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ConnectOne Bancorp, Inc. Reports First Quarter 2015 Results; Earnings Momentum and Solid Loan Growth Continues

ENGLEWOOD CLIFFS, N.J., April 24, 2015 (GLOBE NEWSWIRE) -- ConnectOne Bancorp, Inc. (Nasdaq:CNOB) (the "Company" or "ConnectOne"), parent company of ConnectOne Bank (the "Bank"), today announced results for the first quarter ended March 31, 2015, the third full quarter following the Merger between the Company and the legacy ConnectOne completed on July 1, 2014 (the "Merger"). Financial information prior to July 1, 2014 includes only the operations of the Company, the legal and accounting acquirer in the transaction. Concurrent with the Merger, the combined company changed its name to ConnectOne.

For the first quarter of 2015 the Company reported net income available to common stockholders of $10.4 million, or $0.34 per diluted share, compared with net income available to common stockholders of $8.0 million, or $0.27 per diluted share, for the fourth quarter of 2014 and $4.4 million, or $0.27 per diluted share, for the first quarter of 2014.

In addition to the results presented in accordance with generally accepted accounting principles ("GAAP"), ConnectOne routinely supplements its evaluation with an analysis of certain non-GAAP financial measures including net income available to common stockholders excluding non-core items. ConnectOne believes these non-GAAP financial measures, in addition to the related GAAP measures, provide meaningful information to investors in understanding our operating performance and trends, and facilitates comparisons with the performance of peers. Reconciliations of non-GAAP disclosures used in this earnings release to the comparable GAAP measure are provided in the accompanying tables.

First quarter 2015 results reflect the following non-core items (on an after-tax basis): $1.1 million of income recorded as a result of purchase accounting, $0.5 million in additional loan loss provision related to the maturity and extension of acquired portfolio loans, $0.3 million in net securities gains, $0.3 million of pension settlement expenses, which have no impact on total stockholders' equity or book value per share, and $0.1 million in amortization of intangible assets. Excluding non-core items, net income available to common stockholders was $9.9 million, or $0.33 per diluted share, for the first quarter of 2015, $9.7 million, or $0.32 per diluted share, for the fourth quarter of 2014, and $4.2 million, or $0.25 per diluted share, for the first quarter of 2014. (See Supplemental GAAP and non-GAAP Financial Measures for a reconciliation of GAAP earnings and non-core measures for all periods discussed above.)

Frank Sorrentino, ConnectOne's Chairman and CEO stated, "With the Merger integration behind us, we're off to a fast start in 2015 by delivering solid growth for the first quarter. Our GAAP and core earnings increased, our loan portfolio grew sequentially by more than $100 million, and we significantly strengthened our infrastructure with investments in people and systems. Additionally, our core return on average tangible assets was 1.22% and our core return on tangible equity was 13.75% for the quarter. Meanwhile, our efficiency ratio was 42.0%, a level which we believe is sustainable and places ConnectOne among the most efficient banks in the U.S. Looking ahead, we're excited about plans to strengthen our market presence and supplement current growth opportunities with the scheduled opening of our first New York City location during the second quarter of 2015. We remain committed to building on our track record of success and believe we are well positioned to achieve a strong operating performance for the remainder of the year."

Operating Results

Fully taxable equivalent ("FTE") net interest income for the first quarter of 2015 was $28.9 million, an increase of $16.6 million, or 135.4%, from the same quarter of 2014. This was a result of a 112.4% increase in average interest-earning assets and a 40 basis-point widening of the net interest rate margin, both due to the Merger. Included in net interest income during the first quarter of 2015 was $1.8 million of accretion and amortization of purchase accounting adjustments. Excluding these purchase accounting adjustments, the adjusted net interest margin was 3.46% in the first quarter of 2015, 18 basis points higher than the 2014 first quarter adjusted net interest margin of 3.28%. The improvement in the adjusted net interest margin in the first quarter of 2015 versus the same 2014 period was primarily attributable to an improved mix of interest earning assets arising from a greater proportion of average loans in first quarter of 2015 along with a reduction in the average rate paid on borrowings, which resulted from a $70 million debt extinguishment and subsequent refinancing accomplished at the end of the third quarter of 2014. The adjusted net interest margin for the first quarter of 2015 was approximately flat (up 3 basis points) compared with the sequential fourth quarter of 2014; however, assuming a continued low interest rate environment, management expects moderate margin compression over the remainder of 2015.

