What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-08-04 compared with 2026-05-05 · 743 added, 333 removed, 1816 unchanged (37% of the section changed)

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CONDITION

(in thousands, except for share data)

(dollars in thousands, except for share data)

Cash and due from banks

50 unchanged sentences

Authorized 5,000,000 shares;

issued 115,000 shares as of March 31, 2026 and as of December 31, 2025;

outstanding 115,000 shares as of March 31, 2026 and as of December 31, 2025

issued 115,000 shares as of June 30, 2026 and as of December 31, 2025;

outstanding 115,000 shares as of June 30, 2026 and as of December 31, 2025

110,927 110,927

1 unchanged sentence

Authorized 100,000,000 shares;

issued 54,264,042 shares as of March 31, 2026 and 54,157,402 shares as of December 31, 2025;

outstanding 50,288,494 shares as of March 31, 2026 and 50,271,854 as of December 31, 2025

issued 54,295,380 shares as of June 30, 2026 and 54,157,402 shares as of December 31, 2025;

outstanding 50,319,832 shares as of June 30, 2026 and 50,271,854 as of December 31, 2025

857,765 857,765

4 unchanged sentences

Treasury stock, at cost:

3,975,548 shares as of March 31, 2026 and 3,885,548 shares as of December 31, 2025

3,975,548 shares as of June 30, 2026 and 3,885,548 shares as of December 31, 2025

( 78,507 ) ( 76,116 )

10 unchanged sentences

Three Months Ended

Six Months Ended

(dollars in thousands, except for per share data)

13 unchanged sentences

Net gains on sale of loans held-for-sale

Net gains on equity securities

Net gains (losses) on equity securities

Total noninterest income

11 unchanged sentences

Total noninterest expenses

Income before income tax expense

Income tax expense

Income (loss) before income tax expense

Income tax expense (benefit)

Net income (loss)

Preferred dividends

Net income available to common stockholders

Earnings per common share

Net income (loss) available to common stockholders

Earnings (loss) per common share

See accompanying notes to unaudited consolidated financial statements.

3 unchanged sentences

Three Months Ended

Six Months Ended

(dollars in thousands)

Other comprehensive (loss) income, net of tax:

Net unrealized holding (losses) gains on available-for-sale securities arising during the period

Net income (loss)

Other comprehensive income (loss), net of tax:

Net unrealized holding gains (losses) on available-for-sale securities arising during the period

Net unrealized gains (losses) on cash flow hedges

Total other comprehensive (loss) income, net of tax

Total comprehensive income

Total other comprehensive income (loss), net of tax

Total comprehensive income (loss)

See accompanying notes to unaudited consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ EQUITY

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

Comprehensive

1 unchanged sentence

(in thousands, except share data)

(Loss) Income

Balance as of March 31, 2026

$ 110,927 $ 857,765 $ 38,257 $ 701,154 $ ( 78,507 ) $ ( 38,049 ) $ 1,591,547

- - - 41,668 - - 41,668

Other comprehensive income, net of tax

- - - - - 3,201 3,201

Cash dividends paid on preferred stock ($ 0.328125 per depositary share)

- - - ( 1,509 ) - - ( 1,509 )

Cash dividends paid on common stock ($ 0.195 per share)

- - - ( 9,813 ) - - ( 9,813 )

Restricted stock grants, net of forfeitures ( 31,338 shares)

- - - - - - -

Stock-based compensation expense

- - 1,431 - - - 1,431

Balance as of June 30, 2026

$ 110,927 $ 857,765 $ 39,688 $ 731,500 $ ( 78,507 ) $ ( 34,848 ) $ 1,626,525

Three Months Ended June 30, 2025

Comprehensive

Stockholders’

(in thousands, except share data)

(Loss) Income

Balance as of March 31, 2025

$ 110,927 $ 586,946 $ 36,007 $ 643,265 $ ( 76,116 ) $ ( 48,090 ) $ 1,252,939

- - - ( 20,293 ) - - ( 20,293 )

Other comprehensive income, net of tax

- - - - - 685 685

Cash dividends paid on preferred stock ($ 0.328125 per depositary share)

- - - ( 1,509 ) - - ( 1,509 )

Cash dividends paid on common stock ($ 0.18 per share)

- - - ( 6,931 ) - - ( 6,931 )

Restricted stock grants, net of forfeitures ( 32,709 shares)

- - - - - - -

Share redemption for tax withholdings on restricted stock units for FLIC ( 22,638 shares)

- - ( 507 ) - - - ( 507 )

Stock issued in connection with FLIC merger ( 11,790,116 shares)

- 270,819 - - - - 270,819

Stock-based compensation expense

- - 1,228 - - - 1,228

Balance as of June 30, 2025

$ 110,927 $ 857,765 $ 36,728 $ 614,532 $ ( 76,116 ) $ ( 47,405 ) $ 1,496,431

CONNECTONE BANCORP, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ EQUITY

Six Months Ended June 30, 2026

Comprehensive

Stockholders’

(in thousands, except share data)

(Loss) Income

Balance as of December 31, 2025

7 unchanged sentences

- - - ( 18,869 ) - - ( 18,869 )

Net forfeitures of restricted stock grants ( 41,099 shares)

Restricted stock grants, net of forfeitures ( 72,437 shares)

- - - - - - -

9 unchanged sentences

- - - - ( 2,391 ) - ( 2,391 )

Stock-based compensation expense

Stock-based compensation

- - 2,862 - - - 2,862

Balance as of March 31, 2026

Balance as of June 30, 2026

$ 110,927 $ 857,765 $ 39,688 $ 731,500 $ ( 78,507 ) $ ( 34,848 ) $ 1,626,525

Three Months Ended March 31, 2025

Six Months Ended June 30, 2025

Comprehensive

1 unchanged sentence

(in thousands, except share data)

(Loss) Income

Balance as of December 31, 2024

1 unchanged sentence

- - - ( 51 ) - - ( 51 )

Other comprehensive loss, net of tax

Other comprehensive income, net of tax

- - - - - 441 441

Cash dividends declared on preferred stock ($ 0.328125 per depositary share)

Cash dividends paid on preferred stock ($ 0.65625 per depositary share)

- - - ( 3,018 ) - - ( 3,018 )

Cash dividends declared on common stock ($ 0.18 per share)

Cash dividends paid on common stock ($ 0.36 per share)

- - - ( 13,845 ) - - ( 13,845 )

7 unchanged sentences

- - - - - - -

Share redemption for tax withholdings on restricted stock units for FLIC ( 22,638 shares)

- - ( 507 ) - - - ( 507 )

Share redemption for tax withholdings on performance units and deferred stock units earned

- - ( 1,627 ) - - - ( 1,627 )

Stock-based compensation expense

Stock issued in connection with FLIC merger ( 11,790,116 shares)

- 270,819 - - - - 270,819

Balance as of March 31, 2025

Stock-based compensation

- - 2,515 - - - 2,515

Balance as of June 30, 2025

$ 110,927 $ 857,765 $ 36,728 $ 614,532 $ ( 76,116 ) $ ( 47,405 ) $ 1,496,431

CONNECTONE BANCORP, INC.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(dollars in thousands)

Cash flows from operating activities

Net income (loss)

Adjustments to reconcile net income to net cash provided by operating activities:

8 unchanged sentences

Stock-based compensation expense

Gains on equity securities, net

Gains on sale of loans held-for-sale, net

Gain on equity securities, net

Gain on sale of loans held-for-sale, net

Loans originated for resale

6 unchanged sentences

Increase in other assets

Decrease in other liabilities

(Decrease) Increase in other liabilities

Net cash provided by operating activities

8 unchanged sentences

Purchases of premises and equipment

Cash acquired, net of cash consideration paid in acquisition

Net cash (used in) provided by investing activities

Cash flows from financing activities

Net increase (decrease) in deposits

Net increase in deposits

Proceeds from issuance of subordinated debt

Payment of subordinated debt issuance costs

Proceeds from FHLB borrowings

4 unchanged sentences

Share redemption for tax withholdings on performance units, deferred stock units earned and restricted stock units

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Net change in cash and cash equivalents

4 unchanged sentences

Interest paid on deposits and borrowings

Supplemental disclosures of noncash activities

Business Combination

Fair value of assets acquired

Fair value of liabilities assumed

Stock issued in connection with FLIC merger

Renewable Energy Tax Credit

Investment in renewable energy tax credit

Renewable energy tax credit commitment

See accompanying notes to unaudited consolidated financial statements.

49 unchanged sentences

The Company accounts for its defined benefit pension plans in accordance with Financial Accounting Standards Board ("FASB") Accounting Standard Codification ("ASC") 715 - 30 .

This standard requires that the funded status of defined benefit postretirement plans be recognized on the Company’s statement of financial condition and changes in the funded status be reflected in other comprehensive income ("OCI").

This standard also requires companies to measure the funded status of the plans as of the date of the company's fiscal year-end.

9 unchanged sentences

Authoritative Accounting Guidance

Adoption of New Accounting Standards

In July 2025, the FASB issued Accounting Standards Update 2025 - 05, "Financial Instruments – Credit Losses (Topic 326 ):

Measurement of Credit Losses for Accounts Receivable and Contract Assets" ("ASU 2025 - 05" ).

ASU 2025 - 05 provides an optional practical expedient allowing entities to assume that current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing reasonable and supportable forecasts for expected credit losses.

The Company adopted ASU 2025 - 05 on a prospective basis effective January 1, 2026.

The adoption of this standard did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.

In December 2023, the FASB issued Accounting Standards Update 2023 - 09, "Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures" ("ASU 2023 - 09" ).

ASU 2023 - 09 requires public entities to disclose additional categories of information in their rate reconciliation tables and provide further detail on federal, state, and foreign income taxes paid, among other requirements.

The Company adopted ASU 2023 - 09 on a prospective basis effective January 1, 2025.

The adoption of this standard did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.

Newly Issued, But Not Yet Effective Accounting Standards

In November 2024, the FASB issued ASU 2024 - 03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 )" ("ASU 2024 - 03" ).

ASU 2024 - 03 requires public entities to provide disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement.

ASU 2024 - 03 is effective for the Company on January 1, 2027.

The Company is currently not expecting the ASU to have a material effect on the consolidated financial statements and footnotes.

In November 2025, the FASB issued Accounting Standards Update 2025 - 08, "Financial Instruments – Credit Losses (Topic 326 ):

Purchased Loans" ("ASU 2025 - 08" ).

ASU 2025 - 08 expands the use of the gross-up approach in Accounting Standards Codification Topic 326 to all purchased seasoned loans.

ASU 2025 - 08 is effective for the Company for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years ( January 1, 2027 for the Company).

The Company is currently evaluating the impact of adopting ASU 2025 - 08 on its consolidated financial position, results of operations, or cash flows.

In September 2025, the FASB issued Accounting Standards Update 2025 - 06, "Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350 - 40 ):

Targeted Improvements to the Accounting for Internal-Use Software" ("ASU 2025 - 06" ).

ASU 2025 - 06 modernizes the accounting for costs related to internal-use software by removing references to project stages and clarifying the capitalization threshold.

ASU 2025 - 06 is effective for the Company for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years ( January 1, 2028 for the Company).

The Company is currently evaluating the impact of adopting ASU 2025 - 06 on its consolidated financial position, results of operations, or cash flows.

In November 2024, the FASB issued Accounting Standards Update 2024 - 03, "Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220 - 40 )" ("ASU 2024 - 03" ).

ASU 2024 - 03 requires public entities to provide disaggregated footnote disclosures of specified expense categories included in expense line items presented on the face of the income statement.

ASU 2024 - 03 is effective for the Company for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027 ( January 1, 2027 for the Company).

The Company is currently evaluating the impact of adopting ASU 2024 - 03 on its consolidated financial position, results of operations, or cash flows.

CONNECTONE BANCORP, INC.

11 unchanged sentences

Accordingly, assets acquired, liabilities assumed, and consideration paid were recorded at estimated fair values on the Acquisition Date.

During the measurement period, the Company updated its assessment of the fair value of net assets acquired, resulting in a net increase of $ 4.6 million to goodwill from the amount originally reported as June 30, 2025.

During the post-closing measurement period, the Company updated its assessment of the fair value of net assets acquired, resulting in a net increase of $ 4.6 million to goodwill from the $ 7.2 million originally reported as June 30, 2025.

This adjustment was primarily related to finalizing the assessment of deferred tax assets and Section 382 valuation allowances.

As of March 31, 2026, total goodwill recorded from the merger is $ 11.9 million.

The post-closing measurement period ended on June 1, 2026, and the purchase price allocation is final.

As of June 30, 2026, total goodwill recorded from the merger is $ 11.9 million.

This goodwill is not amortizable or deductible for tax purposes and represents the future economic benefits and synergies expected from the combined operations.

There have been no adjustments to the preliminary purchase price allocation during the three months ended March 31, 2026.

While the measurement period remains open until June 1, 2026, the Company’s valuation and assessment are substantially complete.

The Company does not anticipate any further material adjustments to the preliminary valuations before the expiration of the measurement period.

There were no adjustments to the purchase price allocation during the three and six months ended June 30, 2026.

In connection with the acquisition, the consideration paid, and the fair value of identifiable assets acquired and liabilities assumed as of the Acquisition Date are summarized in the following tables:

74 unchanged sentences

Business Combination – (continued)

The following table provides details related to the fair value of PCD loans that were acquired on June 1, 2025.

The following table provides details related to the fair value of loans that were acquired on June 1, 2025.

