ALERUS FINANCIAL CORP
For the period ended Mar 31, 2026. Filed May 1, 2026.
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.
Mar 31, 2026 · Filed May 1, 2026
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 2025-09-30; filed 2025-11-05.
0001437749-25-033350
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-01.
0001437749-26-014481
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 136 previous paragraphs and 131 current paragraphs.
93 unchanged; 30 reworded; 7 added; 12 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 87 previous and 79 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 (7)
Current report
Property Sales
Current report
Net interest income for the three months ended March 31, 2026 was $44.9 million, an increase of $3.8 million, or 9.1%, compared to $41.2 million for the three months ended March 31, 2025. The increase in net interest income for the first quarter of 2026 compared to the first quarter of 2025 was primarily due to higher interest income on investment securities following the strategic balance sheet repositioning in the fourth quarter of 2025, partially offset by less purchase accounting accretion. Interest expense decreased $5.0 million, or 18.4%, from the first quarter of 2025, as the average rates paid on deposits and borrowings declined.
Current report
The Company recorded a provision release of $4.9 million for the first quarter of 2026, compared to a provision for credit losses of $0.9 million for the first quarter of 2025. The provision release in the first quarter of 2026 was primarily driven by changes to loan balances and loan mix, largely due to decreases in balances in the commercial real estate construction, land and development pool, which is reserved at a higher rate than most other loan pools, in addition to decreases in reserves on individually evaluated loans.
Current report
Total noninterest income for the three months ended March 31, 2026 was $30.8 million, an increase of $3.2 million, or 11.6%, from the three months ended March 31, 2025. The increase was driven by an increase in mortgage banking and retirement and benefit services revenues. Mortgage banking revenue increased $2.0 million, or 131.5%, in the first quarter of 2026 compared to the first quarter of 2025, due to an increase in the mortgage servicing asset valuation, as well as increased origination volume and improved gain on sale margin. Retirement and benefit services revenue increased $1.3 million, or 8.1%, in the first quarter of 2026 compared to the first quarter of 2025, primarily driven by both asset-based and transaction-based fees.
Current report
Total noninterest expense for the three months ended March 31, 2026 was $50.4 million, a $27.0 thousand, or 0.1%, increase compared to $50.4 million for the three months ended March 31, 2025. The underlying changes were driven by increases in compensation, professional fees and assessments, and occupancy and equipment expense, offset by decreases in employee taxes and benefits and intangible amortization expense. Compensation increased $1.1 million, or 4.9%, from the first quarter of 2025, primarily due to higher annual bonus expense. Professional fees and assessments increased $0.8 million, or 26.8%, from the first quarter of 2025, primarily due to a reclassification of consulting services and other third-party vendor expenses from business services, software and technology expense to professional fees and assessments. Occupancy and equipment expense increased $0.5 million, or 17.9%, from the first quarter of 2025, primarily driven by facility investments and the strategic realignment of locations from owned to leased space. In the first quarter of 2026, employee taxes and benefits decreased $1.1 million, or 14.5%, from the first quarter of 2025, primarily due to lower claims on group insurance. Intangible amortization expense decreased $0.7 million, or 27.2%, in the first quarter of 2026, primarily due to the annual reset of the $33.5 million core deposit intangible recorded in connection with the HMNF acquisition in the fourth quarter of 2024.
Current report
Wealth Advisory Services
Current report
Total loans outstanding were $4.0 billion as of March 31, 2026, a decrease of $13.3 million, or 0.3%, from December 31, 2025. The decrease was primarily driven by a $28.3 million decrease in consumer loans, partially offset by a $15.1 million increase in commercial loans.
Removed paragraphs (12)
Previous report
Property Sale
Previous report
Net income for the nine months ended September 30, 2025, was $50.5 million, or $1.95 per diluted common share, a $32.6 million, or 182.9%, increase compared to $17.8 million, or $0.89 per diluted common share, for the nine months ended September 30, 2024. Earnings for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 increased primarily due to a $58.6 million increase in net interest income, partially offset by a $29.1 million increase in noninterest expense.