Noninterest income, excluding net securities gains, totaled $1.0 million in the first quarter of 2015 and $1.1 million for the first quarter of 2014. Securities gains were $0.5 million and $1.4 million for the first quarter of 2015 and 2014, respectively. Non-interest income includes bank-owned life insurance income, deposit and loan fees, annuities and life insurance commissions, and gains on sales of residential mortgages in the secondary market and represents a relatively small portion of the Bank's total revenue. Although management intends to continue its strategy of de-emphasizing service charges in order to attract new and retain existing clients, it expects fee income to increase modestly in 2015.

Noninterest expenses totaled $12.6 million for the first quarter of 2015 compared with $6.4 million (excluding $1.1 million of Merger-related charges) for the same quarter of 2014. The increase in the first quarter of 2015 was primarily attributable to the Merger as well as an increased level of business and staff resulting from organic growth. The Company's operating efficiency ratio (see Supplemental GAAP and non-GAAP Financial Measures) was 42.0% in the 2015 first quarter, 38.4% in the 2014 fourth quarter, and 48.2% in the 2014 first quarter. The decrease from the year-ago quarter reflects realization of Merger cost savings. The increase in the efficiency ratio from the sequential fourth quarter of 2014 was due to increased infrastructure costs, including increased staff levels, and seasonal factors.

Income tax expense was $5.0 million and $1.6 million for the first quarter of 2015 and 2014, respectively, resulting in effective tax rates of 32.6% and 26.8% for the first quarter of 2015 and 2014, respectively. The increase in the effective tax rate for 2015 reflects a decline in the percentage of tax-exempt income to total pretax income. The effective tax rate for the remainder of 2015 is expected to remain fairly constant.

Asset Quality

The provision for loan losses increased to $1.8 million in the first quarter of 2015, compared with $0.6 million in the first quarter of 2014. The increases primarily resulted from higher loan growth and the maturity and extension of acquired portfolio loans.

Nonperforming assets, which includes nonaccrual loans and other real estate owned, were $15.5 million at March 31, 2015, $12.7 million at December 31, 2014, and $3.6 million at March 31, 2014. Nonperforming assets as a percent of total assets was 0.44% at March 31, 2015, 0.37% at December 31, 2014, and 0.22% at March 31, 2014. Annualized net charge-offs were 0.01% for the first quarter 2015 and 0.13% in the first quarter of 2014. The allowance for loan losses was $15.9 million, representing 0.60% of loans receivable and 109.2% of nonaccrual loans at March 31, 2015. At December 31, 2014, the allowance was $14.2 million representing 0.56% of loans receivable and 122.0% of nonaccrual loans, and at March 31, 2014, the allowance was $10.6 million representing 1.08% of loans receivable and 311.9% of nonaccrual loans. In purchase accounting, any allowance for loan losses on an acquired loan portfolio is reversed and a credit risk discount is applied directly to the acquired loan balances. In Management's opinion, a useful non-GAAP metric is the ratio of allowance for loan losses plus the credit risk discount to total loans receivable. This non-GAAP ratio was 1.20% at March 31, 2015, 1.23% at December 31, 2014, and 1.12% at March 31, 2014. (See Supplemental GAAP and non-GAAP Financial Measures).

Selected Balance Sheet Items

At March 31, 2015, the Company's total assets were $3.5 billion, an increase of $0.1 billion from December 31, 2014. Loans were $2.6 billion, an increase of $0.1 billion from December 31, 2014, funded with cash and increases in deposits and borrowings.

The Company's stockholders' equity was $456.2 million at March 31, 2015, an increase of $10.0 million from December 31, 2014. The increase in stockholders' equity was due to an $8.1 million increase in retained earnings, a $0.8 million increase in other comprehensive income (primarily an increase in unrealized gains on available for sale securities and pension plan actuarial gains), and approximately $1.1 million of equity issuance related to stock-based compensation, including the exercise of options.

As of March 31, 2015, the Company's tangible common equity ratio and tangible book value per share were 8.78% and $9.86, respectively. As of December 31, 2014, the tangible common equity ratio and tangible book value per share were 8.62% and $9.57, respectively. Total goodwill and other intangible assets were $150.5 million as of March 31, 2015, a decrease of $0.2 million from December 31, 2014.

About ConnectOne Bancorp, Inc.

ConnectOne is a New Jersey corporation and a registered bank holding company pursuant to the Bank Holding Company Act of 1956, as amended, and serves as the holding company for ConnectOne Bank ("the Bank"). The Bank is a community-based, full-service New Jersey-chartered commercial bank that was founded in 2005. The Bank operates from its headquarters located at 301 Sylvan Avenue in the Borough of Englewood Cliffs, Bergen County, New Jersey, and through its 23 other banking offices.