Gross-up for PCD

9 unchanged sentences

2,860,661 ( 171,884 ) - 2,688,777

Total PCD Loans

$ 3,132,565 $ ( 206,278 ) $ ( 43,336 ) $ 2,882,951

2 unchanged sentences

Deferred Tax Benefit – The Company recorded a net deferred income tax benefit of $ 46.5 million related to the tax attributes of FLIC, along with the effects of fair value adjustments resulting from applying the purchase method of accounting.

This amount represents a measurement period adjustment from the preliminary $ 51.1 million benefit previously reported.

The current estimate reflects the $ 4.6 million net decrease in deferred tax assets described above, which accounts for the true-up of tax attributes, the application of the finalized 30.9 % blended statutory tax rate, and the recognition of a valuation allowance related to Section 382 limitations.

No changes were made to these estimates during the three months ended March 31, 2026.

While the measurement period remains open until June 1, 2026, the Company’s assessment of the combined statutory tax rates and the differences between the book and tax bases of acquired assets and assumed liabilities is substantially complete.

Although these amounts remain preliminary until the expiration of the measurement period, the Company believes the current values reflect the final fair value of these attributes in all material respects and does not anticipate further adjustments.

This amount reflects a $ 4.6 million net decrease in the deferred tax assets from the preliminary $ 51.1 million benefit originally reported as of June 30, 2025.

The post-closing measurement period adjustment accounted for the true-up of tax attributes, the application of a 30.9 % blended statutory tax rate, and the recognition of a valuation allowance related to Section 382 limitations.

The post-closing measurement period ended on June 1, 2026 and the valuation tax attributes and deferred taxes are final.

No adjustments were made to these estimates during the three and six months ended June 30, 2026.

Deposits – The fair values used for the demand and savings deposits equal the amount payable on demand at the Acquisition Date.

1 unchanged sentence

Borrowings – The fair value of Federal Home Loan Bank ("FHLB") advances were estimated by discounting the estimated future cash flows using rates currently available to the Company for debt with similar remaining maturities.

Costs related to the acquisition and subsequent integration totaled $ 2.1 million for the three months ended March 31, 2026.

These costs consisted of $ 0.1 million in direct merger-related expenses and $ 2.0 million in restructuring charges.

These amounts were expensed as incurred and are recorded within "Merger Expenses and Restructuring Charges" in the Company’s Consolidated Statements of Income.

Acquisition and integration costs totaled $ 0.1 million and $ 2.2 million for the three and six months ended June 30, 2026, respectively.

Direct merger-related expenses were $ 0.0 and $ 0.1 million, and restructuring charges were $ 0.1 million and $ 2.1 million for the same periods.

All such costs were expensed as incurred and are included in "Merger Expenses and Restructuring Charges" in the Consolidated Statements of Income.

CONNECTONE BANCORP, INC.

8 unchanged sentences

Three Months Ended

Six Months Ended

(dollars in thousands)

March 31, 2025

June 30, 2025

Net interest income

$ 101,169 $ 195,235

Noninterest income

25,127 54,570

Net income available to common stockholders

23,618 51,552

$ 0.47 $ 1.03

CONNECTONE BANCORP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Earnings per Common Share

Earnings (loss) per Common Share

The Company calculates earnings per share (“EPS”) in accordance with FASB ASC 260 - 10 - 45.

1 unchanged sentence

Under the two -class method, basic EPS is calculated by excluding dividends paid to participating securities and any undistributed earnings attributable to those securities.

Earnings per common share have been computed based on the following:

Earnings (loss) per common share have been computed based on the following:

Three Months Ended

Six Months Ended

(dollars in thousands, except for per share data)

Net income available to common stockholders

Net income (loss) available to common stockholders

$ 40,159 $ ( 21,802 ) $ 76,472 $ ( 3,069 )

1 unchanged sentence

( 83 ) 53 ( 159 ) 8

Income attributable to common stock

Income (loss) attributable to common stock

$ 40,076 $ ( 21,749 ) $ 76,313 $ ( 3,061 )

8 unchanged sentences

50,405 41,998 50,397 40,150

Earnings per common share:

Earnings (loss) per common share:

$ 0.80 $ ( 0.52 ) $ 1.52 $ ( 0.08 )

There were no antidilutive share equivalents during the three months ended March 31, 2026 and March 31, 2025 .

0.80 ( 0.52 ) 1.51 ( 0.08 )

For the three and six months ended June 30, 2026, there were no anti-dilutive share equivalents.

For the three and six months ended June 30, 2025, incremental shares of 175,000 and 220,000 , respectively, were excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive due to the net loss.

CONNECTONE BANCORP, INC.

2 unchanged sentences

Investment Securities

All of the Company’s investment securities were classified as available-for-sale as of March 31, 2026 and December 31, 2025.

Available-for-sale securities are reported at fair value, with unrealized gains and losses, net of tax, included in accumulated other comprehensive income within stockholders’ equity.

All of the Company’s investment securities were classified as available-for-sale as of June 30, 2026 and December 31, 2025.

Available-for-sale securities are reported at fair value, with unrealized gains and losses, net of tax, included in accumulated other comprehensive income (loss) within stockholders’ equity.

Fair value is determined using quoted market prices or, in instances of limited market activity, based on various assumptions.

2 unchanged sentences

(dollars in thousands)

March 31, 2026

June 30, 2026

Available-for-sale securities:

35 unchanged sentences

$ 1,308,082 $ 13,265 $ ( 70,409 ) $ 1,250,938 $ -

The Company did not have any securities classified as held-to-maturity at March 31, 2026 and December 31, 2025.

The Company did not have any securities classified as held-to-maturity at June 30, 2026 and December 31, 2025.

CONNECTONE BANCORP, INC.

2 unchanged sentences

Investment Securities – (continued)

Investment securities with a carrying value of approximately $ 782.7 million and $ 771.2 million at March 31, 2026 and December 31, 2025 , respectively, were pledged to secure public deposits, borrowings and for other purposes required or permitted by law.

As of March 31, 2026 and December 31, 2025 , there were no holdings of any one issuer, other than the U.S.

Investment securities with a carrying value of approximately $ 682.1 million and $ 771.2 million at June 30, 2026 and December 31, 2025 , respectively, were pledged to secure public deposits, borrowings and for other purposes required or permitted by law.

As of June 30, 2026 and December 31, 2025 , there were no holdings of any one issuer, other than the U.S.

Government and its agencies, in an amount greater than 10% of stockholders’ equity.

The following table presents the amortized cost and fair value of available-for-sale securities by contractual maturity as of March 31, 2026.

The following table presents the amortized cost and fair value of available-for-sale securities by contractual maturity as of June 30, 2026.

Actual maturities can be expected to differ from contractual maturities due to prepayment or early call options of the issuer.

Securities not due at a single maturity date, such as mortgage-backed securities, are shown separately.

March 31, 2026

June 30, 2026

(dollars in thousands)

15 unchanged sentences

$ 1,244,362 $ 1,179,258

There were no realized gains or losses on available-for-sale securities during the three months ended March 31, 2026 and March 31, 2025 .

There were no realized gains or losses on available-for-sale securities during the three and six months ended June 30, 2026 and June 30, 2025 .

CONNECTONE BANCORP, INC.

3 unchanged sentences

The following tables set forth securities with unrealized losses at the dates indicated presented by the length of time the securities have been in a continuous unrealized loss position.

March 31, 2026

June 30, 2026

Less than 12 Months

38 unchanged sentences

The Company has elected to exclude accrued interest from the amortized cost of its available-for-sale securities.

Accrued interest receivable for available-for-sale securities totaled $ 4.9 million and $ 5.2 million as of March 31, 2026 and December 31, 2025 .

There were no sales of available-for-sale securities during the three months ended March 31, 2026 and 2025.

Accrued interest receivable for available-for-sale securities totaled $ 4.9 million and $ 5.2 million as of June 30, 2026 and December 31, 2025 , respectively.

There were no sales of available-for-sale securities during the three and six months ended June 30, 2026 .

On June 2, 2025, the Company sold a significant portion of the available-for-sale investments acquired from FLIC with proceeds of $277.5 million, with no gross gains or losses realized upon sale.

CONNECTONE BANCORP, INC.

12 unchanged sentences

Any impairment that has not been recorded through an ACL is recognized in OCI, net of applicable taxes.

The Company has not recognized an ACL for available-for-sale securities as of March 31, 2026 and December 31, 2025.

The Company has not recognized an ACL for available-for-sale securities as of June 30, 2026 and December 31, 2025.

Federal agency obligations, residential and commercial mortgage-backed pass-through securities are issued by U.S.

8 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Renewable Energy Investments

On June 30, 2026, the Company entered into an agreement to commit up to $ 50.0 million in capital investments to a renewable energy tax equity fund ("Renewable Energy Investment").

The investment was executed to generate economic return as well as Federal Investment Tax Credits ("ITCs") and other tax benefits.

The Company accounts for this investment using the Proportional Amortization Method ("PAM") under ASC 323 - 740, Investments – Equity Method and Joint Ventures – Income Taxes .

Under PAM, the Company amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits allocated to it in future periods.

The net amortization expense and recognized tax credits will be reflected as a component of income tax expense in the Consolidated Statements of Income.

As of June 30, 2026, the balance sheet reflects the unfunded status of the commitment prior to capital calls and project completions:

Unfunded Capital Commitments :

The Company recognized an unfunded capital commitment liability of $ 50.0 million, included within Other Liabilities on the Consolidated Statement of Condition, representing its maximum legally binding obligation to fund future capital calls under the agreement.

Capital contributions will be paid in tranches pursuant to capital calls issued as underlying project construction milestones and placed-in-service criteria are satisfied.

Investment Asset :

The Company recognized a corresponding equity investment asset of $ 50.0 million, included within Other Assets on the Consolidated Statement of Condition, reflecting the gross commitment prior to capital deployment.

For the three and six months ended June 30, 2026, no capital calls were paid, and no tax credits, tax benefits, or proportional amortization expenses were recognized in the Consolidated Statements of Income, as the underlying renewable energy assets were not yet placed in service.

In accordance with ASC 740 - 270, Income Taxes — Interim Reporting , the Company calculates its quarterly income tax provision using an estimated annual effective tax rate ("AETR").

The Company incorporated the anticipated full-year tax credits and net benefits from this commitment into its estimated AETR calculation for fiscal year 2026.

This expectation supports maintaining the Company’s estimated current full-year effective tax rate at approximately 28 % for 2026.

CONNECTONE BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As part of our overall asset liability management strategy, the Company utilizes interest rate swaps to help manage its interest rate risk position.

15 unchanged sentences

The change in fair value of the hedging instrument that is included in the assessment of hedge effectiveness is presented in the same income statement line item that is used to present the earnings effect of the hedged item.

As of March 31, 2026 , the Bank was not utilizing fair value hedges.

As of June 30, 2026 , the Bank was not utilizing fair value hedges.

Cash Flow Hedges

4 unchanged sentences

The swaps are determined to be fully effective during the period presented and therefore no amount of ineffectiveness has been included in net income.

Therefore, the aggregate fair value of the swap is recorded in other assets (liabilities) with changes in fair value recorded in other comprehensive income (loss) ("OCI").

The amount included in accumulated other comprehensive income (loss) ("AOCI") would be reclassified to current earnings should the hedges no longer be considered effective.

Therefore, the aggregate fair value of the swap is recorded in other assets (liabilities) with changes in fair value recorded in OCI.

The amount included in accumulated other comprehensive income (loss) would be reclassified to current earnings should the hedges no longer be considered effective.

The Company expects the hedges to remain fully effective during the remaining term of the swaps.

2 unchanged sentences

The structure of these instruments is such that the Company entered into a total of $ 225 million in notional amount of sold interest rate cap agreements, in which we are required to pay the counterparty an incremental amount if the index rate exceeds a set cap rate.

Simultaneously, the Company purchased a total of $ 225 million notional amount of interest rate cap agreements in which we receive an incremental amount if the index rate is above a set cap rate.

Simultaneously, the Company purchased a total of $ 225 million in notional amount of interest rate cap agreements in which we receive an incremental amount if the index rate is above a set cap rate.

No payments are required if the index rate is at, or below, the cap rate on the sold or purchased interest rate cap agreements.

Interest income recorded on these swap and interest rate cap transactions totaled approximately $ 2.6 million and $ 4.1 million during the three months ended March 31, 2026 and March 31, 2025 , respectively, and is recorded as a component of either interest expense on FHLB advances or on brokered certificates of deposit.

Net interest income recorded on these swap and interest rate cap transactions totaled approximately $ 2.4 million and $ 5.1 million and $ 4.5 million and $ 8.6 million during the three and six months ended June 30, 2026 and June 30, 2025 , respectively, and is recorded as a reduction of interest expense on FHLB advances or on brokered certificates of deposit.

CONNECTONE BANCORP, INC.

3 unchanged sentences

The following table presents the gross gains (losses) recorded in OCI and the Consolidated Statements of Income relating to the cash flow hedge derivative instruments for the periods indicated:

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

Amount of gain (loss) recognized in OCI (Effective Portion)

4 unchanged sentences

$ 4,039 $ ( 2,430 ) $ -

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Amount of gain (loss) recognized in OCI (Effective Portion)

4 unchanged sentences

$ - $ ( 4,468 ) $ -

Six Months Ended June 30, 2026

Amount of gain (loss) recognized in OCI (Effective Portion)

Amount of (gain) loss reclassified from OCI to interest expense

Amount of gain recognized in other noninterest income (Ineffective Portion)

(dollars in thousands)

Interest rate contracts

$ 8,644 $ ( 5,064 ) $ -

Six Months Ended June 30, 2025

Amount of gain (loss) recognized in OCI (Effective Portion)

Amount of (gain) loss reclassified from OCI to interest expense

Amount of gain recognized in other noninterest income (Ineffective Portion)

(dollars in thousands)

Interest rate contracts

$ ( 3,792 ) $ ( 8,610 ) $ -

CONNECTONE BANCORP, INC.

