ConnectOne Bancorp, Inc. Reports First Quarter 2025 Results; Declares Common and Preferred Dividends
24-Apr-2025 07:00:05 EDT
ConnectOne Bancorp, Inc. Reports First Quarter 2025 Results; Declares Common and Preferred Dividends
GlobeNewswire April 24, 2025
ENGLEWOOD CLIFFS, N.J., April 24, 2025 (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 $18.7 million for the first quarter of 2025 compared with $18.9 million for the fourth quarter of 2024 and $15.7 million for the first quarter of 2024. Diluted earnings per share were $0.49 for the first quarter of 2025 compared with $0.49 for the fourth quarter of 2024 and $0.41 for the first quarter of 2024. Return on average assets was 0.84%, 0.84% and 0.70% for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively. Return on average tangible common equity was 8.25%, 8.27% and 7.15% for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively.
Operating net income available to common stockholders, which excludes non-operating items (primarily merger and branch closure related expenses), was $19.7 million for the first quarter of 2025, $20.2 million for the fourth quarter of 2024 and $15.9 million for the first quarter of 2024. Operating diluted earnings per share were $0.51 for the first quarter of 2025, $0.52 for the fourth quarter of 2024 and $0.41 for the first quarter of 2024. Operating return on average assets was 0.88%, 0.90% and 0.71% for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively. Operating return on average tangible common equity was 8.59%, 8.77% and 7.12% for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively. See supplemental tables for a complete reconciliation of GAAP earnings to operating earnings, and other non-GAAP measures.
Net income available to common stockholders and diluted earnings per share during the first quarter of 2025 were essentially flat when compared to the fourth quarter of 2024, reflecting modest changes in all statement of income categories. The increase of $3.0 million in net income available to common stockholders versus the first quarter of 2024 was primarily due to a $5.5 million increase in net interest income, a $0.5 million decrease in provision for credit losses and a $0.6 million increase in noninterest income, partially offset by a $2.2 million increase in noninterest expenses and a $1.3 million increase in income tax expense.
“We are pleased with ConnectOne's solid performance to start the year, demonstrating disciplined execution across the organization,” said Frank Sorrentino, Chairman and Chief Executive Officer of ConnectOne. “We look forward to finalizing our planned merger with The First of Long Island Corporation in the second quarter- bringing together two highly compatible relationship focused institutions to create a premier New York Metro community bank, providing attractive opportunities for our combined client base and the markets we serve.”
“Our net interest margin widened meaningfully again as expected — increasing 7 basis points during the 2025 first quarter — driven by a strengthened balance sheet and favorable interest rate positioning. We anticipate this positive momentum to carry through the remainder of the year and into 2026, supporting continued margin expansion.” Mr. Sorrentino commented, “Although the loan portfolio contracted slightly since year-end, our loan pipeline is robust, backed by solid credits at attractive spreads, and continues to reflect steady, diversified growth.”
“Credit quality trends remained stable during the first quarter with nonaccrual loans decreasing to 0.61% of total loans and annualized quarterly charge-offs remaining below 0.18% for the fifth consecutive quarter,” Mr. Sorrentino added. “In addition, our tangible book value per share continues to build ahead of the merger, increasing by more than 3% since announcing the transaction, our loan to deposit ratio declined to 105.6%, and our regulatory CRE concentration ratio improved by 15 percentage points to 420%.”
Mr. Sorrentino concluded, “Although there is an increasing industry-wide focus on the impact of potential tariff policy on borrower health in various loan segments, our direct exposure to import/export-dependent segments is very limited. Our ongoing portfolio reviews have shown very limited disruption to date, and we remain confident in the stability and resilience of our credit portfolio.”
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 June 2, 2025, to common stockholders of record on May 15, 2025. 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 June 2, 2025 to holders of record on May 15, 2025.