Previous report
Net interest income for the three months ended September 30, 2025 was $43.1 million, an increase of $20.6 million, or 91.4%, compared to $22.5 million for the three months ended September 30, 2024. The increase in net interest income for the third quarter of 2025 compared to the third quarter of 2024 was primarily due to the earning assets acquired in the HMNF transaction, strong organic loan growth at higher yields, and purchase accounting accretion. Interest expense decreased $2.2 million, or 7.3%, from the third quarter of 2024, as average borrowing balances declined, alongside a decrease in the average rate paid on deposits, more than offset the increase in interest-bearing deposits stemming from the HMNF transaction and organic deposit growth.
Previous report
Net interest income for the nine months ended September 30, 2025 was $127.3 million, an increase of $58.6 million, or 85.2%, compared to $68.8 million for the nine months ended September 30, 2024. Net interest income for the nine months ended September 30, 2025 increased compared to the nine months ended September 30, 2024 primarily driven by the earning assets acquired in the HMNF transaction, strong organic loan growth at higher yields, and purchase accounting accretion. Interest expense decreased $3.6 million, or 4.2%, from the nine months ended September 30, 2024, as the decline in average borrowing balances, alongside a decrease in the average rate paid on deposits, more than offset the increase in interest-bearing deposits stemming from the HMNF transaction and organic deposit growth.
Previous report
The Company did not record a provision for credit losses for the third quarter of 2025, compared to a provision for credit losses of $1.7 million for the third quarter of 2024. The decrease in the provision for credit losses was primarily driven by the decrease in the provision for credit losses on unfunded commitments.
Previous report
The Company recorded a provision for credit losses of $0.9 million for the nine months ended September 30, 2025 compared to a provision for credit losses of $6.2 million for the nine months ended September 30, 2024. The decrease in the provision for credit losses was primarily driven by the decrease in the provision for credit losses on unfunded commitments.
Previous report
Total noninterest income for the three months ended September 30, 2025 was $29.4 million, an increase of $1.1 million, or 3.8%, from the three months ended September 30, 2024. The increase in noninterest income was primarily driven by an increase of $0.9 million, or 35.0%, in mortgage banking revenue in the third quarter of 2025 compared to the third quarter of 2024, primarily driven by higher mortgage originations as a result of expansion into HMNF legacy markets. Retirement and benefit services revenue increased $0.4 million, or 2.2%, in the third quarter of 2025 compared to the third quarter of 2024, primarily driven by a 6.7% increase in assets under administration/management during that same period.
Previous report
Total noninterest income for the nine months ended September 30, 2025 was $88.8 million, an increase of $7.8 million, or 9.6%, from the nine months ended September 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. Mortgage banking revenue increased $1.9 million, or 27.3%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily driven by a higher gain on sale rate and increased mortgage servicing revenue from the HMNF transaction. Wealth revenue increased $1.7 million, or 8.7%, for the nine months ended September 30, 2025 compared to the nine months ended September 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.
Previous report
Total noninterest expense for the three months ended September 30, 2025 was $50.5 million, an $8.1 million, or 19.1%, increase compared to $42.4 million for the three months ended September 30, 2024. The year over year increase was primarily driven by higher compensation expense, business services, software and technology expense, intangible amortization expense, occupancy and equipment expense, and employee taxes and benefits expense. Compensation expense and employee taxes and benefits expense increased primarily due to increased head count resulting from the HMNF transaction. Business services, software and technology expense increased primarily due to the increased company size following the HMNF transaction along with multiple platform upgrades. 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 the increased branch footprint resulting from the HMNF transaction.
Previous report
Total noninterest expense for the nine months ended September 30, 2025 was $149.3 million, a $29.1 million, or 24.2%, increase compared to $120.2 million for the nine months ended September 30, 2024. The year over year increase was primarily driven by higher compensation expense, intangible amortization expense, employee taxes and benefits expense, business services, software and technology expense, other 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. Business services, software and technology expense increased primarily due to platform upgrades. Other expense increased primarily due to an insurance reimbursement. Occupancy and equipment expense increased primarily due to the increased branch footprint resulting from the HMNF transaction.
Previous report
Wealth
Previous report
Total loans outstanding were $4.1 billion as of September 30, 2025, an increase of $109.5 million, or 2.7%, from December 31, 2024. The increase was primarily driven by a $40.1 million increase in consumer loans, a $35.4 million increase in commercial and industrial loans, and a $29.4 million increase in CRE loans.
