ALERUS FINANCIAL CORP
For the period ended Jun 30, 2026. Filed Aug 3, 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.
Jun 30, 2026 · Filed Aug 3, 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 2026-03-31; filed 2026-05-01.
0001437749-26-014481
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-03.
0001437749-26-025463
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 131 previous paragraphs and 138 current paragraphs.
101 unchanged; 27 reworded; 9 added; 2 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 79 previous and 83 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 (9)
Current report
Net income for the six months ended June 30, 2026 was $43.8 million, or $1.70 per diluted common share, a $10.3 million, or 30.6%, increase compared to $33.6 million, or $1.30 per diluted common share, for the six months ended June 30, 2025. Earnings for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 increased primarily due to an increase in net interest income of $8.4 million and an increase in noninterest income of $4.4 million, partially offset by an increase in noninterest expense of $4.5 million.
Current report
Net interest income for the six months ended June 30, 2026 was $92.6 million, an increase of $8.4 million, or 10.0%, compared to $84.2 million for the six months ended June 30, 2025. Interest income increased for the six months ended June 30, 2026 compared to the six months ended June 30, 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 $9.4 million, or 17.3%, from the six months ended June 30, 2025, as average rates paid on deposits and borrowings declined primarily driven by Federal Reserve rate cuts in the second half of 2025.
Current report
The Company recorded a provision for credit losses of $0.5 million for the second quarter of 2026, compared to no provision for credit losses for the second quarter of 2025.
Current report
Total noninterest income for the three months ended June 30, 2026 was $32.9 million, an increase of $1.2 million, or 3.7%, from the three months ended June 30, 2025. The increase was driven by an increase in other noninterest income, retirement and benefit services revenue, and service charges on deposit accounts, partially offset by a decrease in the gain on sale of non-mortgage loans. Other noninterest income increased $1.7 million, or 86.1%, compared to the second quarter of 2025, primarily driven by a gain on the sale of a property in the Rochester, Minnesota market, increased swap fee income, and mutual fund investment gains related to the underlying assets of the deferred compensation plans. Retirement and benefit services revenue increased $1.3 million, or 8.3%, in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by recurring annual income. Service charges on deposit accounts increased $0.4 million, or 62.6%, compared to the second quarter of 2025, primarily due to a reclassification of fees from other noninterest income to service charges on deposit accounts revenue in the first quarter of 2026. Gain on sale of non-mortgage loans decreased $2.1 million, or 100.0%, compared to the second quarter of 2025 due to a $2.1 million gain on the sale of a PCD hospitality loan during the second quarter of 2025.
Current report
Total noninterest income for the six months ended June 30, 2026 was $63.8 million, an increase of $4.4 million, or 7.4%, from the six months ended June 30, 2025. The increase was driven by an increase in retirement and benefit services revenue, mortgage banking revenue, other noninterest income, and service charges on deposit accounts, partially offset by a decrease in the gain on sale of non-mortgage loans. Retirement and benefit services revenue increased $2.6 million, or 8.2%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily driven by recurring annual income. Mortgage banking revenue increased $1.6 million, or 30.0%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, due to an increase in the mortgage servicing asset valuation, as well as an increase in sold loan volume. Other noninterest income increased $1.0 million, or 21.7%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily driven by a gain on the sale of a property in the Rochester, Minnesota market, increased swap fee income, and mutual fund investment gains related to the underlying assets of the deferred compensation plans. Service charges on deposit accounts increased $0.7 million, or 53.3%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to a reclassification of fees from other noninterest income to service charges on deposit accounts revenue in the first quarter of 2026. Gain on sale of non-mortgage loans decreased $2.1 million, or 100.0%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, due to a $2.1 million gain on the sale of a PCD hospitality loan during the second quarter of 2025.
Current report
Total noninterest expense for the three months ended June 30, 2026 was $52.9 million, a $4.4 million, or 9.2%, increase compared to $48.4 million for the three months ended June 30, 2025. The underlying changes were driven by increases in compensation, professional fees and assessments, and other noninterest expense. Compensation increased $1.8 million, or 7.4%, primarily due to annual merit increases, as well as increases in the deferred compensation plan liabilities driven by mutual fund investment gains related to the underlying assets of the plans. Professional fees and assessments increased $1.4 million, or 61.7%, primarily due to the reclassification of consulting services and other third-party vendor expenses from business services, software and technology expense to professional fees and assessments, as well as an increase in legal fees. Other noninterest expense increased $1.5 million, or 104.3%, due to an increase in other real estate owned balances and related holding costs, as well as increased corporate insurance costs.
