8-K

United States

Securities And Exchange Commission
Washington, DC 20549

FORM 8-K

Current Report Pursuant to
Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): April 26, 2023

Alerus Financial Corporation
(Exact Name of Registrant as Specified in Charter)

Delaware	001-39036	45-0375407
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

401 Demers Avenue
Grand Forks, North Dakota 58201
(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code: (701) 795-3200

N/A

(Former Name or Former Address, if Changed Since Last Report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, $1.00 par value per share	ALRS	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b–2 of the Securities Exchange Act of 1934 (§ 240.12b–2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02.     Results of Operations and Financial Condition.

On April 26, 2023, Alerus Financial Corporation (the “Company”) issued a press release announcing its financial results for the three months ended March 31, 2023. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

The information in Item 2.02 of this Current Report on Form 8-K, and the related Exhibit 99.1, attached hereto is being “furnished” and will not, except to the extent required by applicable law or regulation, be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor will any of such information or exhibits be deemed incorporated by reference to any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

Item 7.01.     Regulation FD Disclosure.

On April 26, 2023, the Company posted a presentation to the Company’s investor relations website, located at investors.alerus.com. The presentation is also attached hereto as Exhibit 99.2.

The information in Item 7.01 of this Current Report on Form 8-K, and the related Exhibit 99.2, attached hereto is being “furnished” and will not, except to the extent required by applicable law or regulation, be deemed “filed” by the Company for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor will any of such information or exhibits be deemed incorporated by reference to any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

Item 9.01.     Financial Statements and Exhibits.

(d)  Exhibits

Exhibit No.	Description
99.1	Press Release of Alerus Financial Corporation, dated April 26, 2023
99.2 104	Investor Presentation of Alerus Financial Corporation Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 26, 2023	Alerus Financial Corporation
	By:	/s/ Katie A. Lorenson
	Name:	Katie A. Lorenson
	Title:	President and Chief Executive Officer

EX-99.1

Exhibit 99.1

FOR RELEASE (04.26.2023) Alan A. Villalon, Chief Financial Officer 952.417.3733 (Office)

ALERUS FINANCIAL CORPORATION REPORTS

FIRST QUARTER 2023 NET INCOME OF $8.2 MILLION

MINNEAPOLIS, MN (April 26, 2023) – Alerus Financial Corporation (Nasdaq: ALRS), or the Company, reported net income of $8.2 million for the first quarter of 2023, or $0.40 per diluted common share, compared to net income of $10.9 million, or $0.53 per diluted common share, for the fourth quarter of 2022, and net income of $10.2 million, or $0.57 per diluted common share, for the first quarter of 2022.

CEO Comments

President and Chief Executive Officer Katie Lorenson said, “Alerus’ highly diversified business model is a unique differentiator in this challenging economic environment with fee income making up over 50.0% of total revenues, our banking franchise is anchored by a strong foundation of capital, risk management, and diversification. Our common equity tier 1 capital ratio at the end of the first quarter was 13.3% and our nearly all-core granular deposit based increased balances by 4.0% during the quarter. Our liquidity position is strong, with total available liquidity to uninsured and not collateralized deposits of 286%. The Company’s loan portfolio remains well diversified by sector and geography, with limited exposure to commercial office borrowers at 3.9% of total loans. The allowance for credit losses to was 1.4% to total loans and 1,675% of non-performing loans. Credit quality remains pristine with net charge-offs of 3 basis points, below the Company’s historical net charge-off rates of 0.27%.

Financial results for the first quarter were impacted by continuing margin pressure and headwinds in the mortgage sector. We are focused on improving long-term profitability and shareholder returns through ongoing restructuring and efficiency enhancing opportunities. We continue to have success in the transformation of our organic growth model and synergistic expansion as we added core holistic relationships in banking and wealth management. Our momentum in talent acquisition continued in the first quarter with key talent adds to the banking and treasury management teams. Thank you to our Alerus employees for your dedication and constant focus on building relationships with clients by bringing value to every interaction and together taking Alerus to new heights.”

Quarterly Highlights

◾ Total deposits were $3.0 billion as of March 31, 2023, an increase of $116.5 million, or 4.0%, from December 31, 2022

◾ Loan to deposit ratio as of March 31, 2023 was 82.0%, compared to 83.8% as of December 31, 2022

◾ Common equity tier 1 capital to risk weighted assets as of March 31, 2023 was 13.30%, compared to 13.39% as of December 31, 2022

◾ Return on average total assets of 0.88%, compared to 1.17% for the fourth quarter of 2022

◾ Return on average common equity of 9.17%, compared to 12.37% for the fourth quarter of 2022

◾ Return on average tangible common equity⁽¹⁾ of 12.58%, compared to 16.63% for the fourth quarter of 2022

◾ Net interest margin (tax-equivalent) was 2.70%, compared to 3.09% for the fourth quarter of 2022

◾ Noninterest expense was $37.9 million, no change compared to $37.9 million for the fourth quarter of 2022

◾ Noninterest income was 51.63% of total revenue, compared to 48.62 for the fourth quarter of 2022

◾ Allowance for credit losses to total loans was 1.41% compared to 1.27% as of December 31, 2022

◾ Expanded the Company’s commercial banking team with the addition of four highly experienced mid-market and treasury management professionals

◾ The Board of Directors previously declared a regular quarterly cash dividend of $0.18 per share, which was paid on April 14, 2023 to shareholders of record as of March 15, 2023. As previously reported, this dividend represents a 12.5% increase over the dividend declared during the first quarter 2022.

(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
	March 31,			December 31,			March 31,
(dollars and shares in thousands, except per share data)	2023			2022			2022
Performance Ratios
Return on average total assets		0.88	%		1.17	%		1.26	%
Return on average common equity		9.17	%		12.37	%		11.78	%
Return on average tangible common equity (1)		12.58	%		16.63	%		14.72	%
Noninterest income as a % of revenue		51.63	%		48.62	%		57.62	%
Net interest margin (tax-equivalent)		2.70	%		3.09	%		2.83	%
Efficiency ratio (1)		74.53	%		69.62	%		72.25	%
Net charge-offs/(recoveries) to average loans		0.03	%		(0.03)	%		(0.03)	%
Dividend payout ratio		45.00	%		33.96	%		28.07	%
Per Common Share
Earnings per common share - basic	$	0.41		$	0.54		$	0.58
Earnings per common share - diluted	$	0.40		$	0.53		$	0.57
Dividends declared per common share	$	0.18		$	0.18		$	0.16
Book value per common share	$	17.90		$	17.85		$	19.00
Tangible book value per common share (1)	$	14.50		$	14.37		$	16.07
Average common shares outstanding - basic		20,028			19,988			17,244
Average common shares outstanding - diluted		20,246			20,232			17,500
Other Data
Retirement and benefit services assets under administration/management	$	33,404,342		$	32,122,520		$	35,333,131
Wealth management assets under administration/management	$	3,675,684		$	3,582,648		$	4,584,856
Mortgage originations	$	77,728		$	126,254		$	186,762

(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 first quarter of 2023 was $23.7 million, a $3.3 million, or 12.3%, decrease from the fourth quarter of 2022. Net interest income increased $2.0 million, or 9.2%, from $21.7 million for the first quarter of 2022. The linked quarter decrease in net interest income was primarily driven by a $5.3 million, or 59.9%, increase in interest expense, partially offset by a $2.0 million, or 5.6%, increase in interest income. The increase in interest expense was primarily driven by a $3.4 million increase in interest expense paid on deposits and $1.8 million in interest expense paid on short-term borrowings. The increase in interest expense paid on deposits was primarily due to the rapid increase in short-term rates and heightened deposit competition. Short-term borrowings expense increased as interest rates have increased and the average balance of fed funds purchased and short-term borrowings increased $105.3 million as compared to the fourth quarter of 2022. This increase was primarily driven by a $97.4 million increase in average loan balances, and a $29.9 million decline in average deposit balances, partially offset by a $12.2 million decline in average investment securities balance.

Net interest margin (tax-equivalent), was 2.70% for the first quarter of 2023, a 39 basis point decrease from 3.09% for the fourth quarter of 2022, and a 13 basis point decrease from 2.83% in the first quarter of 2022. The linked quarter decrease was primarily driven by a 78 basis point increase in the average rate paid on interest-bearing liabilities, partially offset by a 21 basis point increase in interest earning asset yields. The increase in the average rate paid on interest-bearing liabilities was the result of a 100 basis point increase in the average rate paid on fed funds purchased and short-term borrowings as well as a 65 basis point increase in the rate paid on interest-bearing deposits.

Noninterest Income

Noninterest income for the first quarter of 2023 was $25.3 million, a $264 thousand, or 1.0%, decrease from the fourth quarter of 2022. The quarter over quarter decrease was primarily driven by decreases of $1.1 million in retirement and benefit services revenue and $453 thousand in mortgage banking revenue, partially offset by a $1.2 million increase in other noninterest income. The decrease in retirement and benefit services revenue was primarily the result of seasonal decreases in administration fees, ESOP transaction fees and loan and distribution fees. Mortgage banking revenue decreased primarily due to a $48.5 million, or 38.4%, decrease in mortgage originations due to the rising interest rate environment and seasonality. Other noninterest income increased primarily due to a $1.2 million increase in proceeds received on a bank-owned life insurance claim.

2

Noninterest income for the first quarter of 2023 decreased $4.2 million, or 14.3%, from $29.5 million in the first quarter of 2022. The decrease in noninterest income was primarily due to a $3.2 million decrease in mortgage banking revenue and a $2.2 million decrease in retirement and benefit services revenue, partially offset by a $1.4 million increase in other noninterest income. Mortgage banking revenue decreased primarily due to a $109.0 million, or 58.4% decrease in mortgage originations, driven by the rising interest rate environment and a reduction in mortgage personnel. Retirement and benefit services revenue decreased primarily due to a decrease in asset based fees as assets under administration/management decreased $1.9 billion, or 5.5%. Additionally, retirement and benefit services revenue experienced decreases of $528 thousand in payroll service fees resulting from the exit of payroll services and $310 thousand in plan document restatement fees. Other noninterest income increased for reasons previously stated.

