• ConnectOne Bancorp, Inc. Reports Second Quarter 2024 Results; Declares Common and Preferred Dividends

    来源: Nasdaq GlobeNewswire / 25 7月 2024 07:00:01   America/New_York

    ENGLEWOOD CLIFFS, N.J., July 25, 2024 (GLOBE NEWSWIRE) -- ConnectOne Bancorp, Inc. (Nasdaq: CNOB) (the “Company” or “ConnectOne”), parent company of ConnectOne Bank (the “Bank”), today reported net income available to common stockholders of $17.5 million for the second quarter of 2024 compared with $15.7 million for the first quarter of 2024 and $19.9 million for the second quarter of 2023. Diluted earnings per share were $0.46 for the second quarter of 2024 compared with $0.41 for the first quarter of 2024 and $0.51 for the second quarter of 2023.

    The increase in net income available to common stockholders and diluted earnings per share from the first quarter of 2024 was primarily due to a $1.5 million decrease to provision for credit losses, a $1.1 million increase in net interest income and a $0.6 million increase in noninterest income, partially offset by a $0.8 million increase in income tax expense and a $0.5 million increase in noninterest expenses. The decrease in net income available to common stockholders from the second quarter of 2023 was primarily due to a $2.4 million decrease in net interest income and a $2.1 million increase in noninterest expenses, partially offset by a $1.0 million increase in noninterest income, a $0.7 million decrease in income tax expense and a $0.5 million decrease to provision for credit losses.

    Pre-tax, pre-provision net revenue (“PPNR”) as a percent of average assets was 1.17%, 1.10% and 1.31% for the three months ended June 30, 2024, March 31, 2024 and June 30, 2023, respectively.

    Frank Sorrentino, ConnectOne’s Chairman and Chief Executive Officer stated, “Reflecting a commitment to our relationship-banking business model, ConnectOne’s second quarter performance was solid and, we believe, is in the early stages of an upswing. Pre-tax and pre-provision net revenue increased sequentially by an annualized 17%, our net interest margin widened by 8 basis points, and both our loan to deposit and CRE concentration ratios improved.”

    “During the second quarter, client deposit balances increased approximately 7% on an annualized basis, with noninterest-bearing demand deposits remaining flat, driven by meaningful growth from existing clients and successfully onboarding new clients to the bank. And while loan originations are continuing at an annualized run-rate of more than $1 billion, our loan portfolio decreased sequentially. This reflected higher pay-downs and pay-offs than usual and was consistent with our strategy to actively manage non-relationship loans off our balance sheet.”

    Mr. Sorrentino concluded, “While ConnectOne remains focused on investing in our valuable franchise, further strengthening our solid balance sheet, enhancing our core funding and improving our loan mix, it also appears banking industry fundamentals may have turned the corner. Either way, we believe that ConnectOne is poised for sustained growth and long-term profitability.”

    Dividend Declarations

    The Company announced that its Board of Directors declared a cash dividend on both its common stock and its outstanding preferred stock.

    A cash dividend on common stock of $0.18 per share will be paid on September 3, 2024, to common stockholders of record on August 15, 2024. A dividend of $0.328125 per depositary share, representing a 1/40th interest in a share of the Company’s 5.25% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A, will also be paid on September 3, 2024 to holders of record on August 15, 2024.

    Operating Results

    Fully taxable equivalent net interest income for the second quarter of 2024 was $62.3 million, an increase of $1.1 million, or 1.9%, from the first quarter of 2024, due to an eight basis-point widening of the net interest margin to 2.72% from 2.64%, which was partially offset by a $113.2 million, or 1.2%, decrease in average interest-earning assets. The net interest margin widening was primarily due to an eight basis-point increase in the yield on interest-earning assets, while the cost to fund those assets remained essentially flat.   The decrease in average interest-earning assets from the first quarter of 2024 was primarily attributable to a $120.0 million decrease in average loans, reflecting a larger than typical volume of loan payoffs, paydowns and sales.

    Fully taxable equivalent net interest income for the second quarter of 2024 decreased by $2.4 million, or 3.7%, from the second quarter of 2023. The decrease from the second quarter of 2023 resulted primarily from a nine basis-point decrease in the net interest margin to 2.72% from 2.81%, partially offset by a $63.5 million, or 0.8%, increase in average loans. The contraction of the net interest margin for the second quarter of 2024 when compared to the second quarter of 2023 was primarily attributable to a 64 basis-point increase in the average cost of deposits, including noninterest-bearing deposits, partially offset by a 42 basis-point increase in the loan portfolio yield.