Operating Results
Fully taxable equivalent net interest income for the first quarter of 2025 was $65.8 million, an increase of $1.0 million, or 1.6%, from the fourth quarter of 2024, due to a seven basis-point widening of the net interest margin to 2.93% from 2.86%, and a 1.2% increase in average interest earning assets, partially offset by a lower day-count. The widening of the net interest margin was primarily due to a 21 basis-point decrease in the average costs of deposits, including noninterest-bearing deposits, partially offset by an 11 basis-point decline in the rate earned on interest-earning assets.
Fully taxable equivalent net interest income for the first quarter of 2025 increased by $5.5 million, or 9.0%, from the first quarter of 2024. The increase from the first quarter of 2024 resulted primarily from a 29 basis-point widening in the net interest margin to 2.93% from 2.64%. During the first quarter of 2025, average total loans decreased by $123.8 million, or 1.5% when compared to the first quarter of 2024. The widening of the net interest margin for the first quarter of 2025 when compared to the first quarter of 2024 was primarily due to a 42 basis-point decrease in the average cost of total funds, including noninterest-bearing deposits, partially offset by a nine basis-point decrease in the loan portfolio yield.
Noninterest income was $4.5 million in the first quarter of 2025, $3.7 million in the fourth quarter of 2024 and $3.8 million in the first quarter of 2024. The $0.7 million increase in noninterest income for the first quarter of 2025 when compared to the fourth quarter of 2024 was primarily due to a $0.8 million increase in net gains on equity securities, including a $0.4 million gain on the sale of a strategic equity investment, and a $0.3 million decrease in net gains on sale of loans held-for-sale. The $0.6 million increase in noninterest income for the first quarter of 2025 when compared to the first quarter of 2024 was primarily due to a $0.4 million increase in deposit, loan and other income and a $0.4 million gain on the sale of a strategic equity investment, partially offset by a $0.2 million decrease in net gains on sale of loans held-for-sale.
Noninterest expenses were $39.3 million for the first quarter of 2025, $38.5 million for the fourth quarter of 2024 and $37.1 million for the first quarter of 2024. The $0.8 million increase in noninterest expenses for the first quarter of 2025 when compared to the fourth quarter of 2024 was primarily due to a $0.5 million increase in merger expenses, a $0.3 million increase in salaries and employee benefits and a $0.3 million bank owned life insurance (“BOLI”) restructuring charge in the first quarter of 2025, partially offset by a $0.5 million decrease in charges related to a branch closing in the fourth quarter of 2024. The $2.2 million increase in noninterest expenses for the first quarter of 2025 when compared to the first quarter of 2024 was primarily due to a $1.3 million increase in merger expenses, a $0.5 million increase in salaries and employee benefits and the aforementioned $0.3 million BOLI restructuring charge. The increases in merger expenses when compared to the fourth quarter of 2024 and the first quarter of 2024 are due to the planned merger with The First of Long Island Corporation.
Income tax expense was $7.2 million for the first quarter of 2025, $6.1 million for the fourth quarter of 2024 and $5.9 million for the first quarter of 2024. The effective tax rates for the first quarter of 2025, fourth quarter of 2024 and first quarter of 2024 were 26.1%, 23.0% and 25.5%, respectively. The effective tax rate for the fourth quarter of 2024 reflects year-end adjustments for the effective tax rate for the full-year 2024. The overall increase in the effective tax rate during the first quarter of 2025 when compared to the fourth quarter of 2024 and the first quarter of 2024 was due to an increase in income before income tax expense and a decrease in tax-free adjustments.
Asset Quality
The provision for credit losses was $3.5 million for the first quarter of 2025, $3.5 million for the fourth quarter of 2024 and $4.0 million for the first quarter of 2024. In each of the quarters presented, the provision for credit losses reflected net portfolio growth, charges related to individually evaluated loans, and changing economic forecasts and conditions.
