10-K 1 cnob20231231_10k.htm FORM 10-K cnob20231231_10k.htm
0000712771 ConnectOne Bancorp, Inc. false --12-31 FY 2023 0 0 1,000 1,000 5,000,000 5,000,000 115,000 115,000 115,000 115,000 0 0 100,000,000 100,000,000 42,122,948 41,942,149 38,519,770 39,243,123 3,603,178 2,699,026 0.371875 0.48 14,247 44,836 4,981 14,711 34,458 330,541 115,000 1.3125 0.595 15,086 53,169 153 31,183 22,350 447,108 1.3125 0.665 7,388 84,057 995 36,006 52,353 904,152 0 0 0 10 25 3 7 10 20 0 1,000 285 January 23, 2034 January 23, 2009 1,000 285 January 23, 2034 January 23, 2009 2020 2021 2022 2023 2019 2020 2021 2022 0.025 9.3 0 3 33.33 10 3 500 11 no 25 0.1 7.5 0 10.3 15 96 67 65 13 3 10 0 15 20 39 22 21 8,001,504 8,001,504 1,259,364 3,745,467 2,510,977 932,081 77,952 False False False False 00007127712023-01-012023-12-31 0000712771us-gaap:CommonStockMember2023-01-012023-12-31 0000712771cnob:DepositarySharesMember2023-01-012023-12-31 iso4217:USD 00007127712023-06-30 xbrli:shares 00007127712024-02-23 thunderdome:item 00007127712023-12-31 00007127712022-12-31 iso4217:USDxbrli:shares 00007127712022-01-012022-12-31 00007127712021-01-012021-12-31 0000712771us-gaap:PreferredStockMember2020-12-31 0000712771us-gaap:CommonStockMember2020-12-31 0000712771us-gaap:AdditionalPaidInCapitalMember2020-12-31 0000712771us-gaap:RetainedEarningsMember2020-12-31 0000712771us-gaap:TreasuryStockCommonMember2020-12-31 0000712771us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-31 00007127712020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:PreferredStockMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:CommonStockMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AdditionalPaidInCapitalMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:TreasuryStockCommonMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:PreferredStockMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:CommonStockMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:AdditionalPaidInCapitalMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:RetainedEarningsMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:TreasuryStockCommonMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2020-12-31 0000712771us-gaap:PreferredStockMember2021-01-012021-12-31 0000712771us-gaap:CommonStockMember2021-01-012021-12-31 0000712771us-gaap:AdditionalPaidInCapitalMember2021-01-012021-12-31 0000712771us-gaap:RetainedEarningsMember2021-01-012021-12-31 0000712771us-gaap:TreasuryStockCommonMember2021-01-012021-12-31 0000712771us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-12-31 0000712771us-gaap:PerformanceSharesMember2021-01-012021-12-31 0000712771us-gaap:PerformanceSharesMemberus-gaap:PreferredStockMember2021-01-012021-12-31 0000712771us-gaap:PerformanceSharesMemberus-gaap:CommonStockMember2021-01-012021-12-31 0000712771us-gaap:PerformanceSharesMemberus-gaap:AdditionalPaidInCapitalMember2021-01-012021-12-31 0000712771us-gaap:PerformanceSharesMemberus-gaap:RetainedEarningsMember2021-01-012021-12-31 0000712771us-gaap:PerformanceSharesMemberus-gaap:TreasuryStockCommonMember2021-01-012021-12-31 0000712771us-gaap:PerformanceSharesMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-12-31 0000712771us-gaap:PreferredStockMember2021-12-31 0000712771us-gaap:CommonStockMember2021-12-31 0000712771us-gaap:AdditionalPaidInCapitalMember2021-12-31 0000712771us-gaap:RetainedEarningsMember2021-12-31 0000712771us-gaap:TreasuryStockCommonMember2021-12-31 0000712771us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-31 00007127712021-12-31 0000712771us-gaap:PreferredStockMember2022-01-012022-12-31 0000712771us-gaap:CommonStockMember2022-01-012022-12-31 0000712771us-gaap:AdditionalPaidInCapitalMember2022-01-012022-12-31 0000712771us-gaap:RetainedEarningsMember2022-01-012022-12-31 0000712771us-gaap:TreasuryStockCommonMember2022-01-012022-12-31 0000712771us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-12-31 0000712771us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-12-31 0000712771us-gaap:RestrictedStockUnitsRSUMemberus-gaap:PreferredStockMember2022-01-012022-12-31 0000712771us-gaap:RestrictedStockUnitsRSUMemberus-gaap:CommonStockMember2022-01-012022-12-31 0000712771us-gaap:RestrictedStockUnitsRSUMemberus-gaap:AdditionalPaidInCapitalMember2022-01-012022-12-31 0000712771us-gaap:RestrictedStockUnitsRSUMemberus-gaap:RetainedEarningsMember2022-01-012022-12-31 0000712771us-gaap:RestrictedStockUnitsRSUMemberus-gaap:TreasuryStockCommonMember2022-01-012022-12-31 0000712771us-gaap:RestrictedStockUnitsRSUMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-12-31 0000712771us-gaap:PerformanceSharesMember2022-01-012022-12-31 0000712771us-gaap:PerformanceSharesMemberus-gaap:PreferredStockMember2022-01-012022-12-31 0000712771us-gaap:PerformanceSharesMemberus-gaap:CommonStockMember2022-01-012022-12-31 0000712771us-gaap:PerformanceSharesMemberus-gaap:AdditionalPaidInCapitalMember2022-01-012022-12-31 0000712771us-gaap:PerformanceSharesMemberus-gaap:RetainedEarningsMember2022-01-012022-12-31 0000712771us-gaap:PerformanceSharesMemberus-gaap:TreasuryStockCommonMember2022-01-012022-12-31 0000712771us-gaap:PerformanceSharesMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-12-31 0000712771us-gaap:PreferredStockMember2022-12-31 0000712771us-gaap:CommonStockMember2022-12-31 0000712771us-gaap:AdditionalPaidInCapitalMember2022-12-31 0000712771us-gaap:RetainedEarningsMember2022-12-31 0000712771us-gaap:TreasuryStockCommonMember2022-12-31 0000712771us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-31 0000712771us-gaap:PreferredStockMember2023-01-012023-12-31 0000712771us-gaap:CommonStockMember2023-01-012023-12-31 0000712771us-gaap:AdditionalPaidInCapitalMember2023-01-012023-12-31 0000712771us-gaap:RetainedEarningsMember2023-01-012023-12-31 0000712771us-gaap:TreasuryStockCommonMember2023-01-012023-12-31 0000712771us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-12-31 0000712771us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-12-31 0000712771us-gaap:RestrictedStockUnitsRSUMemberus-gaap:PreferredStockMember2023-01-012023-12-31 0000712771us-gaap:RestrictedStockUnitsRSUMemberus-gaap:CommonStockMember2023-01-012023-12-31 0000712771us-gaap:RestrictedStockUnitsRSUMemberus-gaap:AdditionalPaidInCapitalMember2023-01-012023-12-31 0000712771us-gaap:RestrictedStockUnitsRSUMemberus-gaap:RetainedEarningsMember2023-01-012023-12-31 0000712771us-gaap:RestrictedStockUnitsRSUMemberus-gaap:TreasuryStockCommonMember2023-01-012023-12-31 0000712771us-gaap:RestrictedStockUnitsRSUMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-12-31 0000712771us-gaap:PerformanceSharesMember2023-01-012023-12-31 0000712771us-gaap:PerformanceSharesMemberus-gaap:PreferredStockMember2023-01-012023-12-31 0000712771us-gaap:PerformanceSharesMemberus-gaap:CommonStockMember2023-01-012023-12-31 0000712771us-gaap:PerformanceSharesMemberus-gaap:AdditionalPaidInCapitalMember2023-01-012023-12-31 0000712771us-gaap:PerformanceSharesMemberus-gaap:RetainedEarningsMember2023-01-012023-12-31 0000712771us-gaap:PerformanceSharesMemberus-gaap:TreasuryStockCommonMember2023-01-012023-12-31 0000712771us-gaap:PerformanceSharesMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-12-31 0000712771us-gaap:PreferredStockMember2023-12-31 0000712771us-gaap:CommonStockMember2023-12-31 0000712771us-gaap:AdditionalPaidInCapitalMember2023-12-31 0000712771us-gaap:RetainedEarningsMember2023-12-31 0000712771us-gaap:TreasuryStockCommonMember2023-12-31 0000712771us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-31 xbrli:pure utr:D 0000712771srt:MinimumMember2023-12-31 0000712771cnob:NonaccrualLoansMembersrt:MinimumMember2023-12-31 utr:Y 0000712771us-gaap:LandBuildingsAndImprovementsMembersrt:MinimumMember2023-12-31 0000712771us-gaap:LandBuildingsAndImprovementsMembersrt:MaximumMember2023-12-31 0000712771cnob:FurnitureFixturesAndEquipmentMembersrt:MinimumMember2023-12-31 0000712771cnob:FurnitureFixturesAndEquipmentMembersrt:MaximumMember2023-12-31 0000712771us-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-31 0000712771us-gaap:ResidentialMortgageBackedSecuritiesMember2023-12-31 0000712771us-gaap:CommercialMortgageBackedSecuritiesMember2023-12-31 0000712771us-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-31 0000712771us-gaap:CorporateDebtSecuritiesMember2023-12-31 0000712771us-gaap:AssetBackedSecuritiesMember2023-12-31 0000712771us-gaap:OtherDebtSecuritiesMember2023-12-31 0000712771us-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-31 0000712771us-gaap:ResidentialMortgageBackedSecuritiesMember2022-12-31 0000712771us-gaap:CommercialMortgageBackedSecuritiesMember2022-12-31 0000712771us-gaap:USStatesAndPoliticalSubdivisionsMember2022-12-31 0000712771us-gaap:CorporateDebtSecuritiesMember2022-12-31 0000712771us-gaap:AssetBackedSecuritiesMember2022-12-31 0000712771us-gaap:OtherDebtSecuritiesMember2022-12-31 0000712771us-gaap:AssetPledgedAsCollateralMember2023-12-31 0000712771us-gaap:AssetPledgedAsCollateralMember2022-12-31 0000712771us-gaap:CommercialPortfolioSegmentMember2023-12-31 0000712771us-gaap:CommercialPortfolioSegmentMember2022-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMember2023-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMember2022-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMember2023-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMember2022-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMember2023-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMember2022-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMember2023-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMember2022-12-31 0000712771us-gaap:CommercialPortfolioSegmentMembercnob:PaycheckProtectionProgramCaresActMember2023-12-31 0000712771us-gaap:CommercialPortfolioSegmentMembercnob:PaycheckProtectionProgramCaresActMember2022-12-31 0000712771us-gaap:AssetPledgedAsCollateralMemberus-gaap:FederalHomeLoanBankAdvancesMember2023-12-31 0000712771us-gaap:AssetPledgedAsCollateralMemberus-gaap:FederalHomeLoanBankAdvancesMember2022-12-31 0000712771us-gaap:ResidentialMortgageMember2023-12-31 0000712771us-gaap:ResidentialMortgageMember2022-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:PassMember2023-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:SpecialMentionMember2023-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:SubstandardMember2023-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:DoubtfulMember2023-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:PassMember2023-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:SpecialMentionMember2023-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:SubstandardMember2023-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:DoubtfulMember2023-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMemberus-gaap:PassMember2023-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMemberus-gaap:SpecialMentionMember2023-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMemberus-gaap:SubstandardMember2023-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMemberus-gaap:DoubtfulMember2023-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMemberus-gaap:PassMember2023-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMemberus-gaap:SpecialMentionMember2023-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMemberus-gaap:SubstandardMember2023-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMemberus-gaap:DoubtfulMember2023-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMemberus-gaap:PassMember2023-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMemberus-gaap:SpecialMentionMember2023-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMemberus-gaap:SubstandardMember2023-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMemberus-gaap:DoubtfulMember2023-12-31 0000712771us-gaap:PassMember2023-12-31 0000712771us-gaap:SpecialMentionMember2023-12-31 0000712771us-gaap:SubstandardMember2023-12-31 0000712771us-gaap:DoubtfulMember2023-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:PassMember2022-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:SpecialMentionMember2022-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:SubstandardMember2022-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:DoubtfulMember2022-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:PassMember2022-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:SpecialMentionMember2022-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:SubstandardMember2022-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:DoubtfulMember2022-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMemberus-gaap:PassMember2022-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMemberus-gaap:SpecialMentionMember2022-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMemberus-gaap:SubstandardMember2022-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMemberus-gaap:DoubtfulMember2022-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMemberus-gaap:PassMember2022-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMemberus-gaap:SpecialMentionMember2022-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMemberus-gaap:SubstandardMember2022-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMemberus-gaap:DoubtfulMember2022-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMemberus-gaap:PassMember2022-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMemberus-gaap:SpecialMentionMember2022-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMemberus-gaap:SubstandardMember2022-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMemberus-gaap:DoubtfulMember2022-12-31 0000712771us-gaap:PassMember2022-12-31 0000712771us-gaap:SpecialMentionMember2022-12-31 0000712771us-gaap:SubstandardMember2022-12-31 0000712771us-gaap:DoubtfulMember2022-12-31 0000712771us-gaap:CommercialPortfolioSegmentMember2023-01-012023-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMember2023-01-012023-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMember2023-01-012023-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMember2023-01-012023-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMember2023-01-012023-12-31 0000712771us-gaap:RealEstateMemberus-gaap:CommercialPortfolioSegmentMember2023-12-31 0000712771cnob:OtherCollateralPledgedMemberus-gaap:CommercialPortfolioSegmentMember2023-12-31 0000712771us-gaap:CollateralPledgedMemberus-gaap:CommercialPortfolioSegmentMember2023-12-31 0000712771us-gaap:RealEstateMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2023-12-31 0000712771cnob:OtherCollateralPledgedMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2023-12-31 0000712771us-gaap:CollateralPledgedMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2023-12-31 0000712771us-gaap:RealEstateMembercnob:CommercialConstructionPortfolioSegmentMember2023-12-31 0000712771cnob:OtherCollateralPledgedMembercnob:CommercialConstructionPortfolioSegmentMember2023-12-31 0000712771us-gaap:CollateralPledgedMembercnob:CommercialConstructionPortfolioSegmentMember2023-12-31 0000712771us-gaap:RealEstateMemberus-gaap:ResidentialPortfolioSegmentMember2023-12-31 0000712771cnob:OtherCollateralPledgedMemberus-gaap:ResidentialPortfolioSegmentMember2023-12-31 0000712771us-gaap:CollateralPledgedMemberus-gaap:ResidentialPortfolioSegmentMember2023-12-31 0000712771us-gaap:RealEstateMember2023-12-31 0000712771cnob:OtherCollateralPledgedMember2023-12-31 0000712771us-gaap:CollateralPledgedMember2023-12-31 0000712771us-gaap:RealEstateMemberus-gaap:CommercialPortfolioSegmentMember2022-12-31 0000712771cnob:OtherCollateralPledgedMemberus-gaap:CommercialPortfolioSegmentMember2022-12-31 0000712771us-gaap:CollateralPledgedMemberus-gaap:CommercialPortfolioSegmentMember2022-12-31 0000712771us-gaap:RealEstateMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2022-12-31 0000712771cnob:OtherCollateralPledgedMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2022-12-31 0000712771us-gaap:CollateralPledgedMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2022-12-31 0000712771us-gaap:RealEstateMembercnob:CommercialConstructionPortfolioSegmentMember2022-12-31 0000712771cnob:OtherCollateralPledgedMembercnob:CommercialConstructionPortfolioSegmentMember2022-12-31 0000712771us-gaap:CollateralPledgedMembercnob:CommercialConstructionPortfolioSegmentMember2022-12-31 0000712771us-gaap:RealEstateMemberus-gaap:ResidentialPortfolioSegmentMember2022-12-31 0000712771cnob:OtherCollateralPledgedMemberus-gaap:ResidentialPortfolioSegmentMember2022-12-31 0000712771us-gaap:CollateralPledgedMemberus-gaap:ResidentialPortfolioSegmentMember2022-12-31 0000712771us-gaap:RealEstateMember2022-12-31 0000712771cnob:OtherCollateralPledgedMember2022-12-31 0000712771us-gaap:CollateralPledgedMember2022-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2023-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMember2023-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2023-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2023-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancialAssetPastDueMember2023-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2023-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2023-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMember2023-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2023-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2023-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMember2023-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2023-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2023-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMember2023-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2023-12-31 0000712771us-gaap:FinancingReceivables30To59DaysPastDueMember2023-12-31 0000712771us-gaap:FinancingReceivables60To89DaysPastDueMember2023-12-31 0000712771us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-12-31 0000712771us-gaap:FinancialAssetPastDueMember2023-12-31 0000712771us-gaap:FinancialAssetNotPastDueMember2023-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2022-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMember2022-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2022-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2022-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancialAssetPastDueMember2022-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2022-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2022-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMember2022-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2022-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2022-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMember2022-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2022-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2022-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMember2022-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2022-12-31 0000712771us-gaap:FinancingReceivables30To59DaysPastDueMember2022-12-31 0000712771us-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-31 0000712771us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-31 0000712771us-gaap:FinancialAssetPastDueMember2022-12-31 0000712771us-gaap:FinancialAssetNotPastDueMember2022-12-31 0000712771us-gaap:FinancialAssetAcquiredWithCreditDeteriorationMemberus-gaap:CommercialPortfolioSegmentMember2023-12-31 0000712771us-gaap:FinancialAssetAcquiredWithCreditDeteriorationMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2023-12-31 0000712771us-gaap:FinancialAssetAcquiredWithCreditDeteriorationMembercnob:CommercialConstructionPortfolioSegmentMember2023-12-31 0000712771us-gaap:FinancialAssetAcquiredWithCreditDeteriorationMemberus-gaap:ResidentialPortfolioSegmentMember2023-12-31 0000712771us-gaap:FinancialAssetAcquiredWithCreditDeteriorationMemberus-gaap:ConsumerPortfolioSegmentMember2023-12-31 0000712771us-gaap:FinancialAssetAcquiredWithCreditDeteriorationMember2023-12-31 0000712771us-gaap:FinancialAssetAcquiredWithCreditDeteriorationMemberus-gaap:CommercialPortfolioSegmentMember2022-12-31 0000712771us-gaap:FinancialAssetAcquiredWithCreditDeteriorationMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2022-12-31 0000712771us-gaap:FinancialAssetAcquiredWithCreditDeteriorationMembercnob:CommercialConstructionPortfolioSegmentMember2022-12-31 0000712771us-gaap:FinancialAssetAcquiredWithCreditDeteriorationMemberus-gaap:ResidentialPortfolioSegmentMember2022-12-31 0000712771us-gaap:FinancialAssetAcquiredWithCreditDeteriorationMemberus-gaap:ConsumerPortfolioSegmentMember2022-12-31 0000712771us-gaap:FinancialAssetAcquiredWithCreditDeteriorationMember2022-12-31 0000712771us-gaap:CommercialPortfolioSegmentMember2021-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMember2021-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMember2021-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMember2021-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMember2021-12-31 0000712771us-gaap:CommercialPortfolioSegmentMember2022-01-012022-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMember2022-01-012022-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMember2022-01-012022-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMember2022-01-012022-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMember2022-01-012022-12-31 00007127712021-01-012021-01-01 0000712771us-gaap:CommercialPortfolioSegmentMember2020-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMember2020-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMember2020-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMember2020-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMember2020-12-31 0000712771us-gaap:UnallocatedFinancingReceivablesMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:CommercialPortfolioSegmentMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustmentMembercnob:CommercialConstructionPortfolioSegmentMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:ResidentialPortfolioSegmentMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:ConsumerPortfolioSegmentMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:UnallocatedFinancingReceivablesMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:CommercialPortfolioSegmentMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMembercnob:CommercialConstructionPortfolioSegmentMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:ResidentialPortfolioSegmentMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:ConsumerPortfolioSegmentMember2020-12-31 0000712771srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:UnallocatedFinancingReceivablesMember2020-12-31 0000712771us-gaap:CommercialPortfolioSegmentMember2021-01-012021-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMember2021-01-012021-12-31 0000712771cnob:CommercialConstructionPortfolioSegmentMember2021-01-012021-12-31 0000712771us-gaap:ResidentialPortfolioSegmentMember2021-01-012021-12-31 0000712771us-gaap:ConsumerPortfolioSegmentMember2021-01-012021-12-31 0000712771us-gaap:UnallocatedFinancingReceivablesMember2021-01-012021-12-31 0000712771us-gaap:UnallocatedFinancingReceivablesMember2021-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:ExtendedMaturityMember2023-01-012023-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:PaymentDeferralMember2023-01-012023-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:ContractualInterestRateReductionMember2023-01-012023-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:ExtendedMaturityMember2023-01-012023-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:PaymentDeferralMember2023-01-012023-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:ContractualInterestRateReductionMember2023-01-012023-12-31 0000712771us-gaap:ExtendedMaturityMember2023-01-012023-12-31 0000712771us-gaap:PaymentDeferralMember2023-01-012023-12-31 0000712771us-gaap:ContractualInterestRateReductionMember2023-01-012023-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2023-01-012023-12-31 