ConnectOne Bancorp(US:CNOB)2024-11-05 21:01Financial 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%[151]. - Diluted earnings per share for Q3 2024 were $0.41, compared to $0.51 for Q3 2023, reflecting a decrease of 19.6%[151]. - For the nine months ended September 30, 2024, net income available to common stockholders was $48.9 million, a decrease of 22.0% from $63.2 million in the same period of 2023[152]. Credit Losses and Risk - The provision for credit losses increased by $2.3 million in Q3 2024 and by $4.8 million for the nine months ended September 30, 2024, indicating rising credit risk[151][152]. - 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 of 153.3%[177]. - 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, representing a year-over-year increase of 23.8%[178]. - Nonaccrual loans totaled $51.3 million as of September 30, 2024, down from $52.5 million as of December 31, 2023[184]. Interest Income and Margin - Fully taxable equivalent net interest income for Q3 2024 decreased by $1.5 million, or 2.4%, compared to Q3 2023, primarily due to a decrease in net interest margin[154]. - The net interest margin for Q3 2024 was 2.67%, down from 2.76% in Q3 2023, reflecting a contraction of 9 basis points[154]. - For the nine months ended September 30, 2024, net interest income was $182.6 million, a decrease from $193.3 million in the same period of 2023, reflecting a net interest margin of 2.67% compared to 2.85%[160]. Asset and Loan Portfolio - Total assets as of September 30, 2024, were $9.74 billion, compared to $9.63 billion as of September 30, 2023, indicating a growth of 1.2%[158]. - As of September 30, 2024, gross loans totaled $8.1 billion, a decrease of $235.5 million or 2.8% compared to December 31, 2023[170]. - The commercial real estate loan segment represented 70.7% of the total loan portfolio as of September 30, 2024, with a balance of $5.7 billion, down from $5.9 billion at the end of 2023[170]. - Average loans receivable for the three months ended September 30, 2024, were $8.1 billion, compared to $8.2 billion for the same period in 2023[181]. Noninterest Income and Expenses - Noninterest income for the nine months ended September 30, 2024, totaled $13.0 million, up from $9.8 million in the same period of 2023, driven by increases in net gains on equity securities and loans held-for-sale[163]. - Noninterest expenses for Q3 2024 included $0.7 million in merger expenses related to the merger with The First of Long Island Corporation[151]. - Noninterest expenses for the nine months ended September 30, 2024, were $113.3 million, an increase from $106.1 million in the same period of 2023, primarily due to higher technology investments and merger-related expenses[165]. Deposits and Liquidity - Average total deposits increased by $27.7 million, or 0.4%, during the third quarter of 2024 compared to the same period in 2023[208]. - Total deposits decreased by $12.1 million, or 0.2%, to $7.52 billion as of September 30, 2024, from $7.54 billion as of December 31, 2023[222]. - Cash and cash equivalents totaled $247.2 million as of September 30, 2024, a decrease of $4.5 million from $242.7 million as of December 31, 2023[204]. - Liquid assets totaled $705.9 million, representing 7.3% of total assets, an increase from $516.3 million (5.2% of total assets) as of December 31, 2023[202]. Capital Ratios - The Company reported a tangible common equity ratio of 9.71% and tangible book value per share of $23.85 as of September 30, 2024, compared to 9.25% and $23.14, respectively, as of December 31, 2023[230]. - Tier 1 leverage capital was reported at $1.07 billion with a ratio of 11.10% as of September 30, 2024, exceeding the minimum requirement of 4.00%[236]. - CET I risk-based ratio stood at 11.07% as of September 30, 2024, above the minimum requirement of 4.50%[236]. - The Total risk-based capital reached $1,182,876 thousand, resulting in a ratio of 13.77%[238]. Interest Rate Risk - Interest rate risk management is identified as the primary market risk for the Company[240]. - As of September 30, 2024, a 200 basis-point increase in interest rates is estimated to decrease net interest income (NII) by 3.95%, while a 100 basis-point decrease would increase NII by 1.32%[192]. - The estimated economic value of equity (EVE) as of September 30, 2024, would decrease by 9.81% with a 200 basis-point increase in interest rates, and increase by 2.23% with a 100 basis-point decrease[194].