ConnectOne Bancorp, Inc.

Note*1a.***** Nature of Operations, Principles of Consolidation and Risk and Uncertainties**

Nature of Operations

ConnectOne Bancorp, Inc. (the “Parent Corporation”) is incorporated under the laws of the State of New Jersey and is a registered bank holding company under the Bank Holding Company Act of1956, as amended (the “BHCA”). The Parent Corporation’s business currently consists of the operation of its wholly-owned subsidiary, ConnectOne Bank (the “Bank” and, collectively with the Parent Corporation and the Parent Corporation’s subsidiaries, the “Company”) and making certain limited investments. The Bank’s direct and indirect subsidiaries include Union Investment Co. (a New Jersey investment company), Twin Bridge Investment Co. (a Delaware investment company), ConnectOne Preferred Funding Corp. (a New Jersey real estate investment trust), Center Financial Group, LLC (a New Jersey financial services company), Center Advertising, Inc. (a New Jersey advertising company), Morris Property Company, LLC, (a New Jersey limited liability company), Volosin Holdings, LLC, (a New Jersey limited liability company), NJCB Spec-1, LLC (a New Jersey limited liability company), Port Jervis Holdings, LLC (a New Jersey limited liability company), BONJ Special Properties, LLC (a New Jersey limited liability company), The First of Long Island REIT (a New York real estate investment trust), FNY Service Corp (a New York investment company) and BoeFly, Inc. (a New Jersey financial technology company).

The Bank is a community-based, full-service New Jersey-chartered commercial bank that was founded in2005. The Bank operates from its headquarters located at301 Sylvan Avenue in the Borough of Englewood Cliffs, Bergen County, New Jersey and through its59 other banking offices. On* June 1, 2025,the Company completed its acquisition of The First of Long Island Corporation (“FLIC”), and The First National Bank of Long Island ("FNBLI"), FLIC’s wholly owned subsidiary depository institution, was merged into the Bank. See Note2.*

Substantially all loans are secured with various types of collateral, including business assets, consumer assets and commercial/residential real estate. Each borrower’s ability to repay their loans is dependent on the conversion of assets, cash flows generated from the borrowers’ business, real estate rental and consumer wages.

Basis of Presentation and Principles of Consolidation

The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP"). The consolidated financial statements of the Parent Corporation are prepared on an accrual basis and include the accounts of the Parent Corporation and the Bank. All significant intercompany accounts and transactions have been eliminated from the accompanying consolidated financial statements.

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Note*1a.*** Nature of Operations, Principles of Consolidation and Risk and Uncertainties - (continued)**

Segment Reporting

The Company’s operations are solely in the financial services industry. The Company provides a range of regional community banking services to commercial and retail clients.

The Company's reportable segment is determined by the Chief Executive Officer, who is designated the Chief Operating Decision Maker ("CODM"), based upon information about the Company's products and services offered, primarily its banking operations. The segment is also distinguished by the level of information provided to the CODM, who uses such information to review performance of various components of the business (such as branches and the subsidiary bank), which are then aggregated if operating performance, products/services, and customers are similar. The CODM will evaluate the financial performance of the Company's business components such as by evaluating revenue streams, significant expenses, and budget to actual results in assessing the Company's segment and in the determination of allocating resources. The CODM uses revenue streams to evaluate product pricing and significant expenses to assess performance and evaluate return on assets. The CODM uses consolidated net income to benchmark the Company against its competitors. The benchmarking analysis coupled with monitoring of budget to actual results are used in assessment of performance and in establishing compensation. Loans, investments, and deposits provide the revenues in the banking operation. Interest expense, provision for credit losses, and payroll provide the significant expenses in the banking operation. All operations are domestic. See Note14 for disclosures related to the reportable segment.

Employee Benefit Plans

The Company has a noncontributory pension plan that covered all eligible employees up until* September 30, 2007**,* at which time the Company froze its defined benefit pension plan. As such, all future benefit accruals in this pension plan were discontinued and all retirement benefits that employees would have earned as of* September 30, 2007*were preserved.

In the FLIC merger, the Company acquired a defined benefit pension plan that covered all former eligible FLIC employees. The Bank made contributions to the plan, which together with participant contributions equal to 2% of their compensation, fund these benefits. Effective* September 30, 2025,*the plan was frozen and all retirement benefits that employees earned through that date were preserved.

The Company’s policy is to fund at least the minimum contribution required by the Employee Retirement Income Security Act of1974. Pension expense is the sum of service cost, interest cost, amortization of actuarial gains and losses and plan expenses, net of the expected return on plan assets and participant contributions. The costs associated with the plans are accrued based on actuarial assumptions and included in salaries and employee benefits expense.

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 s

tatus 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.

Use of Estimates

In preparing the consolidated financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the consolidated statements of condition and that affect the results of operations for the periods presented. Actual results could differ significantly from those estimates.

Reclassifications

Certain reclassifications have been made to amounts reported in prior periods to conform to the current period presentation. The reclassifications hadno material effect on net income or total stockholders' equity.

