General The following discussion explains the Company’s financial condition and results of operations as of and for the three and six months ended June 30, 2026 and 2025. Annualized results for this interim period may not be indicative of results for the full year or future periods. The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes presented elsewhere in this report and the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 4, 2026. Forward-Looking Statements This Quarterly Report on Form 10-Q 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 the Company’s 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 the Company’s current beliefs, expectations and assumptions regarding the Company’s 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 the Company’s control. The Company’s 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 the Company’s 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 Board of Governors of the Federal Reserve System (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; ● the Company’s ability to successfully manage credit risk, including in the CRE 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 the Company’s market areas, including the level and impact of inflation rates and possible recession; ● the Company’s ability to raise additional capital to implement its business plan; ● credit risks and risks from concentrations (including by type of borrower, geographic area, collateral, and industry) within the Company’s loan portfolio; ● the concentration of large loans to certain borrowers (including CRE loans); ● the level of nonperforming assets on the Company’s balance sheet; ● the Company’s ability to implement organic and acquisition growth strategies; ● the commencement, cost, and outcome of litigation and other legal proceedings and regulatory actions against the Company or to which the Company may become subject, including with respect to pending actions relating to the Company’s previous ESOP fiduciary services commenced by government and private parties; ● the impact of economic or market conditions on the Company’s fee-based services; ● the Company’s ability to continue to grow the retirement and benefit services business; ● the Company’s ability to continue to originate a sufficient volume of residential mortgages; ● the occurrence of fraudulent activity, breaches or failures of the Company’s or its 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; 40 Table of Contents ● interruptions involving the Company’s information technology and telecommunications systems or third-party servicers; ● potential losses incurred in connection with mortgage loan repurchases; ● the composition of the Company’s executive management team and the Company’s ability to attract and retain key personnel; ● rapid and expensive technological changes implemented by the Company 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, financial technology companies and digital asset service providers; ● the Company’s ability to successfully manage liquidity risk, including the Company’s 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 (“FDIC”) insurance limits; ● the effectiveness of the Company’s risk management framework; ● potential impairment to the goodwill the Company recorded in connection with the Company’s past acquisitions, including the acquisitions of Metro Phoenix Bank and HMN Financial, Inc. (“HMNF”); ● the extensive regulatory framework that applies to the Company; ● the ability of the Bank to pay dividends to the Company, and the Company's ability to pay dividends to its stockholders; ● new or revised accounting standards, as may be adopted by state and federal regulatory agencies, the FASB, the SEC or the Public Company Accounting Oversight Board; ● fluctuations in the values of the securities held in the Company’s 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 the Company’s customers and their businesses; ● severe weather, 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 the Company’s internal control over financial reporting; ● the Company’s success at managing and responding to the risks involved in the foregoing items; and ● any other risks described in the “Risk Factors” section of this report and in other reports filed by Alerus Financial Corporation with the SEC. Any forward-looking statement made by the Company in this report is based only on information currently available to the Company 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. Overview The Company is a commercial wealth advisory services bank and national retirement and benefit services provider headquartered in Grand Forks, North Dakota. Through the Company’s subsidiary, Alerus Financial, National Association, the Company provides financial solutions to businesses and consumers through three distinct business lines—banking, retirement and benefit services, and wealth advisory services. These solutions are delivered through a relationship‑oriented primary point of contact along with responsive and client‑friendly technology. The Company’s business model produces strong financial performance and a diversified revenue stream, which has helped the Company establish a brand and culture yielding both a loyal client base and passionate and dedicated employees. The Company generates a majority of overall revenue from noninterest income, which is driven primarily by the Company’s retirement and benefit services and wealth advisory services business lines. The remainder of the Company’s revenue consists of net interest income, which the Company derives from offering traditional banking products and services. 41 Table of Contents Critical Accounting Policies Critical accounting policies are defined as those that are reflective of significant judgements and uncertainties and could potentially result in materially different results under different assumptions and conditions. In preparing the Company’s consolidated financial statements, management is required to make significant estimates and assumptions that affect assets, liabilities, revenues, and expenses reported. Actual results could differ materially from our current estimates as a result of changing conditions and future events. Several estimates are particularly critical and are susceptible to significant near term change, including (i) the ACL on loans; (ii) goodwill impairment; and (iii) fair value of loans acquired in business combinations. The Company’s Annual Report on Form 10-K for the year ended December 31, 2025 includes a discussion of the Company’s critical accounting policies. There have been no material changes to the Company’s critical accounting policies from those disclosed within its Annual Report on Form 10-K for the year ended December 31, 2025. Refer to “NOTE 2 Recent Accounting Pronouncements” of the consolidated financial statements included in this report for a discussion of accounting pronouncements issued but yet to be adopted and implemented. Recent Developments Stockholder Dividend On May 21, 2026, the Board of Directors of the Company declared a quarterly cash dividend of $0.22 per share of common stock. This dividend was paid on July 10, 2026, to stockholders of record at the close of business on June 26, 2026. Property Sales The Company’s West Fargo, North Dakota branch is listed for sale for $3.8 million and is expected to sell within the next 12 months. At June 30, 2026, the facility had a carrying value of approximately $0.4 million. The Company expects to record a gain on the sale upon closing, as the expected sale price is greater than the property’s carrying value. Operating Results Overview The following table summarizes key financial results as of and for the periods indicated: Three months ended Six months ended June 30, March 31, June 30, June 30, June 30, (dollars and shares in thousands, except per share data) 2026 2026 2025 2026 2025 Performance Ratios Return on average total assets 1.60 % 1.79 % 1.53 % 1.69 % 1.28 % Adjusted return on average total assets (1) 1.58 % 1.79 % 1.41 % 1.68 % 1.26 % Return on average common equity 14.56 % 16.44 % 15.82 % 15.49 % 13.37 % Return on average tangible common equity (1) 19.33 % 21.85 % 22.65 % 20.57 % 19.66 % Adjusted return on average tangible common equity (1) 19.04 % 21.96 % 21.02 % 20.48 % 19.36 % Noninterest income as a % of revenue 40.85 % 40.72 % 42.47 % 40.78 % 41.37 % Adjusted noninterest (loss) income as a % of revenue (1) 40.36 % 40.73 % 40.86 % 40.54 % 40.52 % Net interest margin (taxable-equivalent basis) (1) 3.97 % 3.77 % 3.51 % 3.87 % 3.46 % Efficiency ratio (1) 62.53 % 63.39 % 60.66 % 62.95 % 64.54 % Adjusted efficiency ratio (1) 62.76 % 63.20 % 62.35 % 62.97 % 64.55 % Net charge-offs (recoveries) to average loans (1) 0.26 % 0.71 % 0.37 % 0.48 % 0.21 % Dividend payout ratio 27.16 % 23.60 % 26.92 % 25.29 % 31.54 % Per Common Share Earnings per common share − basic $ 0.82 $ 0.90 $ 0.79 $ 1.72 $ 1.31 Earnings per common share − diluted $ 0.81 $ 0.89 $ 0.78 $ 1.70 $ 1.30 Adjusted earnings per common share − diluted (1) $ 0.80 $ 0.89 $ 0.72 $ 1.69 $ 1.27 Dividends declared per common share $ 0.22 $ 0.21 $ 0.21 $ 0.43 $ 0.41 Book value per common share $ 23.34 $ 22.79 $ 21.00 Tangible book value per common share (1) $ 18.73 $ 18.15 $ 16.11 Average common shares outstanding − basic 25,081 25,380 25,368 25,230 25,363 Average common shares outstanding − diluted 25,395 25,679 25,714 25,537 25,683 Other Data Retirement and benefit services assets under administration/management $ 45,163,767 $ 42,273,839 $ 42,451,544 Wealth advisory services assets under administration/management $ 5,195,511 $ 4,792,609 $ 4,613,102 Mortgage originations $ 113,450 $ 94,434 $ 134,634 $ 207,884 $ 205,227 (1) Represents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.” 42 Table of Contents Selected Financial Data The following tables summarize selected financial data as of and for the periods indicated: Three months ended Six months ended June 30, March 31, June 30, June 30, June 30, (dollars in thousands) 2026 2026 2025 2026 2025 Selected Average Balance Sheet Data Loans $ 4,032,142 $ 4,029,719 $ 4,079,084 $ 4,030,939 $ 4,051,129 Investment securities 773,692 771,885 823,463 772,793 841,479 Assets 5,226,319 5,218,515 5,302,728 5,222,438 5,287,622 Deposits 4,180,857 4,238,713 4,305,275 4,209,625 4,340,739 Fed funds purchased and Bank Term Funding Program 74,104 35,628 149,046 54,972 99,714 FHLB short-term advances 226,703 204,444 200,000 215,635 200,000 Long-term debt 59,225 59,195 59,112 59,210 59,098 Stockholders’ equity 574,862 566,563 513,606 570,735 506,470 June 30, March 31, December 31, June 30, March 31, (dollars in thousands) 2026 2026 2025 2025 2025 Selected Period End Balance Sheet Data Loans $ 4,034,244 $ 4,034,744 4,048,022 $ 4,044,657 $ 4,102,075 Allowance for credit losses on loans (48,361 ) (50,505 ) (61,915 ) (59,278 ) (62,127 ) Investment securities 777,208 771,296 770,302 806,544 791,650 Assets 5,288,718 5,287,971 5,230,084 5,323,822 5,330,572 Deposits 4,191,897 4,347,882 4,192,003 4,337,468 4,412,653 Long-term debt 59,239 59,211 59,182 59,126 59,154 Total stockholders’ equity 583,143 574,693 564,933 533,155 550,687 Three months ended Six months ended June 30, March 31, June 30, June 30, June 30, (dollars in thousands) 2026 2026 2025 2026 2025 Selected Income Statement Data Net interest income $ 47,712 $ 44,911 $ 43,032 $ 92,623 $ 84,189 Provision for (recovery of) credit losses 495 (4,883 ) — (4,388 ) 863 Noninterest income 32,945 30,847 31,763 63,792 59,395 Noninterest expense 52,883 50,391 48,438 103,274 98,805 Income before income taxes 27,279 30,250 26,357 57,529 43,916 Income tax expense 6,414 7,279 6,104 13,693 10,349 Net income $ 20,865 $ 22,971 $ 20,253 $ 43,836 $ 33,567 Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures In addition to the results presented in accordance with GAAP, the Company routinely supplements its evaluation with an analysis of certain non-GAAP financial measures. Management uses the non-GAAP financial measures presented in the tables below 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. 