Current report
Total nonperforming loans were $7.5 million at June 30, 2026, compared to $69.1 million as of December 31, 2025. The decrease was primarily driven by the sale of three non-performing loans representing a construction, land and development relationship. There were no historical charge-offs on this relationship and there were no charge-offs recognized as a result of the transaction.
Current report
OREO and repossessed assets were $9.6 million at June 30, 2026, compared to $0.3 million as of December 31, 2025. The increase was primarily driven by the transfer of one 1-4 family property and one apartment complex to OREO in the second quarter of 2026.
Current report
Total deposits were $4.2 billion as of June 30, 2026, a decrease of $0.1 million, or 0.0%, from December 31, 2025. Interest-bearing deposits increased $48.2 million during this period, while noninterest-bearing deposits decreased $48.3 million. The decrease in total deposits was due to seasonal outflows from public funds depositors.
Removed paragraphs (2)
Previous 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.
Previous report
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.
Reworded paragraphs (27)
Previous wording
Item** 2 –** Management**’s Discussion and Analysis of Financial Condition and Results of Operations
Current wording
ITEM** 2 –** MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**
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, 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.*
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, 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
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.
Current wording
On May 21, 2026, the Board of Directors of the Company declared a quarterly cash dividend of $0.22 per share of common stock. This dividend was paid on July 10, 2026, to stockholders of record at the close of business on June 26, 2026.
Previous 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.
Current wording
Net income for the three months ended June 30, 2026 was $20.9 million, or $0.81 per diluted common share, a $0.6 million, or 3.0%, increase compared to $20.3 million, or $0.78 per diluted common share, for the three months ended June 30, 2025. Earnings for the second quarter of 2026 compared to the second quarter of 2025 increased primarily due to an increase in net interest income of $4.7 million, partially offset by an increase in noninterest expense $4.4 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 months ended March 31, 2026 and 2025.
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, 2026 and 2025.
Previous wording
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 wording
Net interest income for the three months ended June 30, 2026 was $47.7 million, an increase of $4.7 million, or 10.9%, compared to $43.0 million for the three months ended June 30, 2025. Interest income increased for the second quarter of 2026 compared to the second quarter of 2025 was primarily driven by 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 $4.5 million, or 16.3%, from the second quarter of 2025, as average rates paid on deposits and borrowings declined primarily driven by Federal Reserve rate cuts in the second half of 2025.
Previous 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.
Current wording
Net interest margin (on a tax-equivalent basis), a non-GAAP financial measure, was 3.97% for the three months ended June 30, 2026 , a 20 basis point increase from 3.51% for the same period in 2025. The increase was mainly attributable to a one-time $1.6 million interest income recovery on a nonaccrual loan resolution, higher purchase accounting accretion and higher loan yields, partially offset by the impact of the subordinated debt refinancing and higher borrowing balances.
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, 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.
Current wording
The following tables present 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, 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 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 wording
The Company recorded a provision release of $4.4 million for the six months ended June 30, 2026, compared to a provision for credit losses of $0.9 million for the six months ended June 30, 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.
Previous wording
The following table presents the Company’s noninterest income for the three months ended March 31, 2026 and 2025:
Current wording
The following table presents the Company’s noninterest income for the three and six months ended June 30, 2026 and 2025:
Previous wording
The following table presents noninterest expense for the three months ended March 31, 2026 and 2025:
Current wording
The following table presents noninterest expense for the three and six months ended June 30, 2026 and 2025:
Previous wording
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 wording
Total noninterest expense for the six months ended June 30, 2026 was $103.3 million, a $4.5 million, or 4.5%, increase compared to $98.8 million for the six months ended June 30, 2025. The underlying changes were driven by increases in compensation, professional fees and assessments, occupancy and equipment expense, and other noninterest expense, offset by decreases in intangible amortization expense and employee taxes and benefits. Compensation increased $2.9 million, or 6.2%, primarily due to higher annual bonus expense, annual merit increases, as well as increases in the deferred compensation plan liabilities driven by mutual fund investment gains related to the underlying assets of the plans. Professional fees and assessments increased $2.2 million, or 42.1%, primarily due to the reclassification of consulting services and other third-party vendor expenses from business services, software and technology expense to professional fees and assessments, as well as an increase in legal fees. Occupancy and equipment expense increased $1.5 million, or 26.6%, primarily driven by facility investments and the strategic realignment of locations from owned to leased space. Other noninterest expense increased $0.7 million, or 16.6%, due to an increase in other real estate owned balances and related holding costs, as well as increased corporate insurance costs. For the six months ended June 30, 2026, intangible amortization expense decreased $1.5 million, or 27.1%, from the six months ended June 30, 2025, primarily due to the annual reset of the $33.5 million core deposit intangible recorded in connection with the HMNF transaction. For the six months ended June 30, 2026, employee taxes and benefits decreased $1.0 million, or 7.0%, from the six months ended June 30, 2025, primarily due to lower claims on group insurance.
