Good morning, and welcome to the Alerus Financial Corporation Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star followed by zero. After today's presentation, there will be an opportunity to ask questions. 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 Alerus Financial Corporation Chairman, President, and CEO, Katie Lorenson. Please go ahead. Thank you. Good morning, and welcome to all listening to our call today. Here in the Twin Cities, I am joined by Karin Taylor, our Chief Risk Officer, and it is my privilege to have this time today to speak to you in my last days as CFO and for the first time as President and CEO of Alerus. Today, I will cover the tremendous results of 2021 made possible by and because of our Alerus team members, our diversified business model, and our longstanding approach to serving clients with an advice-based holistic approach. In 2021, we continued to grow our client base and expand relationships with current clients. Alerus delivered record net income to shareholders, exceeded production goals, all while being recognized internally and externally as a top workplace. The hard work of our team members throughout the company and their perseverance to provide an exceptional client experience continues to drive strong shareholder returns, culminating in an ROTCE of 18.89% for the year. Our performance is anchored in our diversified business model, and fee income for the year was 63% of total revenue. Maintaining our exceptional levels of fee income continues to be a high priority for our company. Our mortgage team was again a significant contributor to our results in 2021. As a reminder, the $48 and a half million of the reported mortgage revenue includes the offset of the hedge unwind of $8 and a half million. I'm proud of our team who surpassed the record of volume in 2020 and finished the year over $1.8 billion of origination. In addition, we maintain margins and pull-through due to our continued industry-leading execution. Alerus has invested in technology, and our team members and clients have embraced the option with 91% of the over 5,500 clients served through digital channels. You've heard me say this before, Alerus is a special company, and our mortgage division is special in itself. We've had a high level of repeat business with clients, and most of our volume has historically been focused on purchase business. We have an exceptional reputation and a great team. Although the industry statistics are again projecting a 30% decrease in volume in 2022, Alerus is a company that outperforms. We believe we can push to keep our decline closer to 20% in volume in 2022. A decline but still outperforming the industry. In our retirement and benefits division, we've surpassed revenue of $71 million, and the client base of Alerus, many of whom see us as their primary source of information for retirement readiness, surpassed 440,000 participants. Our retirement and HSA business is also a significant source of deposits, and these balances grew $72 million to total $669 million. This year's revenue included approximately $2.5 million of document restatement fees. As we've discussed on previous calls, these are recurring but not annual fees. We will look to replace those fees with new revenue generation and anticipate holding revenue at 2021 levels. Our wealth management team members brought peace of mind through advice and planning to more clients than ever, with $527 million in new production and assets under management, including four consecutive months of new production greater than $50 million. Here, too, Alerus technology investments shine. With a few clicks, distribution rollovers are invested, managed, and a team member is proactively reaching out to understand goals and help establish a plan. We rolled out this digital option in late Q3 and ended the year with 360 accounts open. We have exceptional momentum in this area and have been successful in recruiting experienced talent. Although the market could be a headwind, we look to continue to grow revenue at nearly the same pace in 2022 as we did in 2021. The banking commercial units of Alerus had another strong year. Our team members have done a great job in serving our commercial clients. In total, Alerus closed 2,500 PPP loans, over 20% of our portfolio through the program. That puts Alerus in the top quartile in the country. In 2021, we continued to expand relationships with the new clients we acquired because of PPP. Overall, loan growth was as expected for the fourth quarter, while loan production for the year reached new levels. We continue to feel the headwind of historic low loan utilization and several significant payoffs. We grew our deposit base by 14% in 2021, which included $450 million in new account balances as team members continued to excel in expanding commercial relationships and treasury management. From a balance sheet perspective, we opted to invest excess liquidity and pull earnings into equity. We more than doubled the size of our investment portfolio. Although this has been a drain on managed margin, the move resulted in year-over-year earnings on the portfolio increasing by $5 million. Karin will cover credit quality, but it is worth repeating that although we've released reserves in Q4, our allowance continues to remain at a robust level, and we look to grow