    Noninterest income was $4.4 million in the second quarter of 2024, $3.8 million in the first quarter of 2024 and $3.4 million in the second quarter of 2023. Included in noninterest income were net (losses) gains on equity securities of $(0.2) million, $0.1 million, and $(0.2) million for the second quarter of 2024, first quarter of 2024 and second quarter of 2023, respectively. Excluding the equity securities (losses) gains, adjusted noninterest income was $4.6 million, $3.8 million, and $3.6 million for the second quarter of 2024, first quarter of 2024 and second quarter of 2023, respectively. The $0.8 million increase in adjusted noninterest income for the second quarter of 2024 when compared to the first quarter of 2024 was primarily due to a $0.8 million increase in net gains on sale of loans held-for-sale. The $1.0 million increase in adjusted noninterest income for the second quarter of 2024 when compared to the second quarter of 2023 was primarily due to an increase in net gains on loans held-for-sale of $0.7 million, an increase in deposit, loan, and other income of $0.1 million and an increase in BOLI income of $0.1 million.

    Noninterest expenses totaled $37.6 million for the second quarter of 2024, $37.1 million for the first quarter of 2024 and $35.5 million for the second quarter of 2023.   The $0.5 million increase from the first quarter of 2024 was attributable to increases in salaries and employee benefits of $0.6 million and other expenses of $0.3 million, partially offset by decreases in information and technology communications of $0.2 million, marketing and advertising of $0.1 million and occupancy and equipment of $0.1 million. The $2.1 million increase from the second quarter of 2023 was attributable to increases in salaries and employee benefits of $1.0 million, information technology and communications of $0.6 million, other expenses of $0.3 million, occupancy and equipment of $0.2 million and FDIC insurance of $0.1 million. The increase in salaries and employee benefits when compared to the first quarter of 2024 and the second quarter of 2023 was primarily attributable to increases in incentive-based compensation accruals, partially offset by decreases in payroll tax expenses. The increases in information technology and communications when compared to the first quarter of 2024 and the second quarter of 2023 are attributable to additional investments in technology, equipment, and software.

    Income tax expense was $6.7 million for the second quarter of 2024, $5.9 million for the first quarter of 2024 and $7.4 million for the second quarter of 2023. The effective tax rates for the second quarter of 2024, first quarter of 2024 and second quarter of 2023 were 26.0%, 25.5% and 25.8%, respectively.

    Asset Quality

    The provision for credit losses was $2.5 million for the second quarter of 2024, $4.0 million for the first quarter of 2024 and $3.0 million for the second quarter of 2023. The decrease in the current quarter’s provision for credit losses from the first quarter of 2024 was primarily attributable to a decrease in general reserves that resulted from a decrease in loans receivable.

    Nonperforming assets, which includes nonaccrual loans and other real estate owned (the Bank had no other real estate owned during the periods reported), were $46.0 million as of June 30, 2024, $52.5 million as of December 31, 2023 and $51.5 million as of June 30, 2023. Nonperforming assets as a percentage of total assets were 0.47% as of June 30, 2024, 0.53% as of December 31, 2023 and 0.53% as of June 30, 2023. The ratio of nonaccrual loans to loans receivable was 0.56%, 0.63% and 0.63%, as of June 30, 2024, December 31, 2023 and June 30, 2023, respectively. The annualized net loan charge-offs ratio was 0.16% for the second quarter of 2024, 0.43% for the fourth quarter of 2023 and 0.05% for the second quarter of 2023. The allowance for credit losses represented 1.01%, 0.98%, and 1.09% of loans receivable as of June 30, 2024, December 31, 2023, and June 30, 2023, respectively. The allowance for credit losses as a percentage of nonaccrual loans was 178.3% as of June 30, 2024, 156.1% as of December 31, 2023 and 173.2% as of June 30, 2023.

    Credit quality metrics remained solid. Criticized and classified loans as a percentage of total loans increased to 1.50% as of June 30, 2024 versus 1.35% as of December 31, 2023 and decreased from 1.70% as of June 30, 2023. Loans delinquent 30 to 89 days were 0.11% of loans as of June 30, 2024 down from 0.30% as of December 31, 2023 and up from 0.04% as of June 30, 2023.

