Financial Performance - Net income available to common stockholders for Q1 2025 was $18.7 million, compared to $18.9 million in Q4 2024 and $15.7 million in Q1 2024, reflecting a year-over-year increase of 18.9%[2] - Diluted earnings per share for Q1 2025 were $0.49, unchanged from Q4 2024 and up from $0.41 in Q1 2024[2] - Operating net income for Q1 2025 was $19.7 million, down from $20.2 million in Q4 2024 but up from $15.9 million in Q1 2024[3] - Net income for Q1 2025 was $20,242, representing a 17.7% increase from $17,205 in Q1 2024[24] - Net income for Q1 2025 was $20,242,000, slightly down from $20,371,000 in Q4 2024, a decrease of 0.6%[28] - Operating net income available to common stockholders was $19,710,000 in Q1 2025, compared to $20,220,000 in Q4 2024, a decline of 2.5%[30] Interest Income and Margin - Fully taxable equivalent net interest income for Q1 2025 was $65.8 million, an increase of $1.0 million or 1.6% from Q4 2024, and up $5.5 million or 9.0% from Q1 2024[7][9] - Net interest income for Q1 2025 was $65,756, an increase of 8.1% compared to $60,300 in Q1 2024[24] - Net interest income for Q1 2025 was $65,756,000, an increase of 1.6% from $64,711,000 in Q4 2024[28] - The net interest margin widened by 7 basis points to 2.93% in Q1 2025, driven by a decrease in average costs of deposits[7] - Net interest margin (GAAP) increased to 2.93% in Q1 2025, up from 2.86% in Q4 2024[30] - The net interest spread improved to 2.17%, up from 2.05% in the prior period[35] Noninterest Income and Expenses - Noninterest income increased to $4.5 million in Q1 2025, compared to $3.7 million in Q4 2024 and $3.8 million in Q1 2024[10] - Noninterest income increased to $4,451 in Q1 2025, up from $3,848 in Q1 2024, a growth of 15.7%[24] - Total noninterest expenses for Q1 2025 were $39,305, an increase of 6.0% from $37,065 in Q1 2024[24] - Noninterest expenses were $39.3 million in Q1 2025, up from $38.5 million in Q4 2024 and $37.1 million in Q1 2024, primarily due to increased merger expenses[11] - Total noninterest income increased to $4,451,000 in Q1 2025, up from $3,744,000 in Q4 2024, representing a growth of 18.9%[28] - Noninterest expenses rose to $39,305,000 in Q1 2025, compared to $38,498,000 in Q4 2024, reflecting an increase of 2.1%[28] Assets and Liabilities - Total assets decreased to $9.759 billion as of March 31, 2025, from $9.880 billion as of December 31, 2024[15] - Total assets as of March 31, 2025, were $9,759,255, a decrease of 1.2% from $9,879,600 on December 31, 2024[23] - Total deposits decreased to $7,767,230 as of March 31, 2025, down from $7,820,114 at the end of 2024, a decline of 0.7%[23] - Total deposits were $7,767,230 as of March 31, 2025, a slight decrease from $7,820,114 on December 31, 2024, reflecting a 0.7% decline[26] - Gross loans decreased to $8,206,343 as of March 31, 2025, down from $8,280,482 on December 31, 2024, representing a decline of 0.9%[26] - Borrowings decreased to $613,053 as of March 31, 2025, down from $688,064 on December 31, 2024, a decline of 10.9%[26] Credit Losses and Risk Ratios - The provision for credit losses was stable at $3.5 million for Q1 2025, consistent with Q4 2024 and down from $4.0 million in Q1 2024[13] - Provision for credit losses remained stable at $3,500 for both Q1 2025 and Q4 2024[24] - Net loan charge-offs for the quarter were $3,400 thousand, slightly up from $3,334 thousand in the previous quarter, indicating a 2% increase[32] - Nonaccrual loans decreased to $49,860 thousand from $57,310 thousand, a reduction of 13%[32] - The common equity Tier 1 risk-based ratio improved to 11.14% from 10.97% in the previous quarter, showing a positive trend in capital adequacy[32] Capital Position - The company maintains a strong capital position with total stockholders' equity of $1,252,939 as of March 31, 2025[23] - Total stockholders' equity increased to $1,252,939 as of March 31, 2025, compared to $1,241,704 on December 31, 2024, marking a growth of 0.9%[27] - Tangible common equity rose to $929,280 thousand, compared to $917,766 thousand in the previous quarter, reflecting a 0.6% increase[32] - Book value per share (GAAP) increased to $29.69 from $29.47, marking a rise of 0.7%[32] Future Plans - The Company plans to finalize its merger with The First of Long Island Corporation in Q2 2025, aiming to create a premier community bank in the New York Metro area[5]

Assets and Mergers - ConnectOne Bancorp, Inc. has total assets of $9.880 billion[25] - The company completed the merger with Greater Hudson Bank, acquiring approximately $0.4 billion in loans and deposits[16] - The merger with Bancorp of New Jersey resulted in the acquisition of approximately $0.8 billion in loans and deposits[18] - The upcoming merger with The First of Long Island Corporation is expected to close in the first or second quarter of 2025, with FLIC having total assets of $4.1 billion and total deposits of $3.3 billion[20] - The company has acquired GHB, BoeFly, and BNJ since January 1, 2019, and is pending regulatory approval for the acquisition of FLIC[133] - The company is expected to exceed $10 billion in assets upon consummation of its merger with The First National Bank of Long Island, subjecting it to examination by the Consumer Financial Protection Bureau[58] Business Model and Operations - ConnectOne Bank operates a "branch-lite" model, focusing on efficiency and technology investments to serve clients in the New York Metropolitan area and South Florida[26] - The company offers a broad range of deposit and loan products, deriving a majority of revenue from net interest income[31] - ConnectOne Bank's market area includes robust markets in New Jersey, New York City, Long Island, and the Hudson Valley, with plans for continued expansion[29] - BoeFly, a subsidiary, connects small to medium-sized businesses with funding solutions through a digital marketplace[27] - The company emphasizes attracting quality business relationship officers to enhance client acquisition and retention[29] - The Company’s strategy emphasizes personalized banking services and cross-selling products to enhance client relationships and maintain funding costs[207] Employee and Training Initiatives - The Company had 489 full-time employees and 4 part-time and temporary employees as of December 31, 2024[43] - In 2024, 71 employees were promoted into new roles, reflecting the Company's focus on internal promotions[49] - ConnectOne University provided comprehensive