0000712771us-gaap:CommercialPortfolioSegmentMembercnob:FinancialAsset30To89DaysPastDueMember2023-01-012023-12-31 0000712771us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-01-012023-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2023-01-012023-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMembercnob:FinancialAsset30To89DaysPastDueMember2023-01-012023-12-31 0000712771us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-01-012023-12-31 0000712771us-gaap:UnfundedLoanCommitmentMember2022-12-31 0000712771us-gaap:UnfundedLoanCommitmentMember2021-12-31 0000712771us-gaap:UnfundedLoanCommitmentMember2023-01-012023-12-31 0000712771us-gaap:UnfundedLoanCommitmentMember2022-01-012022-12-31 0000712771us-gaap:UnfundedLoanCommitmentMember2023-12-31 0000712771us-gaap:LandMember2023-12-31 0000712771us-gaap:LandMember2022-12-31 0000712771us-gaap:BuildingMembersrt:MinimumMember2023-12-31 0000712771us-gaap:BuildingMembersrt:MaximumMember2023-12-31 0000712771us-gaap:BuildingMember2023-12-31 0000712771us-gaap:BuildingMember2022-12-31 0000712771us-gaap:FurnitureAndFixturesMembersrt:MinimumMember2023-12-31 0000712771us-gaap:FurnitureAndFixturesMembersrt:MaximumMember2023-12-31 0000712771us-gaap:FurnitureAndFixturesMember2023-12-31 0000712771us-gaap:FurnitureAndFixturesMember2022-12-31 0000712771us-gaap:LeaseholdImprovementsMembersrt:MinimumMember2023-12-31 0000712771us-gaap:LeaseholdImprovementsMembersrt:MaximumMember2023-12-31 0000712771us-gaap:LeaseholdImprovementsMember2023-12-31 0000712771us-gaap:LeaseholdImprovementsMember2022-12-31 0000712771us-gaap:BorrowingsMember2023-12-31 0000712771us-gaap:CoreDepositsMember2023-12-31 0000712771us-gaap:CoreDepositsMember2022-12-31 0000712771cnob:CenterBancorpStatutoryTrustIIMemberus-gaap:SubordinatedDebtMember2003-12-19 0000712771cnob:CenterBancorpStatutoryTrustIIMemberus-gaap:SubordinatedDebtMember2003-12-012003-12-31 0000712771cnob:CenterBancorpStatutoryTrustIIMemberus-gaap:SubordinatedDebtMembercnob:LIBORLondonInterbankOfferedRateMember2003-12-012003-12-31 0000712771cnob:CenterBancorpStatutoryTrustIIMember2023-12-31 0000712771cnob:CenterBancorpStatutoryTrustIIMemberus-gaap:SubordinatedDebtMembercnob:SecuredOvernightFinancingRateSofrMember2023-12-31 0000712771cnob:CenterBancorpStatutoryTrustIIMemberus-gaap:SubordinatedDebtMembercnob:SecuredOvernightFinancingRateSofrMember2023-05-01 0000712771cnob:CenterBancorpStatutoryTrustIIMemberus-gaap:SubordinatedDebtMember2023-12-31 0000712771cnob:CenterBancorpStatutoryTrustIIMemberus-gaap:SubordinatedDebtMembercnob:SecuredOvernightFinancingRateSofrMember2023-01-012023-12-31 0000712771cnob:CenterBancorpStatutoryTrustIIMemberus-gaap:SubordinatedDebtMember2023-01-012023-12-31 0000712771cnob:CenterBancorpStatutoryTrustIIMemberus-gaap:SubordinatedDebtMember2022-12-31 0000712771cnob:CenterBancorpStatutoryTrustIIMemberus-gaap:SubordinatedDebtMembercnob:LIBORLondonInterbankOfferedRateMember2022-01-012022-12-31 0000712771cnob:CenterBancorpStatutoryTrustIIMemberus-gaap:SubordinatedDebtMember2022-01-012022-12-31 0000712771cnob:The2020NotesMemberus-gaap:SubordinatedDebtMember2020-06-10 0000712771cnob:The2020NotesMemberus-gaap:SubordinatedDebtMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2020-06-102020-06-10 0000712771cnob:TheNotesMemberus-gaap:SubordinatedDebtMember2018-01-11 0000712771cnob:TheNotesMemberus-gaap:SubordinatedDebtMembercnob:LIBORLondonInterbankOfferedRateMember2018-01-112018-01-11 0000712771cnob:TheNotesMemberus-gaap:SubordinatedDebtMember2015-06-30 0000712771cnob:TheNotesMemberus-gaap:SubordinatedDebtMembercnob:LIBORLondonInterbankOfferedRateMember2015-06-012015-06-30 0000712771us-gaap:DomesticCountryMember2023-01-012023-12-31 0000712771us-gaap:StateAndLocalJurisdictionMember2023-01-012023-12-31 0000712771us-gaap:StateAndLocalJurisdictionMember2023-12-31 0000712771us-gaap:SeriesAPreferredStockMembercnob:UnderwrittenPublicOfferingMember2021-08-192021-08-19 0000712771us-gaap:SeriesAPreferredStockMembercnob:UnderwrittenPublicOfferingMember2021-08-19 0000712771us-gaap:SeriesAPreferredStockMember2021-08-192021-08-19 0000712771us-gaap:SeriesAPreferredStockMember2021-08-19 0000712771us-gaap:CommitmentsToExtendCreditMember2023-12-31 0000712771us-gaap:CommitmentsToExtendCreditMember2022-12-31 0000712771us-gaap:HomeEquityMember2023-12-31 0000712771us-gaap:HomeEquityMember2022-12-31 0000712771cnob:OutstandingCommercialMortgageLoanCommitmentsMember2023-12-31 0000712771cnob:OutstandingCommercialMortgageLoanCommitmentsMember2022-12-31 0000712771us-gaap:StandbyLettersOfCreditMember2023-12-31 0000712771us-gaap:StandbyLettersOfCreditMember2022-12-31 0000712771cnob:OverdraftProtectionLinesMember2023-12-31 0000712771cnob:OverdraftProtectionLinesMember2022-12-31 0000712771us-gaap:DepositsMembercnob:PrincipalOfficersDirectorsAndTheirAffiliatesMember2023-01-012023-12-31 0000712771us-gaap:DepositsMembercnob:PrincipalOfficersDirectorsAndTheirAffiliatesMember2022-01-012022-12-31 0000712771cnob:UnionCenterNationalBankMember2023-12-31 0000712771cnob:UnionCenterNationalBankMember2022-12-31 0000712771srt:ParentCompanyMember2023-12-31 0000712771srt:ParentCompanyMember2022-12-31 0000712771us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-01-012023-12-31 0000712771us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-01-012022-12-31 0000712771us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-01-012021-12-31 0000712771us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-01-012023-12-31 0000712771us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-01-012022-12-31 0000712771us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-01-012021-12-31 0000712771us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-01-012023-12-31 0000712771us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-01-012022-12-31 0000712771us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-01-012021-12-31 0000712771us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-12-31 0000712771us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-01-012022-12-31 0000712771us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-01-012021-12-31 0000712771us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-12-31 0000712771us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-12-31 0000712771us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-12-31 0000712771us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-12-31 0000712771us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-12-31 0000712771us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-12-31 0000712771us-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:PensionPlansDefinedBenefitMember2021-12-31 0000712771us-gaap:PensionPlansDefinedBenefitMember2023-01-012023-12-31 0000712771us-gaap:PensionPlansDefinedBenefitMember2022-01-012022-12-31 0000712771us-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:PensionPlansDefinedBenefitMember2021-01-012021-12-31 0000712771us-gaap:PensionPlansDefinedBenefitMembersrt:ScenarioForecastMember2024-01-012024-12-31 0000712771us-gaap:DefinedBenefitPlanEquitySecuritiesUsMemberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:DefinedBenefitPlanEquitySecuritiesUsMemberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:DefinedBenefitPlanEquitySecuritiesUsMemberus-gaap:PensionPlansDefinedBenefitMember2023-01-012023-12-31 0000712771us-gaap:DefinedBenefitPlanEquitySecuritiesNonUsMemberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:DefinedBenefitPlanEquitySecuritiesNonUsMemberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:DefinedBenefitPlanEquitySecuritiesNonUsMemberus-gaap:PensionPlansDefinedBenefitMember2023-01-012023-12-31 0000712771cnob:DebtAndorFixedIncomeSecuritiesMemberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771cnob:DebtAndorFixedIncomeSecuritiesMemberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771cnob:DebtAndorFixedIncomeSecuritiesMemberus-gaap:PensionPlansDefinedBenefitMember2023-01-012023-12-31 0000712771cnob:CashAndOtherAlternativeInvestmentsMemberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771cnob:CashAndOtherAlternativeInvestmentsMemberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771cnob:CashAndOtherAlternativeInvestmentsMemberus-gaap:PensionPlansDefinedBenefitMember2023-01-012023-12-31 0000712771us-gaap:DefinedBenefitPlanCashMemberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:DefinedBenefitPlanCashMemberus-gaap:FairValueInputsLevel1Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:DefinedBenefitPlanCashMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:DefinedBenefitPlanCashMemberus-gaap:FairValueInputsLevel3Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:DefinedBenefitPlanEquitySecuritiesUsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:DefinedBenefitPlanEquitySecuritiesUsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:DefinedBenefitPlanEquitySecuritiesUsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:DefinedBenefitPlanEquitySecuritiesNonUsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:DefinedBenefitPlanEquitySecuritiesNonUsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:DefinedBenefitPlanEquitySecuritiesNonUsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771cnob:CashAndOtherAlternativeInvestmentsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771cnob:CashAndOtherAlternativeInvestmentsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771cnob:CashAndOtherAlternativeInvestmentsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771cnob:CommodityFundsMemberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771cnob:CommodityFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771cnob:CommodityFundsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771cnob:CommodityFundsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:DefinedBenefitPlanRealEstateMemberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:DefinedBenefitPlanRealEstateMemberus-gaap:FairValueInputsLevel1Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:DefinedBenefitPlanRealEstateMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:DefinedBenefitPlanRealEstateMemberus-gaap:FairValueInputsLevel3Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:PensionPlansDefinedBenefitMember2023-12-31 0000712771us-gaap:DefinedBenefitPlanCashMemberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:DefinedBenefitPlanCashMemberus-gaap:FairValueInputsLevel1Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:DefinedBenefitPlanCashMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:DefinedBenefitPlanCashMemberus-gaap:FairValueInputsLevel3Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:DefinedBenefitPlanEquitySecuritiesUsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:DefinedBenefitPlanEquitySecuritiesUsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:DefinedBenefitPlanEquitySecuritiesUsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:DefinedBenefitPlanEquitySecuritiesNonUsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:DefinedBenefitPlanEquitySecuritiesNonUsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:DefinedBenefitPlanEquitySecuritiesNonUsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771cnob:CashAndOtherAlternativeInvestmentsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771cnob:CashAndOtherAlternativeInvestmentsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771cnob:CashAndOtherAlternativeInvestmentsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771cnob:CommodityFundsMemberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771cnob:CommodityFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771cnob:CommodityFundsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771cnob:CommodityFundsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:DefinedBenefitPlanRealEstateMemberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:DefinedBenefitPlanRealEstateMemberus-gaap:FairValueInputsLevel1Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:DefinedBenefitPlanRealEstateMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:DefinedBenefitPlanRealEstateMemberus-gaap:FairValueInputsLevel3Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:PensionPlansDefinedBenefitMember2022-12-31 0000712771cnob:The401kPlanMember2014-01-012014-12-31 0000712771cnob:The401kPlanMember2018-01-012018-12-31 0000712771cnob:The401kPlanMember2022-01-012022-12-31 0000712771cnob:The401kPlanMember2021-01-012021-12-31 0000712771us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2023-01-012023-12-31 0000712771us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2022-01-012022-12-31 0000712771us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2021-01-012021-12-31 0000712771cnob:The2017EquityCompensationPlanMember2023-01-012023-12-31 0000712771cnob:The2017EquityCompensationPlanMember2023-12-31 0000712771cnob:RestrictedStockOptionsAndRestrictedStockUnitsMembercnob:The2017EquityCompensationPlanMember2017-05-232017-05-23 0000712771cnob:RestrictedStockOptionsAndRestrictedStockUnitsMembercnob:The2017EquityCompensationPlanMembercnob:VestingEachYearMember2017-05-232017-05-23 0000712771us-gaap:EmployeeStockOptionMembercnob:The2017EquityCompensationPlanMember2017-05-232017-05-23 0000712771us-gaap:PerformanceSharesMembercnob:The2017EquityCompensationPlanMember2017-05-232017-05-23 0000712771us-gaap:RestrictedStockMember2022-12-31 0000712771us-gaap:RestrictedStockMember2023-01-012023-12-31 0000712771us-gaap:RestrictedStockMember2023-12-31 0000712771us-gaap:PerformanceSharesMember2022-12-31 0000712771us-gaap:PerformanceSharesMember2023-12-31 0000712771us-gaap:RestrictedStockUnitsRSUMember2022-12-31 0000712771us-gaap:RestrictedStockUnitsRSUMember2023-12-31 0000712771us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-12-31 0000712771us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-31 0000712771cnob:CommencedFixedInterestRateSwapsMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMembersrt:MinimumMember2022-12-31 0000712771cnob:CommencedFixedInterestRateSwapsMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMembersrt:MaximumMember2022-12-31 0000712771us-gaap:InterestRateCapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-10-01 0000712771us-gaap:InterestRateCapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-11-30 0000712771us-gaap:InterestRateCapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:LongMember2022-12-31 0000712771us-gaap:InterestRateCapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-01-012023-12-31 0000712771us-gaap:InterestRateCapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-01-012022-12-31 0000712771us-gaap:InterestRateCapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-01-012021-12-31 0000712771us-gaap:InterestRateSwapMember2023-01-012023-12-31 0000712771us-gaap:InterestRateSwapMember2022-01-012022-12-31 0000712771us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-12-31 0000712771us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-31 0000712771us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2023-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2023-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2023-12-31 0000712771us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialMortgageBackedSecuritiesMember2023-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialMortgageBackedSecuritiesMember2023-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialMortgageBackedSecuritiesMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialMortgageBackedSecuritiesMember2023-12-31 0000712771us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-31 0000712771us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-12-31 0000712771us-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2023-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2023-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2023-12-31 0000712771us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2023-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2023-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2023-12-31 0000712771us-gaap:FairValueMeasurementsRecurringMemberus-gaap:OtherDebtSecuritiesMember2023-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:OtherDebtSecuritiesMember2023-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:OtherDebtSecuritiesMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:OtherDebtSecuritiesMember2023-12-31 0000712771us-gaap:FairValueMeasurementsRecurringMember2023-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-31 0000712771us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-31 0000712771us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2022-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2022-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2022-12-31 0000712771us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialMortgageBackedSecuritiesMember2022-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialMortgageBackedSecuritiesMember2022-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialMortgageBackedSecuritiesMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialMortgageBackedSecuritiesMember2022-12-31 0000712771us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2022-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2022-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2022-12-31 0000712771us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2022-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2022-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2022-12-31 0000712771us-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2022-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2022-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2022-12-31 0000712771us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2022-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2022-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2022-12-31 0000712771us-gaap:FairValueMeasurementsRecurringMemberus-gaap:OtherDebtSecuritiesMember2022-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:OtherDebtSecuritiesMember2022-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:OtherDebtSecuritiesMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:OtherDebtSecuritiesMember2022-12-31 0000712771us-gaap:FairValueMeasurementsRecurringMember2022-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-31 0000712771us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMember2023-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMember2023-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMember2023-12-31 0000712771us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2023-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2023-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2023-12-31 0000712771us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMember2022-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMember2022-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMember2022-12-31 0000712771us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2022-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2022-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2022-12-31 0000712771us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:ResidentialPortfolioSegmentMember2022-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:ResidentialPortfolioSegmentMember2022-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:ResidentialPortfolioSegmentMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:ResidentialPortfolioSegmentMember2022-12-31 0000712771us-gaap:USStatesAndPoliticalSubdivisionsMember2023-01-012023-12-31 0000712771us-gaap:USStatesAndPoliticalSubdivisionsMember2021-12-31 0000712771us-gaap:USStatesAndPoliticalSubdivisionsMember2022-01-012022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:MeasurementInputDiscountRateMemberus-gaap:ValuationTechniqueDiscountedCashFlowMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:MeasurementInputDiscountRateMemberus-gaap:ValuationTechniqueDiscountedCashFlowMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembercnob:AppraisalsOfCollateralValueMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:MaximumMembercnob:AppraisalsOfCollateralValueMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:WeightedAverageMembercnob:AppraisalsOfCollateralValueMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:MinimumMembercnob:AppraisalsOfCollateralValueMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembercnob:AppraisalsOfCollateralValueMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:MaximumMembercnob:AppraisalsOfCollateralValueMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:WeightedAverageMembercnob:AppraisalsOfCollateralValueMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:MinimumMembercnob:AppraisalsOfCollateralValueMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMembercnob:AverageTransferPriceAsPriceToUnpaidPrincipalBalanceMemberus-gaap:MarketApproachValuationTechniqueMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMembercnob:AverageTransferPriceAsPriceToUnpaidPrincipalBalanceMembersrt:MaximumMemberus-gaap:MarketApproachValuationTechniqueMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMembercnob:AverageTransferPriceAsPriceToUnpaidPrincipalBalanceMembersrt:WeightedAverageMemberus-gaap:MarketApproachValuationTechniqueMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMembercnob:AverageTransferPriceAsPriceToUnpaidPrincipalBalanceMembersrt:MinimumMemberus-gaap:MarketApproachValuationTechniqueMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembercnob:AppraisalsOfCollateralValueMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:MaximumMembercnob:AppraisalsOfCollateralValueMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:WeightedAverageMembercnob:AppraisalsOfCollateralValueMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:MinimumMembercnob:AppraisalsOfCollateralValueMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembercnob:AppraisalsOfCollateralValueMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:MaximumMembercnob:AppraisalsOfCollateralValueMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:WeightedAverageMembercnob:AppraisalsOfCollateralValueMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:MinimumMembercnob:AppraisalsOfCollateralValueMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembercnob:AppraisalsOfCollateralValueMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:MaximumMembercnob:AppraisalsOfCollateralValueMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:WeightedAverageMembercnob:AppraisalsOfCollateralValueMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:MeasurementInputComparabilityAdjustmentMembersrt:MinimumMembercnob:AppraisalsOfCollateralValueMember2022-12-31 0000712771us-gaap:CarryingReportedAmountFairValueDisclosureMember2023-12-31 0000712771us-gaap:EstimateOfFairValueFairValueDisclosureMember2023-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-12-31 0000712771us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-12-31 0000712771us-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-31 0000712771us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-31 0000712771us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-31 0000712771us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-31 0000712771srt:ParentCompanyMember2023-01-012023-12-31 0000712771srt:ParentCompanyMember2022-01-012022-12-31 0000712771srt:ParentCompanyMember2021-01-012021-12-31 0000712771srt:ParentCompanyMember2021-12-31 0000712771srt:ParentCompanyMember2020-12-31 00007127712023-10-012023-12-31 00007127712023-07-012023-09-30 00007127712023-04-012023-06-30 00007127712023-01-012023-03-31 00007127712022-10-012022-12-31 00007127712022-07-012022-09-30 00007127712022-04-012022-06-30 00007127712022-01-012022-03-31
 

