Exhibit 99.1

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

FOR RELEASE (7.29.2026) 

ALERUS FINANCIAL CORPORATION REPORTS

Second QUARTER 2026 NET INCOME OF $20.9 MILLION

MINNEAPOLIS, MN (July 29, 2026) – Alerus Financial Corporation (Nasdaq: ALRS), or the Company, reported net income of $20.9 million for the second quarter of 2026, or $0.81 per diluted common share, compared to net income of $23.0 million, or $0.89 per diluted common share, for the first quarter of 2026, and net income of $20.3 million, or $0.78 per diluted common share, for the second quarter of 2025. 

CEO Comments 

President and Chief Executive Officer Katie O'Neill Lorenson said, “Our second quarter results demonstrate the continued strength of Alerus' diversified business model and the strategic investments and transformation efforts we have made over the past several years. Earnings per diluted common share of $0.81 and return on average tangible common equity⁽¹⁾ of 19.33% reflect disciplined execution across the franchise, including expanding net interest margin, growing fee-based revenue, and continued improvement in credit quality. 

The strength of our business model is evident in our ability to generate balanced growth across multiple revenue streams. Noninterest income again represented more than 40% of total revenue, while our banking franchise continued to benefit from disciplined balance sheet management and prudent risk oversight. These results reflect the resilience of our earnings profile and the advantages of a strategy designed to create long-term value. 

Most importantly, these results are a testament to the talented team we have built at Alerus and their unwavering focus on serving our clients, communities, and one another. Their consistent execution, collaboration, and focus on doing the right thing continue to translate our strategy into results. As we look ahead, we remain focused on executing our long-term growth strategy, investing in our people and capabilities, and building on the momentum that positions Alerus to deliver sustainable value for our shareholders.” 

Second Quarter Highlights 

(1)    Represents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.”

Selected Financial Data (unaudited) 

(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 second quarter of 2026 was $47.7 million, a $2.8 million, or 6.2%, increase from the first quarter of 2026. Interest income increased $3.6 million, or 5.4%, primarily due to higher interest income on loans from a one-time $1.6 million interest income recovery on a nonaccrual loan resolution, higher purchase accounting accretion, and higher loan yields. Interest expense increased $0.8 million, or 3.8%, from the first quarter of 2026, as average rates paid on borrowings increased following a refinancing of subordinated debt in the first quarter and higher average short-term borrowing balances. 

Net interest income increased $4.7 million, or 10.9%, from $43.0 million for the second quarter of 2025. Interest income increased $0.2 million, or 0.3%, from the second quarter of 2025, primarily driven by higher interest income on investment securities following the strategic balance sheet repositioning in the fourth quarter of 2025, partially offset by less purchase accounting accretion. Interest expense decreased $4.5 million, or 16.3%, from the second quarter of 2025, as average rates paid on deposits and borrowings declined primarily driven by Federal Reserve rate cuts in the second half of 2025. 

Net interest margin (on a tax-equivalent basis)⁽¹⁾ was 3.97% for the second quarter of 2026, a 20 basis point increase from 3.77% for the first quarter of 2026, and a 46 basis point increase from 3.51% for the second quarter of 2025. The quarter over quarter increase was mainly attributable to a one-time $1.6 million interest income recovery on a nonaccrual loan resolution, higher purchase accounting accretion, and higher loan yields, partially offset by the impact of the first quarter subordinated debt refinancing and higher borrowing balances. The increase from the second quarter of 2025 was primarily driven by lower cost of funds and higher yields on investment securities, partially offset by less purchase accounting accretion. 

Noninterest Income 

Noninterest income for the second quarter of 2026 was $32.9 million, a $2.1 million, or 6.8%, increase from the first quarter of 2026. This increase was driven by an increase in other noninterest income and wealth advisory services revenue, partially offset by a decrease in mortgage banking revenue. Other noninterest income increased $1.9 million, or 106.9%, from the first quarter of 2026, primarily driven by a gain on the sale of a property in the Rochester, Minnesota market, increased swap fee income, and mutual fund investment gains related to the underlying assets of the deferred compensation plans. Wealth advisory services revenue increased $0.5 million, or 6.5%, from the first quarter of 2026, primarily driven by an increase in both asset-based fees tied to equity markets and transaction-based fees. Mortgage banking revenue decreased $0.3 million, or 9.6%, from the first quarter of 2026, primarily driven by lower gain on sale margins from product mix and increased competition. 

