ConnectOne Bancorp, Inc. Reports Record Third Quarter 2013 Earnings; Loan Portfolio Surpasses $1 Billion Milestone

ConnectOne Bancorp, Inc. Reports Record Third Quarter 2013 Earnings; Loan
Portfolio Surpasses $1 Billion Milestone

ENGLEWOOD CLIFFS, N.J., Oct. 25, 2013 (GLOBE NEWSWIRE) -- ConnectOne Bancorp,
Inc. (Nasdaq:CNOB) (the "Company" or "ConnectOne"), parent company of
ConnectOne Bank (the "Bank"), today reported net income available to common
stockholders of $2.6 million for the third quarter of 2013, representing a
17.8% increase from $2.2 million earned during the third quarter of 2012. Net
income available to common stockholders for the first nine months of 2013 was
$7.4 million, a 28.8% increase from the prior year period.

Diluted earnings per share were $0.50 and $1.54, for the third quarter and
year-to-date periods of 2013, respectively, compared with diluted earnings per
share of $0.68 and $1.92 for the third quarter and first nine months of 2012,
respectively. Diluted earnings per share for 2013 reflect the Company's
February 2013 initial public offering and issuance of 1.8 million shares of
common stock. Diluted earnings per share for 2012 reflect preferred dividends
of $2,000 for the third quarter and $0.4 million for the first nine months.
All shares of preferred were converted into common in 2012 and had no impact
on 2013 results.

Frank Sorrentino III, Chairman and CEO of ConnectOne, stated, "The third
quarter of 2013 marks another period of solid growth and strong financial
performance for the Company. We delivered record quarterly earnings, which
have now increased for six consecutive quarterly periods. Our well-diversified
loan portfolio grew to more than $1 billion at quarter-end, increasing by 21%
from year-end 2012 and by 8% from June 30, 2013. Additionally, the Company's
third quarter net interest margin of 3.93% widened by 4 basis points from the
3.89% reported in the second quarter 2013. Our commitment to operating
efficiency remains on track. Reflecting the success of our strategy, our third
quarter efficiency ratio of 48.1% improved slightly from 48.3% in the
comparable 2012 third quarter and from 48.6% in the sequential 2013 second
quarter. In addition, asset quality remains solid. The ratio of non-performing
assets to total assets remained below 1.00%, declining to 0.90% at September
30, 2013 from 0.97% at June 30, 2013."

Mr. Sorrentino, commenting on near-term organic growth prospects, stated,
"Looking ahead, our pipeline of new commercial, construction, commercial real
estate, and multi-family loans remains strong. During the third quarter, we
submitted an application to the New Jersey Department of Banking and Insurance
to open a de novo branch in Newark, New Jersey. An attractive site for the
planned new branch in Newark's Ironbound District has been selected, which
will allow our lending and banking teams to capitalize on the area's
high-density business demographic beginning in early 2014."

Earnings

Fully taxable equivalent ("FTE") net interest income for the third quarter of
2013 totaled $10.6 million, an increase of $1.9 million, or 21.7%, from the
year ago quarter. The increase in net interest income was primarily due to an
increase in average interest-earning assets, which grew by 24.2% to $1.1
billion, and was partially offset by an 8 basis points contraction in the net
interest margin, from 4.01% in the third quarter of 2012 to 3.93% in the third
quarter of 2013. Average total loans increased by 29.7% to $1.0 billion in the
third quarter of 2013 from the prior year period. FTE net interest income for
the first nine months of 2013 totaled $29.8 million, an increase of $4.5
million, or 18.0%, from the year ago period. The increase in net interest
income was primarily due to an increase in average interest-earning assets,
which grew by 27.3% to $1.0 billion, and was partially offset by a 31 basis
points contraction in the net interest margin, from 4.25% in the first nine
months of 2012 to 3.94% in the first nine months of 2013. Average total loans
increased by 29.6% to $931.1 million in the first nine months of 2013 from the
prior year period. The net interest margin in the current quarter widened
slightly, by 4 basis points, from the sequential second quarter of 2013, as
prepayment fees increased and the level of low earning cash balances
decreased. Management expects net interest income to increase as the loan
portfolio grows, although any such increases will likely be moderated by net
interest margin compression resulting from the maturity, prepayment or
contractual re-pricing of loans and securities in this extended period of low
interest rates.

