ConnectOne Bancorp, Inc.

Previous wording

Net income available to common stockholders for the three months ended March 31, 2025 was $18.7 million compared to $15.7 million for the comparable three-month period ended March 31, 2024. The Company’s diluted earnings per share were $0.49 for the three months ended March 31, 2025 as compared with diluted earnings per share of $0.41 for the comparable three-month period ended March 31, 2024. The $3.0 million increase in net income available to common stockholders and the $0.08 increase in diluted earnings per share were due to a $5.5 million increase in net interest income, $0.5 million decrease in provision for credit losses and $0.6 million increase in noninterest income, partially offset by an increase of $2.2 million in noninterest expenses and a $1.3 million increase in income tax expense. Included in noninterest expenses for the three months ended March 31, 2025 were $1.3 million in merger expenses related to the previously announced merger with The First of Long Island Corporation. There were no such charges for the three months ended March 31, 2024.

Current wording

Net (loss) income available to common stockholders for the three months ended June 30, 2025 was ($21.8) million, as compared to $17.5 million for the comparable three-month period ended June 30, 2024. The Company’s diluted earnings per share were ($0.52) for the three months ended June 30, 2025, as compared with diluted earnings per share of $0.46 for the comparable three-month period ended June 30, 2024. The $39.3 million decrease in net income available to common stockholders and the $0.98 decrease in diluted earnings per share were due to a $36.1 million increase in noninterest expenses and a $33.2 million increase in provision for credit losses, partially offset by a $17.4 million increase in net interest income, a $11.7 million decrease in income tax expense and a $0.8 million increase in noninterest income. Included in noninterest expenses for the three months ended June 30, 2025 were $30.7 million in merger expenses related to the merger with FLIC. The increase in the provision for credit losses during the quarter was primarily due to an initial provision for credit losses of $27.4 million that was recorded as part of the merger with FLIC. The increase in net interest income, the decrease in income tax expense and the increase in noninterest income were all primarily due to the merger with FLIC.

Previous wording

Fully taxable equivalent net interest income for the three months ended March 31, 2025 was $66.6 million, an increase of $5.5 million, or 9.0%, from the three months ended March 31, 2024.The increase primarily resulted from a 29 basis-point increase in the net interest margin to 2.93% from 2.64%. During the three months ended March 31, 2025, average total loans decreased by $123.8 million, or 1.5% when compared to the three months ended March 31, 2024. The widening of the net interest margin during the three months ended March 31, 2025 when compared to the three months ended March 31, 2024 was primarily due to a 42 basis-point decrease in the average cost of total funds, including noninterest-bearing deposits, partially offset by a nine basis-point decrease in the loan portfolio yield.

Current wording

Fully taxable equivalent net interest income for the three months ended June 30, 2025 was $79.8 million, an increase of $17.6 million, or 28.2%, from the three months ended June 30, 2024. The increase primarily resulted from a 34 basis-point increase in the net interest margin to 3.06% from 2.72%. During the three months ended June 30, 2025, average interest-earning assets increased by $1.3 billion, primarily due to the merger with FLIC. The widening of the net interest margin during the three months ended June 30, 2025 when compared to the three months ended June 30, 2024 was primarily due to a 56 basis-point decrease in the average cost of total funds, including noninterest-bearing deposits, partially offset by higher average cash balances and the impact of a $200 million long-term subordinated debt issuance, with a rate of 8.125%, that was consummated on May 15, 2025.

Previous wording

The following table presents for the three months ended March 31, 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 tables presents for the three and six months ended June 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.

Previous wording

Noninterest income totaled $4.5 million for the three months ended March 31, 2025, compared with $3.8 million for the three months ended March 31, 2024. The $0.6 million increase in noninterest income during the three months ended March 31, 2025 when compared to the three months ended March 31, 2024 was primarily due to a $0.4 million increase in deposit, loan and other income and a $0.4 million increase in het gains on equity securities, partially offset by a $0.2 million decrease in net gains on sale of loans held-for-sale.

Current wording

Noninterest income totaled $9.6 million for the six months ended June 30, 2025, compared with $8.2 million for the six months ended June 30, 2024. The $1.4 million increase in noninterest income during the six months ended June 30, 2025 when compared to the six months ended June 30, 2024 was primarily due to a $1.3 million increase in deposit, loan and other income, a $1.0 million increase in net gains on equity securities and a $0.3 million increase in BOLI income, partially offset by a $1.3 million decrease in net gains on sale of loans held-for-sale.

