ENGLEWOOD CLIFFS, N.J., Jan. 27, 2022 (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 $31.3 million for the fourth quarter of 2021, compared with $32.1 million for the third quarter of 2021 and $25.6 million for the fourth quarter of 2020. Diluted earnings per share were $0.79 for the fourth quarter of 2021 compared with $0.80 for the third quarter of 2021 and $0.64 for the fourth quarter of 2020. The $0.8 million decrease in net income available to common stockholders and $0.01 decrease in diluted earnings per share versus the third quarter of 2021 were primarily due to $1.7 million in preferred dividends, a $1.4 million increase in income tax expense and a $0.2 million decrease in noninterest income, partially offset by a $2.2 million increase in net interest income, a $0.3 million decrease in provision for credit losses and a $0.1 million decrease in noninterest expenses. The $5.7 million increase in net income available to common stockholders and $0.15 increase in diluted earnings per share versus the fourth quarter of 2020 were due to a $9.1 million increase in net interest income, a $0.3 million increase in noninterest income, and a $4.2 million decrease in the provision for credit losses, partially offset by a $1.7 million increase in noninterest expenses, a $4.5 million increase in income tax expense, and $1.7 million in preferred dividends. Full-year 2021 net income available to common stockholders was $128.6 million, compared to $71.3 million for 2020. Diluted earnings per share for the full-year 2021 was $3.22, compared with $1.79 for 2020.
Pre-tax, pre-provision net revenue (“PPNR”) increased to $46.2 million for the fourth quarter of 2021, reflecting a 4.7% sequential increase from the third quarter of 2021 and a 20.2% increase from the prior year quarter.
Frank Sorrentino, ConnectOne’s Chairman and Chief Executive Officer stated, “ConnectOne’s strong fourth quarter capped off an exceptional year for our Company. We delivered record financial performance, realized significant organic growth, and continued to leverage our investments in technology to increase our operational efficiency even further. Loans, net of the Paycheck Protection Program (“PPP”), increased by 5.3% sequentially and by 15.4% for the year, while noninterest bearing deposits grew by 7.7% sequentially and by 20.8% for the year. Our performance is a testament to our team’s continued resilience, the diligent execution of our “client first” philosophy and ConnectOne’s stellar reputation among commercial businesses and the real estate industry.”
“We continue to operate efficiently and effectively and our fourth quarter operating performance was highlighted by solid year-over-year net revenue growth, strong earnings and best-in-class efficiency. We also continued to deliver outstanding performance metrics, further solidifying our status as a top performer in the banking industry. This quarter’s PPNR as a percentage of assets was 2.28%, return on assets was 1.63%, the efficiency ratio was 37.0% and return on tangible common equity was 16.0% while tangible book value per share increased 3.6% sequentially, to $20.12.”
Mr. Sorrentino added, “Looking ahead, we’re excited about what the future holds for ConnectOne and continue to see tangible opportunities in 2022 to further maximize long-term shareholder value. We’re projecting strong growth and increased operating leverage, while our margins and efficiency are expected to remain among the best in the industry. We also remain optimistic regarding continued momentum for loan growth in 2022 and believe we’re well positioned to continue to pursue attractive opportunities to expand our valuable franchise.”
Dividend Declarations
The Company announced that its Board of Directors declared a cash dividend on its common stock and a quarterly cash dividend on its preferred stock. A common stock dividend of $0.13 per share will be paid on March 1, 2022 to common stockholders of record on February 14, 2022.
A dividend of $0.328125 per share for every depositary share, representing a 1/40th interest in the Company’s 5.25% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A, will be paid on March 1, 2022 to preferred stockholders of record on February 14, 2022.
Operating Results
Fully taxable equivalent net interest income for the fourth quarter of 2021 was $70.9 million, an increase of $2.1 million, or 3.1%, from the third quarter of 2021 resulting primarily from a 4.1% increase in average loans, and a 2 basis-point widening of the net interest margin to 3.75% from 3.73%. Excluding purchase accounting adjustments, the adjusted net interest margin was 3.66% for the fourth quarter of 2021 and 3.63% for the third quarter of 2021. The net interest margin widened primarily as a result of lower average cash balances. Included in interest income in the fourth and third quarters of 2021 was the accretion of PPP fee income of $1.5 million and $3.4 million, respectively. Remaining deferred and unrecognized PPP fees were $4.6 million as of December 31, 2021.
Fully taxable equivalent net interest income for the fourth quarter of 2021 increased by $9.1 million, or 14.6%, from the fourth quarter of 2020. The increase from the fourth quarter of 2020 resulted primarily from an 8.2% increase in average loans and a 25 basis-point widening of the net interest margin to 3.75% from 3.50%. The widening of the net interest margin resulted from a 43 basis-point reduction in the cost of interest-bearing liabilities, partially offset by a 10 basis-point reduction in the yield on average interest-earning assets.
