Earnings release
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Connectone Bancorp, Inc. Announces Third Quarter 2026 Results Including Balance Sheet Restructuring and Repositioning Company Release - 10/22/2026 7:00 AM ET OPERATING PERFORMANCE ACCELERATES PPNR RATIO SURPASSES 2% AND OPERATING RETURN ON TANGIBLE COMMON EQUITY TOPS 15% KEY METRICS STRENGTHENED BY BALANCE SHEET RESTRUCTURING TOTAL LOANS AND AVERAGE CLIENT DEPOSITS BOTH ACHIEVE 11% SEQUENTIAL ANNUALIZED GROWTH NET INTEREST MARGIN EXPANDS TO 3.44% COMMON AND PREFERRED DIVIDENDS DECLARED ENGLEWOOD CLIFFS, N.J., Oct. 22, 2026 (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 $29.9 million for the third quarter of 2026 compared with $40.2 million for the second quarter of 2026 and $39.5 million for the third quarter of 2025. Diluted earnings per share was $0.59 for the third quarter of 2026 compared with $0.80 for the second quarter of 2026 and $0.78 for the third quarter of 2025. Return on average assets was 0.86%, 1.17% and 1.16% for the three months ended September 30, 2026, June 30, 2026 and September 30, 2025, respectively. Return on average tangible common equity was 10.1%, 13.8% and 14.7% for the three months ended September 30, 2026, June 30, 2026 and September 30, 2025, respectively. Third quarter results include a $23.0 million pretax charge related to the balance sheet restructuring and repositioning, discussed below. Operating net income available to common stockholders (which excludes the $23.0 million pretax restructuring charge, among other non-operating items – see supplemental tables discussed below) was $47.9 million for the third quarter of 2026, $42.2 million for the second quarter of 2026 and $35.5 million for the third quarter of 2025. Operating diluted earnings per share was $0.95 for the third quarter of 2026, $0.84 for the second quarter of 2026 and $0.70 for the third quarter of 2025. Operating return on average assets was 1.35%, 1.23% and 1.05% for the three months ended September 30, 2026, June 30, 2026 and September 30, 2025, respectively. Operating return on average tangible common equity was 15.2%, 13.8% and 12.6% for the three months ended September 30, 2026, June 30, 2026 and September 30, 2025, respectively. Pre-provision net operating revenue ("Operating PPNR") as a percentage of average assets was 2.01%, 1.94% and 1.61% for the three months ended September 30, 2026, June 30, 2026 and September 30, 2025, 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 for the third quarter of 2026, compared to the second quarter of 2026, was primarily due to the $23.0 million pretax restructuring charge related to the above-mentioned balance sheet repositioning. This charge was partially offset by a $3.7 million increase in net interest income, a $3.3 million reduction in the provision for credit losses and a $5.2 million decrease in income tax expense. Compared to the third quarter of 2025, the decrease in net income available to common stockholders and diluted earnings per share was primarily due to a $33.9 million decrease in noninterest income. The decrease in noninterest income was mainly attributable to the aforementioned $23.0 million pretax charge in the third quarter of 2026, as well as $10.1 million of non-recurring income recognized in the third quarter of 2025, consisting of a $6.6 million employee retention tax credit (“ERTC”) and a $3.5 million defined benefit pension plan curtailment gain. The decrease was partially offset by a $15.3 million increase in net interest income, a $5.3 million decrease in income tax expense, a $3.3 million decrease in noninterest expenses and a $0.5 million reduction in the provision for credit losses. Balance Sheet Restructuring and Repositioning The transaction. During the third quarter of 2026, the Company completed a strategic review of its balance sheet. As a result, during the fourth quarter, the Company entered into an agreement to sell a pool of up to approximately $750 million in unpaid principal balance of non-relationship multifamily loans, subject to adjustment as provided for under the transaction agreements, to a single third-party purchaser. Loans secured by NYC rent-stabilized properties represent approximately 61% of the pool. The pool consists of loans originated by ConnectOne Bank (30%) and the First National Bank of Long Island (“FLIC”) (70%), which was acquired by the Company in June 2025. The transaction is expected to close in late October, and the final balance of loans sold will be determined at the closing. Third quarter impact. The loan pool was transferred to held-for-sale, at the lower of cost or fair value of $678.9 million as of September 30, 2026, resulting in a $23.0 million pretax loss on loans held-for-sale, recorded in noninterest income. This charge reflects the gross discount on the sale price, substantially offset by the interest-rate and credit purchase accounting marks previously recorded on the FLIC-originated loans, as part of the merger with FLICʼs parent company. The recognized loss on the pool is attributed to increases in market interest rates since the loans were originated. The charge is excluded from operating earnings. Fourth quarter impact and timing. The transaction is scheduled to close in late October, 2026. Transaction costs related to the restructuring of approximately $7 to $8 million will be recognized upon closing and payment in the fourth quarter of 2026. Use of proceeds and benefits. The majority of net proceeds from the sale are expected to be reinvested in government-guaranteed securities at yields similar to those of the loans sold, with the remaining balance used to pay down wholesale funding. The restructuring reduces the Companyʼs concentrations in commercial real estate (“CRE”) and NYC rent-stabilized properties while strengthening the Bankʼs liquidity position. The Bankʼs regulatory CRE concentration ratio declines to approximately 397% proforma for the loan sale from 439% at June 30, 2026, and exposure to NYC rent-stabilized assets is projected to decline to approximately 2% of total loans, from 6% as of June 30, 2026. The balance sheet repositioning also reduced the Bankʼs loan-to- deposit ratio to 97.1% at September 30, 2026, and will expand its liquid assets. “Our core performance was strong and reflects the successful execution of our relationship-driven banking strategy. Operating PPNR exceeded 2% of average assets and operating return on tangible common equity topped 15%,” commented Frank Sorrentino, ConnectOneʼs Chairman and Chief Executive Officer. “Loans and average client deposits each grew at an annualized rate of about 11%, and our net interest margin widened to 3.44% despite higher short-term rates and a competitive funding environment. Disciplined expense management kept costs well controlled, and credit quality metrics improved.” “Furthermore, we executed a definitive agreement to sell a pool of up to approximately $750 million of multifamily loans, executing on the balance sheet repositioning we have been contemplating. By selectively divesting non-relationship loans, this transaction reduces our CRE and rent-stabilized concentrations, strengthens key financial metrics and enhances our financial flexibility, while largely preserving our earnings power.”