2 unchanged sentences

Derivatives - (continued)

The following table reflects the cash flow hedges included in the consolidated statements of condition as of March 31, 2026 and December 31, 2025 :

March 31, 2026

The following table reflects the cash flow hedges included in the consolidated statements of condition as of June 30, 2026 and December 31, 2025 :

June 30, 2026

December 31, 2025

11 unchanged sentences

Because the Bank acts as an intermediary for its borrower, changes in the fair value of the underlying derivative contracts offset each other and do not impact the Bank’s results of operations.

The following table reflects the back-to-back swaps that are not designated as hedging instruments as of March 31, 2026:

March 31, 2026

The following tables reflect the back-to-back swaps that are not designated as hedging instruments as of June 30, 2026 and December 31, 2025 :

June 30, 2026

(dollars in thousands)

4 unchanged sentences

3 35,589 457 -

December 31, 2025

(dollars in thousands)

Derivatives not designated as hedging instruments included in other assets / other liabilities:

Interest rate swaps with borrowers

3 $ 35,914 $ 229 $ -

Interest rate swaps with offsetting counterparties

3 35,914 - 229

CONNECTONE BANCORP, INC.

2 unchanged sentences

Loans and the Allowance for Credit Losses

Loans Receivable – The following table sets forth the composition of the Company’s loan portfolio segments, including net deferred loan fees, as of March 31, 2026 and December 31, 2025 :

March 31, 2026 December 31, 2025

Loans Receivable – The following table sets forth the composition of the Company’s loan portfolio segments, including net deferred loan fees, as of June 30, 2026 and December 31, 2025 :

June 30, 2026 December 31, 2025

(dollars in thousands)

11 unchanged sentences

$ 11,869,034 $ 11,453,280

As of March 31, 2026 and December 31, 2025 , loans totaling approximately $ 8.5 billion and $ 8.2 billion, respectively, were pledged to secure borrowings from the FHLB of New York and the Federal Reserve Bank of New York.

Loans held-for-sale – The following table sets forth the composition of the Company's loans held-for-sale portfolio as of March 31, 2026 and December 31, 2025 .

March 31, 2026

As of June 30, 2026 and December 31, 2025 , loans totaling approximately $ 8.8 billion and $ 8.2 billion, respectively, were pledged to secure borrowings from the FHLB of New York and the Federal Reserve Bank of New York.

Loans held-for-sale – The following table sets forth the composition of the Company's loans held-for-sale portfolio as of June 30, 2026 and December 31, 2025 .

June 30, 2026

December 31, 2025

(dollars in thousands)

$ 10,222 $ 391

Loans Receivable on Nonaccrual Status - The following tables present the carrying value of nonaccrual loans with an ACL and the carrying value of nonaccrual loans without an ACL as of March 31, 2026 and December 31, 2025 :

March 31, 2026

Residential real estate

June 30, 2026

Nonaccrual loans with ACL

23 unchanged sentences

Purchased Credit-Deteriorated Loans ("PCD") - PCD loans are defined as a loan or group of loans that have experienced more-than-insignificant credit deterioration since origination.

The following table presents the recorded investment of those loans as of March 31, 2026 and December 31, 2025:

The following table presents the recorded investment of those loans as of June 30, 2026 and December 31, 2025:

(dollars in thousands)

March 31, 2026

June 30, 2026

December 31, 2025

5 unchanged sentences

$ 193,447 $ 221,130

The majority of these loans are associated with multifamily properties located in the five boroughs of New York City, most of which are entirely or predominantly rent-regulated.

This specific pool is subject to unique stressors, primarily due to the 2019 New York rent laws, which restricted rent increases while operating in an environment of escalating expenses.

The loans in the above table are primarily secured by multifamily properties located in the five boroughs of New York City and subject to rent regulation.

This specific pool is subject to unique stressors, including the 2019 New York rent laws, which further restricted rent increases while operating in an environment of escalating expenses.

In addition, the current city administration has supported a rent freeze on rent stabilized apartments, while proposing other policy initiatives which could have an adverse impact on rent stabilized properties.

The New York City Rent Guidelines Board recently approved no increases for one - and two -year lease renewals after October 1.

Credit Quality Indicators - The Company continuously monitors the credit quality of its loans receivable.

15 unchanged sentences

Generally, loans up for renewal are subject to a full credit evaluation before the renewal is granted and such loans are considered current period originations for purposes of the table below.

The following table presents loans by origination, risk designation and gross charge-offs as of and during the three months ended March 31, 2026 (dollars in thousands):

The following table presents loans by origination, risk designation and gross charge-offs as of and during the six months ended June 30, 2026 (dollars in thousands):

Term loans amortized cost basis by origination year

126 unchanged sentences

Collateral Dependent Loans :

The following tables present the amortized cost basis of collateral dependent loans by loan segment as of March 31, 2026 and December 31, 2025 :

March 31, 2026

The following tables present the amortized cost basis of collateral dependent loans by loan segment as of June 30, 2026 and December 31, 2025 :

June 30, 2026

Real Estate Other

19 unchanged sentences

Loans and the Allowance for Credit Losses – (continued)

Aging Analysis - The following tables present the aging of the amortized cost in past due loans as of March 31, 2026 and December 31, 2025 :

March 31, 2026

Aging Analysis - The following tables present the aging of the amortized cost in past due loans as of June 30, 2026 and December 31, 2025 :

June 30, 2026

30-59 Days Past Due

32 unchanged sentences

The following tables detail the amount of gross loans that are individually analyzed, collectively evaluated, and loans acquired with deteriorated quality, and the related portion of the ACL for loans that are allocated to each loan portfolio segment.

March 31, 2026

June 30, 2026

Commercial real estate Commercial construction

40 unchanged sentences

Loans and the Allowance for Credit Losses – (continued)

Activity in the Company’s ACL for loans for the three months ended March 31, 2026 and March 31, 2025 are summarized in the tables below.

Three Months Ended March 31, 2026

Activity in the Company’s ACL for loans for the three and six months ended June 30, 2026 and June 30, 2025 are summarized in the tables below.

Three Months Ended June 30, 2026

Commercial real estate

2 unchanged sentences

(dollars in thousands)

Balance as of December 31, 2025

Balance as of March 31, 2026

$ 16,189 $ 119,800 $ 4,680 $ 12,368 $ 19 $ 153,056

3 unchanged sentences

505 13 - 13 - 531

Provision for credit losses - loans:

Operating provision for credit losses

Provision for (reversal of) credit losses – loans:

Operating (reversal of) provision for credit losses

( 2,308 ) 10,181 ( 511 ) ( 362 ) 1 7,001

Nonaccretable credit marks on PCD loans

Provision for (reversal of) PCD allowance

1,811 ( 547 ) - ( 178 ) - 1,086

Balance as of June 30, 2026

$ 13,902 $ 110,218 $ 4,169 $ 11,840 $ 20 $ 140,149

Three Months Ended June 30, 2025

Commercial real estate

Commercial construction

Residential real estate

(dollars in thousands)

Balance as of March 31, 2025

$ 18,031 $ 54,586 $ 5,030 $ 4,752 $ 4 $ 82,403

Three Months Ended March 31, 2025

( 3,011 ) ( 2,027 ) - - ( 1 ) ( 5,039 )

23 90 - 5 - 118

Provision for (reversal of) credit losses – loans:

Initial provision related to acquisition

985 16,017 78 10,217 10 27,307

Operating provision for (reversal of) credit losses

3,968 4,281 314 ( 514 ) 16 8,065

Nonaccretable credit marks on PCD loans

965 42,256 - 115 - 43,336

Balance as of June 30, 2025

$ 20,961 $ 115,203 $ 5,422 $ 14,575 $ 29 $ 156,190

CONNECTONE BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Loans and the Allowance for Credit Losses – (continued)

Six Months Ended June 30, 2026

Commercial real estate

4 unchanged sentences

$ 15,358 $ 121,427 $ 5,303 $ 12,199 $ 18 $ 154,305

Non-PCD Loans

( 2,770 ) ( 17,009 ) - ( 1 ) - ( 19,780 )

- ( 8,868 ) - - - ( 8,868 )

(Reversal of) provision for credit losses – loans

935 35 - 28 - 998

Balance as of March 31, 2025

Provision for (reversal of) credit losses – loans:

Operating (reversal of) provision for credit losses

( 1,549 ) 15,508 ( 1,134 ) ( 207 ) 2 12,620

Provision for (reversal of) PCD allowance

1,928 ( 875 ) - ( 179 ) - 874

Balance as of June 30, 2026

$ 13,902 $ 110,218 $ 4,169 $ 11,840 $ 20 $ 140,149

Six Months Ended June 30, 2025

Commercial real estate

Commercial construction

Residential real estate

(dollars in thousands)

Balance as of December 31, 2024

$ 18,278 $ 54,777 $ 5,064 $ 4,561 $ 5 $ 82,685

( 3,011 ) ( 5,582 ) - - ( 1 ) ( 8,594 )

178 90 - 5 - 273

Provision for (reversal of) credit losses – loans:

Initial provision related to acquisition - loans

985 16,017 78 10,217 10 27,307

Operating provision for (reversal of) credit losses

3,566 7,645 280 ( 323 ) 15 11,183

Nonaccretable credit marks on PCD loans

965 42,256 - 115 - 43,336

Balance as of June 30, 2025

$ 20,961 $ 115,203 $ 5,422 $ 14,575 $ 29 $ 156,190

CONNECTONE BANCORP, INC.

3 unchanged sentences

Loan Modifications to Borrowers Experiencing Financial Difficulty:

The following table presents the amortized cost basis of loans to borrowers experiencing financial difficulty that were modified during the three months ended March 31, 2026 .

The modification percentage represents the total loans modified during the three months ended as a percentage of the total gross loan balances as of March 31, 2026 .

The following tables present the amortized cost basis of loans to borrowers experiencing financial difficulty that were modified during the three and six months ended June 30, 2026 .

The modification percentage represents the total loans modified during the three and six months ended as a percentage of the total gross loan balances as of June 30, 2026 .

Three Months Ended

Amortized Cost Basis

2 unchanged sentences

Interest Rate Reduction

Gross Loans at March 31, 2026

Gross Loans at June 30, 2026

Modification % (Modified Loans/Gross Loans)

March 31, 2026

(dollars in thousands)

June 30, 2026

$ 1,500 $ 1,425 $ - $ 2,925 $ 1,603,736 0.18 %

7 unchanged sentences

$ 30,426 $ 1,425 $ - $ 31,851 $ 11,872,515 0.27 %

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the three months ended March 31, 2026 .

Six Months Ended

Amortized Cost Basis

Term Extension

Payment Deferral

Interest Rate Reduction

Gross Loans at June 30, 2026

Modification % (Modified Loans/Gross Loans)

(dollars in thousands)

June 30, 2026

$ 9,811 $ 1,425 $ 596 $ 11,832 $ 1,603,736 0.74 %

Commercial real estate

28,926 - - 28,926 8,545,330 0.34

Commercial construction

- - - - 528,103 -

Residential real estate

- - - - 1,192,033 -

- - - - 3,313 -

$ 38,737 $ 1,425 $ 596 $ 40,758 $ 11,872,515 0.34 %

CONNECTONE BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Loans and the Allowance for Credit Losses – (continued)

The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the three and six months ended June 30, 2026 .

Three Months Ended

Weighted Average Term Extension (Months)

1 unchanged sentence

Weighted Average Interest Rate Reduction

Weighted Average Payment Reduction

March 31, 2026

(dollars in thousands)

June 30, 2026

Commercial real estate

124 2 2.0 % -

Six Months Ended

Weighted Average Term Extension (Months)

Weighted Average Payment Deferral (Months)

Weighted Average Interest Rate Reduction

June 30, 2026

Commercial real estate

CONNECTONE BANCORP, INC.

3 unchanged sentences

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

The following table presents the performance of such loans that have been modified in the last twelve months through March 31, 2026 .

The following table presents the performance of such loans that have been modified in the last twelve months through June 30, 2026 .

30-89 Days Past Due

90 Days or Greater Past Due

March 31, 2026

June 30, 2026

(dollars in thousands)

2 unchanged sentences

28,926 - 2,371

$ 46,871 $ - $ 2,371

The following tables present the amortized cost basis of loans to borrowers experiencing financial difficulty that were modified during the three and six months ended June 30, 2025 .

The modification percentage represents the total loans modified during the three and six months ended as a percentage of the total gross loan balances as of June 30, 2025 .

Three Months Ended

Amortized Cost Basis

Term Extension

Payment Deferral

Interest Rate Reduction

Gross Loans at June 30, 2026

Modification % (Modified Loans/Gross Loans)

(dollars in thousands)

June 30, 2025

$ 6,491 $ 19,461 $ - $ 25,952 $ 1,607,528 1.61 %

Commercial real estate

- - - - 7,624,033 -

Commercial construction

8,419 - - 8,419 681,222 1.24

There were eight modifications to borrowers experiencing financial difficulty during the three months ended March 31, 2026.

There were no modifications to borrowers experiencing financial difficulty during the three months ended March 31, 2025.

During the three months ended March 31, 2026 and March 31, 2025 , the Company had no commitments to lend additional funds to borrowers experiencing financial difficulty for which the Company modified the terms of the loans in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension during the current period.

There were no loans to borrowers experiencing financial difficulty that had a payment default during the three months ended March 31, 2026 and March 31, 2025, which were modified in the twelve months prior to that default.