Noninterest Expense

Noninterest expense for both the first quarter of 2023 and the fourth quarter of 2022 was $37.9 million. The minor linked quarter changes in noninterest expense included a $983 thousand decrease in other noninterest expense and a $302 thousand decrease in professional fees and assessments, partially offset by an increase of $966 thousand in employee taxes and benefits, $919 thousand increase in business services, software and technology. Compensation expense remained flat quarter over quarter, despite the first quarter including one-time expenses of $484 thousand in severance costs and $415 thousand related to talent acquisition. The decrease in other noninterest expense was primarily driven by a reduction of the provision for unfunded commitments which is now being reported within the provision for credit losses, as the Company adopted the new Current Expected Credit Loss, or CECL, accounting standard on January 1, 2023. Professional fees and assessments declined, primarily due to a decrease in the legal fees and mergers and acquisition expenses associated with the acquisition of Metro Phoenix Bank, which was completed in the third quarter of 2022. Employee taxes and benefits increased primarily due to seasonality. Business services, software and technology expense increased primarily due to the recognition of the benefits of renegotiated contracts at lower rates in the fourth quarter.

Noninterest expense for the first quarter of 2023 decreased $202 thousand, or 0.5%, from $38.1 million in the first quarter of 2022. The year over year decrease in noninterest expense was primarily driven by a $389 thousand decrease in professional fees and assessments, partially offset by a $400 thousand increase in business services, software and technology expense. Professional fees and assessments decreased primarily due to a $284 thousand decrease in recruitment expenses. Business services, software and technology expense increased primarily due to increased technology expenses associated with the acquisition and integration of Metro Phoenix Bank.

Financial Condition

Total assets were $3.9 billion as of March 31, 2023, an increase of $107.1 million, or 2.8%, from December 31, 2022. The increase in assets included increases of $86.9 million in cash and cash equivalents, $42.6 million in loans held for investment, partially offset by a $19.8 million decrease in investment securities from December 31, 2022.

Loans

Total loans were $2.5 billion as of March 31, 2023, an increase of $42.6 million, or 1.7%, from December 31, 2022. The increase in total loans was primarily due to increases of $52.7 million in commercial real estate loans, $11.0 million in real estate construction loans and $20.3 million in residential real estate loans, partially offset by a $30.3 million decrease in commercial and industrial loans.

3

The following table presents the composition of our loan portfolio as of the dates indicated:

	March 31,		December 31,		September 30,		June 30,		March 31,
(dollars in thousands)	2023		2022		2022		2022		2022
Commercial
Commercial and industrial	$	553,578	$	583,876	$	564,655	$	484,426	$	467,449
Real estate construction		108,776		97,810		89,215		48,870		41,604
Commercial real estate		934,324		881,670		819,068		599,737		602,158
Total commercial		1,596,678		1,563,356		1,472,938		1,133,033		1,111,211
Consumer
Residential real estate first mortgage		698,002		679,551		649,818		568,571		522,489
Residential real estate junior lien		152,281		150,479		143,681		135,255		130,604
Other revolving and installment		39,664		50,608		51,794		53,384		53,738
Total consumer		889,947		880,638		845,293		757,210		706,831
Total loans	$	2,486,625	$	2,443,994	$	2,318,231	$	1,890,243	$	1,818,042

Deposits

Total deposits were $3.0 billion as of March 31, 2023, an increase of $116.5 million, or 4.0%, from December 31, 2022. Interest-bearing deposits increased $184.5 million, while noninterest-bearing deposits decreased $68.0 million in the first quarter of 2023. The increase in interest-bearing deposits included increases of $111.4 million in interest-bearing demand deposits, $40.2 million in money market savings accounts and $33.1 million in time deposits. Interest-bearing deposits increased primarily due to an increase in our synergistic, commercial and public funds deposits. Synergistic deposits, which include deposits from our retirement and benefit services and wealth management segments including HSA deposits, increased $66.4 million. Excluding synergistic deposits, commercial transaction deposits including public funds increased $65.0 million, while consumer transaction deposits decreased $48.8 million in the first quarter of 2023. Noninterest bearing deposits as a percentage of total deposits was 26.2% as of March 31, 2023, compared to 29.5% as of December 31, 2022.

The following table presents the composition of our deposit portfolio as of the dates indicated:

	March 31,		December 31,		September 30,		June 30,		March 31,
(dollars in thousands)	2023		2022		2022		2022		2022
Noninterest-bearing demand	$	792,977	$	860,987	$	905,228	$	764,808	$	831,558
Interest-bearing
Interest-bearing demand		817,675		706,275		653,216		642,641		760,321
Savings accounts		99,742		99,882		101,820		97,227		99,299
Money market savings		1,076,166		1,035,981		1,079,520		914,423		976,905
Time deposits		245,418		212,359		222,027		200,451		224,184
Total interest-bearing		2,239,001		2,054,497		2,056,583		1,854,742		2,060,709
Total deposits	$	3,031,978	$	2,915,484	$	2,961,811	$	2,619,550	$	2,892,267

Asset Quality

Effective January 1, 2023, the Company adopted the new CECL accounting standard. The adoption of CECL resulted in the Company’s allowance for credit losses increasing by approximately $5.9 million relative to the allowance held as of December 31, 2022. The adoption of CECL resulted in additional allowance of $3.9 million in the allowance for credit losses on loans and $1.9 million in additional allowance for credit losses on unfunded commitments. Total nonperforming assets were $2.1 million as of March 31, 2023, a decrease of $1.7 million, or 44.6%, from December 31, 2022. As of March 31, 2023, the allowance for credit losses on loans was $35.1 million, or 1.41% of total loans, compared to $31.1 million, or 1.27% of total loans, as of December 31, 2022. In addition, the fair value mark on the acquired Metro Phoenix Bank loan portfolio was $6.9 million and $7.1 million, as of March 31, 2023 and December 31, 2022, respectively.

4

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

	As of and for the three months ended
	March 31,			December 31,			September 30,			June 30,			March 31,
(dollars in thousands)	2023			2022			2022			2022			2022
Nonaccrual loans	$	2,118		$	3,794		$	4,303		$	4,370		$	4,069
Accruing loans 90+ days past due		—			—			1,000			—			146
Total nonperforming loans		2,118			3,794			5,303			4,370			4,215
OREO and repossessed assets		—			30			904			860			865
Total nonperforming assets	$	2,118		$	3,824		$	6,207		$	5,230		$	5,080
Net charge-offs/(recoveries)		170			(178)			405			340			(141)
Net charge-offs/(recoveries) to average loans		0.03	%		(0.03)	%		0.07	%		0.07	%		(0.03)	%
Nonperforming loans to total loans		0.09	%		0.16	%		0.23	%		0.23	%		0.23	%
Nonperforming assets to total assets		0.05	%		0.10	%		0.17	%		0.16	%		0.15	%
Allowance for credit losses on loans to total loans		1.41	%		1.27	%		1.34	%		1.66	%		1.74	%
Allowance for credit losses on loans to nonperforming loans		1,657	%		821	%		584	%		718	%		752	%

For the first quarter of 2023, the Company had net charge-offs of $170 thousand compared to net recoveries of $178 thousand for the fourth quarter of 2022 and $141 thousand of net recoveries for the first quarter of 2022.

The Company recorded a provision for credit losses expense of $550 thousand in the three months ended March 31, 2023, a $550 thousand increase compared to both the three months ended December 31, 2022, and March 31, 2022. The provision for credit losses expense for the three months ended March 31, 2023, included $269 thousand in provision for credit losses on loans and $230 thousand in provision for credit losses on unfunded commitments. The increase in provision for credit losses was primarily a result of a change in forecasting assumptions in the new methodology with the adoption of CECL.

Capital

Total stockholders’ equity was $359.1 million as of March 31, 2023, an increase of $2.2 million, or 0.6%, from December 31, 2022. While stockholders’ equity remained relatively flat, the Company saw decreases of $4.5 million in retained earnings as a result of the adoption of CECL, partially offset by a $2.3 million decrease in the amount of other comprehensive loss. Tangible book value per common share, a non-GAAP financial measure, increased to $14.50 as of March 31, 2023, from $14.37 as of December 31, 2022. Tangible common equity to tangible assets, a non-GAAP financial measure, decreased to 7.62% as of March 31, 2023, from 7.74% as of December 31, 2022. Common equity tier 1 capital to risk weighted assets decreased to 13.30% as of March 31, 2023, from 13.39% as of December 31, 2022.

5

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

	March 31,			December 31,			March 31,
	2023			2022			2022
Capital Ratios(1)
Alerus Financial Corporation Consolidated
Common equity tier 1 capital to risk weighted assets		13.30	%		13.39	%		14.27	%
Tier 1 capital to risk weighted assets		13.60	%		13.69	%		14.66	%
Total capital to risk weighted assets		16.51	%		16.48	%		18.12	%
Tier 1 capital to average assets		11.00	%		11.25	%		10.30	%
Tangible common equity / tangible assets (2)		7.62	%		7.74	%		8.46	%
Alerus Financial, N.A.
Common equity tier 1 capital to risk weighted assets		12.67	%		12.76	%		13.52	%
Tier 1 capital to risk weighted assets		12.67	%		12.76	%		13.52	%
Total capital to risk weighted assets		13.87	%		13.83	%		14.77	%
Tier 1 capital to average assets		10.24	%		10.48	%		9.50	%

(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, April 27, 2023, to discuss its financial results. The call can be accessed via telephone at (844) 200-6205, using access code 057461. 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 is a diversified financial services company with corporate offices in Grand Forks, North Dakota, and the Minneapolis-St. Paul, Minnesota metropolitan area. Through its subsidiary, Alerus Financial, N.A., the Company provides innovative and comprehensive financial solutions to business and consumer clients through four distinct business segments—banking, retirement and benefit services, wealth management, and mortgage. The Company provides clients with a primary point of contact to help fully understand the unique needs and delivery channel preferences of each client. Clients are provided with competitive products, valuable insight and sound advice supported by digital solutions designed to meet the clients’ needs. The Company has banking, mortgage, and wealth management offices in Grand Forks and Fargo, North Dakota, the Minneapolis-St. Paul, Minnesota metropolitan area, and Phoenix, Scottsdale, and Mesa Arizona. Alerus Retirement and Benefits plan administration hubs are located in Minnesota, Michigan, and Colorado.

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 common equity per share, return on average tangible common equity, net interest margin (tax-equivalent), and the efficiency ratio. 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.