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Note1b. Authoritative Accounting Guidance

Adoption of New Accounting Standards in2025**

In* December 2023,the FASB issued Accounting Standard Update ("ASU")2023-09, Income Taxes (Topic740*): Improvements to Income Tax Disclosures. These amendments require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than5% of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate). The amendments require that all entities disclose on an annual basis the following information about income taxes paid:1) The amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes; and2) The amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than5% of total income taxes paid (net of refunds received). The amendments also require that all entities disclose the following information:1) Income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign; and2) Income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. The Company adopted ASU2023-09 on* January 1, 2025.*

Newly Issued, But Not Yet Effective Accounting Standards

In* November 2024,the FASB issued ASU2024*-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic220-40)" ("ASU2024-03"). ASU2024-03 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. ASU2024-03 is effective for the Company on* January 1, 2027.The Company is currentlynot* expecting the ASU to have a material effect on the consolidated financial statements and footnotes.

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Note2. Business Combination

On* June 1, 2025 (the “Acquisition Date”), the Company completed the acquisition of FLIC, the parent company for the FNBLI, in accordance with the definitive Agreement and Plan of Merger dated as of September 4, 2024 (the “Merger Agreement”). Pursuant to the Merger Agreement, on the Acquisition Date, FLIC merged with and into the Company, with the Company continuing as the surviving corporation, and FNBLI merged with and into the Bank, with the Bank as the surviving bank (collectively, the “merger”). As part of this merger, the Company acquired36* branch offices located in Nassau and Suffolk Counties of Long Island, and the boroughs of New York City.

In connection with the completion of the merger, former FLIC shareholders received 0.5175 shares of the Company’s common stock for each share of FLIC common stock they held. The value of the total transaction consideration was approximately $270.8 million. The consideration included the issuance of 11,790,116 shares of the Company’s common stock, valued at $22.97 per share, which was the closing price of the Company’s common stock on* May 30, 2025,*the last trading day prior to the consummation of the merger. Also included in the total consideration was cash in lieu of any fractional shares, which was effectively settled upon closing.

The acquisition of FLIC was accounted for as a business combination using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration paid were recorded at estimated fair values on the Acquisition Date. The excess consideration paid over the estimated fair value of the net assets acquired has been reported as goodwill in the Company’s consolidated statements of financial condition. The $7.2 million of goodwill created from the merger isnot amortizable or deductible for tax purposes. The amount of goodwill represents an asset attributed to the future economic benefits arising from other assets acquired in a business combination. Future economic benefits consist largely of the synergies and economies of scale expected from combining the operations of FLIC and the Company.

The Company considers its valuations of acquired loans and other assets to be preliminary, as management continues to identify and assess information regarding the nature of these assets acquired and liabilities assumed, including extended information gathering, management review procedures, and any new information that* may*arise as a result of integration activities. Accordingly, the amounts recorded for current and deferred taxes are also considered preliminary, as the Company continues to evaluate the federal, state and local combined statutory tax rate for the merged entity and the nature and extent of permanent and temporary differences between the book and tax bases of these other assets acquired and other liabilities assumed.

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:

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The following is a description of the valuation methodologies used to estimate the fair values of significant assets and liabilities presented above.

Cash and cash equivalents – The carrying amount of these items is a reasonable estimate of their fair value based on the short-term nature of these assets.

Investment securities – Fair values for investment securities available-for-sale were based on quoted market prices, where available. If quoted market prices werenot available, fair value estimates are based on observable inputs, including quoted market prices for similar instruments. Fair value estimates also reflect an adjustment related to certain securities that were sold shortly after closing and were determined by the current market price. Additional information is included in Note4 - Investments.

Loans – The fair value of the loan portfolio was calculated on a pooled loan basis using discounted cash flow analysis for accruing loans and on an individual basis for nonaccrual loans. This analysis took into consideration the contractual terms of the loans and assumptions related to the credit risk, expected lifetime losses, qualitative factors, collateral values, discount rates, and other liquidity considerations to estimate projected cash flows. The assumptions used in determining the fair value of the loan portfolio were considered reasonable from a market-participant viewpoint.

Acquired loans are classified intotwo categories: purchased credit deteriorated (“PCD”) and non-PCD loans. PCD loans are defined as a loan or group of loans that have experienced more-than-insignificant credit deterioration since origination. The Company considers various factors in connection with the identification of more-than-insignificant deterioration in credit, including butnot limited to nonperforming status, delinquency, risk ratings, and other qualitative factors that indicate deterioration in credit quality since origination. Non-PCD loans will have an allowance established subsequent to the Acquisition Date, which is recognized as an expense through the provision for credit losses. For PCD loans, the loans were recorded at their amortized cost, less an allowance for credit losses ("ACL") of $43.3 million on the Acquisition Date. There isno provision for credit loss expense recognized on PCD loans because the initial allowance is established by grossing-up the amortized cost of the PCD loans. The remaining difference between the net of the amortized cost basis and the ACL and the fair value allocated to the loans on the date of acquisition is recognized as a non-credit-related discount that will be accreted into interest income over the life of the loans.

