ALERUS FINANCIAL CORPORATION ANNOUNCES Fourth QUARTER 2025 RESULTS, INCLUDING BALANCE SHEET REPOSITIONING (Form 8-K)

ALERUS FINANCIAL CORPORATION ANNOUNCES

Fourth QUARTER 2025 RESULTS, INCLUDING BALANCE SHEET REPOSITIONING

MINNEAPOLIS, MN (January 28, 2026) - Alerus Financial Corporation (Nasdaq: ALRS), or the Company, reported a net loss of $33.1 million for the fourth quarter of 2025, or $(1.27) per diluted common share, compared to net income of $16.9 million, or $0.65 per diluted common share, for the third quarter of 2025, and a net loss of $0.1 million, or $0.00 per diluted common share, for the fourth quarter of 2024.

During the fourth quarter of 2025, the Company sold $360.1 million of available-for-sale securities as part of a strategic balance sheet repositioning. The sale resulted in a one-time pre-tax net loss of $68.4 million. Proceeds from the sale were reinvested into new, higher yielding investment securities. Adjusted pre-provision net revenue (non-GAAP)⁽¹⁾ was $25.3 million, compared to $22.1 million for the third quarter 2025.

CEO Comments

President and Chief Executive Officer Katie O'Neill Lorenson said, "2025 was a defining year for Alerus. In our first full year integrating the HMN Financial, Inc. ("HMNF") acquisition, we exceeded our financial performance expectations with an adjusted return on average assets ("ROAA") (non-GAAP)⁽¹⁾ of 1.35% and adjusted efficiency ratio (non-GAAP)⁽¹⁾ of 64.45% for the year ended December 31, 2025. We demonstrated our capabilities as a high-quality consolidator with strong retention of team members and clients throughout the transaction and integration process.

We also took decisive strategic action to position the company for the next stage of growth. Our strategic balance sheet repositioning removed the drag of legacy low-yielding securities, and positions Alerus for higher profitability in 2026 and beyond. In parallel, we de-risked the loan portfolio by reducing commercial real estate ("CRE") concentrations, completing targeted loan sales, and managing renewals with greater selectivity, all while achieving strong commercial and industrial ("C&I") loan growth. These actions strengthened our capital and risk profile, with tangible common equity to tangible assets rising to 8.72% and reserves ending at 1.53% of loans.

Strong banking operating results were bolstered by differentiated and durable fee-based revenue, where Alerus maintained our position as an industry leader with adjusted noninterest income as a percentage of revenue (non-GAAP)⁽¹⁾ of 40.77%. Adjusted non-interest income (non-GAAP)⁽¹⁾ increased 7.0% year over year, driven by sustained organic growth across our retirement and wealth segments, as assets under administration and management expanded to a combined $49.8 billion. Throughout 2025, we strengthened our operating foundation by implementing new core systems and processes to support client and advisor growth. While we will continue to invest in people and technology, we are very focused on delivering positive operating leverage to drive returns and tangible book value growth higher.

Our disciplined focus on shareholder value translated into tangible book value growth of 21.54% from the prior year, supported by a fourth quarter adjusted return on average tangible equity (non-GAAP)⁽¹⁾ of 21.05%. As we enter 2026, our commitment is clear - drive superior returns, strengthen long-term shareholder value, and execute with the discipline and vision enabled by our diversified business model and exceptional team."

Fourth Quarter Highlights

	■	Diluted earnings (loss) per common share of $(1.27); adjusted diluted earnings per common share (non-GAAP)(1) of $0.85, versus $0.66 in the third quarter of 2025.
	■	Return on average total assets of (2.50)%; adjusted return on average total assets (non-GAAP)(1) of 1.62%, versus 1.28% in the third quarter of 2025.
	■	Return on average tangible common equity of (28.15)%; adjusted return on average tangible common equity (non-GAAP)(1) of 21.05%, versus 18.55% in the third quarter of 2025.
	■	Net interest income was $45.2 million, an increase of 4.7% from $43.1 million in the third quarter of 2025.
	■	Net interest margin was 3.69%, an increase compared to 3.50% in the third quarter of 2025.

