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A regional bank like a smaller U.S. Bancorp (USB), plus the retirement and wealth management services of a Principal Financial (PFG).

A mini-JPMorgan Chase (JPM) or Wells Fargo (WFC) focused on banking, wealth management, and retirement services in specific regions.

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• Commercial & Consumer Banking: Provides a comprehensive suite of banking products and services, including deposits, loans for businesses and individuals, and treasury management solutions.
• Wealth Management Services: Offers financial planning, investment management, and trust services to individuals, families, and businesses to help grow and protect their assets.
• Retirement Plan Services: Delivers comprehensive 401(k) and other retirement plan administration, recordkeeping, and consulting services for businesses and their employees.
• Residential Mortgage Lending: Originates and services residential mortgage loans to help individuals and families purchase or refinance their homes.

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1. Businesses and Employers:

This category includes small to middle-market businesses and larger corporations. Alerus provides commercial banking services (such as loans, deposits, and treasury management) to these entities. Crucially, they also serve as plan administrators for employer-sponsored retirement plans (e.g., 401(k), 403(b)) and benefit solutions (e.g., Health Savings Accounts, Flexible Spending Accounts). In these cases, the direct customer for Alerus's services is the employer company itself.

2. Individuals and Families:

Alerus caters to individuals for their personal financial needs. This includes retail banking customers (for checking, savings, mortgages, and personal loans), as well as individuals and families seeking comprehensive wealth management services (including investment advisory, trust services, and financial planning). Furthermore, employees who participate in the employer-sponsored retirement and benefit plans administered by Alerus are also considered individual customers.

3. Institutional Clients:

This category encompasses various institutional entities such as non-profit organizations, foundations, endowments, and governmental entities. Alerus provides specialized wealth management services and banking solutions tailored to the unique requirements of these institutional clients.

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Katie A. Lorenson, President and Chief Executive Officer

Katie A. Lorenson was appointed President and Chief Executive Officer of Alerus Financial effective January 1, 2022, after serving as the company's Chief Financial Officer since December 2017. During her tenure as CFO, she spearheaded Alerus' initial public offering in 2019. Before joining Alerus, Ms. Lorenson served as Chief Financial Officer for MidWestOne Financial Group, Inc. She previously held the position of Chief Financial Officer for Central Bancshares, which was acquired by MidWestOne Financial Group, Inc. in 2015. Her earlier career included serving as a manager on the Financial Institutions Team for RSM US LLP (formerly McGladrey & Pullen).

Alan A. Villalon, Executive Vice President and Chief Financial Officer

Alan A. Villalon was named Chief Financial Officer and Executive Vice President of Alerus Financial, effective January 28, 2022, taking over from Katie Lorenson when she became CEO. Mr. Villalon is a strategic finance executive with over 25 years of experience in financial services. Most recently, he served as Deputy Director of Investor Relations and Senior Vice President at U.S. Bank. Prior to U.S. Bank, he spent the majority of his career in equity analyst research roles, including serving as a Senior Research Analyst at Thrivent Asset Management and Nuveen Asset Management/First American Funds Advisors.

Randy L. Newman, Director

Randy L. Newman joined Alerus (formerly First National Bank North Dakota) in 1981, becoming President in 1987 and Chief Executive Officer in 1995. He transitioned from CEO to Executive Chairman of the Board on January 1, 2022, and currently serves as a Director. Under his leadership, Alerus underwent significant expansion, including 24 acquisitions, transforming into a diversified financial services company. Before joining Alerus, Mr. Newman taught Corporate Finance and Business Strategy courses at the University of North Dakota. He also served on the Board of Directors for the Federal Home Loan Bank in Des Moines from 1998 to 2007 and as a director of the Ninth Federal Reserve Bank in Minneapolis from 2013 to 2018.

Karin M. Taylor, Executive Vice President and Chief Operating Officer

Karin M. Taylor joined Alerus as Chief Risk Officer in November 2018. As Executive Vice President and Chief Operating Officer, she oversees risk management, regulatory compliance, legal, internal audit, operations, and information technology. Ms. Taylor brings approximately 30 years of experience in the financial industry, with nearly 20 years specializing in risk management. Prior to Alerus, she served as Chief Risk Officer at MidWestOne Bank and previously as Chief Risk Officer for Central Bank, which was acquired by MidWestOne Financial Group, Inc. in 2015.

Jim R. Collins, Executive Vice President and Chief Banking and Revenue Officer

Jim R. Collins joined Alerus as Executive Vice President and Chief Banking and Revenue Officer in May 2022. He has nearly 30 years of experience in the financial services industry, with extensive expertise in commercial banking. Before joining Alerus, he served as the Minnesota regional CEO and president of corporate banking for Old National Bank. Prior to that, he held various leadership roles for Anchor Bank for over 13 years, including senior vice president of commercial banking, market president, and regional president. Mr. Collins also served as director of commercial, community, and wealth when Anchor Bank was acquired by Old National Bank in 2017.

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1. Interest Rate Risk

   Alerus Financial is significantly exposed to interest rate risk, where changes in interest rates can materially affect its financial condition and results of operations. This includes the impact on net interest income, loan demand, and the valuation of its assets and liabilities.

2. Credit Risk and Asset Quality

   The company faces risks related to managing its credit risk and maintaining an adequate allowance for credit losses. This encompasses potential issues with the quality of its loan portfolio, including concentrations within the portfolio, and the level of nonperforming assets on its balance sheet.