job skills and cybersecurity training, advancing leadership skills for 125 managers in 2024[44] Regulatory Environment and Capital Requirements - The Dodd-Frank Act requires banking regulators to seek to make capital standards countercyclical, impacting capital requirements for the Company[58] - The Economic Growth, Regulatory Relief and Consumer Protection Act raised the asset threshold for stress tests from $10 billion to $250 billion, providing regulatory relief for midsized banks[60] - The Company and the Bank are required to maintain a Common Equity Tier 1 Capital Ratio of 4.5%, a Tier 1 Capital Ratio of 6.0%, and a Total Capital Ratio of 8.0%[73] - The New Rules require a capital conservation buffer of 2.5% composed entirely of CET1, on top of the minimum risk-weighted asset ratios[69] - An institution will be classified as "well capitalized" if it has a total risk-based capital ratio of at least 10.0%[64] - The Company has elected not to opt into the Community Bank Leverage Ratio framework[79] - The Company is studying the revisions to the Community Reinvestment Act regulations to determine the impact on its operations, which is currently uncertain[88] Loan Portfolio and Credit Losses - As of December 31, 2024, the company had $6.3 billion in commercial real estate loans, representing 76.2% of total loans receivable[104] - Commercial real estate loans accounted for 435% of the Bank's Tier 1 capital plus the allowance for credit losses on loans[104] - A significant portion of the loan portfolio will reset interest rates in 2025 and 2026, potentially increasing borrowers' repayment costs[111] - The company targets small-to medium-sized businesses, which may be more vulnerable to economic downturns, impacting their ability to repay loans[113] - The company is subject to regulatory scrutiny regarding its high concentration of commercial real estate loans, which may require heightened risk management practices[108] - The Company's allowance for credit losses for loans totaled $82.7 million as of December 31, 2024, an increase from $82.0 million in 2023, primarily due to increases in individually evaluated allowance[201] - The quantitative component of the allowance for credit losses for collectively evaluated loans decreased by $7.4 million to $81.2 million as of December 31, 2024, attributed to a decrease in collectively evaluated loans of $54.4 million[202] - The qualitative component of the allowance for credit losses increased by $8.0 million, reflecting trends in qualitative loss factors over 2024[202] Financial Performance - Net income available to common stockholders for the year ended December 31, 2024 was $67.8 million, a decrease of $13.2 million, or 16.3%, compared to $81.0 million for 2023[211] - Diluted earnings per share for 2024 were $1.76, reflecting a 15.0% decrease from $2.07 for 2023[211] - Net income available to common stockholders for 2023 was $81.0 million, a decrease of $38.2 million, or 32.1%, compared to $119.2 million for 2022[212] - Diluted earnings per share for 2023 were $2.07, a 31.2% decrease from $3.01 for 2022[212] - The company's net interest income is primarily influenced by the difference between interest earned on interest-earning assets and interest paid on borrowed funds[208] - Net interest margin is affected by the weighted average rates on interest-earning assets and interest-bearing liabilities[208] Risks and Challenges - The company may face challenges in raising additional capital to support its growth-oriented business strategy[102] - The impact of remote work on the commercial real estate market remains uncertain, potentially affecting borrowers' repayment capabilities[106] - Increased competition for deposits may require the company to raise interest rates to retain existing deposits or attract new ones[119] - The company faces substantial competition from fintech companies, which may offer more favorable terms and reduce margins on banking services[122] - The company may incur impairment to goodwill if significant negative industry trends or reduced cash flow estimates occur[132] - The inability to receive dividends from the bank could adversely affect the company's financial condition and results of operations[129] - The company is subject to heightened regulatory requirements due to its approaching $10 billion in total assets, which may increase operating costs[141] - Unanticipated costs related to the merger could have a dilutive effect on ConnectOne's earnings per share, potentially resulting in lower earnings than anticipated[154] - ConnectOne may face challenges in attracting and retaining customers during the merger process due to uncertainties affecting employees and business relationships[149] Cybersecurity and Compliance - Cybersecurity is a material part of ConnectOne's business, and incidents could have a material effect on its operations and reputation, although no significant incidents have occurred to date[174] - The Company maintains a cybersecurity risk mitigation program that includes monthly vulnerability scanning and annual risk assessments[178] Shareholder and Stock Information - The Company has a share repurchase program authorized for up to 2,000,000 shares, with 282,370 shares repurchased during the year ended December 31, 2024[190] - As of December 31, 2024, there were 641,118 shares remaining for repurchase under the share repurchase program[191] - The Company’s stock is traded on the NASDAQ Global Select Market under the symbol "CNOB," with 678 stockholders of record as of December 31, 2024[188]

