ConnectOne Bancorp, Inc. Reports Second Quarter 2025 Results; Declares Common and Preferred Dividends

Market Summary NASDAQ : CNOB Market Cap ($M): 0.00 Price: $ 33.09 Change: $ (0.14) (0.44) % Volume: 311,629 As of June 29, 2026 3:16 PM ET Minimum 20 minute delay. Press Release Company Release - 7/29/2025 7:00 AM ET ENGLEWOOD CLIFFS, N.J., July 29, 2025 (GLOBE NEWSWIRE) -- ConnectOne Bancorp, Inc. (Nasdaq: CNOB) (the “Company” or “ConnectOne”), parent company of ConnectOne Bank (the “Bank”), today reported a net loss available to common stockholders of $(21.8) million for the second quarter of 2025 compared with net income available to common stockholders of $18.7 million for the first quarter of 2025 and $17.5 million for the second quarter of 2024. Diluted earnings per share were $(0.52) for the second quarter of 2025 compared with $0.49 for the first quarter of 2025 and $0.46 for the second quarter of 2024. On June 1, 2025, the merger with The First of Long Island Corporation (“FLIC”) was completed. The full quarter results of the combined entity include one month of activity from FLIC. Historical financial information includes only the operations of ConnectOne, pre-merger. Return on average assets was (0.73)%, 0.84% and 0.79% for the three months ended June 30, 2025, March 31, 2025 and June 30, 2024, respectively. Return on average tangible common equity was (8.42)%, 8.25% and 7.98% for the three months ended June 30, 2025, March 31, 2025 and June 30, 2024, respectively. Operating net income available to common stockholders, which excludes non-operating items (primarily merger-related expenses and an initial provision for credit losses totaling $58.1 million, pre-tax, in the aggregate), was $23.1 million for the second quarter of 2025, $19.7 million for the first quarter of 2025 and $17.9 million for the second quarter of 2024. Operating diluted earnings per share were $0.55 for the second quarter of 2025, $0.51 for the first quarter of 2025 and $0.47 for the second quarter of 2024. Operating return on average assets was 0.89%, 0.88% and 0.80% for the three months ended June 30, 2025, March 31, 2025 and June 30, 2024, respectively. Operating return on average tangible common equity was 9.29%, 8.59% and 8.05% for the three months ended June 30, 2025, March 31, 2025 and June 30, 2024, respectively. See supplemental tables for a complete reconciliation of GAAP earnings to operating earnings, and other non-GAAP measures. The decrease in net income available to common stockholders and diluted earnings per share during the second quarter of 2025 when compared to the first quarter of 2025 was primarily due to a $34.3 million increase in noninterest expenses, which included $30.7 million in merger expenses and a $32.2 million increase in provision for credit losses. The provision for credit losses during the second quarter of 2025 included $27.4 million in an initial provision for credit losses related to the merger with FLIC. The increase in noninterest expenses and provision for credit losses was partially offset by a $13.1 million increase in net interest income, a $0.7 million increase in noninterest income and a $12.1 million decrease in income tax expenses. The decrease in net income available to common stockholders and diluted earnings per share during the second quarter of 2025 when compared to the second quarter of 2024 was primarily due to a $36.1 million increase in noninterest expenses, which included the aforementioned $30.7 million in merger expenses and a $33.2 million increase in provision for credit losses, which included the aforementioned $27.4 million initial provision for credit losses related to the merger with FLIC. These increases were partially offset by a $17.4 million increase in net interest income, a $0.8 million increase in noninterest income and a $11.7 decrease in income tax expenses. “ConnectOne’s solid second quarter reflects continued momentum in executing our strategy and the integration of the largest merger in our Company's