 ENGLEWOOD CLIFFS, N.J., July 30, 2020 GLOBE NEWSWIRE -- ConnectOne Bancorp, Inc. Nasdaq: CNOB the Company or ConnectOne, parent company of ConnectOne Bank the Bank, today reported net income of 14.8 million for the second quarter of 2020 compared with 6.0 million for the first quarter of 2020 and 19.3 million for the second quarter of 2019. Diluted earnings per share were 0.37 in the second quarter of 2020 compared with 0.15 in the first quarter of 2020 and 0.54 in the second quarter of 2019. The increase in net income and diluted earnings per share from the first quarter of 2020 was due to an increase in net interest income, an increase in noninterest income, a decrease in noninterest expenses, and a decrease in provision for loan losses. Included in net income were merger and restructuring expenses of 5.1 million for the second quarter of 2020, 9.5 million for the first quarter of 2020 and 0.3 million for the second quarter of 2019. On a pre-tax, pre-provision and pre-merger charges basis, earnings were 37.5 million for the second quarter of 2020, 32.6 million for the first quarter of 2020, and 26.2 million for the second quarter of 2019. Frank Sorrentino, ConnectOnes Chairman and Chief Executive Officer stated, We continue to execute on our priorities of using our full range of banking expertise to support our clients, ensuring the safety and well-being of our employees and maintaining a strong financial position. During the quarter, ConnectOne performed well. We reported earnings of 0.37 per share, despite an additional 14 million of reserves due to the uncertainty regarding the pandemic, matching our reserves from the first quarter of 2020 and bringing our total reserves for the total portfolio to approximately 1.08. Tangible book value per share increased to 16.28. Additionally, we had strong pre-tax operating revenue which was in excess of 1.95 of total average assets, placing us among the strongest in the industry. Operationally, our teams continue to offer essential banking services virtually and, as a technology-forward bank, the investments weve made in financial technology and in our infrastructure over the past few years is playing a critical role in positioning ConnectOnes virtual bank model. Further, weve continued to be a resource to the communities we serve by actively participating in the SBAs Paycheck Protection Program the PPP, funding over 470 million of PPP loans. Additionally, our FinTech subsidiary BoeFly which connects small- to mid-sized businesses to a network of financial lenders has significantly increased its relationships with borrowers and banking partners and has participated in the PPP programs in a meaningful way. Were operating our Bank efficiently and effectively and Im proud of the continued resiliency of the ConnectOne team. Mr. Sorrentino added, Looking ahead, while the nation and the banking industry face considerable uncertainty about the length of the pandemic, we have reason to be optimistic. ConnectOne has always been a commercial real estate lender with low loss history, we have low exposure to hot button industries and our CI portfolio has focused on lending in low-risk industries. Were operating ConnectOne in a disciplined manner, our capital levels are solid, our portfolio is underwritten with low LTVs and reasonable cap rates, and were confident that together we will all get through this. When we come out on the other side, we expect to get back to executing prudent growth trends and strong metrics, as we focused on in the past.Dividend DeclarationThe Company announced that its Board of Directors declared a cash dividend on its common stock of 0.09 per share. The dividend will be paid on September 1, 2020, to all shareholders of record on August 17, 2020. Operating ResultsFully taxable equivalent net interest income for the second quarter of 2020 was 61.3 million, an increase of 5.5 million, or 9.8, from the first quarter of 2020, and an increase of 15.2 million from the second quarter of 2019. The increase from the first quarter of 2020 resulted primarily from an 8.8 increase in average interest-earning assets, largely due to PPP loan originations, and a 3 basis-point widening of the net interest margin to 3.44 from 3.41. Included in net interest income were purchase accounting adjustments of 3.1 million for the second quarter of 2020 and 3.5 million for the first quarter of 2020. Excluding these purchase accounting adjustments, the adjusted net interest margin was 3.27 for the second quarter of 2020 and 3.20 for the first quarter of 2020. The widening of the adjusted net interest margin resulted primarily from the favorable impact the Feds first quarter interest rate reductions had on our funding costs, which more than offset declines in our interest-earning