ConnectOne Bancorp, Inc.

Previous wording

This report includes forward-looking statements within the meaning of Sections 27A of the Securities Act of 1933, as amended, and 21E of the Securities Exchange Act of 1934, as amended, that involve inherent risks and uncertainties. This report contains certain forward-looking statements with respect to the financial condition, results of operations, plans, objectives, future performance and business of ConnectOne Bancorp Inc. and its subsidiaries, including statements preceded by, followed by, or that include words or phrases such as “believes,” “expects,” “anticipates,” “plans,” “trend,” “objective,” “continue,” “remain,” “pattern” or similar expressions or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) competitive pressures among depository institutions may increase significantly; (2) changes in the interest rate environment may reduce interest margins; (3) prepayment speeds, loan origination and sale volumes, charge-offs and credit loss provisions may vary substantially from period to period; (4) general economic conditions may be less favorable than expected or may be adversely effected by policy uncertainties, including regarding the impact of tariffs; (5) political developments, sovereign debt problems, wars or other hostilities such as the ongoing conflict between Ukraine and Russia 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; (7) changes and trends in the securities markets may adversely impact ConnectOne Bancorp; (8) a delayed or incomplete resolution of regulatory issues could adversely impact planning by ConnectOne Bancorp; (9) the impact on reputation risk created by the developments discussed above on such matters as business generation and retention, funding and liquidity could be significant; (10) the outcome of regulatory and legal investigations and proceedings may not be anticipated, and (11) the impact of health emergencies or natural disasters on our employees and operations, and those of our customers. Further information on other factors that could affect the financial results of ConnectOne Bancorp is included in Item 1a. of ConnectOne Bancorp’s Annual Report on Form 10-K as amended and updated in ConnectOne Bancorp’s other filings with the Securities and Exchange Commission. These documents are available free of charge at the Commission’s website at http://www.sec.gov and/or from ConnectOne Bancorp, Inc.

Current wording

This report includes forward-looking statements within the meaning of Sections 27A of the Securities Act of 1933, as amended, and 21E of the Securities Exchange Act of 1934, as amended, that involve inherent risks and uncertainties. This report contains certain forward-looking statements with respect to the financial condition, results of operations, plans, objectives, future performance and business of ConnectOne Bancorp Inc. and its subsidiaries, including statements preceded by, followed by, or that include words or phrases such as “believes,” “expects,” “anticipates,” “plans,” “trend,” “objective,” “continue,” “remain,” “pattern” or similar expressions or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) competitive pressures among depository institutions may increase significantly; (2) changes in the interest rate environment may reduce interest margins; (3) prepayment speeds, loan origination and sale volumes, charge-offs and credit loss provisions may vary substantially from period to period; (4) general economic conditions may be less favorable than expected or may be adversely effected by policy uncertainties, including regarding the impact of tariffs; (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; (7) changes and trends in the securities markets may adversely impact ConnectOne Bancorp; (8) a delayed or incomplete resolution of regulatory issues could adversely impact planning by ConnectOne Bancorp; (9) the impact on reputation risk created by the developments discussed above on such matters as business generation and retention, funding and liquidity could be significant; (10) the outcome of regulatory and legal investigations and proceedings may not be anticipated, and (11) the impact of health emergencies or natural disasters on our employees and operations, and those of our customers. Further information on other factors that could affect the financial results of ConnectOne Bancorp is included in Item 1a. of ConnectOne Bancorp’s Annual Report on Form 10-K as amended and updated in ConnectOne Bancorp’s other filings with the Securities and Exchange Commission. These documents are available free of charge at the Commission’s website at http://www.se…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Net income available to common stockholders for the three months ended September 30, 2025 was $39.5 million, as compared to $15.7 million for the comparable three-month period ended September 30, 2024. The Company’s diluted earnings per share were $0.78 for the three months ended September 30, 2025, as compared with diluted earnings per share of $0.41 for the comparable three-month period ended September 30, 2024. The $23.8 million increase in net income available to common stockholders and the $0.37 increase in diluted earnings per share were due to a $41.1 million increase in net interest income and a $14.7 million increase in noninterest income, which were partially offset by a $20.0 million increase in noninterest expenses, a $10.3 million increase in income tax expense and a $1.7 million increase in the provision for credit losses on loans.