into this balance throughout 2022 and beyond. While we exceeded expectations in revenue, expenses for the quarter were in line. Our team members' execution in controlling costs continues, and we delivered another solid quarter of managed expenses. We continue to extract efficiencies in processes, operations, and facility closures while growing our client base and engaging clients in our digital offerings. Looking ahead into 2022, we are looking to continue our execution in cost controls and excluding the Metro transaction projecting flat expenses. We certainly acknowledge and are feeling the wage pressure in current positions as well as in new hires. During 2021, we converted and integrated our Denver fee income acquisition with nearly 100% client retention. We listed out a highly sought after and nationally recognized SBA team. This team engaged immediately and production has exceeded expectations. We also announced our 25th acquisition of a high-performing high growth commercial focused bank in the robust Phoenix, Arizona market. Our strong earnings and the rebuild of capital through amortization of the purchase price for acquisitions drove a growth in tangible books by 12% in 2021. Organic growth remains a priority in addition to our constant focus on building pipelines of acquisition targets and partners in the fee income space. I'll now turn it over to Karin, and then we will open it up for questions. Thank you, Katie, and good morning, everyone. Our pandemic related programs continued to wind down over the past quarter. As of 19thJanuary, PPP loan balances forgiven totals $443 million, or about 93% of that portfolio, leaving approximately $25 million in balances on the books. $3.3 million in loans remain on deferral, primarily in the residential real estate portfolio. Credit metrics continued to improve over the fourth quarter as several long-term workouts were resolved, resulting in a decrease in non-performing loans to total loans to 12 basis points, down from 35 basis points at the end of the third quarter. In addition, we recorded net recoveries for the quarter of $1 million. As a result, we released $1.5 million in reserves in the fourth quarter, bringing our allowance to total loans, excluding PPP loans, to 1.83%. Our team remained agile and resilient over the past quarter. Despite increased illness and exposures as the Omicron variant surged through our markets, our teams remained focused on serving clients. Commercial line utilization dropped to 17%, its lowest point in 5 years. While excess liquidity in the system remains challenging, loan production met expectations for the quarter and loans net of PPP increased by $27 million or 1.62% on the linked quarter. The increase was driven by growth in commercial real estate and residential real estate first mortgage portfolios. Market demand for both C&I and CRE loans continues to improve across our footprint. Our business advisors remain focused on building their pipelines, and momentum is strong early in the first quarter. That concludes our prepared remarks, and we'll open it up for questions. Thank you. We will now begin the question and answer session. To take a question, you may press star then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to reassemble our roster. Okay, our first question comes from Jeff Rulis from D.A. Davidson. Jeff, please go ahead. Thanks. Good morning. Just to follow on the loan growth or the demand. I think Karin you touched on that toward the end. Do you happen to have linked quarter payoff activity or payoff levels as well as the pipeline quarter over quarter? I can tell you that our payoff activity continued to be elevated through the quarter. I don't have the exact numbers, Jeff. Okay. Similar, you saw similar payoffs in 3Q versus 4Q? Mm-hmm. Okay. The pipeline quarter- In fact, we had a couple Yes. Oh, I'm sorry. We had a couple, you know, large paydowns on lines of credit at the end of the year, and that contributed obviously to that loan utilization. Mm-hmm. Okay. You talked about demand picking up and I guess just high level thoughts on net growth in 2022, I guess ex the PPP is as you did here, but just in general. Yeah, we, you know, we still believe that mid- to high-single digits for the Alerus balance sheet. Of course, we are still on track for the Metro deal with all the projections that we gave back in December in that regard. We do intend to pull back on some of the participation sold within the Metro transaction. We expect mid- to high-single digits for our growth and high- to double digits for the Metro balance sheet. Great. Thank you. The PPP fees linked quarter, do you have those and also what's remaining? Yes. There's about $1 million remaining. Let me come back to you on that one, Jeff. Okay. No problem. I'll just close with maybe one quick last one, just housekeeping on the provision levels. Currently, any expectations for, you know, more of an expectation to grow into reserves or would you expect a provision expense in 2022? You know, I think, Jeff, that's a good way to look at it. We expect that, as our required reserve related to, you know, economic factors decreases as things continue to improve, that we would expect that loan growth would offset that. You know, at this point, we don't see any significant credit deterioration on the horizon. Okay. Jeff, for