Exhibit 99.1

Alan A. Villalon, Chief Financial Officer  952.417.3733 (Office)

FOR RELEASE (10.30.2025)

ALERUS FINANCIAL CORPORATION REPORTS

Third QUARTER 2025 NET INCOME OF $16.9 MILLION

MINNEAPOLIS, MN (October 30, 2025) – Alerus Financial Corporation (Nasdaq: ALRS), or the Company, reported net income of $16.9 million for the third quarter of 2025, or $0.65 per diluted common share, compared to net income of $20.3 million, or $0.78 per diluted common share, for the second quarter of 2025, and net income of $5.2 million, or $0.26 per diluted common share, for the third quarter of 2024. 

CEO Comments

President and Chief Executive Officer Katie Lorenson said, “Alerus delivered another strong quarter, building on the momentum established earlier this year. Our results reflect the strength and resilience of our diversified business model, coupled with disciplined execution by an exceptional team of professionals. The strategic addition of the Home Federal franchise and team, in addition to the transformative changes made to the commercial wealth bank over the last several years, are driving stronger results with a return on total average assets of 1.28% through the first nine months of 2025. 

In the third quarter, we continued to grow our balance sheet with strong sequential organic growth in both loans and deposits. This growth propelled net interest income to $43.1 million, a record level in our company history. Fee income remains resilient and, at over 40% of total revenues, is more than double the banking industry average. Our focus on relationship-driven commercial banking, combined with growth in our retirement, benefits, and wealth management businesses, positions us well for long-term success. 

With an annualized return on tangible equity over 19%, we saw exceptional tangible book value growth of almost 5% in the third quarter. We remain committed to achieving superior returns and increasing shareholder value by organically growing revenues through client expansion, managing expenses prudently, and maintaining credit discipline. Our capital and reserve levels are ready to weather potential economic uncertainty as our tangible common equity ratio is now over 8% and our allowance for credit losses on loans to total loans was 1.51% as of the end of the third quarter. 

As we continue to demonstrate the ability to deliver stronger returns, I am proud of our team’s commitment and dedication to executing our strategy, supporting our clients and communities, and delivering consistent results while building sustainable value for our shareholders.” 

Third Quarter Highlights

■ Return on average total assets was 1.27% in the third quarter of 2025. 

■ Return on average tangible common equity (non-GAAP)⁽¹⁾ was 18.48% in the third quarter of 2025. 

■ Earnings per diluted common share in the third quarter of 2025 of $0.65. 

■ Net interest income was $43.1 million in the third quarter of 2025, an increase of 0.2% from $43.0 million in the second quarter of 2025. 

■ Net interest margin was 3.50% in the third quarter of 2025, which remained stable when compared to 3.51% in the second quarter of 2025. 

■ Noninterest income, which represented 40.6% of total revenues, was $29.4 million in the third quarter of 2025. Adjusted noninterest income (non-GAAP)⁽¹⁾ was $29.4 million in the third quarter of 2025, which was stable in comparison to adjusted noninterest income (non-GAAP)⁽¹⁾ of $29.7 million in the second quarter of 2025. 

■ Total loans were $4.1 billion as of September 30, 2025, an increase of $109.5 million, or 2.7%, from December 31, 2024. 

■ Total deposits were $4.4 billion as of September 30, 2025, an increase of $34.2 million, or 0.8%, from December 31, 2024. 

■ Total retirement and benefit services assets under administration/management at September 30, 2025 were $44.0 billion, a 3.7% increase from June 30, 2025. 

■ Total wealth management assets under administration/management at September 30, 2025 were $4.8 billion, a 4.3% increase from June 30, 2025. 

■ Net charge-offs (recoveries) to average loans was (0.17)% in the third quarter of 2025. Adjusted net charge-offs (recoveries) to average loans (non-GAAP)⁽¹⁾ was (0.17)% in the third quarter of 2025, compared to adjusted net charge-offs (recoveries) to average loans (non-GAAP)⁽¹⁾ of 0.07% in the second quarter of 2025. 

■ Tangible book value per common share (non-GAAP)⁽¹⁾ was $16.90 as of September 30, 2025, an increase of 4.9% from $16.11 as of June 30, 2025. 

■ Tangible common equity to tangible assets ratio (non-GAAP)⁽¹⁾ was 8.24% as of September 30, 2025, 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.”