    Selected Balance Sheet Items

    The Company’s total assets were $9.724 billion as of June 30, 2024, compared to $9.856 billion as of December 31, 2023.  Loans receivable were $8.158 billion as of June 30, 2024 and $8.345 billion as of December 31, 2023. Total deposits were $7.576 billion as of June 30, 2024 and $7.536 billion as of December 31, 2023.

    The Company’s total stockholders’ equity was $1.224 billion as of June 30, 2024 and $1.217 billion as of December 31, 2023. The increase in total stockholders’ equity was primarily attributable to an increase in retained earnings of approximately $20 million, partially offset by increases in accumulated other comprehensive loss of approximately $7 million and increases in treasury stock of approximately $6 million. As of June 30, 2024, the Company’s tangible common equity ratio and tangible book value per share were 9.46% and $23.45, respectively, compared to 9.25% and $23.14, respectively, as of December 31, 2023. Total goodwill and other intangible assets were $213.6 million as of June 30, 2024, and $214.2 million as of December 31, 2023.

    Use of Non-GAAP Financial Measures

    In addition to the results presented in accordance with Generally Accepted Accounting Principles ("GAAP"), ConnectOne routinely supplements its evaluation with an analysis of certain non-GAAP measures. ConnectOne believes these non-GAAP financial measures, in addition to the related GAAP measures, provide meaningful information to investors in understanding our operating performance and trends. These non-GAAP measures have inherent limitations and are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for an analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Reconciliations of non-GAAP financial measures disclosed in this earnings release to the comparable GAAP measures are provided in the accompanying tables.

    Second Quarter 2024 Results Conference Call

    Management will also host a conference call and audio webcast at 10:00 a.m. ET on July 25, 2024 to review the Company's financial performance and operating results. The conference call dial-in number is 1 (646) 307-1963, access code 8868797. Please dial in at least five minutes before the start of the call to register. An audio webcast of the conference call will be available to the public, on a listen-only basis, via the "Investor Relations" link on the Company's website https://www.ConnectOneBank.com or at http://ir.connectonebank.com.

    A replay of the conference call will be available beginning at approximately 1:00 p.m. ET on Thursday, July 25, 2024 and ending on Thursday, August 1, 2024 by dialing 1 (609) 800-9909, access code 8868797. An online archive of the webcast will be available following the completion of the conference call at https://www.ConnectOneBank.com or at http://ir.connectonebank.com.

    About ConnectOne Bancorp, Inc.

    ConnectOne Bancorp, Inc., is a modern financial services company that operates, through its subsidiary, ConnectOne Bank, and the Bank’s fintech subsidiary, BoeFly, Inc. ConnectOne Bank is a high-performing commercial bank offering a full suite of banking & lending products and services that focus on small to middle-market businesses. BoeFly, Inc. is a fintech marketplace that connects borrowers in the franchise space with funding solutions through a network of partner banks. ConnectOne Bancorp, Inc. is traded on the Nasdaq Global Market under the trading symbol "CNOB," and information about ConnectOne may be found at https://www.connectonebank.com.

    This news release contains certain forward-looking statements which are based on certain assumptions and describe future plans, strategies, and expectations of the Company. These forward-looking statements are generally identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," or similar expressions. The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, those factors set forth in Item 1A – Risk Factors of the Company’s Annual Report on Form 10-K, as filed with the U.S. Securities and Exchange Commission, as supplemented by the Company’s subsequent filings with the U.S. Securities and Exchange Commission, and changes in interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company's market area, changes in accounting principles and guidelines and the impact of the COVID-19 pandemic on the Company, its employees and operations, and its customers. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

    Investor Contact:
    William S. Burns
    Senior Executive Vice President & CFO
    201.816.4474: bburns@cnob.com

    Media Contact:
    Shannan Weeks 
    MWW 
    732.299.7890: sweeks@mww.com


    CONNECTONE BANCORP, INC. AND SUBSIDIARIES
    CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
    (in thousands)     
          
     June 30, December 31,  June 30,
      2024   2023   2023 
     (unaudited)   (unaudited)
    ASSETS     
    Cash and due from banks$47,105  $61,421  $56,286 
    Interest-bearing deposits with banks 246,408   181,293   263,638 
    Cash and cash equivalents 293,513   242,714   319,924 
          
    Investment securities 620,579   617,162   612,819 
    Equity securities 19,743   18,564   17,950 
          