Nonperforming assets, which includes nonaccrual loans and other real estate owned (the Bank had no other real estate owned during the periods reported), were $49.9 million as of March 31, 2025, $57.3 million as of December 31, 2024 and $47.4 million as of March 31, 2024. Nonperforming assets as a percentage of total assets were 0.51% as of March 31, 2025, 0.58% as of December 31, 2024 and 0.48% as of March 31, 2024. The ratio of nonaccrual loans to loans receivable was 0.61%, 0.69% and 0.57%, as of March 31, 2025, December 31, 2024 and March 31, 2024, respectively. The annualized net loan charge-offs ratio was 0.17% for the first quarter of 2025, 0.16% for the fourth quarter of 2024 and 0.15% for the first quarter of 2024. The allowance for credit losses represented 1.00% of loans receivable as of March 31, 2025, December 31, 2024, and March 31, 2024. The allowance for credit losses as a percentage of nonaccrual loans was 165.3% as of March 31, 2025, 144.3% as of December 31, 2024 and 174.7% as of March 31, 2024. Criticized and classified loans as a percentage of loans receivable was 2.79% as of March 31, 2025, up slightly from 2.68% as of December 31, 2024 and up from 1.30% as of March 31, 2024. Loans delinquent 30 to 89 days were 0.18% of loans receivable as of March 31, 2025, up from 0.04% as of December 31, 2024 and up from 0.04% as of March 31, 2024. The overall credit quality metrics of the Bank's loan portfolio are sound, reflecting charge-offs, nonaccruals, delinquencies and classified loans all remaining within historical ranges.
Selected Balance Sheet Items
The Company's total assets were $9.759 billion as of March 31, 2025, compared to $9.880 billion as of December 31, 2024. Loans receivable were $8.201 billion as of March 31, 2025 and $8.275 billion as of December 31, 2024. Total deposits were $7.767 billion as of March 31, 2025 and $7.820 billion as of December 31, 2024.
The Company's total stockholders' equity was $1.253 billion as of March 31, 2025 and $1.242 billion as of December 31, 2024. The increase in total stockholders' equity was primarily due to an increase in retained earnings of $11.8 million. As of March 31, 2025, the Company's tangible common equity ratio and tangible book value per share were 9.73% and $24.16, respectively, compared to 9.49% and $23.92, respectively, as of December 31, 2024. Total goodwill and other intangible assets were $212.7 million as of March 31, 2025, and $213.0 million as of December 31, 2024.
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.
First Quarter 2025 Results Conference Call
Management will also host a conference call and audio webcast at 10:00 a.m. ET on April 24, 2025 to review the Company's financial performance and operating results. The conference call dial-in number is 1 (646) 307-1963, access code 5043609. 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, April 24, 2025 and ending on Thursday, May 1, 2025 by dialing 1 (609) 800-9909, access code 5043609. 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 health emergencies and natural disasters 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 MikeWorldWide 732.299.7890; sweeks@mww.com
CONNECTONE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
(in thousands)
March 31,
December 31,
March 31,
2025
2024
2024
(unaudited)
(unaudited)
ASSETS
Cash and due from banks
$
49,759
$
57,816
$
45,322
Interest-bearing deposits with banks
242,844
298,672
232,261
Cash and cash equivalents
292,603
356,488
277,583
Investment securities
636,806
612,847
619,397
Equity securities
18,859
20,092
19,457
Loans held-for-sale
202
743
–
Loans receivable
8,201,134
8,274,810
8,297,957
Less: Allowance for credit losses – loans