Current wording

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.

Previous wording

Fully taxable equivalent net interest income for the third quarter of 2025 increased $41.4 million, or 67.2%, from the third quarter of 2024, due to a 44 basis-point widening of the net interest margin to 3.11% from 2.67%, and a 43.1% increase in average interest earning assets. The increase in average interest-earning assets was primarily due to the merger with FLIC. The margin also benefited from a 70 basis-point decrease in the average costs of deposits, including noninterest-bearing deposits, partially offset by an increase in cost of subordinated debt.

Current wording

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. The margin also benefited from a 20 basis-point increase in the yield on interest-earning assets and a 49 basis-point decrease in the average costs of deposits, including noninterest-bearing deposits.

Previous wording

The following tables present for the three and nine months ended September 30, 2025 and 2024, 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.

Current wording

The following table presents for the three months ended March 31, 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.

Previous wording

Noninterest expenses totaled $171.6 million for the nine months ended September 30, 2025, compared with $113.3 million for the nine months ended September 30, 2024. The $58.3 million increase in noninterest expenses during the nine months ended September 30, 2025 when compared to the nine months ended September 30, 2024 was primarily due to a $33.2 million increase in merger expenses, a $12.4 million increase in salaries and employee benefits, a $3.8 million increase in amortization of core deposit intangibles. a $2.5 million increase in occupancy and equipment expenses, a $1.9 million increase in professional and consulting expenses, a $1.6 million increase in information technology and communications expenses, a $1.0 million in restructuring and exit charges, a $0.8 million increase in FDIC expense, a $0.3 million BOLI restructuring charge, a $0.5 million increase in other expenses and a $0.3 million increase in marketing and advertising. The increases when compared to the nine months ended September 30, 2024 were primarily due to the merger with FLIC.

Current wording

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.

Previous wording

Income tax expense was $16.3 million for the third quarter of 2025, resulting in an effective tax rate of 28.2%. This compares to an income tax expense of $6.0 million and an effective tax rate of 26.0% in the third quarter of 2024. The increase in income tax expense when compared to the third quarter of 2024 was primarily due to higher taxable income, resulting from the merger with FLIC.

Current wording

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.

Previous wording

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

Current wording

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.

Previous wording

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

Current wording

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

Previous wording

The provision for credit losses, which includes a provision for unfunded commitments, for the three and nine months ended September 30, 2025 was $5.5 million and $44.7 million, respectively, compared to $3.8 million and $10.3 million, for the three and nine months ended September 30, 2025 and September 30, 2024, respectively. Included in the provision for credit losses for the nine months ended September 30, 2025 was $27.4 million in initial provision for credit losses related to the FLIC merger. In each of the periods presented, the provision for credit losses also reflected net, organic loan growth, charges related to individually evaluated loans and changing macroeconomic forecasts and conditions.

Current wording

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.

Previous wording

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

Current wording

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

Previous wording

The Company manages asset quality and credit risk by maintaining diversification in its loan portfolio and through review processes that include 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.

Current wording

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.

Previous wording

Nonperforming assets include nonaccrual loans and other real estate owned ("OREO"). Nonaccrual loans represent loans on which interest accruals have been suspended. In general, it is the policy of management to consider the charge-off of uncollectible amounts of loans at the point they become past due 90 days.

Current wording

Nonperforming assets include nonaccrual loans and other real estate owned ("OREO") (the Company had no OREO at the periods presented). Nonaccrual loans represent loans on which interest accruals have been suspended. In general, it is the policy of management to consider the charge-off of uncollectible amounts of loans at the point they become past due 90 days.

