Form 4: ALRS CFO Alan Villalon Converts RSUs, Receives New Grant

Alerus Financial Corp's EVP & CFO, Alan Villalon, converted performance-based restricted stock units into 3,217 common shares and received a new grant of 7,246 restricted stock units.

Summary

• Alan Villalon, EVP & Chief Financial Officer of Alerus Financial Corp (ALRS), converted 3,217 performance-based restricted stock units (RSUs) into common stock on February 26, 2026.
• These RSUs were originally granted on February 21, 2023, and vested at 112% of the target due to the Alerus Financial Corporation Compensation Committee certifying established total net income goals.
• Following this conversion, Villalon directly owns 15,719 shares of common stock.
• An additional 775.3659 shares are beneficially owned indirectly through the Alerus Financial Corporation Employee Stock Ownership Program (ESOP).
• Villalon also received a new grant of 7,246 restricted stock units on February 26, 2026.
• This new grant comprises 2,898 time-based restricted stock units and 4,348 performance-based restricted stock units.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing positively as it reflects strong company performance leading to above-target executive compensation and continued alignment of executive incentives with future company goals through new equity grants.

Positives

• The vesting of performance-based restricted stock units at 112% of target indicates strong achievement of net income goals by Alerus Financial Corporation.
• The grant of new restricted stock units (7,246 shares) aligns management's incentives with long-term company performance and shareholder value.

Future Outlook

Alan Villalon received a new grant of 7,246 restricted stock units, with time-based units vesting on February 26, 2029, and performance-based units vesting by March 15, 2029, contingent on achieving relative cumulative EPS and ROE goals, with a potential payout range of 0% to 150% of target.

Industry Context

StockSavvy.ai notes that executive compensation, particularly through performance-based equity awards, is a common practice in the financial services industry. This aligns executive incentives with long-term shareholder value and company performance, a trend seen across many regional banks and financial institutions aiming to retain key talent and drive strategic objectives.

Comparison to Industry Standards

• The use of performance-based restricted stock units with a payout range (0-150%) tied to specific financial metrics (net income, EPS, ROE) is a standard practice in executive compensation across the financial sector, comparable to structures at peers like U.S. Bancorp or KeyCorp, which also link a significant portion of executive equity awards to performance hurdles.
• The 112% payout on the vested performance-based RSUs suggests Alerus Financial Corp's net income performance exceeded its internal targets, which is a positive indicator relative to industry averages where achieving 100% of target is often considered successful.

Stakeholder Impact

• Shareholders: Positive impact due to executive compensation being tied to performance, potentially indicating strong future performance and aligning management interests with shareholder value. The 112% payout suggests good past performance.
• Employees: The ESOP allocation indicates broader employee participation in company ownership.

Next Steps

• Vesting of 2,898 time-based restricted stock units on February 26, 2029.
• Certification and vesting of 4,348 performance-based restricted stock units by March 15, 2029, based on relative cumulative EPS and ROE goals.

Key Dates

Recommendation

This Form 4 filing details routine executive compensation activities, including the vesting of performance-based restricted stock units at an above-target rate and the grant of new equity awards. While the above-target vesting is a positive indicator of past performance, and new grants align executive incentives, these are standard occurrences for a publicly traded company and do not present new information significant enough to warrant a change in investment recommendation. The filing reinforces a 'hold' stance, suggesting continued monitoring of the company's financial performance and strategic initiatives.

Keywords

ALRS, Alerus Financial Corp, Alan Villalon, Form 4, Insider Trading, Restricted Stock Units, RSU Conversion, Executive Compensation, Stock Ownership, Financial Services, Banking