Financial Performance - Net income available to common stockholders for Q4 2024 was $18.9 million, a 20.5% increase from Q3 2024 and a 6.2% increase from Q4 2023[1] - Diluted earnings per share for Q4 2024 were $0.49, compared to $0.41 in Q3 2024 and $0.46 in Q4 2023[1] - Full-year 2024 net income available to common stockholders was $67.8 million, down from $81.0 million in 2023[1] - Operating net income for Q4 2024 was $20.2 million, up from $16.1 million in Q3 2024 and $19.1 million in Q4 2023[2] - Net income for the year ended December 31, 2024, was $73,793 thousand, a decrease of 15.1% from $87,003 thousand in 2023[24] - Earnings per common share for the year ended December 31, 2024, were $1.77, down from $2.08 in 2023, reflecting a decrease of 14.9%[24] Interest Income and Margin - Fully taxable equivalent net interest income for Q4 2024 was $64.7 million, a 6.3% increase from Q3 2024[6] - The bank's net interest margin improved to 2.86% in Q4 2024, up from 2.67% in Q3 2024[6] - Net interest income after provision for credit losses was $233,537 thousand for the year ended December 31, 2024, down from $246,906 thousand in 2023, representing a decline of 5.4%[24] - The company reported a net interest income of $517,889 thousand for the year ended December 31, 2024, compared to $490,065 thousand in 2023, showing an increase of 5.7%[24] - Net interest income for Q4 2024 was $64,711 thousand, an increase of 3.0% compared to $60,887 thousand in Q3 2024[28] - Net interest income (tax equivalent basis) increased to $65,593 thousand from $62,627 thousand, showing a growth of 4.73%[31] Assets and Liabilities - Total assets as of December 31, 2024, were $9.880 billion, an increase from $9.856 billion a year earlier[14] - Total assets increased to $9,879,600 thousand as of December 31, 2024, compared to $9,855,603 thousand as of December 31, 2023, reflecting a growth of approximately 0.24%[23] - The company’s total liabilities were $8,637,896 thousand as of December 31, 2024, slightly down from $8,638,983 thousand in 2023, indicating a marginal decrease of 0.01%[23] - Total assets decreased slightly to $9,653,446 thousand from $9,742,853 thousand[36] Deposits and Loans - Total deposits rose to $7,820,114 thousand as of December 31, 2024, up from $7,536,202 thousand a year earlier, indicating an increase of 3.77%[23] - Total loans reached $8,275,553 thousand, reflecting an increase of 2.0% from $8,111,976 thousand in the previous quarter[26] - Loans receivable increased to $8,345,145 thousand from $8,297,957 thousand, reflecting a growth of 0.6% quarter-over-quarter[34] Credit Quality - Nonperforming assets were $57.3 million as of December 31, 2024, representing 0.58% of total assets[13] - The allowance for credit losses was 1.00% of loans receivable as of December 31, 2024, compared to 0.98% a year earlier[13] - The provision for credit losses increased to $13,800 thousand for the year ended December 31, 2024, compared to $8,200 thousand in 2023, marking a rise of 68.3%[24] - Nonperforming assets increased to $57,310 thousand from $52,524 thousand, indicating a rise in asset quality concerns[33] - Nonaccrual loans as a percentage of loans receivable rose to 0.63% from 0.57% in the previous quarter[34] Operational Efficiency - Noninterest expenses totaled $151,798 thousand for the year ended December 31, 2024, an increase of 5.4% from $143,949 thousand in 2023[24] - Noninterest expenses totaled $38,498 thousand in Q4 2024, a decrease from $38,641 thousand in Q3 2024[28] - The operating efficiency ratio (non-GAAP) improved to 52.9%, down from 53.4%, indicating enhanced operational efficiency[31] Equity and Shareholder Value - The company reported a total stockholders' equity of $1,241,704 thousand as of December 31, 2024, up from $1,239,496 thousand in the previous quarter[26] - Book value per share (GAAP) increased to $29.47 from $28.70, reflecting a positive trend in shareholder equity[33] - Common equity ratio (GAAP) decreased slightly to 11.45% from 11.71%, reflecting a minor decline in capital adequacy[33] Future Outlook - The proposed merger with The First of Long Island Corporation is expected to close in Q2 2025, enhancing ConnectOne's presence on Long Island[3]

Financial Performance - Net income available to common stockholders for Q3 2024 was $15.7 million, down from $19.9 million in Q3 2023, representing a decrease of 21.1%[162] - Diluted earnings per share for Q3 2024 were $0.41, compared to $0.51 for Q3 2023, a decrease of 19.6%[162] - For the nine months ended September 30, 2024, net income available to common stockholders was $48.9 million, down from $63.2 million in the same period of 2023, a decrease of 22.7%[163] - Diluted earnings per share for the nine months ended September 30, 2024 were $1.27, compared to $1.61 for the same period in 2023, a decrease of 21.1%[163] Interest Income and Margin - Fully taxable equivalent net interest income for Q3 2024 decreased by $1.5 million, or 2.4%, from Q3 2023[165] - The net interest margin for Q3 2024 was 2.67%, down from 2.76% in Q3 2023, a decrease of 9 basis points[165] - Net interest income for the nine months ended September 30, 2024, was $182.6 million, down from $193.3 million in 2023, representing a decrease of 5.5%[176] - The company reported a net interest margin of 2.67% for the nine months ended September 30, 2024, down from 2.85% in 2023[172] - The average yield on interest-earning assets increased to 5.67% for the nine months ended September 30, 2024, compared to 5.30% in 2023[172] Loan and Credit Quality - The loan portfolio decreased by $235.5 million or 2.8% to $8.1 billion as of September 30, 2024, compared to December 31, 2023[183] - The provision for credit losses increased by $2.3 million in Q3 2024 compared to Q3 2023[162] - Net charge-offs for the nine months ended September 30, 2024 were $9.9 million, compared to $8.0 million for the same period in 2023, with significant charge-offs related to multifamily and commercial loans[191] - Nonaccrual loans as of September 30, 2024 amounted to $51.3 million, representing 0.63% of total loans receivable, unchanged from December 31, 2023[199] - The provision for credit losses for the three months ended September 30, 2024 was $3.8 million, compared to $1.5 million for the same period in 2023, reflecting an increase in specific reserves[190] Noninterest Income and Expenses - Noninterest income rose to $13.0 million for the nine months ended September 30, 2024, compared to $9.8 million in 2023, marking an increase of 32.7%[177] - Noninterest expenses totaled $113.3 million for the nine months ended September 30, 2024, up from $106.1 million in 2023, indicating a rise of 6.8%[179] - Noninterest expenses for Q3 2024 included $0.7 million in merger expenses related to the merger with The First of Long Island Corporation[162] Deposits and Liquidity - Average total deposits increased by $27.7 million, or 0.4%, during Q3 2024 compared to Q3 2023, driven by a $143.5 million increase in savings deposits[223] - Total deposits decreased by $12.1 million, or 0.2%, to $7.52 billion as of September 30, 2024, compared to $7.54 billion as of December 31, 2023[235] - Estimated uninsured deposits rose to $6.50 billion as of September 30, 2024, from $6.15 billion as of December 31, 2023[234] - The bank had aggregate available and unused credit of approximately $2.9 billion as of