Selected Financial Data (unaudited)

	As of and for the
	Three months ended									Nine months ended
	September 30,			June 30,			September 30,			September 30,			September 30,
(dollars and shares in thousands, except per share data)	2025			2025			2024			2025			2024
Performance Ratios
Return on average total assets		1.27	%		1.53	%		0.48	%		1.28	%		0.56	%
Adjusted return on average total assets (1)		1.28	%		1.41	%		0.57	%		1.27	%		0.62	%
Return on average common equity		12.80	%		15.82	%		5.52	%		13.17	%		6.43	%
Return on average tangible common equity (1)		18.48	%		22.65	%		7.83	%		19.25	%		8.98	%
Adjusted return on average tangible common equity (1)		18.55	%		21.02	%		9.04	%		19.08	%		9.79	%
Noninterest income as a % of revenue		40.56	%		42.47	%		55.72	%		41.09	%		54.10	%
Net interest margin (tax-equivalent)		3.50	%		3.51	%		2.23	%		3.47	%		2.31	%
Efficiency ratio (1)		65.34	%		60.66	%		80.29	%		64.81	%		77.17	%
Adjusted efficiency ratio (1)		65.22	%		62.35	%		77.71	%		64.78	%		75.50	%
Net charge-offs (recoveries) to average loans		(0.17	)%		0.37	%		0.04	%		0.08	%		0.14	%
Adjusted net charge-offs (recoveries) to average loans		(0.17	)%		0.07	%		0.04	%		(0.02	)%		0.14	%
Dividend payout ratio		32.31	%		26.92	%		76.92	%		31.79	%		66.29	%
Per Common Share
Earnings per common share - basic	$	0.66		$	0.79		$	0.26		$	1.97		$	0.90
Earnings per common share - diluted	$	0.65		$	0.78		$	0.26		$	1.95		$	0.89
Adjusted earnings per common share - diluted (1)	$	0.66		$	0.72		$	0.31		$	1.93		$	0.98
Dividends declared per common share	$	0.21		$	0.21		$	0.20		$	0.62		$	0.59
Book value per common share	$	21.68		$	21.00		$	19.53
Tangible book value per common share (1)	$	16.90		$	16.11		$	16.50
Average common shares outstanding - basic		25,395			25,368			19,788			25,374			19,768
Average common shares outstanding - diluted		25,713			25,714			20,075			25,693			20,037
Other Data
Retirement and benefit services assets under administration/management	$	44,005,277		$	42,451,544		$	41,249,280
Wealth management assets under administration/management	$	4,812,250		$	4,613,102		$	4,397,505
Mortgage originations	$	142,768		$	134,634		$	82,388		$	347,995		$	245,743

(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 third quarter of 2025 was $43.1 million, a $0.1 million, or 0.2%, increase from the second quarter of 2025. The increase was primarily due to strong organic loan growth and increased income from higher average interest-earning cash balances resulting from deposit growth. 

Net interest income increased $20.6 million, or 91.4%, from $22.5 million for the third quarter of 2024. Interest income increased $18.4 million, or 35.3%, from the third quarter of 2024, primarily driven by earning assets acquired in the HMN Financial, Inc. (“HMNF”) acquisition, strong organic loan growth at higher yields, and purchase accounting accretion. Interest expense decreased $2.2 million, or 7.3%, from the third quarter of 2024, as the average borrowing balance declined, alongside a decrease in the average rate paid on deposits, which more than offset the increase in interest-bearing deposits stemming from the HMNF acquisition and organic deposit growth. 

Net interest margin (on a tax-equivalent basis) (non-GAAP) was 3.50% for the third quarter of 2025, a one basis point decrease from 3.51% for the second quarter of 2025, and a 127 basis point increase from 2.23% for the third quarter of 2024. The quarter over quarter decrease was mainly attributable to lower average loan balances following the sale of a pool of hospitality loans early in the third quarter of 2025. The increase from the third quarter of 2024 was primarily driven by higher rates on interest earning assets from organic loan growth and the HMNF acquisition, purchase accounting accretion, lower rates paid on deposits, and lower borrowing balances. 

Noninterest Income

Noninterest income for the third quarter of 2025 was $29.4 million, a $2.3 million, or 7.3%, decrease from the second quarter of 2025. The quarter over quarter decrease was primarily driven by decreases from the gain on sale of non-mortgage loans and wealth management revenue, partially offset by an increase in retirement and benefit services revenue. Gain on sale of non-mortgage loans decreased from 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. Wealth management revenue decreased $0.8 million, or 10.9%, from the second quarter of 2025, primarily due to the timing of the wealth management platform conversion and a decrease in brokerage and insurance commissions. Retirement and benefit services revenue increased $0.5 million, or 2.9%, from the second quarter of 2025, primarily driven by asset-based fees. 

Noninterest income for the third quarter of 2025 increased by $1.1 million, or 3.8%, from the third quarter of 2024. Mortgage banking revenue increased $0.9 million, or 35.0%, in the third quarter of 2025 compared to the third quarter of 2024, primarily driven by higher mortgage originations as a result of expansion into HMNF legacy markets. Retirement and benefit services revenue increased $0.4 million, or 2.2%, in the third quarter of 2025 compared to the third quarter of 2024, primarily driven by a 6.7% increase in assets under administration/management during that same period. 