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. The following tables present these non-GAAP financial measures along with the most directly comparable financial measures calculated in accordance with GAAP as of and for the periods indicated: June 30, March 31, December 31, June 30, (dollars and shares in thousands, except per share data) 2026 2026 2025 2025 Tangible common equity to tangible assets . Total common stockholders’ equity $ 583,143 $ 574,693 $ 564,933 $ 533,155 Less: Goodwill 85,634 85,634 85,634 85,634 Less: Other intangible assets 29,422 31,397 33,371 38,462 Tangible common equity (a) 468,087 457,662 445,928 409,059 Total assets 5,288,718 5,287,971 5,230,084 5,323,822 Less: Goodwill 85,634 85,634 85,634 85,634 Less: Other intangible assets 29,422 31,397 33,371 38,462 Tangible assets (b) 5,173,662 5,170,940 5,111,079 5,199,726 Tangible common equity to tangible assets (a)/(b) 9.05 % 8.85 % 8.72 % 7.87 % Tangible book value per common share Tangible common equity (a) 468,087 457,662 445,928 409,059 Total common shares issued and outstanding (c) 24,986 25,214 25,406 25,389 Tangible book value per common share (a)/(c) $ 18.73 $ 18.15 $ 17.55 $ 16.11 43 Table of Contents Three months ended Six months ended June 30, March 31, June 30, June 30, June 30, (dollars and shares in thousands, except per share data) 2026 2026 2025 2026 2025 Return on Average Tangible Common Equity Net income $ 20,865 $ 22,971 $ 20,253 $ 43,836 $ 33,567 Add: Intangible amortization expense (net of tax) (1) 1,559 1,560 2,141 3,120 4,281 Net income, excluding intangible amortization (d) 22,424 24,531 22,394 46,956 37,848 Average total equity 574,862 566,563 513,606 570,735 506,470 Less: Average goodwill 85,634 85,634 85,634 85,634 85,634 Less: Average other intangible assets (net of tax) (1) 24,003 25,664 31,436 24,829 32,571 Average tangible common equity (e) 465,225 455,265 396,536 460,272 388,265 Return on average tangible common equity (d)/(e) 19.33 % 21.85 % 22.65 % 20.57 % 19.66 % Efficiency ratio Noninterest expense $ 52,883 $ 50,392 $ 48,438 $ 103,274 $ 98,805 Less: Intangible amortization expense 1,974 1,974 2,710 3,949 5,419 Adjusted noninterest expense (f) 50,909 48,418 45,728 99,325 93,386 Net interest income (v) 47,712 44,912 43,032 92,623 84,189 Noninterest income 32,945 30,847 31,763 63,792 59,395 Tax-equivalent adjustment 755 619 592 1,374 1,110 Total tax-equivalent revenue (g) 81,412 76,378 75,387 157,789 144,694 Efficiency ratio (f)/(g) 62.53 % 63.39 % 60.66 % 62.95 % 64.54 % Pre-Provision Net Revenue Net interest income $ 47,712 $ 44,912 $ 43,032 $ 92,623 $ 84,189 Add: Noninterest income 32,945 30,847 31,763 63,792 59,395 Less: Noninterest expense 52,883 50,392 48,438 103,274 98,805 Pre-provision net revenue $ 27,774 $ 25,367 $ 26,357 $ 53,141 $ 44,779 Adjusted Noninterest Income Noninterest income $ 32,945 $ 30,847 $ 31,763 $ 63,792 $ 59,395 Less: Adjusted noninterest income items Net gain (loss) on sale of loans — — 2,115 — 2,115 Net gain on sale of premises and equipment 653 (21 ) (84 ) 632 (84 ) Total adjusted noninterest income items (h) 653 (21 ) 2,031 632 2,031 Adjusted noninterest income (i) $ 32,292 $ 30,868 $ 29,732 $ 63,160 $ 57,364 Adjusted Noninterest (Loss) Income as a Percentage of Revenue Adjusted noninterest income (i) $ 32,292 30,868 29,732 63,160 57,364 Net interest income (v) 47,712 44,912 43,032 92,623 84,189 Adjusted revenue (w) 80,004 75,780 72,764 155,783 141,553 Adjusted noninterest (loss) income as a percentage of revenue (i)/(w) $ 40.36 % 40.73 % 40.86 % 40.54 40.52 Adjusted Noninterest Expense Noninterest expense $ 52,883 $ 50,392 $ 48,438 $ 103,274 $ 98,805 Less: Adjusted noninterest expense items HMNF merger- and acquisition-related expenses 6 (34 ) 11 (27 ) 298 Severance and signing bonus expense 216 167 (23 ) 383 1,004 Total adjusted noninterest expense items (j) 222 133 (12 ) 356 1,302 Adjusted noninterest expense (k) $ 52,661 $ 50,259 $ 48,450 $ 102,918 $ 97,503 Adjusted Pre-Provision Net Revenue Net interest income $ 47,712 $ 44,912 $ 43,032 $ 92,623 $ 84,189 Add: Adjusted noninterest income (i) 32,292 30,868 29,732 63,160 57,364 Less: Adjusted noninterest expense (k) 52,661 50,259 48,450 102,918 97,503 Adjusted pre-provision net revenue $ 27,343 $ 25,521 $ 24,314 $ 52,865 $ 44,050 (1) Items calculated after-tax utilizing a marginal income tax rate of 21.0%. 44 Table of Contents Three months ended Six months ended June 30, March 31, June 30, June 30, June 30, (dollars and shares in thousands, except per share data) 2026 2026 2025 2026 2025 Adjusted Efficiency Ratio Adjusted noninterest expense (k) $ 52,661 $ 50,259 $ 48,450 $ 102,918 $ 97,503 Less: Intangible amortization expense 1,974 1,974 2,710 3,949 5,419 Adjusted noninterest expense for efficiency ratio (l) 50,687 48,285 45,740 98,969 92,084 Tax-equivalent revenue Net interest income 47,712 44,912 43,032 92,623 84,189 Add: Adjusted noninterest income (i) 32,292 30,868 29,732 63,160 57,364 Add: Tax-equivalent adjustment 755 619 592 1,374 1,110 Total tax-equivalent revenue (m) 80,759 76,399 73,356 157,157 142,663 Adjusted efficiency ratio (l)/(m) 62.76 % 63.20 % 62.35 % 62.97 % 64.55 % Adjusted Net Income Net income $ 20,865 $ 22,971 $ 20,253 $ 43,836 $ 33,567 Less: Adjusted noninterest income items (net of tax) (1) (h) 516 (17 ) 1,604 499 1,604 Add: Adjusted noninterest expense items (net of tax) (1) (j) 175 105 (9 ) 281 1,029 Adjusted net income (n) $ 20,525 $ 23,093 $ 18,640 $ 43,618 $ 32,991 Adjusted Return on Average Total Assets Average total assets (o) $ 5,226,319 $ 5,218,515 $ 5,302,728 $ 5,222,438 $ 5,287,622 Adjusted return on average total assets (n)/(o) 1.58 % 1.79 % 1.41 % 1.68 % 1.26 % Adjusted Return on Average Tangible Common Equity Adjusted net income (n) $ 20,525 $ 23,093 $ 18,640 $ 43,618 $ 32,991 Add: Intangible amortization expense (net of tax) (1) 1,559 1,560 2,141 3,120 4,281 Adjusted net income, excluding intangible amortization (p) 22,084 24,653 20,781 46,738 37,272 Average total equity 574,862 566,563 513,606 570,735 506,470 Less: Average goodwill 85,634 85,634 85,634 85,634 85,634 Less: Average other intangible assets (net of tax) (1) 24,003 25,664 31,436 24,829 32,571 Average tangible common equity (q) 465,225 455,265 396,536 460,272 388,265 Adjusted return on average tangible common equity (p)/(q) 19.04 % 21.96 % 21.02 % 20.48 % 19.36 % Adjusted Earnings Per Common Share − Diluted Adjusted net income (n) $ 20,525 $ 23,093 $ 18,640 $ 43,618 $ 32,991 Less: Dividends and undistributed earnings allocated to participating securities 191 206 205 400 298 Adjusted net income available to common stockholders (r) 20,334 22,887 18,435 43,218 32,693 Weighted-average common shares outstanding for diluted earnings per share (s) 25,395 25,679 25,714 25,537 25,683 Adjusted earnings per common share − diluted (r)/(s) $ 0.80 $ 0.89 $ 0.72 $ 1.69 $ 1.27 Net Charge-Offs (Recoveries) to Average Loans Net charge-offs (recoveries) (t) $ 2,575 $ 7,027 $ 3,767 $ 9,602 $ 4,174 Average total loans (u) $ 4,032,142 $ 4,029,719 $ 4,079,084 $ 4,030,939 $ 4,051,129 Net charge-offs (recoveries) to average loans (t)/(u) 0.26 % 0.71 % 0.37 % 0.48 % 0.21 % Net Interest Margin (on a Tax-Equivalent Basis) Net interest income (v) $ 47,712 $ 44,912 $ 43,032 $ 92,623 $ 84,189 Add: Tax equivalent adjustment for loans and securities 755 619 592 1,374 1,110 Net interest income (on a tax-equivalent basis) (1) (w) $ 48,467 $ 45,531 $ 43,624 $ 93,997 $ 85,299 Interest earning assets (x) 4,896,740 4,901,399 4,988,946 3,745,132 3,870,507 Net interest margin (on a tax-equivalent basis) (1) (w)/(x) 3.97 % 3.77 % 3.51 % 5.06 % 4.44 % (1) Items calculated after-tax utilizing a marginal income tax rate of 21.0%. Discussion and Analysis of Results of Operations Net Income Net income for the three months ended June 30, 2026 was $20.9 million, or $0.81 per diluted common share, a $0.6 million, or 3.0%, increase compared to $20.3 million, or $0.78 per diluted common share, for the three months ended June 30, 2025. Earnings for the second quarter of 2026 compared to the second quarter of 2025 increased primarily due to an increase in net interest income of $4.7 million, partially offset by an increase in noninterest expense $4.4 million. Net income for the six months ended June 30, 2026 was $43.8 million, or $1.70 per diluted common share, a $10.3 million, or 30.6%, increase compared to $33.6 million, or $1.30 per diluted common share, for the six months ended June 30, 2025. Earnings for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 increased primarily due to an increase in net interest income of $8.4 million and an increase in noninterest income of $4.4 million, partially offset by an increase in noninterest expense of $4.5 million. Net Interest Income Net interest income is the difference between interest income and yield related fees earned on assets and interest expense paid on liabilities. Net interest margin is the difference between the yield on interest earning assets and the cost of interest-bearing liabilities as a percentage of interest earning assets. Net interest margin is presented on a tax-equivalent basis, which means that tax-free interest income has been adjusted to a pre-tax-equivalent income, assuming a federal income tax rate of 21% for the three and six months ended June 30, 2026 and 2025. 