September 30, 2024, after accounting for $1.4 billion in outstanding borrowings[218] - Cash and cash equivalents totaled $247.2 million as of September 30, 2024, reflecting a decrease of $4.5 million from December 31, 2023[219] Capital and Equity - The Company’s tangible common equity ratio improved to 9.71% as of September 30, 2024, compared to 9.25% as of December 31, 2023[240] - Total risk-based capital for the Company was $1.23 billion, with a ratio of 14.29% as of September 30, 2024, exceeding the minimum requirement[247] - The Company’s stockholders' equity remained flat at approximately $1.2 billion as of September 30, 2024, compared to December 31, 2023[240] - Retained earnings increased by $29 million, offset by $6 million in treasury stock and $2 million in accumulated other comprehensive losses[240] Interest Rate Sensitivity - A 200 basis-point increase in interest rates is estimated to decrease net interest income by 3.95% over the next year, compared to a decrease of 9.25% estimated as of December 31, 2023[206] - As of September 30, 2024, a 200 basis-point increase in interest rates would decrease net interest income by 1.23% over the next three years[207] - The estimated economic value of equity (EVE) would decrease by 9.81% with a 200 basis-point increase in interest rates as of September 30, 2024[208] Asset Management - Total interest-earning assets increased to $9.25 billion for the nine months ended September 30, 2024, compared to $9.16 billion for the same period in 2023, reflecting a growth of 0.9%[172] - The average securities portfolio increased by $13.5 million to approximately $736.9 million for the three months ended September 30, 2024, representing 8.0% of average total interest-earning assets[200] - Net unrealized losses on securities available-for-sale decreased to $51.1 million as of September 30, 2024, from $57.8 million as of December 31, 2023, due to changes in market conditions[201]

Financial Performance - Net income available to common stockholders for Q2 2024 was $17.5 million, down from $19.9 million in Q2 2023, representing a decrease of 12.1%[160] - Diluted earnings per share for Q2 2024 were $0.46, compared to $0.51 for Q2 2023, reflecting a decline of 9.8%[160] - For the first half of 2024, net income available to common stockholders was $33.2 million, a decrease of 23.5% from $43.3 million in the same period of 2023[161] - The company's diluted earnings per share for the first half of 2024 were $0.86, down from $1.10 in the first half of 2023, a decrease of 21.8%[161] Interest Income and Margin - Fully taxable equivalent net interest income for Q2 2024 decreased by $2.4 million, or 3.7%, compared to Q2 2023[163] - The net interest margin for Q2 2024 was 2.72%, down from 2.81% in Q2 2023, a contraction of 9 basis points[163] - For the first half of 2024, fully taxable equivalent net interest income decreased by $9.1 million, or 6.9%, compared to the first half of 2023[164] - The net interest margin for the first half of 2024 was 2.68%, down from 2.89% in the first half of 2023, a decrease of 21 basis points[164] - The average yield on interest-earning assets increased to 5.67% for the six months ended June 30, 2024, compared to 5.21% in 2023[1] Loan and Deposit Trends - Average total loans increased by $63.5 million, or 0.8%, in Q2 2024 compared to Q2 2023[163] - As of June 30, 2024, gross loans totaled $8.162 billion, a decrease of $189.3 million or 2.3% from December 31, 2023[1] - Average total deposits decreased by $82 million, or 1.1%, during Q2 2024 compared to Q2 2023, primarily due to a decrease in noninterest-bearing demand deposits[223] - Average time deposits increased by $69 million during the six months ended June 30, 2024, attributed to increases in retail time deposits[229] - Total deposits rose by $40 million, or 0.5%, to $7.6 billion as of June 30, 2024, compared to $7.5 billion as of December 31, 2023[236] Noninterest Income and Expenses - Noninterest income for the three months ended June 30, 2024, totaled $4.4 million, up from $3.4 million in the same period of 2023, primarily due to a $0.7 million increase in net gains on the sale of loans held-for-sale[1] - Noninterest expenses for the six months ended June 30, 2024, were $74.7 million, an increase of $4.3 million compared to $70.3 million in 2023, driven by higher salaries and technology investments[1] Credit Quality and Losses - As of June 30, 2024, the allowance for credit losses for loans was $82.1 million, an increase of $0.1 million from $82.0 million as of December 31, 2023[189] - For the three months ended June 30, 2024, the provision for credit losses was $2.5 million, compared to $3.0 million for the same period in 2023, reflecting a decrease in general reserves[190] - Net charge-offs for the six months ended June 30, 2024, were $6.4 million, compared to $5.5 million for the same period in 2023, with the increase attributed to multifamily loans[191] - Nonaccrual loans decreased to $46.0 million as of June 30, 2024, from $52.5 million as of December 31, 2023, representing a reduction in nonperforming assets[199] Liquidity and Capital - Liquid assets as of June 30, 2024, totaled $731.2 million, representing 7.5% of total assets, an increase from $516.3 million (5.2% of total assets) as of December 31, 2023[217] - The Bank had aggregate available and unused credit of approximately $3.2 billion as of June 30, 2024, after accounting for outstanding borrowings[218] - The tangible common equity ratio improved to 9.46% as of June 30, 2024, up from 9.25% as of December 31, 2023[242] - Total risk-based capital ratio for the Company was 14.10% as of June 30, 2024, exceeding the minimum requirement of 8.00%[249] Interest Rate Sensitivity - A 200 basis-point increase in interest rates is estimated to decrease net interest income by 6.65% over the next year as of June 30, 2024[206] - As of June 30, 2024, a 200 basis-point increase in interest rates would decrease net interest income by 2.86% over the next three years[207] - The estimated economic value of equity (EVE) would decrease by 12.33% with a 200 basis-point increase in interest rates as of June 30, 2024[208]

