EXHIBIT 99.1
ConnectOne Bancorp, Inc. Reports Second Quarter 2021 Results; Declares Common Dividend
ENGLEWOOD CLIFFS, N.J., July 29, 2021 (GLOBE NEWSWIRE) -- ConnectOne Bancorp, Inc. (Nasdaq: CNOB) (the “Company” or “ConnectOne”), parent company of ConnectOne Bank (the “Bank”), today reported net income of $32.2 million for the second quarter of 2021 compared with $33.0 million for the first quarter of 2021 and $14.8 million for the second quarter of 2020. Diluted earnings per share were $0.81 for the second quarter of 2021 compared with $0.82 in the first quarter of 2021 and $0.37 in the second quarter of 2020. The decrease in net income and diluted earnings per share from the first quarter of 2021 was primarily due to a $4.1 million decrease in the release of provision for credit losses, partially offset by a $1.9 million increase in net interest income, a $1.0 million increase in noninterest income, and a $0.2 million decrease income tax expense. The increase in net income and diluted earnings per share from the second quarter of 2020 was primarily due to a $16.7 million decrease in the provision for credit losses, a $2.2 million increase in net interest income, a $6.8 million decrease in noninterest expenses, offset by an $8.1 million increase in income tax expense.
Frank Sorrentino, ConnectOne’s Chairman and Chief Executive Officer stated, “We are extremely pleased with our second quarter results highlighted by strong earnings, continued net interest margin expansion, an increase in noninterest income and best-in-class efficiency. We continued to deliver outstanding performance metrics, further solidifying our status as a top performer in the banking industry. This quarter’s pre-tax, pre-provision earnings as a percent of assets was 2.19%, return on assets was 1.71%, our return on tangible common equity was 17.8% while our tangible book value per share increased another 4% sequentially, to $18.76.”
“Our proactive, client-first approach has resulted in robust lending opportunities across our markets and beyond, delivering strong second quarter loan growth, especially towards the end of period, resulting in annualized sequential loan growth, net of Paycheck Protection Program (“PPP”) forgiveness, in excess of 20%. We remain focused on leveraging our strong technological foundation by investing in infrastructure, communication tools and digital channels to remain well-positioned for continued growth. During the quarter we benefited once again from BoeFly’s involvement in the latest round of PPP, as our fintech subsidiary continues to increase its relationships with borrowers and banking partners, further driving its revenue growth.”
“ConnectOne will continue to pursue attractive opportunities to expand our valuable franchise. While we remain disciplined in our approach to growth, the dislocation in our marketplace--resulting directly from increased M&A activity--provides ConnectOne with meaningful opportunities to expand, grow and leverage our franchise organically.”
Dividend Declaration
The Company announced that its Board of Directors declared a cash dividend on its common stock of $0.11 per share. The dividend will be paid on September 1, 2021 to shareholders of record on August 16, 2021.
Operating Results
Fully taxable equivalent net interest income for the second quarter of 2021 was $63.4 million, an increase of $1.8 million, or 3.0%, from the first quarter of 2021 resulting primarily from a 0.7% increase in average interest-earning assets, and a 4 basis-point widening of the net interest margin to 3.60% from 3.56%. Excluding purchase accounting adjustments, the adjusted net interest margin was 3.49% for the second quarter of 2021 and 3.44% for the first quarter of 2021. The net interest margin widened as a result of continued improvement in the Bank’s cost and mix of funding sources, which more than offset a declining yield on loans and investment securities. This was the seventh consecutive quarter that the Bank’s net interest margin widened. Included in interest income in both the first and second quarters of 2021 was the accretion of PPP fee income of approximately $2.3 million. Remaining deferred and unrecognized PPP fees were $9.4 million as of June 30, 2021.
Fully taxable equivalent net interest income for the second quarter of 2021 increased by $2.2 million, or 3.5%, from the second quarter of 2020. The increase from the second quarter of 2020 resulted primarily from a 16 basis-point widening of the net interest margin to 3.60% from 3.44%, offset by a 1.5% decrease in interest-earning assets, largely due to lower levels of PPP loans. The widening of the net interest margin resulted from a 53 basis-point reduction in the cost of interest-bearing liabilities, partially offset by a 27 basis-point reduction in the yield on average interest-earning assets.
The Company continues to gain momentum in building core noninterest revenue. Noninterest income was $4.5 million in the second quarter of 2021, $3.4 million in the first quarter of 2021 and $4.6 million in the second quarter of 2020. Non-core items included, during the current quarter, $0.7 million in BoeFly PPP referral income and $0.2 million in securities gains; during the first quarter 2021, $0.7 million gain on the sale of branches and a $0.2 million loss on equity securities; and during the second quarter 2020, $2.3 million of BoeFly PPP referral income. Excluding the aforementioned non-core items, noninterest income increased to $3.6 million during the second quarter of 2021 from $2.9 million during the first quarter of 2021 and $2.3 million during the second quarter of 2020. Primary contributors to the increase are gains on the sale of commercial and SBA loans, and BoeFly’s growing business volumes.
Noninterest expenses totaled $26.3 million for the second quarter of 2021, $26.5 million for the first quarter of 2021 and $33.1 million for the second quarter of 2020. Noninterest expenses decreased $0.2 million from the first quarter of 2021 which resulted from decreases in FDIC insurance expense of $0.4 million and salaries and employee benefits of $0.3 million, partially offset by increases in other expenses of $0.3 million, professional and consulting expenses of $0.2 million and data processing of $0.1 million. Included in noninterest expenses during the second quarter of 2020 were merger-related expenses of $5.2 million and an additional $2.3 million in expenses related to the BoeFly acquisition. Excluding these two items, noninterest expenses during the second quarter of 2021 increased by $0.7 million when compared to the second quarter of 2020. This increase is mainly attributable to increases in salaries and employee benefits of $0.8 million, professional and consulting expenses of $0.4 million and other expenses of $0.2 million, partially offset by decreases in FDIC insurance expense of $0.5 million and marketing and advertising expenses of $0.1 million. The Company continues to invest in building its revenue generating capabilities, which is expected to increase non-interest expenses in the second half of 2021. Notwithstanding these expected expense increases, the Company remains focused on maintaining an efficiency ratio of approximately 40% or lower.