45 Table of Contents Net interest income for the three months ended June 30, 2026 was $47.7 million, an increase of $4.7 million, or 10.9%, compared to $43.0 million for the three months ended June 30, 2025. Interest income increased for the second quarter of 2026 compared to the second quarter of 2025 was 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 income for the six months ended June 30, 2026 was $92.6 million, an increase of $8.4 million, or 10.0%, compared to $84.2 million for the six months ended June 30, 2025. Interest income increased for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily due to 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 $9.4 million, or 17.3%, from the six months ended June 30, 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), a non-GAAP financial measure, was 3.97% for the three months ended June 30, 2026 , a 20 basis point increase from 3.51% for the same period in 2025. The 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 subordinated debt refinancing and higher borrowing balances. The following tables present average balance sheet information, interest income, interest expense and the corresponding average yields on assets, average yields earned, and rates paid for the three and six months ended June 30, 2026 and 2025. The Company derived these yields and rates by dividing income or expense by the average balance of the corresponding assets or liabilities. The Company derived average balances from the daily balances throughout the periods indicated. Average loan balances include loans that have been placed on nonaccrual status, while interest previously accrued on these loans is reversed against interest income. In these tables, adjustments are made to the yields on tax‑exempt assets in order to present tax‑exempt income and fully taxable income on a fully taxable equivalent (“FTE”) basis. Three months ended June 30, 2026 2025 Interest Average Interest Average Average Income/ Yield/ Average Income/ Yield/ (dollars in thousands) Balance Expense Rate Balance Expense Rate Interest-Earning Assets Interest-bearing deposits with banks $ 45,777 $ 469 4.11 % $ 35,951 $ 494 5.51 % Investment securities (1) 773,692 7,454 3.86 823,463 5,513 2.69 Loans held for sale 18,885 212 4.50 22,302 247 4.44 Loans Commercial and industrial 779,471 13,736 7.07 653,635 12,242 7.51 CRE − Owner occupied 502,476 7,756 6.19 442,796 6,947 6.29 CRE − Construction, land and development 103,618 3,380 13.08 337,867 5,025 5.97 CRE − Multifamily 394,683 5,957 6.05 347,277 5,821 6.72 CRE − Non-owner occupied 922,958 13,983 6.08 955,134 15,525 6.52 Agricultural − Land 53,823 775 5.78 66,044 948 5.76 Agricultural − Production 53,351 924 6.95 67,412 1,231 7.32 RRE − First lien 838,819 10,311 4.93 898,903 11,016 4.92 RRE − Construction 34,981 578 6.63 39,682 754 7.62 RRE − HELOC 271,254 4,068 6.02 188,494 3,285 6.99 RRE − Junior lien 32,676 532 6.53 42,435 674 6.37 Other consumer 44,032 715 6.51 39,405 689 7.01 Total loans (1) 4,032,142 62,715 6.24 4,079,084 64,157 6.31 Federal Reserve/FHLB Stock 26,244 530 8.10 28,146 607 8.65 Total interest-earning assets 4,896,740 71,380 5.85 4,988,946 71,018 5.71 Noninterest-earning assets 329,579 313,782 Total assets $ 5,226,319 $ 5,302,728 Interest-Bearing Liabilities Interest-bearing demand deposits $ 1,378,394 $ 5,758 1.68 % $ 1,247,241 $ 5,582 1.80 % Money market and savings deposits 1,441,099 8,421 2.34 1,561,977 10,799 2.77 Time deposits 571,276 4,759 3.34 687,428 6,377 3.72 Fed funds purchased 74,104 712 3.85 149,046 1,719 4.63 FHLB short-term advances 226,703 2,224 3.93 200,000 2,263 4.54 Long-term debt 59,225 1,040 7.04 59,112 652 4.42 Total interest-bearing liabilities 3,750,801 22,914 2.45 3,904,804 27,392 2.81 Noninterest-Bearing Liabilities and Stockholders' Equity Noninterest-bearing deposits 790,088 808,629 Operating lease liabilities 43,217 18,346 Accrued expenses and other liabilities 67,351 57,343 Other noninterest-bearing liabilities 110,568 75,689 Stockholders’ equity 574,862 513,606 Total liabilities and stockholders’ equity $ 5,226,319 $ 5,302,728 Net interest income on FTE basis (1) $ 48,466 $ 43,626 Net interest rate spread on FTE basis (1) 3.40 % 2.90 % Net interest margin on FTE basis (1) 3.97 % 3.51 % (1) Taxable equivalent adjustment was calculated utilizing a marginal income tax rate of 21.0 percent. 46 Table of Contents Six months ended June 30, 2026 2025 Interest Average Interest Average Average Income/ Yield/ Average Income/ Yield/ (dollars in thousands) Balance Expense Rate Balance Expense Rate Interest-Earning Assets Interest-bearing deposits with banks $ 53,185 $ 1,107 4.20 % $ 34,695 $ 884 5.14 % Investment securities (1) 772,793 14,758 3.85 841,479 11,422 2.74 Loans held for sale 17,260 392 4.58 16,856 396 4.74 Loans Commercial and industrial 751,791 26,414 7.09 655,725 24,101 7.41 CRE − Owner occupied 466,603 14,267 6.17 411,546 12,749 6.25 CRE − Construction, land and development 157,388 6,079 7.79 340,279 9,958 5.90 CRE − Multifamily 394,051 11,583 5.93 355,715 11,511 6.53 CRE − Non-owner occupied 918,823 27,454 6.03 957,629 31,297 6.59 Agricultural − Land 56,789 1,659 5.89 66,633 1,916 5.80 Agricultural − Production 56,077 1,936 6.96 64,190 2,326 7.31 RRE − First lien 851,876 20,835 4.93 899,367 21,616 4.85 RRE − Construction 33,949 1,088 6.46 38,305 1,519 8.00 RRE − HELOC 266,447 7,956 6.02 178,601 6,244 7.05 RRE − Junior lien 34,481 1,107 6.47 43,261 1,353 6.31 Other consumer 42,664 1,356 6.41 39,878 1,387 7.01 Total loans (1) 4,030,939 121,734 6.09 4,051,129 125,977 6.27 Federal Reserve/FHLB Stock 24,881 986 7.99 25,287 1,036 8.26 Total interest-earning assets 4,899,058 138,977 5.72 4,969,446 139,715 5.67 Noninterest-earning assets 323,380 318,176 Total assets $ 5,222,438 $ 5,287,622 Interest-Bearing Liabilities Interest-bearing demand deposits $ 1,372,863 $ 11,273 1.66 % $ 1,247,482 $ 11,146 1.80 % Money market and savings deposits 1,472,276 17,205 2.36 1,576,218 22,131 2.83 Time deposits 570,176 9,535 3.37 687,995 13,016 3.82 Fed funds purchased 54,972 1,064 3.90 99,714 2,295 4.64 FHLB short-term advances 215,635 4,228 3.95 200,000 4,526 4.56 Long-term debt 59,210 1,675 5.70 59,098 1,302 4.44 Total interest-bearing liabilities 3,745,132 44,980 2.42 3,870,507 54,416 2.84 Noninterest-Bearing Liabilities and Stockholders' Equity Noninterest-bearing deposits 794,310 829,044 Operating lease liabilities 40,848 18,586 Accrued expenses and other liabilities 71,413 63,015 Other noninterest-bearing liabilities 112,261 81,601 Stockholders’ equity 570,735 506,470 Total liabilities and stockholders’ equity $ 5,222,438 $ 5,287,622 Net interest income on FTE basis (1) $ 93,997 $ 85,299 Net interest rate spread on FTE basis (1) 3.30 % 2.83 % Net interest margin on FTE basis (1) 3.87 % 3.46 % (1) Taxable equivalent adjustment was calculated utilizing a marginal income tax rate of 21.0 percent. 47 Table of Contents Interest Rates and Operating Interest Differential Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest earning assets and interest-bearing liabilities, as well as changes in average interest rates. The following table shows the effect that these factors had on the interest earned on interest earning assets and the interest incurred on interest-bearing liabilities. The effect of changes in volume is determined by multiplying the change in volume by the previous period’s average rate. Similarly, the effect of rate changes is calculated by multiplying the change in average rate by the previous period’s volume. Three months ended June 30, 2026 Six months ended June 30, 2026 Compared with Compared with Three months ended June 30, 2025 Six months ended June 30, 2025 Change due to: Interest Change due to: Interest (tax-equivalent basis, dollars in thousands) Volume Rate Variance Volume Rate Variance Interest-earning assets Interest-bearing deposits with banks $ 135 $ (160 ) $ (25 ) $ 471 $ (248 ) $ 223 Investment securities (1) (334 ) 2,275 1,941 (933 ) 4,269 3,336 Loans held for sale (38 ) 3 (35 ) 9 (13 ) (4 ) Loans Commercial and industrial 1,873 (379 ) 1,494 3,530 (1,217 ) 2,313 CRE − Construction, land and development (3,925 ) 2,280 (1,645 ) (5,351 ) 1,472 (3,879 ) CRE − Multifamily 771 (635 ) 136 1,241 (1,169 ) 72 CRE − Non-owner occupied (505 ) (1,037 ) (1,542 ) (1,268 ) (2,575 ) (3,843 ) CRE − Owner occupied 1,089 (280 ) 809 1,706 (188 ) 1,518 Agricultural − Land (223 ) 50 (173 ) (283 ) 26 (257 ) Agricultural − Production (172 ) (135 ) (307 ) (294 ) (96 ) (390 ) RRE − First lien (1,141 ) 436 (705 ) (1,142 ) 361 (781 ) RRE − Construction (82 ) (94 ) (176 ) (173 ) (258 ) (431 ) RRE − HELOC 1,314 (531 ) 783 3,071 (1,359 ) 1,712 RRE − Junior lien (171 ) 29 (142 ) (275 ) 29 (246 ) Other consumer 73 (47 ) 26 97 (128 ) (31 ) Total loans (1) (1,099 ) (343 ) (1,442 ) 859 (5,102 ) (4,243 ) Federal Reserve/FHLB Stock (41 ) (36 ) (77 ) (17 ) (33 ) (50 ) Total interest income (1,377 ) 1,739 362 389 (1,127 ) (738 ) Interest-bearing liabilities Interest-bearing demand deposits 589 (413 ) 176 1,119 (992 ) 127 Money market and savings deposits (835 ) (1,543 ) (2,378 ) (1,459 ) (3,467 ) (4,926 ) Time deposits (1,077 ) (541 ) (1,618 ) (2,232 ) (1,249 ) (3,481 ) Fed funds purchased (865 ) (142 ) (1,007 ) (1,029 ) (202 ) (1,231 ) FHLB short-term advances 302 (341 ) (39 ) 354 (652 ) (298 ) Long-term debt 1 387 388 2 371 373 Total interest expense (1,885 ) (2,593 ) (4,478 ) (3,245 ) (6,191 ) (9,436 ) Change in net interest income $ 508 $ 4,332 $ 4,840 $ 3,634 $ 5,064 $ 8,698 48 Table of Contents Provision for Credit Losses The provision for credit losses was comprised of the following components for the periods presented: Three months ended Six months ended June 30, June 30, (dollars in thousands) 2026 2025 2026 2025 Provision (recovery) for credit losses on loans $ 431 $ 1,116 $ (3,954 ) $ 3,523 Provision (recovery) for credit losses on unfunded commitments 67 (1,192 ) (426 ) (2,734 ) Provision (recovery) for HTM debt securities (3 ) (2 ) (8 ) (4 ) Provision (recovery) for non-mortgage loans transferred to held for sale — 78 — 78 Provision for credit losses $ 495 $ — $ (4,388 ) $ 863 The Company recorded a provision for credit losses of $0.5 million for the second quarter of 2026, compared to no provision for credit losses for the second quarter of 2025. The Company recorded a provision release of $4.4 million for the six months ended June 30, 2026, compared to a provision for credit losses of $0.9 million for the six months ended June 30, 2025. The provision release in the first quarter of 2026 was primarily driven by changes to loan balances and loan mix, largely due to decreases in balances in the commercial real estate construction, land and development pool, which is reserved at a higher rate than most other loan pools, in addition to decreases in reserves on individually evaluated loans. Noninterest Income The Company’s noninterest income is generated from retirement and benefit services, wealth advisory services, mortgage banking, and other general banking services. The following table presents the Company’s noninterest income for the three and six months ended June 30, 2026 and 2025: Three months ended Six months ended June 30, June 30, (dollars in thousands) 2026 2025 2026 2025 Retirement and benefit services $ 17,347 $ 16,024 $ 34,754 $ 32,130 Wealth advisory services 7,705 7,363 14,942 14,267 Mortgage banking 3,195 3,651 