82,403
82,685
82,869
Net loans receivable
8,118,731
8,192,125
8,215,088
Investment in restricted stock, at cost
37,031
40,449
48,931
Bank premises and equipment, net
27,624
28,447
29,827
Accrued interest receivable
46,740
45,498
49,731
Bank owned life insurance
244,651
243,672
239,308
Right of use operating lease assets
13,755
14,489
11,725
Goodwill
208,372
208,372
208,372
Core deposit intangibles
4,360
4,639
5,553
Other assets
109,521
111,739
128,992
Total assets
$
9,759,255
$
9,879,600
$
9,853,964
LIABILITIES
Deposits:
Noninterest-bearing
$
1,319,196
$
1,422,044
$
1,290,523
Interest-bearing
6,448,034
6,398,070
6,298,131
Total deposits
7,767,230
7,820,114
7,588,654
Borrowings
613,053
688,064
877,568
Subordinated debentures, net
80,071
79,944
79,566
Operating lease liabilities
14,737
15,498
12,843
Other liabilities
31,225
34,276
78,724
Total liabilities
8,506,316
8,637,896
8,637,355
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
36,007
36,347
32,866
Retained earnings
643,265
631,446
600,118
Treasury stock
(76,116
)
(76,116
)
(76,116
)
Accumulated other comprehensive loss
(48,090
)
(47,846
)
(38,132
)
Total stockholders' equity
1,252,939
1,241,704
1,216,609
Total liabilities and stockholders' equity
$
9,759,255
$
9,879,600
$
9,853,964
CONNECTONE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except for per share data)
Three Months Ended
03/31/25
12/31/24
03/31/24
Interest income
Interest and fees on loans
$
115,351
$
118,346
$
120,088
Interest and dividends on investment securities:
Taxable
4,987
4,804
4,334
Tax-exempt
1,097
1,109
1,154
Dividends
889
959
1,125
Interest on federal funds sold and other short-term investments
2,465
2,815
2,906
Total interest income
124,789
128,033
129,607
Interest expense
Deposits
53,992
58,568
60,407
Borrowings
5,041
4,754
8,900
Total interest expense
59,033
63,322
69,307
Net interest income
65,756
64,711
60,300
Provision for credit losses
3,500
3,500
4,000
Net interest income after provision for credit losses
62,256
61,211
56,300
Noninterest income
Deposit, loan and other income
2,006
1,798
1,592
Income on bank owned life insurance
1,584
1,656
1,664
Net gains on sale of loans held-for-sale
332
597
506
Net gains (losses) on equity securities
529
(307
)
86
Total noninterest income
4,451
3,744
3,848
Noninterest expenses
Salaries and employee benefits
22,578
22,244
22,131
Occupancy and equipment
2,680
2,818
3,009
FDIC insurance
1,800
1,800
1,800
Professional and consulting
2,366
2,449
1,928
Marketing and advertising
595
495
677
Information technology and communications
4,604
4,523
4,389
Merger expenses
1,320
863
–
Branch closing expenses
–
477
–
Bank owned life insurance restructuring charge
327
–
–
Amortization of core deposit intangibles
279
296
321
Other expenses
2,756
2,533
2,810
Total noninterest expenses
39,305
38,498
37,065
Income before income tax expense
27,402
26,457
23,083
Income tax expense
7,160
6,086
5,878
Net income
20,242
20,371
17,205
Preferred dividends
1,509
1,509
1,509
Net income available to common stockholders
$
18,733
$
18,862
$
15,696
Earnings per common share:
Basic
$
0.49
$
0.49
$
0.41
Diluted
0.49
0.49
0.41
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
Mar. 31,
Dec. 31,
Sept. 30,
Jun. 30,
Mar. 31,
2025
2024
2024
2024
2024
Selected Financial Data
(dollars in thousands)
Total assets
$
9,759,255
$
9,879,600
$
9,639,603
$
9,723,731
$
9,853,964
Loans receivable:
Commercial
1,483,392
$
1,522,308
$
1,505,743
$
1,491,079
$
1,561,063
Commercial real estate
3,356,943
3,384,319
3,261,160
3,274,941
3,333,488
Multifamily
2,490,256
2,506,782
2,482,258
2,499,581
2,507,893
Commercial construction
617,593
616,246
616,087
639,168
646,593
Residential
256,555
