ConnectOne Bancorp Q3 2024: $7.87B Assets, $0.98 EPS

TL;DR

CNOB Q3: $7.87B assets, $316.8M net interest income, $0.98 EPS. Solid quarter.

AI Summary

ConnectOne Bancorp, Inc. reported its Q3 2024 results, with total assets reaching $7.87 billion as of September 30, 2024. Net interest income for the nine months ended September 30, 2024, was $316.8 million. The company's diluted earnings per share for the same period were $0.98. ConnectOne Bancorp, Inc. is headquartered in Englewood Cliffs, NJ.

Why It Matters

This filing provides insight into the financial health and performance of ConnectOne Bancorp, Inc. during the third quarter of 2024, impacting investors and the regional banking sector.

Risk Assessment

Risk Level: medium — The company operates in the commercial banking sector, which is subject to economic fluctuations and regulatory changes.

Key Numbers

• $7.87B — Total Assets (As of September 30, 2024)
• $316.8M — Net Interest Income (Nine months ended September 30, 2024)
• $0.98 — Diluted EPS (Nine months ended September 30, 2024)

Key Players & Entities

• ConnectOne Bancorp, Inc. (company) — Filer
• Englewood Cliffs, NJ (location) — Business Address
• $7.87 billion (dollar_amount) — Total Assets as of September 30, 2024
• $316.8 million (dollar_amount) — Net Interest Income for nine months ended September 30, 2024
• $0.98 (dollar_amount) — Diluted Earnings Per Share for nine months ended September 30, 2024

FAQ

Filing Documents

• cnob20240930_10q.htm (10-Q) — 3833KB
• ex_710507.htm (EX-31.1) — 8KB
• ex_710508.htm (EX-31.2) — 8KB
• ex_710509.htm (EX-32.1) — 4KB
• ex_710510.htm (EX-32.2) — 4KB
• image1banklogo.jpg (GRAPHIC) — 7KB
• 0001437749-24-033329.txt ( ) — 16272KB
• cnob-20240930.xsd (EX-101.SCH) — 77KB
• cnob-20240930_cal.xml (EX-101.CAL) — 83KB
• cnob-20240930_def.xml (EX-101.DEF) — 596KB
• cnob-20240930_lab.xml (EX-101.LAB) — 478KB
• cnob-20240930_pre.xml (EX-101.PRE) — 638KB
• cnob20240930_10q_htm.xml (XML) — 4231KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 3 Consolidated Statements of Condition as of September 30, 2024 (unaudited) and December 31, 2023 3 Consolidated Statements of Income for the three and nine months ended September 30, 2024 and 2023 (unaudited) 4 Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023 (unaudited) 5 Consolidated Statements of Changes in Stockholders' Equity for the three and nine months ended September 30, 2024 and 2023 (unaudited) 6 Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 (unaudited) 8

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 10 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 47 Item 3. Qualitative and Quantitative Disclosures about Market Risks 67 Item 4.

Controls and Procedures

Controls and Procedures 67

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 68 Item 1a.

Risk Factors

Risk Factors 68 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 68 Item 3. Defaults Upon Senior Securities 68 Item 4. Mine Safety Disclosures 68 Item 5. Other Information 68 Item 6. Exhibits 69

SIGNATURES

SIGNATURES 70 2 Table of Contents

Financial Statements

Item 1. Financial Statements CONNECTONE BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CONDITION (in thousands, except for share data) September 30, December 31, 2024 2023 (unaudited) ASSETS Cash and due from banks $ 61,093 $ 61,421 Interest-bearing deposits with banks 186,155 181,293 Cash and cash equivalents 247,248 242,714 Investment securities 646,713 617,162 Equity securities 20,399 18,564 Loans receivable 8,111,976 8,345,145 Less: Allowance for credit losses - loans 82,494 81,974 Net loans receivable 8,029,482 8,263,171 Investment in restricted stock, at cost 42,772 51,457 Bank premises and equipment, net 29,068 30,779 Accrued interest receivable 46,951 49,108 Bank owned life insurance 242,016 237,644 Right of use operating lease assets 14,211 12,007 Goodwill 208,372 208,372 Core deposit intangibles 4,935 5,874 Other assets 107,436 118,751 Total assets $ 9,639,603 $ 9,855,603 LIABILITIES Deposits: Noninterest-bearing $ 1,262,568 $ 1,259,364 Interest-bearing 6,261,537 6,276,838 Total deposits 7,524,105 7,536,202 Borrowings 742,133 933,579 Subordinated debentures, net 79,818 79,439 Operating lease liabilities 15,252 13,171 Other liabilities 38,799 76,592 Total liabilities 8,400,107 8,638,983 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred Stock, no par value; $ 1,000 per share liquidation preference; Authorized 5,000,000 shares; issued 115,000 shares as of September 30, 2024 and as of December 31, 2023; outstanding 115,000 shares as of September 30, 2024 and as of December 31, 2023 110,927 110,927 Common stock, no par value: Authorized 100,000,000 shares; issued 42,253,765 shares as of September 30, 2024 and 42,122,948 shares as of December 31, 2023; outstanding 38,368,217 shares as of September 30, 2024 and 38,519,770 as of December 31, 2023 586,946 586,946 Additional paid-in capital 34,995 33,182 Retained earnings 619,497 59