6,730 5,177 Service charges on deposit accounts 1,106 680 2,039 1,330 Gain on sale of non-mortgage loan — 2,115 — 2,115 Other 3,592 1,930 5,327 4,376 Total noninterest income $ 32,945 $ 31,763 $ 63,792 $ 59,395 Noninterest income as a % of revenue 40.85 % 42.47 % 40.78 % 41.37 % Total noninterest income for the three months ended June 30, 2026 was $32.9 million, an increase of $1.2 million, or 3.7%, from the three months ended June 30, 2025. The 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%, in the second quarter of 2026 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. Total noninterest income for the six months ended June 30, 2026 was $63.8 million, an increase of $4.4 million, or 7.4%, from the six months ended June 30, 2025. The increase was driven by an increase in retirement and benefit services revenue, mortgage banking revenue, other noninterest income, and service charges on deposit accounts, partially offset by a decrease in the gain on sale of non-mortgage loans. Retirement and benefit services revenue increased $2.6 million, or 8.2%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily driven by recurring annual income. Mortgage banking revenue increased $1.6 million, or 30.0%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, due to an increase in the mortgage servicing asset valuation, as well as an increase in sold loan volume. Other noninterest income increased $1.0 million, or 21.7%, in the six months ended June 30, 2026 compared to the six months ended June 30, 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. Service charges on deposit accounts increased $0.7 million, or 53.3%, in the six months ended June 30, 2026 compared to the six months ended June 30, 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%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, due to a $2.1 million gain on the sale of a PCD hospitality loan during the second quarter of 2025. See “NOTE 16 Segment Reporting” of the consolidated financial statements and Segment Reporting section below for additional discussion regarding the Company’s business lines. 49 Table of Contents Noninterest Expense The following table presents noninterest expense for the three and six months ended June 30, 2026 and 2025: Three months ended Six months ended June 30, June 30, (dollars in thousands) 2026 2025 2026 2025 Compensation $ 26,155 $ 24,343 $ 50,242 $ 47,304 Employee taxes and benefits 6,755 6,633 13,395 14,396 Occupancy and equipment expense 3,493 2,559 6,919 5,466 Business services, software and technology expense 5,440 5,868 11,279 11,620 Intangible amortization expense 1,974 2,710 3,949 5,419 Professional fees and assessments 3,781 2,339 7,581 5,335 Marketing and business development 869 787 1,730 1,752 Supplies and postage 540 490 1,146 1,121 Travel 357 347 718 634 Mortgage and lending expenses 614 940 1,323 1,476 Other 2,905 1,422 4,992 4,282 Total noninterest expense $ 52,883 $ 48,438 $ 103,274 $ 98,805 Total noninterest expense for the three months ended June 30, 2026 was $52.9 million, a $4.4 million, or 9.2%, increase compared to $48.4 million for the three months ended June 30, 2025. The underlying changes were driven by increases in compensation, professional fees and assessments, and other noninterest expense. Compensation increased $1.8 million, or 7.4%, primarily due to annual merit increases, as well as increases in the deferred compensation plan liabilities driven by mutual fund investment gains related to the underlying assets of the plans. Professional fees and assessments increased $1.4 million, or 61.7%, 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. Other noninterest expense increased $1.5 million, or 104.3%, due to an increase in other real estate owned balances and related holding costs, as well as increased corporate insurance costs. Total noninterest expense for the six months ended June 30, 2026 was $103.3 million, a $4.5 million, or 4.5%, increase compared to $98.8 million for the six months ended June 30, 2025. The underlying changes were driven by increases in compensation, professional fees and assessments, occupancy and equipment expense, and other noninterest expense, offset by decreases in intangible amortization expense and employee taxes and benefits. Compensation increased $2.9 million, or 6.2%, primarily due to higher annual bonus expense, annual merit increases, as well as increases in the deferred compensation plan liabilities driven by mutual fund investment gains related to the underlying assets of the plans. Professional fees and assessments increased $2.2 million, or 42.1%, 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. Occupancy and equipment expense increased $1.5 million, or 26.6%, primarily driven by facility investments and the strategic realignment of locations from owned to leased space. Other noninterest expense increased $0.7 million, or 16.6%, due to an increase in other real estate owned balances and related holding costs, as well as increased corporate insurance costs. For the six months ended June 30, 2026, intangible amortization expense decreased $1.5 million, or 27.1%, from the six months ended June 30, 2025, primarily due to the annual reset of the $33.5 million core deposit intangible recorded in connection with the HMNF transaction. For the six months ended June 30, 2026, employee taxes and benefits decreased $1.0 million, or 7.0%, from the six months ended June 30, 2025, primarily due to lower claims on group insurance. Income Tax Expense Income tax expense is an estimate based on the amount the Company expects to owe the applicable taxing authorities, plus the impact of deferred tax items. Accrued taxes represent the net estimated amount due, or to be received from, taxing authorities. In estimating accrued taxes, management assesses the relative merits and risks of the appropriate tax treatment of transactions, taking into account statutory, judicial, and regulatory guidance in the context of the Company’s tax position. If the final resolution of taxes payable differs from the Company’s estimates due to regulatory determination or legislative or judicial actions, adjustments to tax expense may be required. For the three months ended June 30, 2026, the Company recognized income tax expense of $6.4 million on $27.3 million of pre-tax income, resulting in an effective tax rate of 23.5%, compared to income tax expense of $6.1 million on $26.4 million of pre-tax income for the three months ended June 30, 2025, resulting in an effective tax rate of 23.2%. For the six months ended June 30, 2026, the Company recognized income tax expense of $13.7 million on $57.5 million of pre-tax income, resulting in an effective tax rate of 23.8%, compared to income tax expense of $10.3 million on $43.9 million of pre-tax income for the six months ended June 30, 2025, resulting in an effective tax rate of 23.6%. 50 Table of Contents Segment Reporting The Company determined reportable segments based on the significance of the services offered, the significance of those services to the Company’s financial condition and operating results, and the Company’s regular review of the operating results of those services. The Company has three operating segments—banking, retirement and benefit services, and wealth advisory services. These segments are components for which financial information is prepared and evaluated regularly by management in deciding how to allocate resources and assess performance. The selected financial information presented for each segment sets forth net interest income, provision for loan losses, noninterest income, and direct and indirect noninterest expense overhead allocations. Corporate administration includes all remaining income and expenses not allocated to the three operating segments. Certain reclassification adjustments have been made between corporate administration and the various lines of business for consistency in presentation. For additional financial information on the Company’s segments see “NOTE 16 Segment Reporting” of the Company’s consolidated financial statements. Banking The banking segment offers a complete line of loan, deposit, cash management, and treasury services through 26 offices in North Dakota, Minnesota, Wisconsin, Iowa, and Arizona, including 13 banking offices acquired in the HMNF transaction. These products and services are supported through web and mobile based applications. The majority of the Company’s assets and liabilities are in the banking segment’s balance sheet. The following table presents the banking segment income statement, inclusive of corporate administration income, for the three and six months ended June 30, 2026 and 2025: Three months ended Six months ended June 30, June 30, (dollars in thousands) 2026 2025 2026 2025 Net interest income $ 47,712 $ 43,032 $ 92,623 $ 84,189 Provision for (recovery of) credit losses 495 — (4,388 ) 863 Noninterest income 7,893 8,376 14,096 12,998 Total revenue 55,110 51,408 111,107 96,324 Noninterest expense (1) 28,257 27,448 55,650 56,659 Net income before taxes $ 26,853 $ 23,960 $ 55,457 $ 39,665 (1) Noninterest expenses do not include corporate administration expenses. Corporate administration expenses include executive compensation, premises and fixed assets expenses, information technology expenses, and other expenses. These expenses are not specific to any specific segment. Retirement and Benefit Services The retirement and benefit services segment provides the following services nationally: record-keeping and administration services to qualified and other types of retirement plans, investment fiduciary services to retirement plans, health savings accounts, flexible spending accounts, and COBRA recordkeeping and administration services. The following table presents the retirement and benefit services segment income statement for the three and six months ended June 30, 2026 and 2025: Three months ended Six months ended June 30, June 30, (dollars in thousands) 2026 2025 2026 2025 Recurring annual income (1) $ 15,135 $ 13,990 $ 28,100 $ 26,015 Transactional income (2) 2,212 2,034 6,654 6,115 Total noninterest income 17,347 16,024 34,754 32,130 Noninterest expense 15,077 13,166 29,686 26,783 Net income before taxes $ 2,270 $ 2,858 $ 5,068 $ 5,347 (1) Recurring annual income primarily includes asset-based fees, administration fees, record-keeping fees, trust/custody fees, advisory fees, and health and welfare fees. $6.3 million and $6.2 million for the three months ended June 30, 2026 and 2025, respectively, was from market sensitive revenue. (2) Transactional income primarily includes distribution fees. Wealth Advisory Services The wealth advisory services segment provides advisory and planning services, investment management, and trust and fiduciary services to clients across the Company’s footprint. The following table presents the wealth advisory services segment income statement for the three and six