Income tax expense was $10.7 million for the second quarter of 2021, $10.9 million for the first quarter of 2021 and $2.5 million for the second quarter of 2020. The effective tax rates for the second quarter of 2021, first quarter of 2021 and second quarter of 2020 were 24.8%, 24.8% and 14.5%, respectively. The higher effective tax rate during the first half of 2021 when compared to the second quarter of 2020 resulted from a lower proportion of income from non-taxable sources.
Asset Quality
The (reversal of) provision for credit losses was $(1.6) million for the second quarter of 2021, $(5.8) million for the first quarter of 2021 and $15.0 million for the second quarter of 2020. The release of allowance for credit losses during the first two quarters of 2021 was the result of the continually improving macro-economic outlook during the first half of 2021. The elevated provision for loan losses for the second quarter of 2020 was due to the continued economic uncertainties of the COVID-19 pandemic, including consideration of related borrower payment deferrals requested and/or granted to date. As of June 30, 2021, the Bank had 79 loans on deferral, with a total balance of approximately $100 million. Of that total, $24.5 million, or 0.4% of loans receivable, were nonpayment deferrals, while the remaining $75.5 million, or 1.2% of loans receivable, were modifications in which borrowers are making modified principal and interest payments.
Nonperforming assets, which includes nonaccrual loans and other real estate owned, were $56.2 million as of June 30, 2021, $61.7 million as of December 31, 2020 and $64.6 million as of June 30, 2020. Nonperforming assets as a percentage of total assets were 0.73% as of June 30, 2021, 0.82% as of December 31, 2020 and 0.85% as of June 30, 2020. Nonaccrual loans were $56.2 million as of June 30, 2021, $61.7 million as of December 31, 2020 and $64.6 million as of June 30, 2020, representing a ratio of nonaccrual loans to loans receivable of 0.88%, 0.99% and 1.01%, respectively. The annualized net loan charge-offs (recoveries) charge-off ratio was 0.01% for the second quarter of 2021, (0.00)% for the first quarter of 2021 and 0.03% for the second quarter of 2020. The allowance for credit losses represented 1.23%, 1.27%, and 1.08% of loans receivable as of June 30, 2021, December 31, 2020 and June 30, 2020, respectively. Excluding PPP loans, the allowance for credit losses represented 1.29%, 1.36%, and 1.17% of loans receivable as of June 30, 2021, December 31, 2020 and June 30, 2020, respectively. The allowance for credit losses as a percentage of nonaccrual loans was 140% as of June 30, 2021, 128.4% as of December 31, 2020 and 106.4% as of June 30, 2021.
Selected Balance Sheet Items
The Company’s total assets were $7.7 billion, an increase of $162.7 million from December 31, 2020. Loans receivable were $6.4 billion, an increase of $171.6 million from December 31, 2020. The increase in loans receivable was attributable to higher, non-PPP, loan originations, offset by decreases in PPP loans resulting from forgiveness activity. As of June 30, 2021, PPP loans totaled $326.8 million, down $70.7 million when compared to $397.5 million as of December 31, 2020.
The Company’s stockholders’ equity was $965.0 million as of June 30, 2021, an increase of $49.7 million from December 31, 2020. The increase in stockholders’ equity was primarily attributable to an increase in retained earnings of $54.3 million, offset by decreases in accumulated other comprehensive income of $3.0 million and an increase in treasury Stock of $2.4 million. As of June 30, 2021, the Company’s tangible common equity ratio and tangible book value per share were 9.97% and $18.76, respectively. As of December 31, 2020, the tangible common equity ratio and tangible book value per share were 9.50% and $17.49, respectively. Total goodwill and other intangible assets were approximately $218.3 million as of June 30, 2021 and $219.2 million as of December 31, 2020.
Use of Non-GAAP Financial Measures
In addition to the results presented in accordance with Generally Accepted Accounting Principles ("GAAP"), ConnectOne routinely supplements its evaluation with an analysis of certain non-GAAP measures. ConnectOne believes these non-GAAP financial measures, in addition to the related GAAP measures, provide meaningful information to investors in understanding our operating performance and trends. These non-GAAP measures have inherent limitations and are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for an analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Reconciliations of non-GAAP financial measures disclosed in this earnings release to the comparable GAAP measures are provided in the accompanying tables.
Second Quarter 2021 Results Conference Call
Management will also host a conference call and audio webcast at 10:00 a.m. ET on July 29, 2021 to review the Company's financial performance and operating results. The conference call dial-in number is 201-689-8471, access code 13720876. Please dial in at least five minutes before the start of the call to register. An audio webcast of the conference call will be available to the public, on a listen-only basis, via the "Investor Relations" link on the Company's website https://www.ConnectOneBank.com or at http://ir.connectonebank.com.
A replay of the conference call will be available beginning at approximately 1:00 p.m. ET on Thursday, July 29, 2021 and ending on Thursday, August 5, 2021 by dialing 412-317-6671, access code 13720876. An online archive of the webcast will be available following the completion of the conference call at https://www.connectonebank.com or at http://ir.connectonebank.com.
About ConnectOne Bancorp, Inc.
ConnectOne Bancorp, Inc., through its subsidiary, ConnectOne Bank offers a full suite of both commercial and consumer banking and lending products and services through its banking offices located across New York and New Jersey. ConnectOne Bancorp, Inc. is traded on the Nasdaq Global Market under the trading symbol "CNOB," and information about ConnectOne may be found at https://www.connectonebank.com.
