Earnings release
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Exhibit 99.1 Alan A. Villalon, Chief Financial Officer 952.417.3733 (Office) FOR RELEASE (7.29.2026) ALERUS FINANCIAL CORPORATION REPORTS SECOND QUARTER 2026 NET INCOME OF $20.9 MILLION MINNEAPOLIS, MN (July 29, 2026) – Alerus Financial Corporation (Nasdaq: ALRS), or the Company, reported net income of $20.9 million for the second quarter of 2026, or $0.81 per diluted common share, compared to net income of $23.0 million, or $0.89 per diluted common share, for the first quarter of 2026, and net income of $20.3 million, or $0.78 per diluted common share, for the second quarter of 2025. CEO Comments President and Chief Executive Officer Katie O'Neill Lorenson said, “Our second quarter results demonstrate the continued strength of Alerus' diversified business model and the strategic investments and transformation efforts we have made over the past several years. Earnings per diluted common share of $0.81 and return on average tangible common equity(1) of 19.33% reflect disciplined execution across the franchise, including expanding net interest margin, growing fee-based revenue, and continued improvement in credit quality. The strength of our business model is evident in our ability to generate balanced growth across multiple revenue streams. Noninterest income again represented more than 40% of total revenue, while our banking franchise continued to benefit from disciplined balance sheet management and prudent risk oversight. These results reflect the resilience of our earnings profile and the advantages of a strategy designed to create long-term value. Most importantly, these results are a testament to the talented team we have built at Alerus and their unwavering focus on serving our clients, communities, and one another. Their consistent execution, collaboration, and focus on doing the right thing continue to translate our strategy into results. As we look ahead, we remain focused on executing our long-term growth strategy, investing in our people and capabilities, and building on the momentum that positions Alerus to deliver sustainable value for our shareholders.” Second Quarter Highlights ■ Earnings per diluted common share of $0.81. ■ Return on average total assets of 1.60%. ■ Return on average tangible common equity(1) of 19.33%. ■ Noninterest income was $32.9 million in the second quarter of 2026, an increase of 6.8% from the first quarter of 2026. Noninterest income represented 40.85% of total revenue in the second quarter of 2026. ■ Net interest margin (on a tax-equivalent basis)(1) was 3.97%, an increase of 20 basis points compared to 3.77% in the first quarter of 2026. ■ Net interest income was $47.7 million in the second quarter of 2026, an increase of 6.2% compared to $44.9 million in the first quarter of 2026, and an increase of 10.9% compared to $43.0 million in the second quarter of 2025. ■ Total assets under administration/management exceeded $50.4 billion, a 7.0% increase from the first quarter of 2026. ■ Nonperforming assets were $17.1 million as of June 30, 2026, a decrease of $36.9 million, or 68.3%, from $54.0 million as of March 31, 2026. Nonperforming assets to total assets declined to 0.32% in the second quarter of 2026 compared to 1.02% the first quarter of 2026. ■ Repurchased $6.8 million of the Company's outstanding common stock at an average per share price of $27.10, reducing common shares outstanding by 250,000 shares at quarter-end. ■ In the first six months of 2026, the Company returned $23.6 million to shareholders in the form of dividends and share repurchases. ■ Increased quarterly dividend by 4.76% over the first quarter of 2026 to $0.22 per share, continuing the Company's decades-long history of increasing its dividend. ■ Tangible book value per common share(1) was $18.73 as of June 30, 2026, an increase of 16.26% from $16.11 as of June 30, 2025. ■ Tangible common equity to tangible assets ratio(1) was 9.05% as of June 30, 2026, an increase from 7.87% as of June 30, 2025. (1) Represents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.”
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Selected Financial Data (unaudited) As of and for the Three months ended Six months ended June 30, March 31, June 30, June 30, June 30, (dollars and shares in thousands, except per share data) 2026 2026 2025 2026 2025 Performance Ratios Return on average total assets 1.60% 1.79% 1.53% 1.69% 1.28% Adjusted return on average total assets (1) 1.58% 1.79% 1.41% 1.68% 1.26% Return on average common equity 14.56% 16.44% 15.82% 15.49% 13.37% Return on average tangible common equity (1) 19.33% 21.85% 22.65% 20.57% 19.66% Adjusted return on average tangible common equity (1) 19.04% 21.96% 21.02% 20.48% 19.36% Noninterest income as a % of revenue 40.85% 40.72% 42.47% 40.78% 41.37% Adjusted noninterest income as a % of revenue (1) 40.36% 40.73% 40.86% 40.54% 40.52% Net interest margin (on a tax-equivalent basis)(1) 3.97% 3.77% 3.51% 3.87% 3.46% Efficiency ratio (1) 62.53% 63.39% 60.66% 62.95% 64.54% Adjusted efficiency ratio (1) 62.76% 63.20% 62.35% 62.97% 64.55% Net charge-offs (recoveries) to average loans (1) 0.26% 0.71% 0.37% 0.48% 0.21% Dividend payout ratio 27.16% 23.60% 26.92% 25.29% 31.54% Per Common Share Earnings per common share - basic $ 0.82 $ 0.90 $ 0.79 $ 1.72 $ 1.31 Earnings per common share - diluted $ 0.81 $ 0.89 $ 0.78 $ 1.70 $ 1.30 Adjusted earnings per common share - diluted (1) $ 0.80 $ 0.89 $ 0.72 $ 1.69 $ 1.27 Dividends declared per common share $ 0.22 $ 0.21 $ 0.21 $ 0.43 $ 0.41 Book