Non-interest income represents a relatively small portion of the Bank's total
revenue as management has historically made a strategic decision to
de-emphasize fee income, focusing instead on customer growth and retention.
During the third quarter of 2013, Management made a decision to invest in bank
owned life insurance ("BOLI") in order to help offset the rising cost of
employee benefits. Life insurance policies on key employees totaling $15
million were purchased at the end of August 2013, contributing $44,000 of BOLI
income to 2013 operating results. Non-interest income totaled $293,000 and
$853,000 for the third quarter and first nine months of 2013, respectively,
versus $294,000 and $815,000 for the third quarter and first nine months of
2012, respectively. Growth in service and card-related fees, and the
aforementioned BOLI income, were essentially offset by declines in gains on
sale of residential mortgage loans.

Non-interest expenses for the third quarter 2013 increased by $0.9 million, or
20.4%, to $5.2 million from $4.3 million in the prior year third quarter.
Non-interest expenses for the first nine months of 2013 increased by $2.0
million, or 15.0%, to $14.9 million from $12.9 million in the prior year
period. The largest factor contributing to the increases in total non-interest
expenses was salaries and employee benefits expense, which increased by $0.6
million to $2.6 million in the third quarter 2013 from $2.0 million in the
third quarter 2012, and which increased by $1.3 million to $7.5 million in the
first nine months of 2013 from $6.3 million in the first nine months of 2012.
The increases were primarily due an increase in the number of full-time
equivalent employees and higher incentive-based compensation. Also
contributing to higher non-interest expenses were increased costs associated
with being a publicly-traded entity, higher legal fees, and a general increase
in other operating expenses related to a significantly increased volume of
business. Management continues to focus on expense control, balancing its
investment in infrastructure with prudent and sustainable growth.

Income tax expense was $1.7 million for the third quarter 2013 and $5.1
million for the first nine months of 2013 versus $1.5 million for the third
quarter 2012 and $4.2 million for the first nine months 2012. The effective
tax rates were 40.2% and 40.9% for the third quarter and first nine months of
2013, respectively, versus 40.4% and 40.4% for the third quarter and first
nine months of 2012, respectively. Effective tax rates for 2013 reflect an
increase in earnings which placed the Company into the higher 35% federal
bracket. The increase in statutory rates was offset by an increase in
non-taxable revenue in the third quarter of 2013. On October 1, 2013, the
Company reorganized its operating structure in order to improve tax
efficiency. The Company's effective tax rate is projected to decline in future
periods by approximately 5 percentage points, resulting from a combination of
an increase in revenue from non-taxable sources and a reorganized operating
structure; however, the effective tax rate in future periods is likely to
fluctuate and will depend upon future levels of taxable and non-taxable
revenue.

Asset Quality

Nonperforming assets, which includes nonaccrual loans and other real estate
owned, totaled $10.1 million, or 0.90% of total assets, at September 30, 2013,
roughly flat from $10.0 million, or 0.97% of total assets, at June 30, 2013
and up from $5.6 million, or 0.64% of total assets, at September 30, 2012. The
allowance for loan losses was $14.7 million, representing 1.42% of loans
receivable and 166.2% of nonaccrual loans at September 30, 2013. At June 30,
2013, the allowance was $14.0 million representing 1.46% of loans receivable
and 146.5% of nonaccrual loans, and at September 30, 2012 the allowance was
$12.2 million representing 1.52% of loans receivable and 217.9% of nonaccrual
loans. The provision for loan losses for the third quarter of 2013 increased
to $1.3 million from $1.0 million for both the second quarter of 2013 and the
third quarter of 2012. The provision for loan losses has remained relatively
constant, although the level is contingent upon many factors including, but
not limited to, loan growth, the Company's historical loss experience,
macroeconomic conditions and reserves required for specific credits. The
annualized rate of net loan charge-offs was 0.25% for the third quarter 2013,
0.26% for the second quarter 2013 and zero for the third quarter 2012.

