# EDGAR Filing Document

**Accession Number:** 0000903419
**File Stem:** 0001558370-23-000524
**Filing Date:** 2023-1
**Character Count:** 106686
**Document Hash:** b91e69b8a421417e617688efc1f592c6
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001558370-23-000524.hdr.sgml**: 20230125

**ACCESSION NUMBER**: 0001558370-23-000524

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 52

**CONFORMED PERIOD OF REPORT**: 20230125

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230125

**DATE AS OF CHANGE**: 20230125

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ALERUS FINANCIAL CORP
- **CENTRAL INDEX KEY:** 0000903419
- **STANDARD INDUSTRIAL CLASSIFICATION:** NATIONAL COMMERCIAL BANKS [6021]
- **IRS NUMBER:** 450375407
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39036
- **FILM NUMBER:** 23552500

**BUSINESS ADDRESS:**
- **STREET 1:** 401 DEMERS AVE
- **CITY:** GRAND FORKS
- **STATE:** ND
- **ZIP:** 58201
- **BUSINESS PHONE:** 7017953200

**MAIL ADDRESS:**
- **STREET 1:** PO BOX 6001
- **STREET 2:** 401 DEMERS AVE
- **CITY:** GRAND FORKS
- **STATE:** ND
- **ZIP:** 58206-6001

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** FIRST NATIONAL CORP NORTH DAKOTA
- **DATE OF NAME CHANGE:** 19980312

?xml version='1.0' encoding='UTF-8'?

**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): **January 25, 2023**

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

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Delaware** | &nbsp;&nbsp;**001-39036** | &nbsp;&nbsp;**45-0375407** |
| &nbsp;&nbsp;(State or Other Jurisdiction of Incorporation) | &nbsp;&nbsp;(Commission File Number) | &nbsp;&nbsp;(IRS Employer Identification No.) |

---

**401 Demers AvenueGrand 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:

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Title of each class** | &nbsp;&nbsp;**Trading symbol** | &nbsp;&nbsp;**Name of each exchange on which registered** |
| &nbsp;&nbsp;Common Stock, $1.00 par value per share | &nbsp;&nbsp;ALRS | &nbsp;&nbsp;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.&nbsp;&nbsp;&nbsp;&nbsp; Results of Operations and Financial Condition.**

On January 25, 2023, Alerus Financial Corporation (the "Company") issued a press release announcing its financial results for the three and twelve months ended December 31, 2022. 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.&nbsp;&nbsp;&nbsp;&nbsp; Regulation FD Disclosure.**

On January 25, 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.&nbsp;&nbsp;&nbsp;&nbsp; Financial Statements and Exhibits.**

**(d) Exhibits**

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| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 99.1 | [Press Release of Alerus Financial Corporation, dated January 25, 2023](alrs-20230125xex99d1.htm) |
| 99.2<br>104 | [Investor Presentation of Alerus Financial Corporation](alrs-20230125xex99d2.htm)<br>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: January 25, 2023 | Alerus Financial Corporation | Alerus Financial Corporation |
|  | By: | /s/ Katie A. Lorenson |
|  | Name: | Katie A. Lorenson |
|  | Title: | President and Chief Executive Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

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| | |
|:---|:---|
| ![Graphic](alrs-20230125xex99d1001.jpg)<br>FOR RELEASE (01.25.2023)<br>| Alan A. Villalon, Chief Financial Officer<br> 952.417.3733 (Office) |

---

**ALERUS FINANCIAL CORPORATION REPORTS**

**FOURTH QUARTER 2022 NET INCOME OF $10.9 MILLION**

**MINNEAPOLIS, MN** (January 25, 2023) – Alerus Financial Corporation (Nasdaq: ALRS) reported net income of $10.9 million for the fourth quarter of 2022, or $0.53 per diluted common share, compared to net income of $9.6 million, or $0.47 per diluted common share, for the third quarter of 2022, and net income of $12.7 million, or $0.72 per diluted common share, for the fourth quarter of 2021.

**CEO Comments**

President and Chief Executive Officer Katie Lorenson said, "2022 was a year of transitions and milestones for our Company. We completed our largest acquisition with Metro Phoenix Bank, which was transformational to our growth in the Arizona market. We added new leadership and had continued momentum in talent acquisitions with successful lift outs and additions of commercial bankers, treasury management professionals, and wealth and retirement advisors. We remain focused on client acquisition and deepening of relationships with existing clients through our diversified business model. We continue to right size our infrastructure and manage expenses, despite facing inflationary pressures. During the year, we returned over 33% of our earnings to our shareholders by increasing our dividend 11%. We remain focused on creating long-term value for our clients, and in return, our shareholders. I want to thank our employees for all their continued hard work in developing the strong foundation from which we will continue to grow from in 2023 and beyond."

**Quarterly Highlights**

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| | |
|:---|:---|
| ◾ | Return on average total assets of 1.17%, compared to 1.02% for the third quarter of 2022 |

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| | |
|:---|:---|
| ◾ | Return on average common equity of 12.37%, compared to 10.25% for the third quarter of 2022 |

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| | |
|:---|:---|
| ◾ | Return on average tangible common equity<sup>(1)</sup> of 16.63%, compared to 13.89% for the third quarter of 2022 |

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| | |
|:---|:---|
| ◾ | Net interest margin (tax-equivalent) was 3.09%, compared to 3.21% for the third quarter of 2022 |

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| | |
|:---|:---|
| ◾ | Noninterest expense was $37.9 million, a $4.8 million, or 11.3%, decrease compared to $42.8 million for the third quarter of 2022 |

---

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| | |
|:---|:---|
| ◾ | Efficiency ratio<sup>(1)</sup> of 69.6%, compared to 74.8% for the third quarter of 2022 |

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| | |
|:---|:---|
| ◾ | Allowance for loan losses to total loans was 1.27% compared to 1.80% as of December 31, 2021. Excluding the acquisition of Metro Phoenix Bank the allowance for loan losses to total loans was 1.43% as of December 31, 2022 |

---

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| | |
|:---|:---|
| ◾ | Noninterest income for the third quarter of 2022 was 48.62% of total revenue, compared to 48.82% for the third quarter of 2022 |

---

---

| | |
|:---|:---|
| ◾ | Loan to deposit ratio was 83.8%, compared to 60.2% as of December 31, 2021 |

---

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| | |
|:---|:---|
| ◾ | Common equity tier 1 capital to risk weighted assets was 13.39%, compared to 14.65% as of December 31, 2021 |

---

**Full Year 2022 Highlights**

---

| | |
|:---|:---|
| ◾ | Net income of $40.0 million, a decrease of $12.7 million, or 24.1%, compared to $52.7 million in 2021 |

---

---

| | |
|:---|:---|
| ◾ | Noninterest expense of $158.8 million, a decrease of $10.1 million, or 6.0%, compared to $168.9 million in 2021 |

---

---

| | |
|:---|:---|
| ◾ | No provision for loan losses expense in 2022, compared to a $3.5 million reversal of provision for loan losses expense in 2021 |

---

---

| | |
|:---|:---|
| ◾ | Loans held for investment increased $686.0 million, or 39.0%, since December 31, 2021, including $270.4 million of loans acquired from Metro Phoenix Bank. Excluding the acquisition of Metro Phoenix Bank and Paycheck Protection Program, or PPP, loans, loans held for investment increased $448.4 million, or 25.5%, since December 31, 2021 |

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| | |
|:---|:---|
| ◾ | Average loans of $2.1 billion, an increase of $200.7 million, or 10.8%, from 2021 |

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| | |
|:---|:---|
| ◾ | Average deposits of $2.9 billion, an increase of $158.0 million, or 5.8%, from 2021 |

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| | |
|:---|:---|
| ◾ | Diluted earnings per share, or EPS, of $2.10, compared to $2.97 in 2021 |

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| | |
|:---|:---|
| ◾ | Return on average total assets of 1.14%, compared to 1.66% in 2021 |

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| | |
|:---|:---|
| ◾ | Return on average common equity of 11.55%, compared to 15.22% in 2021 |

---

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| | |
|:---|:---|
| ◾ | Return on average tangible common equity<sup>(1)</sup> of 15.09%, compared to 18.89% in 2021 |

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| | |
|:---|:---|
| ◾ | Revenue of $211.0 million, a decrease of $23.5 million, or 10.0%, compared to $234.5 million in 2021 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Net interest income was $99.7 million, an increase of $12.6 million, or 14.5%, compared to $87.1 million in 2021

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Noninterest income was $111.2 million, a decrease of $36.2 million, or 24.5%, compared to $147.4 million in 2021

---

| | |
|:---|:---|
| ◾ | Dividends declared per common share were $0.70, a $0.07, or 11.1% increase compared to $0.63 in 2021 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Represents a non-GAAP financial measure. See "Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures."

