What caused ALRS's Q3 2024 earnings miss?

Alerus Financial Corporation (NASDAQ: ALRS) experienced a Q3 2024 earnings miss, with diluted EPS coming in at $0.26, missing the consensus estimate of $0.46. This shortfall can be attributed to several key factors:

|code|Ticker|Name|Date|Diluted EPS YoY|Diluted EPS|market_code|
|---|---|---|---|---|---|---|
|ALRS|ALRS.O|Alerus Financial|2024 Q1|-21.951219512195117|0.32|186|
|ALRS|ALRS.O|Alerus Financial|2024 Q2|-31.11111111111111|0.31|186|
|ALRS|ALRS.O|Alerus Financial|2024 Q3|-42.22222222222222|0.26|186|

1. **Decrease in Net Interest Margin**: The company's net interest margin decreased to $22.5 million, primarily due to higher interest expenses and a reduced net interest margin overall. This decline is a result of various factors, including increased funding costs and a shift in the company's asset mix.
2. **Increase in Non-Interest Expenses**: Non-interest expenses rose by 9.5%, driven by costs associated with new hires and mergers. This increase in operational expenses has squeezed the net profit, contributing to the earnings shortfall.

In summary, Alerus Financial's Q3 2024 earnings miss was likely a result of a combination of lower net interest income due to higher interest expenses and reduced net interest margin, and increased non-interest expenses.