2

Noninterest Expense

Noninterest expense for the third quarter of 2025 was $50.5 million, a $2.1 million, or 4.3%, increase from the second quarter of 2025. Compensation expense increased $0.6 million, or 2.6%, from the second quarter of 2025, primarily due to higher incentives paid. Other noninterest expense increased $0.5 million, or 33.3%, from the second quarter of 2025, primarily driven by an insurance reimbursement payment received in the second quarter of 2025. Business services, software and technology expense increased $0.4 million, or 7.1%, from the second quarter of 2025, primarily driven by platform upgrades. Professional fees and assessments increased $0.3 million, or 14.4%, from the second quarter of 2025, primarily driven by an increase in legal fees. Occupancy and equipment expense increased $0.3 million, or 11.3%, from the second quarter of 2025, primarily driven by the consolidation of two offices and the opening of a new facility in our Fargo, North Dakota market. Employee taxes and benefits expense decreased $0.5 million, or 8.1%, from the second quarter of 2025, primarily due to seasonal reductions in benefit related expenses. 

Noninterest expense for the third quarter of 2025 increased $8.1 million, or 19.1%, from $42.4 million in the third quarter of 2024. The increase was primarily driven by increases in compensation expense, business services, software and technology expense, intangible amortization expense, occupancy and equipment expense, and employee taxes and benefits expense. In the third quarter of 2025, compensation expense increased $3.9 million, or 18.6%, and employee taxes and benefits expense increased $0.7 million, or 12.9%. Both compensation expense and employee taxes and benefits expense increased compared to the third quarter of 2024 primarily due to increased headcount resulting from the HMNF acquisition. Business services, software and technology expense increased $1.4 million, or 28.8%, from the third quarter of 2024, primarily driven by the increased company size following the HMNF acquisition along with multiple platform upgrades. Intangible amortization expense increased $1.4 million, or 104.7%, in the third quarter of 2025, primarily driven by the $33.5 million core deposit intangible recorded in connection with the HMNF acquisition. Occupancy and equipment expense increased $0.8 million, or 36.8%, from the third quarter of 2024, primarily driven by the increased branch footprint resulting from the HMNF acquisition. 

Financial Condition

Total assets were $5.3 billion as of September 30, 2025, an increase of $68.9 million, or 1.3%, from December 31, 2024. The increase was primarily due to a $109.5 million increase in loans held for investment and a $30.8 million increase in cash and cash equivalents, partially offset by a decrease of $57.0 million in available-for-sale investment securities and a decrease of $16.4 million in held-to-maturity investment securities. 

Loans Held for Investment

Total loans held for investment were $4.1 billion as of September 30, 2025, an increase of $109.5 million, or 2.7%, from December 31, 2024. The increase was primarily driven by a $69.4 million increase in commercial loans and a $40.1 million increase in consumer loans. 

The following table presents the composition of our loans held for investment portfolio as of the dates indicated: 

	September 30,		June 30,		March 31,		December 31,		September 30,
(dollars in thousands)	2025		2025		2025		2024		2024
Commercial
Commercial and industrial	$	702,135	$	675,892	$	658,446	$	666,727	$	606,245
Commercial real estate
Construction, land and development		349,768		352,749		360,024		294,677		173,629
Multifamily		374,761		333,307		353,060		363,123		275,377
Non-owner occupied		865,785		887,643		951,559		967,025		686,071
Owner occupied		435,320		440,170		424,880		371,418		296,366
Total commercial real estate		2,025,634		2,013,869		2,089,523		1,996,243		1,431,443
Agricultural
Land		65,900		66,395		68,894		61,299		45,821
Production		63,051		67,931		64,240		63,008		39,436
Total agricultural		128,951		134,326		133,134		124,307		85,257
Total commercial		2,856,720		2,824,087		2,881,103		2,787,277		2,122,945
Consumer
Residential real estate
First lien		894,402		901,738		907,534		921,019		690,451
Construction		34,124		35,754		38,553		33,547		11,808
HELOC		234,681		200,624		175,600		162,509		134,301
Junior lien		40,434		41,450		43,740		44,060		36,445
Total residential real estate		1,203,641		1,179,566		1,165,427		1,161,135		873,005
Other consumer		41,714		41,004		38,953		44,122		36,393
Total consumer		1,245,355		1,220,570		1,204,380		1,205,257		909,398
Total loans	$	4,102,075	$	4,044,657	$	4,085,483	$	3,992,534	$	3,032,343

3

Deposits

Total deposits were $4.4 billion as of September 30, 2025, an increase of $34.2 million, or 0.8%, from December 31, 2024. Interest-bearing deposits increased $160.9 million and noninterest-bearing deposits decreased $126.7 million from December 31, 2024. 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 season low in the third quarter of 2025. 