6

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 we make 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 the future of 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: interest rate risks associated with our business, including the effects of recent and anticipated rate increases by the Federal Reserve; our ability to successfully manage credit risk and maintain an adequate level of allowance for credit losses; new or revised accounting standards, including as a result of the implementation of the new Current Expected Credit Loss Standard; business and economic conditions generally and in the financial services industry, nationally and within our market areas, including continued rising rates of inflation; the effects of recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short-period of time at Silicon Valley Bank and Signature Bank that resulted in the failure of those institutions; the overall health of the local and national real estate market; concentrations within our loan portfolio; the level of nonperforming assets on our balance sheet; our ability to implement our organic and acquisition growth strategies, including the integration of Metro Phoenix Bank which we acquired in 2022; 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 information security controls or cybersecurity-related incidents; 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 technological change in the financial services industry; increased competition in the financial services industry from non-banks such as credit unions and Fintech companies, including 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, who have balances above current FDIC insurance limits and may withdraw deposits to diversify their exposure; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal proceedings and regulatory actions against us or to which we may become subject; potential impairment to the goodwill we recorded in connection with our past acquisitions, including the acquisition of Metro Phoenix Bank; the extensive regulatory framework that applies to us; the impact of recent and future legislative and regulatory changes, including in response to the recent failures of Silicon Valley Bank and Signature Bank; fluctuations in the values of the securities held in our securities portfolio, including as a result of rising interest rates, which has resulted in unrealized losses in our portfolio; 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, natural disasters, widespread disease or pandemics, such as the COVID-19 global pandemic; acts of war or terrorism, including the Russian invasion of Ukraine, or other adverse external events; any material weaknesses in our internal control over financial reporting; developments and uncertainty related to the future use and availability of some reference rates, such as the expected discontinuation of the London Interbank Offered Rate, as well as the development and implementation of other alternative reference rates; changes to U.S. or state tax laws, regulations and guidance, including the new 1.0% excise tax on stock buybacks by publicly traded companies; talent and labor shortages and employee turnover; our success at managing 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 Securities and Exchange Commission.

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. We undertake 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.

7

Alerus Financial Corporation and Subsidiaries

Consolidated Balance Sheets

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

	March 31,		December 31,
	2023		2022
Assets	(Unaudited)		(Audited)
Cash and cash equivalents	$	145,181	$	58,242
Investment securities
Available-for-sale, at fair value		705,825		717,324
Held-to-maturity, at carrying value (allowance for credit losses of $223 at March 31, 2023)		313,648		321,902
Loans held for sale		16,900		9,488
Loans		2,486,625		2,443,994
Allowance for credit losses on loans		(35,102)		(31,146)
Net loans		2,451,523		2,412,848
Land, premises and equipment, net		17,631		17,288
Operating lease right-of-use assets		5,122		5,419
Accrued interest receivable		12,983		12,869
Bank-owned life insurance		32,583		33,991
Goodwill		47,087		47,087
Other intangible assets		21,131		22,455
Servicing rights		2,421		2,643
Deferred income taxes, net		41,620		42,369
Other assets		73,118		75,712
Total assets	$	3,886,773	$	3,779,637
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing	$	792,977	$	860,987
Interest-bearing		2,239,001		2,054,497
Total deposits		3,031,978		2,915,484
Short-term borrowings		372,145		378,080
Long-term debt		58,872		58,843
Operating lease liabilities		5,545		5,902
Accrued expenses and other liabilities		59,115		64,456
Total liabilities		3,527,655		3,422,765
Stockholders’ equity
Preferred stock, $1 par value, 2,000,000 shares authorized: 0 issued and outstanding		—		—
Common stock, $1 par value, 30,000,000 shares authorized: 20,066,807 and 19,991,681 issued and outstanding		20,067		19,992
Additional paid-in capital		154,818		155,095
Retained earnings		280,540		280,426
Accumulated other comprehensive income (loss)		(96,307)		(98,641)
Total stockholders’ equity		359,118		356,872
Total liabilities and stockholders’ equity	$	3,886,773	$	3,779,637

8

Alerus Financial Corporation and Subsidiaries

Consolidated Statements of Income

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

	Three months ended
	March 31,		December 31,		March 31,
	2023		2022		2022
Interest Income	(Unaudited)		(Unaudited)		(Unaudited)
Loans, including fees	$	30,933	$	29,248	$	17,292
Investment securities
Taxable		5,951		5,813		5,440
Exempt from federal income taxes		190		210		216
Other		735		541		116
Total interest income		37,809		35,812		23,064
Interest Expense
Deposits		9,104		5,675		829
Short-term borrowings		4,393		2,545		—
Long-term debt		654		628		562
Total interest expense		14,151		8,848		1,391
Net interest income		23,658		26,964		21,673
Provision for credit losses		550		—		—
Net interest income after provision for credit losses		23,108		26,964		21,673
Noninterest Income
Retirement and benefit services		15,482		16,599		17,646
Wealth management		5,194		5,144		5,326
Mortgage banking		1,717		2,170		4,931
Service charges on deposit accounts		301		282		363
Other		2,559		1,322		1,204
Total noninterest income		25,253		25,517		29,470
Noninterest Expense
Compensation		19,158		19,189		19,051
Employee taxes and benefits		5,853		4,887		6,162
Occupancy and equipment expense		1,899		1,892		2,051
Business services, software and technology expense		5,324		4,405		4,924
Intangible amortization expense		1,324		1,324		1,053
Professional fees and assessments		1,152		1,454		1,541
Marketing and business development		686		950		600
Supplies and postage		460		634		646
Travel		248		356		179
Mortgage and lending expenses		497		606		686
Other		1,268		2,251		1,178
Total noninterest expense		37,869		37,948		38,071
Income before income taxes		10,492		14,533		13,072
Income tax expense		2,306		3,624		2,888
Net income	$	8,186	$	10,909	$	10,184
Per Common Share Data
Earnings per common share	$	0.41	$	0.54	$	0.58
Diluted earnings per common share	$	0.40	$	0.53	$	0.57
Dividends declared per common share	$	0.18	$	0.18	$	0.16
Average common shares outstanding		20,028		19,988		17,244
Diluted average common shares outstanding		20,246		20,232		17,500

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)

	March 31,			December 31,			March 31,
	2023			2022			2022
Tangible Common Equity to Tangible Assets
Total common stockholders’ equity	$	359,118		$	356,872		$	328,505
Less: Goodwill		47,087			47,087			31,490
Less: Other intangible assets		21,131			22,455			19,197
Tangible common equity (a)		290,900			287,330			277,818
Total assets		3,886,773			3,779,637			3,336,199
Less: Goodwill		47,087			47,087			31,490
Less: Other intangible assets		21,131			22,455			19,197
Tangible assets (b)		3,818,555			3,710,095			3,285,512
Tangible common equity to tangible assets (a)/(b)		7.62	%		7.74	%		8.46	%
Tangible Book Value Per Common Share
Total common stockholders’ equity	$	359,118		$	356,872		$	328,505
Less: Goodwill		47,087			47,087			31,490
Less: Other intangible assets		21,131			22,455			19,197
Tangible common equity (c)		290,900			287,330			277,818
Total common shares issued and outstanding (d)		20,067			19,992			17,289
Tangible book value per common share (c)/(d)	$	14.50		$	14.37		$	16.07

	Three months ended
	March 31,			December 31,			March 31,
	2023			2022			2022
Return on Average Tangible Common Equity
Net income	$	8,186		$	10,909		$	10,184
Add: Intangible amortization expense (net of tax)		1,046			1,046			832
Net income, excluding intangible amortization (e)		9,232			11,955			11,016
Average total equity		361,857			349,812			350,545
Less: Average goodwill		47,087			46,283			31,490
Less: Average other intangible assets (net of tax)		17,209			18,243			15,569
Average tangible common equity (f)		297,561			285,286			303,486
Return on average tangible common equity (e)/(f)		12.58	%		16.63	%		14.72	%
Efficiency Ratio
Noninterest expense	$	37,869		$	37,948		$	38,071
Less: Intangible amortization expense		1,324			1,324			1,053
Adjusted noninterest expense (g)		36,545			36,624			37,018
Net interest income		23,658			26,964			21,673
Noninterest income		25,253			25,517			29,470
Tax-equivalent adjustment		124			124			94
Total tax-equivalent revenue (h)		49,035			52,605			51,237
Efficiency ratio (g)/(h)		74.53	%		69.62	%		72.25	%

10

Alerus Financial Corporation and Subsidiaries

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

(dollars in thousands)

	Three months ended
	March 31, 2023				December 31, 2022				March 31, 2022
			Average				Average				Average
	Average		Yield/		Average		Yield/		Average		Yield/
	Balance		Rate		Balance		Rate		Balance		Rate
Interest Earning Assets
Interest-bearing deposits with banks	$	41,947	3.23	%	$	26,510	2.16	%	$	105,726	0.18	%
Investment securities (1)		1,034,288	2.43	%		1,046,441	2.30	%		1,216,256	1.90	%
Fed funds sold		—	—	%		7,119	3.40	%		—	—	%
Loans held for sale		10,345	4.98	%		14,505	4.54	%		24,656	2.57	%
Loans
Commercial:
Commercial and industrial		559,416	6.09	%		561,252	5.80	%		434,656	4.68	%
Real estate construction		103,099	6.56	%		96,189	6.02	%		41,139	3.89	%
Commercial real estate		911,634	4.95	%		838,466	4.85	%		601,024	3.64	%
Total commercial		1,574,149	5.46	%		1,495,907	5.28	%		1,076,819	4.07	%
Consumer
Residential real estate first mortgage		688,754	3.76	%		665,135	3.64	%		514,724	3.49	%
Residential real estate junior lien		149,720	7.21	%		146,912	6.46	%		125,997	4.45	%
Other revolving and installment		44,531	5.86	%		51,836	5.62	%		50,686	4.38	%
Total consumer		883,005	4.45	%		863,883	4.24	%		691,407	3.73	%
Total loans (1)		2,457,154	5.10	%		2,359,790	4.90	%		1,768,226	3.94	%
Federal Reserve/FHLB stock		23,668	6.87	%		19,603	6.80	%		6,486	4.38	%
Total interest earning assets		3,567,402	4.31	%		3,473,968	4.10	%		3,121,350	3.01	%
Noninterest earning assets		224,134				232,754				165,459
Total assets	$	3,791,536			$	3,706,722			$	3,286,809
Interest-Bearing Liabilities
Interest-bearing demand deposits	$	746,660	0.87	%	$	692,217	0.50	%	$	714,472	0.12	%
Money market and savings deposits		1,165,269	2.17	%		1,185,502	1.39	%		1,043,430	0.14	%
Time deposits		231,959	2.23	%		214,264	1.20	%		227,485	0.44	%
Fed funds purchased		290,187	4.85	%		86,350	3.78	%		—	—	%
Short-term borrowings		80,000	4.69	%		178,533	3.82	%		—	—	%
Long-term debt		58,858	4.51	%		58,830	4.24	%		58,908	3.87	%
Total interest-bearing liabilities		2,572,933	2.23	%		2,415,696	1.45	%		2,044,295	0.28	%
Noninterest-Bearing Liabilities and Stockholders' Equity
Noninterest-bearing deposits		789,134				870,948				831,441
Other noninterest-bearing liabilities		67,612				70,266				60,528
Stockholders’ equity		361,857				349,812				350,545
Total liabilities and stockholders’ equity	$	3,791,536			$	3,706,722			$	3,286,809
Net interest income (1)
Net interest rate spread			2.08	%			2.65	%			2.73	%
Net interest margin, tax-equivalent (1)			2.70	%			3.09	%			2.83	%

(1) Taxable-equivalent adjustment was calculated utilizing a marginal income tax rate of 21.0%.