value per common share $ 23.34 $ 22.79 $ 21.00 Tangible book value per common share (1) $ 18.73 $ 18.15 $ 16.11 Average common shares outstanding - basic 25,081 25,380 25,368 25,230 25,363 Average common shares outstanding - diluted 25,395 25,679 25,714 25,537 25,683 Other Data Retirement and benefit services assets under administration/management $ 45,163,767 $ 42,273,839 $ 42,451,544 Wealth advisory services assets under administration/management $ 5,195,511 $ 4,792,609 $ 4,613,102 Mortgage originations $ 113,450 $ 94,434 $ 134,634 $ 207,884 $ 205,227 (1) Represents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.” Results of Operations Net Interest Income Net interest income for the second quarter of 2026 was $47.7 million, a $2.8 million, or 6.2%, increase from the first quarter of 2026. Interest income increased $3.6 million, or 5.4%, primarily due to higher interest income on loans from a one-time $1.6 million interest income recovery on a nonaccrual loan resolution, higher purchase accounting accretion, and higher loan yields. Interest expense increased $0.8 million, or 3.8%, from the first quarter of 2026, as average rates paid on borrowings increased following a refinancing of subordinated debt in the first quarter and higher average short-term borrowing balances. Net interest income increased $4.7 million, or 10.9%, from $43.0 million for the second quarter of 2025. Interest income increased $0.2 million, or 0.3%, from the second quarter of 2025, 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. Net interest margin (on a tax-equivalent basis)(1) was 3.97% for the second quarter of 2026, a 20 basis point increase from 3.77% for the first quarter of 2026, and a 46 basis point increase from 3.51% for the second quarter of 2025. The quarter over quarter 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 first quarter subordinated debt refinancing and higher borrowing balances. The increase from the second quarter of 2025 was primarily driven by lower cost of funds and higher yields on investment securities, partially offset by less purchase accounting accretion. Noninterest Income Noninterest income for the second quarter of 2026 was $32.9 million, a $2.1 million, or 6.8%, increase from the first quarter of 2026. This increase was driven by an increase in other noninterest income and wealth advisory services revenue, partially offset by a
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decrease in mortgage banking revenue. Other noninterest income increased $1.9 million, or 106.9%, from the first quarter of 2026, 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. Wealth advisory services revenue increased $0.5 million, or 6.5%, from the first quarter of 2026, primarily driven by an increase in both asset-based fees tied to equity markets and transaction-based fees. Mortgage banking revenue decreased $0.3 million, or 9.6%, from the first quarter of 2026, primarily driven by lower gain on sale margins from product mix and increased competition. Noninterest income for the second quarter of 2026 increased by $1.2 million, or 3.7%, from the second quarter of 2025. This 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%, 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. (1) Represents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.” 2
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Noninterest Expense Noninterest expense for the second quarter of 2026 was $52.9 million, a $2.5 million, or 4.9%, increase from the first quarter of 2026, primarily due to increases in compensation expense and other noninterest expense, partially offset by a decrease in business services, software, and technology expense. Compensation expense increased $2.1 million, or 8.6%, from the first quarter of 2026, primarily due to annual merit increases, talent additions to the Arizona commercial banking team, and increases in deferred compensation plan liabilities driven by mutual fund investment gains related to the underlying assets of the plans. Other noninterest expense increased $0.8 million, or 39.3%, from the first quarter of 2026, due to an increase in other real estate owned balances and related holding costs, as well as increased corporate insurance costs. Business services, software, and technology expense decreased $0.4 million, or 6.8%, from the first quarter of 2026, primarily due to a decrease in core processing expenses, as well as a decrease in IT hardware expenses. Noninterest expense for the second quarter of 2026 increased $4.4 million, or 9.2%, from $48.4 million in the second quarter of 2025, primarily due to increases in compensation expense, professional fees and assessments, and other noninterest expense. Compensation expense increased $1.8 million, or 7.4%, from the second quarter of 2025, primarily due to annual merit increases, as well as increases in deferred compensation plan liabilities driven by mutual fund investment gains related to the underlying assets of the plans. Other noninterest expense increased $1.5 million, or 104.3%, from the second quarter of 2025, due to an increase in other real estate owned balances and related holding costs, as well as increased corporate insurance costs. Professional fees and assessments increased $1.4 million, or 61.7%, from the second quarter of 2025, 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. Financial Condition Total assets were $5.3 billion as of June 30, 2026, an increase of $58.6 million, or 1.1%, from December 31, 2025. The increase was primarily due to a $41.8 million increase in cash and cash