    Loans held-for-sale 435   -   1,089 
          
    Loans receivable 8,157,903   8,345,145   8,148,540 
    Less: Allowance for credit losses - loans 82,077   81,974   89,205 
    Net loans receivable 8,075,826   8,263,171   8,059,335 
          
    Investment in restricted stock, at cost 43,403   51,457   46,688 
    Bank premises and equipment, net 28,881   30,779   29,093 
    Accrued interest receivable 48,262   49,108   46,237 
    Bank owned life insurance 240,985   237,644   234,412 
    Right of use operating lease assets 13,359   12,007   8,874 
    Goodwill 208,372   208,372   208,372 
    Core deposit intangibles 5,232   5,874   6,569 
    Other assets 125,141   118,751   132,601 
         Total assets$9,723,731  $9,855,603  $9,723,963 
          
    LIABILITIES     
    Deposits:     
    Noninterest-bearing$1,268,882  $1,259,364  $1,356,293 
    Interest-bearing 6,307,132   6,276,838   6,182,004 
    Total deposits 7,576,014   7,536,202   7,538,297 
    Borrowings 756,144   933,579   827,601 
    Subordinated debentures, net 79,692   79,439   79,187 
    Operating lease liabilities 14,435   13,171   10,007 
    Other liabilities 73,219   76,592   69,474 
         Total liabilities 8,499,504   8,638,983   8,524,566 
          
    COMMITMENTS AND CONTINGENCIES     
          
    STOCKHOLDERS' EQUITY     
    Preferred stock 110,927   110,927   110,927 
    Common stock 586,946   586,946   586,946 
    Additional paid-in capital 33,955   33,182   30,740 
    Retained earnings 610,759   590,970   566,498 
    Treasury stock (76,116)  (70,296)  (61,877)
    Accumulated other comprehensive loss (42,244)  (35,109)  (33,837)
       Total stockholders' equity 1,224,227   1,216,620   1,199,397 
       Total liabilities and stockholders' equity$9,723,731  $9,855,603  $9,723,963 
          


    CONNECTONE BANCORP, INC. AND SUBSIDIARIES       
    CONSOLIDATED STATEMENTS OF INCOME       
    (dollars in thousands, except for per share data)       
            
     Three Months EndedSix Months Ended
     06/30/24 06/30/23 06/30/24 06/30/23
    Interest income       
    Interest and fees on loans$120,145  $111,048  $240,233  $217,951 
    Interest and dividends on investment securities:       
    Taxable 4,683   4,029   9,017   8,258 
    Tax-exempt 1,121   1,247   2,275   2,339 
    Dividends 1,217   945   2,342   1,843 
    Interest on federal funds sold and other short-term investments 2,841   4,056   5,747   7,031 
    Total interest income 130,007   121,325   259,614   237,422 
    Interest expense       
    Deposits 62,086   50,714   122,493   90,801 
    Borrowings 6,482   6,768   15,382   15,694 
    Total interest expense 68,568   57,482   137,875   106,495 
            
    Net interest income 61,439   63,843   121,739   130,927 
    Provision for credit losses 2,500   3,000   6,500   4,000 
    Net interest income after provision for credit losses 58,939   60,843   115,239   126,927 
            
    Noninterest income       
    Deposit, loan and other income 1,654   1,545   3,246   2,948 
    Income on bank owned life insurance 1,677   1,553   3,341   3,084 
    Net gains on sale of loans held-for-sale 1,277   550   1,783   599 
    Net losses on equity securities (209)  (210)  (123)  (401)
    Total noninterest income 4,399   3,438   8,247   6,230 
            
    Noninterest expenses       
    Salaries and employee benefits 22,721   21,726   44,852   43,962 
    Occupancy and equipment 2,899   2,677   5,908   5,438 
    FDIC insurance 1,800   1,715   3,600   2,665 
    Professional and consulting 1,923   1,932   3,851   4,126 
    Marketing and advertising 613   556   1,290   1,088 
    Information technology and communications 4,198   3,644   8,587   6,705 
    Amortization of core deposit intangibles 321   371   642   743 
    Other expenses 3,119   2,829   5,929   5,593 
    Total noninterest expenses 37,594   35,450   74,659   70,320 
            
    Income before income tax expense 25,744   28,831   48,827   62,837 
    Income tax expense 6,688   7,437   12,566   16,514 
    Net income 19,056   21,394   36,261   46,323 
    Preferred dividends 1,509   1,509   3,018   3,018 
    Net income available to common stockholders$17,547  $19,885  $33,243  $43,305 
            