**Selected Financial Data (unaudited)**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **As of and for the** | **As of and for the** | **As of and for the** | **As of and for the** | **As of and for the** |
|  | **Three months ended**  | **Three months ended**  | **Three months ended**  | **Year ended**  | **Year ended**  |
|  | **December 31,**  | **September 30,**  | **December 31,**  | **December 31,**  | **December 31,**  |
| *(dollars and shares in thousands, except per share data)* | **2022** | **2022** | **2021** | **2022** | **2021** |
| **Performance Ratios** |  |  |  |  |  |
| Return on average total assets | 1.17% | 1.02% | 1.50% | 1.14% | 1.66% |
| Return on average common equity | 12.37% | 10.25% | 14.12% | 11.55% | 15.22% |
| Return on average tangible common equity <sup>(1)</sup> | 16.63% | 13.89% | 17.36% | 15.09% | 18.89% |
| Noninterest income as a % of revenue | 48.62% | 48.82% | 59.67% | 52.72% | 62.86% |
| Net interest margin (tax-equivalent)  | 3.09% | 3.21% | 2.84% | 3.04% | 2.90% |
| Efficiency ratio <sup>(1)</sup> | 69.62% | 74.76% | 71.06% | 72.86% | 70.02% |
| Net charge-offs/(recoveries) to average loans | (0.03)% | 0.07% | (0.22)% | 0.02% | (0.04)% |
| Dividend payout ratio | 33.96% | 38.30% | 22.22% | 33.33% | 21.21% |
| **Per Common Share** |  |  |  |  |  |
| Earnings per common share - basic  | $0.54 | $0.48 | $0.73 | $2.12 | $3.02 |
| Earnings per common share - diluted | $0.53 | $0.47 | $0.72 | $2.10 | $2.97 |
| Dividends declared per common share | $0.18 | $0.18 | $0.16 | $0.70 | $0.63 |
| Book value per common share | $17.85 | $17.25 | $20.88 |  |  |
| Tangible book value per common share <sup>(1)</sup> | $14.37 | $13.76 | $17.87 |  |  |
| Average common shares outstanding - basic | 19988 | 19987 | 17210 | 18640 | 17189 |
| Average common shares outstanding - diluted | 20232 | 20230 | 17480 | 18884 | 17486 |
| **Other Data** |  |  |  |  |  |
| Retirement and benefit services assets under administration/management | $32122520 | $30545694 | $36732938 |  |  |
| Wealth management assets under administration/management | $3582648 | $3435786 | $4039931 |  |  |
| Mortgage originations | $126254 | $229901 | $356821 | $812314 | $1836064 |

---

(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 2022 was $27.0 million, a $1.4 million, or 4.8%, decrease from the third quarter of 2022. Net interest income increased $4.2 million, or 18.3%, from $22.8 million for the fourth quarter of 2021. The quarter over quarter decrease in net interest income was primarily driven by an increase of $4.8 million, or 123.5%, in interest expense, partially offset by a $3.5 million, or 11.0%, increase in interest income. The increase in interest expense was primarily due to increases of $3.8 million in interest expense paid on deposits and $1.0 million in interest expense paid on short-term borrowings. The increase in interest expense paid on deposits was primarily due to deposit rate increases in response to a highly competitive deposit environment arising from the Federal Reserve Bank raising short-term rates. Short-term borrowings expense increased as short-term rates increased and the average balance of short-term borrowings increased as loan growth outpaced deposit growth in the fourth quarter of 2022.

Net interest margin (tax-equivalent), a non-GAAP financial measure, was 3.09% for the fourth quarter of 2022, a 12 basis point decrease from 3.21% for the third quarter of 2022, and a 25 basis point increase from 2.84% in the fourth quarter of 2021. The linked quarter decrease was primarily driven by a 79 basis point increase in the rate paid on interest-bearing liabilities, partially offset by a 45 basis point increase in interest earning asset yields. The increase in the rate paid on interest-bearing liabilities was the result of a 73 basis point increase on the rate paid on interest-bearing deposits and a 143 basis point increase in the rate paid on fed funds purchased and short-term borrowings. The increase in interest earning asset yields was primarily driven by a 49 basis point increase in loan yields. Additionally, we saw a $97.4 million increase in average total loans, primarily due to a $56.6 million increase in the average balance of commercial real estate and real estate construction loans.

------

***Noninterest Income***

Noninterest income for the fourth quarter of 2022 was $25.5 million, a $1.5 million, or 5.5%, decrease from the third quarter of 2022. The quarter over quarter decrease was primarily driven by a $1.6 million decrease in mortgage banking revenue, partially offset by a $292 thousand increase in wealth management revenue. The decrease in mortgage banking revenue was primarily due to a $103.6 million, or 45.1%, decrease in mortgage originations driven by macroeconomic challenges, partially offset by a 41 basis point increase in the gain on sale margin. The increase in wealth management revenue was primarily driven by a $146.9 million increase in assets under management, due to increased market value from improved bond and equity markets.

Noninterest income for the fourth quarter of 2022 decreased $8.2 million, or 24.3%, from $33.7 million in the fourth quarter of 2021. The decrease in noninterest income was primarily due to decreases of $5.8 million in mortgage banking revenue, $2.0 million in retirement and benefit services revenue and $489 thousand in wealth management revenue. The decrease in mortgage banking revenue was primarily due to a $230.6 million decrease in mortgage originations driven by macroeconomic challenges. The decrease in retirement and benefit services revenue was primarily due to a $4.6 billion decrease in assets under administration/management. Wealth management revenue decreased primarily due to a $457.3 million decrease in assets under management. Both decreases in assets under administration/management were mainly driven by lower bond and equity markets.

***Noninterest Expense***

Noninterest expense for the fourth quarter of 2022 was $37.9 million, a $4.8 million, or 11.3%, decrease compared to the third quarter of 2022. The linked quarter decrease in noninterest expense was primarily due to decreases of $2.0 million in compensation expense, $1.7 million in professional fees and assessments, and $968 thousand in business services, software and technology expense. Compensation expense decreased primarily due to lower mortgage incentives associated with the decrease in mortgage originations as well as an accrual adjustment to performance bonus accruals. The decrease in professional fees and assessments was primarily driven by a decline in the one-time expenses associated with the acquisition of Metro Phoenix Bank. Business services, software and technology expense decreased primarily due to the timing of contract renewals.

Noninterest expense for the fourth quarter of 2022 decreased $3.3 million, or 8.1%, from $41.3 million in the fourth quarter of 2021. The year over year decrease in noninterest expense was primarily driven by decreases of $2.9 million in compensation expense, $815 thousand of business services, software and technology expense, and $703 thousand in employee taxes and benefits expense, partially offset by a $1.0 million increase in other noninterest expense. The decrease in compensation expense was primarily due to lower mortgage incentives associated with the decrease in mortgage originations. Business services, software and technology expense decreased primarily due to the timing of contract renewals. The decrease in employee taxes and benefits expense was primarily due to a $531 thousand decrease in share-based compensation from an acceleration upon employee retirements. The increase in other noninterest expense included $469 thousand in one-time expenses from our divestiture of payroll services and $247 thousand increase in the provision for unfunded commitments.

**Financial Condition**

Total assets were $3.8 billion as of December 31, 2022, an increase of $386.9 million, or 11.4%, from December 31, 2021. The increase in assets included an increase of $686.0 million in loans held for investment, partially offset by decreases of $184.1 million in cash and cash equivalents and $166.5 million in investment securities.

***Loans***

Total loans were $2.4 billion as of December 31, 2022, an increase of $686.0 million, or 39.0%, from December 31, 2021. The increase in total loans was primarily due to increases of $415.6 million in organic loan growth and $270.4 million in loans acquired from Metro Phoenix Bank. Excluding loans acquired from Metro Phoenix Bank, the increase in organic loan growth included increases of $154.5 million in commercial real estate, $149.2 million in residential real estate first mortgages and $50.5 million in commercial and industrial loans. Excluding PPP loans and loans acquired from Metro Phoenix Bank, commercial and industrial loans increased $83.4 million.

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

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **December 31,**  | **September 30,**  | **June 30,**  | **March 31,**  | **December 31,**  |
| *(dollars in thousands)* | **2022** | **2022** | **2022** | **2022** | **2021** |
| **Commercial** |  |  |  |  |  |
| Commercial and industrial <sup>(1)</sup> | $583876 | $564655 | $484426 | $467449 | $436761 |
| Real estate construction | 97810 | 89215 | 48870 | 41604 | 40619 |
| Commercial real estate | 881670 | 819068 | 599737 | 602158 | 598893 |
| &nbsp;&nbsp;Total commercial | 1563356 | 1472938 | 1133033 | 1111211 | 1076273 |
| **Consumer** |  |  |  |  |  |
| Residential real estate first mortgage | 679551 | 649818 | 568571 | 522489 | 510716 |
| Residential real estate junior lien | 150479 | 143681 | 135255 | 130604 | 125668 |
| Other revolving and installment | 50608 | 51794 | 53384 | 53738 | 45363 |
| &nbsp;&nbsp;Total consumer | 880638 | 845293 | 757210 | 706831 | 681747 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total loans | $2443994 | $2318231 | $1890243 | $1818042 | $1758020 |

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&nbsp;&nbsp;&nbsp;&nbsp;(1) Includes PPP loans of $737 thousand at December 31, 2022, $2.9 million at September 30, 2022, $6.9 million at June 30, 2022, $13.1 million at March 31, 2022 and $33.6 million at December 31, 2021.