For more information visit https://www.connectonebank.com/.

Forward-Looking Statements

This news release contains certain forward-looking statements which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," or similar expressions. The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, those factors set forth in Item 1A – Risk Factors of the Company's Annual Report on Form 10-K, as filed with the Securities Exchange Commission, and changes in interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company's market area and accounting principles and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

CONNECTONE BANCORP, INC.
CONSOLIDATED STATEMENTS OF CONDITION
(in thousands, except for share data)

March 31,
December 31,
2015 2014
(unaudited) (audited)
ASSETS
Cash and due from banks $ 30,127 $ 31,813
Interest-bearing deposits with banks 58,416 95,034
Cash and cash equivalents 88,543 126,847
Investment securities:
Securities available-for-sale 276,121 289,532
Securities held-to-maturity, fair value of $240,264 and $231,445 231,720 224,682
Loans held for sale 1,392 --
Loans receivable 2,640,739 2,538,641
Less: Allowance for loan losses (15,933) (14,160)
Net loans receivable 2,624,806 2,524,481
Investment in restricted stock, at cost 24,874 23,535
Bank premises and equipment, net 20,358 20,653
Accrued interest receivable 11,513 11,700
Bank-owned life insurance 52,904 52,518
Other real estate owned 870 1,108
Goodwill 145,909 145,909
Core deposit intangibles 4,584 4,825
Other assets 22,297 22,782
Total assets $ 3,505,891 $ 3,448,572
LIABILITIES & STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest-bearing $ 479,652 $ 492,515
Interest-bearing 2,016,359 1,983,092
Total deposits 2,496,011 2,475,607
Borrowings 525,148 495,553
Subordinated debentures 5,155 5,155
Accounts payable and accrued liabilities 23,383 26,038
Total liabilities 3,049,697 3,002,353
Commitments and Contingencies
Stockholders' Equity
Preferred stock, $1,000 liquidation value per share, authorized 5,000,000 shares; issued and outstanding 11,250 shares of Series B preferred stock at March 31, 2015 and December 31, 2014; total liquidation value of $11,250 at March 31, 2015 and December 31, 2014 11,250 11,250
Common stock, no par value, authorized 50,000,000 shares; issued 31,928,524 shares at March 31, 2015 and 31,758,558 at December 31, 2014; outstanding 29,864,602 shares at March 31, 2015 and 29,694,636 at December 31, 2014 374,287 374,287
Additional paid-in capital 7,084 6,015
Retained earnings 80,526 72,398
Treasury stock, at cost (2,063,922 common shares at March 31, 2015 and December 31, 2014) (16,717) (16,717)
Accumulated other comprehensive loss (236) (1,014)
Total stockholders' equity 456,194 446,219
Total liabilities and stockholders' equity $ 3,505,891 $ 3,448,572
CONNECTONE BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(dollars in thousands, except share data)
Three Months Ended March 31,
2015 2014
Interest income
Interest and fees on loans $ 29,314 $ 10,111
Interest and dividends on investment securities:
Taxable 2,910 3,016
Nontaxable 883 1,056
Dividends 220 154
Interest on federal funds sold and other short-term investments 43 --
Total interest income 33,370 14,337
Interest expense
Deposits 3,025 1,316
Borrowings 2,053 1,411
Total interest expense 5,078 2,727
Net interest income 28,292 11,610
Provision for loan losses 1,825 625
Net interest income after provision for loan losses 26,467 10,985
Noninterest income
Annuity and insurance commissions 86 100
Bank-owned life insurance 386 255
Net gains on sale of loans held for sale 114 36
Deposit, loan and other income 463 715
Net gains on sale of investment securities 506 1,415
Total noninterest income 1,555 2,521
Noninterest expenses