Noninterest income was $3.8 million in the fourth quarter of 2021, $4.0 million in the third quarter of 2021 and $3.4 million in the fourth quarter of 2020. The decrease in noninterest income of $0.2 million from the third quarter of 2021 was primarily attributable to a decrease in deposit, loan and other income of $0.2 million, reflecting PPP referral fees at BoeFly during the third quarter. The increase of $0.3 million in noninterest income when compared to the fourth quarter of 2020 was attributable to increases in deposit, loan and other income of $0.2 million and increases in sale of loans held-for-sale of $0.3 million, partially offset by decreases in BOLI income of $0.1 million and net loss on equity securities of $0.1 million.
Noninterest expenses totaled $28.1 million for the fourth quarter of 2021, $28.2 million for the third quarter of 2021 and $26.4 million for the fourth quarter of 2020. The decrease in noninterest expenses of $0.1 million from the third quarter of 2021 was primarily attributable to a decrease in salaries and employee benefits of $0.3 million and professional and consulting of $0.2 million, partially offset by increases in occupancy and equipment of $0.1 million, FDIC insurance of $0.1 million and marketing and advertising of $0.1 million. The increase in noninterest expenses of $1.7 million from the fourth quarter of 2020 was primarily attributable to increases in salaries and employee benefits of $1.9 million, other expenses of $1.1 million, and marketing and advertising of $0.2 million, partially offset by decreases in occupancy and equipment of $0.9 million, professional and consulting of $0.2 million and FDIC insurance $0.3 million. The Company’s expense base growth reflects its commitment to organic expansion through investments in people and technology, while remaining focused on maintaining best-in-class operating efficiency. The Company expects operating expenses to accelerate in 2022 at an increased pace, largely resulting from wage inflation, increased staffing levels and its ongoing investment in technology.
Income tax expense was $12.3 million for the fourth quarter of 2021, $10.9 million for the third quarter of 2021 and $7.8 million for the fourth quarter of 2020. The effective tax rates for the fourth quarter of 2021, third quarter of 2021 and fourth quarter of 2020 were 27.1%, 25.3% and 23.3%, respectively. The higher effective tax rate during the fourth quarter of 2021 when compared to the third quarter of 2021 and fourth quarter of 2020 was the result of a higher percentage of income being derived from taxable sources. The effective tax rate for the full-year 2021 was 25.5%. The Company expects its effective tax rate to increase in 2022, as a result of the Company’s revenue growth in existing and new markets.
Asset Quality
The provision for credit losses was $0.8 million for the fourth quarter of 2021, $1.1 million for the third quarter of 2021 and $5.0 million for the fourth quarter of 2020. The provision for credit losses during the fourth quarter of 2021 and the third quarter of 2021 was the result of strong organic loan growth, while continuing to reflect improvement in the macroeconomic outlook. The elevated provision for loan losses during the fourth quarter of 2020 was due to the economic uncertainties surrounding the COVID-19 pandemic, including consideration of related payment deferrals requested or granted at that time. As of December 31, 2021, the Bank had only one commercial real estate loan remaining on deferral under The Cares Act with a balance of $0.5 million.
Nonperforming assets, which includes nonaccrual loans and other real estate owned (the Bank had no other real estate owned during the periods reported), were $61.7 million as of December 31, 2021, $66.0 million as of September 30, 2021 and $61.7 million as of December 31, 2020. The decrease in nonaccrual loans versus the sequential quarter was due to payoffs and loans returning to accrual status. Nonperforming assets as a percentage of total assets were 0.76% as of December 31, 2021, 0.83% as of September 30, 2021 and 0.82% as of December 31, 2020. The ratio of nonaccrual loans to loans receivable was 0.90%, 1.00% and 0.99%, as of December 31, 2021, September 30, 2021 and December 31, 2020, respectively. The annualized net loan charge-offs ratio was 0.01% for the fourth quarter of 2021, 0.10% for the third quarter of 2021 and 0.00% for the fourth quarter of 2020. The prior sequential quarter included a $1.4 million charge-off of a commercial real estate loan that previously had a specific credit reserve. The allowance for credit losses represented 1.15%, 1.19%, and 1.27% of loans receivable as of December 31, 2021, September 30, 2021 and December 31, 2020, respectively. Excluding PPP loans, the allowance for credit losses represented 1.17%, 1.22%, and 1.36% of loans receivable as of December 31, 2021, September 30, 2021 and December 31, 2020, respectively. The allowance for credit losses as a percentage of nonaccrual loans was 127.7% as of December 31, 2021, 118.2% as of September 30, 2021 and 128.4% as of December 31, 2020.