equivalents, a $20.1 million increase in available-for-sale investment securities, a $8.5 million increase in other assets, and a $4.8 million increase in loans held for sale, partially offset by a decrease of $13.8 million in loans held for investment. Loans Held for Investment Total loans held for investment 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. The following table presents the composition of our loans held for investment portfolio as of the dates indicated: June 30, March 31, December 31, September 30, June 30, (dollars in thousands) 2026 2026 2025 2025 2025 Commercial Commercial and business lending Commercial and industrial $ 759,959 $ 747,447 $ 736,833 $ 702,135 $ 675,892 Commercial real estate − Owner occupied 622,241 444,276 427,260 435,320 440,170 Total commercial and business lending 1,382,200 1,191,723 1,164,093 1,137,455 1,116,062 Investor commercial real estate Construction, land and development 79,850 146,897 246,238 349,768 352,749 Multifamily 361,875 392,097 383,505 374,761 333,307 Non-owner occupied 893,367 976,339 875,862 865,785 887,643 Total investor commercial real estate 1,335,092 1,515,333 1,505,605 1,590,314 1,573,699 Agricultural Land 54,202 54,028 64,799 65,900 66,395 Production 53,367 50,983 62,500 63,051 67,931 Total agricultural 107,569 105,011 127,299 128,951 134,326 Total commercial 2,824,861 2,812,067 2,796,997 2,856,720 2,824,087 Consumer Residential real estate First lien 828,936 851,551 874,737 894,402 901,738 Construction 31,202 32,872 33,703 34,124 35,754 HELOC 273,124 262,131 260,883 234,681 200,624 Junior lien 31,941 35,783 36,844 40,434 41,450 Total residential real estate 1,165,203 1,182,337 1,206,167 1,203,641 1,179,566 Other consumer 44,180 40,340 44,858 41,715 41,003 Total consumer 1,209,383 1,222,677 1,251,025 1,245,356 1,220,569
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Total loans $ 4,034,244 $ 4,034,744 $ 4,048,022 $ 4,102,076 $ 4,044,656 3
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Deposits Total deposits were $4.2 billion as of June 30, 2026, a decrease of $0.1 million, or 0.0%, from December 31, 2025. Noninterest-bearing deposits decreased $48.3 million and interest-bearing deposits increased $48.2 million from December 31, 2025. The decrease in total deposits was due primarily to seasonal outflows from public funds depositors. The following table presents the composition of the Company’s deposit portfolio as of the dates indicated: June 30, March 31, December 31, September 30, June 30, (dollars in thousands) 2026 2026 2025 2025 2025 Noninterest-bearing demand $ 759,640 $ 857,625 $ 807,896 $ 776,791 $ 790,300 Interest-bearing Interest-bearing demand 1,429,951 1,449,156 1,296,315 1,256,687 1,214,597 Savings accounts 173,255 178,347 173,759 174,113 175,586 Money market savings 1,252,823 1,291,794 1,337,491 1,460,006 1,358,516 Time deposits 576,228 570,960 576,542 745,056 798,469 Total interest-bearing 3,432,257 3,490,257 3,384,107 3,635,862 3,547,168 Total deposits $ 4,191,897 $ 4,347,882 $ 4,192,003 $ 4,412,653 $ 4,337,468 Asset Quality Total nonperforming assets were $17.1 million as of June 30, 2026, a decrease of $52.3 million, or 75.3%, from December 31, 2025. As of June 30, 2026, the allowance for credit losses on loans was $48.4 million, or 1.20% of total loans, compared to $61.9 million, or 1.53% of total loans, as of December 31, 2025. The following table presents selected asset quality data as of and for the periods indicated: As of and for the three months ended June 30, March 31, December 31, September 30, June 30, (dollars in thousands) 2026 2026 2025 2025 2025 Nonaccrual loans $ 7,105 $ 53,881 $ 69,065 $ 59,644 $ 51,276 Accruing loans 90+ days past due 436 — — — 202 Total nonperforming loans 7,541 53,881 69,065 59,644 51,478 OREO and repossessed assets 9,571 126 308 467 751 Total nonperforming assets $ 17,112 $ 54,007 $ 69,373 $ 60,111 $ 52,229 Criticized loans 83,090 132,459 149,162 191,331 212,592 Net charge-offs (recoveries) 2,575 7,027 (311) (1,715) 3,767 Net charge-offs (recoveries) to average loans (1) 0.26% 0.71% (0.03)% (0.17)% 0.37% Nonperforming loans to total loans 0.19% 1.34% 1.71% 1.45% 1.27% Nonperforming assets to total assets 0.32% 1.02% 1.33% 1.13% 0.98% Criticized loans to total loans 2.06% 3.28% 3.68% 4.66% 5.26% Allowance for credit losses on loans to total loans 1.20% 1.25% 1.53% 1.51% 1.47% Allowance for credit losses on loans to nonperforming loans 641.31% 93.73% 89.65% 104.16% 115.15% For the second quarter of 2026, the Company had net charge-offs of $2.6 million, compared to net charge-offs of $7.0 million for the first quarter of 2026 and net charge-offs of $3.8 million for the second quarter of 2025. The quarter over quarter decrease in net charge-offs was primarily due to charge-offs of $6.4 million in the first quarter of 2026 related to one non-accruing long-term commercial and industrial client relationship. This relationship carried a specific reserve of $9.0 million as of December 31, 2025. Of the $2.6 million of net-charge offs recognized in the second quarter of 2026, $1.4 million was attributable to this same relationship. As of June 30, 2026, the relationship had a remaining reserve of $1.0 million, which represented approximately 63.3% of the book balance as of that date. Management does not believe the charge-offs resulting from this relationship are indicative of a broader credit quality trend in the Company's loan portfolio. The decrease in the allowance for credit losses on loans to total loans from December 31, 2025 to June 30, 2026 was primarily the result of problem loan resolution. The Company recorded a provision for credit losses of $0.5 million for the second quarter of 2026, compared to a provision release of $4.9 million for the first quarter of 2026, and no provision for credit losses for the second quarter of 2025. 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