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, as supplemented by the Company’s subsequent filings with the Securities and Exchange Commission, and changes in interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company's market area, changes in accounting principles and guidelines and the impact of the COVID-19 pandemic on the Company, its employees and operations, and its customers. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
Investor Contact:
William S. Burns
Executive VP & CFO
201.816.4474; bburns@cnob.com
Media Contact:
Will Crockett MWW
703.944.4213; wcrockett@mww.com
| | | | | | |
| CONNECTONE BANCORP, INC. AND SUBSIDIARIES | | | | | |
| CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION | | | | |
| (in thousands) | | | | | |
| | | | | | |
| | June 30, | | December 31, | | June 30, |
| | | 2021 | | | | 2020 | | | | 2020 | |
| | (unaudited) | | | | (unaudited) |
| ASSETS | | | | | |
| Cash and due from banks | $ | 59,148 | | | $ | 63,637 | | | $ | 62,764 | |
| Interest-bearing deposits with banks | | 290,269 | | | | 240,119 | | | | 286,597 | |
| Cash and cash equivalents | | 349,417 | | | | 303,756 | | | | 349,361 | |
| | | | | | |
| Investment securities | | 458,933 | | | | 487,955 | | | | 418,426 | |
| Equity securities | | 13,223 | | | | 13,387 | | | | 13,407 | |
| | | | | | |
| Loans held-for-sale | | 6,159 | | | | 4,710 | | | | 11,212 | |
| | | | | | |
| Loans receivable | | 6,407,904 | | | | 6,236,307 | | | | 6,363,267 | |
| Less: Allowance for credit losses - loans | | 78,684 | | | | 79,226 | | | | 68,724 | |
| Net loans receivable | | 6,329,220 | | | | 6,157,081 | | | | 6,294,543 | |
| | | | | | |
| Investment in restricted stock, at cost | | 22,563 | | | | 25,099 | | | | 26,656 | |
| Bank premises and equipment, net | | 28,811 | | | | 30,108 | | | | 31,103 | |
| Accrued interest receivable | | 34,001 | | | | 35,317 | | | | 29,894 | |
| Bank owned life insurance | | 193,209 | | | | 165,960 | | | | 165,056 | |
| Right of use operating lease assets | | 12,504 | | | | 16,159 | | | | 23,771 | |
| Goodwill | | 208,372 | | | | 208,372 | | | | 208,373 | |
| Core deposit intangibles | | 9,963 | | | | 10,977 | | | | 12,232 | |
| Other assets | | 43,707 | | | | 88,458 | | | | 33,150 | |
| Total assets | $ | 7,710,082 | | | $ | 7,547,339 | | | $ | 7,617,184 | |
| | | | | | |
| LIABILITIES | | | | | |
| Deposits: | | | | | |
| Noninterest-bearing | $ | 1,485,952 | | | $ | 1,339,108 | | | $ | 1,276,070 | |
| Interest-bearing | | 4,706,561 | | | | 4,620,116 | | | | 4,550,791 | |
| Total deposits | | 6,192,513 | | | | 5,959,224 | | | | 5,826,861 | |
| Borrowings | | 353,462 | | | | 425,954 | | | | 667,062 | |
| Subordinated debentures, net | | 152,800 | | | | 202,648 | | | | 202,476 | |
| Lease liabilities | | 14,235 | | | | 18,026 | | | | 27,648 | |
| Other liabilities | | 32,112 | | | | 26,177 | | | | 25,396 | |
| Total liabilities | | 6,745,122 | | | | 6,632,029 | | | | 6,749,443 | |
| | | | | | |
| COMMITMENTS AND CONTINGENCIES | | | | | |
| | | | | | |
| STOCKHOLDERS' EQUITY | | | | | |
| Common stock | | 586,946 | | | | 586,946 | | | | 586,946 | |
| Additional paid-in capital | | 24,606 | | | | 23,887 | | | | 22,069 | |
| Retained earnings | | 386,280 | | | | 331,951 | | | | 288,688 | |
| Treasury stock | | (32,682 | ) | | | (30,271 | ) | | | (30,271 | ) |
| Accumulated other comprehensive (loss) income | | (190 | ) | | | 2,797 | | | | 309 | |
| Total stockholders' equity | | 964,960 | | | | 915,310 | | | | 867,741 | |
| Total liabilities and stockholders' equity | $ | 7,710,082 | | | $ | 7,547,339 | | | $ | 7,617,184 | |
| | | | | | |
| CONNECTONE BANCORP, INC. AND SUBSIDIARIES | | | | | | | |
| CONSOLIDATED STATEMENTS OF INCOME | | | | | | | |
| (dollars in thousands, except for per share data) | | | | | | | |
| | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | 06/30/21 | | 06/30/20 | | 06/30/21 | | 06/30/20 |
| Interest income | | | | | | | |
| Interest and fees on loans | $ | 71,101 | | | $ | 75,797 | | $ | 141,563 | | | $ | 148,733 |
| Interest and dividends on investment securities: | | | | | | | |
| Taxable | | 995 | | | | 1,712 | | | 2,083 | | | | 3,778 |
| Tax-exempt | | 608 | | | | 647 | | | 1,374 | | | | 1,460 |
| Dividends | | 263 | | | | 442 | | | 519 | | | | 842 |
| Interest on federal funds sold and other short-term investments | | 84 | | | | 79 | | | 133 | | | | 578 |
| Total interest income | | 73,051 | | | | 78,677 | | | 145,672 | | | | 155,391 |
| Interest expense | | | | | | | |
| Deposits | | 6,424 | | | | 13,597 | | | 14,009 | | | | 30,809 |
| Borrowings | | 3,618 | | | | 4,290 | | | 7,491 | | | | 8,511 |
| Total interest expense | | 10,042 | | | | 17,887 | | | 21,500 | | | | 39,320 |
| | | | | | | | |
| Net interest income | | 63,009 | | | | 60,790 | | | 124,172 | | | | 116,071 |
| (Reversal of) provision for credit losses | | (1,649 | ) | | | 15,000 | | | (7,415 | ) | | | 31,000 |
| Net interest income after (reversal of) provision for credit losses | | 64,658 | | | | 45,790 | | | 131,587 | | | | 85,071 |
| | | | | | | | |
| Noninterest income | | | | | | | |
| Deposit, loan and other income | | 2,222 | | | | 3,212 | | | 3,390 | | | | 4,499 |
| Income on bank owned life insurance | | 1,185 | | | | 1,128 | | | 2,249 | | | | 2,095 |
| Net gains on sale of loans held-for-sale | | 847 | | | | 237 | | | 1,554 | | | | 630 |
| Gain on sale of branches | | - | | | | - | | | 674 | | | | - |
| Net gains (losses) on equity securities | | 23 | | | | 44 | | | (164 | ) | | | 222 |
| Net gains on sale/redemption of investment securities | | 195 | | | | - | | | 195 | | | | 29 |
| Total noninterest income | | 4,472 | | | | 4,621 | | | 7,898 | | | | 7,475 |
| | | | | | | | |
| Noninterest expenses | | | | | | | |
| Salaries and employee benefits | | 15,284 | | | | 14,500 | | | 30,849 | | | | 29,063 |
| Occupancy and equipment | | 3,187 | | | | 3,156 | | | 6,591 | | | | 6,627 |
| FDIC insurance | | 580 | | | | 1,093 | | | 1,515 | | | | 1,949 |
| Professional and consulting | | 2,117 | | | | 1,673 | | | 4,073 | | | | 3,247 |
| Marketing and advertising | | 278 | | | | 426 | | | 519 | | | | 730 |
| Data processing | | 1,603 | | | | 1,586 | | | 3,139 | | | | 3,059 |
| Merger expenses | | - | | | | 5,146 | | | - | | | | 14,640 |
| Amortization of core deposit intangible | | 508 | | | | 652 | | | 1,015 | | | | 1,304 |
| Increase in value of acquisition price | | - | | | | 2,333 | | | - | | | | 2,333 |
| Other expenses | | 2,702 | | | | 2,498 | | | 5,043 | | | | 5,169 |
| Total noninterest expenses | | 26,259 | | | | 33,063 | | | 52,744 | | | | 68,121 |
| | | | | | | | |
| Income before income tax expense | | 42,871 | | | | 17,348 | | | 86,741 | | | | 24,425 |
| Income tax expense | | 10,652 | | | | 2,516 | | | 21,523 | | | | 3,563 |
| Net income | $ | 32,219 | | | $ | 14,832 | | $ | 65,218 | | | $ | 20,862 |
| | | | | | | | |
| Earnings per common share: | | | | | | | |
| Basic | $ | 0.81 | | | $ | 0.37 | | $ | 1.64 | | | $ | 0.53 |
| Diluted | | 0.81 | | | | 0.37 | | | 1.63 | | | | 0.52 |
| | | | | | | | |
ConnectOne's management believes that the supplemental financial information, including non-GAAP measures provided below, is useful to investors. The non-GAAP measures should not be viewed as a substitute for financial results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP financial measures presented by other companies.
