Alerus Financial Corporation and its wholly owned subsidiary, Alerus Financial,  have completed the previously announced acquisition of HMN Financial and its wholly owned subsidiary, Home Federal Savings Bank. Under the terms of the transaction, HMN Financial, Inc. merged with and into Alerus Financial Corporation, and Home Federal Savings Bank merged with and into Alerus Financial. The all-stock transaction is valued at approximately $128.8 million as of closing.

Founded in 1934, Home Federal includes 12 branches in Minnesota and one branch in each of Iowa and Wisconsin. As of June 30, 2024, HMNF had, on a consolidated basis, $1.1 billion in total assets, which included approximately $876.6 million in loans and $983.2 million in total deposits.

The transaction expands the Alerus franchise into Rochester, Minnesota and represents the largest bank acquisition in Alerus’ history. Alerus has now completed twenty-six acquisitions since 2000 as part of its long-term plan to continually expand its business segments, including banking, wealth services, and retirement and benefits plans and services. With the addition of Home Federal, Alerus now has approximately $5.5 billion in total assets, $3.8 billion in total loans, $4.3 billion in total deposits, and assets under administration and management of approximately $43.6 billion, with 29 locations across the Midwest, as well as Arizona.

“We are pleased to welcome Home Federal’s clients and employees to Alerus and look forward to providing enhanced products and services with greater capacity to clients in the Rochester, Minnesota, market and throughout our expanded footprint,” said Alerus President and Chief Executive Officer Katie Lorenson. “Alerus has a long history of successful acquisitions and is one of the most diversified financial services companies in the country. Combining our capabilities and shared focus on client service will provide positive results for our clients, our team members, and our stockholders.”

Alerus expects to transition Home Federal client accounts to Alerus systems in the fourth quarter of 2024. Until this transition occurs, Home Federal clients will continue to be served through Home Federal’s website, mobile app, and branches. Additional information will be provided to clients in advance of conversion to ensure a seamless transition to Alerus systems.

In addition, Alerus is pleased to announce HMN Financial, Inc. board member Jeffrey Bolton has joined Alerus Financial Corporation’s board of directors in connection with closing.

Bolton brings extensive expertise in healthcare administration, business, and finance to the board of directors. He is the former chief administrative officer at Mayo Clinic, a position he held from 2013 until his retirement in 2021. Prior to his role as chief administrative officer, he served as Mayo Clinic’s chief financial officer from 2002 until 2013. He was also a member of Mayo Clinic’s board of trustees from 2011 until his retirement. Prior to his time at Mayo Clinic, Mr. Bolton served in various business and finance-related positions at Carnegie Mellon University, including chief financial officer and vice president for business and planning.

Raymond James & Associates, Inc. served as financial advisor and Barack Ferrazzano Kirschbaum & Nagelberg LLP served as legal counsel to Alerus on the transaction. D.A. Davidson & Co. served as financial advisor and Ballard Spahr LLP served as legal counsel to HMN Financial, Inc.