CONNECTONE BN(CNOBP) - 2024 Q3 - Quarterly Report

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$182.6 million, down from $193.3 million in 2023, representing a decrease of 5.5$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$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$113.3 million for the nine months ended September 30, 2024, up from $106.1 million in 2023, indicating a rise of 6.8$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$143.5 million increase in savings deposits[223] - Total deposits decreased by $12.1 million, or 0.2$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$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]