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Mr. Sorrentino concluded, “As we approach year-end, we remain focused on operational excellence, disciplined growth and deepening client relationships. With a stronger balance sheet and solid momentum in our core business, we believe ConnectOne is well positioned to create long-term value for our shareholders.” Dividend Declarations The Board of Directors declared cash dividends on the Company's common and outstanding preferred stock. A cash dividend on common stock of $0.195 per share will be paid on December 1, 2026, to common stockholders of record on November 13, 2026. A dividend of $0.556620 per depositary share, representing a 1/40th interest in a share of the Companyʼs 5.25% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A, will also be paid on December 1, 2026, to holders of record on November 13, 2026. Operating Results Fully taxable equivalent net interest income for the third quarter of 2026 was $118.5 million, an increase of $3.7 million, or 3.2%, from the second quarter of 2026, largely due to a 2 basis-point widening of the net interest margin to 3.44% from 3.42% and a 1.7% increase in average interest-earning assets. The margin benefited from a 5 basis-point increase in the yield on interest-earning assets, primarily due to loan repricing, partially offset by a 3 basis-point increase in the average cost of deposits, including noninterest-bearing deposits. Fully taxable equivalent net interest income for the third quarter of 2026 increased $15.3 million, or 14.8%, from the third quarter of 2025, due to a 33 basis- point widening of the net interest margin to 3.44% from 3.11%, and a 3.9% increase in average interest-earning assets. The margin benefited from a 15 basis-point increase in the yield on interest-earning assets and a 17 basis-point decrease in the average cost of deposits, including noninterest-bearing deposits. Noninterest income was $(14.5) million in the third quarter of 2026, $7.9 million in the second quarter of 2026 and $19.4 million in the third quarter of 2025. Noninterest income for the third quarter of 2026 included the $23.0 million pretax restructuring charge. Excluding this item, noninterest income increased $0.6 million compared to the second quarter of 2026, primarily due to a $1.1 million increase in BOLI income, driven by death benefits recorded in the third quarter of 2026, partially offset by a $0.4 million decrease in net gains on sale of loans held-for-sale, primarily SBA loans. During the third quarter of 2025, the Company recognized $10.1 million in non-recurring gains, consisting of a $6.6 million one-time benefit related to the ERTC and a $3.5 million defined benefit pension plan curtailment gain. Excluding these items, noninterest income decreased $0.8 million, compared to the third quarter of 2025, primarily due to a $1.9 million decrease in net gains on equity securities and a $0.5 million decrease in deposit, loan and other income, partially offset by a $1.2 million increase in BOLI income, driven by the aforementioned death benefits and a $0.3 million increase in net gains on sale of loans held-for-sale, primarily SBA loans. Noninterest expenses were $55.4 million for the third quarter of 2026, $55.4 million for the second quarter of 2026 and $58.7 million for the third quarter of 2025. Noninterest expenses were unchanged compared to the second quarter of 2026, as a $1.4 million increase in salaries and employee benefits was offset by a $0.5 million decrease in occupancy and equipment expenses, a $0.4 million decrease in other expenses, a $0.2 million decrease in marketing and advertising expenses, a $0.2 million decrease in FDIC insurance expense and a $0.1 million decrease in information technology and communication expenses. The $3.3 million decrease compared to the third quarter of 2025 was primarily due to a $2.9 million decrease in merger, restructuring and exit expenses, a $0.9 million decrease in FDIC insurance expense, a $0.4 million decrease in amortization of core deposit intangibles, a $0.1 million decrease in occupancy and equipment expenses and a $0.1 million decrease in other expenses, partially offset by a $0.5 million increase in salaries and employee benefits, a $0.4 million increase in professional and consulting expenses and a $0.2 million increase in marketing and advertising expenses. Income tax expense was $11.0 million for the third quarter of 2026, $16.2 million for the second quarter of 2026 and $16.3 million for the third quarter of 2025. The effective tax rates were 26.0%, 28.0% and 28.4% for the third quarter of 2026, second quarter of 2026 and third quarter of 2025, respectively. The decrease in income tax expense and the effective tax rate for the third quarter of 2026 was primarily due to lower taxable income resulting from the loss on loans held-for-sale related to the balance sheet restructuring. The projected effective tax rate for the fourth quarter of 2026 is 27.5%. Asset Quality The provision for credit losses was $5.0 million for the third quarter of 2026, $8.3 million for the second quarter of 2026 and $5.5 million for the third quarter of 2025. The provision for credit losses for the third quarter of 2026, reflected core loan growth, charge-offs, and specific reserves, partially offset by the transfer of loans to loans held-for-sale at fair value. The provision in the second quarter of 2026 was elevated primarily due to charge-offs on certain NYC rent-stabilized multifamily loans during the second quarter of 2026. Nonperforming assets, which include nonaccrual loans and other real estate owned (the Bank had no other real estate owned during the periods reported), were $64.3 million as of September 30, 