 

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

(Mark One) 

 

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. 

 

For the Fiscal Year Ended December 31, 2023

 

OR 

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. 

 

 

For the Transition Period from          to        

 

Commission File Number: 000-11486

  

connectone.jpg
 

ConnectOne Bancorp, Inc.(Exact name of registrant as specified in its charter)

New Jersey 

52-1273725 

(State or Other Jurisdiction of

Incorporation or Organization)

(IRS Employer

Identification Number)

 

301 Sylvan Avenue

Englewood Cliffs, New Jersey 07632

(Address of Principal Executive Offices) (Zip Code)

 

201-816-8900

(Registrant’s Telephone Number, Including Area Code)

 

Securities registered pursuant to Section 12(b) of the Exchange Act:

 

Title of each class 

Trading Symbol 

Name of each exchange on which registered 

Common Stock, no par value

CNOB

NASDAQ

Depositary Shares (each representing a 1/40th interest in a share of 5.25% Series A Non-Cumulative, perpetual preferred stock)

CNOBP

NASDAQ

 

Securities registered pursuant to Section 12(g) of the Exchange Act: None

 

Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

 

Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No

 

 

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, a smaller reporting company or emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934.

 

Large Accelerated Filer ☒ 

Accelerated Filer ☐ 

Non-Accelerated ☐ 

Small Reporting Company  

 

   
   

Emerging Growth Company  

 

               If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared its audit report. Yes  No ☐

 

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. 

 

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes  No ☒

 

The aggregate market value of the voting and nonvoting common equity held by nonaffiliates computed by reference to the price at which the common equity was last sold or the average bid and ask price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter - $604.8 million.

 

Shares Outstanding on February 23, 2024

Common Stock, no par value: 38,404,043 shares 

 

DOCUMENTS INCORPORATED BY REFERENCE 

Definitive proxy statement in connection with the 2024 Annual Stockholders Meeting to be filed with the Commission pursuant to Regulation 14A will be incorporated by reference in Part III

 

 

 

CONNECTONE BANCORP, INC.

 

TABLE OF CONTENTS

 

   

Page

PART I

Item 1

Business

5

Item 1A

Risk Factors

21

Item 1B

Unresolved Staff Comments

30
Item 1C Cybersecurity 31

Item 2

Properties

33

Item 3

Legal Proceedings

33

Item 4

Mine Safety Disclosures

33

PART II

Item 5

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

34

Item 6

[Reserved]

36

Item 7

Management’s Discussion and Analysis of Financial Condition and Results of Operations

37

Item 7A

Quantitative and Qualitative Disclosures About Market Risk

66

PART II

Item 8

Financial Statements and Supplementary Data:

67
 

Report of Independent Registered Public Accounting Firm

68
 

Consolidated Statements of Financial Condition

71
 

Consolidated Statements of Income

72
 

Consolidated Statements of Comprehensive Income

73
 

Consolidated Statements of Changes in Stockholders’ Equity

74
 

Consolidated Statements of Cash Flows

75
 

Notes to Consolidated Financial Statements

76

Item 9

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

139

Item 9A

Controls and Procedures

139

Item 9B

Other Information

140

PART III

Item 10

Directors, Executive Officers and Corporate Governance

141

Item 11

Executive Compensation

141

Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

141

Item 13

Certain Relationships and Related Transactions, and Director Independence

141

Item 14

Principal Accounting Fees and Services

141

PART IV

Item 15

Exhibits, Financial Statements Schedules

142

 

Signatures

145

 

Information included in or incorporated by reference in this Annual Report on Form 10-K, other filings with the Securities and Exchange Commission, the Companys press releases or other public statements, contain or may contain forward-looking statements. Please refer to a discussion of the Companys forward-looking statements and associated risks in Item 1 - Business Forward Looking Statements and Item 1A - Risk Factors in this Annual Report on Form 10-K.

 

 

 

CONNECTONE BANCORP, INC.

FORM 10-K

 

PART I

Item 1. Business

 

Forward Looking Statements

 

This report, in Item 1, Item 7 and elsewhere, includes forward-looking statements within the meaning of Sections 27A of the Securities Act of 1933, as amended, and 21E of the Securities Exchange Act of 1934, as amended, that involve inherent risks and uncertainties. These forward-looking statements concern the financial condition, results of operations, plans, objectives, future performance and business of ConnectOne Bancorp, Inc. and its subsidiaries, including statements preceded by, followed by or that include words or phrases such as “believes,” “expects,” “anticipates,” “plans,” “trend,” “objective,” “continue,” “remain,” “pattern” or similar expressions or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) the impact of the COVID-19 pandemic and the government’s response to the pandemic on our operations as well as those of our clients and on the economy generally and in our market area specifically, (2) competitive pressures among depository institutions may increase significantly; (3) changes in the interest rate environment may reduce interest margins; (4) prepayment speeds, loan origination and sale volumes, charge-offs and loan loss provisions may vary substantially from period to period; (5) general economic conditions may be less favorable than expected; (6) political developments, wars or other hostilities may disrupt or increase volatility in securities markets or other economic conditions; (7) legislative or regulatory changes or actions may adversely affect the businesses in which ConnectOne Bancorp, Inc. is engaged; (8) changes and trends in the securities markets may adversely impact ConnectOne Bancorp, Inc.; (9) a delayed or incomplete resolution of regulatory issues could adversely impact our planning; (10) difficulties in integrating any businesses that we may acquire, which may increase our expenses and delay the achievement of any benefits that we may expect from such acquisitions; (11) the impact of reputation risk created by the developments discussed above on such matters as business generation and retention, funding and liquidity could be significant; and (12) the outcome of any future regulatory and legal investigations and proceedings may not be anticipated. Further information on other factors that could affect the financial results of ConnectOne Bancorp, Inc. are included in Item 1A of this Annual Report on Form 10-K and in ConnectOne Bancorp’s other filings with the Securities and Exchange Commission. These documents are available free of charge at the Commission’s website at http://www.sec.gov and/or from ConnectOne Bancorp, Inc. ConnectOne Bancorp, Inc. assumes no obligation to update forward-looking statements at any time.

 

Historical Development of Business

 

ConnectOne Bancorp, Inc., (the “Company” and with ConnectOne Bank, “we” or “us”) a one-bank holding company, was incorporated in the State of New Jersey on November 12, 1982 as Center Bancorp, Inc. and commenced operations on May 1, 1983 upon the acquisition of all outstanding shares of capital stock of Union Center National Bank, its then principal subsidiary.

 

On January 20, 2014, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with ConnectOne Bancorp, Inc., a New Jersey corporation (“Legacy ConnectOne”). Effective July 1, 2014, the Company completed the merger contemplated by the Merger Agreement (the “Merger”) with Legacy ConnectOne merging with and into the Company, with the Company as the surviving corporation. Also, at closing, the Company changed its name to “ConnectOne Bancorp, Inc.” and changed its NASDAQ trading symbol to “CNOB”. Immediately following the consummation of the Merger, Union Center National Bank merged with and into ConnectOne Bank, a New Jersey-chartered commercial bank (“ConnectOne Bank” or the “Bank”) and a wholly-owned subsidiary of Legacy ConnectOne, with ConnectOne Bank continuing as the surviving bank.

 

On July 11, 2018, the Company entered into an Agreement and Plan of Merger with Greater Hudson Bank (“GHB”), under which GHB merged with and into ConnectOne Bank, with ConnectOne Bank as the surviving bank. This transaction was consummated effective January 2, 2019. As part of this merger, the Company acquired approximately $0.4 billion in loans, assumed approximately $0.4 billion in deposits and acquired seven branch offices located in Rockland, Orange and Westchester, Counties, New York.

 

On May 31, 2019, the Company, through the Bank, completed its purchase of all of the assets of New York/Boston-based BoeFly, LLC and contributed them to its newly formed subsidiary, BoeFly, Inc (“BoeFly”). BoeFly’s online business lending marketplace helps connect small- to medium-size businesses, primarily franchisors and franchisees, with professional loan brokers and lenders across the United States. BoeFly operates as an independent brand and subsidiary of the Bank.

 

 

 

On January 2, 2020, the Company completed its in-market merger with Bergen County, New Jersey based Bancorp of New Jersey, Inc. (“BNJ”), pursuant to which BNJ merged with and into the Company, and BNJ’s bank subsidiary, Bank of New Jersey, merged with and into the Bank. All of BNJ’s offices were located in Bergen County, New Jersey. As part of this merger, the Company acquired approximately $0.8 billion in loans and assumed approximately $0.8 billion in deposits.

 

The Company’s primary activity, at this time, is to act as a holding company for the Bank and its other subsidiaries. As used herein, the term “Parent Corporation” shall refer to the Company on an unconsolidated basis.

 

The Company owns 100% of the voting shares of Center Bancorp, Inc. Statutory Trust II, through which it issued trust preferred securities. The trust exists for the exclusive purpose of (i) issuing trust securities representing undivided beneficial interests in the assets of the trust; (ii) investing the gross proceeds of the trust securities in $5.2 million of junior subordinated deferrable interest debentures (subordinated debentures) of the Company; and (iii) engaging in only those activities necessary or incidental thereto. These subordinated debentures and the related income effects are not eliminated in the consolidated financial statements as the statutory business trust is not consolidated in accordance with Financial Accounting Standards Board (“FASB”) ASC 810-10 “Consolidation of Variable Interest Entities.” Distributions on the subordinated debentures owned by the subsidiary trust have been classified as interest expense in the Consolidated Statements of Income. See Note 9 of the Notes to Consolidated Financial Statements.

 

Except as described above, the Company’s direct and indirect subsidiaries are all included in the Company’s consolidated financial statements. These subsidiaries include BoeFly, an advertising subsidiary, a financial services company, and various investment subsidiaries which hold, maintain and manage investment assets for the Company. The Company’s subsidiaries also include a Real Estate Investment Trust (the “REIT”) which holds a portion of the Company’s real estate loan portfolio. All subsidiaries mentioned above are directly or indirectly wholly owned by the Company, except that the Company indirectly owns less than 100% of the preferred stock of the REIT. A REIT must have 100 or more individual shareholders. The REIT has issued less than 20% of its outstanding non-voting preferred stock to individuals, primarily Bank personnel and directors.

 

SEC Reports and Corporate Governance

 

The Company makes its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and amendments thereto available on its website at https://www.connectonebank.com without charge as soon as reasonably practicable after filing or furnishing them to the SEC. Also available on the website is the Company’s corporate Code of Conduct that applies to all of the Company’s employees, including principal officers and directors. Additionally, within the Investor Relations section of the Company’s web site, charters for the Audit and Risk Committee, Nominating and Corporate Governance Committee and Compensation Committee can be found, along with the Company’s Corporate Governance Guidelines, Equal Employment Opportunity and Right to be Free of Gender Inequity 2022, Anti-Harassment & Discrimination Policy, Compensation Recoupment Policy and Code of Ethics.

 

  The Company will provide, without charge, a copy of its Annual Report on Form 10-K to any shareholder by mail. Requests should be sent to:

 

ConnectOne Bancorp, Inc.

Attention: Investor Relations

301 Sylvan Avenue

Englewood Cliffs, New Jersey 07632

 

Narrative Description of the Business

 

ConnectOne Bancorp, Inc. is a modern financial services company with over $9.856 billion in assets. It operates primarily through its bank subsidiary, ConnectOne Bank.

 

ConnectOne Bank is a high-performing commercial bank offering a full suite of deposit and loan products and services to the general public, primarily to small and mid-sized businesses, local professionals and individuals residing, working and conducting business in the New York Metropolitan area and the South Florida market served by our West Palm Beach office. The Bank’s continuous investments in technology coupled with top talent allow ConnectOne to operate a “branch-lite” model, making for a highly efficient operating environment. 

 

BoeFly, a wholly owned subsidiary of ConnectOne Bank, is a fintech marketplace that connects borrowers in the franchise space with funding solutions through a network of partner banks, including the Bank. 

 

 

Our Market Area

 

ConnectOne Bank's offices are located primarily in the New York metro market and span New Jersey, New York City, Long Island, and the Hudson Valley, including Rockland, Orange, and Westchester counties. Through high tech tools and service, the Bank is able to extend its reach supporting clients as they move into new markets, such as South Florida where we opened an office in West Palm Beach in August 2022. Our market area includes some of the most robust markets in the United States. The Bank's goal is to continue to expand and do business to support our clients as they grow. Advances in technology have created new delivery channels that allow us to service clients and maintain business relationships with a reduced-branch model, establishing regional offices that serve as business hubs. The Bank's experience has shown that the key to client acquisition and retention is attracting quality business relationship officers who will frequently go to the client, rather than having the client come to us. 

 

BoeFly operates out of its main offices in Boston, Massachusetts and New York, and has a nationwide presence through its digital business marketplace.

 

Products and Services

 

We derive a majority of our revenue from net interest income (i.e., the difference between the interest we receive on our loans and investment securities and the interest we pay on deposits and borrowings). We offer a broad range of deposit and loan products. In addition, to attract the business of consumer and business clients, we provide an extensive array of other banking services. Products and services provided include personal and business checking accounts, money market accounts, time and savings accounts, credit cards, wire transfers, safe deposit boxes, access to automated teller services and telephone, internet and mobile banking. We offer retirement accounts to consumers and cash management services to business clients that include TreasuryDirect, Automated Clearing House origination, Remote Deposit Capture and digital invoicing.

 

Noninterest bearing demand deposit products include “Totally Free Checking” and “Simply Better Checking” for consumer clients and “Small Business Checking” and “Analysis Checking” for commercial clients. Interest-bearing checking accounts require minimum balances for both consumer and commercial clients and include “Consumer Interest Checking” and “Business Interest Checking”. Money market accounts consist of products that provide a market rate of interest to depositors. Our savings accounts offer paper and/or electronic statements. Time deposits ("TD") are for non-retirement and IRA accounts, generally with initial maturities ranging from 31 days to 60 months, and brokered TDs, which we use for asset liability management purposes and to supplement other sources of funding. Many of our deposit products can be accessed through both our branches and online to provide ease of access to our clients and communities. CDARS/ICS reciprocal deposits are offered based on the Bank’s participation in the IntraFi Network LLC ("the network"), formerly known as Promontory Interfinancial Network. Clients, who are Federal Deposit Insurance Corporation (“FDIC”) insurance sensitive, are able to place large dollar deposits with the Company and the Company utilizes CDARS to place those funds into certificates of deposit issued by other banks in the Network. This occurs in increments of less than the FDIC insurance limits so that both the principal and interest are eligible for FDIC insurance coverage in amounts larger than the insured dollar amount. Unless certain conditions are satisfied, the FDIC considers these funds as brokered deposits.