Reworded paragraphs (30)
Previous wording
The following discussion explains the Company’s financial condition and results of operations as of and for the three and nine months ended September 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.*
Current wording
The following discussion explains the Company’s financial condition and results of operations as of and for the three months ended March 31, 2026 and 2025*. 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, 2025*, filed with the SEC on March 4, 2026.*
Previous wording
This Quarterly Report on Form 10-Q 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 the Company’s 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.
Current wording
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by 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 the Company’s 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.
Previous wording
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on the Company’s current beliefs, expectations and assumptions regarding the Company’s 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 the Company’s control. The Company’s 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 the Company’s actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, the following:
Current wording
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on the Company’s current beliefs, expectations and assumptions regarding the Company’s 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 known and unknown uncertainties, risks, changes in circumstances, and other factors that are difficult to predict and many of which are outside of the Company’s control. The Company’s 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 the Company’s actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, the following:
Previous wording
The Company is a commercial wealth bank and national retirement services provider headquartered in Grand Forks, North Dakota. Through the Company’s subsidiary, Alerus Financial, National Association, the Company provides financial solutions to businesses and consumers through three distinct business lines—banking, retirement and benefit services, and wealth. These solutions are delivered through a relationship‑oriented primary point of contact along with responsive and client‑friendly technology.
Current wording
The Company is a commercial wealth advisory services bank and national retirement and benefit services provider headquartered in Grand Forks, North Dakota. Through the Company’s subsidiary, Alerus Financial, National Association, the Company provides financial solutions to businesses and consumers through three distinct business lines—banking, retirement and benefit services, and wealth advisory services. These solutions are delivered through a relationship‑oriented primary point of contact along with responsive and client‑friendly technology.
Previous wording
The Company’s business model produces strong financial performance and a diversified revenue stream, which has helped the Company establish a brand and culture yielding both a loyal client base and passionate and dedicated employees. The Company generates a majority of overall revenue from noninterest income, which is driven primarily by the Company’s retirement and benefit services and wealth business lines. The remainder of the Company’s revenue consists of net interest income, which the Company derives from offering traditional banking products and services.
Current wording
The Company’s business model produces strong financial performance and a diversified revenue stream, which has helped the Company establish a brand and culture yielding both a loyal client base and passionate and dedicated employees. The Company generates a majority of overall revenue from noninterest income, which is driven primarily by the Company’s retirement and benefit services and wealth advisory services business lines. The remainder of the Company’s revenue consists of net interest income, which the Company derives from offering traditional banking products and services.
Previous wording
On September 2, 2025, the Board of Directors of the Company declared a quarterly cash dividend of $0.21 per common share. This dividend was paid on October 10, 2025, to stockholders of record at the close of business on September 26, 2025.
Current wording
On February 25, 2026, the Board of Directors of the Company declared a quarterly cash dividend of $0.21 per share of common stock. This dividend was paid on April 10, 2026, to stockholders of record at the close of business on March 27, 2026.
Previous wording
Net income for the three months ended September 30, 2025, was $16.9 million, or $0.65 per diluted common share, a $11.7 million, or 225.0%, increase compared to $5.2 million, or $0.26 per diluted common share, for the three months ended September 30, 2024. Earnings for the third quarter of 2025 compared to the third quarter of 2024 increased primarily due to a $20.6 million increase in net interest income, partially offset by an $8.1 million increase in noninterest expense.
Current wording
Net income for the three months ended March 31, 2026, was $23.0 million, or $0.89 per diluted common share, a $9.7 million, or 72.5%, increase compared to $13.3 million, or $0.52 per diluted common share, for the three months ended March 31, 2025. Earnings for the first quarter of 2026 compared to the first quarter of 2025 increased primarily due to an increase in net interest income of $3.8 million and a decrease in the provision for (recovery of) credit losses of $5.7 million.
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 and nine months ended September 30, 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 months ended March 31, 2026 and 2025.
Previous wording
Net interest margin (on a tax-equivalent basis) for the three months ended September 30, 2025 was 3.50%, compared to 2.23% 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, lower rates paid on deposits and lower borrowing balances.
Current wording
Net interest margin (on a tax-equivalent basis), a non-GAAP financial measure, for the three months ended March 31, 2026 was 3.77%, compared to 3.41% for the same period in 2025. The increase was mainly attributable to lower cost of funds and higher yields on investment securities.
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 and nine months ended September 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.
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 months ended March 31, 2026 and 2025. 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’s noninterest income is generated from retirement and benefit services, wealth, mortgage banking, and other general banking services.
