CONNECTONE BN(CNOBP) - 2023 Q1 - Quarterly Report

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$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$8.1 billion, an increase of $32.0 million or 0.4$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$760.0 million (7.9% of total assets) as of December 31, 2022[190] - Total deposits increased by $396.6 million, or 5.4$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]