Financial Performance - Net income available to common stockholders for Q1 2024 was $15.7 million, down from $23.4 million in Q1 2023, representing a decrease of 33.6%[149] - Diluted earnings per share for Q1 2024 were $0.41, compared to $0.59 in Q1 2023, a decrease of 30.5%[149] - Noninterest income totaled $3.9 million for Q1 2024, an increase from $2.8 million in Q1 2023, primarily driven by gains on loan sales[158] - Noninterest expenses rose to $37.1 million in Q1 2024, up from $34.9 million in Q1 2023, an increase of 6.3%[159] - Income tax expense decreased to $5.9 million in Q1 2024 from $9.1 million in Q1 2023, reflecting lower income before tax[160] - The effective tax rate for Q1 2024 was 25.5%, down from 26.7% in Q1 2023, due to lower taxable income[160] Loan Portfolio - Gross loans totaled $8.3 billion as of March 31, 2024, a decrease of $47.7 million, or 0.6%, compared to December 31, 2023[163] - The commercial real estate loan segment accounted for 70.2% of the total loan portfolio as of March 31, 2024[163] - As of March 31, 2024, total commercial real estate loans amounted to $5,829,950, a slight decrease from $5,895,545 as of December 31, 2023, maintaining a loan-to-value ratio of 56%[165] - The total multifamily loans as of March 31, 2024, were $2,496,821, a decrease from $2,553,401 as of December 31, 2023[166] - Average loans receivable increased to $8,332,729 for the three months ended March 31, 2024, compared to $8,117,572 for the same period in 2023[174] Credit Quality - The allowance for credit losses for loans increased to $82.9 million as of March 31, 2024, up from $82.0 million as of December 31, 2023[169] - The provision for credit losses for the three months ended March 31, 2024, was $4.0 million, compared to $1.0 million for the same period in 2023, reflecting changes in macroeconomic forecasts[170] - Net charge-offs for the three months ended March 31, 2024, were $3.2 million, a decrease from $4.5 million in the same period of 2023[171] - Nonaccrual loans decreased to $47,438 as of March 31, 2024, from $52,524 as of December 31, 2023, representing 0.57% of total loans receivable[178] - The ratio of annualized net charge-offs to average loans receivable during the period was 0.15% for the three months ended March 31, 2024, compared to 0.22% for the same period in 2023[174] Liquidity and Deposits - As of March 31, 2024, liquid assets totaled $706.2 million, representing 7.2% of total assets, an increase from $516.3 million (5.2%) as of December 31, 2023[195] - Average total deposits increased by $142 million, or 1.9%, to $7.5 billion for Q1 2024 from $7.4 billion for Q1 2023, primarily due to a $210 million increase in time deposits[199] - Total deposits increased by $53 million, or 0.7%, to $7.6 billion as of March 31, 2024, compared to $7.5 billion as of December 31, 2023[209] - Time deposits increased by $92 million, savings deposits by $41 million, and noninterest-bearing demand deposits by $31 million, while demand, interest-bearing & NOW deposits decreased by $111 million[209] - The bank's liquidity position is deemed adequate to meet short and long-term obligations, with liquid assets supporting operational needs[195] Interest Rate Sensitivity - The estimated change in Economic Value of Equity (EVE) for a 200 basis-point increase in interest rates would decrease EVE by 12.46% as of March 31, 2024[187] - A 200 basis-point increase in interest rates is projected to decrease net interest income (NII) by 6.38% over the next year as of March 31, 2024[185] - Average demand deposits included $1.1 billion in ICS reciprocal deposits for Q1 2024, compared to $376 million for Q1 2023, reflecting a shift in client deposits due to market conditions[202] - The beta for nonreciprocal brokered deposits is higher than that of ICS and CDARS reciprocal deposits, indicating a stronger correlation to market interest rates[203] Capital Position - Stockholders' equity remained flat at approximately $1.2 billion as of March 31, 2024, with retained earnings increasing by $9 million[214] - The tangible common equity ratio was 9.25% as of March 31, 2024, unchanged from December 31, 2023[216] - Total risk-based capital ratio for the Company was 13.88% as of March 31, 2024, exceeding the minimum requirement[221] - The Company held $648 million of time deposits with balances in excess of $250,000 as of March 31, 2024[211] - The interest rate for subordinated debentures was 8.43% as of March 31, 2024[212] - The Company’s total assets were approximately $9.85 billion as of March 31, 2024[216] - The Company and Bank satisfied the capital conservation buffer requirements as of March 31, 2024[222]

Financial Overview - ConnectOne Bancorp, Inc. has over $9.856 billion in assets[22] - The company acquired approximately $0.4 billion in loans and deposits from Greater Hudson Bank in January 2019[15] - Following the merger with Bancorp of New Jersey, the company acquired approximately $0.8 billion in loans and deposits[17] - The bank's largest committed relationship was $173.6 million, with the single largest loan outstanding at $60.0 million as of December 31, 2023[34] - As of December 31, 2023, the company had $6.5 billion in commercial real estate loans, representing 78.1% of total loans receivable[110] - The company's total assets were $9.856 billion as of December 31, 2023, approaching the $10 billion threshold which will subject it to heightened regulatory requirements[143] Revenue and Income - The company offers a broad range of deposit and loan products, generating revenue primarily from net interest income[27] - Net income available to common stockholders for the year ended December 31, 2023 was $81.0 million, a decrease of $38.2 million, or 32.1%, compared to net income of $119.2 million for 2022[199] - Diluted earnings per share for 2023 were $2.07, reflecting a 31.2% decrease from $3.01 for 2022[199] - Fully taxable equivalent net interest income for 2023 totaled $258.3 million, a decrease of $46.3 million, or 15.2%, from 2022[202] - The net interest margin contracted by 87 basis points to 2.82% in 2023 from 3.69% in 2022, primarily due to a 199-basis point increase in the average cost of deposits[202] Loan Portfolio and Risks - Approximately 64.5% of the commercial real estate loans, or $3.8 billion, were originated in the past three years, indicating a significant portion of unseasoned loans[115] - The company may face increased lending risks due to the significant growth in its loan portfolio, particularly in commercial real estate[115] - The ongoing COVID-19 pandemic has created economic uncertainty, potentially impacting the company's loan repayment rates and overall financial condition[105] - The company targets small-to medium-sized businesses, which may be more vulnerable