11

EX-99.2

Exhibit 99.2

EARNINGS PRESENTATION Q1 2023 NASDAQ: ALRS Alerus

1 Forward-Looking Statements This presentation 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 we make 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 the future of 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: interest rate risks associated with our business, including the effects of recent and anticipated rate increases by the Federal Reserve; our ability to successfully manage credit risk and maintain an adequate level of allowance for credit losses on loans; new or revised accounting standards, including as a result of the implementation of the new Current Expected Credit Loss Standard; business and economic conditions generally and in the financial services industry, nationally and within our market areas, including continued rising rates of inflation; the effects of recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time at Silicon Valley Bank and Signature Bank that resulted in the failure of those institutions; the overall health of the local and national real estate market; concentrations within our loan portfolio; the level of nonperforming assets on our balance sheet; our ability to implement our organic and acquisition growth strategies, including the integration of Metro Phoenix Bank which we acquired in 2022; 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 information security controls or cybersecurity-related incidents; 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 technological change in the financial services industry; increased competition in the financial services industry from non-banks such as credit unions and Fintech companies, including 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, who have balances above current FDIC insurance limits and may withdraw deposits to diversify their exposure; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal proceedings and regulatory actions against us or to which we may become subject; potential impairment to the goodwill we recorded in connection with our past acquisitions, including the acquisition of Metro Phoenix Bank; the extensive regulatory framework that applies to us; the impact of recent and future legislative and regulatory changes, including in response to the recent failures of Silicon Valley Bank and Signature Bank; fluctuations in the values of the securities held in our securities portfolio, including as a result of rising interest rates, which has resulted in unrealized losses in our portfolio; 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, natural disasters, widespread disease or pandemics, such as the COVID-19 global pandemic; acts of war or terrorism, including the Russian invasion of Ukraine, or other adverse external events; any material weaknesses in our internal control over financial reporting; developments and uncertainty related to the future use and availability of some reference rates, such as the expected discontinuation of the London Interbank Offered Rate, as well as the development and implementation of other alternative reference rates; changes to U.S. or state tax laws, regulations and guidance, including the new 1.0% excise tax on stock buybacks by publicly traded companies; talent and labor shortages and employee turnover; our success at managing 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 Securities and Exchange Commission. Any forward-looking statement made by us in this presentation is based only on information currently available to us and speaks only as of the date on which it is made. We undertake 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. Non-GAAP Financial Measures This presentation includes certain ratios and amounts that do not conform to U.S. Generally Accepted Accounting Principles, or GAAP. Management uses certain non-GAAP financial measures to evaluate financial performance and business trends from period to period and believes that disclosure of these non-GAAP financial measures will help investors, rating agencies and analysts evaluate the financial performance and condition of Alerus Financial Corporation. This presentation includes a reconciliation of each non-GAAP financial measure to the most comparable GAAP equivalent. Miscellaneous Except as otherwise indicated, this presentation speaks as of the date hereof. The delivery of this presentation shall not, under any circumstances, create any implication that there has been no change in the affairs of Alerus Financial Corporation after the date hereof. Certain of the information contained herein may be derived from information provided by industry sources. We believe that such information is accurate and that the sources from which it has been obtained are reliable. We cannot guarantee the accuracy of such information, however, and we have not independently verified such information. DISCLAIMERS

2 Retirement and Benefit Revenue 31.2% Wealth Management Revenue 9.9% Mortgage Revenue 6.6% Banking Fees and Other Income 3.6% Net Interest Income 48.7% FOR THE TWELVE MONTHS ENDED MARCH 31, 2023 Noninterest income: $107.0 million Net interest income: $101.7 million $31.9 $34.2 $36.7 $32.1 $33.4 2019 2020 2021 2022 Q1 2023 OUR MISSION ▪ To positively impact our clients’ financial potential-through holistic guidance, unparalleled service, and engaging technology. COMPANY PROFILE Data as of 3/31/2023. DIVERSIFIED REVENUE STREAM ASSET GROWTH ($ IN BILLIONS) Banking Assets Retirement and Benefits AUA/AUM Wealth Management AUA/AUM $3.1 $3.3 $4.0 $3.6 $3.7 2019 2020 2021 2022 Q1 2023 NONINTEREST INCOME AS A % OF REVENUE: 51.3% DIVERSIFIED FINANCIAL SERVICES COMPANY ▪ $3.9 billion Banking assets ▪ $33.4 billion Retirement and Benefits AUA/AUM ▪ $3.7 billion Wealth Management AUA/AUM ▪ $77.7 million in Mortgage Originations YTD ALERUS BUSINESS LINES ▪ Banking ▪ Retirement and Benefits ▪ Wealth Management ▪ Mortgage $2.4 $3.0 $3.4 $3.8 $3.9 2019 2020 2021 2022 Q1 2023

3 A BIG COMPANY MODEL WITH SMALL COMPANY EXECUTION OUR DIVERSE BUSINESS LINES Revenue data LTM as of 3/31/2023. TRUSTED ADVISOR BANKING WEALTH MANAGEMENT • Residential mortgage lending • Residential construction lending • Home equity/second mortgages • Advisory services • Trust and fiduciary services • Investment management • Insurance planning • Financial planning • Education planning • Retirement plan administration and recordkeeping • Retirement plan investment advisory • Health and welfare administration COMMERCIAL BANKING • Commercial and commercial real estate lending • Small business lending • Treasury management • Deposit services CONSUMER BANKING • Private banking • Deposit products and services • Consumer lending MORTGAGE RETIREMENT AND BENEFITS 31% of Revenue 7% of Revenue 10% of Revenue 52% of Revenue

4 FRANCHISE FOOTPRINT FULL-SERVICE BANKING OFFICES Alerus offers banking, retirement and benefits, mortgage and wealth management services at all full-service banking offices ▪ Grand Forks, ND: 4 full-service banking offices ▪ Fargo, ND: 3 full-service banking offices ▪ Twin Cities, MN: 6 full-service banking offices ▪ Phoenix, AZ: 3 full-service banking offices RETIREMENT AND BENEFITS SERVICES OFFICES ▪ 1 office in Minnesota ▪ 1 office in Michigan ▪ 1 office in Colorado ▪ Serve clients in all 50 states through retirement plan services DIVERSIFIED CLIENT BASE ▪ 38,200 consumer clients ▪ 16,700 commercial clients ▪ 8,100 employer-sponsored retirement plans Data as of 3/31/2023. ▪ 389,100 employer-sponsored retirement plan participants ▪ 70,300 health savings account participants ▪ 39,000 flexible spending account/health reimbursement arrangement participants

5 STRONG GROWTH MARKETS AND STABLE CORE FUNDING MARKET DISTRIBUTION LOANS $2,452 DEPOSITS $3,032 ARB ASSETS UNDER ADMIN/MGMT. $33,404 WM ASSETS UNDER ADMIN/MGMT. $3,676 MORTGAGE ORIGINATIONS $78 (DOLLARS IN MILLIONS) Data as of 3/31/2023. LEGEND 30.2% 53.2% 16.6% 40.5% 23.5% 11.0% 25.0% 5.2% 89.1% 5.7% 72.7% 11.0% 3.4% 12.9% 9.2% 13.2% 77.6% North Dakota Minnesota Arizona National Synergistic

6 ONE ALERUS REINVENTION OF PROCESSES We consistently seek new ways to enhance efficiencies and improve scalability TAILORED ADVICE We strive to provide each client with a primary point of contact — a trusted advisor — who deals with individual needs and integrates other department’s expertise when necessary SYNERGISTIC GROWTH Deposits sourced from our retirement and benefits division totaled $758.0 million as of March 31, 2023 Cumulative rollovers have added $1.2 billion of assets under management Residential real estate first mortgages totaled $698.0 million in the first quarter TECHNOLOGY INVESTMENT We have proactively invested in technology to further our goal to effectively integrate all departments and business lines These investments allow for digital and proactive engagement with clients DIVERSIFIED SERVICES We provide comprehensive products and services to clients including banking, mortgage, wealth management, and retirement and benefits ONE ALERUS STRATEGY Our collaborative One Alerus culture brings our product and service offerings to clients in a cohesive and seamless manner. We believe One Alerus enables us to achieve future organic growth through client acquisition, retention and expansion to provide strong returns to our stockholders and employees through our ESOP. CULTURE + BUSINESS MODEL = SUSTAINED TOP TIER SHAREHOLDER RESULTS ONE ALERUS

7 EXPANDED TO COLORADO Acquired Retirement Planning Services, Inc. (Littleton, CO) To supplement our strong organic growth, we have executed 25 acquisitions throughout the history of our company across all business lines: STRATEGIC GROWTH 2000 2002 2003 2006 2007 2019 2009 2016 2015 2014 2013 2012 REBRANDED TO ALERUS 2011 Acquired a branch from BNC National Bank (Fargo, ND) Acquired Pension Solutions, Inc. (St. Paul, MN) The catalyst to the Retirement Division OPENED A TRUST AND INVESTMENT OFFICE (TWIN CITIES) Acquired Stanton Trust Company (Minneapolis, MN) EXPANDED TO MINNESOTA MARKET OPENED A BUSINESS BANKING OFFICE (MINNETONKA, MN) Acquired Acclaim Benefits, Inc. (Minneapolis, MN) Acquired Stanton Investment Advisors (Minneapolis, MN) EXPANDED TO ARIZONA MARKET OPENED A BUSINESS BANKING OFFICE (SCOTTSDALE, AZ) Acquired retirement plan practice of Eide Bailly, LLP (Minneapolis, MN) Acquired Prosperan Bank (Twin Cities, MN) Acquired deposits from BankFirst (Minneapolis, MN) Acquired Residential Mortgage Group (Minnetonka, MN) Acquired selected loans and deposits (in MN) and a branch (in AZ) from BNC National Bank EXPANDED TO MICHIGAN Acquired PensionTrend, Inc. and PensionTrend Investment Advisers, LLC (Okemos, MI) Acquired Tegrit Administrators, LLC Acquired Private Bank Minnesota (Minneapolis, MN) Acquired Retirement Alliance, Inc. (Manchester, NH) Acquired Interactive Retirement Systems, Ltd. (Bloomington, MN) Acquired Beacon Bank (Shorewood, Excelsior, Eden Prairie and Duluth, MN) Acquired Alliance Benefit Group North Central States, Inc. (Albert Lea and Eden Prairie, MN) COMPLETED INITIAL PUBLIC OFFERING (IPO) 2017 LAUNCHED ONE ALERUS STRATEGIC GROWTH PLAN 2020 2022 Acquired Metro Phoenix Bank (Phoenix, AZ)

