PART I – FINANCIAL INFORMATION Financial Statements Presents ConnectOne Bancorp's unaudited consolidated financial statements for Q1 2025, detailing condition, income, and cash flows Consolidated Statements of Condition Highlights (unaudited) | (in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $9,759,255 | $9,879,600 | | Net Loans Receivable | $8,118,731 | $8,192,125 | | Total Deposits | $7,767,230 | $7,820,114 | | Total Liabilities | $8,506,316 | $8,637,896 | | Total Stockholders' Equity | $1,252,939 | $1,241,704 | Consolidated Statements of Income Highlights (unaudited) | (in thousands, except per share data) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Interest Income | $65,756 | $60,300 | | Provision for Credit Losses | $3,500 | $4,000 | | Net Income | $20,242 | $17,205 | | Net Income Available to Common Stockholders | $18,733 | $15,696 | | Diluted Earnings Per Share | $0.49 | $0.41 | - The company entered into a definitive merger agreement with The First of Long Island Corporation, valued at approximately $288 million as of March 31, 2025, with shareholder approval obtained on February 14, 2025394041 - As of March 31, 2025, the available-for-sale investment securities portfolio had a fair value of $636.8 million, with gross unrealized losses of $89.1 million primarily due to interest rate changes, and no allowance for credit losses was recorded474960 Management's Discussion and Analysis of Financial Condition and Results of Operations Management analyzes Q1 2025 financial performance, highlighting increased net income from expanded net interest margin and key operational areas Operating Results Overview Net income to common stockholders increased in Q1 2025, driven by higher net interest income and lower credit loss provision Q1 2025 vs. Q1 2024 Performance | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income to Common Stockholders | $18.7 million | $15.7 million | | Diluted EPS | $0.49 | $0.41 | - The increase in net income was primarily due to higher net interest income and lower provision for credit losses, partially offset by increased noninterest expenses, which included $1.3 million in merger-related costs174 Net Interest Income and Margin Net interest income increased to $66.6 million in Q1 2025, with net interest margin expanding to 2.93% due to lower funding costs Net Interest Income and Margin (Tax-Equivalent) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Interest Income | $66.6 million | $61.1 million | | Net Interest Margin | 2.93% | 2.64% | | Avg. Yield on Earning Assets | 5.52% | 5.63% | | Avg. Cost of Interest-Bearing Liabilities | 3.35% | 3.82% | Financial Condition Total assets were $9.8 billion as of March 31, 2025, with strong liquidity and exceeding regulatory capital requirements Loan Portfolio Composition | Loan Category | Balance at Mar 31, 2025 (in thousands) | % of Total | Change from Dec 31, 2024 (in thousands) | | :--- | :--- | :--- | :--- | | Commercial | $1,492,920 | 18.2% | $(39,810) | | Commercial Real Estate | $5,837,671 | 71.1% | $(43,008) | | Commercial Construction | $617,593 | 7.5% | $1,347 | | Total Gross Loans | $8,206,343 | 100.0% | $(74,139) | Asset Quality Indicators | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Nonperforming Assets | $49,860 thousand | $57,310 thousand | | Nonperforming Assets to Total Assets | 0.51% | 0.58% | | ACL as a % of Loans Receivable | 1.00% | 1.00% | Capital Adequacy Ratios (Company) | Ratio | March 31, 2025 | Minimum Requirement | | :--- | :--- | :--- | | CET I Risk-Based Ratio | 11.14% | 4.50% | | Tier 1 Risk-Based Capital | 12.46% | 6.00% | | Total Risk-Based Capital | 14.29% | 8.00% | Tangible Book Value Per Share | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Tangible Book Value Per Common Share | $24.16 | $23.92 | | Tangible Common Equity Ratio | 9.73% | 9.49% | Interest Rate Sensitivity Analysis The company manages interest rate risk using NII and EVE models, with rate changes impacting NII and EVE as of March 31, 2025 Interest Rate Sensitivity as of March 31, 2025 | Rate Shock (basis points) | Estimated Change in 1-Year NII | Estimated Change in EVE | | :--- | :--- | :--- | | +200 | -5.30% | -5.11% | | +100 | -2.16% | -1.64% | | -100 | +2.27% | +0.40% | Qualitative and Quantitative Disclosures about Market Risks The company identifies interest rate risk as its primary market risk, with detailed analysis in the MD&A section - The company's primary market risk is interest rate risk management, with further details provided in the MD&A section on Interest Rate Sensitivity Analysis254 Controls and Procedures The company's disclosure controls and procedures were effective as of Q1 2025, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures are effective255 - No material changes were made to the company's internal controls over financial reporting during the last fiscal quarter256 PART II – OTHER INFORMATION Legal Proceedings The company is not subject to any legal proceedings expected to materially impact its financial condition or operations - The Company is not subject to any legal proceedings which could have a materially adverse impact on its results of operations and financial condition258 Risk Factors No material changes to the company's inherent business risk factors have occurred since the FY2024 Annual Report on Form 10-K - There have been no material changes to the risks inherent in the business from those described in the Annual Report on Form 10-K for the year ended December 31, 2024259 Unregistered Sales of Equity Securities and Use of Proceeds The company did not repurchase shares in Q1 2025, with 641,118 shares remaining authorized under the existing repurchase program - The Company did not repurchase any shares during the quarter ended March 31, 2025, with 641,118 shares remaining for repurchase under the program260 Exhibits This section lists all exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - The report includes CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, along with Inline XBRL instance and taxonomy documents262
CONNECTONE BN(CNOBP) - 2025 Q1 - Quarterly Report