Current wording
The Company’s noninterest income is generated from retirement and benefit services, wealth advisory services, mortgage banking, and other general banking services.
Previous wording
The following table presents the Company’s noninterest income for the three and nine months ended September 30, 2025 and 2024:
Current wording
The following table presents the Company’s noninterest income for the three months ended March 31, 2026 and 2025:
Previous wording
The following table presents noninterest expense for the three and nine months ended September 30, 2025 and 2024:
Current wording
The following table presents noninterest expense for the three months ended March 31, 2026 and 2025:
Previous wording
For the three months ended September 30, 2025, the Company recognized income tax expense of $5.1 million on $22.0 million of pre-tax income, resulting in an effective tax rate of 23.2%, compared to income tax expense of $1.6 million on $6.8 million of pre-tax income for the three months ended September 30, 2024, resulting in an effective tax rate of 23.4%.
Current wording
For the three months ended March 31, 2026, the Company recognized income tax expense of $7.3 million on $30.3 million of pre-tax income, resulting in an effective tax rate of 24.1%, compared to income tax expense of $4.2 million on $17.6 million of pre-tax income for the three months ended March 31, 2025, resulting in an effective tax rate of 24.2%.
Previous wording
The Company determined reportable segments based on the significance of the services offered, the significance of those services to the Company’s financial condition and operating results, and the Company’s regular review of the operating results of those services. The Company has three operating segments—banking, retirement and benefit services, and wealth. These segments are components for which financial information is prepared and evaluated regularly by management in deciding how to allocate resources and assess performance.
Current wording
The Company determined reportable segments based on the significance of the services offered, the significance of those services to the Company’s financial condition and operating results, and the Company’s regular review of the operating results of those services. The Company has three operating segments—banking, retirement and benefit services, and wealth advisory services. These segments are components for which financial information is prepared and evaluated regularly by management in deciding how to allocate resources and assess performance.
Previous wording
The banking segment offers a complete line of loan, deposit, cash management, and treasury services through 28 offices in North Dakota, Minnesota, Wisconsin, Iowa, and Arizona, including 15 banking offices acquired in the HMNF transaction. These products and services are supported through web and mobile based applications. The majority of the Company’s assets and liabilities are in the banking segment’s balance sheet.
Current wording
The banking segment offers a complete line of loan, deposit, cash management, and treasury services through 26 offices in North Dakota, Minnesota, Wisconsin, Iowa, and Arizona, including 13 banking offices acquired in the HMNF transaction. These products and services are supported through web and mobile based applications. The majority of the Company’s assets and liabilities are in the banking segment’s balance sheet.
Previous wording
The following table presents the banking segment income statement, net of corporate administration, for the three and nine months ended September 30, 2025 and 2024:
Current wording
The following table presents the banking segment income statement, inclusive of corporate administration income, for the three months ended March 31, 2026 and 2025:
Previous wording
The following table presents the retirement and benefits services segment income statement for the three and nine months ended September 30, 2025 and 2024:
Current wording
The following table presents the retirement and benefit services segment income statement for the three months ended March 31, 2026 and 2025:
Previous wording
The wealth segment provides advisory and planning services, investment management, and trust and fiduciary services to clients across the Company’s footprint.
Current wording
The wealth advisory services segment provides advisory and planning services, investment management, and trust and fiduciary services to clients across the Company’s footprint.
Previous wording
The following table presents the wealth segment income statement for the three and nine months ended September 30, 2025 and 2024:
Current wording
The following table presents the wealth advisory services segment income statement for the three months ended March 31, 2026 and 2025:
Previous wording
Total assets were $5.3 billion as of September 30, 2025, an increase of $68.9 million, or 1.3%, compared to December 31, 2024. The increase was primarily due to a $109.5 million increase in loans held for investment, partially offset by a decrease of $57.0 million in available-for-sale investment securities.
Current wording
Total assets were $5.3 billion as of March 31, 2026, an increase of $57.9 million, or 1.1%, compared to December 31, 2025. The increase was primarily due to an increase of $61.6 million in cash and cash equivalents and an increase of $8.0 million in available-for-sale investment securities, partially offset by a decrease of $13.3 million in loans held for investment.