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

Premises and equipment – The estimated fair value of premises was measured based upon appraisals from independentthird parties. The estimated fair value of equipment was determined to approximate the carrying amount of these assets.

Deferred Tax Benefit – The Company recorded a net deferred income tax benefit of $51.1 million related to tax attributes of FLIC, along with the effects of fair value adjustments resulting from applying the purchase method of accounting.

Deposits – The fair values used for the demand and savings deposits equal the amount payable on demand at the Acquisition Date. The fair value of time deposits is estimated by discounting the estimated future cash flows using current rates offered for deposits with similar remaining maturities.

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.

As a result of the integration of operations of FLIC, the Company recognized net interest income and net income of $35.5 million and $25.6 million, respectively, from the Acquisition Date through and including* September 30, 2025* and is included in the Company’s Consolidated Statements of Income.

Costs related to the acquisition totaled $34.0 million for thenine months ended* September 30, 2025*. These amounts were expensed as incurred and are recorded as merger expenses in the Company’s Consolidated Statements of Income.

The following table presents unaudited supplemental pro forma information as if the merger had occurred on* January 1, 2024.The unaudited pro forma information includes adjustments for (i) accreting and amortizing the discounts and premiums associated with the estimated fair value adjustments to acquired loans, investment securities, deposits, and borrowings, (ii) the amortization of recognized intangible assets arising from the merger, (iii) depreciation expense on premises and equipment, and (iv) the related estimated income tax effects. The pro forma amounts below donot* reflect the Company's expectations as of the date of the pro forma information of further operating cost savings and other business synergies expected to be achieved, including revenue growth as a result of the merger. As a result, actual amounts differed from the unaudited pro forma information presented.

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Note3. Earnings per Common Share

FASB ASCNo. 260-10-45 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share (“EPS”). The restricted stock awards granted by the Company contain non-forfeitable rights to dividends and therefore are considered participating securities. Thetwo-class method for calculating basic EPS excludes dividends paid to participating securities and any undistributed earnings attributable to participating securities.

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

There wereno antidilutive share equivalents during thenine months ended* September 30, 2025* and* September 30, 2024*.

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Note4. Investment Securities

Immediately after the merger, the Company sold a significant portion of the available-for-sale investments acquired from FLIC for proceeds of $277.5 million, withno gross gains or losses realized upon sale.

All of the Company’s investment securities are classified as available-for-sale as of* September 30, 2025* and* December 31, 2024*. Investment securities available-for-sale are reported at fair value with unrealized gains or losses included in stockholders’ equity, net of tax. Accordingly, the carrying value of such securities reflects their fair value as of* September 30, 2025* and* December 31, 2024*. Fair value is based upon either quoted market prices, or in certain cases where there is limited activity in the market for a particular instrument, assumptions are made to determine their fair value. See Note7 of the Notes to Consolidated Financial Statements for further discussion.

The following tables present information related to the Company’s portfolio of securities available-for-sale as of* September 30, 2025* and* December 31, 2024*.

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Investment securities having a carrying value of approximately $834.7 million and $184.0 million as of* September 30, 2025* and* December 31, 2024*, respectively, were pledged to secure public deposits, borrowings, repurchase agreements, access to unutilized Federal Reserve Discount Window borrowings and FHLB advances and for other purposes required or permitted by law. As of* September 30, 2025* and* December 31, 2024*, there wereno holdings of securities of anyone issuer, other than the U.S. Government and its agencies, in an amount greater than10% of stockholders’ equity.

The following table presents information for investments in securities available-for-sale as of* September 30, 2025*, based on scheduled maturities. Actual maturities can be expected to differ from scheduled maturities due to prepayment or early call options of the issuer. Securitiesnot due at a single maturity date are shown separately.

There wereno realized gains or losses on investment securities available for sale during thenine months ended* September 30, 2025* and* September 30, 2024*.

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The following tables indicate securities in an unrealized loss position for which an ACL hasnot been recorded, aggregated by investment category and by the length of continuous time individual securities have been in an unrealized loss position as of* September 30, 2025* and* December 31, 2024*.

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The Company has elected to exclude accrued interest from the amortized cost of its investment securities available-for-sale. Accrued interest receivable for investment securities available-for-sale totaled $5.2 million and $2.3 million as of* September 30, 2025* and* December 31, 2024*.

The Company evaluates securities in an unrealized loss position for impairment related to credit losses on at least a quarterly basis. Securities in unrealized loss positions arefirst assessed as to whether we intend to sell, or if it is more likely thannot that we will be required to sell the security before recovery of its amortized cost basis. Ifone of the criteria is met, the security’s amortized cost basis is written down to fair value through current earnings. For securities that donot meet these criteria, the Company evaluates whether the decline in fair value resulted from credit losses or other factors. If this assessment indicates that a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an ACL is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Unrealized losses on asset backed securities and state and municipal securities havenot been recognized into income because the issuers are of high credit quality and we donot intend to sell and it is likely that we willnot be required to sell the securities prior to their anticipated recovery. The decline in fair value is largely due to changes in interest rates and other market conditions. The issuers continue to make timely principal and interest payments on the securities. Any impairment that hasnot been recorded through an ACL is recognized in OCI, net of applicable taxes. No ACL for available-for-sale securities was recorded as of* September 30, 2025*.