The following table presents the composition of the Company’s deposit portfolio as of the dates indicated: 

	September 30,		June 30,		March 31,		December 31,		September 30,
(dollars in thousands)	2025		2025		2025		2024		2024
Noninterest-bearing demand	$	776,791	$	790,300	$	889,270	$	903,466	$	657,547
Interest-bearing
Interest-bearing demand		1,256,687		1,214,597		1,283,031		1,220,173		1,034,694
Savings accounts		174,113		175,586		177,341		165,882		75,675
Money market savings		1,460,006		1,358,516		1,472,127		1,381,924		1,067,187
Time deposits		745,056		798,469		663,522		706,965		488,447
Total interest-bearing		3,635,862		3,547,168		3,596,021		3,474,944		2,666,003
Total deposits	$	4,412,653	$	4,337,468	$	4,485,291	$	4,378,410	$	3,323,550

Asset Quality

Total nonperforming assets were $60.1 million as of September 30, 2025, a decrease of $2.8 million, or 4.4%, from December 31, 2024. As of September 30, 2025, the allowance for credit losses on loans was $62.1 million, or 1.51% of total loans, compared to $59.9 million, or 1.50% of total loans, as of December 31, 2024. 

The following table presents selected asset quality data as of and for the periods indicated: 

	As of and for the three months ended
	September 30,			June 30,			March 31,			December 31,			September 30,
(dollars in thousands)	2025			2025			2025			2024			2024
Nonaccrual loans	$	59,644		$	51,276		$	50,517		$	54,433		$	48,026
Accruing loans 90+ days past due		—			202			—			8,453			—
Total nonperforming loans		59,644			51,478			50,517			62,886			48,026
OREO and repossessed assets		467			751			493			—			—
Total nonperforming assets	$	60,111		$	52,229		$	51,010		$	62,886		$	48,026
Net charge-offs (recoveries)		(1,715	)		3,767			407			1,258			316
Net charge-offs (recoveries) to average loans		(0.17	)%		0.37	%		0.04	%		0.13	%		0.04	%
Nonperforming loans to total loans		1.45	%		1.27	%		1.24	%		1.58	%		1.58	%
Nonperforming assets to total assets		1.13	%		0.98	%		0.96	%		1.20	%		1.18	%
Allowance for credit losses on loans to total loans		1.51	%		1.47	%		1.52	%		1.50	%		1.29	%
Allowance for credit losses on loans to nonperforming loans		104	%		115	%		123	%		95	%		82	%

For the third quarter of 2025, the Company had net recoveries of $1.7 million, compared to net charge-offs of $3.8 million for the second quarter of 2025 and net charge-offs of $0.3 million for the third quarter of 2024. The quarter over quarter decrease in net charge-offs was primarily driven by a $1.9 million recovery in the third quarter of 2025 related to a loan that had previously been charged-off , compared to a $3.4 million charge-off related to the sale of one PCD non-owner occupied commercial real estate hospitality loan and the transfer of a pool of non-owner occupied commercial real estate hospitality loans to non-mortgage loans held for sale in the second quarter of 2025. Of the $3.4 million charge-off in the second quarter of 2025, $3.1 million represented reserves on PCD loans acquired in the HMNF acquisition that were reserved in the day 1 accounting of the acquisition. Excluding the charge-off of such PCD reserves, the Company had adjusted net charge-offs (non-GAAP) of $0.7 million and adjusted net charge-offs to average loans (non-GAAP) of 0.07% for the second quarter of 2025. 

The Company recorded no provision for credit losses for both the third quarter of 2025 and the second quarter of 2025, compared to a provision for credit losses of $1.7 million for the third quarter of 2024. 

The unearned fair value adjustments on acquired loan portfolios were $47.3 million as of September 30, 2025, $70.6 million as of December 31, 2024, and $3.8 million as of September 30, 2024. 

4

Capital

Total stockholders’ equity was $550.7 million as of September 30, 2025, an increase of $55.3 million from December 31, 2024. The change was primarily driven by an increase in retained earnings of $34.7 million and an increase in accumulated other comprehensive income of $19.0 million. Tangible book value per common share (non-GAAP) increased to $16.90 as of September 30, 2025, from $14.44 as of December 31, 2024. Tangible common equity to tangible assets (non-GAAP) increased to 8.24% as of September 30, 2025, from 7.13% as of December 31, 2024. Common equity tier 1 capital to risk weighted assets increased to 10.84% as of September 30, 2025, from 9.91% as of December 31, 2024. 

The following table presents our capital ratios as of the dates indicated: 

	September 30,			December 31,			September 30,
	2025			2024			2024
Capital Ratios(1)
Alerus Financial Corporation Consolidated
Common equity tier 1 capital to risk weighted assets		10.84	%		9.91	%		11.12	%
Tier 1 capital to risk weighted assets		11.05	%		10.12	%		11.38	%
Total capital to risk weighted assets		13.41	%		12.49	%		14.04	%
Tier 1 capital to average assets		9.49	%		8.65	%		9.30	%
Tangible common equity / tangible assets (2)		8.24	%		7.13	%		8.11	%
Alerus Financial, N.A.
Common equity tier 1 capital to risk weighted assets		11.00	%		10.18	%		10.73	%
Tier 1 capital to risk weighted assets		11.00	%		10.18	%		10.73	%
Total capital to risk weighted assets		12.25	%		11.43	%		11.98	%
Tier 1 capital to average assets		9.31	%		8.69	%		8.90	%