Financial Condition

At September 30, 2013, total assets were $1.1 billion, a $200.0 million
increase from December 31, 2012. The increase in total assets was due
primarily to a $182.2 million increase, to $1.0 billion, in loans receivable,
a $3.4 million increase, to $24.7 million, in securities, and $15.0 million in
BOLI purchases. The growth in assets was funded by a $128.4 million increase
in deposits, an $18.2 million increase in Federal Home Loan Bank borrowings,
$7.4 million in retained earnings, and $47.8 million in net proceeds from the
Company's first quarter 2013 initial public equity offering.

Capital

Stockholders' equity totaled $127.2 million as of September 30, 2013, an
increase of $54.9 million from $72.4 million as of year-end 2012, due
primarily to retained earnings and the Company's first quarter 2013 equity
offering. Accumulated other comprehensive earnings declined by $0.5 million as
the increase in the general level of interest rates over the course of 2013 to
date resulted in a decline in market values in our relatively small securities
portfolio. As of September 30, 2013, the tangible common equity ratio and
tangible book value per share were 11.24% and $24.95, respectively. As of
December 31, 2012, the Company's tangible common equity ratio and tangible
book value per share were 7.76% and $22.77, respectively.

About ConnectOne Bancorp, Inc.

ConnectOne is a New Jersey corporation and a registered bank holding company
pursuant to the Bank Holding Company Act of 1956, as amended, that was formed
in 2008 to serve as the holding company for ConnectOne Bank ("the Bank"). The
Bank is a community-based, full-service New Jersey-chartered commercial bank
that was founded in 2005. The Bank operates from its headquarters located at
301 Sylvan Avenue in the Borough of Englewood Cliffs, Bergen County, New
Jersey, and through its seven other banking offices.

For more information visit https://www.ConnectOneBank.com/.

Forward-Looking Statements

This news release contains certain forward-looking statements which are based
on certain assumptions and describe future plans, strategies and expectations
of the Company. These forward-looking statements are generally identified by
use of the words "believe," "expect," "intend," "anticipate," "estimate,"
"project," or similar expressions. The Company's ability to predict results or
the actual effect of future plans or strategies is inherently uncertain.
Factors which could have a material adverse effect on the operations of the
Company and its subsidiaries include, but are not limited to, those factors
set forth in Item 1A – Risk Factors of the Company's Annual Report on Form
10-K, as filed with the Securities Exchange Commission, and changes in
interest rates, general economic conditions, legislative/regulatory changes,
monetary and fiscal policies of the U.S. Government, including policies of the
U.S. Treasury and the Federal Reserve Board, the quality or composition of the
loan or investment portfolios, demand for loan products, deposit flows,
competition, demand for financial services in the Company's market area and
accounting principles and guidelines. These risks and uncertainties should be
considered in evaluating forward-looking statements and undue reliance should
not be placed on such statements. The Company does not undertake, and
specifically disclaims any obligation, to publicly release the result of any
revisions which may be made to any forward-looking statements to reflect
events or circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events.