Residential real estate

- - - - 1,254,646 -

- - - - 1,709 -

$ 14,910 $ 19,461 $ - $ 34,371 $ 11,169,138 0.31 %

Six Months Ended

Amortized Cost Basis

Term Extension

Payment Deferral

Interest Rate Reduction

Gross Loans at June 30, 2026

Modification % (Modified Loans/Gross Loans)

(dollars in thousands)

June 30, 2025

$ 6,491 $ 19,461 $ - $ 25,952 $ 1,607,528 1.61 %

Commercial real estate

- - - - 7,624,033 -

Commercial construction

8,419 - - 8,419 681,222 1.24

Residential real estate

- - - - 1,254,646 -

- - - - 1,709 -

$ 14,910 $ 19,461 $ - $ 34,371 $ 11,169,138 0.31 %

CONNECTONE BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Loans and the Allowance for Credit Losses – (continued)

The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the three and six months ended June 30, 2025 .

Three Months Ended

Weighted Average Term Extension (Months)

Weighted Average Payment Deferral (Months)

Weighted Average Interest Rate Reduction

June 30, 2025

Commercial construction

Six Months Ended

Weighted Average Term Extension (Months)

Weighted Average Payment Deferral (Months)

Weighted Average Interest Rate Reduction

June 30, 2025

Commercial construction

During the three and six months ended June 30, 2026 and June 30, 2025 , the Company had no commitments to lend additional funds to borrowers experiencing financial difficulty for which the Company modified the terms of the loans in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension during the current period.

There were no loans to borrowers experiencing financial difficulty that had a payment default during the three and six months ended June 30, 2026 and June 30, 2025, which were modified in the twelve months prior to that default.

Default is determined at 90 or more days past due, upon charge-off, or upon foreclosure.

7 unchanged sentences

The provision is recorded within the provision for credit losses on the Company’s income statement.

The following table presents a roll forward of the ACL for unfunded commitments for the three months ended March 31, 2026 and 2025 :

The following tables present a roll forward of the ACL for unfunded commitments for the three and six months ended June 30, 2026 and 2025 :

Three Months Ended

3 unchanged sentences

$ 2,901 $ 3,009

(Reversal of) provision for credit losses – unfunded commitments

Provision for credit losses – unfunded commitments

Balance at end of period

$ 3,114 $ 3,337

Six Months Ended

(dollars in thousands)

Balance at beginning of period

$ 3,108 $ 2,627

Provision for credit losses – unfunded commitments

Balance at end of period

$ 3,114 $ 3,337

Components of Provision for Credit Losses

The following table summarizes the provision for (reversal of) credit losses for the three months ended March 31, 2026 and 2025 :

The following tables summarize the provision for (reversal of) credit losses for the three and six months ended June 30, 2026 and 2025 :

Three Months Ended

1 unchanged sentence

(dollars in thousands)

Provision for credit losses – loans

Operating provision for credit losses

$ 7,001 $ 8,065

Release of nonaccretable marks due to improvements in expected cash flows

(Reversal of) provision for credit losses - unfunded commitments

Initial provision related to acquisition – loans

Provision for credit losses on PCD loans

Provision for credit losses - unfunded commitments

Provision for credit losses

$ 8,300 $ 35,700

Six Months Ended

(dollars in thousands)

Operating provision for credit losses

$ 12,620 $ 11,183

Initial provision related to acquisition - loans

Provision for credit losses on PCD loans

Provision for credit losses - unfunded commitments

Provision for credit losses

$ 13,500 $ 39,200

CONNECTONE BANCORP, INC.

22 unchanged sentences

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following methods and assumptions were used to estimate the fair values of the Company’s assets measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025 :

The following methods and assumptions were used to estimate the fair values of the Company’s assets measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025 :

Available-for-Sale Securities and Equity Securities :

16 unchanged sentences

Fair Value Measurements and Fair Value of Financial Instruments – (continued)

For financial assets and liabilities measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used as of March 31, 2026 and December 31, 2025 are as follows:

March 31, 2026

For financial assets and liabilities measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used as of June 30, 2026 and December 31, 2025 are as follows:

June 30, 2026

Fair Value Measurements at Reporting Date Using

19 unchanged sentences

Other securities

1,760 1,760 - -

Total available-for-sale securities

42 unchanged sentences

$ 704 $ - $ 704 $ -

There were no transfers between Level 1, Level 2 and Level 3 during the three months ended March 31, 2026 and for the year ended December 31, 2025 .

There were no transfers between Level 1, Level 2 and Level 3 during the six months ended June 30, 2026 and for the year ended December 31, 2025 .

Assets Measured at Fair Value on a Nonrecurring Basis

1 unchanged sentence

These adjustments to fair value usually result from the application of lower of cost or fair value accounting or impairment write-downs of individual assets.

The following methods and assumptions were used to estimate the fair values of the Company’s assets measured at fair value on a nonrecurring basis as of March 31, 2026 and December 31, 2025 .

The following methods and assumptions were used to estimate the fair values of the Company’s assets measured at fair value on a nonrecurring basis as of June 30, 2026 and December 31, 2025 .

Loans Held-for-Sale :

2 unchanged sentences

Management obtains quotes or bids on all or parts of these loans directly from the purchasing financial institutions (Level 2 ).

As of March 31, 2026 loans held-for-sale totaled $ 10.2 consisting entirely of SBA loans.

As of June 30, 2026, the Company held no loans held-for-sale.

As of December 31, 2025 , loans held-for-sale totaled $ 0.4 million, consisting entirely of residential mortgage loans.

10 unchanged sentences

Estimates of fair value used for collateral supporting commercial loans generally are based on assumptions not observable in the marketplace and are also based on Level 3 inputs.

For assets measured at fair value on a nonrecurring basis, the fair value measurements as of March 31, 2026 and December 31, 2025 are as follows:

For assets measured at fair value on a nonrecurring basis, the fair value measurements as of June 30, 2026 and December 31, 2025 are as follows:

Fair Value Measurements at Reporting Date Using

Assets measured at fair value on a nonrecurring basis:

March 31, 2026 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

June 30, 2026 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

Collateral dependent loans:

(dollars in thousands)

$ 728 $ - $ - $ 728

Commercial real estate

6 unchanged sentences

$ 693 $ - $ - $ 693

Collateral dependent loans – Collateral dependent loans as of March 31, 2026 that required a valuation allowance were $ 10.0 million with a related valuation allowance of $ 0.2 million compared to $ 0.8 million with a related valuation allowance of $ 0.1 million as of December 31, 2025 .

Collateral dependent loans – Collateral dependent loans as of June 30, 2026 that required a nonrecurring fair value measurement were $ 41.7 million with no related specific allowance for credit losses compared to $ 0.8 million with a specific allowance for credit losses of $ 0.1 million as of December 31, 2025 .

CONNECTONE BANCORP, INC.

4 unchanged sentences

Recurring basis

The tables below present a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3 ) for the three months ended March 31, 2026 and for the year ended December 31, 2025 :

The tables below present a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3 ) for the six months ended June 30, 2026 and for the year ended December 31, 2025 :

(dollars in thousands)

Obligations of U.S.

states and political subdivisions

(dollars in thousands)

Beginning balance, January 1, 2026

1 unchanged sentence

Change in unrealized loss

Ending balance, March 31, 2026

Ending balance, June 30, 2026

(dollars in thousands)

Obligations of U.S.

states and political subdivisions

(dollars in thousands)

Beginning balance, January 1, 2025

2 unchanged sentences

Ending balance, December 31, 2025

The following methods and assumptions were used to estimate the fair values of the Company’s assets measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025 .

The table below provides quantitative information about significant unobservable inputs used in fair value measurements within Level 3 hierarchy.

March 31, 2026

Valuation Techniques

Unobservable Input

Available-for-sale securities:

(dollars in thousands)

Obligations of U.S.

states and political subdivisions

$ 6,378 Discounted cash flows

Discount rate

The following methods and assumptions were used to estimate the fair values of the Company’s assets measured on a recurring basis.

The Company held no Level 3 recurring assets at June 30, 2026.

Quantitative information regarding the significant unobservable inputs used in Level 3 fair value measurements as of December 31, 2025, is detailed below:

December 31, 2025

14 unchanged sentences

The tables below provide quantitative information about significant unobservable inputs used in fair value measurements within Level 3 hierarchy of collateral dependent loans.

March 31, 2026

June 30, 2026

(dollars in thousands)

2 unchanged sentences

Range (weighted average)

Commercial loans

$ 728 Appraisals of collateral value

Adjustment for comparable sales

-5% to +15% (+8.1%)

Commercial real estate loans

2 unchanged sentences

-1% to +15% (+3.0%)

Commercial real estate loans

29,934 Income capitalization approach

Capitalization rate

Total commercial real estate loans

41,655 Vacancy & collection loss rate

December 31, 2025

11 unchanged sentences

Fair Value Measurements and Fair Value of Financial Instruments – (continued)

As of March 31, 2026, the fair value measurements presented are consistent with Topic 820, Fair Value Measurement , in which fair value represents exit price.

The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments as of March 31, 2026 and December 31, 2025 :

As of June 30, 2026, the fair value measurements presented are consistent with Topic 820, Fair Value Measurement , in which fair value represents exit price.

The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments as of June 30, 2026 and December 31, 2025 :

Fair Value Measurements

4 unchanged sentences

(dollars in thousands)

March 31, 2026

June 30, 2026

Financial assets:

8 unchanged sentences

11,728,885 11,532,302 - - 11,532,302

Loans held-for-sale

10,222 10,222 - 10,222 -

Derivatives - interest rate contracts

60 unchanged sentences

The Company’s OCI is comprised of unrealized holding gains and losses on available-for-sale securities, unrealized gains and losses on cash flow hedges, obligations for defined benefit pension plan and an adjustment to reflect the curtailment of the Company’s defined benefit pension plan, each net of taxes.

The following table represents the reclassification out of AOCI for the periods presented (dollars in thousands):

Details about Accumulated Other Comprehensive Income Components

Amounts Reclassified from Accumulated Other Comprehensive Income

The following table represents the reclassification out of accumulated other comprehensive income (loss) for the periods presented (dollars in thousands):

Details about Accumulated Other Comprehensive Income (Loss) Components

Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)

Affected Line item in the Consolidated Statements of Income

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Interest income on cash flow hedges

7 unchanged sentences

Comprehensive Income – (continued)

AOCI as of March 31, 2026 and December 31, 2025 consisted of the following:

March 31, 2026

Accumulated other comprehensive income (loss) as of June 30, 2026 and December 31, 2025 consisted of the following:

June 30, 2026

December 31, 2025

6 unchanged sentences

Stock-based Compensation

The Company’s stockholders approved the 2017 Equity Compensation Plan (“the Plan”) on May 23, 2017.

The Plan eliminates all remaining issuable shares under previous plans and is the only outstanding plan as of March 31, 2026 .

On May 30, 2023, the Company's stockholders approved an amendment to the Plan that increased the maximum number of shares issuable to 1,200,000 .

Grants under the Plan can be in the form of stock options (qualified or non-qualified), restricted shares, deferred stock units or performance units.

Shares available for grant and issuance under the Plan as of March 31, 2026 were approximately 64,787 .

The Company intends to issue all shares under the Plan in the form of newly issued shares.

As of March 31, 2026 and December 31, 2025, the Company had no outstanding stock options.

On May 19, 2026, the Company’s stockholders approved the 2026 Equity Incentive Plan (the “2026 Plan”).

Upon stockholder approval, the 2026 Plan replaced all prior equity incentive plans, and no further awards will be granted under any previous plans.

The 2026 Plan initially authorized 1,500,000 shares of common stock for issuance, which may be granted in the form of stock options (qualified or non-qualified), restricted stock, restricted stock units, or performance units.

The Company intends to issue all shares under the 2026 Plan from newly issued shares of common stock.

As of June 30, 2026, the 2026 Plan was the Company’s only active equity plan, with 1,467,136 shares remaining available for future grant.

As of June 30, 2026 and December 31, 2025, the Company had no outstanding stock options.

Restricted stock and deferred stock units generally vest over a three -year period, with one - third vesting annually beginning one year after the grant date.

7 unchanged sentences

Forfeiture rates are not estimated but are recorded as incurred.

Stock-based compensation expense for the three months ended March 31, 2026 and March 31, 2025 was $ 1.4 million and $ 1.3 million, respectively.

Activity in the Company’s restricted stock for the three months ended March 31, 2026 was as follows:

Stock-based compensation expense for the six months ended June 30, 2026 and June 30, 2025 was $ 2.9 million and $ 2.5 million, respectively.

Activity in the Company’s restricted stock for the six months ended June 30, 2026 was as follows:

Nonvested Shares

5 unchanged sentences

( 7,326 ) 21.63

Nonvested as of March 31, 2026

Nonvested as of June 30, 2026

113,441 $ 24.55

3 unchanged sentences

Stock-Based Compensation – (continued)

As of March 31, 2026 , there was approximately $ 1.6 million of total unrecognized compensation cost related to nonvested restricted stock granted.

As of June 30, 2026 , there was approximately $ 2.1 million of total unrecognized compensation cost related to nonvested restricted stock granted.

The cost is expected to be recognized over a weighted average period of 1.3 years.

8 unchanged sentences

( 12,954 ) 21.30

Unearned as of March 31, 2026

Unearned as of June 30, 2026

249,446 382,501 $ 23.16

As of March 31, 2026 , the specific number of shares related to performance units that were expected to vest was 255,833 , determined by actual performance in consideration of the established range of the performance targets, which is consistent with the level of expense currently being recognized over the vesting period.

