What changed in this filing

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Item 1. Business

2026-02-24 compared with 2025-02-21 · 50 added, 51 removed, 318 unchanged (24% of the section changed)

32 unchanged sentences

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.

BoeFly is the Bank’s business-to-business fintech subsidiary, providing a marketplace that connects franchisors, franchisees, and lenders.

The platform utilizes proprietary technology for franchisee applicant vetting and facilitates efficient access to capital by referring qualified loan opportunities to both the Bank and an expanded network of external referral partners.

On January 2, 2020, the Company completed its in-market merger with Bergen County, New Jersey based Bancorp of New Jersey, Inc.

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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.

On June 1, 2025 (the “Acquisition Date”), the Company completed the acquisition of The First of Long Island Corporation (“FLIC”), the parent company for The First National Bank of Long Island (“FNBLI”), in accordance with the definitive Agreement and Plan of Merger dated as of September 4, 2024 (the “Merger Agreement”).

Pursuant to the Merger Agreement, on the Acquisition Date, FLIC merged with and into the Company, with the Company continuing as the surviving corporation, and FNBLI merged with and into the Bank, with the Bank as the surviving bank (collectively, the “merger”).

As part of this merger, the Company acquired 36 branch offices located in Nassau and Suffolk Counties of Long Island, and the boroughs of New York City.

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

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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.

The Company’s subsidiaries also include two Real Estate Investment Trust (each, a “REIT”) each of 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 each 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.

Each REIT has issued non-voting preferred stock to individuals, primarily Bank personnel and directors and former personnel of FLIC.

SEC Reports and Corporate Governance

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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.

In addition, the Investor Relations section of the Company’s website provides access to our primary governance documents, including charters for the Audit, Risk, Nominating and Corporate Governance, and Compensation Committees.

Also available are the Company’s Corporate Governance Guidelines, Code of Ethics, and key policies regarding Compensation Recoupment, Anti-Harassment & Discrimination, and Equal Employment Opportunity.

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

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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.

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 Florida market served by our West Palm Beach office and Orlando loan production 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.

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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 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.

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 Florida where we opened an office in West Palm Beach in August 2022 and a loan production office in 2025.

Our market area includes some of the most robust markets in the United States.

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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.

For clients that are Federal Deposit Insurance Corporation (“FDIC”) insurance sensitive, we participate in the IntraFi Network LLC, formerly known as the Promontory Interfinancial Network, and, to a lesser extent the National Bank InterDeposit Company (“NBID”) network, which is operated by ModernFi .

Through these networks, Clients are able to place large dollar deposits with the Company and the Company utilizes or will utilize CDARS and/or NBID to place those funds into certificates of deposit issued by other banks in the respective networks.

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 standard insured dollar amount.

Unless certain conditions are satisfied, the FDIC considers these funds as brokered deposits.

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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.

As part of a strategic initiative to grow our residential portfolio and increase our volume of loan sales, the Company is building an enhanced lending team focused on originating loans secured by 1-4 family properties and investing in technology to support those efforts.

However, we are not and have not historically been a participant in the sub-prime lending market.

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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.

Residential mortgages include loans secured by first liens on 1-4 family, 1-4 family investment properties, condominium and cooperative residential real estate 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.

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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.

The Senior Lending Group (Chief Executive Officer, President, Chief Credit Officer and Chief Lending Officer) can approve loans up to $40 million in aggregate loan exposure with no policy exceptions.

Furthermore, the Senior Lending Group has authority to approve unsecured loan amounts without policy exceptions up to $10 million.

Loans to insiders must be approved by the entire Board of Directors.

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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 ($172.0 million) and 25% of the capital base for loans secured by readily marketable collateral ($286.7 million).

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 totaling $237.9 million) and 25% of the capital base for loans secured by readily marketable collateral totaling $396.5 million).

As of December 31, 2025, the Bank’s largest committed relationship (to several affiliated borrowers) was $223.0 million, and the single largest loan outstanding was $88.0 million.

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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.

We endeavor to build a team of financial experts and relationship specialists with diverse experience who understand the demands of a successful business and are prepared to meet them.

Demographics :

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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 take business related continuing education classes at partner community colleges and other institutions;

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 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.

During 2025, 210 employees participated in our leadership and mentoring programs within ConnectOne University.

Through ConnectOne University, we also sponsor two employees each year to attend the Stonier Graduate School of Banking.

This is a competitive process requiring an employee to be nominated by the employee’s manager and then participate in a panel interview.

We offer our employees a full benefits program, including health insurance, flexible spending accounts, a 401(k) plan with the Company matching employee contributions up to 5.0% of the employee’s compensation or $17,250, whichever is lower, and an employee discount program under which our employees get discounts at various retailers and service providers.

We request employee feedback and concerns through our annual Employment Engagement Survey.

The results of this survey are presented to our senior management group for the identification of action items to be implemented.

During 2025, approximately 94% of our employees participated in the Engagement Survey.

Health and Safety :

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.

The Bank has established wellness programs that include a Preventative Care Incentive Program, vaccination time-off, as well as health programs & service discounts.

Benefits & Employee Retention;

Employee Integration :

We offer a wide variety of benefits and incentive rewards to attract, engage, retain and motivate talent.

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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.

In connection with our merger with FLIC, 206 FLIC employees, the overwhelming majority of FLIC employees, joined us effective June 1, 2025.

Both prior to the closing of the transaction and immediately after the closing of the transaction, we undertook extensive efforts to integrate the former FLIC employees, including extensive education and training programs, mentorship programs and pairing former FLIC employees with CNOB navigators to assist with their transition to employment with CNOB.

We were successful in integrating these new employees, which increased our employee base by approximately 28%.

We focus on promoting employees from within and leveraging their knowledge of the organization as we continue to grow our Bank.

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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.

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 or bank holding company 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.

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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.

Additionally, the Dodd-Frank Act established 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:

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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, 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.

Institutions with $10 billion or less in assets continue to be examined for compliance with the consumer laws by their primary bank regulators.

During 2025, the Trump Administration declined to request funding for the Bureau from the FRB and has significantly scaled back its operations.

These actions have been subject to litigation, which is ongoing.

In light of this, the future role of the Bureau is uncertain.

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.

Amendments to the Federal Deposit Insurance Act ("FDIA") 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.

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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.

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 a number of the rules and regulations initially adopted have 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.

Given the uncertainty associated with the way the provisions of the Dodd-Frank Act will be implemented by the various regulatory agencies in the future, 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.

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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 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.

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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.

The Company and the Bank did not elect to opt into the CBLR, and as a result of the FLIC merger are no longer eligible to utilize 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 deposits of the Bank are insured up to applicable limits by the 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.

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The Company paid $8.6 million and $7.2 million in total FDIC assessments in 2025 and 2024, respectively.

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%.

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 FDIC Board of Directors approved a final rule to implement a special assessment to recover the loss to the DIF associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.

The FDIA 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.

1 unchanged sentence

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;

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.

In December of 2025, due to its current assessment of the loss incurred due to the systemic risk determination, the FDIC adopted an interim final rule to reduce the assessment rate for the eighth quarterly assessment, due March 30, 2026, from 3.36 basis points per quarter to 2.97 basis points per quarter.

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

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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.

All such dividends are subject to the laws of the State of New Jersey, the Banking Act, the 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.

As a bank holding company under the Bank Holding Company Act of 1956, as amended (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.

10 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