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 1/40^th 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; 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)

	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 SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except for per share data)

	Three Months Ended						Six Months Ended
	06/30/25			06/30/24			06/30/25			06/30/24
Interest 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, 2025								March 31, 2025									June 30, 2024
	Average									Average									Average
Interest-earning assets:	Balance			Interest			Rate⁽⁷⁾			Balance			Interest			Rate⁽⁷⁾			Balance			Interest			Rate⁽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.

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