history,” commented Frank Sorrentino, Chairman and Chief Executive Officer of ConnectOne. “Following completion of the merger on June 1st, we immediately opened as a unified organization with one team, and fully deployed the ConnectOne brand across our new markets. This transformational merger establishes ConnectOne as a $14 billion regional financial institution with 61 locations and more than 700 banking professionals.” “The merger and the addition of our new team members continues to exceed expectations. Our core systems conversion was successfully completed, and our client-centric execution has resulted in strong client retention. We’ve also seen steady momentum in new client onboarding, reinforcing the complementary nature of both organizations.” Mr. Sorrentino added, “Operationally, the merger has significantly improved our loan and deposit mix, net interest margin, credit metrics, and profitability ratios. At June 30, 2025 total loans were $11.2 billion, deposits totaled $11.3 billion, and our market capitalization now exceeds $1.2 billion. The current loan-to-deposit ratio of 99% and noninterest-bearing demand composition exceeding 21% reflect both the merger and our relationship-based approach.” “I’m incredibly proud of how seamlessly our teams have come together as one organization, with a shared commitment to client success and operational excellence. We believe these early results reflect the compelling value of the transaction and reinforce our confidence in the long-term potential of the combined franchise,” Mr. Sorrentino concluded. 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 2, 2025, to common stockholders of record on August 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 September 2, 2025 to holders of record on August 15, 2025. Operating Results Fully taxable equivalent net interest income for the second quarter of 2025 was $79.8 million, an increase of $13.2 million, or 19.9%, from the first quarter of 2025, due to a 13 basis-point widening of the net interest margin to 3.06% from 2.93%, and a 13.5% increase in average interest earning assets. The increase in average interest-earning assets was primarily due to the merger with FLIC. Accretion of purchase accounting adjustments of $3.3 million contributed approximately 13 basis points to the net interest margin during the second quarter of 2025. The margin also benefited from an 11 basis-point decrease in the average costs of deposits, including noninterest-bearing deposits, partially offset by higher average cash balances and the impact of a $200 million long-term subordinated debt issuance, with a rate of 8.125%, that was consummated on May 15, 2025. Fully taxable equivalent net interest income for the second quarter of 2025 increased $17.6 million, or 28.2%, from the second quarter of 2024, due to a 34 basis-point widening of the net interest margin to 3.06% from 2.72%, and a 13.7% increase in average interest earning assets. The increase in average interest-earning assets was primarily due to the merger with FLIC. The aforementioned accretion of purchase accounting adjustments contributed approximately 13 basis points to the net interest margin during the second quarter of 2025. The margin also benefited from a 56 basis-point decrease in the average costs of deposits, including noninterest-bearing deposits, partially offset by higher average cash balances and the subordinated debt issuance discussed above. Noninterest income was $5.2 million in the second quarter of 2025, $4.5 million in the first quarter of 2025 and $4.4 million in the second quarter of 2024. The $0.7 million increase in noninterest income for the second quarter of 2025 when compared to the first quarter of 2025 was primarily due to a $0.6 million increase in deposit, loan and other income and a $0.5 million increase in BOLI income (partially resulting from 1035 exchanges), partially offset by a $0.2 million decrease in net gains on sale of loans held-for-sale and a $0.2 million decrease in net gains on equity securities. The