to economic downturns, affecting their ability to repay loans[116] - The company must implement heightened risk management practices due to high concentrations of commercial real estate loans[113] Employee Development and Culture - As of December 31, 2023, the company had 487 full-time employees and 12 part-time and temporary employees[40] - In 2023, 289 employees participated in leadership and mentoring programs within ConnectOne University[43] - The company sponsored two employees to attend the Stonier Graduate School of Banking in 2023[44] - In 2023, 58 employees were promoted into new roles, emphasizing internal growth[49] - The company offers a tuition reimbursement program for up to $5,250 in tuition expenses related to approved business-related coursework[46] Regulatory Environment - The Dodd-Frank Act requires capital rules that apply to bank holding companies, impacting the company's capital requirements[60] - The Economic Growth, Regulatory Relief and Consumer Protection Act increased the asset threshold for stress tests from $10 billion to $250 billion[62] - The company is subject to examination by the Federal Reserve System and must comply with various regulatory requirements[54] - The Company and the Bank are required to maintain a leverage ratio of 4% as part of the New Rules implementing Basel III[71] - The New Rules require a capital conservation buffer of 2.5% composed entirely of CET1, on top of the minimum risk-weighted asset ratios[72] Capital and Financial Management - The Company has a Common Equity Tier 1 Capital Ratio of 7%, a Tier 1 Capital Ratio of 8.5%, and a Total Capital Ratio of 10.5%[77] - The capital conservation buffer required is 2.5%, and failure to maintain it could limit dividend payments and equity repurchases[133] - The Company accrued $2.1 million as of December 31, 2023, related to a special assessment for the Deposit Insurance Fund following the closures of Silicon Valley Bank and Signature Bank[89] - The special assessment will be collected at an annual rate of approximately 13.4 basis points for an anticipated total of eight quarterly assessment periods starting January 1, 2024[89] Competition and Market Position - The company faces substantial competition in loan origination and deposit attraction, which may adversely affect profitability[119] - Increased competition for deposits may adversely affect the company's ability to generate necessary funds for lending operations[123] - Recent events in the financial services industry have increased competition for deposits and could impact the company's stock price[145] Shareholder and Stock Management - The Company repurchased a total of 904,152 shares during the year ended December 31, 2023, with 933,488 shares remaining for repurchase under the program[179] - The average price paid per share for repurchases in the fourth quarter of 2023 was $21.17[180] - As of December 31, 2023, the Company had 697 stockholders of record[177] - The Company has a share repurchase program authorized for up to 2,000,000 shares, which may be modified or suspended at the Company's discretion[179] Cybersecurity and Risk Management - The Company has not experienced any cybersecurity incidents that have materially affected its business strategy or financial condition to date[165] - The Company's cybersecurity risk management is overseen by the management IT Committee, which includes key executives such as the Chief Compliance Officer and Chief Technology Officer[165] - The Company maintains insurance that may cover expenses and losses incurred from cybersecurity incidents[170] Economic and Market Conditions - A sustained increase in market interest rates could compress the company's net interest margin and adversely affect earnings[150] - The company faces liquidity risks that could impede its ability to meet obligations and capitalize on growth opportunities[126]

Financial Performance - Net income available to common stockholders for Q3 2023 was $19.9 million, down from $27.4 million in Q3 2022, representing a decrease of 27.4%[150] - Diluted earnings per share for Q3 2023 were $0.51, compared to $0.70 for Q3 2022, a decrease of 27.1%[150] - For the nine months ended September 30, 2023, net income available to common stockholders was $63.2 million, down from $88.1 million in the same period of 2022, a decrease of 28.2%[151] - Diluted earnings per share for the nine months ended September 30, 2023 were $1.61, compared to $2.23 for the same period in 2022, a decrease of 28%[151] Interest Income and Margin - Fully taxable equivalent net interest income for Q3 2023 decreased by $15.6 million, or 19.8%, compared to Q3 2022[153] - The net interest margin contracted to 2.76% in Q3 2023 from 3.68% in Q3 2022, a decrease of 92 basis points[153] - For the nine months ended September 30, 2023, fully taxable equivalent net interest income decreased by $30.2 million, or 13.4%, compared to the same period in 2022[154] - The net interest margin for the nine months ended September 30, 2023 was 2.85%, down from 3.76% in the same period of 2022, a decrease of 91 basis points[154] - The company reported a net interest spread of 2.12% for the nine months ended September 30, 2023, compared to 3.51% for the same period in 2022[1][3] Assets and Loans - Total interest-earning assets increased to $9.09 billion in Q3 2023 from $8.50 billion in Q3 2022[158] - Total assets as of September 30, 2023 were $9.63 billion, compared to $9.03 billion as of September 30, 2022[158] - Total gross loans as of September 30, 2023, amounted to $8.2 billion, reflecting an increase of $79.0 million or 1.0% compared to December 31, 2022[171] - Average loans receivable increased to $8,169,139 thousand in Q3 2023 from $7,580,176 thousand in Q3 2022, representing an increase of 7.8%[179] Noninterest Income and Expenses - Noninterest income for the nine months ended September 30, 2023, totaled $9.8 million, slightly up from $9.7 million for the same period in 2022[166] - Noninterest expenses increased to $106.1 million for the nine months ended September 30, 2023, compared to $93.1 million for the same period in 2022, marking a rise of $13.0 million[168] Credit Losses and Charge-offs - The allowance for credit losses for loans was $88.2 million as of September 30, 2023, down from $90.5 million as of December 31, 2022[173] - Net charge-offs for the nine months ended September 30, 2023, were $8.1 million, compared to $0.9 million for the same period in 