	■	Retirement and benefit services income was $17.3 million, an increase of 4.6% from $16.5 million in the third quarter of 2025. Assets under administration grew 2.1% over the prior quarter.
	■	Wealth management income was $7.4 million, an increase of 13.4% from $6.6 million in the third quarter of 2025. Assets under management grew 0.8% over the prior quarter.
	■	Efficiency ratio of 557.48%; adjusted efficiency ratio (non-GAAP)(1) of 63.55%, versus 65.22% in the third quarter of 2025.
	■	Pre-provision net revenue of $(43.7) million; adjusted pre-provision net revenue (non-GAAP)(1) of $25.3, an increase of 14.3% from $22.1 in the third quarter of 2025.
	■	Net charge-offs (recoveries) to average loans was (0.03)%.
	■	Tangible book value per common share (non-GAAP)(1) was $17.55 as of December 31, 2025, an increase of 3.8% from $16.90 as of September 30, 2025.
	■	Tangible common equity to tangible assets ratio (non-GAAP)(1) was 8.72% as of December 31, 2025, an increase from 8.24% as of September 30, 2025.

Full Year 2025 Highlights

	■	Diluted earnings per common share of $0.68; adjusted diluted earnings per common share (non-GAAP)(1) of $2.78, versus $1.45 for the full year 2024.
	■	Return on average total assets of 0.33%; adjusted return on average total assets (non-GAAP)(1) of 1.35%, versus 0.69% for the full year 2024.
	■	Return on average tangible common equity of 6.29%; adjusted return on average tangible common equity (non-GAAP)(1) of 19.48%, versus 11.22% in the full year 2024.
	■	Net interest income was $172.5 million, an increase of 61.1% from $107.0 million for the year ended December 31, 2024.
	■	Net interest margin was 3.53%, an increase of 97 basis points from 2.56% for the year ended December 31, 2024.

■

Total loans at the end of 2025 grew 1.4% over the prior year.

■

Noninterest income was $51.9 million; adjusted noninterest income (non-GAAP)(1) was $118.7 million, an increase of 7.0% compared to $111.0 million for the year ended December 31, 2024.

	■	Retirement and benefit services income was $65.9 million, an increase of 2.4% from $64.4 million for the year ended December 31, 2024. Assets under administration grew 10.3% over the prior year end.
	■	Wealth management income was $28.3 million, an increase of 8.0% from $26.2 million for the year ended December 31, 2024. Assets under management grew 5.9% over the prior year end.
	■	Mortgage originations were $484.8 million, an increase of 54.4% from $334.3 million for the year ended December 31, 2024.
	■	Efficiency ratio of 84.10%; adjusted efficiency ratio (non-GAAP)(1) of 64.45%, versus 73.45% for the full year 2024.
	■	Pre-provision net revenue of $23.1 million; adjusted pre-provision net revenue (non-GAAP)(1) of $91.5 million, an increase of 82.0% from $50.2 million for the full year 2024.
	■	Net charge-offs to average loans of 0.05%; adjusted net recoveries to average loans (non-GAAP)(1) of (0.02)%, versus adjusted net charge-offs to average loans (non-GAAP)(1) of 0.13% for the full year 2024.
	■	Tangible book value per common share (non-GAAP)(1) was $17.55, compared to $14.44 as of December 31, 2024.
	■	Tangible common equity to tangible assets ratio (non-GAAP)(1) was 8.72%, an increase from 7.13% as of December 31, 2024.