Previous wording

Noninterest expenses totaled $39.3 million for the three months ended March 31, 2025, compared with $37.1 million for the three months ended March 31, 2024. The $2.2 million increase in noninterest expenses during the three months ended March 31, 2025 when compared to the three months ended March 31, 2024 was primarily due to a $1.3 million increase in merger expenses, a $0.5 million increase in salaries and employee benefits and a $0.3 million BOLI restructuring charge that took place during the three months ended March 31, 2025. The increases in merger expenses are due to the planned merger with The First of Long Island Corporation.

Current wording

Noninterest expenses totaled $113.0 million for the six months ended June 30, 2025, compared with $74.7 million for the six months ended June 30, 2024. The $38.3 million increase in noninterest expenses during the six months ended June 30, 2025 when compared to the six months ended June 30, 2024 was primarily due to a $32.1 million increase in merger expenses, a $3.0 million increase in salaries and employee benefits, a $1.1 million increase in professional and consulting expenses, a $0.9 million increase in amortization of core deposit intangibles, a $0.8 million increase in information technology and communications expenses, a $0.3 million BOLI restructuring charge, a $0.3 million increase in occupancy and equipment expenses and a $0.2 million increase in FDIC expense, partially offset by a $0.5 million decrease in other expenses. The increases when compared to the six months ended June 30, 2024 were primarily due to the merger with FLIC.

Previous wording

Income tax expense was $7.2 million for the three months ended March 31, 2025, compared to $5.9 million for the three months ended March 31, 2024. The increase in income tax expense was the result of higher income before income tax expense and a decrease in tax-free adjustments. The effective tax rate for the three months ended March 31, 2025 and March 31, 2024 was 26.1% and 25.5%, respectively.

Current wording

Income tax expense was $2.2 million for the six months ended June 30, 2025, compared to $12.6 million for the six months ended June 30, 2024. The decrease in income tax expense was the result of lower taxable income before income tax expense that resulted from the additional expenses due to the FLIC merger.

Previous wording

The provision for credit losses, which includes a provision for unfunded commitments, for the three months ended March 31, 2025 and March 31, 2024, was $3.5 million and $4.0 million, respectively. The provision for credit losses for the periods presented reflected net portfolio loan growth, charges related to individually evaluated loans, and changing economic forecasts and conditions.

Current wording

The provision for credit losses, which includes a provision for unfunded commitments, for the three and six months ended June 30, 2025 was $35.7 million and $39.2 million, respectively, compared to $2.5 million and $6.5 million, for the three and six months ended June 30, 2025 and June 30, 2024 respectively. Included in the provision for credit losses for the three and six months ended June 30, 2025 was $27.4 million in initial provision for credit losses related the FLIC merger which primarily caused the increase for both periods. 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.

Previous wording

As of March 31, 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 March 31, 2025, average securities, on an amortized cost basis, increased by $25.6 million to $745.9 million, or 8.1% of average total interest-earning assets, from $720.3 million, or 7.7% of average interest-earning assets, for the three months ended March 31, 2024.

Current wording

As of June 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 June 30, 2025, average securities, on an amortized cost basis, increased by $196.4 million to $936.0 million, or 8.9% of average total interest-earning assets, from $739.6 million, or 8.0% of average interest-earning assets, for the three months ended June 30, 2024. For the six months ended June 30, 2025, average securities, on an amortized cost basis increased by $111.5 million to approximately $841.5 million, or 8.5% of average total interest-earning assets, from approximately $729.9 million, or 7.9% of average interest-earning assets, for the six months ended June 30, 2024.

Previous wording

As of March 31, 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 $64.2 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 allowance for credit losses is recognized in other comprehensive income, net of applicable taxes. The Company did not record an allowance for credit losses for available-for-sale securities as of March 31, 2025.

Current wording

As of June 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 $60.3 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 allowance for credit losses is recognized in other comprehensive income, net of applicable taxes. The Company did not record an allowance for credit losses for available-for-sale securities as of June 30, 2025.