 

Deposits serve as the primary source of funding for our interest-earning assets, but also generate noninterest revenue through insufficient funds fees, stop payment fees, wire transfer fees, safe deposit rental fees, debit card income, including foreign ATM fees and credit and debit card interchange, and other miscellaneous fees. In addition, the Bank generates additional noninterest revenue associated with residential, commercial and Small Business Administration (“SBA”) loan originations and sales, loan servicing, late fees and merchant services.

 

We offer consumer and commercial business loans on a secured and unsecured basis, revolving lines of credit, commercial mortgage loans, and residential mortgages on both primary and secondary residences, home equity loans, bridge loans and other personal purpose loans. However, we are not and have not historically been a participant in the sub-prime lending market.

 

Commercial loans are loans made for business purposes and are primarily secured by collateral such as business assets including accounts receivable, inventory and equipment. These facilities can also be secured by cash balances with the Bank, marketable securities held by or under the control of the Bank, and commercial and residential real estate.

 

Commercial construction loans are loans to finance the construction of commercial or residential properties secured by first liens on such properties. Commercial real estate loans include loans secured by first liens on completed commercial properties, including multifamily properties, to purchase or refinance such properties, as well as land loans. Residential mortgages include loans secured by first liens on 1-4 family, 1-4 family  investment properties , condominium and cooperative residential real estate and are generally made to existing clients of the Bank to purchase or refinance primary and secondary residences. Home equity loans and lines of credit include loans secured by first or second liens on residential real estate for primary or secondary residences. Consumer loans are made to individuals who qualify for auto loans, cash reserve, credit cards and installment loans.

 

 

The Board of Directors has approved a credit policy granting designated lending authorities to the Management Credit Committee and specific officers of the Bank. The Management Credit Committee is comprised of six members of senior management, the Bank President, Chief Credit Officer, Chief Lending Officer, two Senior Credit Officers and one Managing Director.  The officers are comprised of the Chief Executive Officer, Bank President, Chief Credit Officer, Chief Lending Officer, Senior Credit Officers, Managing Directors, Team Leaders and the Consumer Loan Officers. All loan approvals require the signatures of a minimum of two officers. The Management Credit Committee (Bank President, Chief Credit Officer, Chief Lending Officer, two Senior Credit Officers and one Managing Director) can approve loans up to $80 million in aggregate loan exposure with no policy exceptions. Furthermore, the Management Credit Committee has authority to approve unsecured loan amounts without policy exceptions up to $40 million.  The Senior Lending Group (Chief Executive Officer, President, Chief Credit Officer and Chief Lending Officer) can approve loans up to $35 million in aggregate loan exposure with no policy exceptions and up to $30 million with policy exceptions. Furthermore, the Senior Lending Group has authority to approve unsecured loan amounts without policy exceptions up to $10 million and up to $5 million with an exception. Loans to insiders must be approved by the entire Board of Directors.

 

The Bank’s lending policies generally provide for lending within our primary trade area. However, the Bank will make loans to people outside of our primary trade area when we deem it prudent to do so. To promote a high degree of asset quality, the Bank focuses primarily upon offering secured loans. However, the Bank does make short-term unsecured loans to borrowers with higher net worth and income profiles. The Bank generally requires loan clients to maintain deposit accounts with the Bank. In addition, the Bank generally provides a minimum required rate of interest in its variable rate loans. The Bank’s legal lending limit to any one borrower is 15% of the Bank’s capital base (defined as tangible equity plus the allowance for credit losses) for most loans ($168.2 million) and 25% of the capital base for loans secured by readily marketable collateral ($280.3 million). As of December 31, 2023, the Bank’s largest committed relationship (to several affiliated borrowers) was $173.6 million, and the single largest loan outstanding was $60.0 million.

 

Our business model includes using industry best practices for community banks, including personalized service, state-of-the-art technology, and extended hours. We believe that this will generate deposit accounts with somewhat larger average balances than are found at many other financial institutions. We also use pricing techniques in our efforts to attract banking relationships having larger than average balances.

 

Competition

 

The banking business is highly competitive. We face substantial immediate competition and potential future competition both in attracting deposits and in originating loans. We compete with numerous commercial banks, savings banks and savings and loan associations, many of which have assets, capital and lending limits larger than those that we have. Other competitors include money market mutual funds, mortgage bankers, insurance companies, stock brokerage firms, regulated small loan companies, credit unions and issuers of commercial paper and other securities. In addition, the banking industry in general faces competition for deposit, credit and money management products from non-bank technology firms, or fintech companies, which may offer products independently or through relationships with insured depository institutions.

 

Our larger competitors have greater financial resources to finance wide-ranging advertising campaigns. Additionally, we endeavor to compete for business by providing high quality, personal service to clients, client access to our decision-makers and competitive interest rates and fees. We seek to hire and retain quality employees who desire greater responsibility than may be available working for a larger employer.

 

 

Human Capital

 

The Company strives to be an employer of choice by creating a working environment that fosters excellence, creativity and professional growth.  We strive to challenge our employees to be the best they can be and to provide them with the tools and training they need to help fulfill their critical service mandate.  We endeavor to build a diverse team of financial experts and relationship specialists who understand the demands of a successful business and are prepared to meet them. 

 

Demographics: As of December 31, 2023, we had 487 full-time employees and 12 part-time and temporary employees. The employees are not represented by a collective bargaining unit.

 

Diversity, Equity, & Inclusion: In 2022, we appointed our first Chief Diversity, Equity & Inclusion Officer, with a mandate to focus on workforce diversity, vendor/supplier diversity and cultivating more diverse leadership, among other vital issues.  Employee resource groups (“ERG”) further support this overall commitment and vision, as well as Diversity, Equity, Inclusion, and Belonging in the workplace.  Our first ERG, WomenConnect, was established in January 2023 and follows a mission to empower and foster an inclusive environment where all individuals feel connected and make an impact through: mentorship, leadership, teamwork in the community, and both professional and personal growth opportunities.

 

Education: We encourage and support the growth and development of our employees and, wherever possible, seek to fill positions by promotion and transfer from within the organization. We have formalized our commitment to training, education and mentoring through our ConnectOne University program.

 

coneuniv.jpg

 

ConnectOne University houses our training, leadership development, continuing education and mentorship programs.

Through ConnectOne University, employees:

 

 

Receive and complete required job training related to their position with the Company, such as compliance and ethics training and position specific training. Classes include an ABA approved curriculum as well as other third party and Company proprietary courses; 

 

 

May take classes to attain job specific certifications to help with career development;

 

 

May take continuing education classes related to other positions and operations at the Company;

 

 

May take business related continuing education classes at partner community colleges and other institutions through a New Jersey State grant program;

 

 

May participate in career mentoring programs in which employees meet with senior officers of the Company to discuss career development; and

 

 

May participate in a tuition reimbursement program under which the Company will reimburse employees for up to $5,250 in tuition expense related to approved business-related course work at any school.

 

During 2023, 289 employees participated in our leadership and mentoring programs within ConnectOne University. Additionally, in 2023 we identified two individuals and placed them into a credit rotation program enabling them to move from their current position into a new career path.    

 

We also sponsored two employees to attend the Stonier Graduate School of Banking.  We sponsor employees on an annual basis. This is a competitive process requiring an employee to be nominated by the employee’s manager and then participate in a panel interview.  We continuously assess any skill gaps and are gearing learning for the banking positions of the future.

 

Health and Safety: The safety, health and wellness of our employees is a top priority. The Bank has established wellness programs that include a Preventative Care Incentive Program, flu shot vaccination time-off, as well as health programs & service discounts.

 

 

Benefits & Employee Retention: We offer a wide variety of benefits and incentive rewards to attract, engage, retain and motivate talent.  Included are competitive wages, performance based-bonuses and incentive based-compensation, stock awards, 401(k) Plan with competitive match, medical/dental/vision plans, insurance benefits, voluntary benefits, commuter benefits, health savings accounts, flexible spending accounts, tuition reimbursement, paid time-off, disability, sick/family leave and in addition, we have employee appreciation events that include team building events, community events, softball games, food truck days, and annual “Amazing” award celebrations.  Employee retention helps us to operate efficiently and is key to our ability to compete against larger competitors.

 

The Bank also has Employee Assistance Programs, which provide work/life assistance and resources for all full-time employees.  All services are provided confidentially and at no additional cost.  The Bank encourages a work/life balance by offering hybrid scheduling that combines working remotely, as well as the ability to work out of our offices. 

 

Promotions: We focus on promoting employees from within and leveraging their knowledge of the organization as we continue to grow our Bank. In 2023, 58 employees were promoted into new roles.

 

We continuously assess any skill gaps and are gearing learning for the banking positions of the future.

 

 

 

 

SUPERVISION AND REGULATION

 

The banking industry is highly regulated. Statutory and regulatory controls increase a bank holding company’s cost of doing business and limit the options of its management to deploy assets and maximize income. The following discussion is not intended to be a complete list of all the activities regulated by the banking laws or of the impact of such laws and regulations on the Company or the Bank. It is intended only to briefly summarize some material provisions.

 

Bank Holding Company Regulation

 

The Company is a bank holding company within the meaning of the Bank Holding Company Act of 1956 (the “Holding Company Act”). As a bank holding company, the Company is supervised by the Board of Governors of the Federal Reserve System (“FRB”) and is required to file reports with the FRB and provide such additional information as the FRB may require. The Company and its subsidiaries are subject to examination by the FRB.

 

The Holding Company Act prohibits the Company, with certain exceptions, from acquiring direct or indirect ownership or control of more than 5% of the voting shares of any company which is not a bank and from engaging in any business other than that of banking, managing and controlling banks or furnishing services to subsidiary banks, except that it may, upon application, engage in, and may own shares of companies engaged in, certain businesses found by the FRB to be so closely related to banking “as to be a proper incident thereto.” The Holding Company Act requires prior approval by the FRB of the acquisition by the Company of more than 5% of the voting stock of any other bank. Satisfactory capital ratios and Community Reinvestment Act ratings and anti-money laundering policies are generally prerequisites to obtaining federal regulatory approval to make acquisitions. The policy of the FRB, embodied in FRB regulations, provides that a bank holding company is expected to act as a source of financial and managerial strength to its subsidiary bank(s) and to commit resources to support the subsidiary bank(s) in circumstances in which it might not do so absent that policy.

 

As a New Jersey-charted commercial bank and an FDIC-insured institution, acquisitions by the Bank require approval of the New Jersey Department of Banking and Insurance (the “Banking Department”) and the FDIC, an agency of the federal government. The Holding Company Act does not place territorial restrictions on the activities of non-bank subsidiaries of bank holding companies. The Gramm-Leach-Bliley Act, discussed below, allows the Company to expand into insurance, securities, merchant banking activities, and other activities that are financial in nature, in certain circumstances.

 

Regulation of Bank Subsidiary

 

The operations of the Bank are subject to requirements and restrictions under federal law, including requirements to maintain reserves against deposits, restrictions on the types and amounts of loans that may be granted, and limitations on the types of investments that may be made and the types of services which may be offered. Various consumer laws and regulations also affect the operations of the Bank. There are various legal limitations, including Sections 23A and 23B of the Federal Reserve Act, which govern the extent to which a bank subsidiary may finance or otherwise supply funds to its holding company or its holding company’s non-bank subsidiaries and affiliates. Under federal law, a bank subsidiary may only make loans or extensions of credit to, or invest in the securities of, its parent or the non-bank subsidiaries of its parent (other than direct subsidiaries of such bank which are not financial subsidiaries) or to any affiliate, or take their securities as collateral for loans to any borrower, upon satisfaction of various regulatory criteria, including specific collateral loan to value requirements.

 

 

The Dodd-Frank Act

 

The Dodd-Frank Act, adopted in 2010, will continue to have a broad impact on the financial services industry as a result of the significant regulatory and compliance changes made by the Dodd-Frank Act, including, among other things, (i) enhanced resolution authority over troubled and failing banks and their holding companies; (ii) increased capital and liquidity requirements; (iii) increased regulatory examination fees; (iv) changes to assessments to be paid to the FDIC for federal deposit insurance; and (v) numerous other provisions designed to improve supervision and oversight of, and strengthening safety and soundness for, the financial services sector. Additionally, the Dodd-Frank Act establishes a new framework for systemic risk oversight within the financial system to be distributed among new and existing federal regulatory agencies, including the Financial Stability Oversight Council, the FRB, the Office of the Comptroller of the Currency and the FDIC. A summary of certain provisions of the Dodd-Frank Act is set forth below:

 

 

Minimum Capital Requirements. The Dodd-Frank Act required capital rules and the application of the same leverage and risk-based capital requirements that apply to insured depository institutions to most bank holding companies. In addition to making bank holding companies subject to the same capital requirements as their bank subsidiaries, these provisions (often referred to as the Collins Amendment to the Dodd-Frank Act) were also intended to eliminate or significantly reduce the use of hybrid capital instruments, especially trust preferred securities, as regulatory capital. The Dodd-Frank Act also requires banking regulators to seek to make capital standards countercyclical, so that the required levels of capital increase in times of economic expansion and decrease in times of economic contraction. See “Capital Adequacy Guidelines” for a description of capital requirements adopted by U.S. federal banking regulators in 2013 and the treatment of trust preferred securities under such rules.

   

 

 

The Consumer Financial Protection Bureau (Bureau). The Dodd-Frank Act created the Bureau. The Bureau is tasked with establishing and implementing rules and regulations under certain federal consumer protection laws with respect to the conduct of providers of certain consumer financial products and services. The Bureau has rulemaking authority over many of the statutes governing products and services offered to bank consumers. In addition, the Dodd-Frank Act permits states to adopt consumer protection laws and regulations that are more stringent than those regulations promulgated by the Bureau and state attorneys general are permitted to enforce consumer protection rules adopted by the Bureau against state-chartered institutions. The Consumer Financial Protection Bureau has examination and enforcement authority over all banks and savings institutions with more than $10 billion in assets. Institutions with $10 billion or less in assets will continue to be examined for compliance with the consumer laws by their primary bank regulators. Although the Bank currently has less than $10 billion in assets, and so is not subject to examination by the Bureau, it is likely that the Bank will exceed $10 billion in total assets in the foreseeable future, and so will become subject to examination by the Bureau.

   

 

 

Deposit Insurance. The Dodd-Frank Act made permanent the $250,000 deposit insurance limit for insured deposits. Amendments to the Federal Deposit Insurance Act also revised the assessment base against which an insured depository institution’s deposit insurance premium paid to the Deposit Insurance Fund (“DIF”) will be calculated. Under the amendments, the assessment base is no longer based on the institution’s deposit base, but rather its average consolidated total assets less its average tangible equity during the assessment period. Additionally, the Dodd-Frank Act makes changes to the minimum designated reserve ratio of the DIF, increasing the minimum from 1.15% to 1.35% of the estimated amount of total insured deposits and eliminating the requirement that the FDIC pay dividends to depository institutions when the reserve ratio exceeds certain thresholds. The FDIC has set the designated reserve ratio at 2.0%.

   

 

 

Shareholder Votes. The Dodd-Frank Act requires publicly traded companies like the Company to give shareholders a non-binding vote on executive compensation and so-called “golden parachute” payments in certain circumstances. The Dodd-Frank Act also authorizes the SEC to promulgate rules that would allow shareholders to nominate their own candidates using a company’s proxy materials, which the SEC has adopted.

 

 

Although a significant number of the rules and regulations mandated by the Dodd-Frank Act have been finalized, many of the requirements called for have yet to be fully implemented and will likely be subject to implementing regulations over the course of several years. In addition, some of the requirements of the Dodd-Frank Act that were implemented have already been revised. See “Economic Growth, Regulatory Relief and Consumer Protection Act” below. Given the uncertainty associated with the way the provisions of the Dodd-Frank Act will be implemented by the various regulatory agencies, the full extent of the impact such requirements will have on financial institutions’ operations is unclear. The changes resulting from the Dodd-Frank Act may impact the profitability of our business activities, require changes to certain of our business practices, impose upon us more stringent capital, liquidity and leverage ratio requirements (which, in turn, could require the Company and the Bank to seek additional capital) or otherwise adversely affect our business. These changes may also require us to invest significant management attention and resources to evaluate and make necessary changes in order to comply with new statutory and regulatory requirements.

 

Economic Growth, Regulatory Relief and Consumer Protection Act.

 

The Economic Growth, Regulatory Relief and Consumer Protection Act (“EGRRCPA”), adopted in May of 2018, was intended to provide regulatory relief to midsized and regional banks. While many of its provisions are aimed at larger institutions, such as raising the threshold to be considered a systemically important financial institution to $250 billion in assets from $50 billion in assets, many of its provisions will provide regulatory relief to those institutions with $10 billion or more in assets, as well as to those institutions with less than $10 billion in assets. Among other things, the EGRRCPA increased the asset threshold for depository institutions and holding companies to perform stress tests required under Dodd Frank from $10 billion to $250 billion, exempted institutions with less than $10 billion in consolidated assets from the Volcker Rule, raised the threshold for the requirement that publicly traded holding companies have a risk committee from $10 billion in consolidated assets to $50 billion in consolidated assets, directed the federal banking agencies to adopt a “community bank leverage ratio”, applicable to institutions and holding companies with less than $10 billion in assets, and to provide that compliance with the new ratio would be deemed compliance with all capital requirements applicable to the institution or holding company (See “-Capital Adequacy Guidelines”), and provided that residential mortgage loans meeting certain criteria and originated by institutions with less than $10 billion in total assets will be deemed to meet the “ability to repay rule” under the Truth in Lending Act. In addition, the EGRRCPA limited the definition of loans that would be subject to the higher risk weighting applicable to High Volatility Commercial Real Estate.