Previous wording

As of September 30, 2025, the Company's recorded investment in PCD loans totaled $269.7 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. The Company, with the assistance of independent third-party loan review experts, identified such deterioration by considering various factors. These factors included, but were not limited to, nonperforming status, payment history and delinquency, risk rating, debt service coverage ability, and rate repricing risk. The resulting PCD designated loans include multifamily loans, commercial real estate, commercial loans, and residential real estate.

Current wording

As of March 31, 2026, the Company's recorded investment in PCD loans totaled $207.6 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. The Company, with the assistance of independent third-party loan review experts, identified such deterioration by considering various factors. These factors included, but were not limited to, nonperforming status, payment history and delinquency, risk rating, debt service coverage ability, and rate repricing risk. The resulting PCD designated loans include multifamily loans, commercial real estate, commercial loans, and residential real estate.

Previous wording

Within the PCD loan portfolio as of September 30, 2025, there is a pool of rent-regulated loans amounting to $200.5 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.

Current wording

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

Previous wording

As of September 30, 2025, 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 September 30, 2025, average securities, on an amortized cost basis, increased by $735.5 million to $1.4 billion, or 10.3% of average total interest-earning assets, from $736.9 million, or 8.0% of average interest-earning assets, for the three months ended September 30, 2024. For the nine months ended September 30, 2025, average securities, on an amortized cost basis increased by $731.3 million to approximately $1.0 billion, or 9.3% of average total interest-earning assets, from approximately $732.3 million, or 7.9% of average interest-earning assets, for the nine months ended September 30, 2024.

Current wording

As of March 31, 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.

Previous wording

As of September 30, 2025, net unrealized losses on securities available-for-sale, which are carried as a component of accumulated other comprehensive loss and included in stockholders’ equity, net of tax, amounted to $47.2 million as compared with net unrealized losses of $69.6 million as of December 31, 2024. The decrease in 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. The issuers continue to make timely principal and interest payments on the securities. 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 September 30, 2025.

Current wording

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. 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. The issuers continue to make timely principal and interest payments on the securities. 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.

Previous wording

Based on our model, which was run as of September 30, 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 4.05%, while a 100 basis-point instantaneous and parallel decrease in interest rates would increase net interest income by 1.81%. As of December 31, 2024, 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 8.02% while a 100 basis-point instantaneous and parallel decrease in interest rates would increase net interest income by 3.56%.

Current wording

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%. 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%.

Previous wording

Based on our model, which was run as of September 30, 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 1.46%, while a 100 basis-point instantaneous and parallel decrease in interest rates would decrease net interest income by 2.00%. As of December 31, 2024, 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 2.08%, while a 100 basis-point instantaneous and parallel decrease in interest rates would increase net interest income by 0.37%.

Current wording

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%. 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%.

Previous wording

An EVE analysis is also used to dynamically model the present value of asset and liability cash flows with instantaneous and parallel rate shocks of up 200 basis points and down 100 basis points. The EVE is likely to be different as interest rates change. Our EVE as of September 30, 2025, would decrease by 4.99% with an instantaneous and parallel rate shock of up 200 basis points, and decrease by 0.89% with an instantaneous and parallel rate shock of down 100 basis points. Our EVE as of December 31, 2024, would decrease by 7.87% with an instantaneous and parallel rate shock of up 200 basis points, and increase by 1.67% with an instantaneous and parallel rate shock of down 100 basis-points.

Current wording

An EVE analysis is also used to dynamically model the present value of asset and liability cash flows with instantaneous and parallel rate shocks of up 200 basis points and down 100 basis points. 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 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.