asset yields. Included in interest income in the second quarter of 2020 was PPP fee income of approximately 3.7 million. The remaining 11.4 million in unamortized fees are expected to be realized over the next two to three quarters. The benefit to the second quarter 2020 net interest margin attributable to the PPP was offset by additional liquidity on the Banks balance sheet.Noninterest income totaled 4.6 million in the second quarter of 2020, 2.9 million in the first quarter of 2020 and 1.9 million in the second quarter of 2019. The increase in noninterest income of 1.8 million from the first quarter of 2020 was primarily attributed to increases deposit, loan and other income of 1.9 million, which includes loan referral fee income of 2.3 million generated by BoeFly as a result of its participation in the PPP program, which was partially offset by decreases in other deposit and loan fees of 0.4 million. Additional decreases were in net gains on sale of loans held-for-sale of 0.2 million and net gains on equity securities of 0.1 million, offset by increases in income on bank owned life insurance of 0.2 million.Noninterest expenses totaled 33.1 million for the second quarter of 2020, 35.1 million for the first quarter of 2020 and 21.6 million for the second quarter of 2019. Included in noninterest expenses were merger-related charges totaling 5.1 million, 9.5 million and 0.3 million, during the second quarter of 2020, first quarter of 2020 and second quarter of 2019, respectively. Excluding merger-related charges, noninterest expenses increased by 2.4 million from the first quarter of 2020, primarily attributable to an additional 2.3 million in expenses related to the BoeFly acquisition.Income tax expense was 2.5 million for the second quarter of 2020, 1.0 million for the first quarter of 2020 and 5.5 million for the second quarter of 2019. The effective tax rates for the second quarter of 2020, first quarter of 2020 and second quarter of 2019 were 14.5, 14.8 and 22.2, respectively.Asset QualityIn accordance with the accounting relief provisions of the CARES Act, the Company has postponed the adoption of the current expected credit losses CECL accounting standards as permitted under regulatory guidance. Management reached this decision due to the complexities of CECL loan loss forecasting exacerbated by the quickly changing economic environment resulting from the COVID-19 pandemic.The provision for loan losses was 15.0 million for the second quarter of 2020, 16.0 million for the first quarter of 2020 and 1.1 million for the second quarter of 2019. The elevated provision for loan losses for the first two quarters of 2020 was due to the continued economic uncertainties of the COVID-19 pandemic, including consideration of related payment deferrals requested andor granted to date. The aggregate payment deferrals are expected to decrease by more than 50 to less than 450 million, as we will commence billing on more than 500 million of loans deferred during the second quarter of 2020. We will continue to work with our borrowers, where necessary, to provide additional support and guidance during this unprecedented difficult operating environment. ConnectOne has relatively low exposure to perceived at-risk industries, such as energy and hospitality. And, consistent with our extensive experience and low loss history in real estate lending, a large portion of our loan portfolio is well-secured and was underwritten with prudent loan-to-value ratios and cap rates. Meanwhile, our well-managed commercial lending program, which has avoided higher risk industries, is virtually all borrower recourse. Nevertheless, as the pandemic crisis persists, there remains potential for increased levels of impaired loans across all segments of the portfolio. Nonperforming assets, which includes nonaccrual loans and other real estate owned, were 64.6 million at June 30, 2020, 49.5 million at December 31, 2019 and 49.9 million at June 30, 2019. Included in nonperforming assets were taxi medallion loans totaling 23.0 million at June 30, 2020, 23.4 million at December 31, 2019 and 26.5 million at June 30, 2019. Nonperforming assets including taxi medallion loans as a percentage of total assets were 0.85 at June 30, 2020, 0.80 at December 31, 2019 and 0.82 at June 30, 2019. Excluding the taxi medallion loans, nonaccrual loans were 41.6 million at June 30, 2020, 26.1 million at December 31, 2019 and 23.4 million at June 30, 2019, representing a ratio of nonaccrual loans excluding taxi medallion loans to loans receivable of 0.66, 0.51 and 0.46, respectively.During the second quarter of 2020, the Bank implemented a series of short-term loan modifications consisting primarily of payment deferrals as requested by borrowers due to the COVID-19 pandemic. 