(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 Friday, October 31, 2025, 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 bank and national retirement 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 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 28 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. Alerus also operates a commercial wealth office in La Crosse, Wisconsin. 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 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 (tax-equivalent), 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 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

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of 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 uncertainties, risks and changes in circumstances 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 in response thereto); interest rate risk, including the effects of changes in interest rates; effects on the U.S. economy resulting from the threat or implementation of new, or changes to, existing policies, regulations, regulatory and other governmental agencies and executive orders, including tariffs, immigration, diversity, equity, and inclusion (DEI) and environmental, social, and governance (ESG) initiatives, consumer protection, foreign policy and tax regulations; 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; the effects of recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time that resulted in several bank failures; our ability to raise additional capital to implement our business plan; the overall health of the local and national real estate market; credit risks and risks from concentrations (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, including the integration of HMNF; 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 ESOP 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; 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; changes in local, state and federal laws, regulations and government policies concerning the Company’s general business, including interpretation and prioritization of such laws, regulations and policies; 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 or terrorism, including ongoing conflicts in the Middle East, the Russian invasion of Ukraine, or other adverse external events; any material weaknesses in our internal control over financial reporting; talent and labor shortages and employee turnover; the effects of the current U.S. government shutdown and its impact on our customers; 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 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

Alerus Financial Corporation and Subsidiaries

Consolidated Balance Sheets

(dollars in thousands, except share and per share data)

	September 30,			December 31,
	2025			2024
Assets	(Unaudited)
Cash and cash equivalents	$	92,043		$	61,239
Investment securities
Trading, at fair value		1,411			3,309
Available-for-sale, at fair value		531,014			588,053
Held-to-maturity, at amortized cost (with an allowance for credit losses on investments of $126 and $131, respectively)		259,225			275,585
Loans held for sale		17,757			16,518
Loans held for investment		4,102,075			3,992,534
Allowance for credit losses on loans		(62,127	)		(59,929	)
Net loans		4,039,948			3,932,605
Land, premises and equipment, net		44,097			39,780
Operating lease right-of-use assets		30,154			13,438
Accrued interest receivable		21,602			20,075
Bank-owned life insurance		38,997			36,033
Goodwill		85,634			85,634
Other intangible assets		35,753			43,882
Servicing rights		6,708			7,918
Deferred income taxes, net		38,497			52,885
Other assets		87,733			84,719
Total assets	$	5,330,573		$	5,261,673
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing	$	776,791		$	903,466
Interest-bearing		3,635,862			3,474,944
Total deposits		4,412,653			4,378,410
Short-term borrowings		200,000			238,960
Long-term debt		59,154			59,069
Operating lease liabilities		36,918			18,991
Accrued expenses and other liabilities		71,160			70,833
Total liabilities		4,779,885			4,766,263
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: 25,396,686 and 25,344,803 issued and outstanding		25,397			25,345
Additional paid-in capital		271,165			269,708
Retained earnings		308,464			273,723
Accumulated other comprehensive loss		(54,338	)		(73,366	)
Total stockholders’ equity		550,688			495,410
Total liabilities and stockholders’ equity	$	5,330,573		$	5,261,673

7

Alerus Financial Corporation and Subsidiaries

Consolidated Statements of Income

(dollars and shares in thousands, except per share data)