months ended June 30, 2026 and 2025: Three months ended Six months ended June 30, June 30, (dollars in thousands) 2026 2025 2026 2025 Asset management $ 6,831 $ 6,314 $ 13,285 $ 9,694 Brokerage 410 417 804 951 Insurance and other 464 632 853 1,243 Total noninterest income 7,705 7,363 14,942 11,888 Noninterest expense 6,374 5,132 12,101 9,969 Net income before taxes $ 1,331 $ 2,231 $ 2,841 $ 1,919 51 Table of Contents Financial Condition Overview Total assets were $5.3 billion as of June 30, 2026, an increase of $58.6 million, or 1.1%, compared to December 31, 2025. The increase was primarily due to an increase of $41.8 million in cash and cash equivalents, an increase of $20.1 million in available-for-sale investment securities, an increase of $8.5 million in other assets, and an increase of $4.8 million in loans held for sale, partially offset by a decrease of $4.8 million in loans held for investment. Investment Securities The following table presents the fair value composition of the Company’s investment securities portfolio as of June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 Percent of Percent of (dollars in thousands) Balance Portfolio Balance Portfolio Available-for-sale U.S. Treasury and agencies $ 13,234 1.8 % $ 405 0.1 % Mortgage backed securities Residential agency 479,653 64.0 476,746 64.2 Asset backed securities 14 — 15 — Corporate bonds 41,290 5.5 36,929 5.0 Total available-for-sale investment securities 534,191 71.3 514,095 69.3 Held-to-maturity Obligations of state and political agencies 99,896 13.3 105,405 14.2 Mortgage backed securities Residential agency 115,338 15.4 122,604 16.5 Total held-to-maturity investment securities 215,234 28.7 228,009 30.7 Total investment securities $ 749,425 100.0 % $ 742,104 100.0 % The composition of the Company’s investment securities portfolio reflects the Company’s investment strategy of maintaining an appropriate level of liquidity for normal operations while providing an additional source of revenue. The investment portfolio also provides a balance to interest rate risk and credit risk in other categories of the balance sheet, while providing a vehicle for the investment of available funds, furnishing liquidity, and supplying securities to pledge as collateral. The investment securities presented in the following table are reported at fair value and by contractual maturity as of June 30, 2026. Actual timing may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Additionally, residential mortgage backed securities and collateralized mortgage obligations receive monthly principal payments, which are not reflected below. The yields below are calculated on a tax-equivalent basis, assuming a 21.0% income tax rate. Maturity as of June 30, 2026 One year or less One to five years Five to ten years After ten years Fair Average Fair Average Fair Average Fair Average (dollars in thousands) Value Yield Value Yield Value Yield Value Yield Available-for-sale U.S. Treasury and agencies $ — — % $ 146 4.02 % $ 4,569 4.65 % $ 8,519 4.81 % Mortgage backed securities Residential agency 36 2.39 8,861 4.10 7,948 4.21 462,809 4.73 Commercial — — — — — — — — Asset backed securities — — — — 14 4.52 — — Corporate bonds — — 2,427 3.00 32,833 3.37 6,030 6.25 Total available-for-sale investment securities 36 2.39 11,434 3.87 45,364 3.65 477,358 4.75 Held-to-maturity Obligations of state and political agencies 13,569 1.78 55,527 2.11 26,133 2.63 4,667 2.37 Mortgage backed securities Residential agency — — — — — — 115,338 2.21 Total held-to-maturity investment securities 13,569 1.78 55,527 2.11 26,133 2.63 120,005 2.21 Total investment securities $ 13,605 1.78 % $ 66,961 2.41 % $ 71,497 3.28 % $ 597,363 4.24 % 52 Table of Contents Loans The loan portfolio represents a broad range of borrowers comprised of commercial and industrial, commercial real estate, agricultural, and consumer loans. Total loans outstanding 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 Company’s loan portfolio is diversified. The following table presents the balance and percentage of loans outstanding by segment/industry as of the dates presented: June 30, 2026 December 31, 2025 Percent of Percent of (dollars in thousands) Balance Portfolio Balance Portfolio Commercial and business lending: General business $ 376,716 9.3 % $ 290,008 7.2 % Services 200,109 5.0 237,966 5.9 Retail trade 72,351 1.8 101,374 2.5 Manufacturing 110,783 2.7 107,485 2.7 Commercial real estate − Owner occupied 622,241 15.4 427,260 10.6 Total commercial and business lending 1,382,200 34.2 1,164,093 28.9 Investor commercial real estate: Construction, land and development 79,850 2.0 246,238 6.1 Multifamily 361,875 9.0 383,505 9.5 Non-owner occupied Office 127,943 3.2 142,095 3.5 Industrial 199,353 4.9 193,041 4.8 Retail 108,160 2.7 116,735 2.9 Hotel 83,440 2.1 110,022 2.7 Medical office 193,737 4.8 174,891 4.3 Medical or nursing facility 105,371 2.6 85,918 2.1 Other commercial real estate 75,363 1.9 53,160 1.3 Total non-owner occupied 893,367 22.2 875,862 21.6 Total investor commercial real estate 1,335,092 33.2 1,505,605 37.2 Agricultural: Land 54,202 1.3 64,799 1.6 Production 53,367 1.3 62,500 1.5 Total agricultural 107,569 2.6 127,299 3.1 Consumer: RRE − First lien 828,936 20.5 874,737 21.6 RRE − Construction 31,202 0.8 33,703 0.8 RRE − HELOC 273,124 6.8 260,883 6.4 RRE − Junior lien 31,941 0.8 36,844 0.9 Other consumer 44,180 1.1 44,858 1.1 Total consumer 1,209,383 30.0 1,251,025 30.8 Total loans $ 4,034,244 100.0 % $ 4,048,022 100.0 % Commercial and industrial loans represent loans for working capital, purchases of equipment and other needs of commercial customers primarily located within the Bank’s geographical footprint. These loans are underwritten individually and represent ongoing relationships based on a thorough knowledge of the customer, the customer’s industry and the customer’s market. While commercial loans are generally secured by the customer’s assets, including real property, inventory, accounts receivable, operating equipment and other property, and may also include personal guarantees of the owners and related parties, the primary source of repayment of the loans is the ongoing cash flow from operations of the customer’s business. In addition, revolving lines of credit are generally governed by a borrowing base. Inherent lending risks are monitored on a continuous basis through interim reporting, covenant testing and annual underwriting. CRE loans consist of term loans secured by a mortgage lien on real property and include both owner occupied CRE loans as well as non-owner occupied loans. Non-owner occupied CRE loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, multi-family, industrial, office, retail and other specific use properties as well as CRE construction loans that are offered to builders and developers generally within the Bank’s geographical footprint. The primary risk characteristics in the non-owner occupied portfolio include impacts of overall leasing rates, absorption timelines, levels of vacancy rates and operating expenses. The Company requires collateral values in excess of the loan amounts, cash flows in excess of expected debt service requirements and equity investment in the project. The expected cash flows from all significant new or renewed income producing property commitments are stress tested to reflect the risks in varying interest rates, vacancy rates and rental rates. Inherent lending risks are monitored on a continuous basis through quarterly monitoring and the Bank’s annual underwriting process, incorporating an analysis of cash flow, collateral, market conditions and guarantor liquidity, if applicable. CRE loan policies are specific to individual product types and underwriting parameters vary depending on the risk profile of each asset class. CRE loan policies are reviewed no less than semi-annually by management and approved by the Bank’s Board of Directors to ensure they align with current market conditions and the Bank’s moderate risk appetite. Construction loans are monitored monthly and includes on-site inspections. Management reviews all construction loans quarterly to ensure projects are on time and within budget. CRE concentration limits have been established by product type and are monitored quarterly by the Bank’s Credit Governance Committee and Bank Board of Directors. 53 Table of Contents CRE loans may be adversely affected by conditions in the real estate markets or in the general economy. The Company does not monitor the CRE portfolio for attributes such as loan-to-value ratios, occupancy rates or net operating income, as these characteristics are assessed and evaluated on an individual loan basis. Portfolio stress testing is completed based on property type and takes into consideration changes to net operating income and capitalization rates. The Company does not have exposure to the office building sector in central business districts as the office portfolio is generally diversified in suburban markets with strong occupancy levels. The following table presents the geographical markets of the collateral related to non-owner occupied and multifamily CRE loans for the periods presented: June 30, 2026 December 31, 2025 Percent of Percent of (dollars in thousands) Balance Total Balance Total Geographical Market: Minnesota $ 595,467 47.4 % $ 621,747 49.4 % North Dakota 207,961 16.6 212,077 16.8 Arizona 141,682 11.3 133,618 10.6 Wisconsin 68,583 5.5 88,229 7.0 Texas 37,027 2.9 37,113 2.9 Illinois 26,561 2.1 2,994 0.2 Oregon 19,896 1.6 17,698 1.4 Colorado 23,345 1.9 23,358 1.9 Kansas 16,970 1.4 16,656 1.3 Missouri 19,561 1.6 16,409 1.3 Georgia 14,614 1.2 14,569 1.2 Virginia 11,187 0.9 11,182 0.9 Iowa 13,868 1.1 11,155 0.9 South Dakota 10,311 0.8 10,415 0.8 Other 48,209 3.8 42,147 3.3 Total non-owner occupied and multifamily commercial real estate loans $ 1,255,242 100.0 % $ 1,259,367 100.0 % The Bank does not currently monitor owner occupied CRE loans based on geographical markets, as the primary source of repayment for these loans is predicated on the cash flow from the underlying operating entity. These loans are generally located within the Company’s geographical footprint. Highly competitive conditions continue to prevail in the small- and middle-market commercial segments in which the Company primarily operates. The Company maintains a commitment to generating growth in the Company’s business portfolio in a manner that adheres to its twin goals of maintaining strong asset quality and producing profitable margins. The Company continues to invest in additional personnel, technology and business development resources to further strengthen its capabilities. Agricultural loans include loans secured by farmland and loans for agricultural production. Farmland includes purposes such as crop and livestock production. Farmland loans are typically written with amortizing payment structures. Collateral values for farmland are