2026, $79.7 million as of June 30, 2026 and $39.7 million as of September 30, 2025. Nonperforming assets as a percentage of total assets was 0.44% as of September 30, 2026, compared to 0.55% as of June 30, 2026 and 0.28% as of September 30, 2025. The ratio of nonaccrual loans to loans receivable was 0.56%, as of September 30, 2026, compared to 0.67% as of June 30, 2026 and 0.35% as of September 30, 2025. The sequential decrease in nonaccrual loans was primarily driven by work-out loan sales, charge-offs and principal payments. Excluding PCD loan charge-offs ($22.2 million in the third quarter of 2026, $4.5 million in the second quarter of 2026 and none in the third quarter of 2025), the annualized net loan charge-off ratio was 0.07% for the third quarter of 2026, 0.71% for the second quarter of 2026 and 0.18% for the third quarter of 2025. The elevated charge-off ratio, excluding PCD charge-offs, for the second quarter of 2026 included charge-offs related to a previously disclosed group of NYC rent- stabilized loans. The allowance for credit losses ("ACL") represented 1.06%, 1.18% and 1.38% of loans receivable as of September 30, 2026, June 30, 2026 and September 30, 2025, respectively. The ACL decreased $19.5 million to $120.6 million as of September 30, 2026, compared to $140.1 million as of June 30, 2026, primarily reflecting the charge-off of $22.2 million of allowance on PCD loans in connection with the pending loan sale, partially offset by provision expense in excess of non-PCD net charge-offs. The charge-offs associated with the pending loan sale related to PCD loans for which an allowance for credit losses had previously been established in connection with the FLIC acquisition and required no additional provision for credit losses in the current quarter. The ACL as a percentage of nonaccrual loans was 187.5% as of September 30, 2026, 175.9% as of June 30, 2026 and 394.5% as of September 30, 2025. Criticized and classified loans as a percentage of loans receivable were 2.02% as of September 30, 2026, compared to 1.89% as of June 30, 2026 and 2.57% as of September 30, 2025. The increase from June 30, 2026 was primarily due to the decrease in loans receivable resulting from the transfer of loans to held-for- sale; criticized and classified loan balances remained relatively stable during the quarter. Loans past due 30-89 days were 0.05% of loans receivable as of September 30, 2026, 0.03% as of June 30, 2026 and 0.08% as of September 30, 2025. Selected Balance Sheet Items
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The Companyʼs total assets were $14.8 billion as of September 30, 2026, compared to $14.0 billion as of December 31, 2025. Loans receivable were $11.4 billion as of September 30, 2026 and $11.5 billion as of December 31, 2025. Loans receivable as of September 30, 2026 excluded $0.8 billion of loans transferred to held-for-sale. Total deposits were $11.8 billion as of September 30, 2026 and $11.2 billion as of December 31, 2025. The Companyʼs total stockholdersʼ equity increased to $1.599 billion as of September 30, 2026 from $1.573 billion as of December 31, 2025. Retained earnings increased $77.7 million, partially offset by an increase in the accumulated other comprehensive loss of $51.0 million. As of September 30, 2026, the Companyʼs tangible common equity ratio and tangible book value per share were 8.38% and $24.19, respectively, compared to 8.62% and $23.52, respectively, as of December 31, 2025. Total goodwill and other intangible assets were $271.6 million as of September 30, 2026 and $280.2 million as of December 31, 2025. Proforma for the loan sale, the tangible common equity ratio was 8.83% as of September 30, 2026. Share Repurchase Program During the third quarter of 2026, the Company repurchased 50,000 shares of common stock at an average price of $32.37 per share. For the nine months ended September 30, 2026, the Company repurchased 140,000 shares of common stock at an average price of $28.26 per share, leaving 501,118 shares authorized for repurchase under the current Board approved repurchase program. The Company intends to repurchase shares from time to time in the open market, in privately negotiated stock purchases or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities and Exchange Commission and applicable federal securities laws. The share repurchase program does not obligate the Company to acquire any particular amount of common stock and the plan may be modified or suspended at any time at the Company's discretion. 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. Third Quarter 2026 Results Conference Call Management will host a conference call and audio webcast at 10:00 a.m. ET on Thursday, October 22, 2026, to review the Companyʼs financial performance and operating results. Chairman and Chief Executive Officer Frank Sorrentino III and Senior Executive Vice President and Chief Financial Officer William S. Burns will host the call. The conference call dial-in number is 1 (585) 542-9983, meeting ID: 828 757 770. 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 Companyʼs website at https://www.ConnectOneBank.com or at http://ir.connectonebank.com. An archive of the webcast will be available following the completion of the call at the same locations. About ConnectOne Bancorp, Inc. ConnectOne Bancorp, Inc., is a modern financial services company that operates, through its subsidiary, ConnectOne Bank, and the Bankʼs 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 Companyʼs Annual Report on Form 10-K, as filed with the U.S. Securities and Exchange Commission, as supplemented by the Companyʼs 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 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.