 

Certain of the regulations needed to implement the EGRRCPA have yet to be promulgated by the federal banking agencies, and others have not been fully implemented or enforced and so it is still uncertain how full implementation of the EGRRCPA will affect the Company and the Bank.

 

Regulation W

 

Regulation W codifies prior regulations under Sections 23A and 23B of the Federal Reserve Act and interpretative guidance with respect to affiliate transactions. Affiliates of a bank include, among other entities, the bank’s holding company and companies that are under common control with the bank. The Company is considered to be an affiliate of the Bank. In general, subject to certain specified exemptions, a bank or its subsidiaries are limited in their ability to engage in “covered transactions” with affiliates:

 

 

to an amount equal to 10% of the bank’s capital and surplus, in the case of covered transactions with any one affiliate; and

     
 

to an amount equal to 20% of the bank’s capital and surplus, in the case of covered transactions with all affiliates.

 

In addition, a bank and its subsidiaries may engage in covered transactions and other specified transactions only on terms and under circumstances that are substantially the same, or at least as favorable to the bank or its subsidiary, as those prevailing at the time for comparable transactions with nonaffiliated companies. A “covered transaction” includes:

 

 

a loan or extension of credit to an affiliate;

     
 

a purchase of, or an investment in, securities issued by an affiliate;

     
 

a purchase of assets from an affiliate, with some exceptions;

     
 

the acceptance of securities issued by an affiliate as collateral for a loan or extension of credit to any party; and

     
 

the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate.

 

 

Further, under Regulation W:

 

 

a bank and its subsidiaries may not purchase a low-quality asset from an affiliate;

     
 

covered transactions and other specified transactions between a bank or its subsidiaries and an affiliate must be on terms and conditions that are consistent with safe and sound banking practices; and

     
 

with some exceptions, each loan or extension of credit by a bank to an affiliate must be secured by certain types of collateral with a market value ranging from 100% to 130% of the loan value, depending on the type of collateral.

 

Regulation W generally excludes all non-bank and non-savings association subsidiaries of banks which are not “financial subsidiaries” from treatment as affiliates, except to the extent that the FRB decides to treat these subsidiaries as affiliates.

 

FDICIA

 

Pursuant to the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”), each federal banking agency has promulgated regulations, specifying the levels at which an insured depository institution such as the Bank would be considered “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” or “critically undercapitalized,” and to take certain mandatory and discretionary supervisory actions based on the capital level of the institution. To qualify to engage in financial activities under the Gramm-Leach-Bliley Act, all depository institutions must be “well capitalized.”

 

The FDIC’s regulations implementing these provisions of FDICIA provide that an institution will be classified as “well capitalized” if it (i) has a total risk-based capital ratio of at least 10.0%, (ii) has a Tier 1 risk-based capital ratio of at least 8.0%, (iii) has a Tier 1 leverage ratio of at least 5.0%, (iv) has a common equity Tier 1 capital ratio of at least 6.5%, and (v) meets certain other requirements. An institution will be classified as “adequately capitalized” if it (i) has a total risk-based capital ratio of at least 8.0%, (ii) has a Tier 1 risk-based capital ratio of at least 6.0%, (iii) has a Tier 1 leverage ratio of at least 4.0%, has a common equity Tier 1 capital ratio of at least 4.5%, and (v) does not meet the definition of “well capitalized.” An institution will be classified as “undercapitalized” if it (i) has a total risk-based capital ratio of less than 8.0%, (ii) has a Tier 1 risk-based capital ratio of less than 6.0%, (iii) has a Tier 1 leverage ratio of less than 4.0%, or (iv) has a common equity Tier 1 capital ratio of less than 4.5%. An institution will be classified as “significantly undercapitalized” if it (i) has a total risk-based capital ratio of less than 6.0%, (ii) has a Tier 1 risk-based capital ratio of less than 4.0%, (iii) has a Tier 1 leverage ratio of less than 3.0%, or (iv) has a common equity Tier 1 capital ratio of less 3.0%. An institution will be classified as “critically undercapitalized” if it has a tangible equity to total assets ratio that is equal to or less than 2.0%. An insured depository institution may be deemed to be in a lower capitalization category if it receives an unsatisfactory examination rating.

 

In addition, significant provisions of FDICIA required federal banking regulators to impose standards in a number of other important areas to assure bank safety and soundness, including internal controls, information systems and internal audit systems, credit underwriting, asset growth, compensation, loan documentation and interest rate exposure.

 

 

Capital Adequacy Guidelines

 

In December 2010 and January 2011, the Basel Committee on Banking Supervision (the “Basel Committee”) published the final texts of reforms on capital and liquidity generally referred to as “Basel III.” In July 2013, the FRB, the FDIC and the Comptroller of the Currency adopted final rules (the “New Rules”), which implement certain provisions of Basel III and the Dodd-Frank Act. 

 

Under the New Rules, the Company and the Bank are required to maintain the following minimum capital ratios, expressed as a percentage of risk-weighted assets:

 

 

Common Equity Tier 1 Capital Ratio of 4.5% (the “CET1”);

     
 

Tier 1 Capital Ratio (CET1 capital plus “Additional Tier 1 capital”) of 6.0%; and

     
 

Total Capital Ratio (Tier 1 capital plus Tier 2 capital) of 8.0%.

 

In addition, the Company and the Bank will be subject to a leverage ratio of 4% (calculated as Tier 1 capital to average consolidated assets as reported on the consolidated financial statements).

 

The New Rules also require a “capital conservation buffer.” Under this provision, the Company and the Bank are required to maintain a 2.5% capital conservation buffer, which is composed entirely of CET1, on top of the minimum risk-weighted asset ratios described above, resulting in the following minimum capital ratios:

 

 

CET1 of 7%;

     
 

Tier 1 Capital Ratio of 8.5%; and

     
 

Total Capital Ratio of 10.5%.

 

The purpose of the capital conservation buffer is to absorb losses during periods of economic stress. Banking institutions with a CET1, Tier 1 Capital Ratio and Total Capital Ratio above the minimum set forth above but below the capital conservation buffer will face constraints on their ability to pay dividends, repurchase equity and pay discretionary bonuses to executive officers, based on the amount of the shortfall.

 

The implementation of the capital conservation buffer began on January 1, 2016 and was fully phased in on January 1, 2019.

 

The New Rules provide for several deductions from and adjustments to CET1. For example, mortgage servicing rights, deferred tax assets dependent upon future taxable income and significant investments in common equity issued by nonconsolidated financial entities must be deducted from CET1 to the extent that any one of those categories exceeds 10% of CET1 or all such categories in the aggregate exceed 15% of CET1.

 

Under the New Rules, banking organizations such as the Company and the Bank may make a one-time permanent election regarding the treatment of accumulated other comprehensive income items in determining regulatory capital ratios. Effective as of January 1, 2015, the Company and the Bank elected to exclude accumulated other comprehensive income items for purposes of determining regulatory capital.

 

While the New Rules generally require the phase-out of non-qualifying capital instruments such as trust preferred securities and cumulative perpetual preferred stock, holding companies with less than $15 billion in total consolidated assets as of December 31, 2009, such as the Company, may permanently include non-qualifying instruments that were issued and included in Tier 1 or Tier 2 capital prior to May 19, 2010 in Additional Tier 1 or Tier 2 capital until they redeem such instruments or until the instruments mature.

 

 

The New Rules prescribe a standardized approach for calculating risk-weighted assets. Depending on the nature of the assets, the risk categories generally range from 0% for U.S. Government and agency securities, to 600% for certain equity exposures, and result in higher risk weights for a variety of asset categories. In addition, the New Rules provide more advantageous risk weights for derivatives and repurchase-style transactions cleared through a qualifying central counterparty and increase the scope of eligible guarantors and eligible collateral for purposes of credit risk mitigation.

 

Consistent with the Dodd-Frank Act, the New Rules adopt alternatives to credit ratings for calculating the risk-weighting for certain assets.

 

In December 2018, the OCC, the Board of Governors of the Federal Reserve System, and the FDIC approved a final rule to address changes to credit loss accounting under GAAP, including banking organizations’ implementation of ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”). The Company adopted the CECL standard effective January 1, 2021.

 

On September 17, 2019, the federal banking agencies issued a final rule providing simplified capital requirements for certain community banking organizations (banks and holding companies) with less than $10 billion in total consolidated assets, implementing provisions of EGRRCPA discussed above. Under the rule, a qualifying community banking organization would be eligible to elect the community bank leverage ratio framework or continue to measure capital under the existing Basel III requirements set forth in the New Rules. The new rule took effect January 1, 2020, and qualifying community banking organizations could elect to opt into the new community bank leverage ratio (“CBLR”) in their call report for the first quarter of 2020.

 

A qualifying community banking organization (“QCBO”) is defined as a bank, a savings association, a bank holding company or a savings and loan holding company with:

 

 

a leverage capital ratio of greater than 9.0%;

     
 

total consolidated assets of less than $10.0 billion;

     
 

total off-balance sheet exposures (excluding derivatives other than credit derivatives and unconditionally cancelable commitments) of 25% or less of total consolidated assets; and

     
 

total trading assets and trading liabilities of 5% or less of total consolidated assets.

 

A QCBO opting into the CBLR must maintain a CBLR of 9.0%, subject to a two-quarter grace period to come back into compliance, provided that the QCBO maintains a leverage ratio of more than 8.0% during the grace period. A QCBO failing to satisfy these requirements must comply with the Basel III requirements as implemented by the New Rules. The numerator of the CBLR is Tier 1 capital, as calculated under present rules. The denominator of the CBLR is the QCBO’s average assets, calculated in accordance with the QCBO’s Call Report instructions and less assets deducted from Tier 1 capital.

 

The Company and the Bank have elected not to opt into the CBLR.

 

Federal Deposit Insurance and Premiums

 

The deposits of the Bank are insured up to applicable limits by the Deposit Insurance Fund (“DIF”) of the FDIC and are subject to deposit insurance assessments to maintain the DIF.

 

The assessment base for deposit insurance premiums is an institution’s average consolidated total assets minus average tangible equity. In connection with adopting this assessment base calculation, the FDIC lowered total base assessment rates to between 2.5 and 9 basis points for banks in the lowest risk category, and 30 to 45 basis points for banks in the highest risk category. The Company paid $5.7 million and $2.8 million in total FDIC assessments in 2023 and 2022, respectively. The increase from 2023 was attributable to balance sheet growth and a two-basis point increase in the Bank’s initial base rate.

 

 

The FDIC has a designated reserve ratio (DRR), that is, the ratio of the DIF to insured deposits, of 1.35%. The Dodd-Frank Act requires the FDIC to offset the effect on institutions with assets less than $10 billion of the increase in the statutory minimum DRR to 1.35% from the former statutory minimum of 1.15%.

 

The FDIC Board of Directors approved a final rule to implement a special assessment to recover the loss to the Deposit Insurance Fund (DIF) associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank. The Federal Deposit Insurance Act (FDI Act) requires the FDIC to take this action in connection with the systemic risk determination announced on March 12, 2023.

 

The assessment base for the special assessment is equal to an insured depository institution’s (IDI’s) estimated uninsured deposits reported as of December 31, 2022, adjusted to exclude the first $5 billion, applicable either to the IDI, if an IDI is not a subsidiary of a holding company, or at the banking organization level, to the extent that an IDI is part of a holding company with one or more subsidiary IDIs.  The special assessment will be collected at an annual rate of approximately 13.4 basis points for an anticipated total of eight quarterly assessment periods. The special assessment will be collected beginning with the first quarterly assessment period of 2024 (i.e., January 1 through March 31, 2024) with an invoice payment date of June 28, 2024.  The Company accrued $2.1 million as of December 31, 2023 related to this special assessment. 

 

Because the estimated loss pursuant to the systemic risk determination will be periodically adjusted, the FDIC could:

 

 

 ●

Cease collection early, if it has collected enough to recover actual or estimated losses;

 

 

 ●

Extend the special assessment collection period one or more quarters beyond the initial eight-quarter collection period, if actual or estimated losses exceed the amounts collected; and

 

 

 ●

Impose a final shortfall special assessment on a one-time basis after the receiverships for Silicon Valley Bank and Signature Bank terminate, if actual losses exceed the amounts collected.

 

 

 

The Gramm-Leach-Bliley Financial Services Modernization Act of 1999

 

The Gramm-Leach-Bliley Financial Services Modernization Act of 1999 (the “Modernization Act”):

 

 

allows bank holding companies meeting management, capital, and Community Reinvestment Act standards to engage in a substantially broader range of non-banking activities than previously was permissible, including insurance underwriting and making merchant banking investments in commercial and financial companies, if the bank holding company elects to become a financial holding company. Thereafter it may engage in certain financial activities without further approvals;

     
 

allows insurers and other financial services companies to acquire banks;

     
 

removes various restrictions that previously applied to bank holding company ownership of securities firms and mutual fund advisory companies; and

     
 

establishes the overall regulatory structure applicable to bank holding companies that also engage in insurance and securities operations.

 

The Modernization Act also modified other financial laws, including laws related to financial privacy and community reinvestment. The Company has elected not to become a financial holding company.

 

Community Reinvestment Act

 

Under the Community Reinvestment Act (“CRA”), as implemented by FDIC regulations, an insured depository institution has a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including low- and moderate-income neighborhoods. The CRA does not establish specific lending requirements or programs for financial institutions, nor does it limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular community, consistent with the CRA. The CRA requires the FDIC, in connection with its examination of every bank, to assess the bank’s record of meeting the credit needs of its community and to take such record into account in its evaluation of certain applications by such bank. Regulations implementing the CRA were substantially revised in 2023 and the changes will begin to become effective over the next several years. The Company is studying the revisions to determine the impact on its operations, which is uncertain at this time.

 

 

USA PATRIOT Act

 

The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”) gives the federal government powers to address terrorist threats through domestic security measures, surveillance powers, information sharing, and anti-money laundering requirements. By way of amendments to the Bank Secrecy Act, the USA PATRIOT Act encourages information-sharing among bank regulatory agencies and law enforcement bodies. Further, certain provisions of the USA PATRIOT Act impose affirmative obligations on a broad range of financial institutions, including banks, thrift institutions, brokers, dealers, credit unions, money transfer agents and parties registered under the Commodity Exchange Act.

 

Among other requirements, the USA PATRIOT Act imposes the following requirements with respect to financial institutions:

 

 

All financial institutions must establish anti-money laundering programs that include, at a minimum: (i) internal policies, procedures, and controls; (ii) specific designation of an anti-money laundering compliance officer; (iii) ongoing employee training programs; and (iv) an independent audit function to test the anti-money laundering program.

     
 

The Secretary of the Department of Treasury, in conjunction with other bank regulators, is authorized to issue regulations that provide for minimum standards with respect to client identification at the time new accounts are opened.

     
 

Financial institutions that establish, maintain, administer, or manage private banking accounts or correspondent accounts in the United States for non-United States persons or their representatives (including foreign individuals visiting the United States) are required to establish appropriate, specific and, where necessary, enhanced due diligence policies, procedures, and controls designed to detect and report money laundering.

     
 

Financial institutions are prohibited from establishing, maintaining, administering or managing correspondent accounts for foreign shell banks (foreign banks that do not have a physical presence in any country), and will be subject to certain record keeping obligations with respect to correspondent accounts of foreign banks.

     
 

Bank regulators are directed to consider a holding company’s effectiveness in combating money laundering when ruling on Federal Reserve Act and Bank Merger Act applications.

 

The United States Treasury Department has issued a number of implementing regulations which address various requirements of the USA PATRIOT Act and are applicable to financial institutions such as the Bank. These regulations impose obligations on financial institutions to maintain appropriate policies, procedures and controls to detect, prevent and report money laundering and terrorist financing and to verify the identity of their clients.

 

 

Loans to Related Parties

 

The Company’s authority to extend credit to its directors and executive officers, as well as to entities controlled by such persons, is currently governed by the requirements of the Sarbanes-Oxley Act of 2002 and Regulation O promulgated by the FRB. Among other things, these provisions require that extensions of credit to insiders (i) be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those prevailing for comparable transactions with unaffiliated persons and that do not involve more than the normal risk of repayment or present other unfavorable features and (ii) not exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of the Bank’s capital. In addition, the Bank’s Board of Directors must approve all extensions of credit to insiders.

 

Dividend Restrictions

 

The Parent Corporation is a legal entity separate and distinct from the Bank. Virtually all the revenue of the Parent Corporation available for payment of dividends on its capital stock will result from amounts paid to the Parent Corporation by the Bank. All such dividends are subject to the laws of the State of New Jersey, the Banking Act, the Federal Deposit Insurance Act (“FDIA”) and the regulations of the Banking Department and of the FDIC.

 

Under the New Jersey Corporation Act, the Parent Corporation is permitted to pay cash dividends provided that the payment does not leave us insolvent. As a bank holding company under the BHCA, we would be prohibited from paying cash dividends if we are not in compliance with any capital requirements applicable to us, including our required capital conservation buffer. However, as a practical matter, for so long as our major operations consist of ownership of the Bank, the Bank will remain our source of dividend payments, and our ability to pay dividends will be subject to any restrictions applicable to the Bank.

 

The Parent Corporation has a series of outstanding perpetual preferred stock, our 5.25% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A. The rights of the preferred stockholders to receive dividends are senior to the rights of our common holders, although the preferred dividend rights are non-cumulative. Therefore, unless all dividends due on our outstanding preferred stock have been declared and paid for the most recent dividend period, we may not pay a dividend on our common stock or repurchase shares of our common stock.

 

Under the New Jersey Banking Act of 1948, as amended, dividends may be paid by the Bank only if, after the payment of the dividend, the capital stock of the Bank will be unimpaired and either the Bank will have a surplus of not less than 50% of its capital stock or the payment of the dividend will not reduce the Bank’s surplus. The payment of dividends is also dependent upon the Bank’s ability to maintain adequate capital ratios pursuant to applicable regulatory requirements.

