 30, 2025, from 7.13% as of December 31, 2024. Common equity tier 1 capital to risk weighted assets increased to 10.54% as of June 30, 2025, from 9.91% as of December 31, 2024.
Previous wording
As of March 31, 2025, the Company had on balance sheet liquidity of $410.2 million, compared to $579.0 million as of December 31, 2024. On balance sheet liquidity includes cash and cash equivalents, federal funds sold, unencumbered securities available‑for‑sale, and over collateralized securities pledging positions available-for-sale.
Current wording
As of June 30, 2025, the Company had on balance sheet liquidity of $505.9 million, compared to $579.0 million as of December 31, 2024. On balance sheet liquidity includes cash and cash equivalents, federal funds sold, unencumbered securities available‑for‑sale, and over collateralized securities pledging positions available-for-sale.
Previous wording
As of March 31, 2025, the Company had off balance sheet liquidity of $2.5 billion, compared to $2.3 billion as of December 31, 2024. Off balance sheet liquidity includes FHLB borrowing capacity, federal funds lines, and brokered deposit capacity.
Current wording
As of June 30, 2025, the Company had off balance sheet liquidity of $2.2 billion, compared to $2.3 billion as of December 31, 2024. Off balance sheet liquidity includes FHLB borrowing capacity, federal funds lines, and brokered deposit capacity.
Previous wording
The Bank is a member of the FHLB, which provides short‑ and long‑term funding to its members through advances collateralized by real estate related assets and other select collateral, most typically in the form of debt securities. Actual borrowing capacity is contingent on the amount of collateral available to be pledged to the FHLB. As of March 31, 2025, the Company had no federal funds purchased and $200.0 million in short-term borrowings from the FHLB. As of March 31, 2025, the Company had $2.4 billion of collateral pledged to the FHLB and, based on this collateral, the Company was eligible to borrow up to an additional $1.3 billion from the FHLB. In addition, the Company can borrow up to $127.0 million through the unsecured lines of credit the Company has established with five other correspondent banks.
Current wording
The Bank is a member of the FHLB, which provides short‑ and long‑term funding to its members through advances collateralized by real estate related assets and other select collateral, most typically in the form of debt securities. Actual borrowing capacity is contingent on the amount of collateral available to be pledged to the FHLB. As of June 30, 2025, the Company had $114.6 million in federal funds purchased and $200.0 million in short-term borrowings from the FHLB. As of June 30, 2025, the Company had $2.4 billion of collateral pledged to the FHLB and, based on this collateral, the Company was eligible to borrow up to an additional $1.1 billion from the FHLB. In addition, the Company can borrow up to $127.0 million through the unsecured lines of credit the Company has established with five other correspondent banks.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Total noninterest expense for the six months ended June 30, 2025 was $98.8 million, a $21.0 million, or 27.0%, increase compared to $77.8 million for the six months ended June 30, 2024. The year over year increase was primarily driven by higher compensation expense, employee taxes and benefits expense, intangible amortization expense, and occupancy and equipment expense. Compensation expense and employee taxes and benefits expense increased primarily due to increased head count resulting from the HMNF transaction. Intangible amortization expense increased primarily due to the $33.5 million core deposit intangible recorded in connection with the HMNF transaction. Occupancy and equipment expense increased primarily due to increased branch footprint resulting from the HMNF transaction.
Current report — wording carried from elsewhere
For the six months ended June 30, 2025, the Company recognized income tax expense of $10.3 million on $43.9 million of pre-tax income, resulting in an effective tax rate of 23.6%, compared to income tax expense of $4.0 million on $16.7 million of pre-tax income for the six months ended June 30, 2024, resulting in an effective tax rate of 24.1%.