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Investor Contact: William S. Burns Senior Executive Vice President & CFO 201.816.4474; bill.burns@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) September 30, December 31, September 30, 2026 2025 2025 (unaudited) (unaudited) ASSETS Cash and due from banks $ 50,643 $ 92,406 $ 96,990 Interest-bearing deposits with banks 262,705 288,489 445,744 Cash and cash equivalents 313,348 380,895 542,734 Investment securities 1,323,789 1,250,938 1,252,202 Equity securities 21,947 19,287 20,133 Loans held-for-sale 678,880 391 — Loans receivable 11,432,533 11,453,280 11,303,636 Less: Allowance for credit losses - loans 120,620 154,305 156,499 Net loans receivable 11,311,913 11,298,975 11,147,137 Investment in restricted stock, at cost 62,661 54,722 51,516 Bank premises and equipment, net 48,351 55,285 55,888 Accrued interest receivable 66,657 60,761 60,630 Bank owned life insurance 378,361 370,713 367,767 Right of use operating lease assets 30,228 29,603 29,283 Goodwill 220,235 220,235 215,611 Core deposit intangibles 51,387 59,923 63,119 Other assets 270,948 200,972 217,565 Total assets $ 14,778,705 $ 14,002,700 $ 14,023,585 LIABILITIES Deposits: Noninterest-bearing $ 2,479,625 $ 2,420,397 $ 2,513,102 Interest-bearing 9,298,717 8,820,218 8,856,193 Total deposits 11,778,342 11,240,615 11,369,295 Borrowings 1,072,398 903,489 833,443 Subordinated debentures, net 202,423 201,864 201,677 Operating lease liabilities 32,807 32,446 33,185 Other liabilities 94,135 50,946 47,641 Total liabilities 13,180,105 12,429,360 12,485,241 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock 110,927 110,927 110,927 Common stock 857,765 857,765 857,765 Additional paid-in capital 41,329 38,763 37,934 Retained earnings 751,575 673,897 644,944 Treasury stock (80,138) (76,116) (76,116) Accumulated other comprehensive loss (82,858) (31,896) (37,110) Total stockholders' equity 1,598,600 1,573,340 1,538,344 Total liabilities and stockholders' equity $ 14,778,705 $ 14,002,700 $ 14,023,585
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CONNECTONE BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except for per share data) Three Months Ended Nine Months Ended 09/30/26 09/30/25 09/30/26 09/30/25 Interest income Interest and fees on loans $ 182,428 $ 165,937 $ 526,976 $ 413,604 Interest and dividends on investment securities: Taxable 12,580 12,033 34,361 24,457 Tax-exempt 1,858 2,014 5,743 4,530 Dividends 843 1,081 2,725 2,758 Interest on federal funds sold and other short-term investments 2,432 6,644 7,640 13,179 Total interest income 200,141 187,709 577,445 458,528 Interest expense Deposits 72,102 75,209 207,355 189,440 Borrowings 10,741 10,483 30,349 22,432 Total interest expense 82,843 85,692 237,704 211,872 Net interest income 117,298 102,017 339,741 246,656 Provision for credit losses 5,000 5,500 18,500 44,700 Net interest income after provision for credit losses 112,298 96,517 321,241 201,956 Noninterest income Deposit, loan and other income 3,347 3,836 9,954 8,412 Defined benefit pension plan curtailment gain — 3,501 — 3,501 Employee retention tax credit — 6,608 — 6,608 Income on bank owned life insurance 4,136 2,931 10,104 6,602 Gains on sale of loans held-for-sale 1,203 859 3,220 1,372 (Loss) on sale of loans held-for-sale-CRE restructuring (23,025) — (23,025) — (Losses) gains on equity securities (159) 1,674 (28) 2,550 Total noninterest income (14,498) 19,409 225 29,045 Noninterest expenses Salaries and employee benefits 32,922 32,401 97,227 80,212 Occupancy and equipment 4,968 5,122 15,832 11,280 FDIC insurance 1,500 2,400 5,200 6,200 Professional and consulting 3,278 2,929 9,513 7,893 Marketing and advertising 951 771 3,038 2,206 Information technology and communications 5,277 5,243 15,914 14,639 Restructuring and exit charges — 994 — 994 Merger expenses and restructuring charges — 1,898 2,233 33,963 Bank owned life insurance restructuring charge — — — 327 Amortization of core deposit intangibles 2,846 3,196 8,536 4,726 Other expenses 3,627 3,719 11,161 9,187 Total noninterest expenses 55,369 58,673 168,654 171,627 Income before income tax expense 42,431 57,253 152,812 59,374 Income tax expense 11,032 16,277 41,923 18,449 Net income 31,399 40,976 110,889 40,925 Preferred dividends 1,509 1,509 4,527 4,527 Net income available to common stockholders $ 29,890 $ 39,467 $ 106,362 $ 36,398 Earnings per common share: Basic $ 0.59 $ 0.79 $ 2.12 $ 0.83 Diluted 0.59 0.78 2.10 0.83 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.