 

The FRB has issued a policy statement regarding the payment of dividends by bank holding companies. In general, the FRB’s policies provide that dividends should be paid only out of current earnings and only if the prospective rate of earnings retention by the bank holding company appears consistent with the organization’s capital needs, asset quality and overall financial condition. FRB regulations also require that a bank holding company serve as a source of financial strength to its subsidiary banks by standing ready to use available resources to provide adequate capital funds to those banks during periods of financial stress or adversity and by maintaining the financial flexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary banks where necessary. Under the prompt corrective action laws, the ability of a bank holding company to pay dividends may be restricted if a subsidiary bank becomes undercapitalized, and under regulations implementing the Basel III accord, a bank holding company’s ability to pay cash dividends may be impaired if it fails to satisfy certain capital buffer requirements. These regulatory policies could affect the ability of the Company to pay dividends or otherwise engage in capital distributions.

 

 

 

Item 1A. Risk Factors

 

An investment in our securities involves risks. Stockholders should carefully consider the risks described below, together with all other information contained in this Annual Report on Form 10-K, before making any purchase or sale decisions regarding our securities. If any of the following risks actually occur, our business, financial condition or operating results may be harmed. In that case, the trading price of our securities may decline, and stockholders may lose part or all of their investment in our securities.

 

Risks Applicable to Our Business:

 

The ongoing COVID-19 pandemic and measures intended to prevent its spread could have a material adverse effect on our business, results of operations and financial condition, and such effects will depend on future developments, which are highly uncertain and are difficult to predict.

 

Global health concerns relating to the COVID-19 outbreak and its variants and related government actions taken to reduce the spread of the virus and changes in customer, employer and employee behavior have weighed on and may continue to effect the macroeconomic environment in our New Jersey/New York metropolitan market trade area and have caused economic uncertainty and reduced economic activity. Given the ongoing and dynamic nature of the pandemic, it is difficult to predict the full impact of the COVID-19 pandemic on our business and that of our clients, employees and third-party service providers. The extent of such an impact will depend on future developments, which are highly uncertain.

 

 

 

 

Our growth-oriented business strategy could be adversely affected if we are not able to attract and retain skilled employees or if we lose the services of our senior management team.

 

We may not be able to successfully manage our business as a result of the strain on our management and operations that may result from growth. Our ability to manage growth will depend upon our ability to continue to attract, hire and retain skilled employees. The loss of members of our senior management team, including those officers named in the summary compensation table of our proxy statement, could have a material adverse effect on our results or operations and ability to execute our strategic goals. Our success will also depend on the ability of our officers and key employees to continue to implement and improve our operational and other systems, to manage multiple, concurrent client relationships and to hire, train and manage our employees.

 

We may need to raise additional capital to execute our growth-oriented business strategy.

 

In order to continue our growth, we will be required to maintain our regulatory capital ratios at levels higher than the minimum ratios set by our regulators. We can offer you no assurances that we will be able to raise capital in the future, or that the terms of any such capital will be beneficial to our existing security holders. In the event we are unable to raise capital in the future, we may not be able to continue our growth strategy.

 

We have a significant concentration in commercial real estate loans.

 

Our loan portfolio is made up largely of commercial real estate loans. These types of loans generally expose a lender to a higher degree of credit risk of non-payment and loss than do residential mortgage loans because of several factors, including dependence on the successful operation of a business or a project for repayment, and loan terms with a balloon payment rather than full amortization over the loan term. In addition, commercial real estate loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to one-to four-family residential mortgage loans. Underwriting and portfolio management activities cannot completely eliminate all risks related to these loans. Any significant failure to pay on time by our clients or a significant default by our clients would materially and adversely affect us.

 

As of December 31, 2023, we had $6.5 billion of commercial real estate loans (nonowner-occupied, owner-occupied multifamily and land), including construction loans, which represented 78.1% of loans receivable. Concentrations in commercial real estate are monitored by regulatory agencies and subject to scrutiny. Guidance from these regulatory agencies includes all commercial real estate loans, including commercial construction loans, in calculating our commercial real estate concentration, but excludes owner-occupied commercial real estate loans. Based on this regulatory definition, our commercial real estate loans represented 463% of the Bank’s Tier 1 capital plus the allowance for credit losses on loans.

 

Loans secured by owner-occupied real estate are reliant on the operating businesses to provide cash flow to meet debt service obligations, and as a result may be more susceptible to the general impact on the economic environment affecting those operating companies as well as the real estate.

 

The impact of the COVID-19 pandemic and the development of remote work or hybrid work models on the metropolitan New York area commercial real estate market is uncertain, causing volatility in rents in certain core urban markets. Many other factors, including the exchange rate for the U.S. dollar, potential international trade tariffs, inflation and changes in federal tax laws affecting the deductibility of state and local taxes and mortgage interest could negatively impact our local economy and real estate market. Accordingly, it may be more difficult for commercial real estate borrowers to repay their loans in a timely manner, as commercial real estate borrowers’ ability to repay their loans frequently depends on the successful development and leasing of their properties. The deterioration of one or a few of our commercial real estate loans could cause a material increase in our level of nonperforming loans, which would result in a loss of revenue from these loans and could result in an increase in the provision for credit losses and/or an increase in charge-offs, all of which could have a material adverse impact on our net income. We also may incur losses on commercial real estate loans due to declines in occupancy rates and rental rates, which may decrease property values and may decrease the likelihood that a borrower may find permanent financing alternatives. Any weakening of the commercial real estate market may increase the likelihood of default on these loans, which could negatively impact our loan portfolio’s performance and asset quality. If we are required to liquidate the collateral securing a loan to satisfy the debt during a period of reduced real estate values, we could incur material losses. Any of these events could increase our costs, require management time and attention, and materially and adversely affect us.

 

 

Federal banking agencies have issued guidance regarding high concentrations of commercial real estate loans within bank loan portfolios. The guidance requires financial institutions that exceed certain levels of commercial real estate lending compared with their total capital to maintain heightened risk management practices that address the following key elements: board and management oversight and strategic planning, portfolio management, development of underwriting standards, risk assessment and monitoring through market analysis and stress testing, and maintenance of increased capital levels as needed to support the level of commercial real estate lending. If there is any deterioration in our commercial real estate portfolio or if our regulators conclude that we have not implemented appropriate risk management practices, it could adversely affect our business, and could result in the requirement to maintain increased capital levels. Such capital may not be available at that time and may result in our regulators requiring us to reduce our concentration on commercial real estate loans.

 

If we are limited in our ability to originate loans secured by commercial real estate, we may face greater risk in our loan portfolio.

 

If, because of our concentration of commercial real estate loans, or for any other reasons, we are limited in our ability to originate loans secured by commercial real estate, we may incur greater risk in our loan portfolio. For example, we are and may continue to seek to further increase our growth rate in commercial and industrial loans, including both secured and unsecured commercial and industrial loans. Unsecured loans generally involve a higher degree of risk of loss than do secured loans because, without collateral, repayment is wholly dependent upon the success of the borrowers’ businesses and personal guarantees. Secured commercial and industrial loans are generally collateralized by accounts receivable, inventory, equipment or other assets owned by the borrower and typically include a personal guaranty of the business owner. Compared to real estate, that type of collateral is more difficult to monitor, its value is harder to ascertain, it may depreciate more rapidly, and it may not be as readily saleable if repossessed. Therefore, we may be exposed to greater risk of loss on these credits.

 

The nature and growth rate of our commercial loan portfolio may expose us to increased lending risks.

 

Given the significant growth in our loan portfolio, many of our commercial real estate loans are unseasoned, meaning that they originated relatively recently. As of December 31, 2023, we had $5.9 billion in commercial real estate loans outstanding. Approximately 64.5% of the loans, or $3.8 billion, were originated in the past three years. As a result, it may be difficult to predict the future performance of our loan portfolio. These loans may have delinquency or charge-off levels above our expectations, which could negatively affect our performance.

 

The small-to medium-sized businesses that the Bank lends to may have fewer resources to weather a downturn in the economy, which may impair a borrowers ability to repay a loan to the Bank that could materially harm our operating results.

 

The Bank targets its business development and marketing strategy primarily to serve the banking and financial services needs of small-to medium-sized businesses. These small-to medium-sized businesses frequently have smaller market share than their competition, may be more vulnerable to economic downturns, often need substantial additional capital to expand or compete and may experience significant volatility in operating results. Any one or more of these factors may impair the borrower’s ability to repay a loan. In addition, the success of a small-to medium-sized business often depends on the management talents and efforts of one or two persons or a small group of persons, and the death, disability or resignation of one or more of these persons could have a material adverse impact on the business and its ability to repay a loan. Economic downturns and other events that negatively impact our market areas could cause the Bank to incur substantial credit losses that could negatively affect our results of operations and financial condition.

 

Our ability to maintain our reputation is critical to the success of our business and the failure to do so may materially adversely affect our performance.

 

Our reputation is one of the most valuable components of our business. As such, we strive to conduct our business in a manner that enhances our reputation. This is done, in part, by recruiting, hiring and retaining employees who share our core values of being an integral part of the communities we serve, delivering superior service to our clients and caring about our clients and associates. If our reputation is negatively affected by the actions of our employees or otherwise, our business and, therefore, our operating results may be materially adversely affected.

 

Anti-takeover provisions in our corporate documents and in New Jersey corporate law may make it difficult and expensive to remove current management.

 

Anti-takeover provisions in our corporate documents and in New Jersey law may render the removal of our existing board of directors and management more difficult. Consequently, it may be difficult and expensive for our stockholders to remove current management, even if current management is not performing adequately.

 

 

Competition in originating loans and attracting deposits may adversely affect our profitability.

 

We face substantial competition in originating loans. This competition currently comes principally from other banks, savings institutions, mortgage banking companies, credit unions and other lenders, including online “fintech” companies. Many of our competitors enjoy advantages, including greater financial resources and higher lending limits, a wider geographic presence, more accessible branch office locations, the ability to offer a wider array of services or more favorable pricing alternatives, as well as lower origination and operating costs. This competition could reduce our net income by decreasing the number and size of loans that we originate and the interest rates we may charge on these loans.

 

In attracting deposits, we face substantial competition from other insured depository institutions such as banks, savings institutions and credit unions, as well as institutions offering uninsured investment alternatives, including money market funds. Many of our competitors enjoy advantages, including greater financial resources, more aggressive marketing campaigns, better brand recognition and more branch locations.

 

These competitors may offer higher interest rates than we do, which could decrease the deposits that we attract or require us to increase our rates to retain existing deposits or attract new deposits.

 

We have also been active in competing for New York and New Jersey governmental and municipal deposits. As of December 31, 2023, governmental and municipal deposits accounted for approximately $745.0 million in deposits. The governor of New Jersey has proposed that the state form and own a bank in which governmental and municipal entities would deposit their excess funds, with the state-owned bank then financing small businesses and municipal projects in New Jersey. Although this proposal is in the very early stages, should this proposal be adopted and a state-owned bank formed, it could impede our ability to attract and retain governmental and municipal deposits.

 

Increased deposit competition could adversely affect our ability to generate the funds necessary for lending operations, which may increase our cost of funds.

 

We also compete with non-bank providers of financial services, such as brokerage firms, consumer finance companies, insurance companies and governmental organizations, which may offer more favorable terms. Some of our non-bank competitors are not subject to the same extensive regulations that govern our operations. As a result, such non-bank competitors may have advantages over us in providing certain products and services. This competition may reduce or limit our margins on banking services, reduce our market share and adversely affect our earnings and financial condition.

 

In addition, the banking industry in general faces competition for deposit, credit and money management products from non-bank technology firms, or fintech companies, which may offer products independently or through relationships with insured depository institutions.

 

External factors, many of which we cannot control, may result in liquidity concerns for us.

 

Liquidity risk is the potential that the Bank may be unable to meet its obligations as they come due, capitalize on growth opportunities as they arise, or pay regular dividends because of an inability to liquidate assets or obtain adequate funding on a timely basis, at a reasonable cost and within acceptable risk tolerances.

 

Liquidity is required to fund various obligations, including credit commitments to borrowers, mortgage and other loan originations, withdrawals by depositors, repayment of borrowings, operating expenses, capital expenditures and dividend payments to shareholders.

 

Liquidity is derived primarily from deposit growth and retention; principal and interest payments on loans; prepayment and maturities of loans; principal and interest payments on investment securities; sale, maturity and prepayment of investment securities; net cash provided from operations, and access to other funding sources. In addition, in recent periods we have substantially increased our use of alternate deposit origination channels, such as brokered deposits, including reciprocal deposit services, and internet listing services.

 

 

Our access to funding sources in amounts adequate to finance our activities could be impaired by factors that affect us specifically or the financial services industry in general. Factors that could detrimentally impact our access to liquidity sources include a decrease in the level of our business activity due to market factors or an adverse regulatory action against us, as well as events affecting other market participants, such as failures of other insured depository institutions. In addition, our ability to use alternate deposit origination channels could be substantially impaired if we fail to remain “well capitalized”. Our ability to borrow could also be impaired by factors that are not specific to us, such as a severe disruption of the financial markets or negative views and expectations about the prospects for the financial services industry as a whole. Furthermore, regional and community banks generally have less access to the capital markets than do the national and super-regional banks because of their smaller size and limited analyst coverage. Any decline in available funding could adversely impact our ability to originate loans, invest in securities, meet our expenses, or fulfill obligations such as meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity, business, results of operations and financial condition.

 

Declines in the value of our investment securities portfolio may adversely impact our results.

 

As of December 31, 2023, we had approximately $617.2 million in fair value of investment securities, all of which are classified as available-for-sale. We may be required to record an allowance for credit on our investment securities if they suffer a decline in value below their amortized cost basis that is considered credit related. Numerous factors, including lack of liquidity for re-sales of certain investment securities, absence of reliable pricing information on investment securities, adverse changes in business climate, adverse actions by regulators, or unanticipated changes in the competitive environment could have a negative effect on our investment portfolio in future periods. If an impairment charge is significant enough, it could affect the ability of the Bank to upstream dividends to the Company, which could have a material adverse effect on our liquidity and our ability to pay dividends to shareholders and could also negatively impact our regulatory capital ratios.

 

The Banks ability to pay dividends is subject to regulatory limitations, which, to the extent that the Company requires such dividends in the future, may affect the Companys ability to honor its obligations and pay dividends.

 

As a bank holding company, the Company is a separate legal entity from the Bank and its subsidiaries and does not have significant operations. We currently depend on the Bank’s cash and liquidity to pay our operating expenses and to fund dividends to shareholders. We cannot assure you that in the future the Bank will have the capacity to pay the necessary dividends and that we will not require dividends from the Bank to satisfy our obligations. Various statutes and regulations limit the availability of dividends from the Bank. It is possible, depending upon our and the Bank’s financial condition and other factors, that bank regulators could assert that payment of dividends or other payments by the Bank are an unsafe or unsound practice. In the event that the Bank is unable to pay dividends, we may not be able to service our obligations, as they become due, or pay dividends on our capital stock. Consequently, the inability to receive dividends from the Bank could adversely affect our financial condition, results of operations, cash flows and prospects.

 

In addition, as described under “Capital Adequacy Guidelines,” banks and bank holding companies are required to maintain a capital conservation buffer on top of minimum risk-weighted asset ratios. The capital conservation buffer is 2.5%. Banking institutions which do not maintain capital in excess of the capital conservation buffer will face constraints on the payment of dividends, equity repurchases, and compensation based on the amount of the shortfall. Accordingly, if the Bank fails to maintain the applicable minimum capital ratios and the capital conservation buffer, distributions to the Company may be prohibited or limited.

 

We may not be able to pay dividends on our common stock if we have not made required dividend payments on our outstanding, noncumulative preferred stock.

 

We have a series of outstanding perpetual preferred stock, our 5.25% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A. The rights of the preferred stockholders to receive dividends are senior to the rights of our common holders, although the preferred dividend rights are non-cumulative. Therefore, unless all dividends due on our outstanding preferred stock have been declared and paid for the most recent dividend period provided for under the terms of the preferred stock, we may not pay a dividend on our common stock or repurchase shares of our common stock during that period.

 

 

We may incur impairment to goodwill.

 

We review our goodwill at least annually. Significant negative industry or economic trends, reduced estimates of future cash flows or disruptions to our business, could indicate that goodwill might be impaired. Our valuation methodology for assessing impairment requires management to make judgments and assumptions based on historical experience and to rely on projections of future operating performance. We operate in a competitive environment and projections of future operating results and cash flows may vary significantly from actual results. Additionally, if our analysis results in an impairment to our goodwill, we would be required to record a non-cash charge to earnings in our financial statements during the period in which such impairment is determined to exist. Any such charge could have a material adverse effect on our results of operations.

 

We have grown and may continue to grow through acquisitions. 

 

Since January 1, 2019, we have acquired GHB, BoeFly and BNJ. To be successful as a larger institution, we must successfully integrate the operations and retain the clients of acquired institutions, attract and retain the management required to successfully manage larger operations, and control costs.

 

Future results of operations will depend in large part on our ability to successfully integrate the operations of the acquired institutions and retain the clients of those institutions. If we are unable to successfully manage the integration of the separate cultures, client bases and operating systems of the acquired institutions, and any other institutions that may be acquired in the future, our results of operations may be adversely affected.

 

In addition, to successfully manage substantial growth, we may need to increase noninterest expenses through additional personnel, leasehold and data processing costs, among others. In order to successfully manage growth, we may need to adopt and effectively implement policies, procedures and controls to maintain credit quality, control costs and oversee our operations. No assurance can be given that we will be successful in this strategy.

 

We may be challenged to successfully manage our business as a result of the strain on management and operations that may result from growth. The ability to manage growth will depend on our ability to continue to attract, hire and retain skilled employees. Success will also depend on the ability of officers and key employees to continue to implement and improve operational and other systems, to manage multiple, concurrent client relationships and to hire, train and manage employees.

 

Finally, substantial growth may stress regulatory capital levels, and may require us to raise additional capital. No assurance can be given that we will be able to raise any required capital, or that we will be able to raise capital on terms that are beneficial to stockholders.

 

 

Attractive acquisition opportunities may not be available to us in the future.

 

We expect that other banking and financial service companies, many of which have significantly greater resources than us, will compete with us in acquiring other target companies if we pursue such acquisitions. This competition could increase prices for potential acquisitions that we believe are attractive. Also, acquisitions are subject to various regulatory approvals. If we fail to receive the appropriate regulatory approvals, we will not be able to consummate an acquisition that we believe is in our best interests. Among other things, our regulators will consider our capital, liquidity, profitability, regulatory compliance and levels of goodwill when considering acquisition and expansion proposals. Any acquisition could be dilutive to our earnings and shareholders’ equity per share of our common stock.