                                                                
                                                                
CONNECTONE BANCORP, INC.                                         
CONSOLIDATED BALANCE SHEETS (unaudited)                          
(dollars in thousands)                                           
                                                                
                                                   September 30, December 31,
                                                   2013          2012
Cash and due from banks                             $3,383      $3,242
Interest-bearing deposits with banks                46,169       47,387
Cash and cash equivalents                          49,552       50,629
                                                                
Securities available for sale                       23,450       19,252
Securities held to maturity, fair value of $1,274   1,218        1,985
at 2013 and $2,084 at 2012
Loans held for sale                                 --           405
                                                                
Loans receivable                                    1,031,070    848,842
Less: Allowance for loan losses                     (14,666)     (13,246)
Net loans receivable                               1,016,404    835,596
                                                                
Investment in restricted stock, at cost             5,834        4,744
Bank premises and equipment, net                    7,808        7,904
Accrued interest receivable                         3,704        3,361
Other real estate owned                             1,303        433
Goodwill                                            260          260
Bank owned life insurance                           15,044       --
Other assets                                        5,358        5,357
Total assets                                       $1,129,935  $929,926
                                                                
Liabilities                                                      
Deposits                                                         
Noninterest-bearing                                $193,492    $170,355
Interest-bearing                                   704,243      598,963
Total deposits                                     897,735      769,318
Long-term borrowings                                97,816       79,568
Accrued interest payable                            2,750        2,803
Capital lease obligation                            3,129        3,185
Other liabilities                                   1,268        2,690
Total liabilities                                  1,002,698    857,564
                                                                
Commitments and Contingencies                                    
                                                                
Stockholders' Equity                                             
Common stock, no par value; authorized 10,000,000
shares at September 30, 2013 and December 31, 2012; 99,118       51,205
issued and outstanding 5,089,392 at September 30,
2013 and 3,166,217 at December 31, 2012
Retained earnings                                   28,081       20,661
Accumulated other comprehensive income              38           496
Total stockholders' equity                         127,237      72,362
Total liabilities and stockholders' equity          $1,129,935  $929,926

                                                                
                                                                
CONNECTONE BANCORP, INC.                                         
CONSOLIDATED STATEMENTS OF INCOME                                 
(unaudited)
(dollars in thousands,                                           
except per share data)
                                                                
                          Three Months Ended September Nine Months Ended
                           30,                          September 30,
                          2013            2012          2013       2012
Interest income                                                  
Loans receivable,         $11,923       $9,955      $33,758  $29,076
including fees
Securities                210            311          584       833
Other interest income     25             23           80        53
Total interest income     12,158         10,289       34,422    29,962
Interest expense                                                 
Deposits                  1,215          1,214        3,510     3,579
Long-term borrowings      346            349          1,010     1,001
Capital lease             47             48           142       145
Total interest expense    1,608          1,611        4,662     4,725
                                                                
Net interest income        10,550         8,678        29,760    25,237
Provision for loan losses  1,300          950          3,175     2,840
Net interest income after 9,250          7,728        26,585    22,397
provision for loan losses
Non-interest income                                              
Service fees              136            88           299       281
Gains on sales of loans   54             126          215       338
Income on bank owned life 44             --           44        --
insurance
Gains on sales of         --             --           --        --
securities
Other income              59             80           295       196
Total non-interest income 293            294          853       815
                                                                
Non-interest expenses                                            
Salaries and employee     2,584          2,024        7,510     6,252
benefits
Occupancy and equipment   806            746          2,296     2,156
Professional fees         454            237          1,045     777
Advertising and promotion 106            168          375       352
Data processing           507            425          1,398     1,242
Other expenses            763            735          2,262     2,162
Total non-interest        5,220          4,335        14,886    12,941
expenses
Income before income tax   4,323          3,687        12,552    10,271
expense
Income tax expense         1,736          1,488        5,132     4,154
Net income                 2,587          2,199        7,420     6,117
Dividends on preferred     --             2            --        354
shares
Net income available to    $2,587        $2,197      $7,420   $5,763
common stockholders
                                                                
Earnings per common share:                                       
Basic                     $0.52         $0.70       $1.58    $2.26
Diluted                   0.50           0.68         1.54      1.92
Weighted average common                                          
shares outstanding:
Basic                     5,011,045      3,145,625    4,691,793 2,546,996
Diluted                   5,158,704      3,256,092    4,828,408 3,184,927