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 1a. Nature of Operations, Principles of Consolidation and Risk and Uncertainties Nature of Operations ConnectOne Bancorp, Inc. (the "Parent Corporation") is incorporated under the laws of the State of New Jersey and is a registered bank holding company under the Bank Holding Company Act of 1956, as amended (the "BHCA"). The Parent Corporation's business currently consists of the operation of its wholly-owned subsidiary, ConnectOne Bank (the "Bank" and, collectively with the Parent Corporation and the Parent Corporation's subsidiaries, the "Company") and making certain limited investments. The Bank's direct and indirect subsidiaries include Union Investment Co. (a New Jersey investment company), Twin Bridge Investment Co. (a Delaware investment company), ConnectOne Preferred Funding Corp. (a New Jersey real estate investment trust), Center Financial Group, LLC (a New Jersey financial services company), Center Advertising, Inc. (a New Jersey advertising company), Morris Property Company, LLC, (a New Jersey limited liability company), Volosin Holdings, LLC, (a New Jersey limited liability company), NJCB Spec- 1, LLC (a New Jersey limited liability company), Port Jervis Holdings, LLC (a New Jersey limited liability company), BONJ Special Properties, LLC (a New Jersey limited liability company) and BoeFly, Inc. (a New Jersey financial technology company). The Bank is a community-based, full-service New Jersey-chartered commercial bank that was founded in 2005. The Bank operates from its headquarters located at 301 Sylvan Avenue in the Borough of Englewood Cliffs, Bergen County, New Jersey and through its 23 other banking offices. Substantially all loans are secured with various types of collateral, including business assets, consumer assets and commercial/residential real estate. Each borrower's ability to repay its loans is dependent on the conversion of assets, cash flows generated from the borrowers'

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 1b. Authoritative Accounting Guidance Adoption of New Accounting Standards in 2024 In June 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2022 - 03, "Fair Value Measurement (Topic 820 ): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions" ("ASU 2022 - 03" ). ASU 2022 - 03 clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. We adopted ASU 2022 - 03 on January 1, 2024 and it did not have a material effect on the Company's financial statements. Newly Issued, But Not Yet Effective Accounting Standards In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures. These amendments require that public business entities on an annual basis ( 1 ) disclose specific categories in the rate reconciliation and ( 2 ) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5% of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate). The amendments require that all entities disclose on an annual basis the following information about income taxes paid: 1 ) The amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes. 2 ) The amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5% of total income taxes paid (net of refunds received). The amendments also require that all entities disclose the following information: 1 ) Income (or loss) from continuing operations

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 2. Business Combination On September 4, 2024, the Parent Corporation and The First of Long Island Corporation (Nasdaq: FLIC) ("First of Long Island"), parent company of The First National Bank of Long Island entered into a definitive agreement pursuant to which First of Long Island will merge with and into the Parent Corporation, which will be the surviving entity in the transaction. The combined company will operate under the ConnectOne brand, and will have approximately $ 14 billion in total assets, $ 11 billion in total deposits, and $ 11 billion in total loans. Under the terms of the agreement, First of Long Island shareholders will receive 0.5175 shares of Parent Corporation common stock for each share of First of Long Island common stock. The transaction is presently valued at approximately $ 284 million in aggregate based upon the closing common stock price of $ 23.97 for ConnectOne as of September 4, 2024. 12 Table of Contents Note 3. Earnings per Common Share Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") No. 260 - 10 - 45 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share ("EPS"). The restricted stock awards granted by the Company contain non-forfeitable rights to dividends and therefore are considered participating securities. The two -class method for calculating basic EPS excludes dividends paid to participating securities and any undistributed earnings attributable to participating securities. Earnings per common share have been computed based on the following: Three Months Ended Nine Months Ended September 30, September 30, (dollars in thousands, except for per share data) 2024 2023 2024 2023 Net income available to common stockholders $ 15,652 $ 19,898 $ 48,89

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 4. Investment Securities All of the Company's investment securities are classified as available-for-sale as of September 30, 2024 and December 31, 2023 . Investment securities available-for-sale are reported at fair value with unrealized gains or losses included in stockholders' equity, net of tax. Accordingly, the carrying value of such securities reflects their fair value as of September 30, 2024 and December 31, 2023 . Fair value is based upon either quoted market prices, or in certain cases where there is limited activity in the market for a particular instrument, assumptions are made to determine their fair value. See Note 7 of the Notes to Consolidated Financial Statements for further discussion. The following tables present information related to the Company's portfolio of securities available-for-sale as of September 30, 2024 and December 31, 2023 . Allowance for Gross Gross Investment Amortized Unrealized Unrealized Fair Credit Cost Gains Losses Value Losses (dollars in thousands) September 30, 2024 Investment securities available-for-sale: Federal agency obligations $ 100,284 $ 596 $ ( 10,070 ) $ 90,810 $ - Residential mortgage pass-through securities 441,794 937 ( 43,496 ) 399,235 - Commercial mortgage pass-through securities 25,053 - ( 2,768 ) 22,285 - Obligations of U.S. states and political subdivisions 143,547 422 ( 15,662 ) 128,307 - Corporate bonds and notes 5,000 11 - 5,011 - Asset-backed securities 917 - ( 11 ) 906 - Other securities 159

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