Selected Balance Sheet Items
The Company’s total assets were $8.1 billion, an increase of $582 million from December 31, 2020. Loans receivable were $6.8 billion, an increase of $592 million from December 31, 2020. The increase in loans receivable was attributable to higher, non-PPP, loan originations, offset by decreases in PPP loans resulting from forgiveness activity. As of December 31, 2021, PPP loans totaled $93 million, down from $398 million as of December 31, 2020, reflecting accelerated forgiveness of the outstanding PPP loans.
The Company’s stockholders’ equity was $1.1 billion as of December 31, 2021, an increase of $208.9 million from December 31, 2020. In August 2021, the Company raised $110.9 million, net of issuance expenses, from the issuance of $115 million in 5.25% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A. This issuance and the increase in retained earnings of $108.2 million were the primary reasons for the overall increase in stockholders’ equity, in addition to an increase in additional paid-in capital of $3.4 million, partially offset by a decrease in accumulated other comprehensive income of $4.2 million and an increase in treasury stock of $9.4 million. As of December 31, 2021, the Company’s tangible common equity ratio and tangible book value per share were 10.06% and $20.12, respectively. As of December 31, 2020, the tangible common equity ratio and tangible book value per share were 9.50% and $17.49, respectively. Total goodwill and other intangible assets were approximately $217.4 million as of December 31, 2021 and $219.3 million as of December 31, 2020.
Share Repurchase Program
During the fourth quarter of 2021, the Company repurchased 41 thousand shares of common stock leaving approximately 2.3 million shares remaining authorized for repurchase under the current Board approved repurchase programs. The Company may repurchase shares from time-to-time in the open market, in privately negotiated stock purchases or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities and Exchange Commission and applicable federal securities laws. The share repurchase plans do not obligate the Company to acquire any particular amount of common stock, and they may be modified or suspended at any time at the Company's discretion.
Use of Non-GAAP Financial Measures
In addition to the results presented in accordance with Generally Accepted Accounting Principles ("GAAP"), ConnectOne routinely supplements its evaluation with an analysis of certain non-GAAP measures. ConnectOne believes these non-GAAP financial measures, in addition to the related GAAP measures, provide meaningful information to investors in understanding our operating performance and trends. These non-GAAP measures have inherent limitations and are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for an analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Reconciliations of non-GAAP financial measures disclosed in this earnings release to the comparable GAAP measures are provided in the accompanying tables.
Fourth Quarter 2021 Results Conference Call
Management will also host a conference call and audio webcast at 10:00 a.m. ET on January 27, 2022 to review the Company's financial performance and operating results. The conference call dial-in number is 201-689-8471, access code 13725707. Please dial in at least five minutes before the start of the call to register. An audio webcast of the conference call will be available to the public, on a listen-only basis, via the "Investor Relations" link on the Company's website https://www.ConnectOneBank.com or at http://ir.connectonebank.com.
A replay of the conference call will be available beginning at approximately 1:00 p.m. ET on Thursday, January 27, 2022 and ending on Thursday, February 3, 2022 by dialing 412-317-6671, access code 13725707. An online archive of the webcast will be available following the completion of the conference call at https://www.connectonebank.com or at http://ir.connectonebank.com.
About ConnectOne Bancorp, Inc.
ConnectOne Bancorp, Inc., is a modern financial services company that operates, through its subsidiary, ConnectOne Bank, and its fintech subsidiary, BoeFly. ConnectOne Bank is a high-performing commercial bank offering a full suite of banking & lending products and services that focus on small to middle-market businesses. BoeFly is a fintech marketplace that connects borrowers in the franchise space with funding solutions through a network of partner banks. ConnectOne Bancorp, Inc. is traded on the Nasdaq Global Market under the trading symbol "CNOB," and information about ConnectOne may be found at 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, as supplemented by the Company’s subsequent filings with the Securities and 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, changes in accounting principles and guidelines and the impact of the COVID-19 pandemic on the Company, its employees and operations, and its customers. 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.