***Deposits***

Total deposits were $2.9 billion as of December 31, 2022, a decrease of $5.1 million, or 0.2%, from December 31, 2021. Interest-bearing deposits increased $72.8 million, while noninterest-bearing deposits decreased $77.9 million in the fourth quarter of 2022. In the third quarter of 2022, we acquired $353.7 million in deposits from our acquisition of Metro Phoenix Bank. Excluding deposits acquired from Metro Phoenix Bank, deposits decreased $358.8 million, or 12.3%, from December 31, 2021. The decrease was primarily due to decreases of $184.7 million in interest-bearing deposits and $174.0 million in noninterest-bearing deposits. Interest-bearing deposits decreased primarily due to a $84.9 million decrease in money market savings accounts, and a $69.0 million decrease in time deposits. Noninterest-bearing deposits decreased primarily due to a $68.3 million decrease in synergistic deposits. Synergistic deposits, which include deposits from our retirement and benefit services and wealth management segments as well as HSA deposits, increased $22.6 million from December 31, 2021, primarily due to increases in our synergistic deposits from our wealth management division.

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

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **December 31,**  | **September 30,**  | **June 30,**  | **March 31,**  | **December 31,**  |
| *(dollars in thousands)* | **2022** | **2022** | **2022** | **2022** | **2021** |
| Noninterest-bearing demand | $860987 | $905228 | $764808 | $831558 | $938840 |
| Interest-bearing |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest-bearing demand | 706275 | 653216 | 642641 | 760321 | 714669 |
| &nbsp;&nbsp;&nbsp;&nbsp;Savings accounts | 99882 | 101820 | 97227 | 99299 | 96825 |
| &nbsp;&nbsp;&nbsp;&nbsp;Money market savings | 1035981 | 1079520 | 914423 | 976905 | 937305 |
| &nbsp;&nbsp;&nbsp;&nbsp;Time deposits | 212359 | 222027 | 200451 | 224184 | 232912 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing | 2054497 | 2056583 | 1854742 | 2060709 | 1981711 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deposits | $2915484 | $2961811 | $2619550 | $2892267 | $2920551 |

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***Asset Quality***

Total nonperforming assets were $3.8 million as of December 31, 2022, an increase of $742 thousand, or 24.1%, from December 31, 2021. As of December 31, 2022, the allowance for loan losses was $31.1 million, or 1.27% of total loans, compared to $31.6 million, or 1.80% of total loans, as of December 31, 2021. Excluding Metro Phoenix Bank, the allowance for loan losses to total loans was 1.43% as of December 31, 2022.

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

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **As of and for the three months ended** | **As of and for the three months ended** | **As of and for the three months ended** | **As of and for the three months ended** | **As of and for the three months ended** |
|  | **December 31,**  | **September 30,**  | **June 30,**  | **March 31,**  | **December 31,**  |
| *(dollars in thousands)* | **2022** | **2022** | **2022** | **2022** | **2021** |
| Nonaccrual loans | $3794 | $4303 | $4370 | $4069 | $2076 |
| Accruing loans 90+ days past due |  | 1000 |  | 146 | 121 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total nonperforming loans | 3794 | 5303 | 4370 | 4215 | 2197 |
| OREO and repossessed assets | 30 | 904 | 860 | 865 | 885 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total nonperforming assets | $3824 | $6207 | $5230 | $5080 | $3082 |
| Net charge-offs/(recoveries) | (178) | 405 | 340 | (141) | (1006) |
| Net charge-offs/(recoveries) to average loans | (0.03)% | 0.07% | 0.07% | (0.03)% | (0.22)% |
| Nonperforming loans to total loans | 0.16% | 0.23% | 0.23% | 0.23% | 0.12% |
| Nonperforming assets to total assets | 0.10% | 0.17% | 0.16% | 0.15% | 0.09% |
| Allowance for loan losses to total loans | 1.27% | 1.34% | 1.66% | 1.74% | 1.80% |
| Allowance for loan losses to nonperforming loans | 821% | 584% | 718% | 752% | 1437% |

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For the fourth quarter of 2022, we had net recoveries of $178 thousand compared to net charge-offs of $405 thousand for the third quarter of 2022 and $1.0 million of net recoveries for the fourth quarter of 2021.

There was no provision expense recorded for the three months ended December 31, 2022, no change compared to the three months ended September 30, 2022, and a $1.5 million increase as compared to the three months ended December 31, 2021. With the decrease in nonperforming assets, as well as adjustments for pandemic related qualitative factors, management concluded no need for additional provision expense in the period.

***Capital***

Total stockholders' equity was $356.9 million as of December 31, 2022, a decrease of $2.5 million, or 0.7%, from December 31, 2021. The decrease in stockholders' equity was primarily due to a $94.4 million decrease in other comprehensive loss, due to rising interest rates, which resulted in a lower fair value of our available-for-sale investment securities portfolio. Tangible book value per common share, a non-GAAP financial measure, decreased to $14.37 as of December 31, 2022, from $17.87 as of December 31, 2021. Tangible common equity to tangible assets, a non-GAAP financial measure, decreased to 7.74% as of December 31, 2022, from 9.21% as of December 31, 2021. Common equity tier 1 capital to risk weighted assets decreased to 13.39% as of December 31, 2022, from 14.65% as of December 31, 2021.

------

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

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| | | | |
|:---|:---|:---|:---|
|  | **December 31,** <br>**2022** | **September 30,** <br>**2022** | **December 31,** <br>**2021** |
| **Capital Ratios**<sup>(1)</sup> |  |  |  |
| *Alerus Financial Corporation Consolidated* |  |  |  |
| &nbsp;&nbsp;Common equity tier 1 capital to risk weighted assets | 13.39% | 13.63% | 14.65% |
| &nbsp;&nbsp;Tier 1 capital to risk weighted assets | 13.69% | 13.94% | 15.06% |
| &nbsp;&nbsp;Total capital to risk weighted assets | 16.48% | 16.84% | 18.64% |
| &nbsp;&nbsp;Tier 1 capital to average assets | 11.25% | 10.82% | 9.79% |
| &nbsp;&nbsp;Tangible common equity / tangible assets <sup>(2)</sup> | 7.74% | 7.59% | 9.21% |
| *Alerus Financial, N.A.* |  |  |  |
| &nbsp;&nbsp;Common equity tier 1 capital to risk weighted assets | 12.76% | 13.01% | 13.87% |
| &nbsp;&nbsp;Tier 1 capital to risk weighted assets | 12.76% | 13.01% | 13.87% |
| &nbsp;&nbsp;Total capital to risk weighted assets | 13.83% | 14.11% | 15.12% |
| &nbsp;&nbsp;Tier 1 capital to average assets | 10.48% | 11.12% | 9.01% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Capital ratios for the current quarter are to be considered preliminary until the Call Report for Alerus Financial, N.A. is filed.

&nbsp;&nbsp;&nbsp;&nbsp;(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, January 26, 2023, to discuss its financial results. The call can be accessed via telephone at (844) 200-6205, using access code 249132. 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., Alerus 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. Alerus 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. Alerus 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 we calculate these non-GAAP financial measures may differ from that of other companies reporting measures with similar names.

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***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 the 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 the 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 loan 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 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 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; 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, the negative effects of the ongoing COVID-19 pandemic, including its effects on the economic environment, our clients, and our operations, including due to supply chain disruptions, as well as any changes to federal, state, or local government laws, regulations, or orders in response to the 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.

------

**Alerus Financial Corporation and Subsidiaries**

**Consolidated Balance Sheets** 

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

---

| | | |
|:---|:---|:---|
|  | **December 31,** <br>**2022** | **December 31,** <br>**2021** |
| **Assets** | (Unaudited) | (Audited) |
| Cash and cash equivalents | $58242 | $242311 |
| Investment securities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Available-for-sale, at fair value | 717324 | 853649 |
| &nbsp;&nbsp;&nbsp;&nbsp;Held-to-maturity, at carrying value | 321902 | 352061 |
| Fed funds sold |  |  |
| Loans held for sale | 9488 | 46490 |
| Loans | 2443994 | 1758020 |
| Allowance for loan losses | (31146) | (31572) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loans | 2412848 | 1726448 |
| Land, premises and equipment, net | 17288 | 18370 |
| Operating lease right-of-use assets | 5419 | 3727 |
| Accrued interest receivable | 12869 | 8537 |
| Bank-owned life insurance | 33991 | 33156 |
| Goodwill | 47087 | 31490 |
| Other intangible assets | 22455 | 20250 |
| Servicing rights | 2643 | 1880 |
| Deferred income taxes, net | 42369 | 11614 |
| Other assets | 75712 | 42708 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $3779637 | $3392691 |
| **Liabilities and Stockholders' Equity** |  |  |
| Deposits |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Noninterest-bearing | $860987 | $938840 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest-bearing | 2054497 | 1981711 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deposits | 2915484 | 2920551 |
| Short-term borrowings | 378080 |  |
| Long-term debt | 58843 | 58933 |
| Operating lease liabilities | 5902 | 4275 |
| Accrued expenses and other liabilities | 64456 | 49529 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 3422765 | 3033288 |
| Stockholders' equity |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred stock, $1 par value, 2,000,000 shares authorized: 0 issued and outstanding |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock, $1 par value, 30,000,000 shares authorized: 19,991,681 and 17,212,588 issued and outstanding | 19992 | 17213 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 155095 | 92878 |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 280426 | 253567 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive income (loss) | (98641) | (4255) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 356872 | 359403 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $3779637 | $3392691 |