Federal agency obligations, residential mortgage-backed pass-through securities and commercial mortgage-backed pass-through securities are issued by U.S. Government agencies and U.S. Government sponsored enterprises. Although a government guarantee exists on these investments, these entities arenot legally backed by the full faith and credit of the federal government, and the current support they receive is subject to a cap as part of the agreement entered into in2008. Nonetheless, at this time we donot foresee any set of circumstances in which the government wouldnot fund its commitments on these investments as the issuers are an integral part of the U.S. housing market in providing liquidity and stability. Therefore, we concluded that azero-allowance approach for these investment securities is appropriate.

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Note5. Derivatives

As part of our overall asset liability management strategy the Company uses derivative instruments, which can include interest rate swaps, collars, caps, and floors. The notional amount doesnot represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual agreements. Derivative instruments are recognized on the balance sheet at their fair value and arenot reported on a net basis.

Derivatives Designated as Hedges

Subsequent changes in fair value for a hedging instrument that has been designated and qualifies as part of a hedging relationship are accounted for in the following manner:

1) Cash flow hedges: changes in fair value are recognized as a component in OCI

2) Fair value hedges: changes in fair value are recognized concurrently in earnings

As long as a hedging instrument is designated and the results of the effectiveness testing support that the instrument qualifies for hedge accounting treatment,100% of the periodic changes in fair value of the hedging instrument are accounted for as outlined above. This is the case whether ornot economic mismatches exist in the hedging relationship. As a result, there isno periodic measurement or recognition of ineffectiveness. Rather, the full impact of hedge gains and losses is recognized in the period in which the hedged transactions impact earnings. 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* September 30, 2025*, the Bank wasnot utilizing fair value hedges.

Cash Flow Hedges

The Company during2021, 2022, 2024 and2025 entered into fourteen pay fixed-rate interest rate swaps, with a total notional amount of $750 million. These are designated as cash flow hedges of outstanding FHLB advances. We are required to pay fixed rates of interest ranging from 0.63% to 3.72% and receive variable rates of interest that reset quarterly based on the daily compounding secured overnight financing rate (“SOFR”). Thefourteen swaps carry expiration dates ranging from* December 2025to May**2028.* The swaps are determined to be fully effective during the period presented and thereforeno 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 OCI (loss). The amount included in accumulated OCI (loss) would be reclassified to current earnings should the hedgesno longer be considered effective. The Company expects the hedges to remain fully effective during the remaining term of the swaps.

The Company previously entered intotwo forward starting interest rate cap spread transactions,one with a total notional amount of $150 million, which became effective on* October 1, 2022and which matures in Octoberof2027* andone interest rate cap spread transaction, with a total notional amount of $75 million, which became effective in* November 2022and which matures in Novemberof2027.* These are designated as cash flow hedges of brokered certificates of deposit, and the interest rate cap spread is indexed to a benchmark of fed funds with payment required on a monthly basis. 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.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 $4.7 million and $13.3 million and $5.6 million and $16.9 million during thethree andnine months ended* September 30, 2025* and* September 30, 2024*, respectively, and is recorded as a component of either interest expense on FHLB advances or on brokered certificates of deposit.

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Note5. Derivatives–** (continued)**

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:

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Note5. Derivatives- (continued)

The following table reflects the cash flow hedges included in the consolidated statements of condition as of* September 30, 2025* and* December 31, 2024*:

Derivatives Not Designated as Hedges

As part of the merger with FLIC, the Bank acquired interest rate swap agreements (each, a “back-to-back swap”) that arenot designated as hedging instruments. A back-to-back swap allows a borrower to effectively convert a variable rate loan to a fixed rate. The Bank originates a variable rate loan with a borrower and simultaneously enters into offsetting back-to-back swaps with the borrower and an unaffiliated dealer counterparty to minimize interest rate risk. In connection with each swap transaction, the Bank agrees to pay interest to the borrower on a notional amount at a variable interest rate and receives interest from the borrower on a similar notional amount at a fixed interest rate. Concurrently, the Bank agrees to pay the dealer counterparty the same fixed interest rate on the same notional amount and receives the same variable interest rate on the same notional amount. Because the Bank acts as an intermediary for its borrower, changes in the fair value of the underlying derivative contracts offset each other and donot impact the Bank’s results of operations.

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Note6. 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 September 30, 2025 and* December 31, 2024*:

As of* September 30, 2025* and* December 31, 2024*, loans totaling approximately $7,979.6 million and $5,788.2 million, 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 September 30, 2025 and December 31, 2024.

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 September 30, 2025 and* December 31, 2024*:

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Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated and loans that are individually evaluated.

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* September**30,* 2025.

The majority of these loans are associated with multifamily properties located in thefive 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 the2019 New York rent laws, which restricted rent increases while operating in an environment of escalating expenses.

