Alerus posts record first-quarter net income for 2021

May 1—Alerus Financial Corporation had a banner year in 2020, and that momentum has carried on into the first quarter of 2021.

The company is reporting first-quarter earnings of $15.2 million, up from $10.2 million in the last quarter of 2020 and well beyond the $5.4 million reported in the first quarter of 2020. According to Alerus CEO Randy Newman, 2020 was a record year for the bank, which carried over into 2021.

Growth was driven in part by fees generated through the bank's mortgage, retirement and benefits and wealth management areas. Officials at Alerus, while cognizant of the pandemic, are taking a positive view of the future, as the nation and region continue to open up.

"We believe our region will continue to face headwinds like it always has, but generally (we're) optimistic on the outlook of the region," said Chris Wolf, Northern Valley Market president.

Alerus has had a strong run over the last few years that began with the announcement of an initial public offering announced in September 2019. Well into the pandemic, the bank acquired Colorado-based Retirement Planning Services Inc., which bolstered its retirement and benefits division, and expanded its footprint into the Rocky Mountain area. In April, the bank received the Raymond James Community Bankers Cup Award for 2020, which recognizes the top 10% of community banks with assets between $500 million and $10 billion.

Wolf pointed to continuing development in the region, including the planned continuation of construction of Altru Health System's new hospital, which is slated to begin this fall.

"We understand the importance of Altru to this community, not only providing quality health care to those of us in this region, but also as a major employer and partner within our community," Wolf said.

Other positive signs include developments downtown and growth in the region's unmanned aerial systems and burgeoning tech sectors, well as projects on UND's campus. Those solid developments, Wolf said, position the community for the future through the creation and retention of jobs.

Wolf pointed out that financial programs, like the state's Innovation Technology Loan Fund, the Grand Forks Growth Fund and other Bank of North Dakota programs, make good use of leveraging federal dollars to invest in the community.

Locally, Wolf said growth at Alerus was partially driven by a record year for mortgages, with people either buying homes or refinancing them. Some commercial clients, he noted, added programs for their employees out of concern for their well-being, including establishing a 401(k), or setting up emergency savings programs.

On the commercial side, Alerus generated 445 payment protection program loans in the region, totaling about $129 million. "First Draw" loans reached 312, for $109.78 million, while "Second Draw" loans amounted to 133, for $18.8 million. The decrease in the generation of those loans is an indication of improved economic conditions.

PPP loans partially took the place of consumer non-mortgage loans, as people began to rely on economic stimulus money for purchases. While not a setback for the bank, PPP loans are generally less profitable, in terms of interest and associated fees. As stimulus funds wind down, people may begin to turn back to traditional loans for purchases of vehicles, or other large ticket items.

Still, Wolf said there is uncertainty about the future, and what shape the "new normal" will take. Despite that uncertainty and "constant change," Wolf said, there is reason for optimism.

"Now's our opportunity to become what it is we aspire to be," he said.