---

------

**Alerus Financial Corporation and Subsidiaries**

**Consolidated Statements of Income**

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

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Three months ended**  | **Three months ended**  | **Three months ended**  | **Year ended**  | **Year ended**  |
|  | **December 31,** <br>**2022** | **September 30,** <br>**2022** | **December 31,** <br>**2021** | **December 31,** <br>**2022** | **December 31,** <br>**2021** |
| **Interest Income** | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) |
| Loans, including fees | $29248 | $25379 | $19354 | $89907 | $78133 |
| Investment securities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Taxable | 5813 | 5939 | 4454 | 23260 | 13001 |
| &nbsp;&nbsp;&nbsp;&nbsp;Exempt from federal income taxes | 210 | 209 | 231 | 848 | 925 |
| Other | 541 | 748 | 166 | 1562 | 598 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest income | 35812 | 32275 | 24205 | 115577 | 92657 |
| **Interest Expense** |  |  |  |  |  |
| Deposits | 5675 | 1852 | 880 | 9169 | 3661 |
| Short-term borrowings | 2545 | 1516 |  | 4339 |  |
| Long-term debt | 628 | 591 | 536 | 2340 | 1897 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest expense | 8848 | 3959 | 1416 | 15848 | 5558 |
| Net interest income | 26964 | 28316 | 22789 | 99729 | 87099 |
| Provision for loan losses |  |  | (1500) |  | (3500) |
| &nbsp;&nbsp;Net interest income after provision for loan losses | 26964 | 28316 | 24289 | 99729 | 90599 |
| **Noninterest Income** |  |  |  |  |  |
| Retirement and benefit services | 16599 | 16597 | 18552 | 67135 | 71709 |
| Wealth management | 5144 | 4852 | 5633 | 20870 | 21052 |
| Mortgage banking | 2170 | 3782 | 7967 | 16921 | 48502 |
| Service charges on deposit accounts | 282 | 377 | 370 | 1434 | 1395 |
| Net gains (losses) on investment securities |  |  |  |  | 125 |
| Other | 1322 | 1402 | 1196 | 4863 | 4604 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total noninterest income | 25517 | 27010 | 33718 | 111223 | 147387 |
| **Noninterest Expense** |  |  |  |  |  |
| Compensation | 19189 | 21168 | 22088 | 80656 | 93386 |
| Employee taxes and benefits | 4887 | 5079 | 5590 | 21915 | 22033 |
| Occupancy and equipment expense | 1892 | 1926 | 1936 | 7605 | 8148 |
| Business services, software and technology expense | 4405 | 5373 | 5220 | 19487 | 20486 |
| Intangible amortization expense | 1324 | 1324 | 1053 | 4754 | 4380 |
| Professional fees and assessments | 1454 | 3126 | 1808 | 8367 | 6292 |
| Marketing and business development | 950 | 890 | 872 | 3254 | 3182 |
| Supplies and postage | 634 | 588 | 778 | 2440 | 2361 |
| Travel | 356 | 291 | 206 | 1182 | 442 |
| Mortgage and lending expenses | 606 | 409 | 488 | 2183 | 4250 |
| Other | 2251 | 2593 | 1237 | 6927 | 3949 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total noninterest expense | 37948 | 42767 | 41276 | 158770 | 168909 |
| Income before income taxes | 14533 | 12559 | 16731 | 52182 | 69077 |
| Income tax expense | 3624 | 2940 | 4026 | 12177 | 16396 |
| &nbsp;&nbsp;Net income | $10909 | $9619 | $12705 | $40005 | $52681 |
| **Per Common Share Data** |  |  |  |  |  |
| Earnings per common share | $0.54 | $0.48 | $0.73 | $2.12 | $3.02 |
| Diluted earnings per common share | $0.53 | $0.47 | $0.72 | $2.10 | $2.97 |
| Dividends declared per common share | $0.18 | $0.18 | $0.16 | $0.70 | $0.63 |
| Average common shares outstanding | 19988 | 19987 | 17210 | 18640 | 17189 |
| Diluted average common shares outstanding | 20232 | 20230 | 17480 | 18884 | 17486 |

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**Alerus Financial Corporation and Subsidiaries**

**Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures (unaudited)**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31,** <br>**2022** | **September 30,** <br>**2022** | **December 31,** <br>**2021** |
| **Tangible Common Equity to Tangible Assets** |  |  |  |
| &nbsp;&nbsp;Total common stockholders' equity | $356872 | $344839 | $359403 |
| &nbsp;&nbsp;Less: Goodwill | 47087 | 46060 | 31490 |
| &nbsp;&nbsp;Less: Other intangible assets | 22455 | 23779 | 20250 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tangible common equity **(a)** | 287330 | 275000 | 307663 |
| &nbsp;&nbsp;Total assets | 3779637 | 3691253 | 3392691 |
| &nbsp;&nbsp;Less: Goodwill | 47087 | 46060 | 31490 |
| &nbsp;&nbsp;Less: Other intangible assets | 22455 | 23779 | 20250 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tangible assets **(b)** | 3710095 | 3621414 | 3340951 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tangible common equity to tangible assets **(a)/(b)** | 7.74% | 7.59% | 9.21% |
| **Tangible Book Value Per Common Share** |  |  |  |
| &nbsp;&nbsp;Total common stockholders' equity | $356872 | $344839 | $359403 |
| &nbsp;&nbsp;Less: Goodwill | 47087 | 46060 | 31490 |
| &nbsp;&nbsp;Less: Other intangible assets | 22455 | 23779 | 20250 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tangible common equity **(c)** | 287330 | 275000 | 307663 |
| &nbsp;&nbsp;Total common shares issued and outstanding **(d)** | 19992 | 19987 | 17213 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tangible book value per common share **(c)/(d)** | $14.37 | $13.76 | $17.87 |

---

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Three months ended**  | **Three months ended**  | **Three months ended**  | **Year ended**  | **Year ended**  |
|  | **December 31,** <br>**2022** | **September 30,** <br>**2022** | **December 31,** <br>**2021** | **December 31,** <br>**2022** | **December 31,** <br>**2021** |
| **Return on Average Tangible Common Equity** |  |  |  |  |  |
| &nbsp;&nbsp;Net income | $10909 | $9619 | $12705 | $40005 | $52681 |
| &nbsp;&nbsp;Add: Intangible amortization expense (net of tax) | 1046 | 1046 | 832 | 3756 | 3460 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income, excluding intangible amortization **(e)** | 11955 | 10665 | 13537 | 43761 | 56141 |
| &nbsp;&nbsp;Average total equity | 349812 | 372274 | 357084 | 346355 | 346059 |
| &nbsp;&nbsp;Less: Average goodwill | 46283 | 48141 | 30930 | 39415 | 30385 |
| &nbsp;&nbsp;Less: Average other intangible assets (net of tax) | 18243 | 19466 | 16843 | 17018 | 18548 |
| &nbsp;&nbsp;&nbsp;&nbsp;Average tangible common equity **(f)** | 285286 | 304667 | 309311 | 289922 | 297126 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Return on average tangible common equity **(e)/(f)** | 16.63% | 13.89% | 17.36% | 15.09% | 18.89% |
| **Efficiency Ratio** |  |  |  |  |  |
| &nbsp;&nbsp;Noninterest expense | $37948 | $42767 | $41276 | $158770 | $168909 |
| &nbsp;&nbsp;Less: Intangible amortization expense | 1324 | 1324 | 1053 | 4754 | 4380 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjusted noninterest expense **(g)** | 36624 | 41443 | 40223 | 154016 | 164529 |
| &nbsp;&nbsp;Net interest income | 26964 | 28316 | 22789 | 99729 | 87099 |
| &nbsp;&nbsp;Noninterest income | 25517 | 27010 | 33718 | 111223 | 147387 |
| &nbsp;&nbsp;Tax-equivalent adjustment | 124 | 112 | 99 | 429 | 492 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total tax-equivalent revenue **(h)** | 52605 | 55438 | 56606 | 211381 | 234978 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Efficiency ratio **(g)/(h)** | 69.62% | 74.76% | 71.06% | 72.86% | 70.02% |

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**Alerus Financial Corporation and Subsidiaries**