                                                           
                                                           
CONNECTONE BANCORP, INC.                                    
CONSOLIDATED FINANCIAL HIGHLIGHTS                            
(dollars in thousands, except per share data)                
                                                           
                              Three Months Ended
                              September 30,     June 30,     September 30,
                              2013              2013         2012
Performance ratios:                                         
Return on average assets      0.95%             0.98%        1.01%
Return on average             8.10%             8.06%        13.13%
stockholders' equity
Net interest margin           3.93%             3.89%        4.01%
Efficiency ratio (1)          48.1%             48.6%        48.3%
                                                           
                              As of
                              September 30,     June 30,     September 30,
                              2013              2013         2012
Capital ratios:                                             
Leverage ratio                11.76%            12.19%       7.96%
Risk-based Tier 1 capital     12.86%            13.69%       9.52%
ratio
Risk-based total capital      14.29%            15.11%       10.77%
ratio
Tangible common equity to     11.24%            12.07%       7.92%
tangible assets
                                                           
Annualized net loan
charge-offs as a % of average  0.25%             0.26%        0.00%
loans
                                                           
Tangible book value per common $24.95          $24.76     $22.15
share
                                                           
Asset quality:                                              
Nonaccrual loans              $8,822          $9,545     $5,622
Other real estate owned       1,303            433         --
Total non-performing assets   $10,125         $9,978     $5,622
                                                           
Performing troubled debt      $2,942          $2,947     $4,733
restructured loans
Loans past due 90 days and    539              1,189       --
still accruing
                                                           
Nonaccrual loans as a % of    0.86%             1.00%        0.70%
loans receivable
Nonperforming assets as a %   0.90%             0.97%        0.64%
of total assets
Allowance for loan losses as  1.42%             1.46%        1.52%
a % of loans receivable
Allowance for loan losses as  166.2%            146.5%       217.9%
a % of nonaccrual loans
                                                           
(1) Efficiency ratio is not a measure recognized under generally accepted
accounting principles and is defined as total non-interest expenses divided by
the sum of net interest income and total non-interest income (excluding
securities gains/(losses)).

                                                                 
                                                                 
CONNECTONE BANCORP,                                               
INC.
NET INTEREST MARGIN ANALYSIS ON A                                  
FULLY TAX EQUIVALENT BASIS
(dollars in                                                       
thousands)
                    For the Three Months Ended
                    September 30, 2013            September 30, 2012
                    Average             Average Average           Average
Interest-earning     Balance      Interest Rate    Balance    Interest Rate
assets:                                    (7)                         (7)
Investment           $28,589    $218   3.03%   $28,982  $311   4.27%
securities (1) (2)
Loans receivable (3) 994,722     11,923  4.76%   767,164   9,955   5.16%
(4)
Interest-bearing     42,812      25      0.23%   62,394    23      0.15%
deposits with banks
Total
interest-earning     1,066,123   12,166  4.53%   858,540   10,289  4.77%
assets
Allowance for loan   (14,393)                   (11,655)          
losses
Non-interest earning 28,008                     21,826            
assets
Total assets        $1,079,738                $868,711         
                                                                 
Interest-bearing                                                  
liabilities:
Savings, NOW, Money
Market, Interest     $336,980   242     0.28%   $306,516 311     0.40%
Checking
Time deposits        342,719     973     1.13%   213,744   903     1.68%
Total
interest-bearing     679,699     1,215   0.71%   520,260   1,214   0.93%
deposits
                                                                 
Borrowings           81,218      346     1.69%   77,871    349     1.78%
Capital lease        3,141       47      5.94%   3,233     48      5.91%
obligation
Total
interest-bearing     764,058     1,608   0.83%   601,364   1,611   1.07%
liabilities
Noninterest-bearing  183,381                    125,723           
deposits
Other liabilities    5,626                      3,230             
Stockholders' equity 126,673                    66,645            
Total liabilities
and stockholders'    $1,079,738                $796,962         
equity
                                                                 
