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Alerus Financial Acquires HMN Financial in an All-Stock Deal for $116.4 Million

  • May 15, 2024

HMNF Merger

Financial services company Alerus Financial Corporation (ALRS) entered into a merger agreement on May 15, to acquire Minnesota-based HMN Financial, Inc. (HMNF) in an all-stock deal valued at about $116.4 million.

As per the terms of the agreement, stockholders of HMNF will receive 1.25 shares of Alerus common stock for each share of HMN common stock they own, which is at a value of $25.86 per share, representing a premium of 32.62% from the stock’s last close.

HMN, headquartered in Rochester, Minnesota, is a savings and loan holding company, and the parent company of Home Federal Savings Bank. After the deal closes, HMNF will merge into Alerus and Home Federal will merge with and into Alerus’ wholly-owned bank subsidiary, Alerus Financial, National Association.

The combined company will have approximately $5.5 billion in total assets, $3.7 billion in total loans, and $4.3 billion in total deposits, with assets under administration and management totaling about $43.1 billion, with 29 locations across the Midwest and Arizona.

The merger, expected to close in the fourth quarter of 2024, will be the twenty-sixth acquisition for Alerus since 2000.

HMN currently holds a Price/Book (TTM) ratio of 0.79, reflecting its financial standing before the merger, whereas the sector median stands at 1.14. This comparison underscores the potential value proposition and market positioning that may result from the merger.

For more information, please refer to the Deal Metrics page here: Deal Metrics for the acquisition of HMN Financial, Inc. (HMNF) by Alerus Financial Corporation (ALRS)

Editor’s Note: Baranjot Kaur contributed to this article

Disclaimer: Please conduct your own research and due diligence before engaging in any transactions with the securities mentioned in this article. The content and data provided in this article are not guaranteed for completeness or accuracy.