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2026. The unearned fair value adjustments on acquired loan portfolios were $36.9 million as of June 30, 2026, $43.8 million as of December 31, 2025, and $58.0 million as of June 30, 2025. 4
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Capital Total stockholders’ equity was $583.1 million as of June 30, 2026, an increase of $18.2 million from December 31, 2025. The increase was primarily driven by an increase in retained earnings of $33.0 million, partially offset by a decrease in additional paid-in capital of $11.5 million and a decrease in accumulated other comprehensive income of $2.8 million. Tangible book value per common share(1) increased to $18.73 as of June 30, 2026, from $17.55 as of December 31, 2025. Tangible common equity to tangible assets(1) 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. During the second quarter of 2026, the Company repurchased approximately $6.8 million of its outstanding common stock at an average per share price of $27.10, which reduced common shares outstanding by 250,000 at quarter-end. The following table presents our capital ratios as of the dates indicated: June 30, December 31, June 30, 2026 2025 2025 Capital Ratios(1) Alerus Financial Corporation Consolidated Common equity tier 1 capital to risk weighted assets 10.81% 10.28% 10.54% Tier 1 capital to risk weighted assets 11.02% 10.48% 10.74% Total capital to risk weighted assets 13.34% 12.87% 13.10% Tier 1 capital to average assets 9.49% 8.86% 9.16% Tangible common equity / tangible assets (2) 9.05% 8.72% 7.87% Alerus Financial, N.A. Common equity tier 1 capital to risk weighted assets 10.92% 10.41% 10.78% Tier 1 capital to risk weighted assets 10.92% 10.41% 10.78% Total capital to risk weighted assets 12.11% 11.66% 12.04% Tier 1 capital to average assets 9.26% 8.62% 9.34% (1) Capital ratios for the current quarter are to be considered preliminary until the Call Report for Alerus Financial, N.A. is filed.(2) Represents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.” Conference Call The Company will host a conference call at 11:00 a.m. Central Time on Thursday, July 30, 2026, to discuss its financial results. Attendees are encouraged to register ahead of time for the call at investors.alerus.com. A recording of the call and transcript will be available on the Company’s investor relations website at investors.alerus.com following the call. About Alerus Financial Corporation Alerus Financial Corporation (Nasdaq: ALRS) is a commercial wealth advisory services bank and national retirement and benefit services provider with corporate offices in Grand Forks, North Dakota, and the Minneapolis-St. Paul, Minnesota metropolitan area. Through its subsidiary, Alerus Financial, National Association (the “Bank”), Alerus provides diversified and comprehensive financial solutions to business and consumer clients, including banking, wealth advisory services, and retirement and benefit plans and services. Alerus provides clients with a primary point of contact to help fully understand their unique needs and delivery channel preferences. Clients are provided with competitive products, valuable insight, and sound advice supported by digital solutions designed to meet their needs. Alerus operates 26 banking and commercial wealth offices, with locations in Grand Forks and Fargo, North Dakota; the Minneapolis-St. Paul, Minnesota metropolitan area; Rochester, Minnesota; Southern Minnesota; Marshalltown, Iowa; Pewaukee, Wisconsin; and Phoenix and Scottsdale, Arizona. The Alerus Retirement and Benefit business serves advisors, brokers, employers, and plan participants across the United States. Non-GAAP Financial Measures Some of the financial measures included in this press release are not measures of financial performance recognized by U.S. Generally Accepted Accounting Principles, or GAAP. These non-GAAP financial measures include the ratio of tangible common equity to tangible assets, tangible book value per common share, return on average tangible common equity, efficiency ratio, pre- provision net revenue, adjusted noninterest (loss) income, adjusted noninterest expense, adjusted pre-provision net revenue, adjusted efficiency ratio, adjusted net income, adjusted return on average total assets, adjusted return on average tangible common equity, net interest margin (on a tax-equivalent basis), adjusted earnings per common share - diluted, and adjusted net charge-offs to average loans. Management uses these non-GAAP financial measures in its analysis of its performance, and believes financial analysts and investors frequently use these measures, and other similar measures, to evaluate capital adequacy and financial performance. Reconciliations of non-GAAP disclosures used in this press release to the comparable GAAP measures are provided in the accompanying tables. Management, banking regulators, many financial analysts and other investors use these measures in conjunction
