Alerus Financial Corporation (NasdaqCM:ALRS) entered into an agreement to acquire HMN Financial, Inc. (NasdaqGM:HMNF) for approximately $120 million on May 15, 2024. According to the terms of the agreement, stockholders of HMNF will receive 1.25 shares of Alerus common stock for each share of HMNF common stock they own. Under the terms of the agreement, HMNF will merge with and into Alerus. Upon completion of the Merger, one HMNF director will join the Alerus Board of Directors. The transaction has been unanimously approved by the Boards of Directors of both companies. Completion of the Merger is subject to customary closing conditions, including receipt of required regulatory approvals and approval by the stockholders of both Alerus and HMNF. The transaction is expected to close in the fourth quarter of 2024. The transaction is expected to be immediately accretive to Alerus? estimated earnings before one-time costs, with a tangible book value earn back of approximately 2.2 years (inclusive of interest rate marks), and an internal rate of return in excess of 25%.

Sanjay Patel of Raymond James & Associates, Inc. acted as financial advisor and Barack Ferrazzano Kirschbaum & Nagelberg LLP acted as legal counsel to Alerus on the transaction. D.A. Davidson & Co. acted as financial advisor and Ballard Spahr LLP acted as legal counsel to HMNF.