Previous wording

Based on our model, which was run as of March 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 5.30%, while a 100 basis-point instantaneous and parallel decrease in interest rates would increase net interest income by 2.27%. 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 June 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 4.94%, while a 100 basis-point instantaneous and parallel decrease in interest rates would increase net interest income by 1.72%. 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%.

Previous wording

Based on our model, which was run as of March 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 0.04%, while a 100 basis-point instantaneous and parallel decrease in interest rates would decrease net interest income by 0.90%. 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 June 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 0.62%, while a 100 basis-point instantaneous and parallel decrease in interest rates would decrease net interest income by 1.70%. 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%.

Previous wording

An economic value of equity ("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, 2025, would decrease by 5.11% with an instantaneous and parallel rate shock of up 200 basis points, and increase by 0.40% 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 economic value of equity ("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 June 30, 2025, would decrease by 5.89% with an instantaneous and parallel rate shock of up 200 basis points, and decrease by 0.40% 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.

Previous wording

As of March 31, 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 March 31, 2025, liquid assets (cash and due from banks, interest-bearing deposits with banks and unencumbered investment securities) were $574.7 million, which represented 5.9% of total assets and 6.9% 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 March 31, 2025, not included in the above liquid assets were securities with a market value of $102.5 million which were pledged to the Federal Home Loan Bank and securities with a market value of $143.2 which were pledged to the Federal Reserve Bank of New York, which supported aggregate unutilized borrowing capacity of $102.2 million and $137.5 million, respectively as of March 31, 2025. As of December 31, 2024, not included in the above liquid assets were securities with a market value of $102.5 million which were pledged to the Federal Home Loan Bank, which support aggregate unutilized borrowing capacity of $95.2 million as of December 31, 2024.

Current wording

As of June 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 June 30, 2025, liquid assets (cash and due from banks, interest-bearing deposits with banks and unencumbered investment securities) were $1.0 billion, which represented 7.5% of total assets and 8.7% 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 June 30, 2025, not included in the above liquid assets were securities with a market value of $100.0 million which were pledged to the Federal Home Loan Bank and securities with a market value of $140.1 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 June 30, 2025 and December 31, 2024.

Previous wording

The Bank is a member of the Federal Home Loan Bank of New York and, based on available qualified collateral as of March 31, 2025, had the ability to borrow $2.4 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 $1.6 billion as of March 31, 2025. In addition, as of March 31, 2025, the Bank had in place borrowing capacity of $280 million through correspondent banks and other unsecured borrowing lines. As of March 31, 2025, the Bank had aggregate available and unused credit of approximately $3.1 billion, which represents the aforementioned facilities totaling $4.3 billion net of $1.3 billion in outstanding borrowings and letters of credit. As of March 31, 2025, outstanding commitments for the Bank to extend credit were approximately $1.2 billion.

Current wording

The Bank is a member of the Federal Home Loan Bank of New York and, based on available qualified collateral as of June 30, 2025, had the ability to borrow $4.0 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 $1.7 billion as of June 30, 2025. In addition, as of June 30, 2025, the Bank had in place borrowing capacity of $280 million through correspondent banks and other unsecured borrowing lines. As of June 30, 2025, the Bank had aggregate available and unused credit of approximately $4.2 billion, which represents the aforementioned facilities totaling $6.0 billion net of $1.8 billion in outstanding borrowings and letters of credit. As of June 30, 2025, outstanding commitments for the Bank to extend credit were approximately $1.4 billion.

Previous wording

Cash and cash equivalents totaled $292.6 million as of March 31, 2025, decreasing by $63.9 million from $356.5 million as of December 31, 2024. Operating activities provided $14.9 million in net cash. Investing activities provided $59.2 million in net cash, primarily reflecting a decrease in loans. Financing activities used $138.0 million in net cash, primarily reflecting $75.0 million in net repayments of FHLB borrowings and a $52.9 million decrease in deposits.

Current wording

Cash and cash equivalents totaled $596.5 million as of June 30, 2025, increasing by $240.0 million from $356.5 million as of December 31, 2024. Operating activities provided $21.3 million in net cash. Investing activities provided $99.0 million in net cash, primarily reflecting a net increase in cash acquired related to FLIC of $54.9 million and a net decrease in loans of $32.0 million. Financing activities provided $119.6 million in net cash, primarily reflecting a net increase in deposits of $207.0 million, proceeds from issuance of subordinated debt of $200.0 million, partially offset by net repayments of FHLB borrowings of $264.6 million.