	Three months ended							Nine months ended
	September 30,			June 30,		September 30,		September 30,		September 30,
	2025			2025		2024		2025		2024
Interest Income	(Unaudited)			(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Loans, including fees	$	63,875		$	63,853	$	42,593	$	189,222	$	123,551
Investment securities
Taxable		5,091			5,310		4,596		16,108		14,008
Exempt from federal income taxes		160			160		169		480		512
Other		1,518			1,101		4,854		3,440		16,200
Total interest income		70,644			70,424		52,212		209,250		154,271
Interest Expense
Deposits		24,350			22,758		22,285		70,643		63,721
Short-term borrowings		2,506			3,982		6,706		9,327		19,748
Long-term debt		652			652		679		1,955		2,041
Total interest expense		27,508			27,392		29,670		81,925		85,510
Net interest income		43,136			43,032		22,542		127,325		68,761
Provision for credit losses		—			—		1,661		863		6,150
Net interest income after provision for credit losses		43,136			43,032		20,881		126,462		62,611
Noninterest Income
Retirement and benefit services		16,496			16,024		16,144		48,625		47,876
Wealth management		6,560			7,363		6,684		20,827		19,161
Mortgage banking		3,474			3,651		2,573		8,651		6,796
Service charges on deposit accounts		703			680		488		2,034		1,333
Gain on sale of non-mortgage loans		(35	)		2,115		—		2,080		—
Other		2,232			1,930		2,474		6,607		5,891
Total noninterest income (loss)		29,430			31,763		28,363		88,824		81,057
Noninterest Expense
Compensation		24,984			24,343		21,058		72,288		60,655
Employee taxes and benefits		6,094			6,633		5,400		20,490		16,722
Occupancy and equipment expense		2,849			2,559		2,082		8,315		5,803
Business services, software and technology expense		6,285			5,868		4,879		17,905		14,823
Intangible amortization expense		2,710			2,710		1,324		8,129		3,972
Professional fees and assessments		2,676			2,339		4,267		8,010		8,633
Marketing and business development		1,069			787		764		2,821		2,200
Supplies and postage		569			490		422		1,690		1,321
Travel		385			347		330		1,019		954
Mortgage and lending expenses		1,025			940		684		2,501		1,592
Other		1,895			1,422		1,237		6,176		3,543
Total noninterest expense		50,541			48,438		42,447		149,344		120,218
Income before income tax expense		22,025			26,357		6,797		65,942		23,450
Income tax expense		5,101			6,104		1,590		15,451		5,604
Net income (loss)	$	16,924		$	20,253	$	5,207	$	50,491	$	17,846
Per Common Share Data
Earnings per common share	$	0.66		$	0.79	$	0.26	$	1.97	$	0.90
Diluted earnings per common share	$	0.65		$	0.78	$	0.26	$	1.95	$	0.89
Dividends declared per common share	$	0.21		$	0.21	$	0.20	$	0.62	$	0.59
Average common shares outstanding		25,395			25,368		19,788		25,374		19,768
Diluted average common shares outstanding		25,713			25,714		20,075		25,693		20,037

8

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)

	September 30,			June 30,			December 31,			September 30,
	2025			2025			2024			2024
Tangible Common Equity to Tangible Assets
Total common stockholders’ equity	$	550,688		$	533,155		$	495,410		$	386,486
Less: Goodwill		85,634			85,634			85,634			46,783
Less: Other intangible assets		35,753			38,462			43,882			13,186
Tangible common equity (a)		429,301			409,059			365,894			326,517
Total assets		5,330,573			5,323,822			5,261,673			4,084,640
Less: Goodwill		85,634			85,634			85,634			46,783
Less: Other intangible assets		35,753			38,462			43,882			13,186
Tangible assets (b)		5,209,186			5,199,726			5,132,157			4,024,671
Tangible common equity to tangible assets (a)/(b)		8.24	%		7.87	%		7.13	%		8.11	%
Tangible Book Value Per Common Share
Tangible common equity (a)		429,301			409,059			365,894			326,517
Total common shares issued and outstanding (c)		25,397			25,389			25,345			19,790
Tangible book value per common share (a)/(c)	$	16.90		$	16.11		$	14.44		$	16.50

	Three months ended									Nine months ended
	September 30,			June 30,			September 30,			September 30,			September 30,
	2025			2025			2024			2025			2024
Return on Average Tangible Common Equity
Net income	$	16,924		$	20,253		$	5,207		$	50,491		$	17,846
Add: Intangible amortization expense (net of tax) (1)		2,141			2,141			1,046			6,421			3,138
Net income, excluding intangible amortization (d)		19,065			22,394			6,253			56,912			20,984
Average total equity		524,459			513,606			375,229			512,533			370,758
Less: Average goodwill		85,634			85,634			46,783			85,634			46,783
Less: Average other intangible assets (net of tax) (1)		29,540			31,436			10,933			31,549			11,969
Average tangible common equity (e)		409,285			396,536			317,513			395,350			312,006
Return on average tangible common equity (d)/(e)		18.48	%		22.65	%		7.83	%		19.25	%		8.98	%
Efficiency Ratio
Noninterest expense	$	50,541		$	48,438		$	42,447		$	149,344		$	120,218
Less: Intangible amortization expense		2,710			2,710			1,324			8,129			3,972
Adjusted noninterest expense (f)		47,831			45,728			41,123			141,215			116,246
Net interest income		43,136			43,032			22,542			127,325			68,761
Noninterest income		29,430			31,763			28,363			88,824			81,057
Tax-equivalent adjustment		638			592			314			1,748			816
Total tax-equivalent revenue (g)		73,204			75,387			51,219			217,897			150,634
Efficiency ratio (f)/(g)		65.34	%		60.66	%		80.29	%		64.81	%		77.17	%
Pre-Provision Net Revenue
Net interest income	$	43,136		$	43,032		$	22,542		$	127,325		$	68,761
Add: Noninterest income		29,430			31,763			28,363			88,824			81,057
Less: Noninterest expense		50,541			48,438			42,447			149,344			120,218
Pre-provision net revenue	$	22,025		$	26,357		$	8,458		$	66,805		$	29,600
Adjusted Noninterest Income
Noninterest income	$	29,430		$	31,763		$	28,363		$	88,824		$	81,057
Less: Adjusted noninterest income items
Net gain (loss) on sale of loans		(35	)		2,115			—			2,080			—
Net gain (loss) on sale/disposal of premises and equipment		—			(84	)		476			(84	)		481
Total adjusted noninterest income items (h)		(35	)		2,031			476			1,996			481
Adjusted noninterest income (i)	$	29,465		$	29,732		$	27,887		$	86,828		$	80,576
Adjusted Noninterest Expense
Noninterest expense	$	50,541		$	48,438		$	42,447		$	149,344		$	120,218
Less: Adjusted noninterest expense items
HMNF merger- and acquisition-related expenses		(43	)		11			1,661			255			2,251
Severance and signing bonus expense		104			(23	)		31			1,108			626
Total adjusted noninterest expense items (j)		61			(12	)		1,692			1,363			2,877
Adjusted noninterest expense (k)	$	50,480		$	48,450		$	40,755		$	147,981		$	117,341

