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Note 3 - Business Combinations | 9 Months Ended
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Sep. 30, 2024
Notes to Financial Statements |
Business Combination Disclosure [Text Block] | NOTE 3 Business Combinations On October 9, 2024, the Company completed the acquisition of HMN Financial, Inc. (“HMNF”) (Nasdaq: HMNF) and its wholly owned subsidiary, Home Federal Savings Bank (together, “Home Federal”). As a result of the transaction, HMNF merged with and into Alerus Financial Corporation, and Home Federal Savings Bank merged with and into Alerus Financial, National Association. The all-stock transaction was valued at approximately $128.8 million as of closing, based on the closing price of the Company’s common stock on October 8, 2024, the trading day immediately preceding the closing of the merger, of $22.90. Founded in 1934, Home Federal had 12 branches in Minnesota and one branch in each of Iowa and Wisconsin. As of June 30, 2024, HMNF had, on a consolidated basis, $1.1 billion in total assets, which included approximately $876.6 million in loans and $199.0 million in investment securities, as well as $983.2 million in total deposits. The transaction expanded the Company’s franchise into Rochester, Minnesota and represents the largest bank acquisition in the Company’s history. The Company’s acquisition of Home Federal is expected to provide earnings benefit, growth potential, synergies and economies of scale arising from the combination of Home Federal with the Company. With the addition of Home Federal, based on June 30, 2024 amounts, the Company now has approximately $5.5 billion in total assets, $3.8 billion in total loans, $4.3 billion in total deposits, and $43.6 billion in assets under administration/management, with 29 locations across the Midwest, as well as Arizona. The Company is in the process of determining the value of the acquired assets and liabilities, and, therefore, no estimated fair value adjustments are available as of October 31, 2024. As a result of the transaction, stockholders of HMNF received 1.25 shares of the Company’s common stock for each share of HMNF common stock, resulting in the issuance of 5,547,658 shares of the Company’s common stock. The merger was structured to qualify as a tax-free reorganization for HMNF’s stockholders. Following the transaction, former stockholders of HMNF now hold approximately 21.9% of the Company’s outstanding common stock. During the three and nine months ended September 30, 2024, the Company incurred $1.7 million and $2.3 million, respectively, in pre-tax acquisition expenses related to the acquisition of HMNF, comprised of legal and professional fees included in professional fees and assessments expense in the consolidated statements of income.

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