Previous wording

Deposits are our primary source of funds. Noninterest bearing demand deposit products include “Totally Free Checking” and “Simply Better Checking” for consumer clients and “Small Business Checking” and “Analysis Checking” for commercial clients. Interest-bearing checking accounts require minimum balances for both consumer and commercial clients and include “Consumer Interest Checking” and “Business Interest Checking”. Money market accounts consist of products that provide a market rate of interest to depositors. Our savings accounts offer paper and/or electronic statements. Time deposits ("TD") are for non-retirement and IRA accounts, generally with initial maturities ranging from 31 days to 60 months, and brokered TDs, which we use for asset liability management purposes and to supplement other sources of funding. Many of our deposit products can be accessed through both our branches and online to provide ease of access to our clients and communities. CDARS/ICS reciprocal deposits are offered based on the Bank’s participation in the IntraFi Network LLC ("the Network"). Clients, who are Federal Deposit Insurance Corporation (“FDIC”) insurance sensitive, are able to place large dollar deposits with the Company and the Company utilizes CDARS to place those funds into certificates of deposit issued by other banks in the Network. This occurs in increments of less than the FDIC insurance limits so that both the principal and interest are eligible for FDIC insurance coverage in amounts larger than the insured dollar amount. Unless certain conditions are satisfied, the FDIC considers these funds as brokered deposits for certain reporting requirements. The Bank also utilizes internet listing services deposits which are obtained through the use of websites such as Rateline or QwickRate.

Current wording

Deposits are our primary source of funds. Noninterest bearing demand deposit products include “Totally Free Checking” and “Simply Better Checking” for consumer clients and “Small Business Checking” and “Analysis Checking” for commercial clients. Interest-bearing checking accounts require minimum balances for both consumer and commercial clients and include “Consumer Interest Checking” and “Business Interest Checking”. Money market accounts consist of products that provide a market rate of interest to depositors. Our savings accounts offer paper and/or electronic statements. Time deposits ("TD") constitute non-retirement and IRA accounts, generally with initial maturities ranging from 31 days to 60 months, and brokered TDs, which we use for asset liability management purposes and to supplement other sources of funding. Many of our deposit products can be accessed through both our branches and online to provide ease of access to our clients and communities. CDARS/ICS reciprocal deposits are offered based on the Bank’s participation in the IntraFi Network LLC ("the Network"). Clients, who are Federal Deposit Insurance Corporation (“FDIC”) insurance sensitive, are able to place large dollar deposits with the Company and the Company utilizes CDARS to place those funds into certificates of deposit issued by other banks in the Network. This occurs in increments of less than the FDIC insurance limits so that both the principal and interest are eligible for FDIC insurance coverage in amounts larger than the insured dollar amount. Unless certain conditions are satisfied, the FDIC considers these funds as brokered deposits for certain reporting requirements. The Bank also utilizes internet listing services deposits which are obtained through the use of websites such as Rateline or QwickRate.

Previous wording

Average aggregate demand deposits included $1.1 billion in ICS reciprocal deposits, during both the three months ended March 31, 2025 and March 31, 2024. Average time deposits during the three months ended March 31, 2025 included $58.5 million in CDARS, compared to $91.7 million during the three months ended March 31, 2024. The decrease in CDARS was attributed to maturities that did not renew.

Current wording

Average aggregate demand deposits included $1.0 billion and $1.2 billion in ICS reciprocal deposits during the three months ended June 30, 2025 and June 30, 2024, respectively. Average time deposits during the three months June 30, 2025 included $45 million in CDARS, compared to $61 million during the three months ended June 30, 2024. The decrease in CDARS was attributed to maturities that did not renew.

Previous wording

The decrease in average time deposits of $86.7 million during the three months ended March 31, 2025 was attributed to decreases in nonreciprocal brokered time deposits of $49.6 million, CDARs of $33.2 million and internet listing services of $19.1 million, partially offset by increases in retail time deposits of $15.2 million.

Current wording

The decrease in average time deposits of $6 million during the three months ended June 30, 2025 was attributed to a $25 million decrease in CDARs, a $10 million decrease in nonreciprocal brokered time deposits and a $2 million decrease in internet listing services, partially offset by a $32 million increase in retail time deposits.