(1) Items calculated after-tax utilizing a marginal income tax rate of 21.0%.

9

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									Nine months ended
	September 30,			June 30,			September 30,			September 30,			September 30,
	2025			2025			2024			2025			2024
Adjusted Pre-Provision Net Revenue
Net interest income	$	43,136		$	43,032		$	22,542		$	127,325		$	68,761
Add: Adjusted noninterest income (i)		29,465			29,732			27,887			86,828			80,576
Less: Adjusted noninterest expense (k)		50,480			48,450			40,755			147,981			117,341
Adjusted pre-provision net revenue	$	22,121		$	24,314		$	9,674		$	66,172		$	31,996
Adjusted Efficiency Ratio
Adjusted noninterest expense (k)	$	50,480		$	48,450		$	40,755		$	147,981		$	117,341
Less: Intangible amortization expense		2,710			2,710			1,324			8,129			3,972
Adjusted noninterest expense for efficiency ratio (l)		47,770			45,740			39,431			139,852			113,369
Tax-equivalent revenue
Net interest income		43,136			43,032			22,542			127,325			68,761
Add: Adjusted noninterest income (i)		29,465			29,732			27,887			86,828			80,576
Add: Tax-equivalent adjustment		638			592			314			1,748			816
Total tax-equivalent revenue (m)		73,239			73,356			50,743			215,901			150,153
Adjusted efficiency ratio (l)/(m)		65.22	%		62.35	%		77.71	%		64.78	%		75.50	%
Adjusted Net Income
Net income	$	16,924		$	20,253		$	5,207		$	50,491		$	17,846
Less: Adjusted noninterest income items (net of tax) (1) (h)		(28	)		1,604			376			1,577			380
Add: Adjusted noninterest expense items (net of tax) (1) (j)		48			(9	)		1,337			1,077			2,273
Adjusted net income (n)	$	17,000		$	18,640		$	6,168		$	49,991		$	19,739
Adjusted Return on Average Total Assets
Average total assets (o)	$	5,273,306		$	5,302,728		$	4,298,080		$	5,282,798		$	4,245,181
Adjusted return on average total assets (n)/(o)		1.28	%		1.41	%		0.57	%		1.27	%		0.62	%
Adjusted Return on Average Tangible Common Equity
Adjusted net income (n)	$	17,000		$	18,640		$	6,168		$	49,991		$	19,739
Add: Intangible amortization expense (net of tax) (1)		2,141			2,141			1,046			6,421			3,138
Adjusted net income, excluding intangible amortization (p)		19,141			20,781			7,214			56,412			22,877
Average total equity		524,459			513,606			375,229			512,533			370,758
Less: Average goodwill		85,634			85,634			46,783			85,634			46,783
Less: Average other intangible assets (net of tax)		29,540			31,436			10,933			31,549			11,969
Average tangible common equity (q)		409,285			396,536			317,513			395,350			312,006
Adjusted return on average tangible common equity (p)/(q)		18.55	%		21.02	%		9.04	%		19.08	%		9.79	%
Adjusted Earnings Per Common Share - Diluted
Adjusted net income (n)	$	17,000		$	18,640		$	6,168		$	49,991		$	19,739
Less: Dividends and undistributed earnings allocated to participating securities		148			205			24			444			102
Adjusted net income available to common stockholders (r)		16,852			18,435			6,144			49,547			19,637
Weighted-average common shares outstanding for diluted earnings per share (s)		25,713			25,714			20,075			25,693			20,037
Adjusted earnings per common share - diluted (r)/(s)	$	0.66		$	0.72		$	0.31		$	1.93		$	0.98
Adjusted Net Charge-Offs to Average Loans
Net charge-offs (recoveries)	$	(1,715	)	$	3,767		$	316		$	2,459		$	2,896
Less: Charge-off of PCD reserves on loans transferred to non-mortgage loans held for sale		—			3,053			-			3,053			-
Adjusted net charge-offs (recoveries) (t)		(1,715	)		714			316			(594	)		2,896
Average total loans (u)	$	4,036,936		$	4,079,084		$	2,968,947		$	4,046,347		$	2,858,634
Adjusted net charge-offs (recoveries) to average loans (t)/(u)		(0.17	)%		0.07	%		0.04	%		(0.02	)%		0.14	%

(1) Items calculated after-tax utilizing a marginal income tax rate of 21.0%. 