As of June 30, 2026 , the specific number of shares related to performance units that were expected to vest was 249,446 , determined by actual performance in consideration of the established range of the performance targets, which is consistent with the level of expense currently being recognized over the vesting period.

Should this expectation change, additional compensation expense could be recorded in future periods or previously recognized expense could be reversed.

As of March 31, 2026 , the maximum number of performance units that ultimately could vest if performance targets were exceeded is 382,501 .

During the three months ended March 31, 2026 , 45,746 shares vested.

As of June 30, 2026 , the maximum number of performance units that ultimately could vest if performance targets were exceeded is 382,501 .

During the six months ended June 30, 2026 , 45,746 shares vested.

A total of 24,582 shares were netted from the vested shares to satisfy employee tax obligations.

The net shares issued from vesting of performance units during the three months ended March 31, 2026 were 21,164 shares.

As of March 31, 2026 , compensation cost of approximately $ 3.0 million related to non-vested performance units not yet recognized is expected to be recognized over a weighted average period of 2.1 years.

The net shares issued from vesting of performance units during the six months ended June 30, 2026 were 21,164 shares.

As of June 30, 2026 , compensation cost of approximately $ 3.2 million related to non-vested performance units not yet recognized is expected to be recognized over a weighted average period of 2.3 years.

A summary of the status of unearned deferred stock units and the changes in deferred stock units during the period is presented in the table below:

8 unchanged sentences

( 3,218 ) 22.21

Unearned as of March 31, 2026

Unearned as of June 30, 2026

186,655 $ 24.98

1 unchanged sentence

A portion of the shares that vest will be netted out to satisfy the tax obligations of the recipient.

During the three months ended March 31, 2026 , 92,170 shares vested.

During the six months ended June 30, 2026 , 92,170 shares vested.

A total of 49,321 shares were netted from the vested shares to satisfy employee tax obligations.

The net shares issued from vesting of deferred stock units during the three months ended March 31, 2026 were 42,849 shares.

As of March 31, 2026 , compensation cost of approximately $ 3.6 million related to non-vested deferred stock units, not yet recognized, is expected to be recognized over a weighted average period of 1.9 years.

The net shares issued from vesting of deferred stock units during the six months ended June 30, 2026 were 42,849 shares.

As of June 30, 2026 , compensation cost of approximately $ 2.9 million related to non-vested deferred stock units, not yet recognized, is expected to be recognized over a weighted average period of 1.7 years.

CONNECTONE BANCORP, INC.

27 unchanged sentences

$ ( 266 ) $ -

Six Months Ended

Affected Line Item in the Consolidated

Statements of Income

Legacy CNOB Plan

(dollars in thousands)

Interest cost

$ 180 $ 211 Deposit, loan and other income/Salaries and employee benefits

Expected return on plan assets

( 476 ) ( 460 ) Deposit, loan and other income/Salaries and employee benefits

Total periodic pension income

$ ( 296 ) $ ( 249 )

Six Months Ended

Affected Line Item in the Consolidated

Statements of Income

Legacy FLIC Plan

(dollars in thousands)

Interest cost

$ 1,252 $ - Deposit, loan and other income

Expected return on plan assets

( 1,783 ) - Deposit, loan and other income

Total periodic pension income

$ ( 531 ) $ -

CONNECTONE BANCORP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Components of Net Periodic Pension Cost - (continued)

Contributions

The Company did not contribute to the pension plans during the three months ended March 31, 2026 .

The Company did not contribute to the pension plans during the six months ended June 30, 2026 .

The Company does not plan on contributing amounts to either Pension Trust for the remainder of 2026.

18 unchanged sentences

Time Deposits

As of March 31, 2026 and December 31, 2025 , the Company's total time deposits were $ 3.0 billion and $ 2.8 billion, respectively.

Included in time deposits were nonreciprocal brokered certificates of approximately $ 0.9 billion as of both March 31, 2026 and December 31, 2025 .

As of March 31, 2026 , the contractual maturities of these time deposits were as follows (dollars in thousands):

As of June 30, 2026 and December 31, 2025 , the Company's total time deposits were $ 2.9 billion and $ 2.8 billion, respectively.

Included in time deposits were nonreciprocal brokered certificates of approximately $ 0.8 billion and $ 0.7 billion as of June 30, 2026 and December 31, 2025 , respectively.

As of June 30, 2026 , the contractual maturities of these time deposits were as follows (dollars in thousands):

Time deposits (before net discount)

1 unchanged sentence

Time deposits (after net discount)

The amount of time deposits with balances greater than or equal to $250,000 was $ 1.0 billion as of both March 31, 2026 and December 31, 2025 .

The amount of time deposits with balances greater than or equal to $250,000 was $ 1.1 billion and $ 1.0 billion as of June 30, 2026 and December 31, 2025, respectively.

CONNECTONE BANCORP, INC.

3 unchanged sentences

The Company’s FHLB borrowings and weighted average interest rates are summarized below:

March 31, 2026

June 30, 2026

December 31, 2025

7 unchanged sentences

- - 25,000 4.18

3 years through less than 4 years

4 years through 5 years

After 5 years

9 unchanged sentences

All FHLB advances bear fixed rates.

The advances as of March 31, 2026 were primarily collateralized by approximately $ 3.8 billion of commercial mortgage loans and securities, net of required over collateralization amounts, under a blanket lien arrangement.

As of March 31, 2026, the Company had a remaining borrowing capacity of approximately $ 1.8 billion at FHLB.

The advances as of June 30, 2026 were primarily collateralized by approximately $ 3.9 billion of commercial mortgage loans and securities, net of required over collateralization amounts, under a blanket lien arrangement.

As of June 30, 2026, the Company had a remaining borrowing capacity of approximately $ 2.0 billion at FHLB.

CONNECTONE BANCORP, INC.

11 unchanged sentences

Therefore, effective for quarterly interest rate resets after July 3, 2023 the subordinated debentures’ floating rate will be three -month CME Term SOFR plus 2.85 % plus a tenor spread adjustment of 0.26161 %.

The rate as of March 31, 2026 was 6.78 %.

The rate as of June 30, 2026 was 6.78 %.

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 FASB ASC 810 - 10.

Distributions on the subordinated debentures owned by the subsidiary trust have been classified as interest expense in the Consolidated Statements of Income.

The following table summarizes the mandatory redeemable trust preferred securities of the Company’s Statutory Trust II as of March 31, 2026 and December 31, 2025 .

As of March 31, 2026

The following table summarizes the mandatory redeemable trust preferred securities of the Company’s Statutory Trust II as of June 30, 2026 and December 31, 2025 .

Issuance Date

4 unchanged sentences

Floating 3-month CME Term SOFR + 285 Basis Points + 26.161 Basis Points

As of December 31, 2025

Issuance Date Securities Issued Liquidation Value Coupon Rate Maturity Redeemable by Issuer Beginning

$1,000 per Capital Security

Floating 3-month CME Term SOFR + 285 Basis Points+26.161 Basis Points

On May 15, 2025, the Parent Corporation issued $ 200 million in aggregate principal amount of fixed-to-floating rate subordinated notes (the "2025 Notes").

10 unchanged sentences

Consolidated Bank

Three Months Ended March 31,

Consolidated Bank

Three Months Ended June 30,

Six Months Ended June 30,

(dollars in thousands)

2 unchanged sentences

Noninterest income

7,914 4,865 14,575 8,614

Total segment income

5 unchanged sentences

Provision for credit losses

8,300 35,700 13,500 39,200

Salaries and employee benefits

2 unchanged sentences

23,795 48,042 48,946 64,374

Income tax (benefit) expense

Segment consolidated net (loss) income

Income tax expense (benefit)

16,183 ( 4,988 ) 30,891 2,172

Segment consolidated net income (loss)

$ 46,021 $ ( 16,878 ) $ 88,044 $ 4,355

Other segment disclosures

3 unchanged sentences

74,985 63,786 146,193 121,521

1,781 1,325 3,587 2,423

Amortization of core deposit intangibles

2,845 1,251 5,690 1,530

Other significant noncash items:

Provision for credit losses

8,300 35,700 13,500 39,200

Segment assets

5 unchanged sentences

$ 14,402,382 $ 13,906,221 $ 14,402,382 $ 13,906,221

9,482 9,517 9,482 9,517

Total consolidated assets

2 unchanged sentences

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

The purpose of this analysis is to provide the reader with information relevant to understanding and assessing the Company’s results of operations for the periods presented herein and financial condition as of March 31, 2026 and December 31, 2025.

In order to fully understand this analysis, the reader is encouraged to review the consolidated financial statements and accompanying notes thereto appearing elsewhere in this report.

10 unchanged sentences

(5) political developments, sovereign debt problems, wars or other hostilities such as the ongoing conflict between Ukraine and Russia and the United States and Iran, and instability in the Middle East, may disrupt or increase volatility in securities markets or other economic conditions;

(6) legislative or regulatory changes or actions may adversely affect the businesses in which ConnectOne Bancorp is engaged or the business of our clients, such as changes affecting the owners of rest stabilized multi-family buildings in New York City;

(6) legislative or regulatory changes or actions may adversely affect the businesses in which ConnectOne Bancorp is engaged or the business of our clients, such as changes affecting the owners of rent stabilized multi-family buildings in New York City;

(7) changes and trends in the securities markets may adversely impact ConnectOne Bancorp;

8 unchanged sentences

We consider accounting policies that require management to exercise significant judgment or discretion or to make significant assumptions that have, or could have, a material impact on the carrying value of certain assets or on income to be critical accounting policies.

As of March 31, 2026, there have been no material changes to our critical accounting policies as compared to the critical accounting policies disclosed in our most recent Annual Report on Form 10-K.

As of June 30, 2026, there have been no material changes to our critical accounting policies as compared to the critical accounting policies disclosed in our most recent Annual Report on Form 10-K.

Reference is made to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Operating Results Overview

Net income available to common stockholders for the three months ended March 31, 2026 was $36.3 million, as compared to $18.7 million for the prior-year period.

The Company’s diluted earnings per share were $0.72 for the three months ended March 31, 2026, as compared with diluted earnings per share of $0.49 for the prior-year period.

The $17.6 million increase in net income available to common stockholders and the $0.23 increase in diluted earnings per share were due to a $43.0 million increase in net interest income and a $2.3 million increase in noninterest income, which was partially offset by an $18.6 million increase in noninterest expenses, a $7.5 million increase in income tax expense and a $1.7 million increase in provision for credit losses.

The increases in net interest income and noninterest expenses were primarily driven by a full three-month impact of the FLIC acquisition in 2026, compared to the pre-merger period in 2025.

Net income (loss) available to common stockholders for the three months ended June 30, 2026 was $40.2 million, as compared to ($21.8) million for the prior-year period.

The Company’s diluted earnings (loss) per share was $0.80 for the three months ended June 30, 2026 compared with ($0.52) for the prior-year period.

The $62.0 million increase in net income available to common stockholders and the $1.32 increase in diluted earnings per share were due to a $34.8 million increase in net interest income, a $27.4 million decrease in provision for credit losses, a $2.7 million increase in noninterest income and a $18.2 million decrease in noninterest expenses, which was partially offset by a $21.2 million increase in income tax expense.

The reduction in provision for credit losses primarily reflects the initial $27.4 million provision recognized in the prior-year period upon closing the acquisition of The First of Long Island Corporation ("FLIC").

Similarly, the $18.2 million decrease in noninterest expenses was driven by $30.7 million in merger and restructuring charges recognized in the prior-year period, partially offset by the inclusion of ongoing FLIC operating expenses in the current period.

Overall, year-over-year variances across all income statement line items were heavily impacted by the merger with FLIC.

Net income (loss) available to common stockholders for the six months ended June 30, 2026 was $76.5 million, as compared to ($3.1) million for the prior-year period.

The Company’s diluted earnings (loss) per share were $1.51 for the six months ended June 30, 2026 compared with ($0.08) for the prior-year period.

The $79.5 million increase in net income available to common stockholders and the $1.59 increase in diluted earnings per share were due to a $77.8 million increase in net interest income, a $25.7 million decrease in provision for credit losses and a $5.1 million increase in noninterest income, which was partially offset by a $28.7 million increase in income tax expense and a $0.3 million increase in noninterest expenses.

The reduction in provision for credit losses primarily reflects the initial $27.4 million provision recognized in the prior-year period upon closing the acquisition of FLIC.

Noninterest expenses were essentially flat year-over-year, as the prior-year period included $32.1 million in merger and restructuring charges associated with the transaction;

excluding these prior-year charges, core noninterest expenses increased due to operating the larger combined franchise for the full six-month period in 2026.

Overall, performance variances across both periods reflect the significant expansion of the franchise following the FLIC merger.

Net Interest Income and Margin

2 unchanged sentences

Net interest margin is defined as net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

Fully taxable equivalent net interest income for the first quarter of 2026 increased $43.4 million, or 65.2%, from prior-year period, due to a 46 basis-point widening of the net interest margin to 3.39% from 2.93%, and a 42.7% increase in average interest earning assets.

The increase in average interest-earning assets was primarily due to the full-period impact of assets acquired in the FLIC merger.

Fully taxable equivalent net interest income for the second quarter of 2026 increased $35.0 million, or 43.9%, from the prior-year period, due to a 36 basis-point widening of the net interest margin to 3.42% from 3.06%, and a 28.5% increase in average interest earning assets.

The margin also benefited from a 16 basis-point increase in the yield on interest-earning assets and a 32 basis-point decrease in the average costs of deposits, including noninterest-bearing deposits.