Previous wording

Aggregate demand deposits included $1.0 billion and $1.1 billion in ICS reciprocal deposits as of March 31, 2025 and December 31, 2024, respectively. Total time deposits as of March 31, 2025 include $47.8 million in CDARS, compared to $60.3 million as of December 31, 2024.

Current wording

Aggregate demand deposits included $1.1 billion in ICS reciprocal deposits as of both June 30, 2025 and December 31, 2024. Total time deposits as of June 30, 2025 include $45 million in CDARS, compared to $60 million as of December 31, 2024.

Previous wording

Included in time deposits were nonreciprocal brokered deposits of $981.6 million as of March 31, 2025, which increased from $907.2 million as of December 31, 2024.

Current wording

Included in time deposits were nonreciprocal brokered deposits of $1.0 billion as of June 30, 2025, which increased from $907 million as of December 31, 2024.

Previous wording

As of March 31, 2025, we held $674.3 million of time deposits 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, 2025:

Current wording

As of June 30, 2025, we held $907 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 June 30, 2025:

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 March 31, 2025 was 7.40%.

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 June 30, 2025 was 7.39%.

Previous wording

During June 2020, the Parent Corporation issued $75 million in aggregate principal amount of fixed-to-floating rate subordinated notes (the “2020 Notes”). The 2020 Notes bear interest at 5.75% annually from, and including, the date of initial issuance up to, but excluding, September 15, 2025 or the date of earlier redemption, payable semi-annually in arrears on September 15 and December 15 of each year, commencing December 15, 2020. From and including September 15, 2025 through maturity or earlier redemption, the interest rate shall reset quarterly to an interest rate per annum equal to a benchmark rate, which is Three-Month Term SOFR (as defined in the Second Supplemental Indenture), plus 560.5 basis points, payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, commencing on June 15, 2025. Notwithstanding the foregoing, if the benchmark rate is less than zero, then the benchmark rate shall be deemed to be zero.

Current wording

During May 2025, the Parent Corporation issued $200 million in aggregate principal amount of fixed-to-floating rate subordinated notes (the "2025 Notes"). The 2025 Notes bear interest at 8.125% annually from, and including, the date of initial issuance up to but excluding June 1, 2030 or the date of earlier redemption, payable semi-annually in arrears on June 1 and December 1 of each year, commencing December 1, 2025. From and including June 1, 2030 through maturity or earlier redemption, the interest rate shall reset quarterly to an interest rate per annum equal to a benchmark rate, which is Three-Month Term SOFR: (as defined in the Prospectus Supplement), plus 441.5 basis points, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, commencing on September 1, 2030. Notwithstanding the foregoing, if the benchmark rate is less than zero, then the benchmark rate shall be deemed to be zero.

Previous wording

The Company’s stockholders’ equity increased by $11.2 million when compared to December 31, 2024. The increase was primarily due to an increase in retained earnings of $11.8 million. As of March 31, 2025, the Company’s tangible common equity ratio and tangible book value per share were 9.73% and $24.16, respectively, compared to 9.49% and $23.92, respectively, as of December 31, 2024. Total goodwill and other intangible assets were $212.7 million as of March 31, 2025, and $213.0 million as of December 31, 2024.

Current wording

The Company’s stockholders’ equity increased by $254.7 million when compared to December 31, 2024. The increase was primarily due to an increase in retained earnings of $16.9 million. As of June 30, 2025, the Company’s tangible common equity ratio and tangible book value per share were 8.09% and $21.95, respectively, compared to 9.49% and $23.92, respectively, as of December 31, 2024. Total goodwill and other intangible assets were $281.9 million as of June 30, 2025, and $213.0 million as of December 31, 2024.

Previous wording

As of March 31, 2025, both the Company and Bank satisfy the capital conservation buffer requirements applicable to them. The lowest ratio at the Company is the Total Risk Based Capital Ratio which was 3.79% above the minimum buffer ratio and, at the Bank, the lowest ratio was the Total Risk Based Capital Ratio which was 3.29% above the minimum buffer ratio.

Current wording

As of June 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 2.56% above the minimum buffer ratio and, at the Bank, the lowest ratio was the Total Risk Based Capital Ratio which was 2.74% above the minimum buffer ratio.