Salaries and employee benefits 6,628 3,332
Occupancy and equipment 2,082 1,080
FDIC insurance 560 300
Professional and consulting 494 255
Marketing and advertising 194 40
Data processing 900 345
Merger-related expenses -- 1,060
Amortization of core deposit intangible 241 --
Other expenses 1,532 1,084
Total noninterest expenses 12,631 7,496
Income before income tax expense 15,391 6,010
Income tax expense 5,012 1,612
Net income 10,379 4,398
Less: Preferred stock dividends 28 28
Net income available to common stockholders $ 10,351 $ 4,370
Earnings per common share:
Basic $ 0.35 $ 0.27
Diluted 0.34 0.27
Weighted average common shares outstanding:
Basic 29,756,855 16,350,183
Diluted 30,148,966 16,405,540
Dividend per common share $ 0.075 $ 0.075
ConnectOne's management believes that the supplemental financial information, including non-GAAP measures, provided below is useful to investors. The non-GAAP measures should not be viewed as a substitute for financial results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP financial measures presented by other companies.
CONNECTONE BANCORP, INC.
SUPPLEMENTAL GAAP AND NON-GAAP FINANCIAL MEASURES
(dollars in thousands, except share data)
Three Months Ended
March 31, Dec. 31, Sept. 30, June 30, March 31,
2015 2014 2014 2014 2014
Earnings, EPS and Operating Data
Net income (GAAP) $ 10,379 $ 8,023 $ 1,766 $ 4,378 $ 4,398
Less: preferred dividends 28 28 28 28 28
Net income available to common stockholders (GAAP) 10,351 7,995 1,738 4,350 4,370
Net gains on sales of securities (506) (718) (111) (574) (1,415)
Partial settlement of pension obligation 559 -- -- -- --
Merger-related expenses -- 1,816 8,784 729 1,060
Loss on debt extinguishment -- -- 4,550 -- --
Amortization of intangible assets 241 245 248 6 6
Provision related to maturity and extension of acquired portfolio loans 757 787 336 -- --
Charge due to wire fraud -- 2,374 -- -- --
Accretion of purchase accounting fair value marks (1,802) (2,491) (2,892) 7 (14)
Non-core items (751) 2,013 10,915 168 (363)
Income tax (expense) benefit (307) 294 4,044 59 (143)
Non-core items, after taxes (444) 1,719 6,871 109 (220)
Core earnings available to common stockholders (non-GAAP) $ 9,907 $ 9,714 $ 8,609 $ 4,459 $ 4,150
Weighted average diluted shares outstanding 30,148,966 30,149,244 30,115,520 16,430,376 16,405,540
Diluted EPS (GAAP) 0.34 $ 0.27 $ 0.06 $ 0.26 $ 0.27
Core Diluted EPS (Non-GAAP) (1) 0.33 $ 0.32 $ 0.29 $ 0.27 $ 0.25
Return on Assets Measures
Core earnings available to common stockholders (non-GAAP) $ 9,907 $ 9,714 $ 8,609 $ 4,459 $ 4,150
Add: preferred dividends 28 28 28 28 28
Core net income (non-GAAP) $ 9,935 $ 9,742 $ 8,637 $ 4,487 $ 4,178
Average assets $ 3,466,820 $ 3,369,402 $ 3,350,599 $ 1,657,440 $ 1,676,936
Less: average intangible assets 150,650 150,934 151,142 16,819 16,825
Average tangible assets $ 3,316,170 $ 3,218,468 $ 3,199,457 $ 1,640,621 $ 1,660,111
Return on avg. assets (GAAP) 1.21% 0.94% 0.21% 1.06% 1.06%
Core return on avg. assets (Non-GAAP) (2) 1.16% 1.15% 1.02% 1.09% 1.01%
Return on avg. tangible assets (Non-GAAP) (3) 1.29% 1.01% 0.24% 1.06% 1.05%
Core return on avg. tangible assets (Non-GAAP) (4) 1.22% 1.20% 1.07% 1.10% 1.02%
__________
(1) Represents core earnings available to common stockholders divided by weighted average diluted shares outstanding.
(2) Core net income divided by average assets.
(3) Net income excluding amortization of intangible assets divided by average tangible assets.
(4) Core net income divided by average tangible assets.
Three Months Ended
(dollars in thousands, except share data) March 31, Dec. 31, Sept. 30, June 30, March 31,
2015 2014 2014 2014 2014
Return on Equity Measures
Core earnings available to common stockholders $ 9,907 $ 9,714 $ 8,609 $ 4,459 $ 4,150