249,691
250,249
256,786
254,214
Consumer
1,604
1,136
835
945
850
Gross loans
8,206,343
8,280,482
8,116,332
8,162,500
8,304,101
Net deferred loan fees
(5,209
)
(5,672
)
(4,356
)
(4,597
)
(6,144
)
Loans receivable
8,201,134
8,274,810
8,111,976
8,157,903
8,297,957
Loans held-for-sale
202
743
–
435
–
Total loans
$
8,201,336
$
8,275,553
$
8,111,976
$
8,158,338
$
8,297,957
Investment and equity securities
$
655,665
$
632,939
$
667,112
$
640,322
$
638,854
Goodwill and other intangible assets
212,732
213,011
213,307
213,604
213,925
Deposits:
Noninterest-bearing demand
$
1,319,196
$
1,422,044
$
1,262,568
$
1,268,882
$
1,290,523
Time deposits
2,550,223
2,557,200
2,614,187
2,593,165
2,623,391
Other interest-bearing deposits
3,897,811
3,840,870
3,647,350
3,713,967
3,674,740
Total deposits
$
7,767,230
$
7,820,114
$
7,524,105
$
7,576,014
$
7,588,654
Borrowings
$
613,053
$
688,064
$
742,133
$
756,144
$
877,568
Subordinated debentures (net of debt issuance costs)
80,071
79,944
79,818
79,692
79,566
Total stockholders' equity
1,252,939
1,241,704
1,239,496
1,224,227
1,216,609
Quarterly Average Balances
Total assets
$
9,748,605
$
9,563,446
$
9,742,853
$
9,745,853
$
9,860,753
Loans receivable:
Commercial
$
1,488,962
$
1,487,850
$
1,485,777
$
1,517,446
$
1,552,360
Commercial real estate (including multifamily)
5,852,342
5,733,188
5,752,467
5,789,498
5,890,853
Commercial construction
610,859
631,022
628,740
652,227
637,993
Residential
256,430
250,589
252,975
254,284
252,965
Consumer
5,687
5,204
7,887
5,155
5,091
Gross loans
8,214,280
8,107,853
8,127,846
8,218,610
8,339,262
Net deferred loan fees
(5,525
)
(4,727
)
(4,513
)
(5,954
)
(6,533
)
Loans receivable
8,208,755
8,103,126
8,123,333
8,212,656
8,332,729
Loans held-for-sale
259
498
83
169
99
Total loans
$
8,209,014
$
8,103,624
$
8,123,416
$
8,212,825
$
8,332,828
Investment and equity securities
$
655,191
$
653,988
$
650,897
$
637,551
$
633,270
Goodwill and other intangible assets
212,915
213,205
213,502
213,813
214,133
Deposits:
Noninterest-bearing demand
$
1,305,722
$
1,304,699
$
1,259,912
$
1,256,251
$
1,254,201
Time deposits
2,480,990
2,478,163
2,625,329
2,587,706
2,567,767
Other interest-bearing deposits
3,888,131
3,838,575
3,747,427
3,721,167
3,696,374
Total deposits
$
7,674,843
$
7,621,437
$
7,632,668
$
7,565,124
$
7,518,342
Borrowings
$
686,391
$
648,300
$
717,586
$
787,256
$
947,003
Subordinated debentures (net of debt issuance costs)
79,988
79,862
79,735
79,609
79,483
Total stockholders' equity
1,254,373
1,241,738
1,234,724
1,220,621
1,220,818
Three Months Ended
Mar. 31,
Dec. 31,
Sept. 30,
Jun. 30,
Mar. 31,
2025
2024
2024
2024
2024
(dollars in thousands, except for per share data)
Net interest income
$
65,756
$
64,711
$
60,887
$
61,439
$
60,300
Provision for credit losses
3,500
3,500
3,800
2,500
4,000
Net interest income after provision for credit losses
62,256
61,211
57,087
58,939
56,300
Noninterest income
Deposit, loan and other income
2,006
1,798
1,817
1,654
1,592
Income on bank owned life insurance
1,584
1,656
2,145
1,677
1,664
Net gains on sale of loans held-for-sale
332
597
343
1,277
506
Net gains (losses) on equity securities
529
(307
)
432
(209
)
86
Total noninterest income
4,451
3,744
4,737
4,399
3,848
Noninterest expenses
Salaries and employee benefits
22,578
22,244
22,957
22,721
22,131
Occupancy and equipment
2,680
2,818
2,889
2,899
3,009
FDIC insurance
1,800
1,800
1,800
1,800
1,800
Professional and consulting
2,366
2,449
2,147
1,923
1,928
Marketing and advertising
595
495
635
613
677
Information technology and communications
4,604
4,523
4,464
4,198
4,389
Merger expenses
1,320
863
742
–
–
Branch closing expenses
–
477
–
–
–
Bank owned life insurance restructuring charge
327