Net interest                      $
income/interest rate             10,558   3.69%             $8,678 3.70%
spread (5)
Tax equivalent                   (8)                      --      
affect
Net interest income,             $                        $8,678 
as reported                       10,550
                                                                 
Net interest margin                      3.93%                     4.01%
(6)
                                                                 
(1) Average balances are calculated on amortized cost.
(2) Interest income is presented on a tax equivalent basis using a 35 percent
federal tax rate.
(3) Includes loan fee income.
(4) Loans receivable include non-accrual loans.
(5) Represents difference between the average yield on interest earning assets
and the average cost of interest bearing liabilities and is presented on a
fully tax equivalent basis.
(6) Represents net interest income divided by average total interest-earning
assets.
(7) Rates are annualized.

                                                                 
                                                                 
CONNECTONE BANCORP,                                               
INC.
NET INTEREST MARGIN ANALYSIS ON A                                  
FULLY TAX EQUIVALENT BASIS
(dollars in                                                       
thousands)
                    For the Nine Months Ended
                    September 30, 2013            September 30, 2012
                    Average             Average Average           Average
Interest-earning     Balance      Interest Rate    Balance    Interest Rate
assets:                                    (7)                         (5)
Investment           $26,747    $592   2.96%   $32,589  $833   3.41%
securities (1) (2)
Loans receivable (3) 931,145     33,758  4.85%   718,270   29,076  5.41%
(4)
Interest-bearing     52,403      80      0.20%   42,869    53      0.17%
deposits with banks
Total
interest-earning     1,010,295   34,430  4.56%   793,728   29,962  5.04%
assets
Allowance for loan   (13,955)                   (10,721)          
losses
Non-interest earning 21,953                     23,019            
assets
Total assets        $1,018,293                $806,026         
                                                                 
Interest-bearing                                                  
liabilities:
Savings, NOW, Money
Market, Interest     $332,451   758     0.30%   $307,671 1,101   0.48%
Checking
Time deposits        308,581     2,752   1.19%   218,112   2,478   1.52%
Total
interest-bearing     641,032     3,510   0.73%   525,783   3,579   0.91%
deposits
                                                                 
Borrowings           78,079      1,010   1.73%   76,728    1,001   1.74%
Capital lease        3,160       142     6.01%   3,233     145     5.99%
obligation
Total
interest-bearing     722,271     4,662   0.86%   605,744   4,725   1.04%
liabilities
Noninterest-bearing  181,641                    130,617           
deposits
Other liabilities    4,725                      4,139             
Stockholders' equity 109,656                    65,526            
Total liabilities
and stockholders'    $1,018,293                $806,026         
equity
                                                                 
                                                                 
Net interest                      $                          $
income/interest rate             29,768   3.69%             25,237   4.00%
spread (5)
Tax equivalent                   (8)                      --      
affect
Net interest income,             $                        $       
as reported                       29,760                      25,237
                                                                 
Net interest margin                      3.94%                     4.25%
(6)
                                                                 
(1) Average balances are calculated on amortized cost.
(2) Interest income is presented on a tax equivalent basis using a 35 percent
federal tax rate.
(3) Includes loan fee income.
(4) Loans receivable include non-accrual loans.
(5) Represents difference between the average yield on interest earning assets
and the average cost of interest bearing liabilities and is presented on a
fully tax equivalent basis.
(6) Represents net interest income divided by average total interest-earning
assets.
(7) Rates are annualized.

CONTACT: Investor Contact:
         William S. Burns
         Executive VP & CFO
         201.816.4474; bburns@cnob.com
        
         Media Contact:
         Rachel Gerber, MWW
         646.215.6889; rgerber@mww.com
 
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