The following table presents for the three months ended March 31, 2026 and 2025, the Company’s average assets, liabilities and stockholders’ equity.

The year-over-year expansion in both net interest margin and average earning assets was primarily driven by the inclusion of a full quarter of FLIC's operating results in the second quarter of 2026, compared to only one month of activity in the prior-year period following the mid-quarter closing of the merger.

Fully taxable equivalent net interest income for the six months ended June 30, 2026 increased $78.4 million, or 53.6%, from prior-year period, due to a 41 basis-point widening of the net interest margin to 3.41% from 3.00%, and a 35.1% increase in average interest-earning assets.

The margin also benefited from a 17 basis-point increase in the yield on interest-earning assets and a 40 basis-point decrease in the average costs of deposits, including noninterest-bearing deposits.

Similarly, performance for the six-month period reflects six full months of the combined balance sheet in 2026 compared to just one month of FLIC activity in the prior-year period, significantly benefiting both average earning asset volumes and net interest margin.

The following tables present for the three and six months ended June 30, 2026 and 2025, the Company’s average assets, liabilities and stockholders’ equity.

The Company’s net interest income, net interest spread and net interest margin are also reflected.

Average Statements of Condition with Interest and Average Rates

Three Months Ended March 31,

Three Months Ended June 30,

(dollars in thousands)

33 unchanged sentences

Rates are annualized.

Six Months Ended June 30,

(dollars in thousands)

Interest-earning assets:

Securities (1) (2)

Total loans (2) (3) (4)

Federal funds sold and interest-bearing with banks

Restricted investment in bank stocks

Total interest-earning assets

Noninterest-earning assets:

Allowance for credit losses

Other noninterest-earning assets

Interest-bearing liabilities:

Interest-bearing deposits:

Time deposits

Other interest-bearing deposits

Total interest-bearing deposits

Subordinated debentures

Finance lease

Total interest-bearing liabilities

Demand deposits

Other liabilities

Total noninterest-bearing liabilities

Stockholders’ equity

Total liabilities and stockholders’ equity

Net interest income (tax-equivalent basis)

Net interest spread (5)

Net interest margin (6)

Tax-equivalent adjustment

Net interest income

Average balances are based on amortized cost and include equity securities.

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

Includes loan fee income and accretion of purchase accounting adjustments.

Total loans include loans held-for-sale and nonaccrual loans.

Represents the 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.

Represents net interest income on a tax-equivalent basis divided by average total interest-earning assets.

Rates are annualized.

Noninterest Income

Noninterest income totaled $6.8 million for the three months ended March 31, 2026, compared with $4.5 million for prior-year-period.

The increase was primarily due to a $1.4 million increase in BOLI income and a $1.3 million increase in deposit, loan and other income, which was partially offset by a $0.4 million decrease in net gains (losses) on equity securities.

The growth in deposit, loan and other income was primarily attributable to the expanded scale of operations following the merger with FLIC.

Noninterest income totaled $7.9 million for the three months ended June 30, 2026, compared with $5.2 million for the prior-year-period.

The increase was primarily due to a $1.4 million increase in net gains on sale of loans held-for-sale, primarily SBA loans, a $0.9 million increase in BOLI income and a $0.8 million increase in deposit, loan and other income, which was partially offset by a $0.4 million decrease in net gains on equity securities.

The increase across these fee-based lines and BOLI income was primarily driven by the inclusion of a full quarter of FLIC operations in 2026, compared to only one month of activity in the prior-year period.

Noninterest income totaled $14.7 million for the six months ended June 30, 2026, compared with $9.6 million for prior-year-period.

The increase was primarily due to a $2.3 million increase in BOLI income, a $2.0 million increase in deposit, loan and other income and a $1.5 million increase in net gains on sale of loans held-for-sale, primarily SBA loans, which was partially offset by a $0.7 million decrease in net gains on equity securities.

Similarly, growth across these noninterest income categories was primarily attributable to operating the expanded franchise for the full six-month period in 2026 compared to just one month of FLIC activity in the prior-year period.

Noninterest Expenses

Noninterest expenses totaled $57.9 million for the three months ended March 31, 2026, compared with $39.3 million for prior-year period.

The increase was primarily due to a $10.2 million increase in salaries and employee benefits, a $2.7 million increase in occupancy and equipment expenses and a $2.6 million increase in amortization of core deposit intangibles.

Other contributing factors included a $0.7 million increase in other expenses, a $0.7 million increase in professional and consulting expenses and a $0.6 million increase in information technology and communication expenses.

Additionally, noninterest expenses for the first quarter of 2026 included $2.1 million in merger expenses and restructuring charges, compared to $1.3 million in the prior-year period.

Excluding these merger-related items, noninterest expenses would have been $55.7 million and $38.0 million for the 2026 and 2025 periods, respectively.

The variances in nearly all noninterest expense categories were primarily attributable to the expanded operations following the merger with FLIC.

Income tax expense was $14.7 million for the first quarter of 2026, resulting in an effective tax rate of 28.0%, compared to income tax expense of $7.2 million and an effective tax rate of 26.1% for the prior-year period.

The increase in income tax expense and the effective tax rate was primarily due to higher pre-tax income and changes in state and local tax apportionment factors resulting from our expanded presence in New York following the FLIC merger.

Noninterest expenses totaled $55.4 million for the three months ended June 30, 2026, compared with $73.6 million for the prior-year period.

Noninterest expenses for the second quarter of 2026 included $0.1 million in merger and restructuring charges, compared to $30.7 million in the prior-year period.

Excluding merger-related charges, adjusted noninterest expenses were $55.3 million for the second quarter of 2026, up $12.4 million from $42.9 million in the prior-year period.

The increase was primarily driven by a full quarter of combined FLIC operations compared to just one month in the 2025 period.

Key drivers of the increase included a $6.3 million increase in salaries and employee benefits, a $2.0 million increase in occupancy and equipment expenses, a $1.6 million increase in amortization of core deposit intangibles, a $1.3 million increase in other expenses, a $0.6 million increase in information technology and communication expenses, and a $0.5 million increase in professional and consulting fees.

Noninterest expenses totaled $113.3 million for the six months ended June 30, 2026, compared with $113.0 million for the prior-year period.

Noninterest expenses for the six months ended June 30, 2026 included $2.2 million in merger and restructuring charges, compared to $32.4 million in merger and restructuring charges in the prior-year period.

Excluding merger-related charges, adjusted noninterest expenses were $111.1 million for the first six months of 2026, up $30.5 million from $80.6 million in the prior-year period.

This increase was primarily driven by six full months of combined FLIC operations in 2026, compared to just one month in the 2025 period.

Key drivers of the increase included a $16.5 million increase in salaries and employee benefits, a $4.7 million increase in occupancy and equipment expenses, a $4.2 million increase in amortization of core deposit intangibles, a $2.1 million increase in other expenses, a $1.3 million increase in professional and consulting fees, a $1.2 million increase in information technology and communication expenses, and a $0.7 million increase in marketing and advertising expenses, partially offset by a $0.1 million decrease in FDIC insurance expense.

Income tax expense was $16.2 million for the second quarter of 2026, resulting in an effective tax rate of 28.0% compared to income tax benefit of ($5.0) million for the prior-year period.

The increase in income tax expense was primarily driven by the return to pre-tax profitability in 2026, compared to a pre-tax loss in the prior-year period that was largely due to initial credit loss provisions and merger-related charges associated with the FLIC acquisition.

Additionally, the effective tax rate was impacted by higher state and local tax apportionment factors resulting from our expanded presence in New York following the merger.

Income tax expense was $30.9 million for the six months ended June 30, 2026, resulting in an effective tax rate of 28.0%, compared to income tax expense of $2.2 million for the prior-year period.

Income tax expense increased primarily due to a return to pre-tax profitability in 2026.

By comparison, the prior-year period reflected a pre-tax loss driven by initial credit loss provisions and FLIC merger-related charges.

The effective tax rate also reflects higher state and local tax apportionment factors resulting from our expanded presence in New York following the FLIC merger.

On June 30, 2026, the Company executed an agreement committing up to $50.0 million to a renewable energy tax equity fund.

The investment was structured to generate economic returns as well as Federal Investment Tax Credits ("ITCs") and other favorable tax attributes, which are accounted for under the Proportional Amortization Method ("PAM") pursuant to ASC 323-740.

While no capital calls were funded and no direct tax credits or proportional amortization expenses were recognized in the consolidated income statement during the second quarter of 2026, the anticipated full-year tax benefits of the transaction were incorporated into our estimated annual effective tax rate calculation for fiscal 2026.

This expectation supports maintaining our estimated full-year effective tax rate at approximately 28%.

We expect the underlying renewable energy projects to achieve placed-in-service status in tranches during the second half of 2026, at which point the corresponding capital calls, direct tax credits, and proportional asset amortization will be recognized in our consolidated financial statements.

Financial Condition

1 unchanged sentence

The following table sets forth the composition of our loan portfolio, excluding loans held-for-sale and net deferred loan fees, by loan segment at the periods indicated.

March 31, 2026

June 30, 2026

December 31, 2025

6 unchanged sentences

Residential real estate

As of March 31, 2026, gross loans totaled $11.7 billion, an increase of $0.3 billion or 2.5% compared to December 31, 2025.

The increase in gross loans as of March 31, 2026, compared to December 31, 2025, was primarily driven by organic growth in the commercial real estate portfolio, reflecting continued lending activity within our expanded market footprint.

As of June 30, 2026, gross loans totaled $11.9 billion, an increase of $0.4 billion or 3.6% compared to December 31, 2025.

The increase in gross loans as of June 30, 2026, compared to December 31, 2025, was primarily driven by organic growth in the commercial real estate portfolio, reflecting continued lending activity within our expanded market footprint.

While the previous table reflects the classification of our loans by loan portfolio segment, the following table presents further disaggregation of our commercial real estate portfolio along with applicable weighted average loan-to-value ratios, typically determined at loan origination.

March 31, 2026

June 30, 2026

December 31, 2025

9 unchanged sentences

The table above is further broken down in the following tables by geography:

March 31, 2026

June 30, 2026

December 31, 2025

5 unchanged sentences

Total multifamily loans (before fair value adjustment)

March 31, 2026

June 30, 2026

December 31, 2025

5 unchanged sentences

Total owner-occupied (before fair value adjustment)

March 31, 2026

June 30, 2026

December 31, 2025

5 unchanged sentences

Total nonowner occupied (before fair value adjustment)

March 31, 2026

June 30, 2026

December 31, 2025

5 unchanged sentences

In addition, the following tables present further details with respect to our nonowner-occupied and owner-occupied borrower concentrations included in the commercial real estate segment.

March 31, 2026

June 30, 2026

December 31, 2025

5 unchanged sentences

Total owner-occupied (before fair value adjustment)

March 31, 2026

June 30, 2026

December 31, 2025

9 unchanged sentences

The loan portfolio also represents the largest asset type on the Company’s Consolidated Statement of Financial Condition.

As of March 31, 2026, the Company’s ACL was $153.1 million, a decrease of $1.2 million from $154.3 million as of December 31, 2025.

The provision for credit losses, which includes a provision for unfunded commitments, for the three months ended March 31, 2026 and March 31, 2025 was $5.2 million and $3.5 million, respectively.

In each of the quarters presented, the provision for credit losses reflected net portfolio growth, charges related to individually evaluated loans, and changing macroeconomic forecasts and conditions.

Net charge-offs for the first quarter of 2026 totaled $6.7 million, or 0.23% of average loans on an annualized basis, compared to $3.4 million, or 0.17% of average loans, for the prior-year period.

The current period activity was primarily driven by the resolution of PCD loans acquired in the FLIC merger, which represented 0.15% of the total annualized net charge-off ratio.

These PCD loans were successfully resolved against previously established nonaccretable credit marks and resulted in a $0.2 million release of provision for credit losses upon settlement.

Excluding these acquisition-related resolutions, the annualized net charge-off ratio for the originating portfolio was 0.08% for the three months ended March 31, 2026, a decrease from the 0.17% reported in the prior-year period.

As of June 30, 2026, the Company’s ACL was $140.1 million, a decrease of $14.2 million from $154.3 million as of December 31, 2025.

The $14.2 million decrease was primarily driven by recent charge-off activity—which reduced specific reserves previously established—alongside improvements in macroeconomic forecasts and continued favorable asset quality metrics, including historically low levels of delinquencies and criticized loans.

For the three and six months ended June 30, 2026, the provision for credit losses (including unfunded commitments) was $8.3 million and $13.5 million, respectively, down from $35.7 million and $39.2 million in the comparable 2025 periods.

The provision in the prior-year periods was significantly elevated due to an initial $27.4 million provision recognized upon closing the FLIC merger in June 2025.

Excluding the initial merger provision from the prior-year base, the provision for credit losses in both 2026 periods reflected net loan portfolio growth, charge-offs and specific reserves on individually evaluated loans, and updates to macroeconomic forecasts and qualitative factors.

Net charge-offs were $21.0 million and $27.7 million for the three and six months ended June 30, 2026, respectively, compared with $4.9 million and $8.3 million for the prior-year periods.

The elevated net charge-off activity during the three and six months ended June 30, 2026 was primarily driven by a $13.8 million charge-off associated with a group of New York City multi-family loans secured by rent-stabilized properties.

The level of the allowance for the respective periods of 2026 and 2025 reflects the credit quality within the loan portfolio, expected loan maturity dates, the changing composition of the commercial and residential real estate loan portfolios and other related factors.

In management’s view, the level of the ACL as of March 31, 2026 is adequate to cover credit losses inherent in the loan portfolio.