 

Hurricanes or other adverse weather or health related events could negatively affect our local economies or disrupt our operations, which would have an adverse effect on our business or results of operations.

 

Hurricanes and other weather events can disrupt our operations, result in damage to our properties and negatively affect the local economies in which we operate. In addition, these weather events may result in a decline in value or destruction of properties securing our loans and an increase in delinquencies, foreclosures and credit losses. Finally, health related events, such as a viral pandemic, could adversely affect the business of our clients and our local economies, thereby adversely affecting our results of operations.

 

The Company will be subject to heightened regulatory requirements when total assets exceed $10 billion.

 

The Company’s total assets were $9.856 billion as of December 31, 2023. Banks with assets in excess of $10 billion are subject to requirements imposed by the Dodd-Frank Act and its implementing regulations, including: the examination authority of the Consumer Financial Protection Bureau to assess compliance with Federal consumer financial laws, imposition of higher FDIC premiums, and reduced debit card interchange fees, all of which increase operating costs and reduce earnings.

 

As the Company approaches $10 billion in total consolidated assets, additional costs have been incurred to prepare for the implementation of these imposed requirements. The Company may be required to invest more significant management attention and resources to evaluate and continue to make any changes necessary to comply with the new statutory and regulatory requirements under the Dodd-Frank Act. Further, Federal financial regulators may require accelerated actions and investments to prepare for compliance before $10 billion in total consolidated assets is exceeded, and may suspend or delay certain regulatory actions, such as approving a proposed merger, if preparations are deemed inadequate. Upon reaching this threshold, the Company faces the risk of failing to meet these requirements, which may negatively impact results of operations and financial condition.

 

   Risks Applicable to the Banking Industry Generally:

 

Recent events impacting the financial services industry.

 

Recent events impacting the financial services industry, including the failures of Silicon Valley Bank, Signature Bank and First Republic Bank, have resulted in increased volatility and reduced valuations of equity and other securities of banks in the capital markets. In addition, the Federal Reserve, in order to combat inflation, has employed quantitative tightening in order to reduce the size of its balance sheet, resulting in increased competition and costs for bank deposits and an increased risk of an economic recession. These recent events have, and could continue to, increase competition for deposits and adversely impact the market price and volatility of the Company’s common stock.

 

These recent events may also result in potentially adverse changes to laws or regulations governing banks and bank holding companies or result in the impositions of restrictions through supervisory or enforcement activities, including higher capital requirements, which could have a material impact on our business. We may be impacted by concerns regarding the soundness or creditworthiness of other financial institutions, which can cause substantial disruption within the financial markets and increased expenses. The cost of resolving the recent bank failures has caused the FDIC to issue additional special assessments and could cause the FDIC to increase premiums or issue additional special assessments in the future.

 

 

Our allowance for credit losses may not be adequate to cover actual losses.

 

Like all financial institutions, we maintain an allowance for credit losses and to provide for loan defaults and nonperformance. The process for determining the amount of the allowance is critical to our financial results and condition. It requires difficult, subjective and complex judgments about the future, as well as the impact of national and regional economic conditions on the ability of our borrowers to repay their loans. If our judgment proves to be incorrect, our allowance may not be sufficient to cover losses in our loan portfolio. Further, state and federal regulatory agencies, as an integral part of their examination process, review our loans and allowance and may require an increase in our allowance for credit losses. Further increases to the allowance could adversely affect our earnings.

 

Changes in interest rates, as well as other actions the Federal Reserve may take may adversely affect our earnings and financial condition.

 

Our net income depends primarily upon our net interest income. Net interest income is the difference between interest income earned on loans, investments and other interest-earning assets and the interest expense incurred on deposits and borrowed funds. The level of net interest income is primarily a function of the average balance of our interest-earning assets, the average balance of our interest-bearing liabilities, and the spread between the yield on such assets and the cost of such liabilities. These factors are influenced by both the pricing and mix of our interest-earning assets and our interest-bearing liabilities which, in turn, are impacted by such external factors as the local economy, competition for loans and deposits, the monetary policy of the Federal Open Market Committee of the Federal Reserve Board of Governors (the “FOMC”), and market interest rates.

 

A sustained increase in market interest rates, such as has been in effect since the first half of 2023, could adversely affect our earnings if our cost of funds increases more rapidly than our yield on our earning assets and compresses our net interest margin. In addition, the economic value of portfolio equity would decline as interest rates increase.

 

Different types of assets and liabilities may react differently, and at different times, to changes in market interest rates. We expect that we will periodically experience gaps in the interest rate sensitivities of our assets and liabilities. That means either our interest-bearing liabilities will be more sensitive to changes in market interest rates than our interest-earning assets, or vice versa. When interest-bearing liabilities mature or re-price more quickly than interest-earning assets, an increase in market rates of interest could reduce our net interest income. Likewise, when interest-earning assets mature or re-price more quickly than interest-bearing liabilities, falling interest rates could reduce our net interest income. We are unable to predict changes in market interest rates, which are affected by many factors beyond our control, including inflation, deflation, recession, unemployment, money supply, domestic and international events and changes in the United States and other financial markets.

 

We also attempt to manage risk from changes in market interest rates, in part, by controlling the mix of interest rate sensitive assets and interest rate sensitive liabilities. However, interest rate risk management techniques are not exact. A rapid increase or decrease in interest rates could adversely affect our results of operations and financial performance.

 

In addition to increases in interest rates, the FOMC has also changed its stance on monetary policy as an additional effort to reduce inflation. Beginning in the second half of 2022, the FOMC began reducing its balance sheet, implementing a program of quantitative tightening to reduce the overall money supply. As a result, we may face greater competition for deposits, resulting in a higher cost of funds and a reduced net interest margin, as well as greater liquidity risk to continue to fund our loan originations. We are unable to predict the duration and ultimate impact of the FOMC’s quantitative tightening program. However, if the program significantly tightens the nation’s money supply, it may adversely affect our results of operations and financial performance. 

 

 

The banking business is subject to significant government regulations.

 

We are subject to extensive governmental supervision, regulation and control. These laws and regulations are subject to change and may require substantial modifications to our operations or may cause us to incur substantial additional compliance costs. In addition, future legislation and government policy could adversely affect the commercial banking industry and our operations. Such governing laws can be anticipated to continue to be the subject of future modification. Our management cannot predict what effect any such future modifications will have on our operations. In addition, the primary focus of Federal and state banking regulation is the protection of depositors and not the shareholders of the regulated institutions.

 

For example, implementation of all required regulations under the Dodd-Frank Act may result in substantial new compliance costs. The Dodd-Frank Act was signed into law on July 21, 2010. Generally, the Dodd-Frank Act is effective the day after it was signed into law, but different effective dates apply to specific sections of the law, many of which will not become effective until various Federal regulatory agencies have promulgated rules implementing the statutory provisions. Ultimately, final implementation the Dodd-Frank Act could have a material adverse impact either on the financial services industry as a whole, or on our business, results of operations and financial condition.

 

These provisions, as well as any other aspects of current or proposed regulatory or legislative changes to laws applicable to the financial industry, may impact the profitability of our business activities and may change certain of our business practices, including the ability to offer new products, obtain financing, attract deposits, make loans, and achieve satisfactory interest spreads, and could expose us to additional costs, including increased compliance costs. These changes also may require us to invest significant management attention and resources to make any necessary changes to operations in order to comply and could therefore also materially and adversely affect our business, financial condition and results of operations.

 

The ultimate effect of certain of these changes on the financial services industry in general, and us in particular, is uncertain at this time.

 

 

The laws that regulate our operations are designed for the protection of depositors and the public, not our shareholders.

 

The federal and state laws and regulations applicable to our operations give regulatory authorities extensive discretion in connection with their supervisory and enforcement responsibilities, and generally have been promulgated to protect depositors and the Deposit Insurance Fund and not for the purpose of protecting shareholders. These laws and regulations can materially affect our future business. Laws and regulations now affecting us may be changed at any time, and the interpretation of such laws and regulations by bank regulatory authorities is also subject to change.

 

We can give no assurance that future changes in laws and regulations or changes in their interpretation will not adversely affect our business. Legislative and regulatory changes may increase our cost of doing business or otherwise adversely affect us and create competitive advantages for non-bank competitors.

 

We cannot predict how changes in technology will impact our business; increased use of technology may expose us to service interruptions or breaches in security.

 

The financial services market, including banking services, is increasingly affected by advances in technology, including developments in:

 

 

Telecommunications;

 

Data processing;

 

Automation;

 

Internet-based banking, including personal computers, mobile phones and tablets;

 

Debit cards and so-called “smart cards”;

 

Remote deposit capture;

 

Artificial Intelligence;

 

Cryptocurrency; and

 

Use of Blockchain.

 

Our ability to compete successfully in the future will depend, to a certain extent, on whether we can anticipate and respond to technological changes. We offer electronic banking services for our consumer and business clients via our website, www.cnob.com, including Internet banking and electronic bill payment, as well as mobile banking by phone. We also offer check cards, ATM cards, credit cards, and automatic and ACH transfers. The successful operation and further development of these and other new technologies will likely require additional capital investments in the future. In addition, increased use of electronic banking creates opportunities for interruptions in service or security breaches, which could expose us to claims by clients or other third parties and damage our reputation. We cannot assure you that we will have sufficient resources or access to the necessary proprietary technology to remain competitive in the future, or that we will be able to maintain a secure electronic environment.

 

Item 1B. Unresolved Staff Comments

 

None.

 

 

Item 1C. Cybersecurity

 

Cybersecurity Risk Management, Strategy and Governance

 

Cybersecurity is a material part of ConnectOne’s business. As a financial institution offering products through multiple digital delivery channels, cybersecurity incidents could have a material effect on the Company, its results of operations and its reputation, although to date the Company has not experienced any cybersecurity incident which has had a material effect on the Company’s business strategy, results of operations or financial condition. See “Item 1A- Risk Factors - We cannot predict how changes in technology will impact our business; increased use of technology may expose us to service interruptions or breaches in security.”

 

Cybersecurity risk is initially overseen at ConnectOne by the management IT Committee (the “ITC”). The members of this committee include, as co-chairs, the Chief Compliance Officer and the Chief Technology Officer.  Additional members are our Information Security Officer, Information Technology (“IT”) Manager, Chief Risk Officer, Chairman & Chief Executive Officer, Chief Strategic Operations Officer, Chief Digital Officer and Chief Brand and Innovation Officer.

 

 

Tarak Patel, Information Security Officer - Mr. Patel has facilitated the management of information security programs at financial institutions for over 17 years.

     
 

Sharif Alexandre, Chief Technology Officer -   Mr. Alexandre has over 20 years industry experience including managing Information Technology and Software Development teams at organizations ranging from technology startups to Fortune 500 companies. He recently oversaw IT operations and currently leads the Software Development and Data Management teams at the Bank.   

     
 

Laura Criscione, Chief Compliance Officer -  Ms. Criscione oversees the company’s Compliance and Information Security.  Ms. Criscione has overseen Compliance and  IT Operations throughout her more than 30-year career in financial institutions.

     
 

Dale Dwaileebe, IT Manager - Mr. Dwaileebe has over 20 years of IT experience, is a current member of Infragard, and holds multiple industry recognized certifications.

     
 

Michael O’Malley, Chief Risk Officer – Mr. O’Malley oversees entity-wide risk management, including cybersecurity related risk.

     
 

Dana Zeller, Chief Strategic Operations Officer – Ms. Zeller’s career has been primarily  in bank operations, in which she has participated in end-to-end implementations and upgrades of core banking technology, from selecting a vendor to managing implementations, to leading enhancement and efficiency initiatives throughout the life of the application.  

     
 

Ali Matera, Chief Digital Officer – Ms. Matera is a technology subject matter expert with over 13 years of IT leadership and over 18 years of financial service experience.  In her career she has been  responsible for technology/digital strategy, enterprise program management, data analytics and IT service management at other financial institutions.

 

In addition to the members above, Frank Sorrentino III, Chairman & Chief Executive Officer and Siya Vansia, Chief Brand & Innovation Officer are also members of the ITC due to their roles in overseeing entity-wide management.

 

 

 

 

In order to ensure that cybersecurity risk management is integrated into the Company’s overall risk management plans, systems and processes, members of the ITC, along with other lines of business heads, report to the management Enterprise Risk Management Committee (the “ERMC”), which in turn reports to the Board Audit and Risk Committee quarterly. The ERMC consists of the Company’s Chief Risk Officer, Chairman & CEO, President, Chief Financial Officer, Treasurer, Chief Compliance Officer, Chief Technology Officer, Chief Strategic Operations Officer and Chief Credit Officer.  In addition, the Company’s Chief Technology Officer attends Company Board of Directors meetings and provides an information technology ("IT") report at each meeting.

 

The Company’s cybersecurity risk mitigation program involves a combination of internal resources and the use of third parties. The Company’s internal IT team performs monthly vulnerability scanning and performs an annual risk assessment based on the National Institute of Standards and Technology Cybersecurity Framework. The results are reported to the ITC. The Company’s IT and compliance staff also review potential cybersecurity threats associated with the Company’s third-party vendors, including performing a review of and obtaining a System of Organization Controls report from all vendors rated as “high risk” by the Company’s internal vendor management program. The Company also has an internal Incident Response Plan and Team, which is charged with overseeing the Company’s response to any cybersecurity incident. The team performs a table-top exercise at least annually to prepare to respond in the event of any actual cybersecurity incident.

 

In addition to these internal resources, the Company uses a third-party vendor to undertake annual penetration and vulnerability testing, with the results reported to the ITC. Finally, the Company’s cybersecurity compliance program is audited by the Bank’s outsourced internal auditor.

 

The Company also maintains insurance which may provide coverage for expenses and certain losses incurred in connection with a cybersecurity incident.

 

 

 

 

Item 2. Properties

 

The Bank operates six banking offices in Bergen County, NJ, in Fort Lee, Englewood Cliffs, Hackensack, Cresskill, Ridgewood and Saddle River; four banking offices in Union County, NJ, consisting of two offices in Union Township, and one office each in Springfield Township, and Summit; one banking office in Morristown in Morris County, NJ; one office in Newark in Essex County, NJ; one office in West New York in Hudson County, NJ; one office in Holmdel in Monmouth County, NJ; one banking office in the borough of Manhattan in New York City, one office in Melville, Nassau County and one financial center in East Hampton, Suffolk County  in Long Island, one in Astoria, Queens and five branches in the Hudson Valley, including in White Plains and Tarrytown, in Westchester County, NY, Bardonia and Blauvelt, in Rockland County, NY and in Middletown, in Orange County, NY, and one financial center in West Palm Beach in Palm Beach County, FL. The Bank’s principal office is located at 301 Sylvan Avenue, Englewood Cliffs, NJ. The principal office is a three-story leased building constructed in 2008.

 

The following table sets forth certain information regarding the Bank’s leased operating locations.

 

Banking Office Location

 

Term

301 Sylvan Avenue, Englewood Cliffs, NJ

 

Term expires November 2028

1 Union Ave, Cresskill, NJ

 

Term expires January 2038

142 John Street, Hackensack, NJ

 

Term expires December 2026

171 East Ridgewood Avenue, Ridgewood, NJ

 

Term expires April 2029

71 East Allendale Road, Saddle River, NJ

 

Term expires May 2032

356 Chestnut Street, Union, NJ

 

Term expires May 2027

545 Morris Avenue, Summit, NJ

 

Term expires January 2034

217 Chestnut Street, Newark, NJ

 

Term expires December 2024

5914 Park Avenue, West New York, NJ

 

Term expires September 2028

963 Holmdel Road, Holmdel, NJ

 

Term expires September 2026

551 Madison Avenue, Suite 201, NY, NY   Term expires May 2032

551 Madison Avenue, Suite 202, NY, NY

 

Term expires October 2028

48 South Service Rd, 2nd Fl, Melville, NY

 

Term expires June 2025

36-19 Broadway, Astoria, NY

 

Term expires August 2028

485 Schutt Rd, Middletown, NY

 

Term expires October 2025

715 Route 304, Bardonia NY

 

Term expires August 2028

567 North Broadway, White Plains NY

 

Term expires September 2028

155 White Plains Rd., Tarrytown NY

 

Term expires December 2026

170 East Erie St, Blauvelt NY

 

Term expires February 2028

625 N Flagler Dr Ste 1002, West Palm Beach, FL

 

Term expires June 2027

78B Park Place, East Hampton, NY   Term expires January 2029

 

Item 3. Legal Proceedings

 

There are no significant pending legal proceedings involving the Company other than those arising out of routine operations. None of these matters would have a material adverse effect on the Company or its results of operations if decided adversely to the Company.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

 

 

PART II

 

Item 5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 

Security Market Information

 

The common stock of the Company is traded on the NASDAQ Global Select Market under the symbol “CNOB”. As of December 31, 2023, the Company had 697 stockholders of record, excluding beneficial owners for whom Cede & Company or others act as nominees.

 

Share Repurchase Program

 

Historically, repurchases have been made from time to time as, in the opinion of management, market conditions warranted, in the open market or in privately negotiated transactions.

 

In September 2021, the Board of Directors authorized the repurchase of up to 2,000,000 shares. The Company may repurchase shares from time to time in the open market, in privately negotiated share 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 plan does not obligate the Company to acquire any particular amount of common stock, and it may be modified or suspended at any time at the Company's discretion. During the year ended December 31, 2023, the Company repurchased a total of 904,152 shares. As of December 31, 2023, shares remaining for repurchase under the program were 933,488.

 

The following table details share repurchases for the year 2023:

 

                           

Cumulative Total

         
                           

Number of Shares

   

Maximum Number

 
                           

Purchased

   

of Shares

 
                           

as Part of Publicly

   

that May Yet

 
           

Total Number

           

Announced

   

Be Purchased

 
   

Shares

   

of Shares

   

Average Price

   

Plans or

   

Under the Plans

 
   

Authorized

   

Purchased

   

Paid per Share

   

Programs

   

or Programs

 
                                      1,827,640  

First quarter 2023

    -       205,163     $ 22.52      

215,163

      1,622,477  

Second quarter 2023

    -       270,000       15.29       485,163       1,352,477  

Third quarter 2023

    -       316,789       19.45       801,952       1,035,688  

Fourth quarter 2023

    -       102,200       21.17       904,152       933,488  

 

Dividends

 

Federal laws and regulations contain restrictions on the ability of the Parent Corporation and the Bank to pay dividends. For information regarding restrictions on dividends, see Part I, Item 1, “Business” and Part II, Item 8, “Financial Statements and Supplementary Data”, Note 18 and Note 21 of the Notes to Consolidated Financial Statements.”