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CONNECTONE BANCORP, INC. SUPPLEMENTAL GAAP AND NON-GAAP FINANCIAL MEASURES As of Sept. 30, Jun. 30, Mar. 31, Dec. 31, Sept. 30, 2026 2026 2026 2025 2025 Selected Financial Data (dollars in thousands) Total assets $ 14,778,705 $ 14,411,864 $ 14,209,561 $ 14,002,700 $ 14,023,585 Loans receivable: Commercial $ 1,650,434 $ 1,598,678 $ 1,638,836 $ 1,558,436 $ 1,613,421 Commercial real estate 4,930,142 4,871,086 4,750,508 4,625,143 4,310,159 Multifamily 3,057,962 3,679,302 3,574,336 3,437,080 3,420,465 Commercial construction 585,707 528,103 571,073 623,902 728,615 Residential 1,207,092 1,192,033 1,202,539 1,210,980 1,233,305 Consumer 4,306 3,313 1,801 2,017 2,166 Gross loans 11,435,643 11,872,515 11,739,093 11,457,558 11,308,131 Net deferred loan fees (3,110) (3,481) (3,497) (4,278) (4,495) Loans receivable 11,432,533 11,869,034 11,735,596 11,453,280 11,303,636 Loans held-for-sale 678,880 — 10,222 391 — Total loans $ 12,111,413 $ 11,869,034 $ 11,745,818 $ 11,453,671 $ 11,303,636 Investment and equity securities $ 1,345,736 $ 1,199,051 $ 1,215,806 $ 1,270,225 $ 1,272,335 Goodwill and other intangible assets 271,622 274,468 277,313 280,158 278,730 Deposits: Noninterest-bearing demand $ 2,479,625 $ 2,512,964 $ 2,393,938 $ 2,420,397 $ 2,513,102 Time deposits 3,119,593 2,927,930 3,010,971 2,796,877 2,977,952 Other interest-bearing deposits 6,179,124 6,299,469 6,108,144 6,023,341 5,878,241 Total deposits $ 11,778,342 $ 11,740,363 $ 11,513,053 $ 11,240,615 $ 11,369,295 Borrowings $ 1,072,398 $ 715,416 $ 827,477 $ 903,489 $ 833,443 Subordinated debentures (net of debt issuance costs) 202,423 202,236 202,050 201,864 201,677 Total stockholders' equity 1,598,600 1,626,525 1,591,547 1,573,340 1,538,344 Quarterly Average Balances Total assets $ 14,534,596 $ 14,254,280 $ 13,999,581 $ 13,963,138 $ 14,050,585 Loans receivable: Commercial $ 1,623,410 $ 1,652,412 $ 1,579,368 $ 1,597,123 $ 1,583,673 Commercial real estate (including multifamily) 8,600,502 8,433,558 8,137,515 7,822,943 7,630,195 Commercial construction 544,828 524,023 613,661 646,414 704,170 Residential 1,199,565 1,198,244 1,204,082 1,221,171 1,241,375 Consumer 10,242 10,855 6,851 5,473 6,747 Gross loans 11,978,547 11,819,092 11,541,477 11,293,124 11,166,160 Net deferred loan fees (3,287) (3,331) (4,042) (4,708) (4,418) Loans receivable 11,975,260 11,815,761 11,537,435 11,288,416 11,161,742 Loans held-for-sale 7,623 107 335 230 318 Total loans $ 11,982,883 $ 11,815,868 $ 11,537,770 $ 11,288,646 $ 11,162,060 Investment and equity securities $ 1,307,476 $ 1,208,532 $ 1,256,147 $ 1,269,275 $ 1,274,000 Goodwill and other intangible assets 273,499 276,313 279,158 279,165 280,814 Deposits: Noninterest-bearing demand $ 2,510,843 $ 2,424,773 $ 2,384,883 $ 2,473,596 $ 2,486,993 Time deposits 2,920,335 2,992,440 2,901,327 2,946,459 3,019,848 Other interest-bearing deposits 6,252,427 6,122,264 5,996,487 5,907,547 5,889,230 Total deposits $ 11,683,605 $ 11,539,477 $ 11,282,697 $ 11,327,602 $ 11,396,071 Borrowings $ 874,544 $ 812,384 $ 833,551 $ 781,388 $ 783,994 Subordinated debentures (net of debt issuance costs) 202,300 202,114 201,928 201,741 263,511 Total stockholders' equity 1,636,171 1,612,528 1,594,699 1,558,366 1,513,892