2022[175] - Total charge-offs for the nine months ended September 30, 2023, were $8,089 thousand, compared to $989 thousand for the same period in 2022, indicating a significant increase in charge-offs[179] - The allowance for credit losses (ACL) as a percentage of loans receivable was 1.08% as of September 30, 2023, down from 1.16% as of September 30, 2022[179] - Provision for credit losses on loans for the nine months ended September 30, 2023, was $5,721 thousand, compared to $13,816 thousand for the same period in 2022, indicating a decrease in provisions[179] Market Conditions and Securities - Net unrealized losses on securities available-for-sale increased to $87.7 million as of September 30, 2023, from $61.8 million as of December 31, 2022, primarily due to changes in market conditions and interest rates[187] - The average securities portfolio decreased by $17.0 million to approximately $723.4 million, or 8.0% of average total interest-earning assets, from 8.7% in the previous year[186] Capital and Liquidity - The Company's stockholders' equity was $1.2 billion as of September 30, 2023, an increase of $9 million from December 31, 2022, primarily due to a $44 million rise in retained earnings[210] - The tangible common equity ratio improved to 9.11% as of September 30, 2023, up from 9.04% as of December 31, 2022[210] - Cash and cash equivalents totaled $253.3 million as of September 30, 2023, reflecting an increase of $15.0 million from December 31, 2022[203] - As of September 30, 2023, liquid assets totaled $515.6 million, representing 5.3% of total assets, down from $760.0 million (7.9%) as of December 31, 2022[201] - Total deposits increased by $81.9 million, or 1.1%, to $7.4 billion as of September 30, 2023, driven by increases in interest-bearing and NOW deposits[205] - The Company reported a Tier 1 risk-based capital ratio of 11.98% as of September 30, 2023, exceeding the minimum requirement of 6.00%[216] - Total risk-based capital for the Company was $1.197 billion, with a ratio of 13.90% as of September 30, 2023, above the minimum requirement of 8.00%[216] - The Bank's total risk-based capital was $1.156 billion, with a ratio of 13.43% as of September 30, 2023, also exceeding the minimum requirement[217] - The Bank had aggregate available and unused credit of approximately $3.3 billion as of September 30, 2023, after accounting for $1.5 billion in outstanding borrowings[202] - The Company had outstanding commitments to extend credit of approximately $1.2 billion as of September 30, 2023[202] Interest Rate Sensitivity - The estimated impact of a 200 basis-point increase in interest rates would decrease net interest income by 8.20% over the next year, compared to a decrease of 2.22% estimated as of December 31, 2022[192] - The economic value of equity (EVE) would decrease by 16.49% with an instantaneous rate shock of up 200 basis points as of September 30, 2023[194] Nonaccrual Loans - Nonaccrual loans increased to $56,059 thousand as of September 30, 2023, from $44,454 thousand as of December 31, 2022, reflecting a rise of 26.5%[183] - The ratio of nonaccrual loans to total loans receivable rose to 0.69% as of September 30, 2023, compared to 0.55% as of December 31, 2022[184]

Financial Performance - Net income available to common stockholders for Q2 2023 was $19.9 million, down from $30.8 million in Q2 2022, representing a decrease of 35.5%[149] - Diluted earnings per share for the six months ended June 30, 2023, were $1.10, compared to $1.53 for the same period in 2022, a decline of 28.1%[150] - Noninterest income for the six months ended June 30, 2023, was $6.2 million, down from $6.4 million in the same period of 2022[1] - Noninterest expenses increased to $70.3 million for the six months ended June 30, 2023, compared to $60.9 million for the same period in 2022[1] Interest Income and Margin - Net interest income for Q2 2023 decreased by $11.5 million, or 15.1%, compared to Q2 2022, primarily due to a 276 basis-point increase in rates paid on interest-bearing deposits[152] - For the six months ended June 30, 2023, net interest income decreased by $14.5 million, or 9.9%, compared to the same period in 2022[153] - The net interest margin contracted to 2.81% in Q2 2023 from 3.91% in Q2 2022, reflecting a 110 basis-point decrease[152] - The net interest margin for the six months ended June 30, 2023, was 2.89%, down from 3.81% in the same period of 2022[1] - The company reported a net interest spread of 2.18% for the six months ended June 30, 2023, compared to 3.62% for the same period in 2022[1] Asset and Loan Growth - Total interest-earning assets increased to $9.23 billion in Q2 2023 from $7.81 billion in Q2 2022, an increase of 18.2%[156] - The average balance of total loans increased to $8.15 billion in Q2 2023 from $7.01 billion in Q2 2022, an increase of 16.3%[156] - Gross loans totaled $8.16 billion as of June 30, 2023, reflecting an increase of $47.1 million or 0.6% from December 31, 2022[1] - Average loans receivable increased to $8,140,859 thousand in Q2 2023 from $7,007,207 thousand in Q2 2022, representing a growth of 16.2%[1] Tax and Expenses - The company reported a $6.7 million decrease in income tax expense for the first half of 2023 compared to the same period in 2022[150] - Noninterest expenses increased by $3.7 million in Q2 2023 compared to Q2 2022, contributing to the decline in net income[149] Credit Quality - The allowance for credit losses for loans was $89.2 million as of June 30, 2023, a decrease of $1.3 million from December 31, 2022[1] - Net charge-offs for the six months ended June 30, 2023, were $5.5 million, compared to $0.5 million for the same period in 2022[1] - Total charge-offs for the six months ended June 30, 2023, were $5,602 thousand, compared to $576 thousand for the same period in 2022, indicating a significant increase in charge-offs[1] - Nonaccrual loans rose to $51,496 thousand as of June 30, 2023, from $44,454 thousand as of June 30, 2022, reflecting an increase of 2.3%[1] - The ratio of annualized net charge-offs to average loans receivable was 0.14% for the six months ended June 30, 2023, compared to 0.01% for the same period in 2022[1] - The allowance for credit losses (ACL) as a percentage of loans receivable was 1.09% as of June 30, 2023, down from 1.14% in the prior year[1] - Nonperforming assets to total assets ratio increased to 0.53% as of June 30, 2023, from 0.46% in the previous year[1] Capital and Liquidity - Total