merger with FLIC primarily contributed to all of the aforementioned increases. The $0.8 million increase in noninterest income for the second quarter of 2025 when compared to the second quarter of 2024 was primarily due to a $0.9 million increase in deposit, loan and other income, a $0.6 million increase in net gains on equity securities and a $0.4 million increase in BOLI income, partially offset by a $1.1 million decrease in net gains on sale of loans held-for-sale. Noninterest expenses were $73.6 million for the second quarter of 2025, $39.3 million for the first quarter of 2025 and $37.6 million for the second quarter of 2024. The increase of $34.3 million during the second quarter of 2025 when compared to the first quarter of 2025 was primarily due to a $29.4 million increase in merger expenses, a $2.7 million increase in salaries and employee benefits, a $1.0 million increase in amortization of core deposit intangibles and a $0.8 million increase in occupancy and equipment. The $36.1 million increase in noninterest expenses for the second quarter of 2025 when compared to the second quarter of 2024 was primarily due to a $30.7 million increase in merger expenses, a $2.5 million increase in salaries and employee benefits, a $0.9 million increase in amortization of core deposit intangibles, a $0.7 million increase in professional and consulting expenses, a $0.6 million increase in occupancy and equipment expenses and a $0.6 million increase in information technology and communications expenses, partially offset by a $0.4 decrease in other expenses. The increases from the first quarter of 2025 and the second quarter of 2024 were primarily due to the merger with FLIC. There was a net income tax benefit of $5.0 million during the second quarter of 2025 compared to income tax expense of $7.2 million during the first quarter of 2025 and $6.7 million during the second quarter of 2024. Included in the second quarter of 2025 was an estimated $3.0 million state tax liability resulting from intercompany dividends. The overall decrease in income tax expense when compared to the first quarter of 2025 and the second quarter of 2024 was primarily due to lower taxable income that resulted from the additional expenses due to the FLIC merger. Asset Quality The provision for credit losses was $35.7 million for the second quarter of 2025, $3.5 million for the first quarter of 2025 and $2.5 million for the second quarter of 2024. Included in the provision for the second quarter of 2025 was a $27.4 million initial provision for credit losses related to the FLIC merger. In each of the quarters presented, the provision for credit losses reflected net portfolio growth, charges related to individually evaluated loans, and changing macroeconomic 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 $39.2 million as of June 30, 2025, $57.3 million as of December 31, 2024 and $46.0 million as of June 30, 2024. The decrease in nonaccruals was primarily due to the work out of three CRE relationships totaling $22.0 million, partially offset by $4.3 million in loans placed into nonaccrual status. Nonperforming assets as a percentage of total assets were 0.28% as of June 30, 2025, 0.58% as of December 31, 2024 and 0.47% as of June 30, 2024. The ratio of nonaccrual loans to loans receivable was 0.35%, 0.69% and 0.56%, as of June 30, 2025, December 31, 2024 and June 30, 2024, respectively. The annualized net loan charge-offs ratio was 0.22% for the second quarter of 2025, 0.17% for the first quarter of 2025 and 0.16% for the second quarter of 2024. The allowance for credit losses represented 1.40%, 1.00% and 1.01% of loans receivable as of June 30, 2025, December 31, 2024 and June 30, 2024, respectively. The allowance for credit losses related to the loan portfolio increased $73.5 million to $156.2 million, compared to $82.7 million as of December 31, 2024. The increase was primarily due to the FLIC merger: $43.3 million of allowance recorded through goodwill related to the purchased credit-deteriorated loans and $27.4 million reflecting the initial provision for credit losses. The allowance for credit losses as a percentage of nonaccrual loans was 398.2% as of June 30, 2025, 144.3% as of December 31, 2024 and 178.3% as of June 30, 2024. Criticized and classified loans as a percentage of loans receivable was 2.44% as of June 30, 2025, down from 2.68% as of December 31, 2024 and up from 1.50% as of June 30, 2024. Loans delinquent 30 to 89 days were 0.13% of loans receivable as of June 30, 2025, up from 0.04% as of December 31, 2024 and up from 0.11% as of June 30, 2024.  