Previous 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%.
Current wording
For the three months ended June 30, 2026, the Company recognized income tax expense of $6.4 million on $27.3 million of pre-tax income, resulting in an effective tax rate of 23.5%, compared to income tax expense of $6.1 million on $26.4 million of pre-tax income for the three months ended June 30, 2025, resulting in an effective tax rate of 23.2%.
Previous 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:
Current wording
The following table presents the banking segment income statement, inclusive of corporate administration income, for the three and six months ended June 30, 2026 and 2025:
Previous wording
The following table presents the retirement and benefit services segment income statement for the three months ended March 31, 2026 and 2025:
Current wording
The following table presents the retirement and benefit services segment income statement for the three and six months ended June 30, 2026 and 2025:
Previous wording
The following table presents the wealth advisory services segment income statement for the three months ended March 31, 2026 and 2025:
Current wording
The following table presents the wealth advisory services segment income statement for the three and six months ended June 30, 2026 and 2025:
Previous 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.
Current wording
Total assets were $5.3 billion as of June 30, 2026, an increase of $58.6 million, or 1.1%, compared to December 31, 2025. The increase was primarily due to an increase of $41.8 million in cash and cash equivalents, an increase of $20.1 million in available-for-sale investment securities, an increase of $8.5 million in other assets, and an increase of $4.8 million in loans held for sale, partially offset by a decrease of $4.8 million in loans held for investment.
Previous wording
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.
Current wording
Total loans outstanding were $4.0 billion as of June 30, 2026, a decrease of $13.8 million, or 0.3%, from December 31, 2025. The decrease was primarily driven by a $41.6 million decrease in consumer loans, partially offset by a $27.9 million increase in commercial 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, 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.
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, 2026, the Company’s RRE portfolio was $1.2 billion, representing a $41.0 million, or 3.4%, 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 $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.
Current wording
Interest income lost on nonaccrual loans was approximately $0.4 million and $1.1 million for the six months ended June 30, 2026 and 2025, respectively. There was no interest income included in net interest income related to nonaccrual loans for the six months ended June 30, 2026 and 2025.
Previous wording
The following table presents information concerning the components of the ACL for the periods presented:
Current wording
The following tables present information concerning the components of the ACL for the periods presented:
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 $3.4 million and $6.0 million as of March 31, 2026 and 2025, 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 $3.5 million and $4.8 million as of June 30, 2026 and 2025, 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 $1.4 billion at both March 31, 2026 and December 31, 2025. These amounts were estimated based on the same methodologies used for regulatory reporting purposes.
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 $1.5 billion at June 30, 2026 and approximately $1.4 billion December 31, 2025. These amounts were estimated based on the same methodologies used for regulatory reporting purposes.
Previous 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.
Current wording
Stockholders’ equity increased $18.2 million, or 3.2%, to $583.1 million as of June 30, 2026, compared to $564.9 million as of December 31, 2025. Tangible common equity to tangible assets, a non-GAAP financial measure, increased to 9.05% as of June 30, 2026, from 8.72% as of December 31, 2025. Common equity tier 1 capital to risk weighted assets increased to 10.81% as of June 30, 2026, from 10.28% as of December 31, 2025.
Previous 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.
Current wording
As of June 30, 2026, the Company had on balance sheet liquidity of $400.7 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 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.
Current wording
As of both June 30, 2026 and December 31, 2025, the Company had off balance sheet liquidity of $2.2 billion. 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, 2026, the Company did not have any federal funds purchased, and had $200.0 million in short-term borrowings from the FHLB. As of March 31, 2026, the Company had $2.1 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.
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, 2026, the Company did not have any federal funds purchased, and had $345.0 million in short-term borrowings from the FHLB. As of June 30, 2026, the Company had $2.0 billion of collateral pledged to the FHLB and, based on this collateral, the Company was eligible to borrow up to an additional $1.0 billion from the FHLB. In addition, the Company can borrow up to $125.0 million through the unsecured lines of credit the Company has established with five other correspondent banks.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For the six months ended June 30, 2026, the Company recognized income tax expense of $13.7 million on $57.5 million of pre-tax income, resulting in an effective tax rate of 23.8%, compared to income tax expense of $10.3 million on $43.9 million of pre-tax income for the six months ended June 30, 2025, resulting in an effective tax rate of 23.6%.
Rearranged previous paragraphs (1)
Previous report — wording carried 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.