Credit Quality Indicators - The Company continuously monitors the credit quality of its loans receivable. In addition to its internal monitoring, the Company utilizes the services of athird-party loan review firm to periodically validate the credit quality of its loans receivable on a sample basis. Credit quality is monitored by reviewing certain credit quality indicators. Assets classified as “Pass” are deemed to possess average to superior credit quality, requiringno more than normal attention. Assets classified as “Special Mention” have generally acceptable credit quality yet possess higher risk characteristics/circumstances than satisfactory assets. Such conditions include strained liquidity, slow pay, stale financial statements, or other conditions that require more stringent attention from the lending staff. These conditions, ifnot corrected,* mayweaken the credit quality or inadequately protect the Company’s credit position at some future date. Assets are classified as "Substandard” if the asset has a well-defined weakness that requires management’s attention to a greater degree than for loans classified as special mention. Such weakness, if left uncorrected, could possibly result in the compromised ability of the loan to perform to contractual requirements. An asset is classified as “Doubtful” if it is inadequately protected by the net worth and/or paying capacity of the obligor or of the collateral, if any, that secures the obligation. Assets classified as doubtful include assets for which there is a “distinct possibility” that a degree of loss will occur if the inadequacies arenot* corrected.

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We evaluate whether a modification, extension or renewal of a loan is a current period origination in accordance with GAAP. 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 thenine months ended* September 30, 2025* (dollars in thousands):

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The following table presents loans by origination, risk designation and gross charge-offs as of and for the year ended* December 31, 2024* (dollars in thousands):

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Collateral Dependent Loans: The following tables present the amortized cost basis of collateral dependent loans by loan segment as of* September 30, 2025* and* December 31, 2024*:

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Aging Analysis** -The following tables present the aging of the amortized cost in past due loans as of September 30, 2025 and* December 31, 2024*:

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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.

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Activity in the Company’s ACL for loans for thethree andnine months ended* September 30, 2025* and2024 are summarized in the tables below.

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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 thethree months ended* September 30, 2025*. The modification percentage represents the total loans modified during thethree months ended as a percentage of the total gross loan balances as of* September 30, 2025*.

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during thethree months ended* September 30, 2025*.

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The following table presents the amortized cost basis of loans to borrowers experiencing financial difficulty that were modified during thenine months ended* September 30, 2025*. The modification percentage represents the total loans modified during thenine months ended as a percentage of the total gross loan balances as of* September 30, 2025*.

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during thenine months ended* September 30, 2025*.

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during thenine months ended* September 30, 2025*.

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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 lasttwelve months through* September 30, 2025*.

There were five andseven modifications to borrowers experiencing financial difficulty during thethree andnine months ended* September 30, 2025,*respectively.

During thethree andnine months ended* September 30, 2025* and* September 30, 2024*, the Company hadno 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 wasone loan to a borrower experiencing financial difficulty that had a payment default during thethree andnine months ended* September 30, 2025* and which was modified in thetwelve months prior to that default. Theone loan was a $323 thousand commercial loan modified in* October 2024that went into forbearance, reducing the monthly payment amount by $6 thousand. At this time, the ACL includes a full reserve against this loan. There wereno such loans during thethree* andnine months ended* September 30, 2024.Default is determined at90* or more days past due, upon charge-off, or upon foreclosure. Modified loans in default are individually evaluated for the ACL or if the modified loan is deemed uncollectible, the loan, or a portion of the loan, is written off and the ACL is adjusted accordingly.

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Allowance for Credit Losses for Unfunded Commitments

The Company has recorded an ACL for unfunded credit commitments, which was recorded in other liabilities. The provision is recorded within the provision for credit losses on the Company’s income statement. The following tables present a roll forward of the ACL for unfunded commitments for thethree andnine months ended* September 30, 2025and2024*:

Components of Provision for Credit Losses

The following tables summarize the provision for (reversal of) credit losses for thethree andnine months ended* September 30, 2025and2024*:

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Note7. Fair Value Measurements and Fair Value of Financial Instruments

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The following information shouldnot be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies* may**not* be meaningful.

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Note7. Fair Value Measurements and Fair Value of Financial Instruments–** (continued)**

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* September 30, 2025* and* December 31, 2024*:

Investment Securities Available-for-Sale and Equity Securities: Where quoted prices are available in an active market, securities are classified within Level1 of the valuation hierarchy. Level1 inputs include securities that have quoted prices in active markets for identical assets. If quoted market prices arenot available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Examples of instruments which would generally be classified within Level2 of the valuation hierarchy include municipal bonds and certain agency collateralized mortgage obligations. In certain cases where there is limited activity in the market for a particular instrument, assumptions must be made to determine the fair value of the instruments and these are classified as Level3. When measuring fair value, the valuation techniques available under the market approach, income approach and/or cost approach are used. The Company’s evaluations are based on market data and the Company employs combinations of these approaches for its valuation methods depending on the asset class.

Derivatives: The fair value of derivatives is based on valuation models using observable market data as of the measurement date (level2). Our derivatives are traded in an over-the-counter market where quoted market prices arenot always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rate, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions andthird-party pricing services.