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Three Months Ended Sept. 30, Jun. 30, Mar. 31, Dec. 31, Sept. 30, 2026 2026 2026 2025 2025 (dollars in thousands, except for per share data) Net interest income $ 117,298 $ 113,639 $ 108,804 $ 106,595 $ 102,017 Provision for credit losses 5,000 8,300 5,200 2,300 5,500 Net interest income after provision for credit losses 112,298 105,339 103,604 104,295 96,517 Noninterest income Deposit, loan and other income 3,347 3,324 3,283 3,289 3,836 Defined benefit pension plan curtailment gain — — — — 3,501 Employee retention tax credit — — — — 6,608 Income on bank owned life insurance 4,136 3,017 2,951 2,946 2,931 Gains on sale of loans held-for-sale 1,203 1,590 427 631 859 (Loss) on sale of loans held-for-sale-CRE restructuring (23,025) — — — — (Losses) gains on equity securities (159) (4) 135 (846) 1,674 Total noninterest income (14,498) 7,927 6,796 6,020 19,409 Noninterest expenses Salaries and employee benefits 32,922 31,537 32,768 31,211 32,401 Occupancy and equipment 4,968 5,519 5,345 5,265 5,122 FDIC insurance 1,500 1,700 2,000 2,400 2,400 Professional and consulting 3,278 3,127 3,108 2,908 2,929 Marketing and advertising 951 1,161 926 974 771 Information technology and communications 5,277 5,394 5,243 5,366 5,243 Restructuring and exit charges — — — — 994 Merger expenses and restructuring charges — 108 2,125 498 1,898 Branch closing expenses — — — 1,275 — Amortization of core deposit intangible 2,846 2,845 2,845 3,196 3,196 Other expenses 3,627 4,025 3,509 3,853 3,719 Total noninterest expenses 55,369 55,416 57,869 56,946 58,673 Income before income tax expense 42,431 57,850 52,531 53,369 57,253 Income tax expense 11,032 16,182 14,709 13,851 16,277 Net income 31,399 41,668 37,822 39,518 40,976 Preferred dividends 1,509 1,509 1,509 1,509 1,509 Net income available to common stockholders $ 29,890 $ 40,159 $ 36,313 $ 38,009 $ 39,467 Weighted average diluted common shares outstanding 50,455,230 50,404,698 50,382,297 50,414,115 50,462,030 Diluted EPS $ 0.59 $ 0.80 $ 0.72 $ 0.75 $ 0.78 Reconciliation of GAAP Net Income to Operating Net Income: Net income $ 31,399 $ 41,668 $ 37,822 $ 39,518 $ 40,976 Restructuring and exit charges — — — — 994 Merger expenses and restructuring charges — 108 2,125 498 1,898 Branch closing expenses — — — 1,275 — Amortization of core deposit intangibles 2,846 2,845 2,845 3,196 3,196 Loss on sale of loans held-for-sale-CRE restructuring 23,025 — — — — Losses (gains) on equity securities 159 4 (135) 846 (1,674) Defined benefit pension plan curtailment gain — — — — (3,501) Employee retention tax credit — — — — (6,608) Tax impact of adjustments (8,069) (917) (1,499) (1,802) 1,737 Operating net income $ 49,360 $ 43,708 $ 41,158 $ 43,531 $ 37,018 Preferred dividends 1,509 1,509 1,509 1,509 1,509 Operating net income available to common stockholders $ 47,851 $ 42,199 $ 39,649 $ 42,022 $ 35,509 Operating diluted EPS (non-GAAP)(1) $ 0.95 $ 0.84 $ 0.79 $ 0.83 $ 0.70 Return on Assets Measures Average assets $ 14,534,596 $ 14,254,280 $ 13,999,581 $ 13,963,138 $ 14,050,585 Return on avg. assets 0.86% 1.17% 1.10% 1.12% 1.16% Operating return on avg. assets (non-GAAP)(2) 1.35 1.23 1.19 1.24 1.05 Pre-provision net operating revenue ("PPNR") return on avg. assets (non-GAAP)(3) 2.01 1.94 1.81 1.75 1.61 ____________________________
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(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 expenses and restructuring charges, branch closing expenses, BOLI restructuring charges, restructuring and exit charges, CRE restructuring, employee retention tax credit, defined benefit pension plan curtailment gain, amortization of core deposit intangibles and net gains on equity securities divided by average assets. Three Months Ended Sept. 30, Jun. 30, Mar. 31, Dec. 31, Sept. 30, 2026 2026 2026 2025 2025 Return on Equity Measures (dollars in thousands) Average stockholders' equity $ 1,636,171 $ 1,612,528 $ 1,594,699 $ 1,558,366 $ 1,513,892 Less: average preferred stock (110,927) (110,927) (110,927) (110,927) (110,927) Average common equity $ 1,525,244 $ 1,501,601 $ 1,483,772 $ 1,447,439 $ 1,402,965 Less: average intangible assets (273,499) (276,313) (279,158) (279,165) (280,814) Average tangible common equity $ 1,251,745 $ 1,225,288 $ 1,204,614 $ 1,168,274 $ 1,122,151 Return on avg. common equity (GAAP) 7.77% 10.73% 9.93% 10.42% 11.16% Operating return on avg. common equity (non- GAAP) (4) 12.45 11.27 10.84 11.52 10.04 Return on avg. tangible common equity (non- GAAP)(5) 10.10 13.79 12.89 13.66 14.74 Operating return on avg. tangible common equity (non-GAAP)(6) 15.17 13.81 13.35 14.27 12.55 Efficiency Measures Total noninterest expenses $ 55,369 $ 55,416 $ 57,869 $ 56,946 $ 58,673 Restructuring and exit charges — — — — (994) Merger expenses and restructuring charges — (108) (2,125) (498) (1,898) Branch closing expenses — — — (1,275) — Amortization of core deposit intangibles (2,846) (2,845) (2,845) (3,196) (3,196) Operating noninterest expense $ 52,523 $ 52,463 $ 52,899 $ 51,977 $ 52,585 Net interest income (tax equivalent basis) $ 118,541 $ 114,841 $ 109,976 $ 107,761 $ 103,155 Noninterest income (14,498) 7,927 6,796 6,020 19,409 Defined benefit pension plan curtailment gain — — — — (3,501) Employee retention tax credit — — — — (6,608) Loss on sale of loans held-for-sale-CRE restructuring 23,025 — — — — Losses (gains) on equity securities 159 4 (135) 846 (1,674) Operating revenue $ 127,227 $ 122,772 $ 116,637 $ 114,627 $ 110,781 Operating efficiency ratio (non-GAAP) (7) 41.3% 42.7% 45.4% 45.3% 47.5% Net Interest Margin Average interest-earning assets $ 13,685,961 $ 13,451,804 $ 13,160,794 $ 13,093,053 $ 13,172,443 Net interest income (tax equivalent basis) $ 118,541 $ 114,841 $ 109,976 $ 107,761 $ 103,155 Net interest margin (non-GAAP) 3.44% 3.42% 3.39% 3.27% 3.11% ____________________________ (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.
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As of Sept. 30, Jun. 30, Mar. 31, Dec. 31, Sept. 30, 2026 2026 2026 2025 2025 Capital Ratios and Book Value per Share (dollars in thousands, except for per share data) Stockholders equity $ 1,598,600 $ 1,626,525 $ 1,591,547 $ 1,573,340 $ 1,538,344 Less: preferred stock (110,927) (110,927) (110,927) (110,927) (110,927) Common equity $ 1,487,673 $ 1,515,598 $ 1,480,620 $ 1,462,413 $ 1,427,417 Less: intangible assets (271,622) (274,468) (277,313) (280,158) (278,730) Tangible common equity $ 1,216,051 $ 1,241,130 $ 1,203,307 $ 1,182,255 $ 1,148,687 Total assets $ 14,778,705 $ 14,411,864 $ 14,209,561 $ 14,002,700 $ 14,023,585 Less: intangible assets (271,622) (274,468) (277,313) (280,158) (278,730) Tangible assets $ 14,507,083 $ 14,137,396 $ 13,932,248 $ 13,722,542 $ 13,744,855 Common shares outstanding 50,268,879 50,319,832 50,288,494 50,271,854 50,273,089 Common equity ratio (GAAP) 10.07% 10.52% 10.42% 10.44% 10.18% Tangible common equity ratio (non-GAAP)(8) 8.38 8.78 8.64 8.62 8.36 Regulatory capital ratios (Bancorp): Leverage ratio 9.80% 9.85% 9.79% 9.61% 9.35% Common equity Tier 1 risk-based ratio 10.10 10.28 10.23 10.24 10.17 Risk-based Tier 1 capital ratio 11.01 11.22 11.19 11.22 11.17 Risk-based total capital ratio 13.44 13.71 13.81 13.88 13.88 Regulatory capital ratios (Bank): Leverage ratio 10.78% 10.81% 10.81% 10.59% 10.35% Common equity Tier 1 risk-based ratio 12.11 12.31 12.35 12.36 12.37 Risk-based Tier 1 capital ratio 12.11 12.31 12.35 12.36 12.37 Risk-based total capital ratio 12.99 13.20 13.33 13.33 13.38 Book value per share (GAAP) $ 29.59 $ 30.12 $ 29.44 $ 29.09 $ 28.39 Tangible book value per share (non-GAAP)(9) 24.19 24.66 23.93 23.52 22.85 Net Loan Charge-offs (Recoveries) (10): Charge-offs $ 3,179 $ 17,022 $ 2,758 $ 5,613 $ 5,174 Recoveries (941) (531) (467) (836) (38) Net loan charge-offs $ 2,238 $ 16,491 $ 2,291 $ 4,777 $ 5,136 Net loan