8 ▪ Diversified client base consists of 38,200 consumers clients, 16,700 commercial clients and over 389,100 employer-sponsored retirement and benefit plan participants ▪ Harness product synergies unavailable to traditional banking organizations ▪ Capitalize on strategic opportunities to grow in our existing markets or new markets ▪ Acquisition targets include banks and nationwide fee income companies with complementary business models, cultural similarities, synergy and growth opportunities ▪ Recruit top talent to accelerate growth in our existing markets or jumpstart our entrance into new markets ▪ Market disruption caused by M&A activity provides lift-out opportunities ▪ Purpose driven organization with a recognizable mission for clients, employees, and stakeholders ▪ Proactively position ourselves as an acquirer and employer of choice ▪ Invested in one of the leading marketing automation technologies ▪ Provide secure and reliable technology that meets evolving client expectations ▪ Integrate our full product and service offerings through our fast-follower strategy KEY STRATEGIC INITIATIVES GROWING THE ALERUS FRANCHISE LEVERAGE OUR EXISTING CLIENT BASE EXECUTE STRATEGIC ACQUISITIONS PURSUE TALENT ACQUISITION ENHANCE BRAND AWARENESS STRENGTHEN AND BUILD INFRASTRUCTURE ▪ Collaborative leadership team focused on growing organically by deepening relationships with existing clients through our expansive services ▪ Diversified business model focused on bringing value to the client through advice and specialty solutions to help clients grow ORGANIC GROWTH “ONE ALERUS”

9 DAN COUGHLIN Since 2016 Chairman, Alerus Financial Corp. Former MD & Co-Head – Fin’l Services Inv. Banking, Raymond James; Former Chairman & CEO, Howe Barnes Hoefer & Arnett MARY ZIMMER Since 2021 Former Director of Diverse Client Segments and Former Northern Regional President, Wells Fargo Advisors Former Head of Intl. Wealth USA, Royal Bank of Canada U.S. Wealth Mgmt. JANET ESTEP Since 2021 Former President and CEO, Nacha Former EVP, US Bank Transaction Division Former VP, Pace Analytical Services RANDY NEWMAN Since 1987 Former President and CEO, Alerus OFFICERS AND DIRECTORS MICHAEL MATHEWS Since 2019 Former CIO, Deluxe Corporation Former SVP – Technology and Enterprise Programs, UnitedHealth Group JON HENDRY Executive Vice President and Chief Technology Officer 39 years with Alerus KARIN TAYLOR Executive Vice President and Chief Risk Officer 5 years with Alerus KEVIN LEMKE Since 1994 President Virtual Systems, Inc. GALEN VETTER Since 2013 Former Global CFO, Franklin Templeton Investments; Former Partner-in-Charge, Upper Midwest Region, RSM EXECUTIVE MANAGEMENT BOARD OF DIRECTORS KATIE LORENSON Director, President and Chief Executive Officer 6 years with Alerus MISSY KENEY Executive Vice President and Chief Engagement Officer 18 years with Alerus AL VILLALON Executive Vice President and Chief Financial Officer Joined Alerus in 2022 JIM COLLINS Executive Vice President and Chief Banking and Revenue Officer Joined Alerus in 2022

10 FIRST QUARTER HIGHLIGHTS

11 DIVERSIFIED BUSINESS MODEL STRENGTHENS FORTRESS BALANCE SHEET SAFETY AND STABILITY STRONG CAPITAL Common Equity Tier 1 Ratio 13.3% Tangible Common Equity Ratio 7.6% CONSERVATIVE CREDIT Nonperforming Assets to Total Assets 0.05% Non-Owner Occupied CRE Office Exposure Equal to 3.9% (no exposure to Central Business Districts) SUPERIOR LIQUIDITY Total Available Liquidity $2.2 Billion Total Available Liquidity to Uninsured Not Collateralized Deposits 286% HIGH DEPOSIT QUALITY Uninsured Not Collateralized 25.1% of Total Deposits Synergistic Deposits $758 million (25% of Total Deposits)

12 ▪ Reported net income of $8.2 million for the first quarter of 2023, or $0.40 per diluted common share. ▪ Loans increased $42.6 million, or 1.7%, compared to the end of the fourth quarter of 2022 primarily due to increases of $52.7 million in commercial real estate loans. ▪ Deposits increased $116.5 million, or 4.0%, compared to the end of the fourth quarter of 2022 primarily due to an increase of $184.5 million in interest-bearing deposits. ▪ Net interest income was $23.7 million in the first quarter, a $3.3 million, or 12.3%, decrease from the fourth quarter of 2022 primarily driven by an increase in interest expense, partially offset by an increase in interest income. ▪ Adopted CECL on January 1, 2023. While our credit quality remains strong, we recorded $550 thousand in provision for credit losses due to loan growth, changing economic conditions and qualitative factors. ▪ Allowance for credit losses on loans was 1.41% of total loans compared to 1.27% at the end of fourth quarter of 2022. SUCCESS IS NEVER FINAL Q1 2023 SUMMARY

13 INCOME STATEMENT Q1 2023 FINANCIAL HIGHLIGHTS 1 – Represents a non-GAAP Financial measure. See “Non-GAAP Disclosure Reconciliation.” (dollars and shares in thousands, except per share data) Net Interest Income $ 23,658 $ 26,964 $ 21,673 Provision for Credit Losses 550 — — Net Interest Income After Provision for Credit Losses 23,108 26,964 21,673 Noninterest Income 25,253 25,517 29,470 Noninterest Expense 37,869 37,948 38,071 Income Before Income Taxes 10,492 14,533 13,072 Income Tax Expense 2,306 3,624 2,888 Net Income $ 8,186 $ 10,909 $ 10,184 Per Common Share Data Earnings Per Common Share - Diluted $ 0.40 $ 0.53 $ 0.57 Diluted Average Common Shares Outstanding 20,246 20,232 17,500 Performance Ratios Return on Average Total Assets 0.88 % 1.17 % 1.26 % Return on Average Tangible Common Equity (1) 12.58 % 16.63 % 14.72 % Noninterest Income as a % of Revenue 51.63 % 48.62 % 57.62 % Net Interest Margin (Tax-Equivalent) 2.70 % 3.09 % 2.83 % Efficiency Ratio (1) 74.53 % 69.62 % 72.25 % Three months ended 2023 March 31, December 31, 2022 March 31, 2022

14 PERFORMANCE RATIOS 1 – Represents a non-GAAP Financial measure. See “Non-GAAP Disclosure Reconciliation.” 2 – Rates have been annualized 1.26% 1.17% 0.88% Q1 2022 Q4 2022 Q1 2023 Return on Average Assets(2) 14.72% 16.63% 12.58% Q1 2022 Q4 2022 Q1 2023 Return on Average Tangible Common Equity(1)/(2) $16.07 $14.37 $14.50 Q1 2022 Q4 2022 Q1 2023 Tangible Book Value per Share(1)

15 KEY BALANCE SHEET ITEMS DOLLARS IN MILLIONS $1,768.2 $2,359.8 $2,457.2 Q1 2022 Q4 2022 Q1 2023 Average Loans $1,985.4 $2,092.1 $2,143.9 $831.4 $870.9 $789.1 $2,816.8 $2,963.0 $2,933.0 Q1 2022 Q4 2022 Q1 2023 Average Deposits Interest-Bearing Deposits Non-Interest Bearing Deposits Average 4.1% Linked Quarter Loans 39.0% Year-over-year Average (1.0)% Linked Quarter Deposits 4.1% Year-over-year

16 1.39% 1.73% 1.80% 1.27% 1.41% 0.00% 0.40% 0.80% 1.20% 1.60% 2.00% 2019 2020 2021 2022 Q1 2023 306% 674% 1,437% 821% 1,657% 00% 200% 400% 600% 800% 1,000% 1,200% 1,400% 1,600% 1,800% 2019 2020 2021 2022 Q1 2023 0.33% 0.17% 0.09% 0.10% 0.05% 0.00% 0.20% 0.40% 0.60% 0.80% 2019 2020 2021 2022 Q1 2023 ASSET QUALITY AND RESERVE LEVELS OVERVIEW NPA / ASSETS (%) RESERVES / NPL (%) RESERVES / LOANS (%) ▪ Solid asset quality based on low levels of nonperforming assets. ▪ Strong reserve levels as criticized loans remain at historically low levels. ▪ Strong credit quality as evidenced by historic net charge-off ratio of 27 bps, dating back 25 years. NCO/ Avg Loans 0.33% 0.03% (0.04)% 0.02% 0.03%

17 NonInterest-Bearing Deposits 26.2% Interest-Bearing Demand Deposits 21.3% Money Market & Savings 38.7% HSA Deposits 5.7% Time Deposits 8.1% STRONG CORE FUNDING MIX ▪ Commercial transaction accounts totaled $1.4 billion and increased 9.0% YoY. Consumer transaction accounts totaled $659.3 million and decreased 13.3% YoY. ▪ Synergistic deposits, including HSA deposits and those sourced through retirement plans and participants, totaled $758.0 million, with a YTD annualized cost of 2.15%. ▪ CD portfolio is primarily 6-month maturity CDs with over 50% held by clients for 10+ years. ▪ Stable deposit relationships with 23-year average tenure on 10 largest depositors. OVERVIEW AS OF MARCH 31, 2023 MARCH 31, 2023 DEPOSIT FUNDING ($3,032 MM) COST OF FUNDS INCREASING WITH SHORT-TERM RATES Data YTD as of 3/31/2023. 1.26% 1.72% 1.71% 0.00% 0.50% 1.00% 1.50% 2.00% Cost of Total Deposits Cost of Interest-Bearing Deposits Total Cost of Funds 2020 2021 2022 Q1 2023 CHECKING ACCOUNTS: 51.2% Commercial 37.2% Consumer 29.3% Synergistic 25.0% Public 8.5% MARCH 31, 2023 DEPOSIT COMPOSITION As of March 31, 2023, core deposits totaled $3.0 billion or 98% of our total deposits