Selected Balance Sheet Items As of June 30, 2025, the balance sheet reflected the merger with FLIC. The Company’s total assets were $13.9 billion as of June 30, 2025, compared to $9.9 billion as of December 31, 2024. Loans receivable were $11.2 billion as of June 30, 2025 and $8.3 billion as of December 31, 2024. Total deposits were $11.3 billion as of June 30, 2025 and $7.8 billion as of December 31, 2024. The increase in total assets, loans receivable and total deposits were primarily due to the merger with FLIC. The Company’s total stockholders’ equity was $1.5 billion as of June 30, 2025 and $1.2 billion as of December 31, 2024. The increase in total stockholders’ equity was primarily due to an increase in common stock of $270.8 million which represented the fair value stock consideration issued for the FLIC merger, partially offset by a $16.9 million decrease in retained earnings. As of June 30, 2025, the Company’s tangible common equity ratio and tangible book value per share were 8.09% and $21.95, respectively, compared to 9.49% and $23.92, respectively, as of December 31, 2024. Total goodwill and other intangible assets were $281.9 million as of June 30, 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. Second Quarter 2025 Results Conference Call Management will also host a conference call and audio webcast at 10:00 a.m. ET on July 29, 2025 to review the Company's financial performance and operating results. The conference call dial-in number is 1 (646) 307-1963, access code 7519286. 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 Tuesday, July 29, 2025 and ending on Tuesday, August 5, 2025 by dialing 1 (609) 800-9909, access code 7519286. 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; [email protected] Media Contact: Shannan Weeks MikeWorldWide 732.299.7890; [email protected] CONNECTONE BANCORP, INC. AND SUBSIDIARIESCONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION(in thousands) June 30 December 31, June 30 2025 2024 2024 (unaudited) (unaudited)ASSETS Cash and due from banks$97,792 $57,816 $47,105 Interest-bearing deposits with banks 498,741 298,672 246,408 Cash and cash equivalents 596,533 356,488 293,513 Investment securities 1,227,200 612,847 620,579 Equity securities 19,707 20,092 19,743 Loans held-for-sale 1,027 743 435 Loans receivable 11,164,477 8,274,810 8,157,903 Less: Allowance for credit losses - loans 156,190 82,685 82,077 Net loans receivable 11,008,287 8,192,125 8,075,826 Investment in restricted stock, at cost 49,248 40,449 43,403 Bank premises and equipment, net 54,297 28,447 28,881 Accrued interest receivable 60,950 45,498 48,262 Bank owned life insurance 364,836 243,672 240,985 Right of use operating lease assets 31,282 14,489 13,359 Goodwill 215,611 208,372 208,372 Core deposit intangibles 66,315 4,639 5,232 Other assets 220,445 111,739 125,141 Total assets$13,915,738 $9,879,600 $9,723,731 LIABILITIES Deposits: Noninterest-bearing$2,424,529 $1,422,044 $1,268,882 Interest-bearing 8,853,958 6,398,070 6,307,132 Total deposits 11,278,487 7,820,114 7,576,014 Borrowings 783,859 688,064 756,144 Subordinated debentures, net 276,500 79,944 79,692 Operating lease liabilities 35,334 15,498 14,435 Other liabilities 45,127 34,276 73,219 Total liabilities 12,419,307 8,637,896 8,499,504 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock 110,927 110,927 110,927 Common stock 857,765 586,946 586,946 Additional paid-in capital 36,728 36,347 33,955 