determined based upon appraisals and evaluations in accordance with established policy guidelines and maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines. Agricultural production loans are for the purpose of financing working capital and/or capital investment for agriculture production activities. Collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, and/or real estate in applicable. Agricultural production loans are primarily paid by the operating cash flow of the borrower. Agricultural production loans may be secured or unsecured. Residential real estate (“RRE”) loans represent loans to consumers for the purchase or refinance of a residence. These loans are generally financed over a 15- to 30-year term and, in most cases, are extended to borrowers to finance their primary residence with both fixed-rate and adjustable-rate terms. Real estate construction loans are also offered to consumers who wish to build their own homes and are often structured to be converted to permanent loans at the end of the construction phase, which is typically twelve months. RRE loans also include home equity loans and lines of credit that are secured by a first or second lien on the borrower’s residence. Home equity lines of credit (“HELOC”) consist mainly of revolving lines of credit secured by residential real estate. Other consumer loans include loans made to individuals not secured by real estate, including loans secured by automobiles or watercraft, and personal unsecured loans. The Company originates both fixed and adjustable rate residential real estate loans conforming to the underwriting guidelines of the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, as well as home equity loans and lines of credit that are secured by first or junior liens. Most of the Company’s fixed rate residential loans, along with some of the Company’s adjustable rate mortgages are sold to other financial institutions with which the Company has established a correspondent lending relationship. The Company’s RRE loans have minimal direct exposure to subprime mortgages as the loans are underwritten to conform to secondary market standards. As of June 30, 2026, the Company’s RRE portfolio was $1.2 billion, representing a $41.0 million, or 3.4%, decrease from December 31, 2025. Market interest rates, expected duration, and the Company’s overall interest rate sensitivity profile continue to be the most significant factors in determining whether the Company chooses to retain versus sell portions of new consumer mortgage originations. 54 Table of Contents The following table presents the maturities and types of interest rates for the loan portfolio as of June 30, 2026: June 30, 2026 After one After five One year but within but within After (dollars in thousands) or less five years fifteen years fifteen years Total Commercial Commercial and business lending Commercial and industrial $ 150,957 $ 415,514 $ 186,931 $ 6,557 $ 759,959 Commercial real estate − Owner occupied 61,772 286,323 173,780 100,366 622,241 Total commercial and business lending 212,729 701,837 360,711 106,923 1,382,200 Investor commercial real estate Construction, land and development 14,149 44,489 14,604 6,608 79,850 Multifamily 98,342 217,402 46,131 — 361,875 Non-owner occupied 110,752 599,441 139,842 43,332 893,367 Total investor commercial real estate 223,243 861,332 200,577 49,940 1,335,092 Agricultural Land 3,171 13,915 17,749 19,367 54,202 Production 35,990 16,958 419 — 53,367 Total agricultural 39,161 30,873 18,168 19,367 107,569 Total commercial 475,133 1,594,042 579,456 176,230 2,824,861 Consumer Residential real estate First lien 13,698 44,442 68,172 702,624 828,936 Construction 25,324 1,455 — 4,423 31,202 HELOC 3,389 10,081 22,409 237,245 273,124 Junior lien 1,380 4,280 17,496 8,785 31,941 Total residential real estate 43,791 60,258 108,077 953,077 1,165,203 Other consumer 17,134 21,695 3,210 2,141 44,180 Total consumer 60,925 81,953 111,287 955,218 1,209,383 Total loans $ 536,058 $ 1,675,995 $ 690,743 $ 1,131,448 $ 4,034,244 Loans with fixed interest rates: Commercial Commercial and business lending Commercial and industrial $ 22,887 $ 257,901 $ 74,770 $ — $ 355,558 Commercial real estate − Owner occupied 51,289 183,846 36,447 1,149 272,731 Total commercial and business lending 74,176 441,747 111,217 1,149 628,289 Investor commercial real estate Construction, land and development 8,474 16,074 1,219 — 25,767 Multifamily 42,816 117,664 19,876 — 180,356 Non-owner occupied 45,348 333,794 72,783 — 451,925 Total investor commercial real estate 96,638 467,532 93,878 — 658,048 Agricultural Land 3,151 13,651 16,089 13,832 46,723 Production 1,372 12,846 419 — 14,637 Total agricultural 4,523 26,497 16,508 13,832 61,360 Total commercial 175,337 935,776 221,603 14,981 1,347,697 Consumer Residential real estate First lien 11,891 36,684 58,378 412,676 519,629 Construction 16,263 48 — 4,423 20,734 HELOC 16 1,004 5,274 3,108 9,402 Junior lien 1,027 3,249 13,603 8,215 26,094 Total residential real estate 29,197 40,985 77,255 428,422 575,859 Other consumer 1,272 10,394 3,210 192 15,068 Total consumer 30,469 51,379 80,465 428,614 590,927 Total loans with fixed interest rates $ 205,806 $ 987,155 $ 302,068 $ 443,595 $ 1,938,624 Loans with floating interest rates: Commercial Commercial and business lending Commercial and industrial $ 128,070 $ 157,613 $ 112,161 $ 6,557 $ 404,401 Commercial real estate − Owner occupied 10,483 102,477 137,333 99,217 349,510 Total commercial and business lending 138,553 260,090 249,494 105,774 753,911 Investor commercial real estate Construction, land and development 5,675 28,415 13,385 6,608 54,083 Multifamily 55,526 99,738 26,255 — 181,519 Non-owner occupied 65,404 265,647 67,059 43,332 441,442 Total investor commercial real estate 126,605 393,800 106,699 49,940 677,044 Agricultural Land 20 264 1,660 5,535 7,479 Production 34,618 4,112 — — 38,730 Total agricultural 34,638 4,376 1,660 5,535 46,209 Total commercial 299,796 658,266 357,853 161,249 1,477,164 Consumer Residential real estate First lien 1,807 7,758 9,794 289,948 309,307 Construction 9,061 1,407 — — 10,468 HELOC 3,373 9,077 17,135 234,137 263,722 Junior lien 353 1,031 3,893 570 5,847 Total residential real estate 14,594 19,273 30,822 524,655 589,344 Other consumer 15,862 11,301 — 1,949 29,112 Total consumer 30,456 30,574 30,822 526,604 618,456 Total loans with floating interest rates $ 330,252 $ 688,840 $ 388,675 $ 687,853 $ 2,095,620 55 Table of Contents The expected life of the Company’s loan portfolio will differ from contractual maturities because borrowers may have the right to curtail or prepay their loans with or without penalties. Consequently, the table above includes information limited to contractual maturities of the underlying loans. Asset Quality The Company’s strategy for credit risk management includes well‑defined, centralized credit policies; uniform underwriting criteria; and ongoing risk monitoring and review processes for all commercial and consumer credit exposures. The strategy also emphasizes diversification on a geographic, industry, and client level; regular credit examinations; and management reviews of loans experiencing deterioration of credit quality. The Company strives to identify potential problem loans early, take necessary charge‑offs promptly, and maintain adequate reserve levels for credit losses inherent in the portfolio. Management performs ongoing, internal reviews of any problem credits and continually assesses the adequacy of the allowance. The Company utilizes an internal lending division, Special Credit Services, to develop and implement strategies for the management of individual nonperforming loans. Credit Quality Indicators Loans are assigned a risk rating and grouped into categories based on relevant information about the ability of borrowers to service their debt, such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The risk ratings are aligned to pass and criticized categories. The criticized categories include special mention, substandard, and doubtful risk ratings. See “NOTE 4 Loans and Allowance for Credit Losses” of the consolidated financial statements for a definition of each of the risk ratings. The table below presents criticized loans outstanding by loan portfolio segment as of June 30, 2026 and December 31, 2025: June 30, December 31, (dollars in thousands) 2026 2025 Commercial Commercial and business lending Commercial and industrial $ 23,570 $ 33,323 Commercial real estate − Owner occupied 15,101 14,058 Total commercial and business lending 38,671 47,381 Investor commercial real estate Construction, land and development — 34,201 Multifamily 19,060 28,541 Non-owner occupied 11,130 17,591 Total investor commercial real estate 30,190 80,333 Agricultural Land 6,627 7,653 Production 4,768 3,662 Total agricultural 11,395 11,315 Total commercial 80,256 139,029 Consumer Residential real estate First lien 2,337 2,602 Construction — 4,680 HELOC 588 128 Junior lien 72 2,375 Total residential real estate 2,997 9,785 Other consumer 274 348 Total consumer 3,271 10,133 Total criticized loans $ 83,527 $ 149,162 Criticized loans as a percent of total loans 2.07 % 3.68 % The following table presents information regarding nonperforming assets as of June 30, 2026 and December 31, 2025: June 30, December 31, (dollars in thousands) 2026 2025 Nonaccrual loans $ 7,105 $ 69,065 Accruing loans 90+ days past due 436 — Total nonperforming loans 7,541 69,065 OREO and repossessed assets 9,571 308 Total nonperforming assets 17,112 69,373 Total restructured accruing loans — 1,436 Total nonperforming assets and restructured accruing loans $ 17,112 $ 70,809 Nonperforming loans to total loans 0.19 % 1.71 % Nonperforming assets to total assets 0.32 % 1.33 % ACL on loans to nonperforming loans 641.31 % 89.65 % Interest income lost on nonaccrual loans was approximately $0.4 million and $1.1 million for the six months ended June 30, 2026 and 2025, respectively. There was no interest income included in net interest income related to nonaccrual loans for the six months ended June 30, 2026 and 2025. Total nonperforming loans were $7.5 million at June 30, 2026, compared to $69.1 million as of December 31, 2025. The decrease was primarily driven by the sale of three non-performing loans representing a construction, land and development relationship. There were no historical charge-offs on this relationship and there were no charge-offs recognized as a result of the transaction. 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. 