18 DEPOSIT CHARACTERISTICS STRONG LIQUIDITY WELL IN EXCESS OF UNINSURED BALANCES 2 – Uninsured and not collateralized deposits represent those customer deposit balances over the current FDIC insurance limit of $250,000 that are not collateralized by other means such as pledged loans or pledged securities On Balance Sheet $0.8 $0.8 Off Balance Sheet $1.4 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 Deposits Uninsured Available Liquidity Not Collateralized Uninsured and not Collateralized (2) 25.1% Uninsured but Collateralized 8.6% Uninsured Holding Company Deposits Held at Bank 2.6% Insured 63.7% UNINSURED VS INSURED UNINSURED VS LIQUIDITY INTEREST-BEARING VS NONINTEREST-BEARING NONINTEREST-BEARING THROUGH TIME $2,060.7 $1,854.7 $2,056.6 $2,054.5 $2,239.0 $831.6 $764.8 $905.2 $861.0 $793.0 $2,892.3 $2,619.5 $2,961.8 $2,915.5 $3,032.0 $- $500.0 $1,000.0 $1,500.0 $2,000.0 $2,500.0 $3,000.0 Q122 Q222 Q322 Q422 Q123 Interest-Bearing Deposits NonInterest-Bearing Deposits ($ in Millions) ($ in Billions) 15.0% 20.0% 25.0% 30.0% 35.0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 FDIC - Industry Data (1) ALRS 1 – Source: FDIC

19 16.7% 16.8% 18.6% 16.5% 16.5% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 2019 2020 2021 2022 Q1 2023 11.1% 9.2% 9.8% 11.3% 11.0% 12.9% 13.2% 15.1% 13.7% 13.6% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 2019 2020 2021 2022 Q1 2023 Tier 1 Leverage Tier 1 Capital STRONG CAPITAL AND SOURCES OF LIQUIDITY COMMON EQUITY TIER 1 TIER 1 CAPITAL/TIER 1 LEVERAGE RATIOS TOTAL RISK BASED CAPITAL SOURCES OF LIQUIDITY Regulatory Capital Minimum to be considered well capitalized. Tier 1 Capital Leverage Regulatory Capital Minimum to be considered well capitalized. 12.5% 12.8% 14.7% 13.4% 13.3% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 2019 2020 2021 2022 Q1 2023 ($ in thousands) Total Assets $ 3,886,773 Cash and cash equivalents $ 145,181 Unencumbered Securities (at Market Value) 642,999 Total On Balance Sheet Liquidity 788,180 FHLB Borrowing Capacity 560,326 Fed Funds Lines 107,000 Brokered CD's Capacity 777,355 Total Off Balance Sheet Liquidity 1,444,681 Total Liquidity as of 3/31/2023 $ 2,232,861

20 KEY REVENUE ITEMS DOLLARS IN THOUSANDS 1 – Other noninterest income consists of service charges on deposit accounts, interchange income and other noninterest income. $21,673 $26,964 $23,658 Q1 2022 Q4 2022 Q1 2023 Net Interest Income $17,646 $16,599 $15,482 $5,326 $5,144 $5,194 $4,931 $2,170 $1,717 $1,567 $1,604 $2,860 $29,470 $25,517 $25,253 Q1 2022 Q4 2022 Q1 2023 Noninterest Income Retirement and benefits Wealth management Mortgage banking Other(1) Net Interest (12.3%) Linked Quarter Income 9.2% Year-over-year Noninterest (1.0)% Linked Quarter Income (14.3)% Year-over-year

21 NET INTEREST MARGIN (NIM) LOAN YIELD(1)/NET INTEREST MARGIN(1) QUARTERLY HIGHLIGHTS AVERAGE EFFECTIVE FF RATE/COST OF FUNDS(1) 1 – Rates have been annualized for interim periods. Source: Federal Reserve. ▪ Loan yields increased as a result of an increase in the average rate received from loans compared to Q4 2022. ▪ Average loans increased $97.4 million compared to Q4 2022, primarily due to an increase of $78.2 million in average commercial loans. ▪ Net interest margin decreased 39 basis points, primarily due to a 78 basis point increase on the average rate paid on interest-bearing liabilities. ▪ Interest-bearing deposit rates increased 65 basis points primarily due to the rapid increase in short-term rates and heightened deposit competition. ▪ The rate paid on fed funds purchased and short-term borrowings increased 100 basis points as rates have risen. The average balance increased $105.3 million compared to Q4 2022. 2.16% 0.08% 1.68% 4.52% 0.51% 0.20% 0.51% 1.71% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 2020 2021 2022 Q1 2023 Average effective FF rate Cost of funds 4.35% 4.14% 4.33% 5.10% 3.22% 2.90% 3.04% 2.70% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 2020 2021 2022 Q1 2023 Loan yield NIM

22 NII AND LOAN FLOORS VARIABLE RATE FLOORS BY INDEX VARIABLE RATE FLOORS QUARTER OVER QUARTER HIGHLIGHTS $ in Millions Balance % of Total Balance Cumulative % of Total Balance No Floors $ 388 38.3% 38.3% At Floor 120 11.9% 50.2% 0-50 bps above floor 35 3.5% 53.7% >50bps to above floor 469 46.3% 100.0% Total $ 1,012 100.0% $ in Millions Index Above the Floor At the Floor No Floor Total Total % Prime $ 308 $ 34 $ 164 $ 506 50.0% 1 Month LIBOR – – 144 144 14.2% 12 Month LIBOR 89 2 18 109 10.8% FHLB 5 Year 17 16 10 43 4.2% Other 90 68 52 210 20.8% Total $ 504 $ 120 $ 388 $1,012 100.0% Percent of Total 49.8% 11.9% 38.3% 100.0% NET INTEREST INCOME NIM: 3.09% 0.13% 0.20% (0.14)% (0.52)% (0.06)% 2.70% ▪ Interest expense paid on deposits increased due to heightened deposit competition as short-term rates have risen rapidly, as well as increased proactive deposit client engagement following recent bank failures. ▪ Fed funds purchased and short-term borrowings expense increased as short-term rates have increased. ▪ The average balance of fed funds purchased and short-term borrowings increased as average loan balances outpaced average deposit balances. ($ in Thousands)

23 $(42,324) $(98,641) $(96,307) $(120,000) $(100,000) $(80,000) $(60,000) $(40,000) $(20,000) $- Q1 2022 Q4 2022 Q1 2023 $1,206,484 $1,039,225 $1,019,473 $- $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 Q1 2022 Q4 2022 Q1 2023 INVESTMENT PORTFOLIO INVESTMENT PORTFOLIO MIX AOCI Yield on Securities: 1.9% 2.3% 2.4% % of Earning Assets: 39.0% 30.1% 29.0% ($ in Thousands) ($ in Thousands) Held-to-Maturity: 30.8% Available-for-Sale: 69.2% Agency Non-MBS 0.3% Corporate Debt 5.7% Agency MBS 35.6% Corporate ABS & CMO 45.4% Municipals 13.0%

24 $34,200 $36,733 $32,123 $33,404 375,000 390,000 405,000 420,000 435,000 450,000 465,000 480,000 495,000 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 2020 2021 2022 Q1 2023 AUA/AUM Participants $14,742 $13,496 $12,739 $2,904 $3,103 $2,743 $17,646 $16,599 $15,482 Q1 2022 Q4 2022 Q1 2023 Recurring annual revenue Transaction based revenue RETIREMENT AND BENEFITS OVERVIEW – 8,100 PLANS - NATIONAL FOOTPRINT ASSETS UNDER ADMINISTRATION/MANAGEMENT REVENUE MIX ▪ RETIREMENT - Provide recordkeeping and administration services to qualified retirement plans ▪ TRUST CUSTODY & ADVISORY SERVICES - Provide investment fiduciary services to retirement plans ▪ HEALTH AND WELFARE - Provide HSA, FSA, COBRA recordkeeping and administration services to employers ▪ REVENUE MIX – 35.7% market sensitive ▪ ONE ALERUS SYNERGIES • IRA rollovers $34.2 million YTD 3/31/2023 • Deposits $527.1 million - HSA deposits, 401(k) Money Market Funds, Emergency Savings, Terminated Participants • Commercial Banking client expansion ($ in Millions) STABLE SYNERGISTIC DEPOSITS ($ in Thousands) Revenue: $60,956 $71,709 $67,135 $15,482 ($ in Thousands) $303,042 $493,961 $525,777 $529,584 $527,128 $200,000 $300,000 $400,000 $500,000 2019 2020 2021 2022 Q1 2023

25 $4,714 $4,509 $4,455 $501 $432 $409 $111 $203 $330 $5,326 $5,144 $5,194 Q1 2022 Q4 2022 Q1 2023 Asset Management Brokerage Insurance & Advisory $108,504 $101,621 $143,183 $161,973 $230,838 $0 $50,000 $100,000 $150,000 $200,000 $250,000 2019 2020 2021 2022 Q1 2023 $3,339 $4,040 $3,583 $3,676 $0 $1,000 $2,000 $3,000 $4,000 2020 2021 2022 Q1 2023 ▪ ADVISORY AND PLANNING SERVICES • Advisory Services, Insurance Planning, Financial Planning, Education Planning ▪ INVESTMENT MANAGEMENT • Personalized SMA strategies, Tax Management and Global Perspective ▪ TRUST AND FIDUCIARY SERVICES • IRA, Agency and Personal Trust ▪ ONE ALERUS SYNERGIES • IRA rollovers • 401(k) managed accounts • Synergistic deposits totaled $230.8 million at Q1 2023 WEALTH MANAGEMENT SERVICES OVERVIEW OF SERVICES ASSETS UNDER ADMINISTRATION/MANAGEMENT REVENUE MIX ($ in Millions) SYNERGISTIC DEPOSITS ($ in Thousands) Revenue: $17,451 $21,052 $20,870 $5,194 ($ in Thousands)