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

Selected Financial Data (unaudited)

		As of and for the
		Three months ended												Year ended
		December 31,				September 30,				December 31,				December 31,				December 31,
(dollars and shares in thousands, except per share data)		2025				2025				2024				2025				2024
Performance Ratios
Return on average total assets			(2.50	)%			1.27	%			(0.00	)%			0.33	%			0.39	%
Adjusted return on average total assets (1)			1.62	%			1.28	%			0.85	%			1.35	%			0.69	%
Return on average common equity			(23.75	)%			12.80	%			(0.05	)%			3.32	%			4.47	%
Return on average tangible common equity (1)			(28.15	)%			18.48	%			2.38	%			6.29	%			7.14	%
Adjusted return on average tangible common equity (1)			21.05	%			18.55	%			14.89	%			19.48	%			11.22	%
Noninterest (loss) income as a % of revenue			(449.23	)%			40.56	%			46.94	%			23.12	%			51.78	%
Adjusted noninterest (loss) income as a % of revenue (1)			41.39	%			40.58	%			44.27	%			40.77	%			50.90	%
Net interest margin (tax-equivalent)			3.69	%			3.50	%			3.20	%			3.53	%			2.56	%
Efficiency ratio (1)			557.48	%			65.34	%			79.47	%			84.10	%			77.92	%
Adjusted efficiency ratio (1)			63.55	%			65.22	%			68.97	%			64.45	%			73.45	%
Net charge-offs (recoveries) to average loans			(0.03	)%			(0.17	)%			0.13	%			0.05	%			0.13	%
Adjusted net charge-offs (recoveries) to average loans (1)			(0.03	)%			(0.17	)%			0.13	%			(0.02	)%			0.13	%
Dividend payout ratio			(16.54	)%			32.31	%			-	%			122.06	%			95.18	%
Per Common Share
Earnings (loss) per common share - basic		$	(1.28	)		$	0.66			$	-			$	0.69			$	0.84
Earnings (loss) per common share - diluted		$	(1.27	)		$	0.65			$	-			$	0.68			$	0.83
Adjusted earnings per common share - diluted (1)		$	0.85			$	0.66			$	0.45			$	2.78			$	1.45
Dividends declared per common share		$	0.21			$	0.21			$	0.20			$	0.83			$	0.79
Book value per common share		$	22.24			$	21.68			$	19.55
Tangible book value per common share (1)		$	17.55			$	16.90			$	14.44
Average common shares outstanding - basic			25,398				25,395				24,857				25,380				21,047
Average common shares outstanding - diluted			25,710				25,713				25,144				25,697				21,321
Other Data
Retirement and benefit services assets under administration/management		$	44,925,311			$	44,005,277			$	40,728,699
Wealth management assets under administration/management		$	4,850,600			$	4,812,250			$	4,579,189
Mortgage originations		$	136,780			$	142,768			$	88,576			$	484,775			$	334,318

(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 fourth quarter of 2025 was $45.2 million, a $2.0 million, or 4.7%, increase from the third quarter of 2025. The increase was primarily due to lower cost of funds and a one-time $2.4 million adjustment related to a sold loan participation. Interest expense decreased $2.3 million, or 8.3%, from the third quarter of 2025, as the average rates paid on deposits and borrowings declined.

Net interest income increased $6.9 million, or 18.0%, from $38.3 million for the fourth quarter of 2024. Interest income increased $3.1 million, or 4.6%, from the fourth quarter of 2024, primarily driven by earning assets acquired in the HMNF acquisition, organic loan growth at higher yields, and purchase accounting accretion. Interest expense decreased $3.8 million, or 13.1%, from the fourth quarter of 2024, as the average rates paid on deposits and borrowings declined, which more than offset the increase in interest-bearing deposits and borrowing balances.

Net interest margin (on a tax-equivalent basis) was 3.69% for the fourth quarter of 2025, a 19 basis point increase from 3.50% for the third quarter of 2025, and a 49 basis point increase from 3.20% for the fourth quarter of 2024. The quarter over quarter increase was mainly attributable to lower cost of funds and a one-time adjustment related to a sold loan participation, offset by less purchase accounting accretion. The increase from the fourth quarter of 2024 was primarily driven by lower cost of funds and higher rates on interest-earning assets, offset by less purchase accounting accretion.