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* September 30, 2025* and* December 31, 2024* are as follows:

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There wereno transfers between Level1, Level2 and Level3 during thenine months ended* September 30, 2025* and for the year ended* December 31, 2024*.

Assets Measured at Fair Value on a Nonrecurring Basis

The Company* maybe required periodically to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. 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 September 30, 2025* and* December 31, 2024*.

Loans Held-for-Sale: Residential mortgage loans, originated and intended for sale in the secondary market, are carried at the lower of aggregate cost or estimated fair value as determined by outstanding commitments from investors. For these loans originated and intended for sale, gains and losses on loan sales (sale proceeds minus carrying value) are recorded in other income and direct loan origination costs and fees are deferred at origination of the loan and are recognized in other income upon sale of the loan. Management obtains quotes or bids on all or parts of these loans directly from the purchasing financial institutions (Level2). As of* September 30, 2025* and* December 31, 2024*, residential mortgage loans held-for sale were $0.0 million and $0.7 million, respectively.

Other loans held-for-sale are carried at the lower of aggregate cost or estimated fair value. Fair value of these loans is determined based on the terms of the loan, such as interest rate, maturity date, reset term, as well as sales of similar assets (Level3). There wereno such loans as of* September 30, 2025* and* December 31, 2024*.

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Collateral Dependent Loans: The Company* mayrecord adjustments to the carrying value of loans based on fair value measurements, generally as partial charge-offs of the uncollectible portions of these loans. These adjustments also include certain impairment amounts for collateral dependent loans calculated in accordance with GAAP. Impairment amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated impairment amount applicable to that loan doesnot* necessarily represent the fair value of the loan. Real estate collateral is valued using independent appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable by market participants. However, due to the substantial judgment applied and limited volume of activity as compared to other assets, fair value is based on Level3 inputs. Estimates of fair value used for collateral supporting commercial loans generally are based on assumptionsnot observable in the marketplace and are also based on Level3 inputs.

For assets measured at fair value on a nonrecurring basis, the fair value measurements as of* September 30, 2025* and* December 31, 2024* are as follows:

Collateral dependent loans –** Collateral dependent loans as of September 30, 2025 that required a valuation allowance were $1.5 million with a related valuation allowance of $0.2 million compared to $4.7 million with a related valuation allowance of $1.1 million as of* December 31, 2024*.

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Assets Measured with Significant Unobservable Level3 Inputs

Recurring basis

The tables below present a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level3) for thenine months ended* September 30, 2025* and for the year ended* December 31, 2024*:

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* September 30, 2025* and* December 31, 2024*. The table below provides quantitative information about significant unobservable inputs used in fair value measurements within Level3 hierarchy.

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Nonrecurring basis*: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 for the periods presented. The tables below provide quantitative information about significant unobservable inputs used in fair value measurements within Level3* hierarchy of collateral dependent loans.

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As of* September 30, 2025* the fair value measurements presented are consistent with Topic820, 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* September 30, 2025* and* December 31, 2024*:

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The fair value of commitments to originate loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair values of letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date. The fair value of commitments to originate loans is immaterial andnot included in the tables above.

Changes in assumptions or estimation methodologies* may*have a material effect on these estimated fair values.

The Company’s remaining assets and liabilities, which arenot considered financial instruments, havenot been valued differently than has been customary with historical cost accounting.No disclosure of the relationship value of the Company’s core deposit base is required by FASB ASC825-10.

Fair value estimates are based on existing balance sheet financial instruments, without attempting to estimate the value of anticipated future business and the value of assets and liabilities that arenot considered financial instruments. For example, there are certain significant assets and liabilities that arenot considered financial assets or liabilities, such as deferred taxes, premises and equipment, and goodwill. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and havenot been considered in the estimates.

Management believes that reasonable comparability between financial institutions* may**not* be likely, due to the wide range of permitted valuation techniques and numerous estimates which must be made, given the absence of active secondary markets for many of the financial instruments. This lack of uniform valuation methodologies also introduces a greater degree of subjectivity to these estimated fair values.

Note8. Comprehensive Income

Total OCI includes all changes in equity during a period from transactions and other events and circumstances from non-owner sources. The Company’s OCI is comprised of unrealized holding gains and losses on securities available-for-sale, unrealized gains (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 accumulated OCI for the periods presented (dollars in thousands):

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Note8. Comprehensive****Income–** (continued)**

Accumulated OCI as of* September 30, 2025* and* December 31, 2024* consisted of the following:

Note9. Stock-based Compensation

The Company’s stockholders approved the2017 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 September 30, 2025*. 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 September 30, 2025* were approximately 170,192. The Company intends to issue all shares under the Plan in the form of newly issued shares.