26 MORTGAGE BANKING OVERVIEW OF SERVICES YEARLY MORTGAGE ORIGINATIONS ($ in Millions) QUARTERLY RESULTS ▪ 1st and 2nd mortgage product offerings through centralized mortgage operations in Minneapolis, Minnesota, with 89.1% sourced from the Twin Cities MSA ▪ Our Twin Cities originators averaged $46 million in annual volume over the last five years ▪ Since 2019 originations have average 59% purchase and 41% refinance ▪ Historically strong secondary market pull through - Q1 2023 95.0% ▪ Enhanced technology with 90% of applications through digital channel QUARTERLY ORIGINATIONS Purchase: 45.2% 51.2% 88.3% 94.9% Refinance: 54.8% 48.8% 11.7% 5.1% Purchase: 70.3% 92.2% 94.9% Refinance: 29.7% 7.8% 5.1% $1,632.5 $1,592.1 $604.8 $56.3 $146.5 $244.0 $207.5 $21.4 $1,779.0 $1,836.1 $812.3 $77.7 $- $500.0 $1,000.0 $1,500.0 $2,000.0 2020 2021 2022 Q1 2023 Portfolio Sale $151.8 $87.4 $56.3 $35.0 $38.9 $21.4 $186.8 $126.3 $77.7 $- $50.0 $100.0 $150.0 $200.0 $250.0 Q1 2022 Q4 2022 Q1 2023 Q1 Q2 Q3 Q4 Q1 Portfolio Sale ($ in Thousands) 2022 2022 2022 2022 2023 Orignation and Sale $ 4,935 $ 5,821 $ 5,028 $ 3,145 $ 1,463 Fair Value Changes (4) 217 (1,246) (974) 254 Total $ 4,931 $ 6,038 $ 3,782 $ 2,171 $ 1,717 Gain on Sale Margin 2.8% 3.4% 2.6% 3.0% 3.0% ($ in Millions)

27 $25,213 $24,076 $25,011 $2,051 $1,892 $1,899 $4,924 $4,405 $5,324 $1,541 $1,454 $1,152 $4,342 $6,121 $4,483 $38,071 $37,948 $37,869 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 Q1 2022 Q4 2022 Q1 2023 Other(1) Professional Fees and Assessments Business Services, Software and Technology Occupancy and Equipment Compensation and benefits NONINTEREST EXPENSE 1 – Other noninterest expense consists of intangible amortization, marketing and business development, supplies and postage, travel, mortgage and lending, and other noninterest expense. QUARTERLY HIGHLIGHTS YEAR OVER YEAR HIGHLIGHTS ▪ Decline in other noninterest expense was primarily driven by a reduction in the provision for unfunded commitments as the Company adopted the CECL accounting standard on January 1, 2023. ▪ Professional fees and assessments declined due to a decrease in legal fees and mergers and acquisitions expenses associated with the acquisition of Metro Phoenix Bank, which closed in Q3 of 2022. ▪ Compensation and benefits increased due to seasonality and included one-time expenses of $484 thousand in severance costs and $415 thousand related to talent acquisition. ▪ Professional fees and assessments decreased $390 thousand, or 25.3%, primarily due to a decrease in recruitment expenses and lower M&A expenses. ▪ Business services and technology expense increased due to increased technology expenses associated with the acquisition and integration of Metro Phoenix Bank. ▪ Compensation and benefits increased primarily due to seasonality of taxes and signing bonuses. Noninterest (0.2)% Linked quarter Expense (0.5)% Year-over-year ($ in Thousands)

28 KEY TAKEAWAYS ALERUS MAINTAINS BOTH A STRONG LIQUIDITY AND CAPITAL POSITION ▪ During the quarter, deposits grew 4.0% from our core commercial and consumer client base. ▪ Uninsured and not collateralized deposits are only 25.1% of total deposits. ▪ Available sources of liquidity exceed $2.2 billion. On balance sheet liquidity of approximately $0.8 billion can cover all uninsured and not collateralized deposits. ▪ Capital remains strong with a Tangible Common Equity ratio of 7.6% and a regulatory Common Equity Tier 1 ratio of 13.6%. ▪ Diversified and differentiated business model highlighted by noninterest income being 51.6% of total revenues ▪ Credit quality remains solid as nonperforming assets are only 0.05% of total assets and net charge-offs are only 0.03% of total loans.

29 APPENDIX

30 BY OUTSTANDING BALANCES WELL DIVERSIFIED LOAN PORTFOLIO Data as of 3/31/2023. 1-4 Residential 1st 28% 1-4 Residential Construction 1% 1-4 Residential Jr Lien 1% HELOC 5% RE Loans to be Sold 1% C&I 21% Ag Production 1% Other CRE 18% Owner Occupied CRE 10% Ag Land 2% Multifamily 7% Other Consumer 1% RE Construction 4%

31 SUMMARY BY INDUSTRY TYPE TOTAL COMMITMENT COMMERCIAL & INDUSTRIAL1 1 – Commercial and industrial loans includes C & I, loans to public entities, and other loans. It excludes ag production loans. “Other” includes to the following industries (1) Nonclassifiable establishments, (2) Management of Companies and Enterprises, (3) Administrative and Support and Waste Management and Remediation Services, (4) Accommodation and Food Services, (5) Educational Services, (6) Other Services (except Public Administration), (7) Information, (8) Arts, Entertainment, and Recreation, (9) Agriculture Forestry, Fishing, and Hunting, (10) Public Administration), (11) Mining Quarrying, and Oil and Gas Extraction, and (12) Utilities. “Other Retail Trade” includes the following sub-industries within Retail Trade: (1) Miscellaneous Store Retailers, (2) Furniture and Home Furnishings Stores, (3) Sporting Goods, Hobby, Musical Instrument, and Book Stores, (4) Clothing and Clothing Accessories Stores, and (5) General Merchandise Stores. Transportation and Warehousing 4% Health Care and Social Assistance 6% Professional, Scientific and Technical Services 9% Manufacturing 12% Real Estate and Rental and Leasing 8% Wholesale Trade 8% Construction 12% Finance and Insurance 11% Other 15% Motor Vehicle and Parts Dealers 8% Food and Beverage Stores 1% Electronics and Appliance Stores 2% Gasoline Stations 1% Building Material and Garden Equipment and Supplies Dealers 1% Nonstore Retailers 1% Other Retail Trade 1% Retail Trade 15%

32 Office 13% Retail 9% Warehouse 11% Mixed Commercial 2% Apartments 19% Hotel 10% Medical or Nursing Facilities 5% Commercial Construction 31% Office 15% Retail 14% Warehouse 14% Manufacturing 1% Commercial Development 1% Mixed Commercial 3% Apartments 15% Hotel 8% Medical or Nursing Facilities 5% Commercial Construction 21% Ag Land 3% LOANS SECURED BY REAL ESTATE TOTAL COMMITMENT COMMERCIAL REAL ESTATE1 1 – Total commitment commercial real estate loans include multifamily loans, ag land, other CRE, owner occupied CRE, real estate construction and ag production. 2 – Total commitment investor real estate loans include multifamily loans, other CRE and real estate construction loans. TOTAL COMMITMENT INVESTOR REAL ESTATE2

33 LOANS SECURED BY REAL ESTATE Portfolio Avg FICO Avg LTV 1 st Mortgage 774 53% Junior 764 76% HELOC 796 73% 1-4 1st Mortage 60% 1-4 Family Jr Liens 3% 1-4 Family Revolving 29% 1-4 Family Construction 6% Held for Sale 2% TOTAL COMMITMENT RESIDENTIAL REAL ESTATE

34 LINE OF CREDIT UTILIZATION C&I AND HOME EQUITY LINES OF CREDIT1 1 – Commercial and industrial loans includes revolving C & I loans and other loans. It excludes non-revolving C&I loans, ag production, and loans to public entities. 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 C&I Funded Unfunded Funded% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 Home Equity Lines of Credit Funded Unfunded Funded%

35 CECL ADOPTION – DRIVERS OF CHANGE FROM ALLL ALLOWANCE FOR CREDIT LOSSES ON LOANS 1 – ACL is the allowance for credit losses on loans and excludes the allowance for investment securities held-for-maturity, and the allowance for unfunded commitments. Portfolio changes primarily represent the impact of increases/decreases in loan balances, age and mix due to new originations, as well as credit quality and net charge-off activity. Economic/Qualitative factors primarily represent our evaluation and determination of an economic forecast applied to our loan portfolio, as well as updates to qualitative factors. ($ in Thousands)

36 CHANGES IN THE ACL FOR LOANS BY PORTFOLIO SEGMENT ALLOWANCE FOR CREDIT LOSSES ON LOANS ($ in thousands) Commercial Commercial and industrial $ 9,158 $ (862) $ (377) $ (175) $ 56 $ 7,800 Real estate construction 1,446 2,518 442 — — 4,406 Commercial real estate 12,688 (424) 69 — 11 12,344 Total commercial 23,292 1,232 134 (175) 67 24,550 Consumer Residential real estate first mortgage 5,769 2,080 209 — 2 8,060 Residential real estate junior lien 1,289 (67) 126 (77) 6 1,277 Other revolving and installment 528 (104) (117) (5) 12 314 Total consumer 7,586 1,909 218 (82) 20 9,651 Unallocated 268 716 (83) — — 901 Total $ 31,146 $ 3,857 $ 269 $ (257) $ 87 $ 35,102 Ending Balance Three months ended March 31, 2023 Loan Charge-offs Loan Recoveries Beginning Balance Provision for Credit Losses(1) Adoption of ASC 326(1) 1 – The difference in the adoption of ASC 326 and the total pre-tax amount adjusted on the Consolidated Balance Sheet included a $2.0 million adjustment for the adoption of ASC 326 on unfunded commitments and $172 thousand adjustment for the adoption of ASC 326 on investment securities held-to-maturity. The difference in the credit loss expense reported herein as compared to the Consolidated Statements of Income is associated with the credit loss expense of $230 thousand related to unfunded commitments and $51 thousand related to investment securities held-to-maturity.