    Earnings per common share:       
    Basic$0.46  $0.51  $0.87  $1.11 
    Diluted 0.46   0.51   0.86   1.10 
            


    ConnectOne's management believes that the supplemental financial information, including non-GAAP measures provided below, is useful to investors, The non-GAAP measures should not be viewed as a substitute for financial results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP financial measures presented by other companies,
              
    CONNECTONE BANCORP, INC,         
    SUPPLEMENTAL GAAP AND NON-GAAP FINANCIAL MEASURES         
              
              
     As of
     Jun, 30, Mar, 31, Dec, 31, Sep, 30, Jun, 30,
      2024   2024   2023   2023   2023 
    Selected Financial Data(dollars in thousands)
    Total assets$9,723,731  $9,853,964  $9,855,603  $9,678,885  $9,723,963 
    Loans receivable:         
    Commercial$1,491,079  $1,561,063  $1,564,768  $1,464,479  $1,462,245 
    Commercial real estate 3,274,941   3,333,488   3,342,603   3,288,704   3,237,559 
    Multifamily 2,499,581   2,507,893   2,566,904   2,559,927   2,604,230 
    Commercial construction 639,168   646,593   620,496   622,748   596,362 
    Residential 256,786   254,214   256,041   251,416   254,405 
    Consumer 945   850   1,029   936   1,416 
    Gross loans 8,162,500   8,304,101   8,351,841   8,188,210   8,156,217 
    Net deferred loan fees (4,597)  (6,144)  (6,696)  (7,101)  (7,677)
    Loans receivable 8,157,903   8,297,957   8,345,145   8,181,109   8,148,540 
    Loans held-for-sale 435   -   -   -   1,089 
    Total loans$8,158,338  $8,297,957  $8,345,145  $8,181,109  $8,149,629 
              
    Investment and equity securities$640,322  $638,854  $635,726  $599,544  $630,769 
    Goodwill and other intangible assets 213,604   213,925   214,246   214,594   214,941 
    Deposits:         
    Noninterest-bearing demand$1,268,882  $1,290,523  $1,259,364  $1,224,125  $1,356,293 
    Time deposits 2,593,165   2,623,391   2,531,371   2,522,210   2,621,148 
    Other interest-bearing deposits 3,713,967   3,674,740   3,745,467   3,692,160   3,560,856 
    Total deposits$7,576,014  $7,588,654  $7,536,202  $7,438,495  $7,538,297 
              
    Borrowings$756,144  $877,568  $933,579  $887,590  $827,601 
    Subordinated debentures (net of debt issuance costs) 79,692   79,566   79,439   79,313   79,187 
    Total stockholders' equity 1,224,227   1,216,609   1,216,620   1,188,154   1,199,397 
              
    Quarterly Average Balances         
    Total assets$9,745,853  $9,860,753  $9,690,746  $9,625,625  $9,765,582 
    Loans receivable:         
    Commercial (including PPP loans)$1,517,446  $1,552,360  $1,510,634  $1,471,006  $1,427,153 
    Commercial real estate (including multifamily) 5,789,498   5,890,853   5,874,854   5,821,794   5,847,147 
    Commercial construction 652,227   637,993   630,468   625,640   611,492 
    Residential 254,284   252,965   253,200   253,114   256,924 
    Consumer 5,155   5,091   6,006   4,972   6,733 
    Gross loans 8,218,610   8,339,262   8,275,162   8,176,526   8,149,449 
    Net deferred loan fees (5,954)  (6,533)  (6,894)  (7,387)  (8,591)
    Loans receivable 8,212,656   8,332,729   8,268,268   8,169,139   8,140,858 
    Loans held-for-sale 169   99   31   171   8,516 
    Total loans$8,212,825  $8,332,828  $8,268,299  $8,169,310  $8,149,374 
              
    Investment and equity securities$637,551  $633,270  $602,287  $628,429  $642,915 
    Goodwill and other intangible assets 213,813   214,133   214,472   214,822   215,182 
    Deposits:         
    Noninterest-bearing demand$1,256,251  $1,254,201  $1,248,132  $1,275,325  $1,347,268 
    Time deposits 2,587,706   2,567,767   2,495,091   2,606,122   2,658,673 
    Other interest-bearing deposits 3,721,167   3,696,374   3,747,093   3,723,561   3,640,939 
    Total deposits$7,565,124  $7,518,342  $7,490,316  $7,605,008  $7,646,880 
              