–
–
–
–
Amortization of core deposit intangible
279
296
297
321
321
Other expenses
2,756
2,533
2,710
3,119
2,810
Total noninterest expenses
39,305
38,498
38,641
37,594
37,065
Income before income tax expense
27,402
26,457
23,183
25,744
23,083
Income tax expense
7,160
6,086
6,022
6,688
5,878
Net income
20,242
20,371
17,161
19,056
17,205
Preferred dividends
1,509
1,509
1,509
1,509
1,509
Net income available to common stockholders
$
18,733
$
18,862
$
15,652
$
17,547
$
15,696
Weighted average diluted common shares outstanding
38,511,237
38,519,581
38,525,484
38,448,594
38,511,747
Diluted EPS
$
0.49
$
0.49
$
0.41
$
0.46
$
0.41
Reconciliation of GAAP Net Income to Operating Net Income:
Net income
$
20,242
$
20,371
$
17,161
$
19,056
$
17,205
Merger expenses
1,320
863
742
–
–
Branch closing expenses
–
477
–
–
–
Bank owned life insurance restructuring charge
327
–
–
–
–
Amortization of core deposit intangibles
279
296
297
321
321
Net (gains) losses on equity securities
(529
)
307
(432
)
209
(86
)
Tax impact of adjustments
(420
)
(585
)
(171
)
(149
)
(66
)
Operating net income
$
21,219
$
21,729
$
17,597
$
19,437
$
17,374
Preferred dividends
1,509
1,509
1,509
1,509
1,509
Operating net income available to common stockholders
$
19,710
$
20,220
$
16,088
$
17,928
$
15,865
Operating diluted EPS (non-GAAP) (1)
$
0.51
$
0.52
$
0.42
$
0.47
$
0.41
Return on Assets Measures
Average assets
$
9,748,605
$
9,653,446
$
9,742,853
$
9,745,853
$
9,860,753
Return on avg. assets
0.84
%
0.84
%
0.70
%
0.79
%
0.70
Operating return on avg. assets (non-GAAP) (2)
0.88
0.90
0.72
0.80
0.71
(1) Operating net income available to common stockholders divided by weighted average diluted shares outstanding.
(2) Operating net income divided by average assets.
Three Months Ended
Mar. 31,
Dec. 31,
Sept. 30,
Jun. 30,
Mar. 31,
2025
2024
2024
2024
2024
Return on Equity Measures
(dollars in thousands)
Average stockholders' equity
$
1,254,373
$
1,241,738
$
1,234,724
$
1,220,621
$
1,220,818
Less: average preferred stock
(110,927
)
(110,927
)
(110,927
)
(110,927
)
(110,927
)
Average common equity
$
1,143,446
$
1,130,811
$
1,123,797
$
1,109,694
$
1,109,891
Less: average intangible assets
(212,915
)
(213,205
)
(213,502
)
(213,813
)
(214,133
)
Average tangible common equity
$
930,531
$
917,606
$
910,295
$
895,881
$
895,758
Return on avg. common equity (GAAP)
6.64
%
6.64
%
5.54
%
6.36
%
5.69
Operating return on avg. common equity (non-GAAP) (3)
6.99
7.11
5.70
6.50
5.75
Return on avg. tangible common equity (non-GAAP) (4)
8.25
8.27
6.93
7.98
7.15
Operating return on avg. tangible common equity (non-GAAP) (5)
8.59
8.77
7.03
8.05
7.12
Efficiency Measures
Total noninterest expenses
$
39,305
$
38,498
$
38,641
$
37,594
$
37,065
Merger expenses
(1,320
)
(863
)
(742
)
–
–
Branch closing expenses
–
(477
)
–
–
–
Bank owned life insurance restructuring charge
(327
)
–
–
–
–
Amortization of core deposit intangibles
(279
)
(296
)
(297
)
(321
)
(321
)
Operating noninterest expense
$
37,379
$
36,862
$
37,602
$
37,273
$
36,744
Net interest income (tax equivalent basis)
$
66,580
$
65,593
$
61,710
$
62,255
$
61,111
Noninterest income
4,451
3,744
4,737
4,399
3,848
Net (gains) losses on equity securities
(529
)
307
(432
)
209
(86
)
Operating revenue
$
70,502
$
69,644
$
66,015
$
66,863
$
64,873
Operating efficiency ratio (non-GAAP) (6)
53.0
%
52.9
%
57.0
%
55.7
%
56.6
Net Interest Margin
Average interest-earning assets
$
9,224,712
$
9,117,201
$
9,206,038
$
9,210,050
$
9,323,291
Net interest income (tax equivalent basis)
66,580
65,593
61,710
62,255
61,111
Net interest margin (GAAP)
2.93
%
2.86
%
2.67
%
2.72
%
2.64
(3) Operating net income available to common stockholders divided by average common equity.
