HMN Financial, Inc. (NASDAQ:HMNF), a federally chartered savings institution, has completed its merger with Alerus Financial (NASDAQ:ALRS) Corporation, as reported in a recent SEC filing. The merger, finalized on Wednesday, was previously announced on May 15, 2024, and has resulted in HMN Financial ceasing to exist as a separate corporate entity, with Alerus continuing as the surviving corporation.
According to the terms of the merger agreement, each share of HMN Financial common stock has been automatically converted into the right to receive 1.25 shares of Alerus common stock, with cash compensation provided for any fractional shares. This exchange ratio was established as part of the merger terms. Moreover, all outstanding restricted stock awards of HMN Financial vested immediately prior to the merger, with all restrictions and risk of forfeiture lapsing.
The completion of the merger prompted HMN Financial to notify the Nasdaq Stock Market of the change, leading to the delisting and deregistration of HMN Financial's common stock from Nasdaq after the market closed on Wednesday. The company plans to file a Form 15 with the SEC to formally deregister its common stock and suspend reporting obligations under the Exchange Act.
As a consequence of the merger, the rights of HMN Financial's security holders have been materially modified, with shareholders now entitled to the merger consideration. The directors and officers of HMN Financial have ceased their roles with the company as a result of the merger, with Alerus' directors and officers assuming their positions in the surviving corporation. Notably, Jeffrey Bolton, a former director of HMN Financial, has been appointed to the Alerus board of directors.
In other recent news, Alerus Financial Corporation has received all necessary regulatory approvals for the acquisition of HMN Financial, Inc. and its subsidiary, Home Federal Savings Bank. The merger, which was previously approved by the boards of both companies, also received approval from stockholders. The acquisition is expected to close early in the fourth quarter of 2024, subject to standard closing conditions. This merger will result in Alerus growing to approximately $5.5 billion in total assets, $3.7 billion in loans, $4.3 billion in deposits, and roughly $43.1 billion in assets under administration and management.
The addition of Home Federal’s 12 branches in Minnesota, one in Iowa, and one in Wisconsin will expand Alerus' footprint, bringing its total to 29 locations across the Midwest and Arizona. These recent developments signify a new chapter for Alerus, with the merger expected to enhance its service offerings and reach.
InvestingPro Insights
As HMN Financial, Inc. (NASDAQ:HMNF) completes its merger with Alerus Financial Corporation, it's worth noting some key financial metrics and trends that have characterized HMNF's performance leading up to this significant corporate event.
According to InvestingPro data, HMNF has demonstrated strong market performance, with a remarkable 53.04% price total return over the past year and a 39.65% return in the last six months. This positive momentum is further reflected in the stock trading at 95.2% of its 52-week high, suggesting investor confidence in the company's prospects.
From a valuation perspective, HMNF's P/E ratio of 23.91 and Price to Book ratio of 1.1 as of the last twelve months ending Q2 2024 indicate a relatively moderate valuation compared to historical norms in the banking sector. This could have made HMNF an attractive merger target for Alerus.
InvestingPro Tips highlight that HMNF has been profitable over the last twelve months, which aligns with the company's reported operating income margin of 21.5%. However, it's noted that HMNF suffers from weak gross profit margins, which may have been a factor in the decision to merge with a larger entity like Alerus.
For investors looking to delve deeper into HMNF's financials and performance metrics, InvestingPro offers 6 additional tips that could provide further context to this merger decision and its potential implications.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.