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

*(dollars in thousands)*

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three months ended**  | **Three months ended**  | **Three months ended**  | **Three months ended**  | **Three months ended**  | **Three months ended**  | **Year ended**  | **Year ended**  | **Year ended**  | **Year ended**  |
|  | **December 31, 2022** | **December 31, 2022** | **September 30, 2022** | **September 30, 2022** | **December 31, 2021** | **December 31, 2021** | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** |
|  | <br>**Average**<br>**Balance** | **Average**<br>**Yield/**<br>**Rate** | <br>**Average**<br>**Balance** | **Average**<br>**Yield/**<br>**Rate** | <br>**Average**<br>**Balance** | **Average**<br>**Yield/**<br>**Rate** | <br>**Average**<br>**Balance** | **Average**<br>**Yield/**<br>**Rate** | <br>**Average**<br>**Balance** | **Average**<br>**Yield/**<br>**Rate** |
| **Interest Earning Assets** |  |  |  |  |  |  |  |  |  |  |
| Interest-bearing deposits with banks | $26510 | 2.16% | $72157 | 2.02% | $232650 | 0.16% | $58149 | 1.01% | $222916 | 0.14% |
| Investment securities <sup>(1)</sup> | 1046441 | 2.30% | 1116458 | 2.20% | 1119370 | 1.68% | 1135426 | 2.14% | 864273 | 1.64% |
| Fed funds sold | 7119 | 3.40% | 21893 | 2.37% |  | —% | 7313 | 2.63% |  | —% |
| Loans held for sale | 14505 | 4.54% | 27032 | 4.14% | 53357 | 2.33% | 24497 | 3.49% | 65968 | 2.26% |
| Loans |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Commercial: |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial and industrial | 561252 | 5.80% | 566987 | 5.41% | 471262 | 5.61% | 507040 | 5.13% | 579002 | 4.91% |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate construction | 96189 | 6.02% | 70545 | 5.60% | 41573 | 3.89% | 63296 | 5.21% | 41751 | 4.10% |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial real estate | 838466 | 4.85% | 807505 | 4.07% | 587542 | 3.90% | 713102 | 4.16% | 571326 | 3.77% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total commercial | 1495907 | 5.28% | 1445037 | 4.67% | 1100377 | 4.63% | 1283438 | 4.59% | 1192079 | 4.34% |
| &nbsp;&nbsp;Consumer |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential real estate first mortgage | 665135 | 3.64% | 624826 | 3.54% | 504997 | 3.30% | 587443 | 3.50% | 477621 | 3.47% |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential real estate junior lien | 146912 | 6.46% | 140664 | 5.41% | 129238 | 4.52% | 136483 | 5.29% | 131412 | 4.64% |
| &nbsp;&nbsp;&nbsp;&nbsp;Other revolving and installment | 51836 | 5.62% | 51834 | 4.98% | 48045 | 4.53% | 52071 | 4.85% | 57574 | 4.41% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total consumer | 863883 | 4.24% | 817324 | 3.96% | 682280 | 3.62% | 775997 | 3.91% | 666607 | 3.78% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans <sup>(1)</sup> | 2359790 | 4.90% | 2262361 | 4.41% | 1782657 | 4.25% | 2059435 | 4.33% | 1858686 | 4.14% |
| Federal Reserve/FHLB stock | 19603 | 6.80% | 18449 | 5.35% | 6496 | 4.34% | 13824 | 5.67% | 6329 | 4.36% |
| &nbsp;&nbsp;Total interest earning assets | 3473968 | 4.10% | 3518350 | 3.65% | 3194530 | 3.02% | 3298644 | 3.52% | 3018172 | 3.09% |
| Noninterest earning assets | 232754 |  | 224804 |  | 159370 |  | 202011 |  | 160648 |  |
| &nbsp;&nbsp;Total assets | $3706722 |  | $3743154 |  | $3353900 |  | $3500655 |  | $3178820 |  |
| **Interest-Bearing Liabilities** |  |  |  |  |  |  |  |  |  |  |
| Interest-bearing demand deposits | $692217 | 0.50% | $659696 | 0.13% | $754432 | 0.13% | $692287 | 0.22% | $697276 | 0.14% |
| Money market and savings deposits | 1185502 | 1.39% | 1180576 | 0.40% | 1039492 | 0.14% | 1113426 | 0.55% | 1023677 | 0.15% |
| Time deposits | 214264 | 1.20% | 234459 | 0.74% | 225497 | 0.46% | 221997 | 0.70% | 215624 | 0.54% |
| Fed funds purchased | 86350 | 3.78% | 84149 | 2.31% |  | —% | 63296 | 2.46% | 3 | —% |
| Short-term borrowings | 178533 | 3.82% | 168750 | 2.41% |  | —% | 89932 | 3.10% |  | —% |
| Long-term debt | 58830 | 4.24% | 58843 | 3.98% | 58938 | 3.61% | 58864 | 3.98% | 50759 | 3.74% |
| &nbsp;&nbsp;Total interest-bearing liabilities | 2415696 | 1.45% | 2386473 | 0.66% | 2078359 | 0.27% | 2239802 | 0.71% | 1987339 | 0.28% |
| **Noninterest-Bearing Liabilities and Stockholders' Equity** |  |  |  |  |  |  |  |  |  |  |
| Noninterest-bearing deposits | 870948 |  | 920340 |  | 851210 |  | 851821 |  | 784998 |  |
| Other noninterest-bearing liabilities | 70266 |  | 64067 |  | 67247 |  | 62677 |  | 60424 |  |
| Stockholders' equity | 349812 |  | 372274 |  | 357084 |  | 346355 |  | 346059 |  |
| &nbsp;&nbsp;Total liabilities and stockholders' equity | $3706722 |  | $3743154 |  | $3353900 |  | $3500655 |  | $3178820 |  |
| Net interest income (1) |  |  |  |  |  |  |  |  |  |  |
| Net interest rate spread |  | 2.65% |  | 2.99% |  | 2.75% |  | 2.81% |  | 2.81% |
| Net interest margin, tax-equivalent <sup>(1)</sup> |  | 3.09% |  | 3.21% |  | 2.84% |  | 3.04% |  | 2.90% |

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

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## Exhibit 99.2

#### Exhibit 99.2

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|:---|:---|
| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g001.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EARNINGS PRESENTATION 4Q 2022 Alerus  |

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|:---|:---|
| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g002.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 the 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 the 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 loan 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 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 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 ; 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, the negative effects of the ongoing COVID - 19 pandemic, including its effects on the economic environment, our clients, and our operations, including due to supply chain disruptions, as well as any changes to federal, state, or local government laws, regulations, or orders in response to the 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  |

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|:---|:---|
| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g003.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2 Retirement and Benefit Revenue 31.8% Wealth Management Revenue 9.9% Mortgage Revenue 8.0% Banking Fees 3.0% Net Interest Income 47.3% FOR THE TWELVE MONTHS ENDED DEC EMBER 31 , 2022 Noninterest income: $111.2 million Net interest income: $99.7 million $27.8 $31.9 $34.2 $36.7 $32.1 2018 2019 2020 2021 2022 OUR MISSION ▪ To positively impact our clients' financial potential - through holistic guidance, unparalleled service, and engaging technology. COMPANY PROFILE Data as of 12/31/2022. DIVERSIFIED REVENUE STREAM ASSET GROWTH (IN BILLIONS) Banking Assets Retirement and Benefits AUA/AUM Wealth Management AUA/AUM $2.6 $3.1 $3.3 $4.0 $3.6 2018 2019 2020 2021 2022 NONINTEREST INCOME AS A % OF REVENUE: 52.7% DIVERSIFIED FINANCIAL SERVICES COMPANY ▪ $3.8 billion Banking assets ▪ $32.1 billion Retirement and Benefits AUA/AUM ▪ $3.6 billion Wealth Management AUA/AUM ▪ $812.3 million in Mortgage Originations YTD ALERUS BUSINESS LINES ▪ Banking ▪ Retirement and Benefits ▪ Wealth Management ▪ Mortgage $2.2 $2.4 $3.0 $3.4 $3.8 2018 2019 2020 2021 2022  |

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|:---|:---|
| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g004.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3 A BIG COMPANY MODEL WITH SMALL COMPANY EXECUTION OUR DIVERSE BUSINESS LINES Revenue data LTM as of 12/31/2022. 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 BUSINESS 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 32% of Revenue 8% of Revenue 10% of Revenue 50% of Revenue  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g005.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 ▪ 38,500 consumer clients ▪ 16,600 commercial clients ▪ 8,100 employer - sponsored retirement plans Data as of 12/31/2022. ▪ 384,800 employer - sponsored retirement plan participants ▪ 69,000 health savings account participants ▪ 37,900 flexible spending account/health reimbursement arrangement participants  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g006.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5 STRONG GROWTH MARKETS AND STABLE CORE FUNDING MARKET DISTRIBUTION DEPOSITS ($2915) LOANS ($2444) (1) ARB ASSETS UNDER ADMIN/MGMT. ($32123) WM ASSETS UNDER ADMIN/MGMT. ($3583) MORTGAGE ORIGINATIONS ($812) ($ IN MILLIONS) Data as of 12/31/2022. 1 – Loans in our national market are purchased participation loans not sourced directly through advisors located in one of our g eographical markets. LEGEND 31.1% 49.1% 17.4% 2.4% 38.4% 24.9% 12.4% 24.3% 5.4% 91.4% 3.2% 73.4% 10.4% 3.4% 12.8% 9.0% 13.2% 77.8%  |