    Borrowings$787,256  $947,003  $823,123  $651,112  $756,303 
    Subordinated debentures (net of debt issuance costs) 79,609   79,483   79,356   79,230   79,104 
    Total stockholders' equity 1,220,621   1,220,818   1,198,389   1,202,647   1,197,043 
              
     Three Months Ended
     Jun, 30, Mar, 31, Dec, 31, Sep, 30, Jun, 30,
      2024   2024   2023   2023   2023 
     (dollars in thousands, except for per share data)
    Net interest income$61,439  $60,300  $61,822  $62,357  $63,843 
    Provision for credit losses 2,500   4,000   2,700   1,500   3,000 
    Net interest income after provision for credit losses 58,939   56,300   59,122   60,857   60,843 
    Noninterest income         
    Deposit, loan and other income 1,654   1,592   1,545   1,605   1,545 
    Income on bank owned life insurance 1,677   1,664   1,635   1,597   1,553 
    Net gains on sale of loans held-for-sale 1,277   506   472   633   550 
    Net (losses) gains on equity securities (209)  86   557   (273)  (210)
    Total noninterest income 4,399   3,848   4,209   3,562   3,438 
    Noninterest expenses         
    Salaries and employee benefits 22,721   22,131   22,010   22,251   21,726 
    Occupancy and equipment 2,899   3,009   2,708   2,738   2,677 
    FDIC insurance 1,800   1,800   1,800   1,800   1,715 
    Professional and consulting 1,923   1,928   1,587   1,834   1,932 
    Marketing and advertising 613   677   323   554   556 
    Information technology and communications 4,198   4,389   4,148   3,487   3,644 
    Amortization of core deposit intangible 321   321   348   347   371 
    Other expenses 3,119   2,810   2,821   2,773   2,829 
    Total noninterest expenses (excluding FDIC special assessment) 37,594   37,065   35,745   35,784   35,450 
              
    FDIC special assessment -   -   2,100   -   - 
    Total noninterest expenses 37,594   37,065   37,845   35,784   35,450 
              
    Income before income tax expense 25,744   23,083   25,486   28,635   28,831 
    Income tax expense 6,688   5,878   6,213   7,228   7,437 
    Net income 19,056   17,205   19,273   21,407   21,394 
    Preferred dividends 1,509   1,509   1,509   1,509   1,509 
    Net income available to common stockholders$17,547  $15,696  $17,764  $19,898  $19,885 
              
    Weighted average diluted common shares outstanding 38,448,594   38,511,747   38,651,391   38,829,681   39,016,839 
    Diluted EPS$0.46  $0.41  $0.46  $0.51  $0.51 
              
    Reconciliation of GAAP Earnings to Pre-tax and Pre-provision Net Revenue        
    Net income$19,056  $17,205  $19,273  $21,407  $21,394 
    Income tax expense 6,688   5,878   6,213   7,228   7,437 
    Provision for credit losses 2,500   4,000   2,700   1,500   3,000 
    Pre-tax and pre-provision net revenue$28,244  $27,083  $28,186  $30,135  $31,831 
              
    Return on Assets Measures         
    Average assets$9,745,853  $9,860,753  $9,690,746  $9,625,625  $9,765,582 
    Return on avg. assets 0.79%  0.70%  0.79%  0.88%  0.88%
    Return on avg. assets (pre-tax and pre-provision) 1.17   1.10   1.15   1.24   1.31 
              
     Three Months Ended
     Jun, 30, Mar, 31, Dec, 31, Sep, 30, Jun, 30,
      2024   2024   2023   2023   2023 
    Return on Equity Measures(dollars in thousands)
    Average stockholders' equity$1,220,621  $1,220,818  $1,198,389  $1,202,647  $1,197,043 
    Less: average preferred stock (110,927)  (110,927)  (110,927)  (110,927)  (110,927)
    Average common equity$1,109,694  $1,109,891  $1,087,462  $1,091,720  $1,086,116 
    Less: average intangible assets (213,813)  (214,133)  (214,472)  (214,822)  (215,182)
    Average tangible common equity$895,881  $895,758  $872,990  $876,898  $870,934 
              
    Return on avg, common equity (GAAP) 6.36%  5.69%  6.48%  7.23%  7.34%
    Return on avg. tangible common equity ("TCE") (non-GAAP) (1) 7.98   7.15   8.18   9.11   9.28 
    Return on avg, tangible common equity (pre-tax and pre-provision) 12.78   12.26   12.92   13.74   14.78 
              