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with more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, which typically stem from the use of the purchase accounting method of accounting for mergers and acquisitions. These non-GAAP financial measures should not be considered in isolation or as a substitute for total stockholders’ equity, total assets, book value per share, return on average assets, return on average equity, or any other measure calculated in accordance with GAAP. Moreover, the manner in which the Company calculates these non-GAAP financial measures may differ from that of other companies reporting measures with similar names. 5
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Forward-Looking Statements This press release 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 our 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. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding our 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 our control. Our 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 our actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, the following: the strength of the local, state, national and international economies and financial markets (including effects of inflationary pressures and future monetary policies of the Federal Reserve and executive orders in response thereto); interest rate risk, including the effects of changes in interest rates; effects on the U.S. economy resulting from actions taken by the federal government, including the threat or implementation of tariffs, immigration enforcement, executive orders, and changes in foreign policy; disruptions to the global supply chain, including as a result of domestic or foreign policies; our ability to successfully manage credit risk, including in the commercial real estate portfolio, and maintain an adequate level of allowance for credit losses; business and economic conditions generally and in the financial services industry, nationally and within our market areas, including the level and impact of inflation rates and possible recession; our ability to raise additional capital to implement our business plan; credit risks and risks from concentrations (including by type of borrower, geographic area, collateral, and industry) within our loan portfolio; the concentration of large loans to certain borrowers (including commercial real estate loans); the level of nonperforming assets on our balance sheet; our ability to implement organic and acquisition growth strategies; the commencement, cost, and outcome of litigation and other legal proceedings and regulatory actions against us or to which the Company may become subject, including with respect to pending actions relating to the Company’s previous employee stock ownership program fiduciary services commenced by government and private parties; the impact of economic or market conditions on our fee-based services; our ability to continue to grow our retirement and benefit services business; our ability to continue to originate a sufficient volume of residential mortgages; the occurrence of fraudulent activity, breaches or failures of our or our third-party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud; interruptions involving our information technology and telecommunications systems or third-party servicers; potential losses incurred in connection with mortgage loan repurchases; the composition of our executive management team and our ability to attract and retain key personnel; rapid and expensive technological changes implemented by us and other parties in the financial services industry, including third-party vendors, which may be more difficult to implement or more expensive than anticipated or which may have unforeseen consequences to us and our customers, including the development and implementation of tools incorporating artificial intelligence; emerging issues related to the development and use of artificial intelligence that could give rise to legal or regulatory action, damage our reputation, or otherwise materially harm our business or customers; increased competition in the financial services industry, including from non-banks such as credit unions, Fintech companies and digital asset service providers; our ability to successfully manage liquidity risk, including our need to access higher cost sources of funds such as fed funds purchased and short-term borrowings; the concentration of large deposits from certain clients, including those who have balances above current Federal Deposit Insurance Corporation insurance limits; the effectiveness of our risk management framework; potential impairment to the goodwill the Company recorded in connection with our past acquisitions, including the acquisitions of Metro Phoenix Bank and HMNF; the extensive regulatory framework that applies to us; the ability of the Bank to pay dividends to us and our ability to pay dividends to our stockholders; new or revised accounting standards, as may be adopted by state and federal regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission (the “SEC”) or the Public Company Accounting Oversight Board; fluctuations in the values of the securities held in our securities portfolio, including as a result of changes in interest rates; governmental monetary, trade and fiscal policies; risks related to climate change and the negative impact it may have on our customers and their businesses; severe weather and natural disasters, and widespread disease or pandemics; acts of war, military conflicts, or terrorism, including the wars in Iran and Ukraine, ongoing conflicts in the Middle East, and other international military conflicts, or adverse external events and changes in foreign relations that can increase levels of political and economic unpredictability, contribute to rising energy and commodity prices, affect global supply chains, increase the volatility of financial markets, and other matters beyond our control; the availability of future equity and debt issuances and other capital raising opportunities on favorable terms; any material weaknesses in our internal control over financial reporting; our success at managing and responding to the risks involved in the foregoing items; and any other risks described in the “Risk Factors” sections of the reports filed by Alerus Financial Corporation with the SEC. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update any forward-looking