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|:---|:---|
| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g007.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 $691.6 million as of December 31, 2022 Cumulative rollovers have added $1.1 billion of assets under management Residential real estate first mortgages totaled $679.6 million in the fourth 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 RESULT S ONE ALERUS  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g008.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 2011 REBRANDED TO ALERUS 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 BN C National Bank EXPANDED TO MICHIGAN Acquired PensionTrend, Inc. and PensionTrend Investment Advisers, LLC (Okemos, MI) Acquired Tegrit Administrators, LLC EXPANDED TO NEW HAMPSHIRE 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)  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g009.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8 ▪ Diversified client base consists of 38,500 consumers clients , 16,600 commercial clients and over 384,800 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"  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g010.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g011.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10 FOURTH QUARTER HIGHLIGHTS  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g012.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11 ▪ Reported net income of $10.9 million for the fourth quarter of 2022, or $0.53 per diluted common share. ▪ Loans increased $686.0 million, or 39.0%, compared to the end of the fourth quarter of 2021. Excluding the $270.4 million in loans acquired from Metro Phoenix Bank, organic loan growth increased $415.6 million compared to the end of the fourth quarter of 2021. ▪ Return on Assets increased 15 bps from the fourth quarter of 2022 to 1.17%. ▪ Net interest income decreased $1.4 million, or 4.8%, compared to the third quarter, primarily due to deposit rate increases in a highly competitive deposit environment driven by rapid rate increases by the Federal Reserve Bank. ▪ Net interest margin decreased 12 basis points due to a 79 basis point increase on interest - bearing liabilities, a result of rising rates, partially offset by a 45 basis point increase in interest earning asset yields, led by a 49 basis point increase in loan yields. ▪ Maintained strong credit quality. No additional provision expense was recorded for the quarter. Allowance for loan losses to non - performing loans was 821%. SUCCESS IS NEVER FINAL Q4 2022 SUMMARY  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g013.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12 INCOME STATEMENT Q4 2022 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 $26,964 $28,316 $22,789 $99,729 $87,099 Provision for Loan Losses — — (1500) — (3500) Net Interest Income After Provision for Loan Losses 26,964 28,316 24,289 99,729 90,599 Noninterest Income 25,517 27,010 33,718 111,223 147,387 Noninterest Expense 37,948 42,767 41,276 158,770 168,909 Income Before Income Taxes 14,533 12,559 16,731 52,182 69,077 Income Tax Expense 3,624 2,940 4,026 12,177 16,396 Net Income $10,909 $9,619 $12,705 $40,005 $52,681 Per Common Share Data Earnings Per Common Share - Diluted $0.53 $0.47 $0.72 $2.10 $2.97 Diluted Average Common Shares Outstanding 20,232 20,230 17,480 18,884 17,486 Performance Ratios Return on Average Total Assets 1.17 % 1.02 % 1.50 % 1.14 % 1.66 % Return on Average Tangible Common Equity (1) 16.63 % 13.89 % 17.36 % 15.09 % 18.89 % Noninterest Income as a % of Revenue 48.62 % 48.82 % 59.67 % 52.72 % 62.86 % Net Interest Margin (Tax-Equivalent) 3.09 % 3.21 % 2.84 % 3.04 % 2.90 % Efficiency Ratio (1) 69.62 % 74.76 % 71.06 % 72.86 % 70.02 % December 31, 2022 December 31, 2021 Three months ended Year ended 2022 December 31, September 30, 2022 December 31, 2021  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g014.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13 PERFORMANCE RATIOS 1 – Represents a non - GAAP Financial measure. See "Non - GAAP Disclosure Reconciliation." 2 – Rates have been annualized 3 – Q3 2022 Rates segregate merger and acquisition expenses associated with the acquisition of Metro Phoenix Bank. 1.50% 1.02% 1.17% 0.15% 1.17% Q4 2021 Q3 2022 Q4 2022 Return on Average Assets (2)/(3) 17.36% 13.89% 16.63% 1.86% 15.75% 16.63% Q4 2021 Q3 2022 Q4 2022 Return on Average Tangible Common Equity (1)/(2)/(3) $17.87 $13.76 $14.37 Q4 2021 Q3 2022 Q4 2022 Tangible Book Value per Share (1)  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g015.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14 KEY BALANCE SHEET ITEMS DOLLARS IN MILLIONS $1,718.5 $1,976.1 $2,358.2 $64.2 $5.2 $1.6 $281.1 $1,782.7 $2,262.4 $2,359.8 Q4 2021 Q3 2022 Q4 2022 Average Loans Core Loans PPP Loans MPB Loans $2,019.4 $1,838.9 $2,092.1 $851.2 $829.1 $870.9 $327.1 $2,870.6 $2,995.1 $2,963.0 Q4 2021 Q3 2022 Q4 2022 Average Deposits Interest-Bearing Deposits Non-Interest Bearing Deposits MPB Deposits Core 4.5% Linked Quarter Loans 37.2% Year-over-year Average (1.1)% Linked Quarter Deposits 3.2% Year-over-year  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g016.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15 1.30% 1.39% 1.73% 1.80% 1.27% 0.16% 1.43% 0.00% 0.40% 0.80% 1.20% 1.60% 2.00% 2018 2019 2020 2021 2022 318% 306% 674% 1,437% 821% 00% 200% 400% 600% 800% 1,000% 1,200% 1,400% 1,600% 2018 2019 2020 2021 2022 0.33% 0.33% 0.17% 0.09% 0.10% 0.00% 0.20% 0.40% 0.60% 0.80% 2018 2019 2020 2021 2022 ASSET QUALITY AND RESERVE LEVELS OVERVIEW NPAS / ASSETS (%) RESERVES / LOANS (%) 1 RESERVES / NPLS (%) ▪ Solid asset quality based on low levels of nonperforming assets. ▪ Strong reserve levels as criticized loans remain low and below pre - pandemic levels. ▪ Strong credit quality as evidenced by historic net charge - off ratio of 27 bps, dating back 25 years. NCO/ Avg Loans 0.18% 0.33% 0.03% (0.04)% 0.02% 1 – The 2022 total segregates loans acquired from Metro Phoenix Bank  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g017.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16 STRONG CORE FUNDING MIX ▪ Commercial transaction accounts totaled $1.3 billion and increased 2.4% YoY. Consumer transaction accounts totaled $708.1 million and decreased 4.2% YoY. ▪ Synergistic deposits, including HSA deposits and those sourced through retirement plans and participants, totaled $669.6 million, with a YTD cost of 0.41%. ▪ CD portfolio is primarily 6 - month maturity CD with over 50% held by clients for 10+ years ▪ Stable deposit relationships with 23 - year average tenure on 10 largest depositors. As of December 31, 2022, core deposits totaled $2.9 billion or 98% of our total deposits OVERVIEW AS OF DECEMBER 31 , 2022 DECEMBER 31, 2022 DEPOSIT FUNDING ($2,915 MM) LOW COST OF FUNDS Data YTD as of 12/31/2022. Non - Interest Bearing Deposits 29.5% Money Market & Savings Deposits 39.0% Interest - Bearing Demand Deposits 18.5% Time Deposits 7.3% HSA Deposits 5.7% 0.32% 0.45% 0.51% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% Cost of Total Deposits Cost of Interest- Bearing Deposits Total Cost of Funds 2019 2020 2021 2022  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g018.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17 12.9% 16.7% 16.8% 18.6% 16.5% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 2018 2019 2020 2021 2022 7.5% 11.1% 9.2% 9.8% 11.3% 8.9% 12.9% 13.2% 15.1% 13.7% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 2018 2019 2020 2021 2022 Tier 1 Leverage Tier 1 Capital STRONG CAPITAL AND SOURCES OF LIQUIDITY COMMON EQUITY TIER 1 TIER 1 CAPITAL/TIER 1 LEVERAGE RATIOS SOURCES OF LIQUIDITY TOTAL RISK BASED CAPITAL Regulatory Capital Minimum to be considered well capitalized. (dollars in thousands) Cash and cash equivalents $54,242 Unencumbered securities – AFS 707,836 FHLB borrowing availability 531,583 Brokered CD capacity 755,927 Fed funds lines 102,000 Total as of 12/31/2022 $2,151,588 Tier 1 Capital Leverage Regulatory Capital Minimum to be considered well capitalized. 8.4% 12.5% 12.8% 14.7% 13.4% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 2018 2019 2020 2021 2022  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g019.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18 KEY REVENUE ITEMS DOLLARS IN THOUSANDS 1 – Other noninterest income consists of service charges on deposit accounts, net gains (losses) on investment securities, speci fic interchange income and other noninterest income. $20,570 $28,218 $26,939 $2,219 $98 $25 $22,789 $28,316 $26,964 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 Q4 2021 Q3 2022 Q4 2022 Net Interest Income Net Interest Income PPP fees $18,552 $16,597 $16,599 $5,633 $4,852 $5,144 $7,967 $3,782 $2,170 $1,566 $1,779 $1,604 $33,718 $27,010 $25,517 Q4 2021 Q3 2022 Q4 2022 Noninterest Income Retirement and benefits Wealth management Mortgage banking Other(1) Net Interest (4.8%) Linked Quarter Income 18.3% Year-over-year Noninterest (5.5)% Linked Quarter Income (24.3)% Year-over-year  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g020.