Previous wording

The estimation of fair value is significant to a number of the Company’s assets, including loans held-for-sale and securities available-for-sale. These are all recorded at either fair value or the lower of cost or fair value. Fair values are volatile and may be influenced by a number of factors. Circumstances that could cause estimates of the fair value of certain assets and liabilities to change include a change in prepayment speeds, discount rates, or market interest rates. Fair values for most available-for-sale securities are based on quoted market prices. If quoted market prices are not available, fair values are based on judgments regarding future expected loss experience, current economic condition risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature, involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Current wording

The estimation of fair value is significant to a number of the Company’s assets, including loans held-for-sale and available-for-sale securities. These are all recorded at either fair value or the lower of cost or fair value. Fair values are volatile and may be influenced by a number of factors. Circumstances that could cause estimates of the fair value of certain assets and liabilities to change include a change in prepayment speeds, discount rates, or market interest rates. Fair values for most available-for-sale securities are based on quoted market prices. If quoted market prices are not available, fair values are based on judgments regarding future expected loss experience, current economic condition risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature, involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Previous wording

As of September 30, 2025, 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 September 30, 2025, liquid assets (cash and due from banks, interest-bearing deposits with banks and unencumbered investment securities) were $974.2 billion, which represented 7.0% of total assets and 8.0% of total deposits and borrowings, compared to $799.7 million as of December 31, 2024, which represented 8.1% of total assets and 9.4% of total deposits and borrowings. As of September 30, 2025, not included in the above liquid assets were securities with a market value of $99.1 million which were pledged to the FHLB and securities with a market value of $139.8 million which were pledged to the Federal Reserve Bank of New York, which supported aggregate unutilized borrowing capacity of $227.0 million and $95.2 million, respectively as of September 30, 2025 and December 31, 2024.

Current wording

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.

Previous wording

The Bank is a member of the FHLB of New York and, based on available qualified collateral as of September 30, 2025, had the ability to borrow $3.9 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 $2.1 billion as of September 30, 2025. In addition, as of September 30, 2025, the Bank had in place borrowing capacity of $280 million through correspondent banks and other unsecured borrowing lines. As of September 30, 2025, the Bank had aggregate available and unused credit of approximately $4.4 billion, which represents the aforementioned facilities totaling $6.2 billion net of $1.8 billion in outstanding borrowings and letters of credit. As of September 30, 2025, outstanding commitments for the Bank to extend credit were approximately $1.5 billion.

Current wording

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.

Previous wording

Cash and cash equivalents totaled $542.7 million as of September 30, 2025, increasing by $186.2 million from $356.5 million as of December 31, 2024. Operating activities provided $58.7 million in net cash. Investing activities used $46.2 million in net cash, a net increase in loans $102.0 million and a net increase in cash acquired related to FLIC of $54.9 million. Financing activities provided $173.7 million in net cash, primarily reflecting a net increase in deposits of $297.2 million and proceeds from issuance of subordinated debt of $200.0 million, partially offset by net repayments of FHLB borrowings of $215.0 million.

Current wording

Cash and 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. Operating activities provided $15.3 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.

Previous wording

Average total deposits increased by $3.8 billion, or 49.3%, during the three months ended September 30, 2025 when compared to the three months ended September 30, 2024. The increase in total average deposits was due to a $1.7 billion increase in interest-bearing demand deposits, a $1.3 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.

Current wording

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.

Previous wording

The increase in average time deposits of $0.4 billion during the three months ended September 30, 2025 was primarily due to a $0.3 billion increase in retail time deposits and a $0.1 billion dollar increase in nonreciprocal brokered certificates of deposit. Average nonreciprocal brokered certificates of deposit included in total time deposits were $1.0 billion and $0.9 billion during the three months ended September 30, 2025 and September 30, 2024, respectively.

Current wording

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.

Previous wording

Average aggregate demand deposits included $1.1 billion and $1.2 billion in ICS reciprocal deposits during the three months ended September 30, 2025 and September 30, 2024, respectively.

Current wording

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.

Previous wording

The beta, which is the measurement of deposit rate sensitivity in response to market rate changes, on nonreciprocal brokered certificates of deposit tends to be higher than that of ICS and CDARS reciprocal deposits, as nonreciprocal brokered certificates of deposit are more directly correlated to prevailing market rates of interest, while ICS and CDARs reciprocal deposits reflect the Bank’s relationship with reciprocal deposit clients and are more driven by a desire for FDIC insurance coverage than market leading rates.