56 Table of Contents Allowance for Credit Losses The ACL on loans is maintained at a level management believes is sufficient to absorb expected losses in the loan portfolio over the remaining estimated life of loans in the portfolio. Under the Current Expected Credit Loss accounting standard, the ACL is a valuation estimated at each balance sheet date and deducted from the amortized cost basis of loans held for investment to present the net amount expected to be collected. These evaluations are inherently subjective as they require management to make material estimates, all of which may be susceptible to significant change. The allowance is increased by provisions charged to expense and decreased by actual charge‑offs, net of recoveries. Management estimates the ACL using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical loss experience provides the basis for estimation of expected credit losses. Adjustments to historical loss information are made for differences in the current loan-specific risk characteristics such as different underwriting standards, portfolio mix, delinquency level, or life of the loan, as well as changes in environmental conditions, levels of economic activity, unemployment rates, property values and other relevant factors. The calculation also contemplates that the Company may not be able to make or obtain such forecasts for the entire life of the financial assets and requires a reversion to historical loss information. Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation. The ACL on individually evaluated loans is recognized on the basis of the present value of expected future cash flows discounted at the effective interest rate, the fair value of collateral adjusted of estimated costs to sell, or observable market price as of the relevant date. The following tables present information concerning the components of the ACL for the periods presented: Three months ended Six months ended June 30, June 30, (dollars in thousands) 2026 2025 2026 2025 ACL on loans at the beginning of the period $ 50,505 $ 61,929 $ 61,915 $ 59,929 (Credit) provision for loan losses 431 1,116 (3,954 ) 3,523 Net charge-offs (recoveries) (1) Commercial and industrial 1,313 (49 ) 7,693 (150 ) CRE − Owner occupied (11 ) (5 ) (22 ) (16 ) CRE − Construction, land and development — — — — CRE − Multifamily 500 — 1,056 — CRE − Non-owner occupied — 3,401 — 3,401 Agricultural − Land — — — — Agricultural − Production 50 384 (144 ) 372 RRE − First lien — — — 54 RRE − Construction — — — — RRE − HELOC — 10 — 260 RRE − Junior lien 718 — 930 300 Other consumer 5 26 87 (47 ) Total net charge-offs 2,575 3,767 9,600 4,174 ACL on loans at the end of the period 48,361 59,278 48,361 59,278 Components of ACL: ACL on HTM debt securities 115 127 115 127 ACL on loans 48,361 59,278 48,361 59,278 ACL on off-balance sheet credit exposures 3,459 4,801 3,459 4,801 ACL at end of the period 51,935 64,206 51,935 64,206 Total loans $ 4,034,244 $ 4,044,657 $ 4,034,244 $ 4,044,657 Average total loans 4,032,142 4,079,084 4,030,939 4,051,129 ACL on loans to total loans 1.20 % 1.47 % 1.20 % 1.47 % ACL on loans to nonaccrual loans 680.66 % 115.61 % 680.66 % 115.61 % ACL on loans to nonperforming loans 641.31 % 115.15 % 641.31 % 115.15 % Net charge-offs/(recoveries) to average total loans (annualized) 0.26 % 0.37 % 0.48 % 0.21 % (1) Additional information related to net charge-offs (recoveries) is presented in the following table for the periods indicated. 57 Table of Contents For the three months ended June 30, Net Charge-offs Total Total Net Charge-offs Average (Recoveries) to (dollars in thousands) Charge-offs Recoveries (Recoveries) Loans Average Loans 2026: Commercial Commercial and business lending Commercial and industrial $ 2,188 $ 875 $ 1,313 $ 779,471 0.68 % Commercial real estate − Owner occupied — 11 (11 ) 505,759 (0.01 ) Total commercial and business lending 2,188 886 1,302 1,285,230 0.41 Investor commercial real estate Construction, land and development — — — 103,618 — Multifamily 500 — 500 399,628 0.50 Non-owner occupied (1) — — — 930,867 — Total investor commercial real estate 500 — 500 1,434,113 0.14 Agricultural Land — — — 53,823 — Production 50 — 50 53,351 0.38 Total agricultural 50 — 50 107,174 0.19 Total commercial 2,738 886 1,852 2,826,517 0.26 Consumer Residential real estate First lien — — — 838,819 — Construction — — — 34,981 — HELOC — — — 271,254 — Junior lien 719 1 718 32,676 8.81 Total residential real estate 719 1 718 1,177,730 0.24 Other consumer 33 28 5 44,032 0.05 Total consumer 752 29 723 1,221,762 0.24 Total loans $ 3,490 $ 915 $ 2,575 $ 4,048,279 0.26 % 2025: Commercial Commercial and business lending Commercial and industrial $ 79 $ 128 $ (49 ) $ 653,635 (0.03 )% Commercial real estate − Owner occupied 6 11 (5 ) 448,771 — Total commercial and business lending 85 139 (54 ) 1,102,406 (0.02 ) Investor commercial real estate Construction, land and development — — — 337,867 — Multifamily — — — 354,909 — Non-owner occupied 3,401 — 3,401 974,705 1.40 Total investor commercial real estate 3,401 — 3,401 1,667,481 0.82 Agricultural Land — — — 66,044 — Production 384 — 384 67,412 2.28 Total agricultural 384 — 384 133,456 1.15 Total commercial 3,870 139 3,731 2,903,343 0.52 Consumer Residential real estate First lien — — — 898,903 — Construction — — — 39,682 — HELOC 10 — 10 188,494 0.02 Junior lien — — — 42,435 — Total residential real estate 10 — 10 1,169,514 — Other consumer 38 12 26 39,405 0.26 Total consumer 48 12 36 1,208,919 0.01 Total loans $ 3,918 $ 151 $ 3,767 $ 4,112,262 0.37 % 58 Table of Contents For the six months ended June 30, Net Charge-offs Total Total Net Charge-offs Average (Recoveries) to (dollars in thousands) Charge-offs Recoveries (Recoveries) Loans Average Loans 2026: Commercial Commercial and business lending Commercial and industrial $ 8,753 $ 1,060 $ 7,693 $ 751,791 2.06 % Commercial real estate − Owner occupied — 22 (22 ) 469,889 (0.01 ) Total commercial and business lending 8,753 1,082 7,671 1,221,680 1.27 Investor commercial real estate Construction, land and development — — — 157,388 — Multifamily 1,056 — 1,056 399,236 0.53 Non-owner occupied — — — 927,340 — Total investor commercial real estate 1,056 — 1,056 1,483,964 0.14 Agricultural Land — — — 56,789 — Production 50 194 (144 ) 56,077 (0.52 ) Total agricultural 50 194 (144 ) 112,866 (0.26 ) Total commercial 9,859 1,276 8,583 2,818,510 0.61 Consumer Residential real estate First lien — — — 851,876 — Construction — — — 33,949 — HELOC — — — 266,447 — Junior lien 931 1 930 34,481 5.44 Total residential real estate 931 1 930 1,186,753 0.16 Other consumer 146 59 87 42,664 0.41 Total consumer 1,077 60 1,017 1,229,417 0.17 Total loans $ 10,936 $ 1,336 $ 9,600 $ 4,047,927 0.48 % 2025: Commercial Commercial and business lending Commercial and industrial $ 248 $ 398 $ (150 ) $ 655,725 (0.05 )% Commercial real estate − Owner occupied 6 22 (16 ) 417,830 (0.01 ) Total commercial and business lending 254 420 (166 ) 1,073,555 (0.03 ) Investor commercial real estate Construction, land and development — — — 340,279 — Multifamily — — — 363,710 — Non-owner occupied 3,401 — 3,401 978,134 0.70 Total investor commercial real estate 3,401 — 3,401 1,682,123 0.41 Agricultural Land — — — 66,633 — Production 384 12 372 64,190 1.17 Total agricultural 384 12 372 130,823 0.57 Total commercial 4,039 432 3,607 2,886,501 0.25 Consumer Residential real estate First lien 54 — 54 899,367 0.01 Construction — — — 38,305 — HELOC 260 — 260 178,601 0.29 Junior lien 300 — 300 43,261 1.40 Total residential real estate 614 — 614 1,159,534 0.11 Other consumer 77 124 (47 ) 39,878 (0.24 ) Total consumer 691 124 567 1,199,412 0.10 Total loans $ 4,730 $ 556 $ 4,174 $ 4,085,913 0.21 % 59 Table of Contents The following table presents the allocation of the ACL on loans as of the dates presented: June 30, 2026 December 31, 2025 Percentage Percentage Allocated of loans to Allocated of loans to (dollars in thousands) Allowance total loans Allowance total loans Commercial and industrial $ 10,477 18.8 % $ 16,216 18.3 % CRE − Owner occupied 5,887 15.4 3,097 10.6 CRE − Construction, land and development 2,978 2.0 13,210 6.1 CRE − Multifamily 3,919 9.0 4,380 9.5 CRE − Non-owner occupied 10,580 22.2 11,006 21.6 Agricultural − Land 883 1.3 959 1.6 Agricultural − Production 568 1.3 623 1.5 RRE − First lien 9,366 20.5 9,358 21.6 RRE − Construction 366 0.8 274 0.8 RRE − HELOC 2,332 6.8 1,787 6.4 RRE − Junior lien 397 0.8 395 0.9 Other consumer 608 1.1 610 1.1 Total loans $ 48,361 100.0 % $ 61,915 100.0 % In the ordinary course of business, the Company enters into commitments to extend credit, including commitments under credit arrangements, commercial letters of credit, and standby letters of credit. Such financial instruments are recorded when they are funded. An ACL on off-balance sheet credit exposures is measured using similar internal and external assumptions as the ACL on loans. This allowance is located in accrued expenses and other liabilities on the consolidated balance sheets. The ACL for unfunded commitments was $3.5 million and $4.8 million as of June 30, 2026 and 2025, respectively. Deposits Deposit inflows and outflows are influenced by prevailing market interest rates, competition, local and economic conditions, and fluctuations in the Company’s customers’ own liquidity needs and may also be influenced by recent developments in the financial services industry, including the large-scale deposit withdrawals over a short period of time that resulted in bank failures. Total deposits were $4.2 billion as of June 30, 2026, a decrease of $0.1 million, or 0.0%, from December 31, 2025. Interest-bearing deposits increased $48.2 million during this period, while noninterest-bearing deposits decreased $48.3 million. The decrease in total deposits was due to seasonal outflows from public funds depositors. The following table presents the composition of the Company’s deposit portfolio as of June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 Percent of Percent of Change (dollars in thousands) Balance Portfolio Balance Portfolio Amount Percent Noninterest-bearing demand $ 759,640 18.1 % $ 807,896 19.3 % $ (48,256 ) (6.0 )% Interest-bearing demand 1,429,951 34.1 1,296,315 30.9 133,636 10.3 Money market and savings (1) 1,426,078 34.0 1,511,250 36.1 (85,172 ) (5.6 ) Time deposits 576,228 13.8 576,542 13.7 (314 ) (0.1 ) Total deposits $ 4,191,897 100.0 % $ 4,192,003 100.0 % $ (106 ) - % (1) Money market and savings deposits included health savings account deposits of $219.5 million and $203.4 million as of June 30, 2026 and December 31, 2025, respectively. The following table presents the average balances and rates of the Company’s deposit portfolio for the three months ended June 30, 2026 and 2025: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Average Average Average Average Average Average Average Average (dollars in thousands) Balance Rate Balance Rate Balance Rate Balance Rate Noninterest-bearing demand $ 790,088 — % $ 808,629 — % $ 794,310 — % $ 829,044 — % Interest-bearing demand 1,378,394 1.68 1,247,241 1.80 1,372,863 1.66 % 1,247,482 1.80 % Money market and savings 1,441,099 2.34 1,561,977 2.77 1,472,276 2.36 % 1,576,218 2.83 % Time deposits 571,276 3.34 687,428 3.72 570,176 3.37 % 687,995 3.82 % Total deposits $ 4,180,857 1.82 % $ 4,305,275 