 

Stockholders Return Comparison

 

Set forth on the following page is a line graph presentation comparing the cumulative stockholder return on the Parent Corporation’s common stock, on a dividend reinvested basis, against the cumulative total returns of the NASDAQ Composite and the KBW Bank Index for the period from December 31, 2018 through December 31, 2023.

 

 

COMPARATIVE SIX-YEAR CUMULATIVE TOTAL RETURN
AMONG CONNECTONE BANCORP INC.
NASDAQ AND KBW BANK INDEX

 
graph2023.jpg
 
 

Assumes $100 Invested on December 31, 2018, with Dividends Reinvested
Year Ended December 31, 2023

 

COMPARISON OF CUMULATIVE TOTAL RETURN OF ONE OR MORE
COMPANIES, PEER GROUPS, INDUSTRY INDEXES AND/OR BROAD MARKETS

 

   

Fiscal Year Ending

 

Company/Index/Market

 

12/31/2018

   

12/31/2019

   

12/31/2020

   

12/31/2021

   

12/31/2022

   

12/31/2023

 

ConnectOne Bancorp, Inc.

    100.00       141.36       100.11       186.70       147.11       138.50  

NASDAQ

    100.00       123.87       113.11       154.57       143.87       143.31  

KBW Bank Index

    100.00       136.73       198.33       242.38       163.58       236.70  
 

 

 

Item 6. [Reserved]

 

 

 

Item 7. Managements Discussion and Analysis (MD&A) of Financial Condition and Results of Operations

 

The purpose of this analysis is to provide the reader with information relevant to understanding and assessing the Company’s results of operations for each of the past three years and financial condition for each of the past two years. In order to fully appreciate this analysis, the reader is encouraged to review the consolidated financial statements and accompanying notes thereto appearing under Item 8 of this report, and statistical data presented in this document.

 

Cautionary Statement Concerning Forward-Looking Statements

 

See Item 1 of this Annual Report on Form 10-K for information regarding forward-looking statements.

 

Critical Accounting Policies and Estimates

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The Company considers the allowance for credit losses and related provision to be critical to our financial results. For information on our significant accounting policies, see Note 1a in the Notes to Consolidated Financial Statements.

 

Allowance for Credit Losses and Related Provision

 

The allowance for credit losses is an estimate of current expected credit losses considering available information relevant to assessing collectability of cash flows over the contractual term of the financial assets necessary to cover lifetime expected credit losses inherent in financial assets at the balance sheet date. The methodology for determining the allowance for credit losses is considered a critical accounting policy by management because of the high degree of judgment involved, the subjectivity of the assumptions used, and the potential for changes in the forecasted economic environment that could result in changes to the amount of the recorded allowance for credit losses. The loan portfolio also represents the largest asset type on the Company’s Consolidated Statements of Condition.
 

Management believes the following information may enable investors to better understand the changes in our allowance for credit losses for loans. The Company’s allowance for credit losses ("ACL") for loans totaled $82.0 million and $90.5 million as of December 31, 2023 and 2022, respectively. The $8.5 million decrease in the allowance for credit losses for loans was primarily driven by net charge-offs of $17.0 million, partially offset by $8.4 million in provision for credit losses.

 

The quantitative component of our ACL for loans on collectively evaluated loans, which is largely based on a selection of various economic forecasts, increased by $3.4 million as of December 31, 2023 when compared to December 31, 2022. This increase was primarily attributable to organic growth of $0.3 billion in collectively evaluated loans. The qualitative component of our ACL for loans, which is largely based on management’s judgment of qualitative loss factors, was relatively unchanged, on an absolute basis, over the same period-of-time, as qualitative factor trends slightly improved over 2023, or largely remained unchanged.

 

The Company’s allowance for credit losses for collectively evaluated loans totaled $80.6 million as of December 31, 2023, which included $71.6 million of allowance related to commercial and commercial real estate loans. Of the $71.6 million allowance related to commercial and commercial real estate loans, $24.1 million was attributable to qualitative loss factors. Changes in managements’ judgement of qualitative loss factors could result in a significant change to the allowance for credit losses for loans. As described in Note 1a to our financial statements filed as part of this Annual Report on Form 10-K, qualitative loss factors are applied to each portfolio segment with the amounts judgmentally determined by the relative risk to the most severe loss periods identified in the historical loan charge-offs of a peer group of similar-sized regional banks. As of December 31, 2023, on a weighted average basis the most severe historical loss rate for our commercial and commercial real estate loans were 2.33% and 1.88%, respectively.

 

 

 

The Company’s quantitative component of allowance for credit losses for collectively evaluated loans is calculated with an economic forecast sourced from Moody’s. Management performed a hypothetical sensitivity analysis to understand the impact of changes in the economic forecast as a key input on our allowance for credit losses for collectively evaluated loans. Within the various economic scenarios considered for this hypothetical sensitivity analysis, as of December 31, 2023, the quantitative estimate of the allowance for credit loss for collectively evaluated loans would increase by approximately $39.4 million under sole consideration of an adverse Moody’s economic forecast. The hypothetical sensitivity calculation reflects the sensitivity of the modeled allowance estimate to macroeconomic forecast data but lacks other qualitative overlays and other qualitative adjustments that are part of the quarterly reserving process. As such, this does not necessarily reflect the nature and extent of future changes in the allowance for reasons including increases or decreases in qualitative adjustments, changes in the risk profile and size of the portfolio, changes in the severity of the macroeconomic scenario and the range of scenarios under management consideration.

 

Our allowance for credit losses for individually analyzed loans is determined on an individual basis using the present value of expected cash flows discounted using the loan’s effective interest rate or, for collateral-dependent loans, the fair value of the collateral, less estimated selling costs, as applicable. As of December 31, 2023, the Company’s allowance for credit losses on individually analyzed loans decreased $9.4 million from December 31, 2022. This decrease was primarily due to reductions in individually analyzed loans, increases in charge-offs, and increases in the fair value of collateral for collateral-dependent loans, partially offset by increases to the allowance on existing individually analyzed loans.

 

Overview and Strategy

 

We serve as a holding company for the Bank, which is our primary asset and only operating subsidiary. We follow a business plan that emphasizes the delivery of customized banking services in our market area to clients who desire a high level of personalized service and responsiveness. The Bank conducts a traditional banking business, making commercial loans, consumer loans and residential and commercial real estate loans. In addition, the Bank offers various non-deposit products through non-proprietary relationships with third party vendors. The Bank relies upon deposits as the primary funding source for its assets. The Bank offers traditional deposit products.

 

Many of our clients relationships start with referrals from existing clients. We then seek to cross sell our products to clients to grow the client relationship. For example, we will frequently offer an interest rate concession on credit products for clients that maintain a noninterest-bearing deposit account at the Bank. This strategy has helped maintain our funding costs and the growth of our interest expense even as we have substantially increased our total deposits. It has also helped fuel our significant loan growth. We believe that the Bank’s continued growth and profitability demonstrate the need for and success of our brand of banking.

 

Our results of operations depend primarily on our net interest income, which is the difference between the interest earned on our interest-earning assets and the interest paid on funds borrowed to support those assets, primarily deposits. Net interest margin is the difference between the weighted average rate received on interest-earning assets and the weighted average rate paid to fund those interest-earning assets, which is also affected by the average level of interest-earning assets as compared with that of interest-bearing liabilities. Net income is also affected by the amount of noninterest income and noninterest expenses.

 

General

 

The following discussion and analysis present the more significant factors affecting the Company’s financial condition as of December 31, 2023 and 2022 and results of operations for each of the years in the three-year period ended December 31, 2023. The MD&A should be read in conjunction with the consolidated financial statements, notes to consolidated financial statements and other information contained in this report.

 

 

Operating Results Overview

 

Net income available to common stockholders for the year ended December 31, 2023 was $81.0 million, a decrease of $38.2 million, or 32.1%, compared to net income of $119.2 million for 2022. Diluted earnings per share were $2.07 for 2023, a 31.2% decrease from $3.01 for 2022.

 

The change in net income from 2022 to 2023 was attributable to the following:

 

  Decrease in net interest income of $47.0 million. The decrease was primarily due to an 87 basis-point contraction in the net interest margin to 2.82% from 3.69%, partially offset by a $0.9 billion, or 11.0%, increase in average interest-earning assets. 
     
 

Increase in noninterest expenses of $17.6 million, primarily due to increases in salaries and employee benefits of $7.0 million attributable to increased staff in both the revenue and back-office areas of the Bank, base salary increases and incentive compensation accruals.  Additionally, there were increases in FDIC insurance of $5.5 million, which included a $2.1 million FDIC special assessment recognized in 2023. Excluding the $2.1 million special assessment, the increase in FDIC insurance from the prior year of $3.4 million was attributable to balance sheet growth and a two-basis point increase in the Bank’s initial base rate. Finally, there were increases in information technology and communications of $3.2 million, other expenses of $2.3 million, occupancy and equipment of $1.0 million and marketing and advertising of $0.3 million, partially offset by decreases in professional and consulting of $0.5 million, BoeFly acquisition of $0.5 million and amortization of core deposit intangibles of $0.2 million. The increase in information technology and communications was primarily attributable to additional investments in technology, equipment and software.

     
  Decrease in provision for credit losses of $9.6 million. The decrease was primarily due to changes in forecasted macroeconomic conditions.
     
 

Increase in noninterest income of $0.7 million, primarily due to decreases in net losses on equity securities of $1.4 million and income on bank owned life insurance of $0.7 million, partially offset by decreases in deposit, loan and other income of $1.4 million.

     
 

Decrease in income tax expense of $16.1 million resulting primarily from lower taxable income.

 

Net income available to common stockholders for the year ended December 31, 2022 was $119.2 million, a decrease of $9.5 million, or 7.4%, compared to net income of $128.6 million for 2021. Diluted earnings per share were $3.01 for 2022, a 6.5% decrease from $3.22 for 2021.

 

The change in net income from 2021 to 2022 was primarily attributable to the following:

 

  Increase in net interest income of $39.2 million. The increase in net interest income was due to an increase in average interest-earning assets, which grew by 14.3% to $8.3 billion and a widening of 3 basis-points in the net interest margin.
     
 
Increase in provision for credit losses of $23.3 million. The increase was primarily due to organic loan growth, as well as changes in forecasted macroeconomic conditions
     
 

Increase in noninterest expenses of $17.4 million, primarily due to increases in salaries and employee benefits of $16.9 million attributable to increased staff in both the revenue and back-office areas of the Bank, base salary increases and incentive compensation accruals. Additionally, there were increases in acquisition expenses related to BoeFly of $1.5 million, other expenses of $1.1 million, marketing and advertising of $0.4 million, and FDIC insurance of $0.2 million, partially offset by decreases in occupancy and equipment of $1.8 million, amortization of core deposit intangibles of $0.3 million, professional and consulting of $0.2 million and information technology and communication of $0.2 million. 

     
 

Decrease in noninterest income of $2.4 million, primarily due to decreases in net gains on loans-held-for-sale of $2.1 million, gains on sales of branches of $0.7 million in 2021, decreases in net gains on sale/redemption of investment securities of $0.2 million and an increase in net losses on equity securities of $1.1 million, partially offset by increases in deposit, loan and other income of $0.9 million and income on bank owned life insurance of $0.8 million.

     
 

Increase in income tax expense of $1.3 million resulting primarily from higher state tax rates and a slightly higher percentage of income being derived from taxable sources.
     
  Increase in preferred dividends of $4.3 million.

 

 

Net Interest Income

 

Fully taxable equivalent net interest income for 2023 totaled $258.3 million, a decrease of $46.3 million, or 15.2%, from 2022. The decrease in net interest income was due to an 87 basis-point contraction in the net interest margin to 2.82% from 3.69%, partially offset by a $0.9 billion, or 11.0%, increase in average interest-earning assets.  The net interest margin contraction was due to a 199-basis point increase in the average cost of deposits, including noninterest-bearing demand, to 2.74%, and was partially offset by a 77 basis-point increase in the loan portfolio yield to 5.57%.  Average total loans, which includes loans held-for-sale, increased by 10.8% to $8.2 billion in 2023 from $7.4 billion in 2022. The increase in average total loans is attributable to higher loan originations.

 

Fully taxable equivalent net interest income for 2022 totaled $304.6 million, an increase of $39.9 million, or 15.1%, from 2022. The increase in net interest income was due to an increase in average interest-earning assets, which grew by 14.3% to $8.3 billion and a widening of 3 basis-points in the net interest margin. The widening of the net interest margin was mainly attributable to higher yields on loans and securities and lower average cash balances, offset by a higher cost of funds. Average total loans, which includes loans held-for-sale, increased by 15.0% to $7.4 billion in 2022 from $6.4 billion in 2021. The increase in average total loans is primarily attributable to higher loan originations. 

 

 

Average Balance Sheets

 

The following table sets forth certain information relating to our average assets and liabilities for the years ended December 31, 2023, 2022 and 2021 and reflects the average yield on assets and average cost of liabilities for the periods indicated. Such yields are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods shown.

 

 

Years Ended December 31,

 
 

2023

 

2022

 

2021

 
 

Average

 

Income/

 

Yield/

 

Average

 

Income/

 

Yield/

 

Average

 

Income/

 

Yield/

 

(Tax-Equivalent Basis)

Balance

 

Expense

 

Rate

 

Balance

 

Expense

 

Rate

 

Balance

 

Expense

 

Rate

 
 

(dollars in thousands)

 

ASSETS

                                                     

Interest-earning assets:

                                                     

Investment securities (1) (2)

$ 726,487   $ 22,541     3.10 % $ 660,760   $ 17,640     2.67 % $ 464,342   $ 7,455     1.61 %

Loans receivable and loans held-for-sale (2) (3) (4)

  8,179,853     455,940     5.57 %   7,380,584     354,450     4.80 %   6,419,610     294,686     4.59 %

Federal funds sold and interest-earning deposits with banks

  220,143     11,104     5.04 %   186,205     2,493     1.34 %   322,692     405     0.13 %

Restricted investment in bank stocks

  44,389     3,662     8.25 %   36,744     1,655     4.50 %   20,797     971     4.67 %

Total interest-earning assets

  9,170,872     493,247     5.38 %   8,264,293     376,238     4.55 %   7,227,441     303,517     4.20 %

Noninterest-earning assets:

                                                     

Allowance for credit losses

  (89,119 )               (84,209 )               (79,863 )            

Noninterest-earning assets

  613,642                 602,657                 587,650              

Total assets

$ 9,695,395               $ 8,782,741               $ 7,735,228              
                                                       

LIABILITIES & STOCKHOLDERS’ EQUITY

                                                     

Interest-bearing liabilities:

                                                     

Time deposits

$ 2,529,892   $ 92,969     3.67 % $ 1,449,826   $ 21,331     1.47 % $ 1,300,270   $ 14,813     1.14 %

Other interest-bearing deposits

  3,667,096     113,207     3.09 %   3,702,773     29,230     0.79 %   3,451,765     9,955     0.29 %

Total interest-bearing deposits

  6,196,988     206,176     3.33 %   5,152,599     50,561     0.98 %   4,752,035     24,768     0.52 %
                                                       

Borrowings

  792,239     22,453     2.83 %   661,729     12,188     1.84 %   318,700     5,300     1.66 %

Subordinated debentures

  85,249     6,234     7.31 %   153,092     8,759     5.72 %   153,199     8,669     5.66 %

Finance obligation

  1,630     96     5.89 %   1,838     119     6.47 %   2,041     123     6.03 %

Total interest-bearing liabilities

  7,076,106     234,959     3.32 %   5,969,258     71,627     1.20 %   5,225,975     38,860     0.74 %

Noninterest-bearing deposits

  1,332,809                 1,612,040                 1,454,148              

Other liabilities

  89,122                 51,048                 48,082              

Stockholders’ equity

  1,197,358                 1,150,395                 1,007,023              

Total liabilities and stockholders’ equity

$ 9,695,395               $ 8,782,741               $ 7,735,228              
                                                       

Net interest income/interest rate spread (5)

        258,288     2.06 %         304,611     3.35 %         264,657     3.46 %

Tax-equivalent adjustment

        (3,182 )               (2,492 )               (1,779 )      

Net interest income as reported

      $ 255,106               $ 302,119               $ 262,878        

Net interest margin (6)

              2.82 %               3.69 %               3.66 %

 

(1)

Average balances are based on amortized cost.

(2)

Interest income is presented on a tax equivalent basis using 21% federal tax rate.

(3)

Includes loan fee income and accretion of purchase accounting adjustments.

(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.

 

 

Rate/Volume Analysis

 

The following table presents, by category, the major factors that contributed to the changes in net interest income. Changes due to both volume and rate have been allocated in proportion to the relationship of the dollar amount change in each.

 

   

2023/2022

   

2022/2021

 
   

Increase (Decrease)

   

Increase (Decrease)

 
   

Due to Change in:

   

Due to Change in:

 
   

Average

   

Average

   

Net

   

Average

   

Average

   

Net

 
   

Volume

   

Rate

   

Change

   

Volume

   

Rate

   

Change

 
   

(dollars in thousands)

 

Interest income:

                                               

Investment securities:

  $ 2,039     $ 2,862     $ 4,901     $ 5,244     $ 4,941     $ 10,185  

Loans receivable and loans held-for-sale

    44,551       56,939       101,490       46,150       13,614       59,764  

Federal funds sold and interest-earnings deposits with banks

    1,712       6,899       8,611       (1,827 )     3,915       2,088  

Restricted investment in bank stocks

    631       1,376       2,007       718       (34 )     684  

Total interest income:

  $ 48,933     $ 68,076     $ 117,009     $ 50,285     $ 22,436     $ 72,721  
                                                 

Interest expense:

                                               

Savings, NOW, money market, interest checking

  $ (1,101 )   $ 85,078     $