Q2 2024 Alerus Financial Corp Earnings Call Transcript
Key Points
- Alerus Financial Corp (ALRS) reported net income of $6.2 million, with earnings per share of $0.31, exceeding expectations.
- The company achieved its fifth consecutive quarter of deposit growth, showcasing strong performance in a competitive environment.
- Loan growth was robust at 4.2% for the quarter, with a disciplined approach to pricing and credit.
- Fee income, a strategic differentiator for ALRS, contributed to over 53% of total revenues, with an 8.1% increase during the quarter.
- The acquisition of HMN Financial is progressing on schedule, with anticipated closing in the fourth quarter, marking ALRS's 26th acquisition.
- A $4.5 million provision expense was recorded due to expected credit normalization and a charge-off of a non-accrual C&I loan.
- Non-performing assets increased to 63 basis points, primarily due to a construction loan moved to non-accrual status.
- The company anticipates a seasonal outflow of $80 million to $100 million in deposits in the third quarter.
- Expenses are expected to grow mid-single digits in 2024, including merger-related costs.
- The company remains slightly liability sensitive, which could impact net interest income if interest rates decrease.
Good afternoon. Welcome to the Alerus Financial Corporation earnings conference call. (Operator Instructions) Please note this event is being recorded.
This call may include forward-looking statements and the company's actual results may differ materially from those indicated in any forward-looking statements. Important factors that could cause actual results to differ materially from those indicated in the forward-looking statements are listed in the earnings release and the company's SEC filings.
I would now like to turn the conference over to the Alerus Financial Corporation President and CEO, Katie Lorenson. Please go ahead.
Thank you. Good morning and thank you for joining Alerusâ second quarter earnings conference call.
Joining me on the call today is CFO, Al Villalon; our Chief Risk and Operating Officer, Karin Taylor; our Chief Banking and Revenue Officer, Jim Collins; and our Chief Retirement Services Officer, Forrest Wilson.
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