(4) Net income available to common stockholders, excluding amortization of intangible assets, divided by average tangible common equity.
(5) Operating net income available to common stockholders, divided by average tangible common equity.
(6) Operating noninterest expense divided by operating revenue.
As of
Mar. 31,
Dec. 31,
Sept. 30,
Jun. 30,
Mar. 31,
2025
2024
2024
2024
2024
Capital Ratios and Book Value per Share
(dollars in thousands, except for per share data)
Stockholders equity
$
1,252,939
$
1,241,704
$
1,239,496
$
1,224,227
$
1,216,609
Less: preferred stock
(110,927
)
(110,927
)
(110,927
)
(110,927
)
(110,927
)
Common equity
$
1,142,012
$
1,130,777
$
1,128,569
$
1,113,300
$
1,105,682
Less: intangible assets
(212,732
)
(213,011
)
(213,307
)
(213,604
)
(213,925
)
Tangible common equity
$
929,280
$
917,766
$
915,262
$
899,696
$
891,757
Total assets
$
9,759,255
$
9,879,600
$
9,639,603
$
9,723,731
$
9,853,964
Less: intangible assets
(212,732
)
(213,011
)
(213,307
)
(213,604
)
(213,925
)
Tangible assets
$
9,546,523
$
9,666,589
$
9,426,296
$
9,510,127
$
9,640,039
Common shares outstanding
38,469,975
38,370,317
38,368,217
38,365,069
38,333,053
Common equity ratio (GAAP)
11.70
%
11.45
%
11.71
%
11.45
%
11.22
Tangible common equity ratio (non-GAAP) (7)
9.73
9.49
9.71
9.46
9.25
Regulatory capital ratios (Bancorp):
Leverage ratio
11.33
%
11.33
%
11.10
%
10.97
%
10.73
Common equity Tier 1 risk-based ratio
11.14
10.97
11.07
10.90
10.70
Risk-based Tier 1 capital ratio
12.46
12.29
12.42
12.25
12.03
Risk-based total capital ratio
14.29
14.11
14.29
14.10
13.88
Regulatory capital ratios (Bank):
Leverage ratio
11.67
%
11.66
%
11.43
%
11.29
%
11.10
Common equity Tier 1 risk-based ratio
12.82
12.63
12.79
12.60
12.43
Risk-based Tier 1 capital ratio
12.82
12.63
12.79
12.60
12.43
Risk-based total capital ratio
13.79
13.60
13.77
13.58
13.41
Book value per share (GAAP)
$
29.69
$
29.47
$
29.41
$
29.02
$
28.84
Tangible book value per share (non-GAAP) (8)
24.16
23.92
23.85
23.45
23.26
Net Loan Charge-offs (Recoveries):
Net loan charge-offs (recoveries):
Charge-offs
$
3,555
$
3,363
$
3,559
$
3,595
$
3,185
Recoveries
(155
)
(29
)
(53
)
(324
)
(23
)
Net loan charge-offs
$
3,400
$
3,334
$
3,506
$
3,271
$
3,162
Net loan charge-offs as a % of average loans receivable (annualized)
0.17
%
0.16
%
0.17
%
0.16
%
0.15
Asset Quality
Nonaccrual loans
$
49,860
$
57,310
$
51,300
$
46,026
$
47,438
Other real estate owned
–
–
–
–
–
Nonperforming assets
$
49,860
$
57,310
$
51,300
$
46,026
$
47,438
Allowance for credit losses – loans (“ACL”)
$
82,403
$
82,685
$
82,494
$
82,077
$
82,869
Loans receivable
8,201,134
8,274,810
8,111,976