Noninterest (Loss) Income

Noninterest (loss) income for the fourth quarter of 2025 was $(36.9) million, a $66.4 million, or 225.5%, decrease from the third quarter of 2025. The quarter over quarter decrease was driven by the previously announced strategic balance sheet repositioning, which resulted in a $68.4 million loss on the sale of investment securities in the fourth quarter of 2025. Adjusted noninterest income (non-GAAP)⁽¹⁾ was $31.9 million in the fourth quarter of 2025, an increase of 8.3% compared to $29.5 million in the third quarter of 2025. Wealth management revenue increased $0.9 million, or 13.4%, from the third quarter of 2025, primarily driven by asset-based fees. Retirement and benefit services revenue increased $0.8 million, or 4.6%, from the third quarter of 2025, primarily driven by both asset-based and transaction-based fees. Other noninterest income increased $0.6 million, or 26.3%, from the third quarter of 2025, primarily driven by increased swap fee revenue.

Noninterest income for the fourth quarter of 2025 decreased by $70.8 million, or 209.1%, from the fourth quarter of 2024. This decrease was driven by the previously announced strategic balance sheet repositioning recognized in the fourth quarter of 2025. Adjusted noninterest income (non-GAAP)⁽¹⁾ was $31.9 million in the fourth quarter of 2025, an increase of 4.9% compared to $30.4 million in the fourth quarter of 2024. Other interest income decreased $3.6 million, or 56.3%, in the fourth quarter of 2025 compared to the fourth quarter of 2024, primarily due to a gain on the sale of fixed assets related to the sale of a Fargo, North Dakota office in the fourth quarter of 2024. Retirement and benefit services revenue increased $0.8 million, or 4.7%, in the fourth quarter of 2025 compared to the fourth quarter of 2024, primarily driven by asset-based fees, due to a 10.3% increase in assets under administration/management during that same period.

(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 fourth quarter of 2025 was $51.9 million, a $1.3 million, or 2.7%, increase from the third quarter of 2025. Occupancy and equipment expense increased $0.8 million, or 28.4%, from the third quarter of 2025, primarily driven by the opening of a new facility in our Fargo, North Dakota market. Business services, software and technology expense increased $0.5 million, or 8.1%, from the third quarter of 2025, primarily due to data processing expenses. Professional fees and assessments increased $0.4 million, or 15.4%, from the third quarter of 2025, primarily driven by an increase in fees related to the balance sheet repositioning in the fourth quarter of 2025. Mortgage and lending expenses decreased $0.4 million, or 38.9%, from the third quarter of 2025, primarily driven by a decrease in reimbursable loan expenses.

Noninterest expense for the fourth quarter of 2025 decreased $8.6 million, or 14.2%, from $60.5 million in the fourth quarter of 2024. The decrease was primarily driven by decreases in professional fees and assessments, compensation expense, and intangible amortization expense, offset by an increase in occupancy and equipment expense. In the fourth quarter of 2025, professional fees and assessments decreased $7.9 million, or 71.8%, from the fourth quarter of 2024, primarily due to acquisition-related expenses in connection with the HMNF acquisition incurred in 2024. Compensation expense decreased $1.5 million, or 5.6% compared to the fourth quarter of 2024 primarily due to lower headcount. Intangible amortization expense decreased $0.4 million, or 15.0%, in the fourth quarter of 2025, primarily due to the annual reset of the $33.5 million core deposit intangible recorded in connection with the HMNF acquisition. Occupancy and equipment expense increased $1.7 million, or 86.3%, from the fourth quarter of 2024, primarily driven by facility upgrades.