Retained earnings 614,532 631,446 610,759 Treasury stock (76,116) (76,116) (76,116)Accumulated other comprehensive loss (47,405) (47,846) (42,244)Total stockholders' equity 1,496,431 1,241,704 1,224,227 Total liabilities and stockholders' equity$13,915,738 $9,879,600 $9,723,731 CONNECTONE BANCORP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(dollars in thousands, except for per share data) Three Months EndedSix Months Ended 06/30/25 06/30/24 06/30/25 06/30/24Interest income Interest and fees on loans$132,316 $120,145 $247,667 $240,233 Interest and dividends on investment securities: Taxable 7,437 4,683 12,424 9,017 Tax-exempt 1,419 1,121 2,516 2,275 Dividends 788 1,217 1,677 2,342 Interest on federal funds sold and other short-term investments 4,070 2,841 6,535 5,747 Total interest income 146,030 130,007 270,819 259,614 Interest expense Deposits 60,239 62,086 114,231 122,493 Borrowings 6,908 6,482 11,949 15,382 Total interest expense 67,147 68,568 126,180 137,875 Net interest income 78,883 61,439 144,639 121,739 Provision for credit losses 35,700 2,500 39,200 6,500 Net interest income after provision for credit losses 43,183 58,939 105,439 115,239 Noninterest income Deposit, loan and other income 2,570 1,654 4,576 3,246 Income on bank owned life insurance 2,087 1,677 3,671 3,341 Net gains on sale of loans held-for-sale 181 1,277 513 1,783 Net gains (losses) on equity securities 347 (209) 876 (123)Total noninterest income 5,185 4,399 9,636 8,247 Noninterest expenses Salaries and employee benefits 25,233 22,721 47,811 44,852 Occupancy and equipment 3,478 2,899 6,158 5,908 FDIC insurance 2,000 1,800 3,800 3,600 Professional and consulting 2,598 1,923 4,964 3,851 Marketing and advertising 840 613 1,435 1,290 Information technology and communications 4,792 4,198 9,396 8,587 Merger expenses 30,745 - 32,065 - Bank owned life insurance restructuring charge - - 327 - Amortization of core deposit intangibles 1,251 321 1,530 642 Other expenses 2,712 3,119 5,468 5,929 Total noninterest expenses 73,649 37,594 112,954 74,659 (Loss) income before income tax expense (25,281) 25,744 2,121 48,827 Income tax (benefit) expense (4,988) 6,688 2,172 12,566 Net (loss) income (20,293) 19,056 (51) 36,261 Preferred dividends 1,509 1,509 3,018 3,018 Net (loss) income available to common stockholders$(21,802) $17,547 $(3,069) $33,243 Earnings per common share: Basic$(0.52) $0.46 $(0.08) $0.87 Diluted (0.52) 0.46 (0.08) 0.86 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, Sept. 30, Jun. 30, 2025 2025 2024 2024 2024 Selected Financial Data(dollars in thousands) Total assets$13,915,738 $9,759,255 $9,879,600 $9,639,603 $9,723,731 Loans receivable: Commercial 1,597,590 $1,483,392 $1,522,308 $1,505,743 $1,491,079 Commercial real estate 4,285,663 3,356,943 3,384,319 3,261,160 3,274,941 Multifamily 3,348,308 2,490,256 2,506,782 2,482,258 2,499,581 Commercial construction 681,222 617,593 616,246 616,087 639,168 Residential 1,254,646 256,555 249,691 250,249 256,786 Consumer 1,709 1,604 1,136 835 945 Gross loans 11,169,138 8,206,343 8,280,482 8,116,332 8,162,500 Net deferred loan fees (4,661) (5,209) (5,672) (4,356) (4,597) Loans receivable 11,164,477 8,201,134 8,274,810 8,111,976 8,157,903 Loans held-for-sale 1,027 202 743 - 435 Total loans$11,165,504 $8,201,336 $8,275,553 $8,111,976 $8,158,338 Investment and equity securities$1,246,907 $655,665 $632,939 $667,112 $640,322 Goodwill and other intangible assets 281,926 212,732 213,011 213,307 213,604 Deposits: Noninterest-bearing demand$2,424,529 $1,319,196 $1,422,044 $1,262,568 $1,268,882 Time deposits 3,065,015 2,550,223 2,557,200 2,614,187 2,593,165 Other interest-bearing deposits 5,788,943 3,897,811 3,840,870 3,647,350 3,713,967 Total deposits$11,278,487 $7,767,230 $7,820,114 $7,524,105 $7,576,014 Borrowings$783,859 $613,053 $688,064 $742,133 $756,144 Subordinated debentures (net of debt issuance costs) 276,500 80,071 79,944 79,818 79,692 Total stockholders' equity 1,496,431 1,252,939 1,241,704 1,239,496 1,224,227 Quarterly Average Balances Total