PPP fees and revenue, we had $2.2 million in the fourth quarter compared to approximately $2 million in the third quarter. Fairly consistent levels. Thank you. Mm-hmm. Thank you, Jeff. Again, as a reminder, if you have a question, please press star followed by one. Our next question comes from Nathan Race from Piper Sandler. Nathan, please go ahead. Yes. Hi, good morning, Katie and Karin. Good morning. Question on the retirement and benefit services revenue. Obviously, you know, a really strong 2021. The RPS deal obviously helped to that extent, but I imagine you guys, you know, are still seeing some opportunities to offset some of the natural attrition within AUA within that line of business. I guess how are you guys kinda thinking about R&B revenue growth in 2022? I guess that was- So we- The equity market volatility that we may see. Right. Yeah. We certainly had 2021 was strong for a number of reasons. Of course, the Denver acquisition and our growth and retention, and then the markets were strong and we also had the retainer fees, which again are recurring, but they're not annual in nature. Those were approximately $2.5 million of the revenue in 2021. Our outlook for 2022 is to replace that revenue with new business generation. We expect revenue to be fairly flat in 2022 versus 2021. Got it. Very helpful. Maybe just thinking about the expense growth outlook for 2022. Obviously you guys, you know, have been well ahead of most peers in terms of investing in technology. But within that context, I understand that that process is never really over. I imagine you guys will have the benefit to some extent in terms of salary expenses coming down to 2022 with lower anticipated mortgage volumes. I also understand you guys probably expect to outperform the industry-wide volume expectations just given from the hires that you guys have made over the last several quarters. Katie, any maybe high-level thoughts just in terms of what you guys are expecting for expense growth on a year-over-year basis in 2022? Yeah. We are targeting to hold Alerus expenses flat with 2021. Metro adds about $5 million or so to that run rate. We'll have estimated transaction expenses that are approximately $3 million. Okay. Kind of flat on the operating expense. Right. Which will be a challenge given the wage pressure, of course, that we're seeing. From a technology investment, et cetera, we are looking to hold in that regard. Okay. Perfect. Just maybe turning to capital. I know you guys still operate with, you know, ample excess dry powder, so to speak. We'd just love to get an update in terms of what you guys are seeing in additional potential acquisition opportunities and, you know, within that context, if we can expect the dividend to kind of remain near its current levels. Just any updated thoughts on the buyback, particularly given, you know, some valuation pressures not only on Alerus but industry-wide over the last several weeks here. We continue to evaluate on the dividend and the stock buyback. From an acquisition standpoint on the fee income side, I continue to build the pipeline. Companies are generally performing quite well, and so there is not a huge appetite for selling right now and exiting the business. That being said, we're just putting more lines out there. When these companies do look to exit, we believe that we'll be the first phone call. As short term and where we sit today, we do anticipate that that's the best opportunity, organic growth as well as those fee income acquisitions to deploy capital, but are continuing to evaluate the buyback as well as dividend increases. Okay. Perfect. If I could just ask one more on just overall balance sheet dynamics. You guys, you know, are not only having good synergistic deposit growth, but it sounds like you guys also have some deposit growth just given some of the factors going on kind of from an industry-wide and macro perspective. Just any thoughts on just kinda how the earning asset base projects into this year? Do you expect some growth just given, you know, continued synergistic deposit growth opportunities? Should we just kind of expect a remix of the earning assets just given that mid to high single digit loan growth outlook that you described earlier? Yes, that's right in regards to, we're looking for that mix to change, but we believe the asset base will hold fairly steady at this point. Okay, great. I appreciate you guys taking all the questions and all the color. Congratulations on a great quarter. Thanks, Nate. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Katie Lorenson for any closing remarks. Thank you. We finished the year with a level of momentum higher than we've ever felt in this company. Although we face headwinds like others in this industry, I am excited about our future, 2022 and beyond. Alerus is positioned to emerge with a stronger than ever Alerus culture and approach to growing our company and expanding relationships. I'm excited to see the Alerus team members continue to shine in 2022 by working together to grow. We thank our team members, our board of directors, and all of our shareholders for their investment and continued support and interest in our company. Again, thank you for joining and listening to today's call. Have a good day, everyone. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your line.