3. Adverse Economic Conditions

   Alerus Financial's business is sensitive to general business and economic conditions, both nationally and within its specific market areas. This includes the effects of inflation and the potential for a recession, which can impact loan demand, deposit levels, asset quality, and the overall financial health of its customers across its banking, mortgage, wealth management, and retirement services segments.

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The clear emerging threat to Alerus Financial is the ongoing and accelerating disruption from specialized financial technology (fintech) companies and challenger banks. These entities offer digitally native, often lower-cost, and highly convenient alternatives across virtually all of Alerus's core financial services.

This includes:

• Neobanks and Digital-Only Banks: Attracting deposits with superior mobile experiences, streamlined account opening, and sometimes more competitive interest rates, directly challenging Alerus's deposit base.
• Digital Lenders: Offering faster, more convenient, and often algorithm-driven loan applications for personal, small business, and even mortgage lending, siphoning off a segment of the borrowing market.
• Robo-Advisors: Providing automated, low-cost investment and wealth management services that appeal to a broad demographic, including younger investors and those seeking accessible financial planning, directly competing with Alerus's wealth management and retirement services.
• Payment Platforms and Digital Wallets: Facilitating instant and seamless transactions, reducing reliance on traditional banking channels for everyday financial interactions.

This broad-based digital competition threatens Alerus Financial by fragmenting the market, increasing customer expectations for technology-driven services, and potentially eroding traditional customer acquisition, retention, and revenue streams.

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Alerus Financial (ALRS) operates across several key financial service segments, with addressable markets primarily within the United States.

Banking Services (U.S.)

Alerus Financial provides a range of banking services, including commercial and business banking, personal banking, and mortgages. The commercial banking market in the U.S. shows varying estimates across different reports:

• The U.S. Commercial Banking Market size is estimated at approximately $226.44 billion in 2024, with a projection to reach $269.28 billion by 2029.
• Another estimate values the U.S. commercial banking market at $732.5 billion in 2025, with a forecast to grow to $915.45 billion by 2030.
• Other data suggests the U.S. commercial banking market was $1.5 trillion in 2024 and is expected to reach $1.6 trillion in 2025.
• In 2023, the U.S. commercial banking market size was evaluated at $229 billion and is slated to reach $339 billion by 2032.
• Another report states the U.S. Commercial Banking Market Size was valued at $222.5 billion in 2023 and is expected to reach $320.5 billion by 2033.
• The U.S. retail banking market, which includes personal banking and mortgages, is valued at $0.87 trillion in 2025 and is projected to reach $1.08 trillion by 2030. This market is also forecast to increase by $92.1 billion at a compound annual growth rate (CAGR) of 4.2% between 2024 and 2029.

Wealth Management (U.S.)

Alerus offers comprehensive wealth management solutions. The U.S. wealth management market represents a significant portion of global assets:

• Global assets under management (AUM) reached $162 trillion in 2025, with the United States holding 54.2% of this total.
• In 2024, the U.S. wealth management market had an AUM of $64.4 trillion, with projections to reach $87.35 trillion by 2028.
• The mass affluent segment in the U.S., comprising approximately 33 million individuals, holds about 43% of the nation's investable assets.

Retirement and Benefit Services (U.S.)

Alerus is a national provider of retirement services and benefits solutions. The U.S. retirement market is the largest globally:

• U.S. retirement-related assets are estimated at approximately $43.4 trillion in early 2025.
• The U.S. retirement market assets were roughly $36 trillion as of 2024.
• The United States Pension Fund Market is expected to reach $6.69 trillion in 2025 and grow to $10.24 trillion by 2030.
• Another estimate for the U.S. Pension Funds Market valued it at $6.12 trillion in 2024, with an expectation to reach $10.24 trillion by 2030.

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Share Repurchases

• A new stock repurchase program was authorized on February 18, 2024, allowing the company to repurchase up to 1,000,000 shares of its common stock, effective until February 18, 2027. This program replaced an existing one from February 22, 2021.
• Common stock repurchases amounted to approximately $339 thousand in 2024 and $3 thousand in 2025 (as of September 30, 2025).

Share Issuance

• In 2024, Alerus Financial completed an all-stock acquisition of HMN Financial, Inc., valued at approximately $128.8 million, involving the issuance of approximately 2.58 million Alerus common shares.
• The number of common shares issued and outstanding increased from 25,344,803 as of December 31, 2024, to 25,396,686 as of September 30, 2025.

Outbound Investments

• Alerus Financial acquired HMN Financial, Inc. in 2024, an all-stock transaction valued at approximately $128.8 million, expanding its presence in the Rochester, Minnesota market.
• In 2022, the company acquired MPB BHC, Inc. (Metro Phoenix Bank), with an aggregate transaction value of approximately $85.3 million including consideration for option holders, to enhance commercial lending and banking services in the Phoenix market.
• In December 2020, Alerus announced the acquisition of Retirement Planning Services, Inc. (RPS) to strengthen its retirement and benefits division and expand its geographic footprint to the Rocky Mountain region.

Capital Expenditures

• Capital expenditures for Alerus Financial were reported at $3.1 million for the quarter ending June 2025.
• The company has invested in technology and resources to enhance client experience, including the introduction of interactive teller machines (ITMs) and opening new offices to integrate business lines and improve client engagement.