As of both* September 30, 2025* and* December 31, 2024*, the Company didnot have any outstanding stock options. Restricted stock and deferred stock units typically have athree-year vesting period startingone year after the date of grant withone-third vesting each year, with accelerated vesting upon a change in control. Restricted stock and deferred stock units granted to new employees and board members* maybe granted with shorter vesting periods. Grants of performance units typically have a cliff vesting after three years or upon a change of control. All issuances are subject to forfeiture if the recipient isno* longer employed prior to the award's vesting. Any forfeitures would result in previously recognized expense being reversed. Restricted stock grants have the same dividend and voting rights as common stock, while options, performance units and deferred stock units donot.

All awards are issued at the fair value of the underlying shares on the grant date. The Company expenses the cost of the awards, which is determined to be the fair market value of the awards at the date of grant, ratably, over the vesting or measurement period. Forfeiture rates arenot estimated but are recorded as incurred. Stock-based compensation expense for thethree andnine months ended* September 30, 2025* and* September 30, 2024* was $1.3 million and $3.8 million and $1.1 million and $3.2 million, respectively.

Activity in the Company’s restricted stock for thenine months ended* September 30, 2025* was as follows:

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Note9. Stock-Based Compensation–** (continued)**

As of* September 30, 2025*, there was approximately $1.3 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 1.2 years.

A summary of the status of unearned performance unit awards and the change during the period is presented in the table below:

As of* September 30, 2025*, the specific number of shares related to performance units that were expected to vest was 235,767, 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* September 30, 2025*, the maximum number of performance units that ultimately could vest if performance targets were exceeded is 383,079. During thenine months ended* September 30, 2025*,43,331 shares vested. A total of 23,754 shares were netted from the vested shares to satisfy employee tax obligations. The net shares issued from vesting of performance units during thenine months ended* September 30, 2025* were 19,577 shares. As of* September 30, 2025*, compensation cost of approximately $2.4 million related to non-vested performance unitsnot yet recognized is expected to be recognized over a weighted-average period of 1.9 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:

Any forfeitures would result in previously recognized expense being reversed. A portion of the shares that vest will be netted out to satisfy the tax obligations of the recipient. During thenine months ended* September 30, 2025*,91,364 shares vested. A total of 48,743 shares were netted from the vested shares to satisfy employee tax obligations. The net shares issued from vesting of deferred stock units during thenine months ended* September 30, 2025* were 42,621 shares. As of* September 30, 2025*, compensation cost of approximately $1.7 million related to non-vested deferred stock units,not yet recognized, is expected to be recognized over a weighted-average period of 1.5 years.

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Note10. Components of Net Periodic Pension Cost

The Company maintainedtwo defined benefit pension plans, which were frozen on* June 30, 2007and September 30, 2025,*respectively. The following table sets forth the net periodic pension cost of the Company’s pension plans for the periods indicated.

*** Contributions***

The Company didnot contribute to the Pension Trust for the frozen Center Bancorp plan during thenine months ended* September 30, 2025*. The Company doesnot plan on contributing amounts to this Pension Trust for the remainder of2025. This trust is established to provide retirement and other benefits for eligible employees and their beneficiaries.No part of the trust assets* may*be applied to any purpose other than providing benefits under the plan and for defraying expenses of administering the plan and the trust.

*** FLIC Merger***

In the FLIC merger, the Company acquired a defined benefit pension plan with a net funded status of $11.2 million as of the Acquisition Date. Former FLIC employees were eligible to participate in the Pension Plan after attaining 21 years of age and completing 12 full months of service. Pension benefits are generally based on a percentage of average annual compensation during the period of creditable service. The Bank has historically made contributions to the Pension Plan which, when taken together with participant contributions equal to 2% of their compensation, will be sufficient to fund these benefits. The Bank’s funding method, the unit credit actuarial cost method, is consistent with the funding requirements of applicable federal laws and regulations which set forth both minimum required and maximum tax deductible contributions. Employees became fully vested after four years of participation in the Pension Plan (no vesting occurs during thefour year period). An internal management committee oversees the affairs of the pension plan and acts as named fiduciary.

Effective* September 30, 2025,the Company froze benefit accruals under this defined benefit pension plan for all participants. The freeze doesnot* affect retirees or vested benefits. The projected benefit obligation was remeasured using a discount rate of 5.41%, increasing the liability by $2.0 million. There wereno other changes in assumptions. The freezing of the plan also resulted in the removal of projected salary increase from the liability determination, resulting in a curtailment gain of $3.5 million recognized in other income during thethird quarter of2025. The plan’s funded status improved to 134%.

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Note10. Components of Net Periodic Pension Cost - (continued)

** Significant Actuarial Assumptions.**The following table sets forth the significant actuarial assumptions used to determine the benefit obligation at the Acquisition Date:

Plan Assets. The objective for the Plan’s assets is to generate long-term investment returns from both income and capital appreciation which outpaces the rate of inflation, while maintaining sufficient liquidity to ensure the Plan’s ability to pay all anticipated benefit and expense obligations when due. The Plan* maymaintain a de minimis amount of cash equivalents, with the remaining assets allocated acrosstwo* broadly-defined financial asset categories: (1) equity, both domestic and international; and (2) fixed income of various durations and issuer type. The goal of the equity allocation is to supplement the Bank’s contributions to the Plan when the Plan is underfunded and increase surplus when the Plan is overfunded. The fixed income component will include longer-duration bonds designed to match and hedge the characteristics of the Plan’s liabilities. Cash equivalents, under normal circumstances, will be temporary holdings for the purpose of paying expenses and monthly benefits.