Financial Condition

Total assets were $5.2 billion as of December 31, 2025, a decrease of $31.6 million, or 0.6%, from December 31, 2024. The decrease was primarily due to a $74.0 million decrease in available-for-sale investment securities and a $21.1 million decrease in held-to-maturity investment securities, partially offset by an increase of $55.5 million in loans held for investment and an increase of $15.3 million in operating lease right-of-use assets.

Loans Held for Investment

Total loans held for investment were $4.0 billion as of December 31, 2025, an increase of $55.5 million, or 1.4%, from December 31, 2024. The increase was primarily driven by a $45.8 million increase in consumer loans and a $9.7 million increase in commercial loans.

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

		December 31,				September 30,				June 30,				March 31,				December 31,
(dollars in thousands)		2025				2025				2025				2025				2024
Commercial
Commercial and industrial		$	736,833			$	702,135			$	675,892			$	658,446			$	666,727
Commercial real estate
Construction, land and development			246,238				349,768				352,749				360,024				294,677
Multifamily			383,505				374,761				333,307				353,060				363,123
Non-owner occupied			875,862				865,785				887,643				951,559				967,025
Owner occupied			427,260				435,320				440,170				424,880				371,418
Total commercial real estate			1,932,865				2,025,634				2,013,869				2,089,523				1,996,243
Agricultural
Land			64,799				65,900				66,395				68,894				61,299
Production			62,500				63,051				67,931				64,240				63,008
Total agricultural			127,299				128,951				134,326				133,134				124,307
Total commercial			2,796,997				2,856,720				2,824,087				2,881,103				2,787,277
Consumer
Residential real estate
First lien			874,737				894,402				901,738				907,534				921,019
Construction			33,703				34,124				35,754				38,553				33,547
HELOC			260,883				234,681				200,624				175,600				162,509
Junior lien			36,844				40,434				41,450				43,740				44,060
Total residential real estate			1,206,167				1,203,641				1,179,566				1,165,427				1,161,135
Other consumer			44,858				41,715				41,003				38,955				44,122
Total consumer			1,251,025				1,245,356				1,220,569				1,204,382				1,205,257
Total loans		$	4,048,022			$	4,102,076			$	4,044,656			$	4,085,485			$	3,992,534

Deposits

Total deposits were $4.2 billion as of December 31, 2025, a decrease of $186.4 million, or 4.3%, from December 31, 2024. Noninterest-bearing deposits decreased $95.6 million and interest-bearing deposits decreased $90.8 million from December 31, 2024. The decrease was primarily driven by a decrease in high-cost time deposits, which included $22.2 million of brokered CDs that matured in 2025 and were not renewed.

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

		December 31,				September 30,				June 30,				March 31,				December 31,
(dollars in thousands)		2025				2025				2025				2025				2024
Noninterest-bearing demand		$	807,896			$	776,791			$	790,300			$	889,270			$	903,466
Interest-bearing
Interest-bearing demand			1,296,315				1,256,687				1,214,597				1,283,031				1,220,173
Savings accounts			173,759				174,113				175,586				177,341				165,882
Money market savings			1,337,491				1,460,006				1,358,516				1,472,127				1,381,924
Time deposits			576,542				745,056				798,469				663,522				706,965
Total interest-bearing			3,384,107				3,635,862				3,547,168				3,596,021				3,474,944
Total deposits		$	4,192,003			$	4,412,653			$	4,337,468			$	4,485,291			$	4,378,410

Asset Quality

Total nonperforming assets were $66.5 million as of December 31, 2025, increase of $3.6 million, or 5.7%, from December 31, 2024. As of December 31, 2025, the allowance for credit losses on loans was $61.9 million, or 1.53% of total loans, compared to $59.9 million, or 1.50% of total loans, as of December 31, 2024.