| CONNECTONE BANCORP, INC. | | | | | | | | | | |
| SUPPLEMENTAL GAAP AND NON-GAAP FINANCIAL MEASURES | | | | | | | | | |
| | | | | | | | | | | |
| | As of | |
| | Jun. 30, | | Mar. 31, | | Dec. 31, | | Sep. 30, | | Jun. 30, | |
| | | 2021 | | | | 2021 | | | | 2020 | | | | 2020 | | | | 2020 | | |
| Selected Financial Data | (dollars in thousands) | |
| Total assets | $ | 7,710,082 | | | $ | 7,449,639 | | | $ | 7,547,339 | | | $ | 7,449,559 | | | $ | 7,617,184 | | |
| Loans receivable: | | | | | | | | | | | | | | | | |
| Commercial | $ | 1,046,965 | | | $ | 1,071,418 | | | $ | 1,092,404 | | | $ | 1,125,273 | | | $ | 1,151,025 | | |
| Paycheck Protection Program ("PPP") loans | | 326,788 | | | | 522,340 | | | | 397,492 | | | | 474,022 | | | | 473,999 | | |
| Commercial real estate | | 2,252,484 | | | | 2,127,806 | | | | 2,103,468 | | | | 2,001,311 | | | | 1,987,695 | | |
| Multifamily | | 1,914,978 | | | | 1,698,331 | | | | 1,712,153 | | | | 1,703,290 | | | | 1,723,273 | | |
| Commercial construction | | 587,121 | | | | 565,872 | | | | 617,747 | | | | 614,112 | | | | 673,893 | | |
| Residential | | 286,907 | | | | 306,376 | | | | 322,564 | | | | 343,376 | | | | 366,315 | | |
| Consumer | | 6,355 | | | | 3,364 | | | | 1,853 | | | | 1,876 | | | | 2,001 | | |
| Gross loans | | 6,421,598 | | | | 6,295,508 | | | | 6,247,681 | | | | 6,263,260 | | | | 6,378,201 | | |
| Unearned net origination fees | | (13,694 | ) | | | (18,317 | ) | | | (11,374 | ) | | | (12,209 | ) | | | (14,934 | ) | |
| Loans receivable | | 6,407,904 | | | | 6,277,191 | | | | 6,236,307 | | | | 6,251,051 | | | | 6,363,267 | | |
| Loans held-for-sale | | 6,159 | | | | 6,900 | | | | 4,710 | | | | 8,508 | | | | 11,212 | | |
| Total loans | $ | 6,414,063 | | | $ | 6,284,091 | | | $ | 6,241,017 | | | $ | 6,259,559 | | | $ | 6,374,479 | | |
| | | | | | | | | | | |
| Investment and equity securities | $ | 472,156 | | | $ | 455,223 | | | $ | 501,342 | | | $ | 466,415 | | | $ | 431,833 | | |
| Goodwill and other intangible assets | | 218,335 | | | | 218,842 | | | | 219,349 | | | | 219,977 | | | | 220,605 | | |
| Deposits: | | | | | | | | | | |
| Noninterest-bearing demand | $ | 1,485,952 | | | $ | 1,384,961 | | | $ | 1,339,108 | | | $ | 1,270,021 | | | $ | 1,276,070 | | |
| Time deposits | | 1,301,807 | | | | 1,356,599 | | | | 1,464,133 | | | | 1,619,609 | | | | 1,807,864 | | |
| Other interest-bearing deposits | | 3,404,754 | | | | 3,209,774 | | | | 3,155,983 | | | | 2,909,126 | | | | 2,742,927 | | |
| Total deposits | $ | 6,192,513 | | | $ | 5,951,335 | | | $ | 5,959,224 | | | $ | 5,798,756 | | | $ | 5,826,861 | | |
| | | | | | | | | | | |
| Borrowings | $ | 353,462 | | | $ | 359,710 | | | $ | 425,954 | | | $ | 506,225 | | | $ | 667,062 | | |
| Subordinated debentures (net of debt issuance costs) | | 152,800 | | | | 152,724 | | | | 202,648 | | | | 202,552 | | | | 202,476 | | |
| Total stockholders' equity | | 964,960 | | | | 935,637 | | | | 915,310 | | | | 890,736 | | | | 867,741 | | |
| | | | | | | | | | | |
| Quarterly Average Balances | | | | | | | | | | |
| Total assets | $ | 7,566,676 | | | $ | 7,500,034 | | | $ | 7,547,651 | | | $ | 7,474,002 | | | $ | 7,684,403 | | |
| Loans receivable: | | | | | | | | | | | | | | | | |
| Commercial (including PPP loans) | $ | 1,485,918 | | | $ | 1,531,790 | | | $ | 1,557,303 | | | $ | 1,610,423 | | | $ | 1,539,749 | | |
| Commercial real estate (including multifamily) | | 3,925,497 | | | | 3,805,856 | | | | 3,704,197 | | | | 3,679,297 | | | | 3,722,966 | | |
| Commercial construction | | 553,396 | | | | 595,466 | | | | 615,439 | | | | 646,281 | | | | 675,698 | | |
| Residential | | 293,633 | | | | 316,233 | | | | 332,403 | | | | 352,426 | | | | 374,283 | | |
| Consumer | | 3,148 | | | | 2,540 | | | | 3,309 | | | | 2,536 | | | | 1,898 | | |
| Gross loans | | 6,261,592 | | | | 6,251,885 | | | | 6,212,651 | | | | 6,290,963 | | | | 6,314,594 | | |
| Unearned net origination fees | | (13,076 | ) | | | (13,163 | ) | | | (12,023 | ) | | | (13,292 | ) | | | (13,420 | ) | |
| Loans receivable | | 6,248,516 | | | | 6,238,723 | | | | 6,200,628 | | | | 6,277,671 | | | | 6,301,174 | | |
| Loans held-for-sale | | 3,696 | | | | 4,237 | | | | 9,003 | | | | 10,772 | | | | 31,329 | | |
| Total loans | $ | 6,252,212 | | | $ | 6,242,960 | | | $ | 6,209,631 | | | $ | 6,288,443 | | | $ | 6,332,503 | | |
| | | | | | | | | | | |
