CORRECTED-Alerus Financial Q2 net income beats estimates as margins expand

Overview

• Alerus Financial Q2 net income rises to $20.3 mln, beating analyst expectations, per LSEG data

• Adjusted EPS for Q2 increases 28.6% from Q1 but misses estimates, per LSEG data

• Co increased quarterly dividend by 5% to $0.21 per share, marking 39th consecutive yr of increases

Outlook

• Company remains focused on executing long-term strategy and sustainable growth

• Alerus emphasizes enhancing client relationships across integrated services

• Company highlights disciplined execution and diversified business model

• Alerus committed to delivering consistent shareholder value

Result Drivers

• REVENUE GROWTH - Increase in net interest income and noninterest income, including gains on loan sales, drove revenue growth

• MARGIN GROWTH - Net interest margin rose to 3.51% in Q2 vs 2.39% in Q2 2024, due to higher rates on interest earning assets from organic loan growth and the HMNF acquisition

• CREDIT RISK MANAGEMENT - Strategic sale of non-owner occupied commercial real estate loans and low net charge-offs demonstrate proactive credit risk management

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy."

• Wall Street's median 12-month price target for Alerus Financial Corp is $24.00, about 9.5% above its July 25 closing price of $21.72

• The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 9 three months ago

Press Release: ID:nBw48YrJva