Noninterest income for the second quarter of 2026 increased by $1.2 million, or 3.7%, from the second quarter of 2025. This increase was driven by an increase in other noninterest income, retirement and benefit services revenue, and service charges on deposit accounts, partially offset by a decrease in the gain on sale of non-mortgage loans. Other noninterest income increased $1.7 million, or 86.1%, compared to the second quarter of 2025, primarily driven by a gain on the sale of a property in the Rochester, Minnesota market, increased swap fee income, and mutual fund investment gains related to the underlying assets of the deferred compensation plans. Retirement and benefit services revenue increased $1.3 million, or 8.3%, compared to the second quarter of 2025, primarily driven by recurring annual income. Service charges on deposit accounts increased $0.4 million, or 62.6%, compared to the second quarter of 2025, primarily due to a reclassification of fees from other noninterest income to service charges on deposit accounts revenue in the first quarter of 2026. Gain on sale of non-mortgage loans decreased $2.1 million, or 100.0%, compared to the second quarter of 2025, due to a $2.1 million gain on the sale of a PCD hospitality loan during the second quarter of 2025. 

(1)    Represents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.”

Noninterest Expense

Noninterest expense for the second quarter of 2026 was $52.9 million, a $2.5 million, or 4.9%, increase from the first quarter of 2026, primarily due to increases in compensation expense and other noninterest expense, partially offset by a decrease in business services, software, and technology expense. Compensation expense increased $2.1 million, or 8.6%, from the first quarter of 2026, primarily due to annual merit increases, talent additions to the Arizona commercial banking team, and increases in deferred compensation plan liabilities driven by mutual fund investment gains related to the underlying assets of the plans. Other noninterest expense increased $0.8 million, or 39.3%, from the first quarter of 2026, due to an increase in other real estate owned balances and related holding costs, as well as increased corporate insurance costs. Business services, software, and technology expense decreased $0.4 million, or 6.8%, from the first quarter of 2026, primarily due to a decrease in core processing expenses, as well as a decrease in IT hardware expenses. 

Noninterest expense for the second quarter of 2026 increased $4.4 million, or 9.2%, from $48.4 million in the second quarter of 2025, primarily due to increases in compensation expense, professional fees and assessments, and other noninterest expense. Compensation expense increased $1.8 million, or 7.4%, from the second quarter of 2025, primarily due to annual merit increases, as well as increases in deferred compensation plan liabilities driven by mutual fund investment gains related to the underlying assets of the plans. Other noninterest expense increased $1.5 million, or 104.3%, from the second quarter of 2025, due to an increase in other real estate owned balances and related holding costs, as well as increased corporate insurance costs. Professional fees and assessments increased $1.4 million, or 61.7%, from the second quarter of 2025, primarily due to the reclassification of consulting services and other third-party vendor expenses from business services, software, and technology expense to professional fees and assessments, as well as an increase in legal fees. 

Financial Condition

Total assets were $5.3 billion as of June 30, 2026, an increase of $58.6 million, or 1.1%, from December 31, 2025. The increase was primarily due to a $41.8 million increase in cash and cash equivalents, a $20.1 million increase in available-for-sale investment securities, a $8.5 million increase in other assets, and a $4.8 million increase in loans held for sale, partially offset by a decrease of $13.8 million in loans held for investment. 

Loans Held for Investment

Total loans held for investment were $4.0 billion as of June 30, 2026, a decrease of $13.8 million, or 0.3%, from December 31, 2025. The decrease was primarily driven by a $41.6 million decrease in consumer loans, partially offset by a $27.9 million increase in commercial loans. 

The following table presents the composition of our loans held for investment portfolio as of the dates indicated: 

Deposits

Total deposits were $4.2 billion as of June 30, 2026, a decrease of $0.1 million, or 0.0%, from December 31, 2025. Noninterest-bearing deposits decreased $48.3 million and interest-bearing deposits increased $48.2 million from December 31, 2025. The decrease in total deposits was due primarily to seasonal outflows from public funds depositors. 