| Investment and equity securities | $ | 450,543 | | | $ | 481,802 | | | $ | 469,820 | | | $ | 429,947 | | | $ | 452,224 | | |
| Goodwill and other intangible assets | | 218,662 | | | | 219,171 | | | | 219,761 | | | | 220,391 | | | | 221,039 | | |
| Deposits: | | | | | | | | | | |
| Noninterest-bearing demand | $ | 1,432,707 | | | $ | 1,348,585 | | | $ | 1,294,447 | | | $ | 1,253,235 | | | $ | 1,277,428 | | |
| Time deposits | | 1,324,510 | | | | 1,422,295 | | | | 1,577,338 | | | | 1,728,129 | | | | 1,905,165 | | |
| Other interest-bearing deposits | | 3,320,400 | | | | 3,225,751 | | | | 3,094,536 | | | | 2,881,592 | | | | 2,639,052 | | |
| Total deposits | $ | 6,077,617 | | | $ | 5,996,631 | | | $ | 5,966,321 | | | $ | 5,862,956 | | | $ | 5,821,645 | | |
| | | | | | | | | | | |
| Borrowings | $ | 331,633 | | | $ | 375,511 | | | $ | 410,098 | | | $ | 467,399 | | | $ | 798,648 | | |
| Subordinated debentures (net of debt issuance costs) | | 152,750 | | | | 154,341 | | | | 202,595 | | | | 202,502 | | | | 141,904 | | |
| Total stockholders' equity | | 952,019 | | | | 928,041 | | | | 906,153 | | | | 883,364 | | | | 868,796 | | |
| | | | | | | | | | | |
| | Three Months Ended | |
| | Jun. 30, | | Mar. 31, | | Dec. 31, | | Sep. 30, | | Jun. 30, | |
| | | 2021 | | | | 2021 | | | | 2020 | | | | 2020 | | | | 2020 | | |
| | (dollars in thousands, except for per share data) | |
| Net interest income | $ | 63,009 | | | $ | 61,163 | | | $ | 61,371 | | | $ | 60,549 | | | $ | 60,790 | | |
| Provision for credit losses | | (1,649 | ) | | | (5,766 | ) | | | 5,000 | | | | 5,000 | | | | 15,000 | | |
| Net interest income after provision for credit losses | | 64,658 | | | | 66,929 | | | | 56,371 | | | | 55,549 | | | | 45,790 | | |
| Noninterest income | | | | | | | | | | |
| Deposit, loan and other income | | 2,222 | | | | 1,168 | | | | 1,300 | | | | 1,278 | | | | 3,212 | | |
| Income on bank owned life insurance | | 1,185 | | | | 1,064 | | | | 1,314 | | | | 1,598 | | | | 1,128 | | |
| Net gains on sale of loans held-for-sale | | 847 | | | | 707 | | | | 841 | | | | 614 | | | | 237 | | |
| Gain on sale of branches | | - | | | | 674 | | | | - | | | | - | | | | - | | |
| Net gains (losses) on equity securities | | 23 | | | | (187 | ) | | | (13 | ) | | | (7 | ) | | | 44 | | |
| Net gains on sale/redemption of investment securities | | 195 | | | | - | | | | - | | | | - | | | | - | | |
| Total noninterest income | | 4,472 | | | | 3,426 | | | | 3,442 | | | | 3,483 | | | | 4,621 | | |
| Noninterest expenses | | | | | | | | | | |
| Salaries and employee benefits | | 15,284 | | | | 15,565 | | | | 14,581 | | | | 15,114 | | | | 14,500 | | |
| Occupancy and equipment | | 3,187 | | | | 3,404 | | | | 3,689 | | | | 3,566 | | | | 3,156 | | |
| FDIC insurance | | 580 | | | | 935 | | | | 948 | | | | 1,105 | | | | 1,093 | | |
| Professional and consulting | | 2,117 | | | | 1,956 | | | | 2,210 | | | | 1,926 | | | | 1,673 | | |
| Marketing and advertising | | 278 | | | | 241 | | | | 256 | | | | 214 | | | | 426 | | |
| Data processing | | 1,603 | | | | 1,536 | | | | 1,479 | | | | 1,470 | | | | 1,586 | | |
| Merger expenses | | - | | | | - | | | | - | | | | - | | | | 5,146 | | |
| Amortization of core deposit intangible | | 508 | | | | 507 | | | | 628 | | | | 627 | | | | 652 | | |
| Increase in value of acquisition price | | - | | | | - | | | | - | | | | - | | | | 2,333 | | |
| Other expenses | | 2,702 | | | | 2,341 | | | | 2,611 | | | | 2,456 | | | | 2,498 | | |
| Total noninterest expenses | | 26,259 | | | | 26,485 | | | | 26,402 | | | | 26,478 | | | | 33,063 | | |
| | | | | | | | | | | |
| Income before income tax expense | | 42,871 | | | | 43,870 | | | | 33,411 | | | | 32,554 | | | | 17,348 | | |
| Income tax expense | | 10,652 | | | | 10,871 | | | | 7,770 | | | | 7,768 | | | | 2,516 | | |
| Net income | $ | 32,219 | | | $ | 32,999 | | | $ | 25,641 | | | $ | 24,786 | | | $ | 14,832 | | |
| | | | | | | | | | | |
| Weighted average diluted shares outstanding | | 39,735,309 | | | | 39,788,881 | | | | 39,726,791 | | | | 39,653,832 | | | | 39,611,712 | | |
| Diluted EPS | $ | 0.81 | | | $ | 0.82 | | | $ | 0.64 | | | $ | 0.62 | | | $ | 0.37 | | |
| | | | | | | | | | | |
| Reconciliation of GAAP Earnings to Pre-tax, Pre-provision and Pre-merger charges Earnings | | | | | | |
| Net income | $ | 32,219 | | | $ | 32,999 | | | $ | 25,641 | | | $ | 24,786 | | | $ | 14,832 | | |
| Income tax expense | | 10,652 | | | | 10,871 | | | | 7,770 | | | | 7,768 | | | | 2,516 | | |