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 September 30, 2025, the Company’s RRE portfolio was $1.2 billion, representing a $42.5 million, or 3.7%, 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 March 31, 2026, the Company’s RRE portfolio was $1.2 billion, representing a $23.8 million, or 2.0%, decrease from December 31, 2025. 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 $3.8 million and $2.8 million for the nine months ended September 30, 2025 and 2024, respectively. There was no interest income included in net interest income related to nonaccrual loans for the nine months ended September 30, 2025 and 2024.
Current wording
Interest income lost on nonaccrual loans was approximately $1.0 million and $1.1 million for the three months ended March 31, 2026 and 2025, respectively. There was no interest income included in net interest income related to nonaccrual loans for the three months ended March 31, 2026 and 2025.
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 $3.7 million and $7.4 million as of September 30, 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 $3.4 million and $6.0 million as of March 31, 2026 and 2025, respectively.
Previous wording
Deposit inflows and outflows are influenced by prevailing market interest rates, competition, local and economic conditions, and fluctuations in the Company’s customers’ own liquidity needs and may also be influenced by recent developments in the financial services industry, including the large-scale deposit withdrawals over a short period of time that resulted in recent bank failures.
Current wording
Deposit inflows and outflows are influenced by prevailing market interest rates, competition, local and economic conditions, and fluctuations in the Company’s customers’ own liquidity needs and may also be influenced by recent developments in the financial services industry, including the large-scale deposit withdrawals over a short period of time that resulted in bank failures.
Previous wording
Total deposits were $4.4 billion as of September 30, 2025, an increase of $34.2 million, or 0.8%, from December 31, 2024. Interest-bearing deposits increased $160.9 million during this period, while noninterest-bearing deposits decreased $126.7 million. The increase in total deposits was driven by growth in commercial deposits due to new and expanded client relationships and funding structure diversification through the utilization of callable brokered CDs. This growth was partially offset by outflows from our public funds depositors, which reached a typical seasonal low in the third quarter of 2025.
Current wording
Total deposits were $4.3 billion as of March 31, 2026, an increase of $155.9 million, or 3.7%, from December 31, 2025. Interest-bearing deposits increased $106.2 million during this period, while noninterest-bearing deposits increased $49.7 million. The increase in total deposits was driven by growth in commercial deposits due to new and expanded client relationships and funding structure diversification through the utilization of callable brokered CDs. This growth was partially offset by outflows from our public funds depositors, which reached a typical seasonal low in the third quarter of 2025.
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 September 30, 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 both March 31, 2026 and December 31, 2025. These amounts were estimated based on the same methodologies used for regulatory reporting purposes.
Previous wording
Stockholders’ equity increased $55.3 million, or 11.2%, to $550.7 million as of September 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 8.24% as of September 30, 2025, from 7.13% as of December 31, 2024. Common equity tier 1 capital to risk weighted assets increased to 10.84% as of September 30, 2025, from 9.91% as of December 31, 2024.
Current wording
Stockholders’ equity increased $9.8 million, or 1.7%, to $574.7 million as of March 31, 2026, compared to $564.9 million as of December 31, 2025. Tangible common equity to tangible assets, a non-GAAP financial measure, increased to 8.85% as of March 31, 2026, from 7.43% as of December 31, 2025. Common equity tier 1 capital to risk weighted assets increased to 10.60% as of March 31, 2026, from 10.28% as of December 31, 2025.
Previous wording
As of September 30, 2025, the Company had on balance sheet liquidity of $566.9 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.
Current wording
As of March 31, 2026, the Company had on balance sheet liquidity of $413.2 million, compared to $568.8 million as of December 31, 2025. 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 September 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.
Current wording
As of March 31, 2026, the Company had off balance sheet liquidity of $2.3 billion, compared to $2.2 billion as of December 31, 2025. Off balance sheet liquidity includes FHLB borrowing capacity, federal funds lines, and brokered deposit capacity.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The Company’s Crossroads branch in Rochester, Minnesota is listed for sale for $1.5 million and is expected to sell within the next 12 months. At March 31, 2026, the facility had a carrying value of approximately $1.0 million. The Company expects to record a gain on the sale upon closing, as the expected sale price is greater than the property’s carrying value.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
For the nine months ended September 30, 2025, the Company recognized income tax expense of $15.5 million on $65.9 million of pre-tax income, resulting in an effective tax rate of 23.4%, compared to income tax expense of $5.6 million on $23.5 million of pre-tax income for the nine months ended September 30, 2024, resulting in an effective tax rate of 23.9%.