In management’s view, the level of the ACL as of June 30, 2026 is adequate to cover credit losses inherent in the loan portfolio.

Management’s judgment regarding the adequacy of the allowance constitutes a “Forward-Looking Statement” under the Private Securities Litigation Reform Act of 1995.

Actual results could differ materially from management’s analysis, based principally upon the factors considered by management in establishing the allowance.

Changes in the ACL on loans are presented in the following tables for the periods indicated (dollars in thousands).

March 31, 2026

Changes in the ACL on loans are presented in the following tables for the periods indicated.

Three Months Ended

June 30, 2026

(dollars in thousands)

Balance as of March 31, 2026,

Commercial real estate

Residential real estate

Total charge-offs

Commercial real estate

Residential real estate

Total recoveries

Net charge-offs

Provision for credit losses for loans

Balance as of June 30, 2026

Ratio of net charge-offs during the year to average loans receivable outstanding during the year

Loans receivable

ACL as a percentage of loans receivable

Six Months Ended

June 30, 2026

(dollars in thousands)

Balance as of December 31, 2025,

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Provision for credit losses for loans

Balance as of March 31, 2026

Balance as of June 30, 2026

Ratio of net charge-offs during the year to average loans receivable outstanding during the year

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Total charge-offs

Commercial real estate

Residential real estate

Total recoveries

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Provision for credit losses – loans

Initial provision related to acquisition

Operating provision for credit losses

Nonaccretable credit marks

Balance - end of period

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ACL as a percentage of loans receivable

Six Months Ended

(dollars in thousands)

Average loans receivable

Analysis of the ACL:

Balance - beginning of period

Commercial real estate

Total charge-offs

Commercial real estate

Residential real estate

Total recoveries

Net charge-offs

Provision for credit losses – loans:

Initial provision related to acquisition

Operating provision for credit losses

Nonaccretable credit marks on PCD loans

Balance - end of period

Ratio of annualized net charge-offs during the period to average loans receivable during the period

Loans receivable

ACL as a percentage of loans receivable

Asset Quality

The Company manages asset quality and credit risk by maintaining diversification in its loan portfolio and through its review processes that includes analysis of credit requests and ongoing examination of outstanding loans, delinquencies, and potential problem loans, with particular attention to portfolio dynamics and mix.

The Company strives to identify loans experiencing difficulty early on, to record charge-offs promptly based on realistic assessments of current collateral values and cash flows, and to maintain an adequate ACL at all times.

It is generally the Company’s policy to discontinue interest accruals once a loan is past due as to interest or principal payments for a period of ninety days.

When a loan is placed on nonaccrual status, interest accruals cease and uncollected accrued interest is reversed and charged against current income.

Payments received on nonaccrual loans are generally applied against principal.

A loan may be restored to an accruing basis when all past due amounts have been collected.

Loans past due 90 days or more, which are both well-secured and in the process of collection, may remain on an accrual basis.

As of March 31, 2026, loans 30-59 days past due were 0.81% of loans receivable, compared to 0.19% as of December 31, 2025.

This rise is predominantly due to an interrelated series of credits totaling $63.8 million secured by 19 multifamily NYC rent-regulated properties.

We are working with our client to resolve these credits;

however, the resulting financial impact cannot be determined at this time.

The Company actively manages credit risk and portfolio quality through stringent underwriting standards, routine credit reviews, and ongoing monitoring of delinquencies, risk ratings, and portfolio dynamics.

Management prioritizes early identification of deteriorating credits, ensuring timely charge-offs based on realistic appraisals of cash flows and underlying collateral, while maintaining an adequate ACL.

As a matter of policy, loans are placed on nonaccrual status when principal or interest payments become 90 days past due, or earlier if full collection is deemed doubtful.

Upon transfer to nonaccrual status, interest recognition ceases, and all previously accrued but uncollected interest is reversed against current-period interest income.

Cash payments received on nonaccrual loans are generally applied to reduce principal.

Loans may be restored to accrual status only when all delinquent amounts are brought current and future payments are reasonably assured.

Well-secured loans in the process of collection may continue to accrue interest beyond 90 days past due, subject to management review.

Nonperforming assets include nonaccrual loans and other real estate owned ("OREO") (the Company had no OREO at the periods presented).

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The following table sets forth, as of the dates indicated, the amount of the Company’s nonperforming assets:

March 31, 2026

June 30, 2026

December 31, 2025

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Nonperforming assets to total assets

The increase in nonaccrual loans was primarily driven by a group of New York City multi-family loans secured by rent-stabilized properties, which added $29.9 million (net of charge-offs) to nonaccruals during the three months ended June 30, 2026.

Purchased Credit-Deteriorated Loans

As of March 31, 2026, the Company's recorded investment in PCD loans totaled $207.6 million.

As of June 30, 2026, the Company's recorded investment in PCD loans totaled $193.4 million.

PCD loans, or purchased credit deteriorated loans, are defined by the CECL standard as acquired financial loans that, at the time of acquisition, have experienced a more-than-insignificant deterioration in credit quality since their origination.

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The resulting PCD designated loans include multifamily loans, commercial real estate, commercial loans, and residential real estate.

Within the PCD loan portfolio as of March 31, 2026, there is a pool of rent-regulated loans amounting to $158.0 million.

Within the PCD loan portfolio as of June 30, 2026, there is a pool of rent-regulated loans amounting to $146.3 million.

These loans are associated with multifamily properties located in the five boroughs of New York City, most of which are entirely or predominantly rent-regulated.

This specific pool is subject to unique stressors, primarily due to the 2019 New York rent laws, which restricted rent increases while operating in an environment of escalating expenses, and certain proposed policies of the new mayoral administration of New York City, including a proposed rent freeze.

Our determination of PCD classification and initial allowance involved significant judgment.

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We continue to monitor roll‑off and performance of the PCD portfolio in our quarterly review process.

Rent-regulated Portfolio

The Bank maintains a solid reserve position, particularly within its rent-regulated multifamily portfolio which includes significant credit and fair value marks applicable to the portfolio acquired from FLIC, in addition to qualitative ACL allocations applicable to its legacy portfolio.

The following table provides additional information on the Bank's New York City ("NYC") rent-regulated portfolio as of March 31, 2026:

Portfolio Composition

% of Total Loans

Unpaid Principal Balance

Acquired Portfolio (1)

Legacy ConnectOne (2)

Total Rent-Regulated

Rent-regulated includes loans secured by multifamily properties with 50% or greater units subject to NYC rent-stabilization guidelines.

1) Portfolio acquired in merger with FLIC on June 1, 2025.

2) Loans originated by the Bank.

3) Offsets include (i) general reserves plus (ii) for the Acquired Portfolio, the applicable nonaccretable and accretable purchase accounting loan marks and (iii) for Legacy ConnectOne, an additional qualitative reserve applicable to rent-regulated multifamily.

Investment Securities

As of March 31, 2026, the principal components of the securities portfolio were federal agency obligations, mortgage-backed securities, obligations of U.S.

As of June 30, 2026, the principal components of the securities portfolio were federal agency obligations, mortgage-backed securities, obligations of U.S.

states and political subdivisions, corporate bonds and notes, asset-backed securities and equity securities.

For the three months ended March 31, 2026, average securities, on an amortized cost basis, increased by $561.3 million to $1.3 billion, or 9.9% of average total interest-earning assets, from $745.9 billion, or 8.1% of average interest-earning assets, for the prior-year period.

As of March 31, 2026, net unrealized losses on available-for-sale securities, which are carried as a component of AOCI and included in stockholders’ equity, net of tax, amounted to $48.2 million as compared with net unrealized losses of $40.7 million as of December 31, 2025.

The increase in unrealized losses is predominantly attributable to changes in market conditions and interest rates.

For the three months ended June 30, 2026, average securities, on an amortized cost basis, increased by $339.1 million to $1.3 billion, or 9.5% of average total interest-earning assets, from $936.0 million, or 8.9% of average interest-earning assets, for the prior-year period.

For the six months ended June 30, 2026, average securities, on an amortized cost basis increased by $449.6 million to approximately $1.3 billion, or 9.7% of average total interest-earning assets, from approximately $841.5 million, or 8.5% of average interest-earning assets, for the six months ended June 30, 2025.

As of June 30, 2026, net unrealized losses on available-for-sale securities, which are carried as a component of accumulated other comprehensive loss and included in stockholders’ equity, net of tax, amounted to $46.1 million as compared with net unrealized losses of $40.7 million as of December 31, 2025.

The increase in net unrealized losses is predominantly attributable to changes in market conditions and interest rates.

Unrealized losses have not been recognized into income because the issuers are of high credit quality, we do not intend to sell, and it is likely that we will not be required to sell the securities prior to their anticipated recovery.

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Any impairment that has not been recorded through an ACL is recognized in OCI, net of applicable taxes.

The Company did not record an ACL for available-for-sale securities as of March 31, 2026.

The Company did not record an ACL for available-for-sale securities as of June 30, 2026.

Interest Rate Sensitivity Analysis

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We currently utilize net interest income simulation and economic value of equity (“EVE”) models to measure the potential impact to the Bank of future changes in interest rates.

As of March 31, 2026 and December 31, 2025, the results of the models were within guidelines prescribed by our Board of Directors.

As of June 30, 2026 and December 31, 2025, the results of the models were within guidelines prescribed by our Board of Directors.

If model results were to fall outside prescribed ranges, action, including additional monitoring and reporting to the Board, would be required by the ALCO and the Bank’s management.

The net interest income simulation model attempts to measure the change in net interest income over the next one-year period, and over the next three-year period on a cumulative basis, assuming certain changes in the general level of interest rates.

The model also utilizes immediate and parallel shifts in market interest rates as of March 31, 2026.

Based on our model, which was run as of March 31, 2026, we estimated that over the next one-year period a 200 basis-point instantaneous and parallel increase in the general level of interest rates would decrease our net interest income by 4.71%, while a 100 basis-point instantaneous and parallel decrease in interest rates would increase net interest income by 2.73%.

The model also utilizes immediate and parallel shifts in market interest rates as of June 30, 2026.

Based on our model, which was run as of June 30, 2026, we estimated that over the next one-year period a 200 basis-point instantaneous and parallel increase in the general level of interest rates would decrease our net interest income by 5.63%, while a 100 basis-point instantaneous and parallel decrease in interest rates would increase net interest income by 3.27%.

As of December 31, 2025, we estimated that over the next one-year period a 200 basis-point instantaneous and parallel increase in the general level of interest rates would decrease our net interest income by 4.95% while a 100 basis-point instantaneous and parallel decrease in interest rates would increase net interest income by 3.06%.

Based on our model, which was run as of March 31, 2026, we estimated that over the next three years, on a cumulative basis, a 200 basis-point instantaneous and parallel increase in the general level of interest rates would increase our net interest income by 0.10%, while a 100 basis-point instantaneous and parallel decrease in interest rates would decrease net interest income by 0.87%.

Based on our model, which was run as of June 30, 2026, we estimated that over the next three years, on a cumulative basis, a 200 basis-point instantaneous and parallel increase in the general level of interest rates would increase our net interest income by 0.87%, while a 100 basis-point instantaneous and parallel decrease in interest rates would decrease net interest income by 0.46%.

As of December 31, 2025, we estimated that over the next three years, on a cumulative basis, a 200 basis-point instantaneous and parallel increase in the general level of interest rates would decrease our net interest income by 0.32%, while a 100 basis-point instantaneous and parallel decrease in interest rates would increase net interest income by 1.04%.

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The EVE is likely to be different as interest rates change.

Our EVE as of March 31, 2026, would decrease by 7.41% with an instantaneous and parallel rate shock of up 200 basis points, and increase by 0.84% with an instantaneous and parallel rate shock of down 100 basis points.

Our EVE as of June 30, 2026, would decrease by 8.38% with an instantaneous and parallel rate shock of up 200 basis-points, and increase by 1.32% with an instantaneous and parallel rate shock of down 100 basis-points.

Our EVE as of December 31, 2025, would decrease by 7.12% with an instantaneous and parallel rate shock of up 200 basis-points, and increase by 0.28% with an instantaneous and parallel rate shock of down 100 basis-points.

The change in interest rate sensitivity was impacted by changes in overall market interest rates, updates to certain model assumptions, changes in short and intermediate-term fixed rate funding and by the deposit mix shift into certificates of deposit, from both noninterest-bearing and interest-bearing non-maturity deposits.

The following table illustrates the most recent results for EVE and one-year net interest income ("NII") sensitivity as of March 31, 2026.

The change in interest rate sensitivity was impacted by changes in overall market interest rates, updates to certain model assumptions, changes in short and intermediate-term fixed rate funding and by the deposit mix shift into noninterest-bearing deposits from listing and brokered certificates of deposit.

The following table illustrates the most recent results for EVE and one-year net interest income ("NII") sensitivity as of June 30, 2026.

Interest Rates

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The policy includes internal limits, deposit concentrations, liquidity sources and availability, stress testing, collateral management, contingency funding plan and other qualitative and quantitative metrics.

As of March 31, 2026, the amount of liquid assets remained at a level management deemed adequate to ensure that, on a short and long-term basis, contractual liabilities, depositors’ withdrawal requirements, and other operational and client credit needs could be satisfied.

As of March 31, 2026, liquid assets (cash and due from banks, interest-bearing deposits with banks and unencumbered investment securities) were $772.0 million, which represented 5.4% of total assets and 6.3% of total deposits and borrowings, compared to $874.4 million as of December 31, 2025, which represented 6.2% of total assets and 7.2% of total deposits and borrowings.