8,157,903
8,297,957
Nonaccrual loans as a % of loans receivable
0.61
%
0.69
%
0.63
%
0.56
%
0.57
Nonperforming assets as a % of total assets
0.51
0.58
0.53
0.47
0.48
ACL as a % of loans receivable
1.00
1.00
1.02
1.01
1.00
ACL as a % of nonaccrual loans
165.3
144.3
160.8
178.3
174.7
(7) Tangible common equity divided by tangible assets
(8) 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
March 31, 2025
December 31, 2024
March 31, 2024
Average
Average
Average
Interest-earning assets:
Balance
Interest
Rate(7)
Balance
Interest
Rate(7)
Balance
Interest
Rate(7)
Investment securities (1) (2)
$
745,873
$
6,375
3.47
%
$
736,131
$
6,207
3.35
%
$
720,303
$
5,794
3.24
%
Loans receivable and loans held-for-sale (2) (3) (4)
8,209,014
115,883
5.73
8,103,624
118,934
5.84
8,332,828
120,592
5.82
Federal funds sold and interest-
bearing deposits with banks
229,491
2,466
4.36
238,957
2,815
4.69
218,212
2,906
5.36
Restricted investment in bank stock
40,334
889
8.94
38,489
959
9.91
51,948
1,126
8.72
Total interest-earning assets
9,224,712
125,613
5.52
9,117,201
128,915
5.63
9,323,291
130,418
5.63
Allowance for loan losses
(84,027
)
(83,938
)
(84,005
)
Noninterest-earning assets
607,920
620,183
621,467
Total assets
$
9,748,605
$
9,653,446
$
9,860,753
Interest-bearing liabilities:
Money market deposits
1,572,287
11,287
2.91
1,642,737
12,694
3.07
1,571,640
13,191
3.38
Savings deposits
656,789
5,227
3.23
559,450
4,710
3.35
441,551
3,385
3.08
Time deposits
2,480,990
25,154
4.11
2,478,163
27,374
4.39
2,567,767
28,038
4.39
Other interest-bearing deposits
1,659,055
12,324
3.01
1,636,388
13,790
3.35
1,683,183
15,793
3.77
Total interest-bearing deposits
6,369,121
53,992
3.44
6,316,738
58,568
3.69
6,264,141
60,407
3.88
Borrowings
686,391
3,725
2.20
648,300
3,430
2.10
947,003
7,567
3.21
Subordinated debentures
79,988
1,298
6.58
79,862
1,305
6.50
79,483
1,311
6.63
Finance lease
1,210
18
6.03
1,280
19
5.91
1,483
22
5.97
Total interest-bearing liabilities
7,136,710
59,033
3.35
7,046,180
63,322
3.58
7,292,110
69,307
3.82
Noninterest-bearing demand deposits
1,305,722
1,304,699
1,254,201
Other liabilities
51,800
60,829
93,624
Total noninterest-bearing liabilities
1,357,522
1,365,528
1,347,825
Stockholders' equity
1,254,373
1,241,738
1,220,818
Total liabilities and stockholders' equity
$
9,748,605
$
9,653,446
$
9,860,753
Net interest income (tax equivalent basis)
66,580
65,593
61,111
Net interest spread (5)
2.17
%
2.05
%
1.80
%
Net interest margin (6)
2.93
%
2.86
%
2.64
%
Tax equivalent adjustment
(824
)
(882
)
(811
)
Net interest income
$
65,756
$
64,711
$
60,300
(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