| Merger charges | | - | | | | - | | | | - | | | | - | | | | 5,146 | | |
| Provision for credit losses | | (1,649 | ) | | | (5,766 | ) | | | 5,000 | | | | 5,000 | | | | 15,000 | | |
| Pre-tax, pre-provision and pre-merger charges earnings | $ | 41,222 | | | $ | 38,104 | | | $ | 38,411 | | | $ | 37,554 | | | $ | 37,494 | | |
| | | | | | | | | | | |
| Return on Assets Measures | | | | | | | | | | |
| Average assets | $ | 7,566,676 | | | $ | 7,500,034 | | | $ | 7,547,651 | | | $ | 7,474,002 | | | $ | 7,684,403 | | |
| Return on avg. assets | | 1.71 | | % | | 1.78 | | % | | 1.35 | | % | | 1.32 | | % | | 0.78 | | % |
| Return on avg. assets (pre-tax, pre-provision and pre-merger charges) | | 2.19 | | | | 2.06 | | | | 2.02 | | | | 2.00 | | | | 1.96 | | |
| | | | | | | | | | | |
| | Three Months Ended | |
| | Jun. 30, | | Mar. 31, | | Dec. 31, | | Sep. 30, | | Jun. 30, | |
| | | 2021 | | | | 2021 | | | | 2020 | | | | 2020 | | | | 2020 | | |
| Return on Equity Measures | (dollars in thousands) | |
| Average common equity | $ | 952,019 | | | $ | 928,041 | | | $ | 906,153 | | | $ | 883,364 | | | $ | 868,796 | | |
| Less: average intangible assets | | (218,662 | ) | | | (219,171 | ) | | | (219,761 | ) | | | (220,391 | ) | | | (221,039 | ) | |
| Average tangible common equity | $ | 733,357 | | | $ | 708,870 | | | $ | 686,392 | | | $ | 662,973 | | | $ | 647,757 | | |
| | | | | | | | | | | |
| Return on avg. common equity (GAAP) | | 13.57 | | % | | 14.42 | | % | | 11.26 | | % | | 11.16 | | % | | 6.87 | | % |
| Return on avg. tangible common equity ("TCE") (non-GAAP) (1) | | 17.82 | | | | 19.08 | | | | 15.12 | | | | 15.14 | | | | 9.50 | | |
| | | | | | | | | | | |
| Efficiency Measures | | | | | | | | | | |
| Total noninterest expenses | $ | 26,259 | | | $ | 26,485 | | | $ | 26,402 | | | $ | 26,478 | | | $ | 33,063 | | |
| Amortization of core deposit intangibles | | (508 | ) | | | (507 | ) | | | (628 | ) | | | (627 | ) | | | (652 | ) | |
| Merger expenses | | - | | | | - | | | | - | | | | - | | | | (5,146 | ) | |
| Foreclosed property expense | | - | | | | - | | | | (2 | ) | | | - | | | | (5 | ) | |
| Operating noninterest expense | $ | 25,751 | | | $ | 25,978 | | | $ | 25,772 | | | $ | 25,851 | | | $ | 27,260 | | |
| | | | | | | | | | | |
| Net interest income (tax equivalent basis) | $ | 63,418 | | | $ | 61,581 | | | $ | 61,840 | | | $ | 61,005 | | | $ | 61,253 | | |
| Noninterest income | | 4,472 | | | | 3,426 | | | | 3,442 | | | | 3,483 | | | | 4,621 | | |
| Net gains on sale of branches | | - | | | | (674 | ) | | | - | | | | - | | | | - | | |
| Net gains on sale/redemption of securities | | (195 | ) | | | - | | | | - | | | | - | | | | - | | |
| Operating revenue | $ | 67,695 | | | $ | 64,333 | | | $ | 65,282 | | | $ | 64,488 | | | $ | 65,874 | | |
| | | | | | | | | | | |
| Operating efficiency ratio (non-GAAP) (2) | | 38.0 | | % | | 40.4 | | % | | 39.5 | | % | | 40.1 | | % | | 41.4 | | % |
| | | | | | | | | | | |
| Net Interest Margin | | | | | | | | | | |
| Average interest-earning assets | $ | 7,059,964 | | | $ | 7,008,500 | | | $ | 7,031,662 | | | $ | 6,962,499 | | | $ | 7,164,545 | | |
| | | | | | | | | | | |
| Net interest income (tax equivalent basis) | $ | 63,418 | | | $ | 61,581 | | | $ | 61,840 | | | $ | 61,005 | | | $ | 61,253 | | |
| Impact of purchase accounting fair value marks | | (2,012 | ) | | | (2,074 | ) | | | (2,237 | ) | | | (2,403 | ) | | | (3,073 | ) | |
| Adjusted net interest income (tax equivalent basis) | $ | 61,406 | | | $ | 59,507 | | | $ | 59,603 | | | $ | 58,602 | | | $ | 58,180 | | |
| | | | | | | | | | | |
| Net interest margin (GAAP) | | 3.60 | | % | | 3.56 | | % | | 3.50 | | % | | 3.49 | | % | | 3.44 | | % |
| Adjusted net interest margin (non-GAAP) (3) | | 3.49 | | | | 3.44 | | | | 3.37 | | | | 3.35 | | | | 3.27 | | |
| | | | | | | | | | | |
| (1) Earnings available to common stockholders excluding amortization of intangible assets divided by average tangible common equity. | |
| (2) Operating noninterest expense divided by operating revenue. | | | | | | | | | | |
| (3) Adjusted net interest margin excludes impact of purchase accounting fair value marks. | | | | | | | |
| | | | | | | | | | | |
| | As of | |
| | Jun. 30, | | Mar. 31, | | Dec. 31, | | Sep. 30, | | Jun. 30, | |
| | | 2021 | | | | 2021 | | | | 2020 | | | | 2020 | | | | 2020 | | |
| Capital Ratios and Book Value per Share | (dollars in thousands, except for per share data) | |