The following table presents the composition of the Company’s deposit portfolio as of the dates indicated: 

Asset Quality

Total nonperforming assets were $17.1 million as of June 30, 2026, a decrease of $52.3 million, or 75.3%, from December 31, 2025. As of June 30, 2026, the allowance for credit losses on loans was $48.4 million, or 1.20% of total loans, compared to $61.9 million, or 1.53% of total loans, as of December 31, 2025. 

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

For the second quarter of 2026, the Company had net charge-offs of $2.6 million, compared to net charge-offs of $7.0 million for the first quarter of 2026 and net charge-offs of $3.8 million for the second quarter of 2025. The quarter over quarter decrease in net charge-offs was primarily due to charge-offs of $6.4 million in the first quarter of 2026 related to one non-accruing long-term commercial and industrial client relationship. This relationship carried a specific reserve of $9.0 million as of December 31, 2025. Of the $2.6 million of net-charge offs recognized in the second quarter of 2026, $1.4 million was attributable to this same relationship. As of June 30, 2026, the relationship had a remaining reserve of $1.0 million, which represented approximately 63.3% of the book balance as of that date. Management does not believe the charge-offs resulting from this relationship are indicative of a broader credit quality trend in the Company's loan portfolio. 

The decrease in the allowance for credit losses on loans to total loans from December 31, 2025 to  June 30, 2026 was primarily the result of problem loan resolution. 

The Company recorded a provision for credit losses of $0.5 million for the second quarter of 2026, compared to a provision release of $4.9 million for the first quarter of 2026, and no provision for credit losses for the second quarter of 2025. 

OREO and repossessed assets were $9.6 million at June 30, 2026, compared to $0.3 million as of December 31, 2025. The increase was primarily driven by the transfer of one 1-4 family property and one apartment complex to OREO in the second quarter of 2026. 

The unearned fair value adjustments on acquired loan portfolios were $36.9 million as of June 30, 2026, $43.8 million as of December 31, 2025, and $58.0 million as of June 30, 2025. 

Capital

Total stockholders’ equity was $583.1 million as of June 30, 2026, an increase of $18.2 million from December 31, 2025. The increase was primarily driven by an increase in retained earnings of $33.0 million, partially offset by a decrease in additional paid-in capital of $11.5 million and a decrease in accumulated other comprehensive income of $2.8 million. Tangible book value per common share⁽¹⁾ increased to $18.73 as of June 30, 2026, from $17.55 as of December 31, 2025. Tangible common equity to tangible assets⁽¹⁾ increased to 9.05% as of June 30, 2026, from 8.72% as of December 31, 2025. Common equity tier 1 capital to risk weighted assets increased to 10.81% as of June 30, 2026, from 10.28% as of December 31, 2025. 

During the second quarter of 2026, the Company repurchased approximately $6.8 million of its outstanding common stock at an average per share price of $27.10, which reduced common shares outstanding by 250,000 at quarter-end. 

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

Conference Call

The Company will host a conference call at 11:00 a.m. Central Time on Thursday, July 30, 2026, to discuss its financial results. Attendees are encouraged to register ahead of time for the call at investors.alerus.com. 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 (Nasdaq: ALRS) is a commercial wealth advisory services bank and national retirement and benefit services provider with corporate offices in Grand Forks, North Dakota, and the Minneapolis-St. Paul, Minnesota metropolitan area. Through its subsidiary, Alerus Financial, National Association (the “Bank”), Alerus provides diversified and comprehensive financial solutions to business and consumer clients, including banking, wealth advisory services, and retirement and benefit plans and services. Alerus provides clients with a primary point of contact to help fully understand their unique needs and delivery channel preferences. Clients are provided with competitive products, valuable insight, and sound advice supported by digital solutions designed to meet their needs. 

Alerus operates 26 banking and commercial wealth offices, with locations in Grand Forks and Fargo, North Dakota; the Minneapolis-St. Paul, Minnesota metropolitan area; Rochester, Minnesota; Southern Minnesota; Marshalltown, Iowa; Pewaukee, Wisconsin; and Phoenix and Scottsdale, Arizona. The Alerus Retirement and Benefit business serves advisors, brokers, employers, and plan participants across the United States. 

