Alerus Financial Corporation (NASDAQ:ALRS) Q1 2023 Earnings Conference Call April 27, 2023 ET

Company Participants

Katie Lorenson - President, Chief Executive Officer

Alan Villalon - Chief Financial Officer

Karin Taylor - Chief Risk Officer

Jim Collins - Chief Banking and Revenue Officer

Karen Bohn - Independent Director

Barret Lahm - Treasurer

Conference Call Participants

Jeff Rulis - D.A. Davidson

Eric Spector - Raymond James

Nathan Race - Piper Sandler

Damon DelMonte - Keefe, Bruyette, & Woods

Operator

Good morning, and welcome to the Alerus Financial Corporation Earnings Conference Call. [Operator Instructions] This call may include forward-looking statements and the Company's actual results may differ materially from those indicated in any forward-looking statements. Important factors that could cause actual results to differ materially from those indicated in the forward-looking statements are listed in the earnings release and the company's SEC filings.

I would now like to turn the conference over to Alerus Financial Corporation President and CEO, Katie Lorenson. Please go ahead.

Katie Lorenson

Good morning. Thank you, Bethany, and thank you to our investors and our analysts joining our call today. We appreciate your time and interest in Alerus. I know we always have good engagement for -- by our employees listening in, and I want to take this opportunity to thank them for their dedication and their client outreach efforts throughout March following the bank failures. The efforts of our team across the company are instrumental in retaining and acquiring our holistic client relationships.

This morning, I will provide some commentary on Alerus' strategic positioning in the current environment, along with some comments on the first quarter. Alerus' CFO, Al Villalon will discuss our financial performance and results for the quarter. Afterwards, Karin Taylor, our Chief Risk Officer; and Jim Collins, our Chief Banking Office and Revenue Officer; and Barret Lahm, our Treasurer, will join us to answer any questions you may have about the quarter.

Let me begin first by highlighting Alerus' strong balance sheet and liquidity in light of the recent market events. As I will describe in more detail, our capital remains strong. Our diverse and relationship oriented deposit base grew 4% over the quarter. Our sources of liquidity more than cover our uninsured and not lateralized deposits and our asset quality remains sound.

Despite the industry-wide challenging conditions, Alerus is strategically positioned to navigate the current operating environment. Alerus is one of the most uniquely diversified financial institutions in the country with over 50% of revenue derived fee income, of which a vast majority of this revenue is recurring and annuitized in nature [technical difficulty].