As of March 31, 2026, not included in the above liquid assets were securities with a market value of $95.0 million which were pledged to the FHLB and securities with a market value of $133.9 million which were pledged to the Federal Reserve Bank of New York, which supported aggregate unutilized borrowing capacity of $215.8 million and $223.3 million, respectively as of March 31, 2026 and December 31, 2025.

The Bank is a member of the FHLB of New York and, based on available qualified collateral as of March 31, 2026, had the ability to borrow $3.8 billion.

The Bank also has a credit facility established with the Federal Reserve Bank of New York for direct discount window borrowings based on pledged collateral and had the ability to borrow $2.3 billion as of March 31, 2026.

In addition, as of March 31, 2026, the Bank had in place borrowing capacity of $280.0 million through correspondent banks and other unsecured borrowing lines.

As of March 31, 2026, the Bank had aggregate available and unused credit of approximately $4.4 billion, which represents the aforementioned facilities totaling $6.3 billion net of $1.9 billion in outstanding borrowings and letters of credit.

As of March 31, 2026, outstanding commitments for the Bank to extend credit were approximately $1.4 billion.

Cash an d cash equivalents totaled $344.5 million as of March 31, 2026, decreasing by $36.4 million from $380.9 million as of December 31, 2025.

As of June 30, 2026, the amount of liquid assets remained at a level management deemed adequate to ensure that, on a short and long-term basis, contractual liabilities, depositors’ withdrawal requirements, and other operational and client credit needs could be satisfied.

As of June 30, 2026, liquid assets (cash and due from banks, interest-bearing deposits with banks and unencumbered investment securities) were $870.9 million, which represented 6.0% of total assets and 7.0% of total deposits and borrowings, compared to $874.4 million as of December 31, 2025, which represented 6.2% of total assets and 7.2% of total deposits and borrowings.

As of June 30, 2026, not included in the above liquid assets were securities with a market value of $92.3 million which were pledged to the FHLB and securities with a market value of $128.5 million which were pledged to the Federal Reserve Bank of New York, which supported aggregate unutilized borrowing capacity of $210.5 million and $223.3 million, respectively as of June 30, 2026 and December 31, 2025.

The Bank is a member of the FHLB of New York and, based on available qualified collateral as of June 30, 2026, had the ability to borrow $3.9 billion.

In addition, as of June 30, 2026, the Bank had in place borrowing capacity of $280.0 million through correspondent banks and other unsecured borrowing lines.

As of June 30, 2026, the Bank had aggregate available and unused credit of approximately $4.7 billion, which represents the aforementioned facilities totaling $6.6 billion net of $1.9 billion in outstanding borrowings and letters of credit.

As of June 30, 2026, outstanding commitments for the Bank to extend credit were approximately $1.6 billion.

Cash an d cash equivalents totaled $362.3 million as of June 30, 2026, decreasing by $18.6 million from $380.9 million as of December 31, 2025.

Operating activities provided $49.8 million in net cash.

Investing activities used $233.1 million in net cash, a net increase in loans $273.3 million and investment purchases of $45.3 million and were partially offset by investment maturities, calls and principal repayments of $89.6 million .Financing activities provided $181.3 million in net cash, primarily reflecting a net increase in deposits of $272.3 million and were partially offset by net repayments of FHLB borrowings of $76.0 million.

Investing activities used $353.6 million in net cash, a net increase in loans of $423.9 million and investment purchases of $101.6 million and were partially offset by investment maturities, calls and principal repayments of $166.2 million.

Financing activities provided $285.2 million in net cash, primarily reflecting a net increase in deposits of $499.5 million and which was partially offset by net repayments of FHLB borrowings of $188.1 million.

Deposits serve as our primary source of funding.

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To support clients with balances exceeding standard FDIC insurance limits, we utilize reciprocal deposit networks.

This primarily includes the IntraFi Network LLC for the placement of Certificate of Deposit Account Registry Service ("CDARS") and Insured Cash Sweep ("ICS") accounts.

This includes the IntraFi Network LLC for the placement of Certificate of Deposit Account Registry Service ("CDARS") and Insured Cash Sweep ("ICS") accounts, as well as the recently launched partnership with the National Bank InterDeposit Company (“NBID”) network, operated by ModernFi.

Through these networks, large-dollar deposits are placed into accounts at other participating banks in increments below the FDIC insurance limit to ensure full principal and interest coverage.

During the first quarter of 2026, the Company expanded these capabilities by launching a partnership with the National Bank InterDeposit Company (“NBID”) network, operated by ModernFi.

We are currently in the initial stages of transitioning select client funds to this network to further diversify our reciprocal deposit options.

While the financial impact of this transition was not material to our results of operations or liquidity position for the three months ended March 31, 2026, we anticipate utilizing this platform to complement our existing reciprocal programs in future periods.

The following table sets forth the average balances and weighted average rates of our deposits for the periods indicated.

Quarter-to-Date Average March 31, 2026

Quarter-to-Date Average March 31, 2025

Quarter-to-Date Average June 30, 2026

Quarter-to-Date Average June 30, 2025

(dollars in thousands)

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Total average deposits

Average total deposits increased by $3.6 billion, or 47.0%, during the three months ended March 31, 2026 when compared to the prior-year period.

The increase in total average deposits was due to a $1.8 billion increase in demand, interest-bearing and NOW deposits, a $1.1 billion increase in noninterest-bearing deposits, a $0.4 billion increase in savings deposits and a $0.4 billion increase in time deposits.

The increase in all quarter-to-date average deposit categories was primarily due to the merger with FLIC.

The increase in average time deposits of $0.4 billion during the three months ended March 31, 2026 was primarily due to a $0.5 billion increase in retail time deposits, partially offset by a $0.1 billion dollar decrease in nonreciprocal brokered certificates of deposit.

Average nonreciprocal brokered certificates of deposit included in total time deposits were $0.8 billion for the three months ended March 31, 2026, compared to $0.9 billion for the prior-year period.

Average aggregate demand deposits included $1.2 billion and $1.1 billion in ICS reciprocal deposits during the three months ended March 31, 2026 and March 31, 2025, respectively.

The deposit beta—the measurement of rate sensitivity in response to market changes—on nonreciprocal brokered certificates of deposit tends to be higher than that of ICS and CDARS reciprocal deposits.

Average total deposits increased by $2.7 billion, or 31.0%, during the three months ended June 30, 2026 when compared to the prior-year period.

The increase in total average deposits was due to a $1.5 billion increase in demand, interest-bearing and NOW deposits, a $0.7 billion increase in noninterest-bearing deposits, a $0.3 billion increase in time deposits and a $0.2 billion increase in savings deposits.

Growth across all deposit categories was primarily driven by the merger with FLIC, which reflected a full quarter of combined operations in 2026 compared to only one month of activity in the prior-year period.

The increase in average time deposits of $0.3 billion during the three months ended June 30, 2026 was primarily due to a $0.4 billion increase in retail time deposits, partially offset by a $0.1 billion decrease in nonreciprocal brokered certificates of deposit.

Average nonreciprocal brokered certificates of deposit included in total time deposits were $0.9 billion for both the three months ended June 30, 2026 and the prior-year period.

Average aggregate demand deposits included $1.2 billion and $1.1 billion in ICS and ModernFi reciprocal deposits in the aggregate during the three months ended June 30, 2026 and June 30, 2025, respectively.

The deposit beta, the measurement of rate sensitivity in response to market changes, on nonreciprocal brokered certificates of deposit tends to be higher than that of ICS, ModernFi and CDARS reciprocal deposits.

This is because nonreciprocal brokered funds are more directly correlated to prevailing market rates, whereas reciprocal deposits reflect deeper client relationships and a primary focus on FDIC insurance coverage rather than market-leading yields.

Year-to-Date Average June 30, 2026

Year-to-Date Average June 30, 2025

(dollars in thousands)

Demand, noninterest-bearing

Demand, interest-bearing & NOW

Total average deposits

Average total deposits increased by $3.2 billion, or 38.4%, during the six months ended June 30, 2026 when compared to the prior-year period.

The increase in total average deposits was due to a $1.6 billion increase in demand, interest-bearing and NOW deposits, a $0.9 billion increase in noninterest-bearing deposits, a $0.4 billion increase in time deposits, and a $0.3 billion increase in savings deposits.

Growth across all deposit categories was primarily attributable to operating the expanded branch network resulting from the FLIC merger for six full months in 2026 compared to only one month of FLIC activity in the prior-year period.

The increase in average time deposits of $0.4 billion during the three months ended June 30, 2026 was primarily due to a $0.4 billion increase in retail time deposits.

Average nonreciprocal brokered certificates of deposit included in total time deposits were $0.8 billion for the six months ended June 30, 2026, compared to $0.9 billion for the prior-year period.

Average aggregate demand deposits included $1.2 billion and $1.0 billion in ICS and ModernFi reciprocal deposits during the six months ended June 30, 2026 and June 30, 2025, respectively.

The following table sets forth information related to the uninsured deposit balances of the Bank.

March 31, 2026

June 30, 2026

December 31, 2025

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The following table sets forth the distribution of total actual deposit accounts, by account types for the periods indicated.

March 31, 2026

June 30, 2026

December 31, 2025

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Total deposits increased by $0.5 billion, or 4.4%, when compared to December 31, 2025.

The increase in total deposits was primarily due to a $0.2 billion increase in time deposits and a $0.1 billion increase in demand, interest-bearing and NOW deposits.

Aggregate demand deposits included $1.2 billion in ICS reciprocal deposits as of both March 31, 2026 and December 31, 2025.

Included in time deposits were nonreciprocal brokered certificates of deposit of $0.9 billion as of March 31, 2026 and $0.7 billion as of December 31, 2025.

As of March 31, 2026, we held $1.0 billion of time deposits with balances greater than $250,000.

The following table provides information on the maturity distribution of the time deposits with balances greater than $250,000 as of March 31, 2026:

March 31, 2026

The increase in total deposits was primarily due to a $0.4 billion increase in demand, interest-bearing and NOW deposits, a $0.1 billion increase in time deposits and a $0.1 billion increase in noninterest bearing deposits, partially offset by a $0.1 billion decrease in savings deposits.

Aggregate demand deposits included $1.3 billion in ICS and ModernFi reciprocal deposits as of June 30, 2026 and $1.2 billion as of December 31, 2025.

Included in time deposits were nonreciprocal brokered certificates of deposit of $0.8 billion as of June 30, 2026 and $0.7 billion as of December 31, 2025.

As of June 30, 2026, we held $1.1 billion of time deposits with balances greater than $250,000.

The following table provides information on the maturity distribution of the time deposits with balances greater than $250,000 as of June 30, 2026:

June 30, 2026

(dollars in thousands)

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Effective for quarterly interest rate resets after July 3, 2023 the subordinated debentures' floating rate will be three-month CME Term SOFR plus 2.85% plus a tenor spread adjustment of 0.26161%.

The rate as of March 31, 2026 was 6.78%.

The rate as of June 30, 2026 was 6.78%.

During May 2025, the Parent Corporation issued $200 million in aggregate principal amount of fixed-to-floating rate subordinated notes (the "2025 Notes").

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The Company’s stockholders’ equity increased by $53.2 million when compared to December 31, 2025.

The increase in total stockholders’ equity was primarily due to an increase in retained earnings of $27.3 million, partially offset by an increase in the AOCI of $6.2 million.

As of March 31, 2026, the Company’s tangible common equity ratio and tangible book value per share were 8.64% and $23.93, respectively, compared to 8.62% and $23.52, respectively, as of December 31, 2025.

Total goodwill and other intangible assets were $277.3 million as of March 31, 2026, and $280.2 million as of December 31, 2025.

The increase in total stockholders’ equity was primarily due to an increase in retained earnings of $57.6 million, partially offset by an increase in accumulated other comprehensive loss of $3.0 million.

As of June 30, 2026, the Company’s tangible common equity ratio and tangible book value per share were 8.78% and $24.66, respectively, compared to 8.62% and $23.52, respectively, as of December 31, 2025.

Total goodwill and other intangible assets were $274.5 million as of June 30, 2026, and $280.2 million as of December 31, 2025.

The following table reconciles common equity to tangible common equity and the tangible common equity ratio.

March 31, 2026

June 30, 2026

December 31, 2025

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The Company and the Bank are subject to regulatory guidelines establishing minimum capital standards that involve quantitative measures of assets, and certain off-balance sheet items, as risk-adjusted assets under regulatory accounting practices.

The following is a summary of regulatory capital amounts and ratios as of March 31, 2026 for the Company and the Bank, compared with minimum capital adequacy requirements and the regulatory requirements for classification as a well-capitalized depository institution (for the Bank).

The following is a summary of regulatory capital amounts and ratios as of June 30, 2026 for the Company and the Bank, compared with minimum capital adequacy requirements and the regulatory requirements for classification as a well-capitalized depository institution (for the Bank).

For Capital Adequacy Purposes

To Be Well-Capitalized Under Prompt Corrective Action Provisions

As of March 31, 2026

As of June 30, 2026

(dollars in thousands)

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To Be Well-Capitalized Under Prompt Corrective Action Provisions

As of March 31, 2026

As of June 30, 2026

(dollars in thousands)

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Total risk-based capital

As of March 31, 2026, both the Company and Bank satisfy the capital conservation buffer requirements applicable to them.

As of June 30, 2026, both the Company and Bank satisfy the capital conservation buffer requirements applicable to them.

The lowest ratio at the Company is the Tier 1 Risk Based Capital Ratio which was 2.72 percentage points above the minimum buffer ratio and, at the Bank, the lowest ratio was the Total Risk Based Capital Ratio which was 2.70 percentage points above the minimum buffer ratio.

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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-Q

Item 1. Financial Statements