| Common equity | $ | 964,960 | | | $ | 935,637 | | | $ | 915,310 | | | $ | 890,736 | | | $ | 867,741 | | |
| Less: intangible assets | | (218,335 | ) | | | (218,842 | ) | | | (219,349 | ) | | | (219,977 | ) | | | (220,605 | ) | |
| Tangible common equity | $ | 746,625 | | | $ | 716,795 | | | $ | 695,961 | | | $ | 670,759 | | | $ | 647,136 | | |
| | | | | | | | | | | |
| Total assets | $ | 7,710,082 | | | $ | 7,449,639 | | | $ | 7,547,339 | | | $ | 7,449,559 | | | $ | 7,617,184 | | |
| Less: intangible assets | | (218,335 | ) | | | (218,842 | ) | | | (219,349 | ) | | | (219,977 | ) | | | (220,605 | ) | |
| Tangible assets | $ | 7,491,747 | | | $ | 7,230,797 | | | $ | 7,327,990 | | | $ | 7,229,582 | | | $ | 7,396,579 | | |
| | | | | | | | | | | |
| Common shares outstanding | | 39,794,815 | | | | 39,773,602 | | | | 39,785,398 | | | | 39,753,033 | | | | 39,753,033 | | |
| | | | | | | | | | | |
| Common equity ratio (GAAP) | | 12.52 | | % | | 12.56 | | % | | 12.13 | | % | | 11.96 | | % | | 11.39 | | % |
| Tangible common equity ratio (non-GAAP) (4) | | 9.97 | | | | 9.91 | | | | 9.50 | | | | 9.28 | | | | 8.75 | | |
| | | | | | | | | | | |
| Regulatory capital ratios (Bancorp): | | | | | | | | | | |
| Leverage ratio | | 10.19 | | % | | 9.89 | | % | | 9.51 | | % | | 9.30 | | % | | 8.99 | | % |
| Common equity Tier 1 risk-based ratio | | 11.09 | | | | 11.36 | | | | 10.79 | | | | 10.63 | | | | 10.04 | | |
| Risk-based Tier 1 capital ratio | | 11.17 | | | | 11.44 | | | | 10.87 | | | | 10.72 | | | | 10.12 | | |
| Risk-based total capital ratio | | 14.58 | | | | 15.08 | | | | 15.08 | | | | 14.94 | | | | 14.32 | | |
| | | | | | | | | | | |
| Regulatory capital ratios (Bank): | | | | | | | | | | |
| Leverage ratio | | 11.34 | | % | | 11.06 | | % | | 10.63 | | % | | 10.41 | | % | | 10.12 | | % |
| Common equity Tier 1 risk-based ratio | | 12.42 | | | | 12.78 | | | | 12.24 | | | | 12.00 | | | | 11.38 | | |
| Risk-based Tier 1 capital ratio | | 12.42 | | | | 12.78 | | | | 12.24 | | | | 12.00 | | | | 11.38 | | |
| Risk-based total capital ratio | | 14.07 | | | | 14.55 | | | | 10.00 | | | | 13.70 | | | | 12.96 | | |
| | | | | | | | | | | |
| Book value per share (GAAP) | $ | 24.25 | | | $ | 23.52 | | | $ | 23.01 | | | $ | 22.41 | | | $ | 21.83 | | |
| Tangible book value per share (non-GAAP) (5) | | 18.76 | | | | 18.02 | | | | 17.49 | | | | 16.87 | | | | 16.28 | | |
| | | | | | | | | | | |
| Net Loan (Recoveries) Charge-Off Detail | | | | | | | | | | |
| Net loan charge-offs (recoveries): | | | | | | | | | | |
| Charge-offs | $ | 212 | | | $ | - | | | $ | 900 | | | $ | 257 | | | $ | 462 | | |
| Recoveries | | (14 | ) | | | (61 | ) | | | (833 | ) | | | (800 | ) | | | (4 | ) | |
| Net loan charge-offs (recoveries) | $ | 198 | | | $ | (61 | ) | | $ | 67 | | | $ | (543 | ) | | $ | 458 | | |
| Net loan charge-offs (recoveries) as a % of average loans receivable (annualized) | | 0.01 | | % | | (0.00 | ) | % | | 0.00 | | % | | (0.03 | ) | % | | 0.03 | % | |
| | | | | | | | | | | |
| Asset Quality | | | | | | | | | | |
| Nonaccrual loans | $ | 56,213 | | | $ | 60,940 | | | $ | 61,696 | | | $ | 65,494 | | | $ | 64,580 | | |
| OREO | | - | | | | - | | | | - | | | | - | | | | - | | |
| Nonperforming assets | $ | 56,213 | | | $ | 60,940 | | | $ | 61,696 | | | $ | 65,494 | | | $ | 64,580 | | |
| | | | | | | | | | | |
| Performing troubled debt restructurings | $ | 33,021 | | | $ | 25,505 | | | $ | 23,655 | | | $ | 18,241 | | | $ | 20,418 | | |
| | | | | | | | | | | |
| Allowance for credit losses - loans ("ACL") | | 78,684 | | | | 80,568 | | | | 79,226 | | | | 74,267 | | | | 68,724 | | |
| | | | | | | | | | | |
| Loans receivable | $ | 6,407,904 | | | $ | 6,277,191 | | | $ | 6,236,307 | | | $ | 6,251,051 | | | $ | 6,363,267 | | |
| Less: PPP loans | | 326,790 | | | | 522,340 | | | | 397,492 | | | | 474,022 | | | | 473,999 | | |
| Loans receivable (excluding PPP loans) | $ | 6,081,114 | | | $ | 5,754,851 | | | $ | 5,838,815 | | | $ | 5,777,029 | | | $ | 5,889,268 | | |
| | | | | | | | | | | |
| Nonaccrual loans as a % of loans receivable | | 0.88 | | % | | 0.97 | | % | | 0.99 | | % | | 1.05 | | % | | 1.01 | | |
| Nonperforming assets as a % of total assets | | 0.73 | | | | 0.82 | | | | 0.82 | | | | 0.88 | | | | 0.85 | | |
| ACL as a % of loans receivable | | 1.23 | | | | 1.28 | | | | 1.27 | | | | 1.19 | | | | 1.08 | | |