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 book value per common share, return on average tangible common equity, efficiency ratio, pre-provision net revenue, adjusted noninterest (loss) income, adjusted noninterest expense, adjusted pre-provision net revenue, adjusted efficiency ratio, adjusted net income, adjusted return on average total assets, adjusted return on average tangible common equity, net interest margin (on a tax-equivalent basis), adjusted earnings per common share - diluted, and adjusted net charge-offs to average loans. Management uses these non-GAAP financial measures in its analysis of its performance, and believes financial analysts and investors frequently use these measures, and other similar measures, to evaluate capital adequacy and financial performance. Reconciliations of non-GAAP disclosures used in this press release to the comparable GAAP measures are provided in the accompanying tables. Management, banking regulators, many financial analysts and other investors use these measures in conjunction with more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, which typically stem from the use of the purchase accounting method of accounting for mergers and acquisitions. 

These non-GAAP financial measures should not be considered in isolation or as a substitute for total stockholders’ equity, total assets, book value per share, return on average assets, return on average equity, or any other measure calculated in accordance with GAAP. Moreover, the manner in which the Company calculates these non-GAAP financial measures may differ from that of other companies reporting measures with similar names. 

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by 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 the Company makes 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 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 known and unknown uncertainties, risks, changes in circumstances, and other factors that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, the following: the strength of the local, state, national and international economies and financial markets (including effects of inflationary pressures and future monetary policies of the Federal Reserve and executive orders in response thereto); interest rate risk, including the effects of changes in interest rates; effects on the U.S. economy resulting from actions taken by the federal government, including the threat or implementation of tariffs, immigration enforcement, executive orders, and changes in foreign policy; disruptions to the global supply chain, including as a result of domestic or foreign policies; our ability to successfully manage credit risk, including in the commercial real estate portfolio, and maintain an adequate level of allowance for credit losses; business and economic conditions generally and in the financial services industry, nationally and within our market areas, including the level and impact of inflation rates and possible recession; our ability to raise additional capital to implement our business plan; credit risks and risks from concentrations (including by type of borrower, geographic area, collateral, and industry) within our loan portfolio; the concentration of large loans to certain borrowers (including commercial real estate loans); the level of nonperforming assets on our balance sheet; our ability to implement organic and acquisition growth strategies; the commencement, cost, and outcome of litigation and other legal proceedings and regulatory actions against us or to which the Company may become subject, including with respect to pending actions relating to the Company’s previous employee stock ownership program fiduciary services commenced by government and private parties; 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 or our third-party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud; 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 and expensive technological changes implemented by us and other parties in the financial services industry, including third-party vendors, which may be more difficult to implement or more expensive than anticipated or which may have unforeseen consequences to us and our customers, including the development and implementation of tools incorporating artificial intelligence; emerging issues related to the development and use of artificial intelligence that could give rise to legal or regulatory action, damage our reputation, or otherwise materially harm our business or customers; increased competition in the financial services industry, including from non-banks such as credit unions, Fintech companies and digital asset service providers; our ability to successfully manage liquidity risk, including our need to access higher cost sources of funds such as fed funds purchased and short-term borrowings; the concentration of large deposits from certain clients, including those who have balances above current Federal Deposit Insurance Corporation insurance limits; the effectiveness of our risk management framework; potential impairment to the goodwill the Company recorded in connection with our past acquisitions, including the acquisitions of Metro Phoenix Bank and HMNF; the extensive regulatory framework that applies to us; the ability of the Bank to pay dividends to us and our ability to pay dividends to our stockholders; new or revised accounting standards, as may be adopted by state and federal regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission (the “SEC”) or the Public Company Accounting Oversight Board; fluctuations in the values of the securities held in our securities portfolio, including as a result of changes in interest rates; 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 and natural disasters, and widespread disease or pandemics; acts of war, military conflicts, or terrorism, including the wars in Iran and Ukraine, ongoing conflicts in the Middle East, and other international military conflicts, or adverse external events and changes in foreign relations that can increase levels of political and economic unpredictability, contribute to rising energy and commodity prices, affect global supply chains, increase the volatility of financial markets, and other matters beyond our control; the availability of future equity and debt issuances and other capital raising opportunities on favorable terms; any material weaknesses in our internal control over financial reporting; our success at managing and responding to 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 SEC. 

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. The Company undertakes 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

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Alerus Financial Corporation and Subsidiaries

Consolidated Statements of Income

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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)

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)

Alerus Financial Corporation and Subsidiaries

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

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