assets$11,108,430 $9,748,605 $9,563,446 $9,742,853 $9,745,853 Loans receivable: Commercial$1,486,245 $1,488,962 $1,487,850 $1,485,777 $1,517,446 Commercial real estate (including multifamily) 6,404,302 5,852,342 5,733,188 5,752,467 5,789,498 Commercial construction 643,115 610,859 631,022 628,740 652,227 Residential 587,118 256,430 250,589 252,975 254,284 Consumer 5,759 5,687 5,204 7,887 5,155 Gross loans 9,126,539 8,214,280 8,107,853 8,127,846 8,218,610 Net deferred loan fees (5,097) (5,525) (4,727) (4,513) (5,954) Loans receivable 9,121,442 8,208,755 8,103,126 8,123,333 8,212,656 Loans held-for-sale 352 259 498 83 169 Total loans$9,121,794 $8,209,014 $8,103,624 $8,123,416 $8,212,825 Investment and equity securities$845,614 $655,191 $653,988 $650,897 $637,551 Goodwill and other intangible assets 235,848 212,915 213,205 213,502 213,813 Deposits: Noninterest-bearing demand$1,680,653 $1,305,722 $1,304,699 $1,259,912 $1,256,251 Time deposits 2,662,411 2,480,990 2,478,163 2,625,329 2,587,706 Other interest-bearing deposits 4,463,648 3,888,131 3,838,575 3,747,427 3,721,167 Total deposits$8,806,712 $7,674,843 $7,621,437 $7,632,668 $7,565,124 Borrowings$723,303 $686,391 $648,300 $717,586 $787,256 Subordinated debentures (net of debt issuance costs) 170,802 79,988 79,862 79,735 79,609 Total stockholders' equity 1,344,254 1,254,373 1,241,738 1,234,724 1,220,621 Three Months Ended Jun. 30, Mar. 31, Dec. 31, Sept. 30, Jun. 30, 2025 2025 2024 2024 2024 (dollars in thousands, except for per share data) Net interest income$78,883 $65,756 $64,711 $60,887 $61,439 Provision for credit losses 35,700 3,500 3,500 3,800 2,500 Net interest income after provision for credit losses 43,183 62,256 61,211 57,087 58,939 Noninterest income Deposit, loan and other income 2,570 2,006 1,798 1,817 1,654 Income on bank owned life insurance 2,087 1,584 1,656 2,145 1,677 Net gains on sale of loans held-for-sale 181 332 597 343 1,277 Net gains (losses) on equity securities 347 529 (307) 432 (209) Total noninterest income 5,185 4,451 3,744 4,737 4,399 Noninterest expenses Salaries and employee benefits 25,233 22,578 22,244 22,957 22,721 Occupancy and equipment 3,478 2,680 2,818 2,889 2,899 FDIC insurance 2,000 1,800 1,800 1,800 1,800 Professional and consulting 2,598 2,366 2,449 2,147 1,923 Marketing and advertising 840 595 495 635 613 Information technology and communications 4,792 4,604 4,523 4,464 4,198 Merger expenses 30,745 1,320 863 742 - Branch closing expenses - - 477 - - Bank owned life insurance restructuring charge - 327 - - - Amortization of core deposit intangible 1,251 279 296 297 321 Other expenses 2,712 2,756 2,533 2,710 3,119 Total noninterest expenses 73,649 39,305 38,498 38,641 37,594 (Loss) income before income tax expense (25,281) 27,402 26,457 23,183 25,744 Income tax (benefit) expense (4,988) 7,160 6,086 6,022 6,688 Net (loss) income (20,293) 20,242 20,371 17,161 19,056 Preferred dividends 1,509 1,509 1,509 1,509 1,509 Net (loss) income available to common stockholders$(21,802) $18,733 $18,862 $15,652 $17,547 Weighted average diluted common shares outstanding 42,173,758 38,511,237 38,519,581 38,525,484 38,448,594 Diluted EPS$(0.52) $0.49 $0.49 $0.41 $0.46 Reconciliation of GAAP Net Income to Operating Net Income: Net (loss) income$(20,293) $20,242 $20,371 $17,161 $19,056 Merger expenses 30,745 1,320 863 742 - Estimated state tax liability on intercompany dividends 3,000 - - - - Initial provision for credit losses related to merger 27,418 - - - - Branch closing expenses - - 477 - - Bank owned life insurance restructuring charge - 327 - - - Amortization of core deposit intangibles 1,251 279 296 297 321 Net (gains) losses on equity securities (347) (529) 307 (432) 209 Tax impact of adjustments (17,168) (420) (585) (171) (149) Operating net income$24,606 $21,219 $21,729 $17,597 $19,437 Preferred dividends 1,509 1,509 1,509 1,509 1,509 Operating net income available to common stockholders$23,097 $19,710 $20,220 $16,088 $17,928 Operating diluted EPS (non-GAAP)(1)$0.55 $0.51 $0.52 $0.42 $0.47 Return on Assets Measures Average assets$11,108,430 $9,748,605 $9,653,446 $9,742,853 $9,745,853 Return on avg. assets (0.73)% 0.84 % 0.84 % 0.70 % 0.79 %Operating return on avg. assets (non-GAAP)(2) 0.89 0.88 0.90 0.72 0.80 Pre provision net operating revenue ("PPNR") return on avg. assets (non-GAAP)(3) 1.47 1.33 1.28 1.11 1.17 (1)Operating net income available to common stockholders divided by weighted average diluted shares outstanding.