What changed in this filing

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Item 1. Business

2025-02-21 compared with 2024-02-23 · 23 added, 29 removed, 346 unchanged (13% of the section changed)

5 unchanged sentences

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;

(1) the impact of the health emergencies, including pandemics, and natural disasters, such as flood or fires, and the government’s response 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;

30 unchanged sentences

As part of this merger, the Company acquired approximately $0.8 billion in loans and assumed approximately $0.8 billion in deposits.

On September 4, 2024, the Company entered into an Agreement and Plan of Merger with The First of Long Island Corporation (“FLIC"), the holding company for the First National Bank of Long Island (“FNBLI”).

Under the agreement, FLIC will merge with and into the Company, with the Company as the surviving entity, and FNBLI will merge with and into ConnectOne Bank, with ConnectOne Bank as the surviving bank.

FNBLI is a Melville, New York headquartered national bank serving Nassau and Suffolk Counties on Long Island and New York City through 37 branches.

On February 14, 2025, at separate special meetings, the shareholders of both companies approved proposals relating to the pending merger of the Company and FLIC.

As of December 31, 2024, FLIC had total assets of $4.1 billion and total deposits of $3.3 billion.

The merger, which is subject to receipt of all required regulatory approvals, is expected to close during the first or second calendar quarter of 2025.

The Company’s primary activity, at this time, is to act as a holding company for the Bank and its other subsidiaries.

5 unchanged sentences

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.

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”) Accounting Standards Codification (“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 10 of the Notes to Consolidated Financial Statements.

17 unchanged sentences

ConnectOne Bancorp, Inc.

is a modern financial services company with over $9.856 billion in assets.

is a modern financial services company with $9.880 billion in assets.

It operates primarily through its bank subsidiary, ConnectOne Bank.

4 unchanged sentences

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.

Through high tech tools and services, the Bank is able to extend its reach by 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.

20 unchanged sentences

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.

In addition, the Bank generates additional noninterest revenue associated with residential, commercial and Small Business Administration (“SBA”) loan originations, 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.

8 unchanged sentences

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 Management Credit Committee is comprised of six members of senior management, including 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.

13 unchanged sentences

As of December 31, 2024, the Bank’s largest committed relationship (to several affiliated borrowers) was $212.7 million, and the single largest loan outstanding was $64.0 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.

The banking business is highly competitive.

13 unchanged sentences

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.

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.

8 unchanged sentences

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

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.

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

During 2024, ConnectOne University continued to drive professional development and growth across the organization.

Key achievements included delivering comprehensive job skills and cybersecurity training, advancing leadership skills for 125 managers, and sponsoring professional certifications and graduate-level education for employees through programs like the ABA Stonier Graduate School of Banking and the ABA Commercial Lending School.

Additionally, approximately 300 employees participated in culture programs, reinforcing our shared values, while the Company supported advanced education through tuition reimbursement for eligible coursework.

These efforts reflect our commitment to fostering a culture of continuous learning and development.

Health and Safety :

The safety, health and wellness of our employees is a top priority.

The safety, health and well-being 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.

12 unchanged sentences

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.

The following discussion is not intended to be a complete list of all the activities regulated by 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.

35 unchanged sentences

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.

Although the Bank currently has less than $10 billion in assets and so is not subject to examination by the Bureau, the Bank will exceed $10 billion in assets upon consummation of its merger with The First National Bank of Long Island, and even without the merger 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.

57 unchanged sentences

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.

8 unchanged sentences

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”).

18 unchanged sentences

The Company paid $7.2 million and $5.7 million in total FDIC assessments in 2024 and 2023, 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 increase in 2024 was attributable to additional premiums paid in 2024 related to the FDIC special assessment.

The FDIC has a designated reserve ratio (DRR), that is, the ratio of the DIF to insured deposits, of 1.35%.

47 unchanged sentences

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.

Virtually all the revenue of the Parent Corporation available for payment of dividends on its capital stock will result from the 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.

13 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business