Alerus Financial IPO: What You Need To Know

A regional diversified financial services company is part of the IPO slate this week.

With the Fed reverting to monetary policy easing, it is prudent to look outside of pure-play bank stocks to defend against the net interest margin squeeze experienced by banks? Here's a look at the new equity. 

The IPO Terms

Grand Forks, North Dakota-based Alerus Financial Corporation proposes to offer 3.25 million shares in an IPO at an estimated price range of $22-$24, according to an amendment to the preliminary prospectus filed with the SEC.

At the midpoint of the price range, the offering is expected to raise gross proceeds of $74.75 million.

Alerus has applied to list its shares on the Nasdaq under the ticker symbol "ALRS."

The company's shares earlier traded on the OTC market under the ticker symbol "ALRS."

Raymond James, D.A. Davidson and Piper Jaffray are the underwriters for the offering.

The Company

Alerus, through its subsidiary Alerus Financial, National Association, provides financial solutions to businesses and consumers through four distinct business lines: banking, retirement and benefit services, wealth management and mortgage.

As of June 30, the company has $2.2 billion of total assets, $27.9 billion of assets under administration and $5.3 billion of assets under management.

The company derives a majority of its overall revenue from non-interest income accrued from the retirement and benefit services, wealth management and mortgage business lines.

The company's primary banking areas include North Dakota, Minnesota and Arizona. 

The Finances

Alerus generated net interest income of $37.41 million and non-interest income of $55.06 million for fiscal year 2018, up 1% and 9.4%, respectively, from 2017.

Net income climbed about 19% to $14.78 million.

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