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19 NET INTEREST MARGIN (NIM) LOAN YIELD (1) /N ET INTEREST MARGIN (1) QUARTERLY HIGHLIGHTS AVERAGE EFFECTIVE FF RATE/COST OF FUNDS (1) 1 – Rates have been annualized for interim periods. Source: Alerus Financial Corporation; Federal Reserve. ▪ Loan yield increased as a result of an increase in the average rate received from loans compared to Q3 2022. ▪ Average loans increased $97.4 million compared to Q3 2022, primarily due to a $50.9 million increase in average commercial loans. ▪ Net interest margin decreased 12 basis points, primarily due to a 51 basis point increase on the average rate paid on deposits. Purchase accounting accretion impacted net interest margin by 10 bps in Q4 2022. ▪ The average rate paid on short - term borrowings and fed funds purchased increased 143 basis points compared to Q3 2022. ▪ The average balance of short - term borrowings and fed funds purchased increased as loan growth outpaced deposit growth in Q4 2022. 1.83% 2.16% 0.08% 1.68% 0.97% 0.51% 0.20% 0.51% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 2019 2020 2021 2022 Average effective FF rate Cost of funds 4.97% 4.35% 4.14% 4.33% 3.65% 3.16% 2.73% 3.02% 0.06% 0.17% 0.02% 3.22% 2.90% 3.04% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 2019 2020 2021 2022 Loan yield NIM ex. PPP Effect of PPP  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g021.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20 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 $384 37.1% 37.1% At Floor 127 12.3% 49.4% 0 - 50 bps above floor 30 2.9% 52.3% >50bps to above floor 494 47.7% 100.0% Total $1,035 100.0% $ in Millions Index Above the Floor At the Floor No Floor Total Total % Prime $342 $36 $170 $548 53.0% 1 Month LIBOR – – 146 146 14.1% 12 Month LIBOR 92 2 18 112 10.8% FHLB 5 Year 13 16 10 39 3.7 % Other 77 73 40 190 18.4% Total $524 $127 $384 $1,035 100.0 % Percent of Total 50.6% 12.3% 37.1% 100.0% NET INTEREST INCOME NIM: 3.21% 0.01% 0.29% (0.01)% 0.00% (0.41) % 0.00% 3.09% ▪ Average loan rates increased 49 basis points due to loans repricing as a result of a rising interest rate environment. ▪ Short - term borrowings and fed funds purchased increased in the quarter due to loan growth outpacing deposit growth ▪ Cost of deposits increased due to a more competitive deposit environment arising from higher interest rates and from banks looking to fund loan growth. ▪ Per our last 10 - Q, assuming a parallel move in interest rates, +300 bps move would result in a decrease in net interest income of 10.1% in the following 12 months but a 2.4% increase in the following 24 months. A +400 bps move would result in a 13.4% decrease in the following 12 months but a 0.7% increase in the following 24 months.  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g022.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21 RETIREMENT AND BENEFITS OVERVIEW – 8,100 PLANS - NATIONAL FOOTPRINT ASSETS UNDER ADMINISTRATION/MANAGEMENT REVENUE MIX 2 ▪ RETIREMENT (58% of Revenue) - Provide recordkeeping and administration services to qualified retirement plans ▪ TRUST CUSTODY & ADVISORY SERVICES (10% of Revenue) - Provide investment fiduciary services to retirement plans ▪ HEALTH AND WELFARE (11% of Revenue) - Provide HSA, FSA, COBRA recordkeeping and administration services to employers ▪ ONE ALERUS SYNERGIES • IRA rollovers $145.4 million YTD 12/31/2022 • Deposits $692 million - HSA deposits, 401(k) Money Market Funds, Emergency Savings, Terminated Participants • Managed accounts • Commercial Banking client expansion ($ in Millions) QUARTERLY RESULTS ($000s) 1 Net Income: $28,404 $25,720 $31,545 $40,929 Revenue: $63,811 $60,956 $71,709 $67,135 Profit Margin: 44.5% 42.2% 44.0% 61.0% Profit Margin: 47.5% 63.1% 69.6% Recurring annual plan revenue 81% Transaction based revenue 19% $8,808 $10,467 $11,555 $18,552 $16,597 $16,599 $0 $5,000 $10,000 $15,000 $20,000 Q4 2021 Q3 2022 Q4 2022 Net Income Revenue 1 – Net income before tax and indirect allocations. Includes funds transfer pricing credit of deposits sourced by division .. 2 – Revenue mix includes 35% market sensitive revenue. $31,905 $34,200 $36,733 $32,123 375,000 390,000 405,000 420,000 435,000 450,000 465,000 480,000 495,000 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 2019 2020 2021 2022 AUA/AUM Participants  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g023.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22 $3,446 $3,276 $4,227 $5,633 $4,852 $5,144 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 Q4 2021 Q3 2022 Q4 2022 Net Income Revenue $3,103 $3,339 $4,040 $3,583 $0 $1,000 $2,000 $3,000 $4,000 2019 2020 2021 2022 ▪ ADVISORY AND PLANNING SERVICES • Retirement Planning, Tax Planning, Insurance Planning, Wealth Transfer Planning and Business Transition Planning ▪ ASSET MANAGEMENT • Personalized SMA strategies, Tax Management and Global Perspective ▪ FIDUCIARY SERVICES • IRA, Agency and Personal Trust ▪ ONE ALERUS SYNERGIES • IRA rollovers • 401(k) managed accounts WEALTH MANAGEMENT SERVICES OVERVIEW OF SERVICES ASSETS UNDER ADMINISTRATION/MANAGEMENT REVENUE MIX ($ in Millions) QUARTERLY RESULTS 1 ($000s) Net Income: $8,314 $9,162 $12,183 $14,891 Revenue: $15,502 $17,451 $21,052 $20,870 Profit Margin: 53.6% 52.2% 57.9% 71.4% Profit Margin: 61.2% 67.5% 82.2% Asset Management 87% Brokerage 9% Insurance & Advisory 4% 1 – Net income before tax and indirect allocations. Includes funds transfer pricing credit of deposits sourced by division ..  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g024.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23 MORTGAGE BANKING OVERVIEW OF SERVICES YEARLY MORTGAGE ORIGINATIONS ($000s) QUARTERLY RESULT S ▪ 1st and 2nd mortgage product offerings through centralized mortgage operations in Minneapolis, Minnesota ▪ Our Twin Cities originators averaged $56 million in annual volume over the last three years ▪ YTD 2,068 loans closed, approximately 88% purchase originations, with approximately 91% sourced from the Twin Cities MSA ▪ Q4 2022 96% pull through on secondary market ▪ ONE ALERUS SYNERGIES • Through enhanced technology, digital applications total approximately 90%. Paperless environment eliminated nearly 200,000+ pages printed on a monthly basis • As of December 31, 2022, residential real estate first mortgages excluding construction mortgages totaled $644.6 million QUARTERLY ORIGINATIONS 1 – Net income before tax and indirect allocations. Purchase: 71.2% 45.2% 51.2% 88.3% Refinance: 28.8% 54.8% 48.8% 11.7% Purchase: 57.7% 94.0% 92.2% Refinance: 42.3% 6.0% 7.8% $863.4 $1,632.5 $1,592.1 $604.8 $83.0 $146.5 $244.0 $207.5 $946.4 $1,779.0 $1,836.1 $812.3 $- $500.0 $1,000.0 $1,500.0 $2,000.0 2019 2020 2021 2022 Portfolio Sale $295.4 $163.9 $87.4 $61.4 $66.0 $38.9 $356.8 $229.9 $126.3 $- $250.0 $500.0 $750.0 Q4 2021 Q3 2022 Q4 2022 Portfolio Sale Q4 Q1 Q2 Q3 Q4 ($000s) 2021 2022 2022 2022 2022 Orignation and Sale $9,812 $4,935 $5,821 $5,028 $3,145 Fair Value Changes (1846) (4) 217 (1246) (974) Total $7,966 $4,931 $6,038 $3,782 $2,171 Net income (1) $1,329 $620 $1,387 $(308) $(1489) Profit Margin 16.7% 12.6% 23.0% (8.1%) (68.6%) Gain on Sale Margin 3.2% 2.8% 3.4% 2.6% 3.0%  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g025.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24 $27,678 $26,247 $24,076 $1,936 $1,926 $1,892 $5,220 $5,373 $4,405 $1,681 $1,314 $1,454 $216 $1,812 $4,545 $6,095 $6,121 $41,276 $42,767 $37,948 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 Q4 2021 Q3 2022 Q4 2022 Other(1) Nonrecurring expense(2) 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, tra vel, mortgage and lending, and other noninterest expense. 2 – Nonrecurring expenses consists of merger & acquisition expense and 1x executive recruiting expense. QUARTERLY HIGHLIGHTS YEAR OVER YEAR HIGHLIGHTS ▪ Decrease in compensation expense primarily the result of a decrease in mortgage incentives associated with the decline in mortgage originations as well as an accrual adjustment to performance bonus accruals. ▪ Professional fees and assessments decreased due to the one - time expenses associated with the acquisition Metro Phoenix Bank in Q3 2022. ▪ Business services, software and technology expense decreased as a result of the timing of contract renewals. ▪ Compensation expense decreased primarily due to lower mortgage compensation from a decline in mortgage originations. ▪ Employee benefits decreased primarily due to a decrease in share - based compensation from an acceleration upon employee retirements. ▪ Other noninterest expense increased primarily due to an increase in reserves related to unfunded commitments arising from the growth in our commercial real estate portfolio. Noninterest (11.3)% Linked quarter Expense (8.1)% Year-over-year  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g026.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25 APPENDIX  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g027.