CONNECTONE BN(CNOBP) - 2024 Q2 - Quarterly Report

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$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$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$8.162 billion, a decrease of $189.3 million or 2.3$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$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]