    Efficiency Measures         
    Total noninterest expenses$37,594  $37,065  $37,845  $35,784  $35,450 
    Amortization of core deposit intangibles (321)  (321)  (348)  (347)  (371)
    FDIC special assessment -   -   (2,100)  -   - 
    Operating noninterest expense$37,273  $36,744  $35,397  $35,437  $35,079 
              
    Net interest income (tax equivalent basis)$62,255  $61,111  $62,627  $63,208  $64,627 
    Noninterest income 4,399   3,848   4,209   3,562   3,438 
    Net losses (gains) on equity securities 209   (86)  (557)  273   210 
    Operating revenue$66,863  $64,873  $66,279  $67,043  $68,275 
              
    Operating efficiency ratio (non-GAAP) (2) 55.7%  56.6%  53.4%  52.9%  51.4%
              
    Net Interest Margin         
    Average interest-earning assets$9,210,050  $9,323,291  $9,172,165  $9,089,431  $9,228,079 
    Net interest income (tax equivalent basis) 62,255   61,111   62,627   63,208   64,627 
    Net interest margin (GAAP) 2.72%  2.64%  2.71%  2.76%  2.81%
              
    (1) Earnings available to common stockholders excluding amortization of intangible assets divided by average tangible common equity,
    (2) Operating noninterest expense divided by operating revenue,
              
     As of
     Jun, 30, Mar, 31, Dec, 31, Sep, 30, Jun, 30,
      2024   2024   2023   2023   2023 
    Capital Ratios and Book Value per Share(dollars in thousands, except for per share data)
    Stockholders equity$1,224,227  $1,216,609  $1,216,620  $1,188,154  $1,199,397 
    Less: preferred stock (110,927)  (110,927)  (110,927)  (110,927)  (110,927)
    Common equity$1,113,300  $1,105,682  $1,105,693  $1,077,227  $1,088,470 
    Less: intangible assets (213,604)  (213,925)  (214,246)  (214,594)  (214,941)
    Tangible common equity$899,696  $891,757  $891,447  $862,633  $873,529 
              
    Total assets$9,723,731  $9,853,964  $9,855,603  $9,678,885  $9,723,963 
    Less: intangible assets (213,604)  (213,925)  (214,246)  (214,594)  (214,941)
    Tangible assets$9,510,127  $9,640,039  $9,641,357  $9,464,291  $9,509,022 
              
    Common shares outstanding 38,365,069   38,333,053   38,519,770   38,621,970   38,966,652 
              
    Common equity ratio (GAAP) 11.45%  11.22%  11.22%  11.13%  11.19%
    Tangible common equity ratio (non-GAAP) (3) 9.46   9.25   9.25   9.11   9.19 
              
    Regulatory capital ratios (Bancorp):         
    Leverage ratio 10.97%  10.73%  10.86%  10.86%  10.62%
    Common equity Tier 1 risk-based ratio 10.93   10.70   10.62   10.64   10.55 
    Risk-based Tier 1 capital ratio 12.28   12.03   11.95   11.98   11.90 
    Risk-based total capital ratio 14.13   13.88   13.77   13.90   13.83 
              
    Regulatory capital ratios (Bank):         
    Leverage ratio 11.29%  11.10%  11.20%  11.23%  10.95%
    Common equity Tier 1 risk-based ratio 12.63   12.43   12.31   12.38   12.26 
    Risk-based Tier 1 capital ratio 12.63   12.43   12.31   12.38   12.26 
    Risk-based total capital ratio 13.61   13.41   13.28   13.43   13.33 
              
    Book value per share (GAAP)$29.02  $28.84  $28.70  $27.89  $27.93 
    Tangible book value per share (non-GAAP) (4) 23.45   23.26   23.14   22.34   22.42 
              
    Net Loan Charge-offs (Recoveries):         
    Net loan charge-offs (recoveries):         
    Charge-offs$3,595  $3,185  $8,960  $2,487  $1,118 
    Recoveries (324)  (23)  -   (8)  (76)
    Net loan charge-offs$3,271  $3,162  $8,960  $2,479  $1,042 
    Net loan charge-offs as a % of average loans receivable (annualized) 0.16%  0.15%  0.43%  0.12%  0.05%
              
