Connectone Bancorp, Inc. Announces Third Quarter 2026 Results Including Balance Sheet Restructuring And Repositioning

(MENAFN- GlobeNewsWire - Nasdaq) 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 FLIC's 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 Company's concentrations in commercial real estate (“CRE”) and NYC rent-stabilized properties while strengthening the Bank's liquidity position. The Bank's 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 Bank's 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, ConnectOne's 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.”

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 Company's 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

The Company's 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 Company's total stockholders' 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 Company's 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 Company's 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 Company's website at or at . 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 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 .

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 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; ...

Media Contact :
Shannan Weeks
MikeWorldWide
732.299.7890; ...

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

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.

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

	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

____________________________

(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.

	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.

CONNECTONE BANCORP, INC. NET INTEREST MARGIN ANALYSIS (dollars in thousands)
	For the Three Months Ended
	September 30, 2026			June 30, 2026			September 30, 2025
Interest-earning assets:	Average Balance			Interest			Rate (7)			Average Balance			Interest			Rate (7)			Average Balance			Interest			Rate (7)
Investment securities (1) (2)	$	1,387,589			$	14,931				4.27	%		$	1,275,125			$	13,397				4.21	%		$	1,355,775			$	14,581				4.27	%
Loans receivable 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 deposits with banks		262,118				2,432				3.68				309,872				2,821				3.65				605,344				6,644				4.35
Restricted investment in bank stock		53,371				843				6.27				50,939				947				7.46				49,264				1,081				8.71
Total interest-earning assets		13,685,961				201,384				5.84				13,451,804				194,109				5.79				13,172,443				188,847				5.69
Allowance for loan losses		(142,006	)				​				​			(155,399	)				​				​			(159,157	)				​				​
Noninterest-earning assets		990,641					​				​			957,875					​				​			1,037,299					​				​
Total assets	$	14,534,596					​				​		$	14,254,280					​				​		$	14,050,585					​				​
			​				​				​				​				​				​				​				​				​
Interest-bearing liabilities:			​				​				​				​				​				​				​				​				​
Money market deposits		3,065,588				22,998				2.98				3,052,487				22,148				2.91				3,041,528				24,578				3.21
Savings deposits		942,742				6,234				2.62				978,961				6,339				2.60				949,775				7,198				3.01
Time deposits		2,920,335				27,603				3.75				2,992,440				27,776				3.72				3,019,848				30,072				3.95
Other interest-bearing deposits		2,244,097				15,267				2.70				2,090,816				13,308				2.55				1,897,927				13,361				2.79
Total interest-bearing deposits		9,172,762				72,102				3.12				9,114,704				69,571				3.06				8,909,078				75,209				3.35
			​				​				​				​				​				​				​				​				​
Borrowings		874,544				6,393				2.90				812,384				5,402				2.67				783,994				4,550				2.30
Subordinated debentures		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
Total interest-bearing liabilities		10,250,375				82,843				3.21				10,130,047				79,268				3.14				9,957,651				85,692				3.41
			​				​				​				​				​				​				​				​				​
Noninterest-bearing demand deposits		2,510,843					​				​			2,424,773					​				​			2,486,993					​				​
Other liabilities		137,207					​				​			86,932					​				​			92,049					​				​
Total noninterest-bearing liabilities		2,648,050					​				​			2,511,705					​				​			2,579,042					​				​
Stockholders' equity		1,636,171					​				​			1,612,528					​				​			1,513,892					​				​
Total liabilities and stockholders' equity	$	14,534,596					​				​		$	14,254,280					​				​		$	14,050,585					​				​
			​				​				​				​				​				​				​				​				​
Net interest income (tax equivalent 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 equivalent adjustment			​			(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.

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