For fixed income investments: (1) the minimum average credit quality shall be investment grade (Standard & Poor’s BBB or Moody’s Baa) or higher; and (2)no more than 5% of the portfolio* maybe invested in securities with ratings below investment grade, andnone* * may*be rated below investment grade at the time of purchase.

Reasonable precautions are taken to avoid excessive concentrations to protect the portfolio against unfavorable outcomes within an asset class. Specifically, the following guidelines are in place:

The portfolio will be rebalanced to the target asset allocation, if needed,no less often than quarterly. Unless expressly authorized in writing by the Committee, the following investing activities are prohibited:

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Note10. Components of Net Periodic Pension Cost - (continued)

The Plan’s actual asset allocations, target allocations and expected long-term rates of return by asset category at acquisition date are set forth in the following tables.

The ranges for the weighted average expected long-term rates of return for equity funds, bond funds and total plan assets set forth in the preceding table represent an average of all expected allocation percentile returns. For these purposes the trustee utilizes athird-party capital markets model (the “model”), which forecasts distributions of future returns for a wide array of broad asset classes. The theoretical and empirical foundation of the model is that the returns of various asset classes reflect the compensation investors require for bearing different types of systematic risk. At the core of the model are estimates of the dynamic statistical relationship between risk factors and asset returns, obtained from statistical analysis based on available historical monthly financial and economic data.

Estimated Future Benefit Payments. The following benefit payments, which reflect expected future service as appropriate, are expected to be made by the Plan.

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Note11. Deposits

*** Time Deposits***

As of* September 30, 2025* and* December 31, 2024*, the Company's total time deposits were $3.0 billion and $2.6 billion, respectively. Included in time deposits were nonreciprocal brokered certificates of deposit of $939.5 million and $907.2 million as of* September 30, 2025* and* December 31, 2024*, respectively. As of* September 30, 2025*, the contractual maturities of these time deposits were as follows (dollars in thousands):

The amount of time deposits with balances greater than or equal to*$250,000* was $926.6 million and $731.0 million as of* September 30, 2025* and* December 31, 2024*, respectively.

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Note12. FHLB Borrowings

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

The FHLB borrowings are secured by pledges of certain collateral including, butnot limited to, U.S. government and agency mortgage-backed securities and a blanket assignment of qualifyingfirst lien mortgage loans, consisting of both residential mortgages and commercial real estate loans.

Advances are payable at stated maturity, with a prepayment penalty for fixed rate advances. All FHLB advances bear fixed rates. The advances as of* September 30, 2025* 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* September 30, 2025* the Company had a remaining borrowing capacity of approximately $2.0 billion at FHLB.

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Note13. Subordinated Debentures

During2003, the Company formed a statutory business trust, which exists for the exclusive purpose of (i) issuing Trust Securities representing undivided beneficial interests in the assets of the Trust; (ii) investing the gross proceeds of the Trust securities in junior subordinated deferrable interest debentures (subordinated debentures) of the Company; and (iii) engaging in only those activities necessary or incidental thereto. On* December 19, 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 capital securities presently qualify as Tier I capital. The trust loaned the proceeds of this offering to the Company and received in exchange $5.2 million of the Parent Corporation’s subordinated debentures. The subordinated debentures are redeemable in whole or in 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 effective June 30, 2023to 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. Therefore, effective for quarterly interest rate resets after July 3, 2023the subordinated debentures’ floating rate will bethree*-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%. These subordinated debentures and the related income effects arenot eliminated in the consolidated financial statements, as the statutory business trust isnot consolidated in accordance with FASB ASC810-10. 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* September 30, 2025* and* December 31, 2024*.

During* June**2020,* the Parent Corporation issued $75 million in aggregate principal amount of fixed-to-floating rate subordinated notes (the*“2020* Notes”). The2020 Notes which were redeemed in full on* September 15, 2025,bore interest, since June 15, 2025,*at a variable rate equal to the then benchmark rate, which is Three-Month Term SOFR (as defined in the Second Supplemental Indenture), plus 560.5 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"). The2025 Notes bear interest at 8.125% annually from, and including, the date of initial issuance up to but excluding* June 1, 2030or the date of earlier redemption, payable semi-annually in arrears on June 1and December 1of each year, commencing December 1, 2025.From and including June 1, 2030through 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 1and December 1of 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.

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Note14. Segment Reporting

Accounting policies for segments are the same as those described in Note1a. Segment performance is evaluated using Consolidated Bank net income. Information reported internally for performance assessment by the CODM follows, inclusive of reconciliations of significant segment totals to the financial statements:

*Occupancy and equipment, professional fees, advertising and promotion, data processing, Federal Deposit Insurance Corporation ("FDIC") insurance premium, merger expenses, amortization of core deposit intangible, insurance expense, restructuring and exit charges and stationery and supplies.

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