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

		As of and for the three months ended
		December 31,				September 30,				June 30,				March 31,				December 31,
(dollars in thousands)		2025				2025				2025				2025				2024
Nonaccrual loans		$	66,148			$	59,644			$	51,276			$	50,517			$	54,433
Accruing loans 90+ days past due			-				-				202				-				8,453
Total nonperforming loans			66,148				59,644				51,478				50,517				62,886
OREO and repossessed assets			308				467				751				493				-
Total nonperforming assets		$	66,456			$	60,111			$	52,229			$	51,010			$	62,886
Net charge-offs (recoveries)			(311	)			(1,715	)			3,767				407				1,258
Net charge-offs (recoveries) to average loans			(0.03	)%			(0.17	)%			0.37	%			0.04	%			0.13	%
Nonperforming loans to total loans			1.63	%			1.45	%			1.27	%			1.24	%			1.58	%
Nonperforming assets to total assets			1.27	%			1.13	%			0.98	%			0.96	%			1.20	%
Allowance for credit losses on loans to total loans			1.53	%			1.51	%			1.47	%			1.52	%			1.50	%
Allowance for credit losses on loans to nonperforming loans			94	%			104	%			115	%			123	%			95	%

For the fourth quarter of 2025, the Company had net recoveries of $0.3 million, compared to net recoveries of $1.7 million for the third quarter of 2025 and net charge-offs of $1.3 million for the fourth quarter of 2024. The quarter over quarter decrease in net recoveries was primarily due to a $1.9 million recovery on a commercial and industrial loan in the third quarter of 2025.

The Company recorded a provision release of $0.3 million for the fourth quarter of 2025, and no provision for credit losses for the third quarter of 2025, compared to a provision for credit losses of $12.0 million for the fourth quarter of 2024. The provision for credit losses for the fourth quarter of 2024 was primarily driven by a $7.8 million day-one provision for credit losses and unfunded commitment reserve related to the HMNF acquisition.

The unearned fair value adjustments on acquired loan portfolios were $43.8 million and $70.6 million as of December 31, 2025 and 2024, respectively.

Capital

Total stockholders' equity was $564.9 million as of December 31, 2025, an increase of $69.5 million from December 31, 2024. The change was primarily driven by an increase in accumulated other comprehensive income of $71.2 million. Tangible book value per common share (non-GAAP)⁽¹⁾ increased to $17.55 as of December 31, 2025, from $14.44 as of December 31, 2024. Tangible common equity to tangible assets (non-GAAP)⁽¹⁾ increased to 8.72% as of December 31, 2025, from 7.13% as of December 31, 2024. Common equity tier 1 capital to risk weighted assets increased to 10.28% as of December 31, 2025, from 9.91% as of December 31, 2024.

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

		December 31,				September 30,				December 31,
		2025				2025				2024
Capital Ratios(1)
Alerus Financial Corporation Consolidated
Common equity tier 1 capital to risk weighted assets			10.28	%			10.84	%			9.91	%
Tier 1 capital to risk weighted assets			10.48	%			11.05	%			10.12	%
Total capital to risk weighted assets			12.87	%			13.41	%			12.49	%
Tier 1 capital to average assets			8.86	%			9.49	%			8.65	%
Tangible common equity / tangible assets (2)			8.72	%			8.24	%			7.13	%
Alerus Financial, N.A.
Common equity tier 1 capital to risk weighted assets			10.41	%			11.00	%			10.18	%
Tier 1 capital to risk weighted assets			10.41	%			11.00	%			10.18	%
Total capital to risk weighted assets			11.66	%			12.25	%			11.43	%
Tier 1 capital to average assets			8.62	%			9.31	%			8.69	%

(1)	Capital ratios for the current quarter are to be considered preliminary until the Call Report for Alerus Financial, N.A. is filed.

(2)	Represents a non-GAAP financial measure. See "Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures."

Conference Call

The Company will host a conference call at 11:00 a.m. Central Time on Thursday, January 29, 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 bank and national retirement 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 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 27 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 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 (tax-equivalent), 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