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statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. 6
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Alerus Financial Corporation and Subsidiaries Consolidated Balance Sheets (dollars in thousands, except share and per share data) June 30, December 31, 2026 2025 Assets (Unaudited) Cash and cash equivalents $ 109,012 $ 67,192 Investment securities Trading, at fair value 501 1,758 Available-for-sale, at fair value 534,191 514,095 Held-to-maturity, at amortized cost (with an allowance for credit losses on investments of $115 and $123, respectively) 242,516 254,448 Loans held for sale 26,713 21,934 Loans held for investment 4,034,244 4,048,022 Allowance for credit losses on loans (48,361) (61,915) Net loans 3,985,883 3,986,107 Land, premises and equipment, net 43,941 43,253 Operating lease right-of-use assets 32,105 28,761 Accrued interest receivable 20,213 21,742 Bank-owned life insurance 41,894 39,307 Goodwill 85,634 85,634 Other intangible assets 29,422 33,371 Servicing rights 7,022 6,383 Deferred income taxes, net 18,114 23,080 Other assets 111,557 103,019 Total assets $ 5,288,718 $ 5,230,084 Liabilities and Stockholders’ Equity Deposits Noninterest-bearing $ 759,640 $ 807,896 Interest-bearing 3,432,257 3,384,107 Total deposits 4,191,897 4,192,003 Short-term borrowings 345,000 308,800 Long-term debt 59,239 59,182 Operating lease liabilities 42,752 36,282 Accrued expenses and other liabilities 66,687 68,883 Total liabilities 4,705,575 4,665,150 Stockholders’ equity Preferred stock, $1 par value, 2,000,000 shares authorized: 0 issued and outstanding — — Common stock, $1 par value, 60,000,000 and 30,000,000 shares authorized: 24,985,815 and 25,406,278 issued and outstanding 24,986 25,406 Additional paid-in capital 260,066 271,609 Retained earnings 303,070 270,075 Accumulated other comprehensive loss (4,979) (2,156) Total stockholders’ equity 583,143 564,934 Total liabilities and stockholders’ equity $ 5,288,718 $ 5,230,084 7
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Alerus Financial Corporation and Subsidiaries Consolidated Statements of Income (dollars and shares in thousands, except per share data) Three months ended Six months ended June 30, March 31, June 30, June 30, June 30, 2026 2026 2025 2026 2025 Interest Income (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) Loans, including fees $ 62,214 $ 58,621 $ 63,853 $ 120,835 $ 125,348 Investment securities Taxable 7,258 7,104 5,310 14,363 11,017 Exempt from federal income taxes 155 158 160 312 320 Other 999 1,094 1,101 2,093 1,920 Total interest income 70,626 66,977 70,424 137,603 138,605 Interest Expense Deposits 18,938 19,074 22,758 38,012 46,293 Short-term borrowings 2,935 2,357 3,982 5,292 6,821 Long-term debt 1,041 634 652 1,676 1,302 Total interest expense 22,914 22,065 27,392 44,980 54,416 Net interest income 47,712 44,912 43,032 92,623 84,189 Provision for (recovery of) credit losses 495 (4,883) — (4,388) 863 Net interest income after provision for (recovery of) credit losses 47,217 49,795 43,032 97,011 83,326 Noninterest Income Retirement and benefit services 17,347 17,406 16,024 34,754 32,130 Wealth advisory services 7,705 7,237 7,363 14,942 14,267 Mortgage banking 3,195 3,535 3,651 6,730 5,177 Service charges on deposit accounts 1,106 933 680 2,039 1,330 Gain on sale of non-mortgage loans — — 2,115 — 2,115 Other 3,592 1,736 1,930 5,327 4,376 Total noninterest income 32,945 30,847 31,763 63,792 59,395 Noninterest Expense Compensation 26,155 24,087 24,343 50,242 47,304 Employee taxes and benefits 6,755 6,640 6,633 13,395 14,396 Occupancy and equipment expense 3,493 3,427 2,559 6,919 5,466 Business services, software and technology expense 5,440 5,839 5,868 11,279 11,620 Intangible amortization expense 1,974 1,974 2,710 3,949 5,419 Professional fees and assessments 3,781 3,800 2,339 7,581 5,335 Marketing and business development 869 861 787 1,730 1,752 Supplies and postage 540 607 490 1,146 1,121 Travel 357 361 347 718 634 Mortgage and lending expenses 614 710 940 1,323 1,476 Other 2,905 2,086 1,422 4,992 4,282 Total noninterest expense 52,883 50,392 48,438 103,274 98,805 Income before income tax expense 27,279 30,250 26,357 57,529 43,916 Income tax expense 6,414 7,279 6,104 13,693 10,349 Net income $ 20,865 $ 22,971 $ 20,253 $ 43,836 $ 33,567 Per Common Share Data Earnings per common share $ 0.82 $ 0.90 $ 0.79 $ 1.72 $ 1.31 Diluted earnings per common share $ 0.81 $ 0.89 $ 0.78 $ 1.70 $ 1.30 Dividends declared per common share $ 0.22 $ 0.21 $ 0.21 $ 0.43 $ 0.41 Average common shares outstanding 25,081 25,380 25,368 25,230 25,363 Diluted average common shares outstanding 25,395 25,679 25,714 25,537 25,683 8