(2)Operating net income divided by average assets.(3)Net income before income tax expense, provision for credit losses, merger charges, BOLI restructuring charges and net gains on equity securities divided by average assets. Three Months Ended Jun. 30, Mar. 31, Dec. 31, Sept. 30, Jun. 30, 2025 2025 2024 2024 2024 Return on Equity Measures(dollars in thousands) Average stockholders' equity$1,344,254 $1,254,373 $1,241,738 $1,234,724 $1,220,621 Less: average preferred stock (110,927) (110,927) (110,927) (110,927) (110,927) Average common equity$1,233,327 $1,143,446 $1,130,811 $1,123,797 $1,109,694 Less: average intangible assets (235,848) (212,915) (213,205) (213,502) (213,813) Average tangible common equity$997,479 $930,531 $917,606 $910,295 $895,881 Return on avg. common equity (GAAP) (7.09)% 6.64 % 6.64 % 5.54 % 6.36 %Operating return on avg. common equity (non-GAAP)(4) 7.51 6.99 7.11 5.70 6.50 Return on avg. tangible common equity (non-GAAP)(5) (8.42) 8.25 8.27 6.93 7.98 Operating return on avg. tangible common equity (non-GAAP)(6) 9.29 8.59 8.77 7.03 8.05 Efficiency Measures Total noninterest expenses$73,649 $39,305 $38,498 $38,641 $37,594 Merger expenses (30,745) (1,320) (863) (742) - Branch closing expenses - - (477) - - Bank owned life insurance restructuring charge - (327) - - - Amortization of core deposit intangibles (1,251) (279) (296) (297) (321) Operating noninterest expense$41,653 $37,379 $36,862 $37,602 $37,273 Net interest income (tax equivalent basis)$79,810 $66,580 $65,593 $61,710 $62,255 Noninterest income 5,185 4,451 3,744 4,737 4,399 Net (gains) losses on equity securities (347) (529) 307 (432) 209 Operating revenue$84,648 $70,502 $69,644 $66,015 $66,863 Operating efficiency ratio (non-GAAP)(7) 49.2 % 53.0 % 52.9 % 57.0 % 55.7 % Net Interest Margin Average interest-earning assets$10,468,589 $9,224,712 $9,117,201 $9,206,038 $9,210,050 Net interest income (tax equivalent basis)$79,810 $66,580 $65,593 $61,710 $62,255 Net interest margin (non-GAAP) 3.06 % 2.93 % 2.86 % 2.67 % 2.72 % (4)Operating net income available to common stockholders divided by average common equity.(5)Net income available to common stockholders, excluding amortization of intangible assets, divided by average tangible common equity.(6)Operating net income available to common stockholders, divided by average tangible common equity.(7)Operating noninterest expense divided by operating revenue. As of Jun. 30, Mar. 31, Dec. 31, Sept. 30, Jun. 30, 2025 2025 2024 2024 2024 Capital Ratios and Book Value per Share(dollars in thousands, except for per share data) Stockholders equity$1,496,431 $1,252,939 $1,241,704 $1,239,496 $1,224,227 Less: preferred stock (110,927) (110,927) (110,927) (110,927) (110,927) Common equity$1,385,504 $1,142,012 $1,130,777 $1,128,569 $1,113,300 Less: intangible assets (281,926) (212,732) (213,011) (213,307) (213,604) Tangible common equity$1,103,578 $929,280 $917,766 $915,262 $899,696 Total assets$13,915,738 $9,759,255 $9,879,600 $9,639,603 $9,723,731 Less: intangible assets (281,926) (212,732) (213,011) (213,307) (213,604) Tangible assets$13,633,812 $9,546,523 $9,666,589 $9,426,296 $9,510,127 Common shares outstanding 50,270,162 38,469,975 38,370,317 38,368,217 38,365,069 Common equity ratio (GAAP) 9.96 % 11.70 % 11.45 % 11.71 % 11.45 %Tangible common equity ratio (non-GAAP)(8) 8.09 9.73 9.49 9.71 9.46 Regulatory capital ratios (Bancorp): Leverage ratio 9.25 % 11.33 % 11.33 % 11.10 % 10.97 %Common equity Tier 1 risk-based ratio 10.04 11.14 10.97 11.07 10.90 Risk-based Tier 1 capital ratio 11.06 12.46 12.29 12.42 12.25 Risk-based