10

Alerus Financial Corporation and Subsidiaries

Analysis of Average Balances, Yields, and Rates (unaudited)

(dollars in thousands)

	Three months ended															Nine months ended
	September 30, 2025					June 30, 2025					September 30, 2024					September 30, 2025					September 30, 2024
			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	$	89,568		4.86	%	$	35,951		5.51	%	$	326,350		5.47	%	$	53,187		4.98	%	$	375,365		5.39	%
Investment securities (1)		796,759		2.64			823,463		2.69			749,062		2.55			826,409		2.70			760,219		2.58
Loans held for sale		20,188		4.93			22,302		4.44			15,795		3.20			17,979		4.80			13,768		6.01
Loans
Commercial and industrial		650,787		7.51			653,635		7.51			593,685		7.26			654,061		7.44			578,839		7.21
CRE − Construction, land and development		363,466		5.77			337,867		5.97			184,611		5.68			348,093		5.85			146,454		7.03
CRE − Multifamily		340,709		6.46			347,277		6.72			242,558		5.62			350,658		6.50			245,372		5.57
CRE − Non-owner occupied (2)		887,935		6.26			955,134		6.52			663,539		5.88			934,143		6.48			615,320		5.85
CRE − Owner occupied		435,469		7.73			442,796		6.29			289,963		5.41			419,608		6.77			284,315		5.41
Agricultural − Land		66,676		5.53			66,044		5.76			42,162		4.93			66,647		5.71			41,138		4.80
Agricultural − Production		64,685		6.80			67,412		7.32			40,964		6.84			64,357		7.13			38,110		6.65
RRE − First lien		898,011		4.83			898,903		4.92			689,382		3.98			898,910		4.84			695,313		4.02
RRE − Construction		33,834		6.61			39,682		7.62			16,792		3.86			36,798		7.57			19,847		4.89
RRE − HELOC		213,232		6.82			188,494		6.99			130,705		8.00			190,272		6.96			124,321		8.19
RRE − Junior lien		40,997		6.40			42,435		6.37			36,818		5.74			42,498		6.34			36,276		6.23
Other consumer		41,135		6.94			39,405		7.01			37,768		6.76			40,302		6.99			33,329		6.64
Total loans (1)		4,036,936		6.31			4,079,084		6.31			2,968,947		5.73			4,046,347		6.28			2,858,634		5.78
Federal Reserve/FHLB stock		22,398		7.46			28,146		8.65			17,562		8.25			24,314		8.01			16,956		8.30
Total interest earning assets		4,965,849		5.70			4,988,946		5.71			4,077,716		5.12			4,968,236		5.68			4,024,942		5.15
Noninterest earning assets		307,457					313,782					220,364					314,562					220,239
Total assets	$	5,273,306				$	5,302,728				$	4,298,080				$	5,282,798				$	4,245,181
Interest-Bearing Liabilities
Interest-bearing demand deposits	$	1,227,029		1.80	%	$	1,247,241		1.80	%	$	1,003,595		2.31	%	$	1,240,589		1.80	%	$	944,143		2.18	%
Money market and savings deposits		1,587,694		2.84			1,561,977		2.77			1,146,896		3.82			1,580,085		2.83			1,160,391		3.79
Time deposits		772,345		3.81			687,428		3.72			485,533		4.46			716,421		3.81			458,545		4.47
Fed funds purchased and BTFP		16,636		4.94			149,046		4.63			327,543		4.97			71,717		4.67			325,455		4.95
FHLB short-term advances		200,000		4.56			200,000		4.54			200,000		5.19			200,000		4.56			200,000		5.13
Long-term debt		59,137		4.37			59,112		4.42			59,027		4.58			59,111		4.42			58,999		4.62
Total interest-bearing liabilities		3,862,841		2.83			3,904,804		2.81			3,222,594		3.66			3,867,923		2.83			3,147,533		3.63
Noninterest-Bearing Liabilities and Stockholders' Equity
Noninterest-bearing deposits		800,028					808,629					628,114					819,266					656,553
Other noninterest-bearing liabilities		85,978					75,689					72,143					83,076					70,337
Stockholders’ equity		524,459					513,606					375,229					512,533					370,758
Total liabilities and stockholders’ equity	$	5,273,306				$	5,302,728				$	4,298,080				$	5,282,798				$	4,245,181
Net interest rate spread				2.87	%				2.90	%				1.46	%				2.85	%				1.52	%
Net interest margin, tax-equivalent (1)				3.50	%				3.51	%				2.23	%				3.47	%				2.31	%

(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 June 30, 2025 and the nine months ended September 30, 2025.

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