assets of the company as of June 30, 2023, were $9.77 billion, up from $8.32 billion as of June 30, 2022, an increase of 17.5%[156] - Total assets increased to $9.73 billion as of June 30, 2023, compared to $8.29 billion as of June 30, 2022[1] - As of June 30, 2023, liquid assets totaled $591.8 million, representing 6.1% of total assets, down from $760.0 million (7.9%) as of December 31, 2022[198] - Total deposits increased by $181.7 million, or 2.5%, to $7.5 billion as of June 30, 2023, primarily due to increases in time deposits and interest-bearing deposits[202] - Cash and cash equivalents rose to $319.9 million, an increase of $51.6 million from $268.3 million as of December 31, 2022[200] - Stockholders' equity was $1.2 billion as of June 30, 2023, an increase of $20.6 million from December 31, 2022, driven by retained earnings[207] - The tangible common equity ratio improved to 9.19% as of June 30, 2023, up from 9.04% as of December 31, 2022[209] - Tier 1 leverage capital for the Company was $1,023.3 million, representing a ratio of 10.62% as of June 30, 2023, exceeding the minimum requirement of 4.00%[214] - Total risk-based capital for the Bank was $1,145.98 million, with a ratio of 13.33% as of June 30, 2023, above the minimum requirement of 8.00%[215] Market Conditions and Risks - Net unrealized losses on securities available-for-sale amounted to $64.6 million as of June 30, 2023, compared to $61.8 million as of December 31, 2022, due to changes in market conditions[1] - The estimated impact of a 200 basis-point increase in interest rates would decrease net interest income by 1.87% over the next year[1] - The economic value of equity (EVE) would decrease by 12.72% with an instantaneous rate shock of up 200 basis points as of June 30, 2023[1] - The Company had aggregate available and unused credit of approximately $3.3 billion as of June 30, 2023, after accounting for $1.4 billion in outstanding borrowings[199] - The Bank's borrowing capacity included $2.9 billion from the Federal Home Loan Bank and $1.3 billion from the Federal Reserve Bank of New York[199]

Financial Performance - Net income available to common stockholders for Q1 2023 was $23.4 million, down from $29.9 million in Q1 2022, representing a decrease of 21.1%[148] - Diluted earnings per share decreased to $0.59 in Q1 2023 from $0.75 in Q1 2022, a decline of 21.3%[148] - Noninterest income totaled $2.8 million in Q1 2023, down from $3.1 million in Q1 2022, with adjusted noninterest income decreasing by $0.7 million[157] - Noninterest expenses increased to $34.9 million in Q1 2023, up from $29.2 million in Q1 2022, an increase of 19.2%[158] - Income tax expense decreased to $9.1 million in Q1 2023 from $11.4 million in Q1 2022, reflecting lower income before taxes[159] - The effective tax rate for Q1 2023 was 26.7%, slightly up from 26.6% in Q1 2022[159] Loan and Credit Quality - As of March 31, 2023, gross loans totaled $8.1 billion, an increase of $32.0 million or 0.4% compared to December 31, 2022[161] - The composition of the loan portfolio included 71.7% in commercial real estate and 17.3% in commercial loans as of March 31, 2023[161] - As of March 31, 2023, the allowance for credit losses (ACL) for loans was $87.0 million, a decrease of $3.5 million from $90.5 million as of December 31, 2022[163] - The provision for credit losses was $1.0 million for the three months ended March 31, 2023, compared to $1.5 million for the same period in 2022, reflecting modest loan growth[164] - Net charge-offs for the three months ended March 31, 2023, were $4.5 million, significantly higher than $0.2 million for the same period in 2022[165] - The ACL as a percentage of loans receivable was 1.07% as of March 31, 2023, down from 1.12% as of December 31, 2022[165] - Nonaccrual loans amounted to $47.7 million as of March 31, 2023, compared to $44.5 million as of December 31, 2022[172] Asset and Capital Management - Average loans receivable increased to $8.12 billion for the three months ended March 31, 2023, from $6.87 billion in the same period of 2022[168] - The Company's stockholders' equity was $1.2 billion as of March 31, 2023, an increase of $12.2 million from December 31, 2022, primarily due to retained earnings[201] - The tangible common equity ratio as of March 31, 2023, was 8.87%, down from 9.04% as of December 31, 2022[201] - The Bank's total risk-based capital ratio was 13.27% as of March 31, 2023, exceeding the minimum requirement of 8.00%[209] - The Company aims to balance capital retention for future growth while providing attractive long-term returns to stockholders[205] Liquidity and Deposits - As of March 31, 2023, liquid assets totaled $827.7 million, representing 8.1% of total assets and 9.6% of total deposits and borrowings, an increase from $760.0 million (7.9% of total assets) as of December 31, 2022[190] - Total deposits increased by $396.6 million, or 5.4%, to $7.8 billion as of March 31, 2023, driven by increases in time deposits and interest-bearing deposits[195] - Cash and cash equivalents rose to $562.4 million as of March 31, 2023, up $294.1 million from $268.3 million as of December 31, 2022[193] Interest Rate Sensitivity - Fully taxable equivalent net interest income decreased by $3.0 million, or 4.3%, from Q1 2022, primarily due to a 71 basis-point decrease in net interest margin from 3.71% to 3.00%[150] - The net interest income simulation model estimated that a 200 basis-point increase in interest rates would decrease net interest income by 0.63% over the next year[181] - The economic value of equity (EVE) would decrease by 12.16% with a 200 basis-point instantaneous increase in interest rates as of March 31, 2023[183] Other Assets - As of March 31, 2023, net unrealized losses on securities available-for-sale were $57.3 million, down from $61.8 million as of December 31, 2022[176] - The Bank's access to the Federal Reserve Bank of New York increased to $1.2 billion from $0.1 billion as of March 31, 2023, reflecting additional pledged loans[192] - The Company had aggregate available and unused credit of approximately $1.2 billion as of March 31, 2023, after accounting for $1.4 billion in outstanding borrowings[191] - Total goodwill and other intangible assets were approximately $215.3 million as of March 31, 2023, slightly down from $215.7 million as of December 31, 2022[201] - The company maintains a diversified loan portfolio to manage asset quality and credit risk effectively[169]