37 ALLOCATION BY LOAN PORTFOLIO SEGMENT ALLOWANCE FOR CREDIT LOSSES ON LOANS ($ in thousands) Commercial and industrial $ 7,800 22.3% $ 9,158 23.9% Real estate construction 4,406 4.4% 1,446 4.0% Commercial real estate 12,344 37.5% 12,688 36.0% Residential real estate first mortgage 8,060 28.1% 5,769 27.8% Residential real estate junior lien 1,277 6.1% 1,289 6.2% Other revolving and installment 314 1.6% 528 2.1% Unallocated 901 — 268 — Total loans $ 35,102 100.0% $ 31,146 100.0% total loans March 31, 2023 December 31, 2022 Allocated of loans to Allowance total loans Allocated Allowance of loans to Percentage Percentage

38 FINANCIAL HIGHLIGHTS ($ in thousands, except where otherwise noted) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Total Assets $ 3,336,199 $ 3,295,065 $ 3,691,253 $ 3,779,637 $ 3,886,773 Total Loans 1,818,042 1,890,243 2,318,231 2,443,994 2,486,625 Total Deposits 2,892,266 2,619,550 2,961,811 2,915,484 3,031,978 Tangible Common Equity1 277,818 258,310 275,000 287,330 290,900 Net Income $ 10,184 $ 9,293 $ 9,619 $ 10,909 $ 8,186 ROAA (%) 1.26 1.14 1.02 1.17 0.88 ROATCE(%)1 14.72 15.25 13.89 16.63 12.58 Net Interest Margin (FTE) (%) 2.83 2.98 3.21 3.09 2.70 Efficiency Ratio (FTE) (%)1 72.25 74.72 74.76 69.62 74.53 Non-Int. Income/Op. Rev. (%) 57.62 56.20 48.82 48.62 51.63 Earnings per common share - diluted $ 0.57 $ 0.52 $ 0.47 $ 0.53 $ 0.40 Total Equity/Total Assets (%) 9.85 9.32 9.34 9.44 9.24 Tang. Cmn. Equity/Tang. Assets (%)1 8.46 7.96 7.59 7.74 7.62 Loans/Deposits (%) 62.86 72.16 78.27 83.83 82.01 NPLs/Loans (%) 0.23 0.23 0.23 0.16 0.09 NPAs/Assets (%) 0.15 0.16 0.17 0.10 0.05 Allowance/NPLs (%) 752.38 717.92 583.97 820.93 1,657.32 Allowance/Loans (%) 1.74 1.66 1.34 1.27 1.41 NCOs/Average Loans (%) (0.03) 0.07 0.07 (0.03) 0.03 Quarterly 1 – Represents a non-GAAP financial measure. See “Non-GAAP Disclosure Reconciliation”.

39 FINANCIAL HIGHLIGHTS 1 – Represents a non-GAAP financial measure. See “Non-GAAP Disclosure Reconciliation”. ($ in thousands, 18-'22 except where otherwise noted) 2018 2019 2020 2021 2022 CAGR Total Assets $ 2,179,070 $ 2,356,878 $ 3,013,771 $ 3,392,691 $ 3,779,637 14.8% Total Loans 1,701,850 1,721,279 1,979,375 1,758,020 2,443,994 9.5% Total Deposits 1,775,096 1,971,316 2,571,993 2,920,551 2,915,484 13.2% Tangible Common Equity1 147,152 240,008 274,043 307,663 287,329 18.2% Net Income $ 25,866 $ 29,540 $ 44,675 $ 52,681 $ 40,005 11.5% ROAA (%) 1.21 1.34 1.61 1.66 1.14 ROATCE(%)1 21.02 17.46 17.74 18.89 15.09 Net Interest Margin (FTE) (%) 3.84 3.65 3.22 2.90 3.04 Efficiency Ratio (FTE) (%)1 73.80 73.22 68.40 70.02 72.86 Non-Int. Income/Op. Rev. (%) 57.73 60.50 64.05 62.86 52.72 Earnings per common share - diluted 1.84 1.91 2.52 2.97 2.10 Total Equity/Total Assets (%) 9.04 12.12 10.96 10.59 9.44 Tang. Cmn. Equity/Tang. Assets (%)1 6.91 10.38 9.27 9.21 7.74 Loans/Deposits (%) 95.87 87.32 76.96 60.19 83.83 NPLs/Loans (%) 0.41 0.45 0.26 0.12 0.16 NPAs/Assets (%) 0.33 0.33 0.17 0.09 0.10 Allowance/NPLs (%) 318.45 305.66 674.13 1,437.05 820.93 Allowance/Loans (%) 1.30 1.39 1.73 1.80 1.27 NCOs/Average Loans (%) 0.18 0.33 0.03 (0.04) 0.02 Annual

40 NON-GAAP DISCLOSURE RECONCILIATION ($ in thousands, except where otherwise noted) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Tangible common equity to tangible assets Total common stockholders' equity $ 328,505 $ 307,158 $ 344,839 $ 356,872 $ 359,118 Less: Goodwill 31,490 31,337 46,060 47,087 47,087 Less: Other intangible assets 19,197 17,511 23,779 22,455 21,131 Tangible common equity (a) 277,818 258,310 275,000 287,330 290,900 Total assets 3,336,199 3,295,065 3,691,253 3,779,637 3,886,773 Less: Goodwill 31,490 31,337 46,060 47,087 47,087 Less: Other intangible assets 19,197 17,511 23,779 22,455 21,131 Tangible assets (b) 3,285,512 3,246,217 3,621,414 3,710,095 3,818,555 Tangible common equity to tangible assets (a)/(b) 8.46% 7.96% 7.59% 7.74% 7.62% Tangible common equity per common share Total stockholders' equity $ 328,505 $ 307,158 $ 344,839 $ 356,872 $ 359,118 Less: Goodwill 31,490 31,337 46,060 47,087 47,087 Less: Other intangible assets 19,197 17,511 23,779 22,455 21,131 Tangible common equity (c) 277,818 258,310 275,000 287,330 290,900 Common shares outstanding (d) 17,289 17,306 19,987 19,992 20,067 Tangible common equity per common share (c)/(d) $ 16.07 $ 14.93 $ 13.76 $ 14.37 $ 14.50 Return on average tangible common equity Net income $ 10,184 $ 9,293 $ 9,619 $ 10,909 $ 8,186 Add: Intangible amortization expense (net of tax) 832 832 1,046 1,046 1,046 Net income, excluding intangible amortization (e) 11,016 10,125 10,665 11,955 9,232 Average total equity 350,545 312,515 372,274 349,812 361,857 Less: Average goodwill 31,490 31,488 48,141 46,283 47,087 Less: Average other intangible assets (net of tax) 15,569 14,737 19,466 18,243 17,209 Average tangible common equity (f) 303,486 266,290 304,667 285,286 297,561 Return on average tangible common equity (e)/(f) 14.72% 15.25% 13.89% 16.63% 12.58% Efficiency Ratio Noninterest expense $ 38,071 $ 39,984 $ 42,767 $ 37,948 $ 37,869 Less: Intangible amortization expense 1,053 1,053 1,324 1,324 1,324 Adjusted noninterest expense (i) 37,018 38,931 41,443 36,624 36,545 Net interest income 21,673 22,776 28,316 26,964 23,658 Noninterest income 29,470 29,226 27,010 25,517 25,253 Tax-equivalent adjustment 94 100 112 124 124 Total tax-equivalent revenue(j) 51,237 52,102 55,438 52,605 49,035 Efficiency ratio (i)/(j) 72.25% 74.72% 74.76% 69.62% 74.53% Quarterly

41 NON-GAAP DISCLOSURE RECONCILIATION ($ in thousands, except where otherwise noted) 2018 2019 2020 2021 2022 Tangible common equity to tangible assets Total common stockholders' equity $ 196,954 $ 285,728 $ 330,163 $ 359,403 $ 356,871 Less: Goodwill 27,329 27,329 30,201 31,490 47,087 Less: Other intangible assets 22,473 18,391 25,919 20,250 22,455 Tangible common equity (a) 147,152 240,008 274,043 307,663 287,329 Total assets 2,179,070 2,356,878 3,013,771 3,392,691 3,779,637 Less: Goodwill 27,329 27,329 30,201 31,490 47,087 Less: Other intangible assets 22,473 18,391 25,919 20,250 22,455 Tangible assets (b) 2,129,268 2,311,158 2,957,651 3,340,951 3,710,095 Tangible common equity to tangible assets (a)/(b) 6.91% 10.38% 9.27% 9.21% 7.74% Tangible common equity per common share Total stockholders' equity $ 196,954 $ 285,728 $ 330,163 $ 359,403 $ 356,871 Less: Goodwill 27,329 27,329 30,201 31,490 47,087 Less: Other intangible assets 22,473 18,391 25,919 20,250 22,455 Tangible common equity (c) 147,152 240,008 274,043 307,663 287,329 Common shares outstanding (d) 13,775 17,050 17,125 17,213 19,992 Tangible common equity per common share (c)/(d) $ 10.68 $ 14.08 $ 16.00 $ 17.87 $ 14.37 Return on average tangible common equity Net income $ 25,866 $ 29,540 $ 44,675 $ 52,681 $ 40,005 Add: Intangible amortization expense (net of tax) 3,664 3,224 3,129 3,460 3,756 Net income, excluding intangible amortization (e) 29,530 32,764 47,804 56,141 43,761 Average total equity 187,341 231,084 310,208 346,059 346,355 Less: Average goodwill 27,329 27,329 27,439 30,385 39,415 Less: Average other intangible assets (net of tax) 19,522 16,101 13,309 18,548 17,018 Average tangible common equity (f) 140,490 187,654 269,460 297,126 289,922 Return on average tangible common equity (e)/(f) 21.02% 17.46% 17.74% 18.89% 15.09% Efficiency Ratio Noninterest expense $ 136,325 $ 142,537 $ 163,799 $ 168,909 $ 158,770 Less: Intangible amortization expense 4,638 4,081 3,961 4,380 4,754 Adjusted noninterest expense (i) 131,687 138,456 159,838 164,529 154,016 Net interest income 75,224 74,551 83,846 87,099 99,729 Noninterest income 102,749 114,194 149,371 147,387 111,223 Tax-equivalent adjustment 462 347 455 492 429 Total tax-equivalent revenue(j) 178,435 189,092 233,672 234,978 211,381 Efficiency ratio (i)/(j) 73.80% 73.22% 68.40% 70.02% 72.86% Annual

XML

Document and Entity Information	Apr. 26, 2023
Document and Entity Information [Abstract]
Document Type	8-K
Document Period End Date	Apr. 26, 2023
Entity File Number	001-39036
Entity Registrant Name	Alerus Financial Corporation
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	45-0375407
Entity Address, Address Line One	401 Demers Avenue
Entity Address, City or Town	Grand Forks
Entity Address, State or Province	ND
Entity Address, Postal Zip Code	58201
City Area Code	701
Local Phone Number	795-3200
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $1.00 par value per share
Trading Symbol	ALRS
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Central Index Key	0000903419
Amendment Flag	false