    Asset Quality         
    Nonaccrual loans$46,026  $47,438  $52,524  $56,059  $51,496 
    Other real estate owned -   -   -   -   - 
    Nonperforming assets$46,026  $47,438  $52,524  $56,059  $51,496 
              
    Allowance for credit losses - loans ("ACL")$82,077  $82,869  $81,974  $88,230  $89,205 
    Loans receivable 8,157,903   8,297,957   8,345,145   8,181,109   8,148,540 
              
    Nonaccrual loans as a % of loans receivable 0.56%  0.57%  0.63%  0.69%  0.63%
    Nonperforming assets as a % of total assets 0.47   0.48   0.53   0.58   0.53 
    ACL as a % of loans receivable 1.01   1.00   0.98   1.08   1.09 
    ACL as a % of nonaccrual loans 178.3   174.7   156.1   157.4   173.2 
              
    (3) Tangible common equity divided by tangible assets
    (4) Tangible common equity divided by common shares outstanding at period-end
             


    CONNECTONE BANCORP, INC.              
    NET INTEREST MARGIN ANALYSIS          
    (dollars in thousands)              
                   
     For the Quarter Ended 
     June 30, 2024March 31, 2024June 30, 2023
     Average     Average     Average    
    Interest-earning assets:BalanceInterestRate (7) BalanceInterestRate (7) BalanceInterestRate (7)
    Investment securities (1) (2)$739,591  $6,102 3.32% $720,303  $5,794 3.24% $726,315  $5,607 3.10%
    Loans receivable and loans held-for-sale (2) (3) (4) 8,212,825   120,663 5.91   8,332,828   120,592 5.82   8,149,374   111,501 5.49 
    Federal funds sold and interest-              
    bearing deposits with banks 212,811   2,841 5.37   218,212   2,906 5.36   309,458   4,056 5.26 
    Restricted investment in bank stock 44,823   1,217 10.92   51,948   1,126 8.72   42,932   945 8.83 
         Total interest-earning assets$9,210,050   130,823 5.71  $9,323,291   130,418 5.63   9,228,079   122,109 5.31 
    Allowance for credit losses (84,681)      (84,005      (87,473)    
    Noninterest-earning assets 620,484       621,467       624,976     
         Total assets$9,745,853      $9,860,753      $9,765,582     
                   
    Interest-bearing liabilities:              
    Time deposits 2,587,706   28,898 4.49   2,567,767   28,038 4.39  $2,658,673   23,778 3.59 
    Other interest-bearing deposits 3,721,167   33,188 3.59   3,696,374   32,369 3.52   3,640,939   26,936 2.97 
         Total interest-bearing deposits 6,308,873   62,086 3.96   6,264,141   60,407 3.88   6,299,612   50,714 3.23 
                   
    Borrowings 787,256   5,150 2.63   947,003   7,567 3.21   756,303   5,438 2.88 
    Subordinated debentures, net 79,609   1,311 6.62   79,483   1,311 6.63   79,104   1,306 6.62 
    Finance lease 1,416   21 5.96   1,483   22 5.97   1,658   24 5.81 
         Total interest-bearing liabilities 7,177,154   68,568 3.84   7,292,110   69,307 3.82   7,136,677   57,482 3.23 
                   
    Noninterest-bearing demand deposits 1,256,251       1,254,201       1,347,268     
    Other liabilities 91,827       93,624       84,594     
         Total noninterest-bearing liabilities 1,348,078       1,347,825       1,431,862     
    Stockholders' equity 1,220,621       1,220,818       1,197,043     
         Total liabilities and stockholders' equity$9,745,853      $9,860,753      $9,765,582     
                   
    Net interest income (tax equivalent basis)  62,255      61,111      64,627   
    Net interest spread (5)  1.87%   1.80%   2.08%
                   
    Net interest margin (6)  2.72%   2.64%   2.81%
                   
    Tax equivalent adjustment  (816)     (811)     (784)  
    Net interest income $61,439     $60,300     $63,843   
                   
    (1) Average balances are calculated on amortized cost.             
    (2) Interest income is presented on a tax equivalent basis using 21% federal tax rate.
    (3) Includes loan fee income.
    (4) Loans include nonaccrual loans.
    (5) Represents difference between the average yield on interest-earning assets and the average cost of interest-bearing
    liabilities and is presented on a tax equivalent basis.
    (6) Represents net interest income on a tax equivalent basis divided by average total interest-earning assets.
    (7) Rates are annualized.
                   

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