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26 BY OUTSTANDING BALANCES WELL DIVERSIFIED LOAN PORTFOLIO As of 12/31/2022 1 - 4 Residential 1st 26% 1 - 4 Residential Construction 1% 1 - 4 Residential Jr Lien 1% HELOC 5% C&I 22% Ag Production 1% Other CRE 21% Owner Occupied CRE 10% Ag Land 2% Multifamily 4% Retail Indirect 1% Other Consumer 2% RE Construction 4%  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g028.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27 SUMMARY BY INDUSTRY TYPE TOTAL COMMITMENT COMMERCIAL & INDUSTRIAL 1 1 – Commercial and industrial loans includes C & I, loans to public entities, and other loans. It excludes PPP and 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 3% Health Care and Social Assistance 6% Professional, Scientific and Technical Services 8% Manufacturing 11% Real Estate and Rental and Leasing 11% Wholesale Trade 7% Construction 11% Finance and Insurance 11% Other 19% Motor Vehicle and Parts Dealers 7% Food and Beverage Stores 1% Electronics and Appliance Stores 2% Gasoline Stations 1% Nonstore Retailers 1% Other Retail Trade 1% Retail Trade 13%  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g029.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28 Office 15% Retail 12% Warehouse 16% Manufacturing 1% Commercial Development 2% Mixed Commercial 3% Apartments 14% Hotel 2% Medical or Nursing Facilities 5% Commercial/Land Development 26% Ag Land 4% LOANS SECURED BY REAL ESTATE TOTAL COMMITMENT COMMERCIAL REAL ESTATE 1 1 – Loans secured by commercial real estate include multifamily loans, ag land, other CRE, owner occupied CRE, and ag production .. Portfolio Avg FICO Avg LTV Serviced 758 66% Non - Serviced 796 31% Junior 762 76% HELOC 796 74% TOTAL COMMITMENT RESIDENTIAL REAL ESTATE Serviced 55% 1 - 4 1st Non - Serviced 5% 1 - 4 Family Jr Liens 3% 1 - 4 Family Revolving 29% 1 - 4 Family Construction 7% Held for Sale 1%  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g030.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;29 LINE OF CREDIT UTILIZATION C&I AND HOME EQUITY LINES OF CREDIT 1 1 – Commercial and industrial loans includes revolving C & I loans and other loans. It excludes non - revolving C&I loans, ag prod uction, PPP 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%  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g031.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30 CHANGES IN THE ALLL BY PORTFOLIO SEGMENT ALLOWANCE FOR LOAN LOSSES (dollars in thousands) Commercial Commercial and industrial $8,925 $1,168 $(1396) $461 $9,158 Real estate construction 783 587 — 76 1,446 Commercial real estate 12,376 178 — 134 12,688 Total commercial 22,084 1,933 (1396) 671 23,292 Consumer Residential real estate first mortgage 6,532 (763) — — 5,769 Residential real estate junior lien 1,295 (288) — 282 1,289 Other revolving and installment 481 30 (153) 170 528 Total consumer 8,308 (1021) (153) 452 7,586 Unallocated 1,180 (912) — — 268 Total $31,572 $— $(1549) $1,123 $31,146 Ending Balance Year ended December 31, 2022 Loan Charge-offs Loan Recoveries Beginning Balance Provision for Loan Losses  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g032.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;31 ALLOCATION BY PORTFOLIO SEGMENT ALLOWANCE FOR LOAN LOSSES (dollars in thousands) Commercial and industrial $9,158 23.9% $8,925 24.8% Real estate construction 1,446 4.0% 783 2.3% Commercial real estate 12,688 36.0% 12,376 34.1% Residential real estate first mortgage 5,769 27.8% 6,532 29.1% Residential real estate junior lien 1,289 6.2% 1,295 7.1% Other revolving and installment 528 2.1% 481 2.6% Unallocated 268 — 1,180 — Total loans $31,146 100.0% $31,572 100.0% total loans December 31, 2022 December 31, 2021 Allocated of loans to Allowance total loans Allocated Allowance of loans to Percentage Percentage  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g033.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;32 ALLOCATION BY RISK SEGMENT (DOLLARS IN THOUSANDS) ALLOWANCE FOR LOAN LOSSES As of 12/31/2022. 1 - Unguaranteed balances exclude PPP loans as well as loans that are guaranteed by another government agency. Reserve/ Unguaranteed Reserve/Total Risk Level Loans Loans Pass $2,408,636 $2,396,975 $28,000 1.2% 1.2% Special Mention 21,954 21,954 918 4.2% 4.2% Substandard 9,458 8,761 1,005 11.5% 10.6% Total Loans Evaluated Collectively 2,440,048 2,427,690 29,923 1.2% 1.2% Total Loans Evaluated Individually 3,945 3,945 955 24.2% 24.2% Unallocated — — 268 — — Total 2,443,993 2,431,635 31,146 1.3% 1.3% Amount Total Loans Balance 1 Reserve Unguaranteed  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g034.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;33 FINANCIAL HIGHLIGHTS (dollars in thousands, except where otherwise noted) Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Total Assets 3,392,691 $3,336,199 $3,295,065 $3,691,253 $3,779,637 $ Total Loans 1,758,020 1,818,042 1,890,243 2,318,231 2,443,994 Total Deposits 2,920,551 2,892,266 2,619,550 2,961,811 2,915,484 Tangible Common Equity 1 307,663 277,818 258,310 275,000 287,330 Net Income 12,705 $10,184 $9,293 $9,619 $10,909 $ ROAA (%) 1.50 1.26 1.14 1.02 1.17 ROATCE(%) 1 17.36 14.72 15.25 13.89 16.63 Net Interest Margin (FTE) (%) 2.11 2.83 2.98 3.21 3.09 Efficiency Ratio (FTE) (%) 1 71.06 72.25 74.72 74.76 69.62 Non-Int. Income/Op. Rev. (%) 59.67 57.62 56.20 48.82 48.62 Earnings per common share - diluted 0.72 $0.57 $0.52 $0.47 $0.53 $ Total Equity/Total Assets (%) 10.59 9.85 9.32 9.34 9.44 Tang. Cmn. Equity/Tang. Assets (%) 1 9.21 8.46 7.96 7.59 7.74 Loans/Deposits (%) 60.19 62.86 72.16 78.27 83.83 NPLs/Loans (%) 0.12 0.23 0.23 0.23 0.16 NPAs/Assets (%) 0.09 0.15 0.16 0.17 0.10 Allowance/NPLs (%) 1,437.05 752.38 717.92 583.97 820.93 Allowance/Loans (%) 1.80 1.74 1.66 1.34 1.27 NCOs/Average Loans (%) (0.21) (0.03) 0.07 0.07 (0.03) Quarterly 1 – Represents a non - GAAP financial measure. See "Non - GAAP Disclosure Reconciliation".  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g035.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;34 FINANCIAL HIGHLIGHTS 1 – Represents a non - GAAP financial measure. See "Non - GAAP Disclosure Reconciliation". (dollars 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 Equity 1 147,152 240,008 274,043 307,663 287,329 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  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g036.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;35 NON - GAAP DISCLOSURE RECONCILIATION ($000s, except where otherwise noted) Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Tangible common equity to tangible assets Total common stockholders' equity 359,403 $328,505 $307,158 $344,839 $356,872 $ Less: Goodwill 31,490 31,490 31,337 46,060 47,087 Less: Other intangible assets 20,250 19,197 17,511 23,779 22,455 Tangible common equity (a) 307,663 277,818 258,310 275,000 287,330 Total assets 3,392,691 3,336,199 3,295,065 3,691,253 3,779,637 Less: Goodwill 31,490 31,490 31,337 46,060 47,087 Less: Other intangible assets 20,250 19,197 17,511 23,779 22,455 Tangible assets (b) 3,340,951 3,285,512 3,246,217 3,621,414 3,710,095 Tangible common equity to tangible assets (a)/(b) 9.21% 8.46% 7.96% 7.59% 7.74% Tangible common equity per common share Total stockholders' equity 359,403 $328,505 $307,158 $344,839 $356,872 $ Less: Goodwill 31,490 31,490 31,337 46,060 47,087 Less: Other intangible assets 20,250 19,197 17,511 23,779 22,455 Tangible common equity (c) 307,663 277,818 258,310 275,000 287,330 Common shares outstanding (d) 17,213 17,289 17,306 19,987 19,992 Tangible common equity per common share (c)/(d) 17.87 $16.07 $14.93 $13.76 $14.37 $ Return on average tangible common equity Net income 12,705 $10,184 $9,293 $9,619 $10,909 $ Add: Intangible amortization expense (net of tax) 832 832 832 1,046 1,046 Net income, excluding intangible amortization (e) 13,537 11,016 10,125 10,665 11,955 Average total equity 357,084 350,545 312,515 372,274 349,812 Less: Average goodwill 30,930 31,490 31,488 48,141 46,283 Less: Average other intangible assets (net of tax) 16,843 15,569 14,737 19,466 18,243 Average tangible common equity (f) 309,311 303,486 266,290 304,667 285,286 Return on average tangible common equity (e)/(f) 17.36% 14.72% 15.25% 13.89% 16.63% Efficiency Ratio Noninterest expense 41,276 $38,071 $39,984 $42,767 $37,948 $ Less: Intangible amortization expense 1,053 1,053 1,053 1,324 1,324 Adjusted noninterest expense (i) 40,223 37,018 38,931 41,443 36,624 Net interest income 22,789 21,673 22,776 28,316 26,964 Noninterest income 33,718 29,470 29,226 27,010 25,517 Tax-equivalent adjustment 99 94 100 112 124 Total tax-equivalent revenue(j) 56,606 51,237 52,102 55,438 52,605 Efficiency ratio (i)/(j) 71.06% 72.25% 74.72% 74.76% 69.62% Quarterly  |

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| &nbsp;&nbsp;![GRAPHIC](alrs-20230125xex99d2g037.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;36 NON - GAAP DISCLOSURE RECONCILIATION ($000s, 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  |

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