charge-offs as a % of average loans receivable (annualized) 0.07% 0.56% 0.08% 0.17% 0.18% Asset Quality Nonaccrual loans $ 64,330 $ 79,664 $ 41,579 $ 45,915 $ 39,671 Other real estate owned — — — — — Nonperforming assets $ 64,330 $ 79,664 $ 41,579 $ 45,915 $ 39,671 Allowance for credit losses - loans (excluding nonaccretable credit marks) $ 108,818 $ 106,120 $ 115,609 $ 112,282 $ 113,163 Add: nonaccretable credit marks 11,802 34,029 37,447 42,023 43,336 Allowance for credit losses - loans ("ACL") $ 120,620 $ 140,149 $ 153,056 $ 154,305 $ 156,499 Loans receivable $ 11,432,533 $ 11,869,034 $ 11,735,596 $ 11,453,280 $ 11,303,636 Nonaccrual loans as a % of loans receivable 0.56% 0.67% 0.35% 0.40% 0.35% Nonperforming assets as a % of total assets 0.44 0.55 0.29 0.33 0.28 ACL as a % of loans receivable 1.06 1.18 1.30 1.35 1.38 ACL as a % of nonaccrual loans 187.5 175.9 368.1 336.1 394.5 ____________________________ (8) Tangible common equity divided by tangible assets. (9) Tangible common equity divided by common shares outstanding at period-end. (10) Includes only non-PCD loans.
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CONNECTONE BANCORP, INC. NET INTEREST MARGIN ANALYSIS (dollars in thousands) For the Three Months Ended September 30, 2026 June 30, 2026 September 30, 2025 Interes t- earning assets: Average Balance Interest Rate(7) Average Balance Interest Rate(7) Average Balance Interest Rate(7) Investm ent securiti es(1) (2) $ 1,387,589 $ 14,931 4.27% $ 1,275,125 $ 13,397 4.21% $ 1,355,775 $ 14,581 4.27% Loans receiva ble and loans held- for- sale(2) (3) (4) 11,982,883 183,178 6.06 11,815,868 176,944 6.01 11,162,060 166,541 5.92 Federal funds sold and interest - bearing deposit s with banks 262,118 2,432 3.68 309,872 2,821 3.65 605,344 6,644 4.35 Restrict ed investm ent in bank stock 53,371 843 6.27 50,939 947 7.46 49,264 1,081 8.71 Total interes t- earning assets 13,685,961 201,384 5.84 13,451,804 194,109 5.79 13,172,443 188,847 5.69 Allowan ce for loan losses (142,006) (155,399) (159,157) Noninte rest- earning assets 990,641 957,875 1,037,299 Total assets $14,534,596 $14,254,280 $14,050,585 Interes t- bearing liabiliti es: Money market deposit s 3,065,588 22,998 2.98 3,052,487 22,148 2.91 3,041,528 24,578 3.21 Savings deposit s 942,742 6,234 2.62 978,961 6,339 2.60 949,775 7,198 3.01 Time deposit s 2,920,335 27,603 3.75 2,992,440 27,776 3.72 3,019,848 30,072 3.95 Other interest - bearing deposit s 2,244,097 15,267 2.70 2,090,816 13,308 2.55 1,897,927 13,361 2.79 Total interes t- bearing deposit s 9,172,762 72,102 3.12 9,114,704 69,571 3.06 8,909,078 75,209 3.35 Borrowi ngs 874,544 6,393 2.90 812,384 5,402 2.67 783,994 4,550 2.30 Subordi nated debent ures 202,300 4,337 8.51 202,114 4,283 8.50 263,511 5,917 8.91 Finance lease 769 11 5.68 845 12 5.70 1,068 16 5.94
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Total interes t- bearing liabiliti es 10,250,375 82,843 3.21 10,130,047 79,268 3.14 9,957,651 85,692 3.41 Noninte rest- bearing demand deposit s 2,510,843 2,424,773 2,486,993 Other liabilitie s 137,207 86,932 92,049 Total noninte rest- bearing liabiliti es 2,648,050 2,511,705 2,579,042 Stockh olders' equity 1,636,171 1,612,528 1,513,892 Total liabiliti es and stockh olders' equity $14,534,596 $14,254,280 $14,050,585 Net interest income (tax equival ent basis) 118,541 114,841 103,155 Net interest spread( 5) 2.63% 2.65% 2.28% Net interest margin (6) 3.44% 3.42% 3.11% Tax equival ent adjustm ent (1,243) (1,202) (1,138) Net interest income $117,298 $113,639 $102,017 ____________________________ (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. This press release was published by a CLEAR® Verified individual. Source: ConnectOne Bancorp, Inc.