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Alerus Financial Corporation and Subsidiaries Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures (unaudited) (dollars and shares in thousands, except per share data) June 30, March 31, June 30, 2026 2026 2025 Tangible Common Equity to Tangible Assets Total common stockholders’ equity $ 583,143 $ 574,693 $ 533,155 Less: Goodwill 85,634 85,634 85,634 Less: Other intangible assets 29,422 31,397 38,462 Tangible common equity (a) 468,087 457,662 409,059 Total assets 5,288,718 5,287,971 5,323,822 Less: Goodwill 85,634 85,634 85,634 Less: Other intangible assets 29,422 31,397 38,462 Tangible assets (b) 5,173,662 5,170,940 5,199,726 Tangible common equity to tangible assets (a)/(b) 9.05% 8.85% 7.87% Tangible Book Value Per Common Share Tangible common equity (a) 468,087 457,662 409,059 Total common shares issued and outstanding (c) 24,986 25,214 25,389 Tangible book value per common share (a)/(c) $ 18.73 $ 18.15 $ 16.11 Three months ended Six months ended June 30, March 31, June 30, June 30, June 30, 2026 2026 2025 2026 2025 Return on Average Tangible Common Equity Net income $ 20,865 $ 22,971 $ 20,253 $ 43,836 $ 33,567 Add: Intangible amortization expense (net of tax) (1) 1,559 1,559 2,141 3,120 4,281 Net income, excluding intangible amortization (d) 22,424 24,530 22,394 46,956 37,848 Average total equity 574,862 566,563 513,606 570,735 506,470 Less: Average goodwill 85,634 85,634 85,634 85,634 85,634 Less: Average other intangible assets (net of tax) (1) 24,003 25,664 31,436 24,829 32,571 Average tangible common equity (e) 465,225 455,265 396,536 460,272 388,265 Return on average tangible common equity (d)/(e) 19.33% 21.85% 22.65% 20.57% 19.66% Efficiency Ratio Noninterest expense $ 52,883 $ 50,392 $ 48,438 $ 103,274 $ 98,805 Less: Intangible amortization expense 1,974 1,974 2,710 3,949 5,419 Noninterest expense excluding intangible amortization (f) 50,909 48,418 45,728 99,325 93,386 Net interest income (v) 47,712 44,912 43,032 92,623 84,189 Noninterest income 32,945 30,847 31,763 63,792 59,395 Tax equivalent adjustment for loans and securities 755 619 592 1,374 1,110 Total tax-equivalent revenue (g) 81,412 76,378 75,387 157,789 144,694 Efficiency ratio (f)/(g) 62.53% 63.39% 60.66% 62.95% 64.54% Pre-Provision Net Revenue Net interest income (v) $ 47,712 $ 44,912 $ 43,032 $ 92,623 $ 84,189 Add: Noninterest income 32,945 30,847 31,763 63,792 59,395 Less: Noninterest expense 52,883 50,392 48,438 103,274 98,805 Pre-provision net revenue $ 27,774 $ 25,367 $ 26,357 $ 53,141 $ 44,779 Adjusted Noninterest Income Noninterest income $ 32,945 $ 30,847 $ 31,763 $ 63,792 $ 59,395 Less: Adjusted noninterest income items Net gain on sale of loans — — 2,115 — 2,115 Net gain (loss) on sale/disposal of premises and equipment 653 (21) (84) 632 (84) Total adjusted noninterest income (loss) items (h) 653 (21) 2,031 632 2,031 Adjusted noninterest income (i) $ 32,292 $ 30,868 $ 29,732 $ 63,160 $ 57,364 Adjusted Noninterest Income as a Percentage of Revenue
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Adjusted noninterest income (i) $ 32,292 $ 30,868 $ 29,732 $ 63,160 $ 57,364 Net interest income (v) 47,712 44,912 43,032 92,623 84,189 Adjusted revenue (w) $ 80,004 $ 75,780 $ 72,764 $ 155,783 $ 141,553 Adjusted noninterest income as a percentage of revenue (i)/(w) 40.36% 40.73% 40.86% 40.54% 40.52% Adjusted Noninterest Expense Noninterest expense $ 52,883 $ 50,392 $ 48,438 $ 103,274 $ 98,805 Less: Adjusted noninterest expense items HMNF merger- and acquisition-related expenses 6 (34) 11 (27) 298 Severance and signing bonus expense 216 167 (23) 383 1,004 Total adjusted noninterest expense items (j) 222 133 (12) 356 1,302 Adjusted noninterest expense (k) $ 52,661 $ 50,259 $ 48,450 $ 102,918 $ 97,503 (1) Items calculated after-tax utilizing a marginal income tax rate of 21.0%. 9
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Alerus Financial Corporation and Subsidiaries Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures (unaudited) (dollars and shares in thousands, except per share data) Three months ended Six months ended June 30, March 31, June 30, June 30, June 30, 2026 2026 2025 2026 2025 Adjusted Pre-Provision Net Revenue Net interest income (v) $ 47,712 $ 44,912 $ 43,032 $ 92,623 $ 84,189 Add: Adjusted noninterest income (i) 32,292 30,868 29,732 63,160 57,364 Less: Adjusted noninterest expense (k) 52,661 50,259 48,450 102,918 97,503 Adjusted pre-provision net revenue $ 27,343 $ 25,521 $ 24,314 $ 52,865 $ 44,050 Adjusted Efficiency Ratio Adjusted noninterest expense (k) $ 52,661 $ 50,259 $ 48,450 $ 102,918 $ 97,503 Less: Intangible amortization expense 1,974 1,974 2,710 3,949 5,419 Adjusted noninterest expense for efficiency ratio (l) 50,687 48,285 45,740 98,969 92,084 Tax-equivalent revenue Net interest income (v) 47,712 44,912 43,032 92,623 84,189 Add: Adjusted noninterest income (i) 32,292 30,868 29,732 63,160 57,364 Add: Tax equivalent adjustment for loans and securities (1) 755 619 592 1,374 1,110 Total tax-equivalent revenue (m) 80,759 76,399 73,356 157,157 142,663 Adjusted efficiency ratio (l)/(m) 62.76% 63.20% 62.35% 62.97% 64.55% Adjusted Net Income Net income $ 20,865 $ 22,971 $ 20,253 $ 43,836 $ 33,567 Less: Adjusted noninterest (loss) income items (net of tax) (1) (h) 516 (17) 1,604 499 1,604 Add: Adjusted noninterest expense items (net of tax) (1) (j) 175 105 (9) 281 1,029 Adjusted net income (n) $ 20,524 $ 23,093 $ 18,640 $ 43,618 $ 32,992 Adjusted Return on Average Total Assets Average total assets (o) $ 5,226,319 $ 5,218,515 $ 5,302,728 $ 5,222,438 $ 5,287,622 Adjusted return on average total assets (n)/(o) 1.58% 1.79% 1.41% 1.68% 1.26% Adjusted Return on Average Tangible Common Equity Adjusted net income (n) $ 20,524 $ 23,093 $ 18,640 $ 43,618 $ 32,992 Add: Intangible amortization expense (net of tax) (1) 1,559 1,559 2,141 3,120 4,281 Adjusted net income, excluding intangible amortization (p) 22,083 24,652 20,781 46,738 37,273 Average total equity 574,862 566,563 513,606 570,735 506,470 Less: Average goodwill 85,634 85,634 85,634 85,634 85,634 Less: Average other intangible assets (net of tax) 24,003 25,664 31,436 24,829 32,571 Average tangible common equity (q) 465,225 455,265 396,536 460,272 388,265 Adjusted return on average tangible common equity (p)/(q) 19.04% 21.96% 21.02% 20.48% 19.36% Adjusted Earnings Per Common Share - Diluted Adjusted net income (n) $ 20,524 $ 23,093 $ 18,640 $ 43,618 $ 32,992 Less: Dividends and undistributed earnings allocated to participating securities 192 206 205 400 297 Adjusted net income available to common stockholders (r) 20,332 22,887 18,435 43,218 32,695 Weighted-average common shares outstanding for diluted earnings per share (s) 25,395 25,679 25,714 25,537 25,683 Adjusted earnings per common share - diluted (r)/(s) $ 0.80 $ 0.89 $ 0.72 $ 1.69 $ 1.27 Net Charge-Offs (Recoveries) to Average Loans Net charge-offs (recoveries) (t) $ 2,575 $ 7,027 $ 3,767 $ 9,602 $ 4,174 Average total loans (u) $ 4,032,142 $ 4,029,719 $ 4,079,084 $ 4,030,939 $ 4,051,129 Net charge-offs (recoveries) to average loans (t)/(u) 0.26% 0.71% 0.37% 0.48% 0.06% Net Interest Margin (on a Tax-Equivalent Basis)
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Net interest income (v) $ 47,712 $ 44,912 $ 43,032 $ 92,623 $ 84,189 Add: Tax equivalent adjustment for loans and securities 755 619 592 1,374 1,110 Net interest income (on a tax-equivalent basis) (1) (y) $ 48,467 $ 45,531 $ 43,624 $ 93,997 $ 85,299 Average interest earning assets (x) $ 4,896,740 $ 4,901,399 $ 4,988,946 4,899,058 4,969,446 Net interest margin (on a tax-equivalent basis) (1) (y)/(x) 3.97% 3.77% 3.51% 3.87% 3.46% (1) Items calculated after-tax utilizing a marginal income tax rate of 21.0%. 10
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Alerus Financial Corporation and Subsidiaries Analysis of Average Balances, Yields, and Rates (unaudited) (dollars in thousands) Three months ended Six months ended June 30, 2026 March 31, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Average Average Average Average Average Average Yield/ Average Yield/ Average Yield/ Average Yield/ Average Yield/ Balance Rate Balance Rate Balance Rate Balance Rate Balance Rate Interest Earning Assets Interest-bearing deposits with banks $ 45,777 4.11% $ 60,675 4.26% $ 35,951 5.51% $ 53,185 4.20% $ 34,695 5.14%Investment securities (1) 773,692 3.86 771,885 3.84 823,463 2.69 772,793 3.85 841,479 2.74 Loans held for sale 18,885 4.50 15,617 4.70 22,302 4.44 17,260 4.58 16,856 4.74 Loans Commercial and industrial 779,471 7.07 723,803 7.10 653,635 7.51 751,791 7.09 655,725 7.41 CRE − Owner occupied 502,476 6.19 430,332 6.14 442,796 6.29 466,603 6.17 411,546 6.25 CRE − Construction, land anddevelopment 103,618 13.08 211,754 5.17 337,867 5.97 157,388 7.79 340,279 5.90 CRE − Multifamily 394,683 6.05 393,412 5.80 347,277 6.72 394,051 5.93 355,715 6.53 CRE − Non-owner occupied (2) 922,958 6.08 914,642 5.97 955,134 6.52 918,823 6.03 957,629 6.59 Agricultural − Land 53,823 5.78 59,787 6.00 66,044 5.76 56,789 5.89 66,633 5.80 Agricultural − Production 53,351 6.95 58,833 6.98 67,412 7.32 56,077 6.96 64,190 7.31 RRE − First lien 838,819 4.93 865,077 4.93 898,903 4.92 851,876 4.93 899,367 4.85 RRE − Construction 34,981 6.63 32,906 6.29 39,682 7.62 33,949 6.46 38,305 8.00 RRE − HELOC 271,254 6.02 261,586 6.03 188,494 6.99 266,447 6.02 178,601 7.05 RRE − Junior lien 32,676 6.53 36,306 6.42 42,435 6.37 34,481 6.47 43,261 6.31 Other consumer 44,032 6.51 41,281 6.31 39,405 7.01 42,664 6.41 39,878 7.01 Total loans (1) 4,032,142 6.24 4,029,719 5.94 4,079,084 6.31 4,030,939 6.09 4,051,129 6.27 Federal Reserve/FHLB stock 26,244 8.10 23,503 7.87 28,146 8.65 24,881 7.99 25,287 8.26 Total interest earning assets 4,896,740 5.85 4,901,399 5.59 4,988,946 5.71 4,899,058 5.72 4,969,446 5.67 Noninterest earning assets 329,579 317,116 313,782 323,380 318,176 Total assets $5,226,319 $5,218,515 $5,302,728 $5,222,438 $5,287,622 Interest-Bearing Liabilities Interest-bearing demand deposits $1,378,394 1.68% $1,367,270 1.64% $1,247,241 1.80% $1,372,863 1.66% $1,247,482 1.80%Money market and savings deposits 1,441,099 2.34 1,503,798 2.37 1,561,977 2.77 1,472,276 2.36 1,576,218 2.83 Time deposits 571,276 3.34 569,065 3.40 687,428 3.72 570,176 3.37 687,995 3.82 Fed funds purchased 74,104 3.85 35,628 4.01 149,046 4.63 54,972 3.90 99,714 4.64 FHLB short-term advances 226,703 3.93 204,444 3.98 200,000 4.54 215,635 3.95 200,000 4.56 Long-term debt 59,225 7.04 59,195 4.34 59,112 4.42 59,210 5.70 59,098 4.44 Total interest-bearing liabilities 3,750,801 2.45 3,739,400 2.39 3,904,804 2.81 3,745,132 2.42 3,870,507 2.84 Noninterest-Bearing Liabilitiesand Stockholders' Equity Noninterest-bearing deposits 790,088 798,579 808,629 794,310 829,044 Other noninterest-bearing liabilities 110,568 113,973 75,689 112,261 81,601 Stockholders’ equity 574,862 566,563 513,606 570,735 506,470 Total liabilities and stockholders’equity $5,226,319 $5,218,515 $5,302,728 $5,222,438 $5,287,622 Net interest rate spread 3.40% 3.20% 2.90% 3.30% 2.83%Net interest margin (on a tax-equivalent basis) (1) 3.97% 3.77% 3.51% 3.87% 3.46% (1) Taxable-equivalent adjustment was calculated utilizing a marginal income tax rate of 21.0%. (2) Average balances and average yield/rate includes non-mortgage loans sold and held for sale for the three months ended December 31, 2025. 11