2.12 % $ 4,209,625 0.90 % $ 4,340,739 1.07 % 60 Table of Contents The following table presents the composition of the Company’s deposit portfolio by client segment as of June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 Percent of Percent of Change (dollars in thousands) Balance Portfolio Balance Portfolio Amount Percent Commercial $ 1,496,346 35.7 % $ 1,563,239 37.3 % $ (66,893 ) (4.3 )% Consumer 1,507,689 36.0 1,469,813 35.1 37,876 2.6 Public (1) 238,769 5.7 180,755 4.3 58,014 32.1 Synergistic (2) Retirement and benefit services (3) 709,039 16.9 725,618 17.3 (16,579 ) (2.3 ) Wealth advisory services (4) 240,054 5.7 252,578 6.0 (12,524 ) (5.0 ) Total synergistic 949,093 22.6 978,196 23.3 (29,103 ) (7.3 ) Total deposits $ 4,191,897 100.0 % $ 4,192,003 100.0 % $ (106 ) - % (1) Public deposits primarily represent municipalities, school districts, and other governmental entities that receive public funding. (2) Synergistic deposits represent the on-balance sheet money market balances that Alerus Retirement and Benefit Services and Alerus Wealth Advisory Services clients hold in proprietary Alerus money market products. (3) $379.7 million and $395.7 million of retirement and benefit services synergistic deposits were indexed as of June 30, 2026 and December 31, 2025, respectively. (4) $240.1 million and $252.6 million of wealth advisory services synergistic deposits were indexed as of June 30, 2026 and December 31, 2025, respectively. The following table presents the contractual maturity of time deposits, including certificate of deposit account registry services and IRA deposits of $250,000 and over, that were outstanding as of June 30, 2026: June 30, (dollars in thousands) 2026 Maturing in: 3 months or less $ 70,858 3 months to 6 months 77,374 6 months to 1 year 24,897 1 year or greater 20,872 Total $ 194,001 The Company’s total uninsured deposits, which are amounts of deposit accounts that exceed the FDIC insurance limit, currently $250,000, were approximately $1.5 billion at June 30, 2026 and approximately $1.4 billion December 31, 2025. These amounts were estimated based on the same methodologies used for regulatory reporting purposes. Borrowings Borrowings as of June 30, 2026 and December 31, 2025 were as follows: June 30, 2026 December 31, 2025 Percent of Percent of (dollars in thousands) Balance Portfolio Balance Portfolio Fed funds purchased $ — — % $ 58,800 16.0 % FHLB short-term advances 345,000 85.3 250,000 67.9 Subordinated notes 50,000 12.4 50,000 13.6 Junior subordinated debentures 9,239 2.3 9,182 2.5 Total borrowed funds $ 404,239 100.0 % $ 367,982 100.0 % Capital Resources Stockholders’ equity is influenced primarily by earnings, dividends, the Company’s sales and repurchases of its common stock and changes in accumulated other comprehensive income caused primarily by fluctuations in unrealized gains or losses, net of taxes, on available-for-sale securities. Stockholders’ equity increased $18.2 million, or 3.2%, to $583.1 million as of June 30, 2026, compared to $564.9 million as of December 31, 2025. Tangible common equity to tangible assets, a non-GAAP financial measure, 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. The Company strives to maintain an adequate capital base to support the Company’s activities in a safe and sound manner while at the same time attempting to maximize stockholder value. Capital adequacy is assessed against the risk inherent in the Company’s balance sheet, recognizing that unexpected loss is the common denominator of risk, and that common equity has the greatest capacity to absorb unexpected loss. The Company is subject to various regulatory capital requirements both at the Company and at the Bank level. Failure to meet minimum capital requirements could result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have an adverse material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, specific capital guidelines must be met that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting policies. The Company has consistently maintained regulatory capital ratios at or above the well-capitalized standards. 61 Table of Contents At June 30, 2026 and December 31, 2025, the Company met all the capital adequacy requirements to which the Company was subject. The table below presents the Company’s and the Bank’s regulatory capital ratios and the Company’s tangible common equity to tangible assets ratio as of June 30, 2026 and December 31, 2025: June 30, December 31, Capital Ratios 2026 2025 Alerus Financial Corporation Consolidated Common equity tier 1 capital to risk weighted assets 10.81 % 10.28 % Tier 1 capital to risk weighted assets 11.02 % 10.48 % Total capital to risk weighted assets 13.34 % 12.87 % Tier 1 capital to average assets 9.49 % 8.86 % Tangible common equity to tangible assets (1) 9.05 % 8.72 % Alerus Financial, National Association Common equity tier 1 capital to risk weighted assets 10.92 % 10.41 % Tier 1 capital to risk weighted assets 10.92 % 10.41 % Total capital to risk weighted assets 12.11 % 11.66 % Tier 1 capital to average assets 9.26 % 8.62 % (1) Represents a non-GAAP financial measure. See “Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Financial Measures.” The regulatory capital ratios for the Company and the Bank, as of June 30, 2026, as shown in the above table, were at levels above the regulatory minimums to be considered “well capitalized.” See “NOTE 19 Regulatory Matters” of the consolidated financial statements for additional information. Off‑Balance Sheet Arrangements The Company is a party to financial instruments with off‑balance sheet risk in the normal course of business to meet the financing needs of the Company’s customers. These financial instruments consist primarily of commitments to extend credit and standby letters of credit. Commitments to extend credit are agreements to lend to customers, generally having fixed expiration dates or other termination clauses that may require payment of a fee. These commitments consist principally of unused commercial and consumer credit lines. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of an underlying contract with a third party. The credit risks associated with commitments to extend credit and standby letters of credit are essentially the same as that involved with extending loans to customers and are subject to normal credit policies. Collateral may be required based on management’s assessment of the customer’s creditworthiness. The fair value of these commitments is considered immaterial for disclosure purposes. A summary of the contractual amounts of the Company’s exposure to off‑balance sheet agreements as of June 30, 2026 and December 31, 2025, was as follows: June 30, December 31, (dollars in thousands) 2026 2025 Commitments to extend credit $ 1,033,270 $ 1,038,347 Standby letters of credit 14,513 14,393 Total $ 1,047,782 $ 1,052,740 Liquidity Liquidity management is the process by which the Company manages the flow of funds necessary to meet the Company’s financial commitments on a timely basis and at a reasonable cost and to take advantage of earnings enhancement opportunities. These financial commitments include withdrawals by depositors, credit commitments to borrowers, expenses of the Company’s operations, and capital expenditures. Liquidity is monitored and closely managed by the Company’s asset and liability committee (the “ALCO”), a group of senior officers from the finance, enterprise risk management, deposit, investment, treasury, and lending areas. It is the ALCO’s responsibility to ensure the Company has the necessary level of funds available for normal operations as well as maintain a contingency funding policy to ensure that potential liquidity stress events are planned for, quickly identified, and that management has plans in place to respond. The ALCO has created policies which establish limits and require measurements to monitor liquidity trends, including modeling and management reporting that identifies the amounts and costs of all available funding sources. As of June 30, 2026, the Company had on balance sheet liquidity of $400.7 million, compared to $568.8 million as of December 31, 2025. On balance sheet liquidity includes cash and cash equivalents, federal funds sold, unencumbered securities available‑for‑sale, and over collateralized securities pledging positions available-for-sale. As of both June 30, 2026 and December 31, 2025, the Company had off balance sheet liquidity of $2.2 billion. Off balance sheet liquidity includes FHLB borrowing capacity, federal funds lines, and brokered deposit capacity. The Bank is a member of the FHLB, which provides short‑ and long‑term funding to its members through advances collateralized by real estate related assets and other select collateral, most typically in the form of debt securities. Actual borrowing capacity is contingent on the amount of collateral available to be pledged to the FHLB. As of June 30, 2026, the Company did not have any federal funds purchased, and had $345.0 million in short-term borrowings from the FHLB. As of June 30, 2026, the Company had $2.0 billion of collateral pledged to the FHLB and, based on this collateral, the Company was eligible to borrow up to an additional $1.0 billion from the FHLB. In addition, the Company can borrow up to $125.0 million through the unsecured lines of credit the Company has established with five other correspondent banks. 62 Table of Contents In addition, because the Bank is “well capitalized,” the Company can accept wholesale deposits up to 20.0% of total assets based on current policy limits, or $1.1 billion, as of June 30, 2026. Management believed that the Company had adequate resources to fund all of the Company’s commitments as of June 30, 2026 and December 31, 2025. The Company’s primary sources of liquidity include liquid assets, as well as unencumbered securities that can be used to collateralize additional funding. Though remote, the possibility of a funding crisis exists at all financial institutions. Management has addressed this issue by formulating a liquidity contingency plan, which has been reviewed and approved by both the Bank’s Board of Directors and the ALCO. The plan addresses the actions that the Company would take in response to both a short‑term and long‑term funding crisis. A short‑term funding crisis would most likely result from a shock to the financial system, either internal or external, which disrupts orderly short‑term funding operations. Such a crisis would likely be temporary in nature and would not involve a change in credit ratings. A long‑term funding crisis would most likely be the result of both external and internal factors and would most likely result in drastic credit deterioration. Management believes that both potential circumstances have been fully addressed through detailed action plans and the establishment of trigger points for monitoring such events.