Average common equity $ 442,970 $ 437,136 $ 432,331 $ 165,301 $ 161,934
Less: average intangible assets 150,650 150,934 151,142 16,819 16,825
Average tangible common equity $ 292,320 $ 286,202 $ 281,189 $ 148,482 $ 145,109
Return on avg. common equity (GAAP) 9.48% 7.26% 1.59% 10.56% 10.94%
Core return on avg. common equity (non-GAAP) (5) 9.07% 8.82% 7.90% 10.82% 10.39%
Return on avg. tangible common equity (non-GAAP) (6) 14.56% 11.28% 2.66% 11.63% 11.96%
Core return on avg. tangible common equity (non-GAAP) (7) 13.75% 13.47% 12.15% 12.04% 11.60%
Efficiency Measures
Total noninterest expenses $ 12,631 $ 15,164 $ 25,400 $ 6,744 $ 7,496
Partial settlement of pension obligation (559) -- -- -- --
Merger-related expenses -- (1,816) (8,784) (729) (1,060)
Loss on debt extinguishment -- -- (4,550) -- --
Charge due to wire fraud -- (2,374) -- -- --
Amortization of intangible assets and fair value marks (241) (218) (224) (6) (7)
Operating non-interest expense $ 11,831 $ 10,756 $ 11,842 $ 6,009 $ 6,429
Net interest income (FTE) 28,906 29,135 28,146 12,252 12,255
Impact of purchase accounting fair value marks (1,776) (2,464) (2,868) 7 (14)
Noninterest income 1,555 2,076 1,173 1,724 2,521
Less: net gains on sales of securities (506) (718) (111) (574) (1,415)
Operating revenue $ 28,179 $ 28,029 $ 26,340 $ 13,409 $ 13,347
Operating Efficiency Ratio (non-GAAP) (8) 42.0% 38.4% 45.0% 44.8% 48.2%
Net Interest Margin
Average interest earning assets $ 3,182,894 $ 3,082,934 $ 3,050,564 $ 1,491,297 $ 1,498,610
Net interest income (FTE) $ 28,906 $ 29,135 $ 28,146 $ 12,252 $ 12,282
Impact of purchase accounting fair value marks (1,776) (2,464) (2,868) 7 (14)
Adjusted net interest income $ 27,130 $ 26,671 $ 25,278 $ 12,259 $ 12,268
Net interest margin (GAAP) 3.68% 3.75% 3.66% 3.29% 3.28%
Adjusted net interest margin (non-GAAP) (9) 3.46% 3.43% 3.29% 3.29% 3.28%
__________
(5) Core earnings available to common stockholders divided by average common equity.
(6) Earnings available to common stockholders excluding amortization of intangibles divided by average tangible common equity.
(7) Core earnings available to common stockholders divided by average tangible common equity.
(8) Operating noninterest expense divided by operating revenue.
(9) Adjusted net interest income divided by average interest earning assets.
As of
(dollars in thousands, except share data) March 31, Dec. 31, Sept. 30, June 30, March 31,
2015 2014 2014 2014 2014
Capital Ratios and Book Value per Share
Common equity $ 444,944 $ 434,969 $ 429,650 $ 167,028 $ 162,563
Less: intangible assets (150,493) (150,734) (150,979) (16,815) (16,821)
Tangible common equity $ 294,451 $ 284,235 $ 278,671 $ 150,213 $ 145,742
Total assets $ 3,505,891 $ 3,448,572 $ 3,356,257 $ 1,665,809 $ 1,676,160
Less: intangible assets (150,493) (150,734) (150,979) (16,815) (16,821)
Tangible assets $ 3,355,398 $ 3,297,838 $ 3,205,278 $ 1,648,994 $ 1,659,339
Common shares outstanding 29,864,602 29,694,906 29,644,037 16,413,490 16,369,012
Common equity ratio (GAAP) 12.69% 12.61% 12.80% 10.03% 9.70%
Tangible common equity ratio (non-GAAP) (10) 8.78% 8.62% 8.69% 9.11% 8.78%
Regulatory capital ratios:
Leverage ratio 9.37% 9.37% 9.23% 10.08% 9.79%
Risk-based total 10.74% 10.94% 11.07% 13.43% 13.22%
Book value per share (GAAP) $ 14.90 $ 14.65 $ 14.49 $ 10.18 $ 9.93
Tangible book value per share (non-GAAP) (11) 9.86 9.57 9.40 9.15 8.90
Asset Quality
Nonaccrual loans $ 14,585 $ 11,610 $ 6,083 $ 4,032 $ 3,409
Other real estate owned 870 1,108 1,442 220 220
Total non-performing assets $ 15,455 $ 12,718 $ 7,525 $ 4,252 $ 3,629
Performing troubled debt restructurings $ 1,731 $ 1,763 $ 1,876 $ 1,586 $ 5,706
Loans past due 90 days and still accruing 638 1,211 -- 144 237