Current wording

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. 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.

Previous wording

Total deposits increased by $3.5 billion, or 45.4%, when compared to December 31, 2024. The increase in total deposits was primarily due to a $1.6 billion increase in interest-bearing demand deposits, a $1.1 billion increase in noninterest-bearing demand deposits, a $0.4 billion increase in time deposits and a $0.4 billion increase in savings deposits. The increase in all deposit categories was primarily due to the merger with FLIC.

Current wording

Total deposits increased by $0.3 billion, or 2.4%, 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.

Previous wording

Aggregate demand deposits included $1.1 billion in ICS reciprocal deposits as of both September 30, 2025 and December 31, 2024.

Current wording

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

Previous wording

Included in time deposits were nonreciprocal brokered certificates of deposit of $0.9 billion as of both September 30, 2025 and December 31, 2024.

Current wording

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.

Previous wording

As of September 30, 2025, we held $888.8 million 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 September 30, 2025:

Current wording

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:

Previous wording

During December 2003, Center Bancorp Statutory Trust II, a statutory business trust and wholly owned subsidiary of the Parent Corporation issued $5.0 million of MMCapS capital securities to investors due on January 23, 2034. The trust loaned the proceeds of this offering to the Parent Corporation and received in exchange $5.2 million of the Parent Corporation’s subordinated debentures. The subordinated debentures are redeemable in whole or part prior to maturity. Upon the cessation of publication of LIBOR rates and pursuant to the Federal LIBOR Act and Federal Reserve regulations implementing the Act, the MMCapS capital securities converted as of June 30, 2023 to a new index based on CME Term SOFR, as defined in the LIBOR Act, plus a tenor spread adjustment, which is referred to as the Benchmark Replacement. 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 September 30, 2025 was 7.42%.

Current wording

During December 2003, Center Bancorp Statutory Trust II, a statutory business trust and wholly owned subsidiary of the Parent Corporation issued $5.0 million of MMCapS capital securities to investors due on January 23, 2034. The trust loaned the proceeds of this offering to the Parent Corporation and received in exchange $5.2 million of the Parent Corporation’s subordinated debentures. The subordinated debentures are redeemable in whole or part prior to maturity. Upon the cessation of publication of LIBOR rates and pursuant to the Federal LIBOR Act and Federal Reserve regulations implementing the Act, the MMCapS capital securities converted as of June 30, 2023 to a new index based on CME Term SOFR, as defined in the LIBOR Act, plus a tenor spread adjustment, which is referred to as the Benchmark Replacement. 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%.

Previous wording

The Company’s stockholders’ equity increased by $296.6 million when compared to December 31, 2024. The increase in total stockholders’ equity was primarily due to an increase in common stock of $270.8 million, which represented the fair value stock consideration issued for the FLIC merger, an increase in retained earnings of $13.5 million, and a decrease in the accumulated other comprehensive loss of $10.7 million. As of September 30, 2025, the Company’s tangible common equity ratio and tangible book value per share were 8.36% and $22.85, respectively, compared to 9.49% and $23.92, respectively, as of December 31, 2024. Total goodwill and other intangible assets were $278.7 million as of September 30, 2025, and $213.0 million as of December 31, 2024.

Current wording

The Company’s stockholders’ equity increased by $18.2 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.

Previous wording

As of September 30, 2025, 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 2.67% above the minimum buffer ratio and, at the Bank, the lowest ratio was the Total Risk Based Capital Ratio which was 2.88% above the minimum buffer ratio.

Current wording

As of March 31, 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 2.69 percentage points above the minimum buffer ratio and, at the Bank, the lowest ratio was the Total Risk Based Capital Ratio which was 2.84 percentage points above the minimum buffer ratio.