total capital ratio 14.35 14.29 14.11 14.29 14.10 Regulatory capital ratios (Bank): Leverage ratio 10.22 % 11.67 % 11.66 % 11.43 % 11.29 %Common equity Tier 1 risk-based ratio 12.22 12.82 12.63 12.79 12.60 Risk-based Tier 1 capital ratio 12.22 12.82 12.63 12.79 12.60 Risk-based total capital ratio 13.24 13.79 13.60 13.77 13.58 Book value per share (GAAP)$27.56 $29.69 $29.47 $29.41 $29.02 Tangible book value per share (non-GAAP)(9) 21.95 24.16 23.92 23.85 23.45 Net Loan Charge-offs (Recoveries): Net loan charge-offs (recoveries): Charge-offs$5,039 $3,555 $3,363 $3,559 $3,595 Recoveries (118) (155) (29) (53) (324) Net loan charge-offs$4,921 $3,400 $3,334 $3,506 $3,271 Net loan charge-offs as a % of average loans receivable (annualized) 0.22 % 0.17 % 0.16 % 0.17 % 0.16 % Asset Quality Nonaccrual loans$39,228 $49,860 $57,310 $51,300 $46,026 Other real estate owned - - - - - Nonperforming assets$39,228 $49,860 $57,310 $51,300 $46,026 Allowance for credit losses - loans ("ACL")$156,190 $82,403 $82,685 $82,494 $82,077 Less: nonaccretable credit marks 43,336 173 173 173 173 ACL excluding nonaccretable credit marks$112,854 $82,230 $82,512 $82,321 $81,904 Loans receivable 11,164,477 8,201,134 8,274,810 8,111,976 8,157,903 Nonaccrual loans as a % of loans receivable 0.35 % 0.61 % 0.69 % 0.63 % 0.56 %Nonperforming assets as a % of total assets 0.28 0.51 0.58 0.53 0.47 ACL as a % of loans receivable 1.40 1.00 1.00 1.02 1.01 ACL excluding nonaccretable credit marks as a % of loans receivable 1.01 1.00 1.00 1.01 1.00 ACL as a % of nonaccrual loans 398.2 165.3 144.3 160.8 178.3 (8)Tangible common equity divided by tangible assets(9)Tangible common equity divided by common shares outstanding at period-end CONNECTONE BANCORP, INC.NET INTEREST MARGIN ANALYSIS(dollars in thousands) For the Three Months Ended June 30, 2025March 31, 2025June 30, 2024 Average Average Average Interest-earning assets:BalanceInterestRate(7) BalanceInterestRate(7) BalanceInterestRate(7) Investment securities(1) (2)$935,996 $9,234 3.96% $745,873 $6,375 3.47% $739,591 $6,102 3.32%Loans receivable and loans held-for-sale(2) (3) (4) 9,121,794 132,865 5.84 8,209,014 115,883 5.73 8,212,825 120,663 5.91 Federal funds sold and interest- bearing deposits with banks 367,309 4,070 4.44 229,491 2,466 4.36 212,811 2,841 5.37 Restricted investment in bank stock 43,490 788 7.27 40,334 889 8.94 44,823 1,217 10.92 Total interest-earning assets 10,468,589 146,957 5.63 9,224,712 125,613 5.52 9,210,050 130,823 5.71 Allowance for loan losses (98,030) (82,027) (84,681) Noninterest-earning assets 737,871 607,920 620,484 Total assets$11,108,430 $9,750,605 $9,745,853 Interest-bearing liabilities: Money market deposits 2,016,336 15,467 3.08 1,572,287 11,287 2.91 1,554,210 13,099 3.39 Savings deposits 777,951 6,172 3.18 656,789 5,227 3.23 481,033 3,893 3.25 Time deposits 2,662,411 26,636 4.01 2,480,990 25,154 4.11 2,587,706 28,898 4.49 Other interest-bearing deposits 1,669,361 11,964 2.87 1,659,055 12,324 3.01 1,685,924 16,196 3.86 Total interest-bearing deposits 7,126,059 60,239 3.39 6,369,121 53,992 3.44 6,308,873 62,086 3.96 Borrowings 723,303 3,530 1.96 686,391 3,725 2.20 787,256 5,150 2.63 Subordinated debentures 170,802 3,361 7.89 79,988 1,298 6.58 79,609 1,311 6.62 Finance lease 1,139 17 5.99 1,210 18 6.03 1,416 21 5.96 Total interest-bearing liabilities 8,021,303 67,147 3.36 7,136,710 59,033 3.35 7,177,154 68,568 3.84 Noninterest-bearing demand deposits 1,680,653 1,305,722 1,256,251 Other liabilities 62,220 51,800 91,827 Total noninterest-bearing liabilities 1,742,873 1,357,522 1,348,078 Stockholders' equity 1,344,254 1,254,373 1,220,621 Total liabilities and stockholders' equity$11,108,430 $9,748,605 $9,745,853 Net interest income (tax equivalent basis) 79,810 66,580 62,255 Net interest spread(5) 2.27% 2.17% 1.87% Net interest margin(6) 3.06% 2.93% 2.72% Tax equivalent adjustment (927) (824) (816) Net interest income $78,883 $65,756 $61,439 (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. Source: ConnectOne Bancorp, Inc.