| ACL as a % of loans receivable (excluding PPP loans) | | 1.29 | | | | 1.40 | | | | 1.36 | | | | 1.29 | | | | 1.17 | | |
| ACL as a % of nonaccrual loans | | 140.0 | | | | 132.2 | | | | 128.4 | | | | 113.4 | | | | 106.4 | | |
| | | | | | | | | | | |
| (4) Tangible common equity divided by tangible assets. | | | | | | | | | | |
| (5) Tangible common equity divided by common shares outstanding at period-end. | | | | | | | | |
| | | | | | | | | | | |
| CONNECTONE BANCORP, INC. AND SUBSIDIARIES | | | | | | | | | | | | | |
| NET INTEREST MARGIN ANALYSIS | | | | | | | | | | | | | | |
| (dollars in thousands) | | | | | | | | | | | | | | |
| | For the Three Months Ended | |
| | June 30, 2021 | March 31, 2021 | June 30, 2020 | |
| | Average | | | | | Average | | | | | Average | | | |
| Interest-earning assets: | Balance | Interest | Rate (7) | | Balance | Interest | Rate (7) | | Balance | Interest | Rate (7) |
| Investment securities (1) (2) | $ | 444,460 | | $ | 1,765 | | 1.59 | % | | $ | 473,181 | | $ | 2,058 | | 1.76 | % | | $ | 443,282 | | $ | 2,531 | | 2.30 | % |
| Loans receivable and loans held-for-sale (2) (3) (4) | | 6,252,212 | | | 71,348 | | 4.58 | | | | 6,242,960 | | | 70,676 | | 4.59 | | | | 6,332,503 | | | 76,088 | | 4.83 | |
| Federal funds sold and interest-bearing deposits with banks | | 341,885 | | | 84 | | 0.10 | | | | 269,537 | | | 49 | | 0.07 | | | | 357,758 | | | 79 | | 0.09 | |
| Restricted investment in bank stock | | 21,407 | | | 263 | | 4.93 | | | | 22,822 | | | 256 | | 4.55 | | | | 31,002 | | | 442 | | 5.73 | |
| Total interest-earning assets | | 7,059,964 | | | 73,460 | | 4.17 | | | | 7,008,500 | | | 73,039 | | 4.23 | | | | 7,164,545 | | | 79,140 | | 4.44 | |
| Allowance for loan losses | | (80,548 | ) | | | | | | (81,549 | ) | | | | | | (53,502 | ) | | | |
| Noninterest-earning assets | | 587,259 | | | | | | | 573,083 | | | | | | | 573,360 | | | | |
| Total assets | $ | 7,566,675 | | | | | | $ | 7,500,034 | | | | | | $ | 7,684,403 | | | | |
| | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | |
| Time deposits | | 1,324,510 | | | 3,963 | | 1.20 | | | $ | 1,422,295 | | $ | 5,151 | | 1.47 | | | | 1,905,165 | | | 9,586 | | 2.02 | |
| Other interest-bearing deposits | | 3,320,400 | | | 2,461 | | 0.30 | | | | 3,225,751 | | | 2,434 | | 0.31 | | | | 2,639,052 | | | 4,011 | | 0.61 | |
| Total interest-bearing deposits | | 4,644,910 | | | 6,424 | | 0.55 | | | | 4,648,046 | | | 7,585 | | 0.66 | | | | 4,544,217 | | | 13,597 | | 1.20 | |
| | | | | | | | | | | | | | | |
| Borrowings | | 331,633 | | | 1,419 | | 1.72 | | | | 375,511 | | | 1,674 | | 1.81 | | | | 798,648 | | | 2,235 | | 1.13 | |
| Subordinated debentures | | 152,750 | | | 2,168 | | 5.69 | | | | 154,341 | | | 2,167 | | 5.69 | | | | 141,904 | | | 2,021 | | 5.73 | |
| Capital lease obligation | | 2,066 | | | 31 | | 6.02 | | | | 2,115 | | | 32 | | 6.14 | | | | 2,257 | | | 34 | | 6.06 | |
| Total interest-bearing liabilities | | 5,131,359 | | | 10,042 | | 0.78 | | | | 5,180,013 | | | 11,458 | | 0.90 | | | | 5,487,026 | | | 17,887 | | 1.31 | |
| | | | | | | | | | | | | | | |
| Noninterest-bearing demand deposits | | 1,432,707 | | | | | | | 1,348,585 | | | | | | | 1,277,428 | | | | |
| Other liabilities | | 50,590 | | | | | | | 43,395 | | | | | | | 51,153 | | | | |
| Total noninterest-bearing liabilities | | 1,483,297 | | | | | | | 1,391,980 | | | | | | | 1,328,581 | | | | |
| Stockholders' equity | | 952,019 | | | | | | | 928,041 | | | | | | | 868,796 | | | | |
| Total liabilities and stockholders' equity | $ | 7,566,675 | | | | | | $ | 7,500,034 | | | | | | $ | 7,684,403 | | | | |
| | | | | | | | | | | | | | | |
| Net interest income (tax equivalent basis) | | | 63,418 | | | | | | | 61,581 | | | | | | | 61,253 | | | |
| Net interest spread (5) | | | 3.39 | | | | | 3.33 | | | | | 3.13 | % |
| | | | | | | | | | | | | | | |
| Net interest margin (6) | | | 3.60 | % | | | | 3.56 | % | | | | 3.44 | % |
| | | | | | | | | | | | | | | |
| Tax equivalent adjustment | | | (409 | ) | | | | | | (418 | ) | | | | | | (463 | ) | | |
| Net interest income | | $ | 63,009 | | | | | | $ | 61,163 | | | | | | $ | 60,790 | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| (1) Average balances are calculated on amortized cost. | | | | | | | | | | | | | |
| (2) Interest income is presented on a tax equivalent basis using 21% federal tax rate. |
| (3) Includes loan fee income 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. |
| (7) Rates are annualized. |