Nonaccrual loans as a % of loans receivable 0.55% 0.46% 0.25% 0.40% 0.35%
Nonperforming assets as a % of total assets 0.44% 0.37% 0.22% 0.26% 0.22%
Allowance for loan losses as a % of nonaccrual loans 109.2% 122.0% 199.2% 268.5% 311.9%
Annualized net charge-offs as a % of average loans 0.01% 0.07% 0.03% 0.04% 0.13%
Total loans receivable $ 2,640,739 $ 2,538,641 $ 2,426,765 $ 1,006,256 $ 987,529
Acquired loans 1,110,859 1,190,085 1,286,482 29,821 32,643
Loans receivable, excluding acquired loans $ 1,529,880 $ 1,348,556 $ 1,140,283 $ 976,435 $ 954,886
Allowance for loan losses $ 15,933 $ 14,160 $ 12,118 $ 10,825 $ 10,633
Accretable credit risk discount on acquired loans 15,800 17,017 18,835 371 429
Total allowance for loan losses and accretable credit risk discount on acquired loans $ 31,733 $ 31,177 $ 30,953 $ 11,196 $ 11,062
Allowance for loan losses as a % of loans receivable 0.60% 0.56% 0.50% 1.08% 1.08%
Allowance for loan losses as a % of loans receivable, excluding acquired loans 1.04% 1.05% 1.06% 1.11% 1.11%
Allowance for loan losses and accretable credit risk discount on loans as a % of loans receivable 1.20% 1.23% 1.28% 1.11% 1.12%
__________
(10) Tangible common equity divided by tangible assets.
(11) Tangible common equity divided by common shares outstanding at period-end.
CONNECTONE BANCORP, INC.
NET INTEREST MARGIN ANALYSIS
(dollars in thousands)
For the Three Months Ended
March 31, 2015 March 31, 2014
Average Average Average Average
Interest-earning assets: Balance Interest Rate (7) Balance Interest Rate (7)
Investment securities (1) (2) $ 509,931 $ 4,268 3.39% $ 526,526 $ 4,682 3.56%
Loans receivable (2) (3) (4) 2,571,552 29,453 4.65% 963,098 10,214 4.24%
Federal funds sold and interest-bearing deposits with banks 76,138 43 0.23% -- -- -- %
Restricted investment in bank stock 25,273 220 3.54% 8,986 113 5.03%
Total interest-earning assets 3,182,894 33,984 4.33% 1,498,610 15,009 4.01%
Allowance for loan losses (14,749) (10,358)
Non-interest earning assets 298,675 188,684
Total assets $ 3,466,820 $ 1,676,936
Interest-bearing liabilities:
Money market deposits $ 707,474 722 0.41% $ 430,086 519 0.48%
Savings deposits 222,613 162 0.29% 162,621 127 0.31%
Time deposits 688,989 1,818 1.07% 171,145 368 0.86%
Other interest-bearing deposits 349,628 323 0.37% 349,361 302 0.35%
Total interest-bearing deposits 1,968,704 3,025 0.62% 1,113,213 1,316 0.47%
Borrowings 534,052 1,968 1.49% 146,500 1,372 3.75%
Capital lease obligation 2,989 45 6.10% -- -- -- %
Subordinated debentures 5,155 40 3.14% 5,155 39 3.03%
Total interest-bearing liabilities 2,510,900 5,078 0.82% 1,264,868 2,727 0.86%
Demand deposits 481,500 225,407
Other liabilities 20,200 13,477
Total noninterest-bearing liabilities 501,700 238,884
Stockholders' equity 454,220 173,184
Total liabilities and stockholders' equity $ 3,466,820 $ 1,676,936
Net interest income (tax equivalent basis) 28,906 12,282
Net interest spread (5) 3.51% 3.15%
Net interest margin (6) 3.68% 3.28%
Tax equivalent adjustment (614) (672)
Net interest income $ 28,292 $ 11,610
__________
(1) Average balances are calculated on amortized cost.
(2) Interest income is presented on a tax equivalent basis using 35 percent federal tax rate.
(3) Includes loan fee income.
(4) Loans include non-accrual loans.
(5) Represents difference between the average yield on interest earning assets and the average cost of interest bearing
liabilities and is presented on a tax equivalent basis.
(6) Represents net interest income on a tax equivalent basis divided by average total interest-earning assets.
(7) Rates are annualized.

CONTACT: Investor Contact: William S. Burns Executive VP & CFO 201.816.4474; bburns@cnob.com Media Contact: Dawn Lauer, MWW 212.827.3744; dlauer@mww.comSource:ConnectOne Bank