Investor Contact:
William S. Burns
Executive VP & CFO
201.816.4474; bburns@cnob.com
Media Contact:
Sutton Resler, MWW
571.236.4966: sresler@mww.com
| CONNECTONE BANCORP, INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION | ||||||||
| (in thousands) | ||||||||
| December 31, | December 31, | |||||||
| 2021 | 2020 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Cash and due from banks | $ | 54,352 | $ | 63,637 | ||||
| Interest-bearing deposits with banks | 211,184 | 240,119 | ||||||
| Cash and cash equivalents | 265,536 | 303,756 | ||||||
| Investment securities | 534,507 | 487,955 | ||||||
| Equity securities | 13,794 | 13,387 | ||||||
| Loans held-for-sale | 250 | 4,710 | ||||||
| Loans receivable | 6,828,622 | 6,236,307 | ||||||
| Less: Allowance for credit losses - loans | 78,773 | 79,226 | ||||||
| Net loans receivable | 6,749,849 | 6,157,081 | ||||||
| Investment in restricted stock, at cost | 27,826 | 25,099 | ||||||
| Bank premises and equipment, net | 29,032 | 30,108 | ||||||
| Accrued interest receivable | 34,152 | 35,317 | ||||||
| Bank owned life insurance | 195,731 | 165,960 | ||||||
| Right of use operating lease assets | 11,017 | 16,159 | ||||||
| Goodwill | 208,372 | 208,372 | ||||||
| Core deposit intangibles | 8,997 | 10,977 | ||||||
| Other assets | 50,417 | 88,458 | ||||||
| Total assets | $ | 8,129,480 | $ | 7,547,339 | ||||
| LIABILITIES | ||||||||
| Deposits: | ||||||||
| Noninterest-bearing | $ | 1,617,049 | $ | 1,339,108 | ||||
| Interest-bearing | 4,715,904 | 4,620,116 | ||||||
| Total deposits | 6,332,953 | 5,959,224 | ||||||
| Borrowings | 468,193 | 425,954 | ||||||
| Subordinated debentures, net | 152,951 | 202,648 | ||||||
| Operating lease liabilities | 12,417 | 18,026 | ||||||
| Other liabilities | 38,754 | 26,177 | ||||||
| Total liabilities | 7,005,268 | 6,632,029 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Preferred stock | 110,927 | - | ||||||
| Common stock | 586,946 | 586,946 | ||||||
| Additional paid-in capital | 27,246 | 23,887 | ||||||
| Retained earnings | 440,169 | 331,951 | ||||||
| Treasury stock | (39,672 | ) | (30,271 | ) | ||||
| Accumulated other comprehensive (loss) income | (1,404 | ) | 2,797 | |||||
| Total stockholders' equity | 1,124,212 | 915,310 | ||||||
| Total liabilities and stockholders' equity | $ | 8,129,480 | $ | 7,547,339 | ||||
| CONNECTONE BANCORP, INC. AND SUBSIDIARIES | |||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
| (dollars in thousands, except for per share data) | |||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| 12/31/21 | 12/31/20 | 12/31/21 | 12/31/20 | ||||||||||||
| Interest income | |||||||||||||||
| Interest and fees on loans | $ | 76,891 | $ | 73,123 | $ | 293,546 | $ | 296,611 | |||||||
| Interest and dividends on investment securities: | |||||||||||||||
| Taxable | 1,265 | 1,373 | 4,413 | 6,456 | |||||||||||
| Tax-exempt | 518 | 649 | 2,403 | 2,797 | |||||||||||
| Dividends | 207 | 374 | 971 | 1,642 | |||||||||||
| Interest on federal funds sold and other short-term investments | 159 | 69 | 405 | 694 | |||||||||||
| Total interest income | 79,040 | 75,588 | 301,738 | 308,200 | |||||||||||
| Interest expense | |||||||||||||||
| Deposits | 5,281 | 9,630 | 24,768 | 52,386 | |||||||||||
| Borrowings | 3,298 | 4,587 | 14,092 | 17,823 | |||||||||||
| Total interest expense | 8,579 | 14,217 | 38,860 | 70,209 | |||||||||||
| Net interest income | 70,461 | 61,371 | 262,878 | 237,991 | |||||||||||
| Provision for (reversal of) credit losses | 815 | 5,000 | (5,500 | ) | 41,000 | ||||||||||
| Net interest income after provision for credit losses | 69,646 | 56,371 | 268,378 | 196,991 | |||||||||||
| Noninterest income | |||||||||||||||
| Deposit, loan and other income | 1,525 | 1,300 | 6,617 | 7,077 | |||||||||||
| Income on bank owned life insurance | 1,244 | 1,314 | 4,771 | 5,007 | |||||||||||
| Net gains on sale of loans held-for-sale | 1,139 | 841 | 3,807 | 2,085 | |||||||||||
| Gain on sale of branches | - | - | 674 | - | |||||||||||
| Net (losses) gains on equity securities | (131 | ) | (13 | ) | (373 | ) | 202 | ||||||||
| Net gains on sale/redemption of investment securities | - | - | 195 | 29 | |||||||||||
| Total noninterest income | 3,777 | 3,442 | 15,691 | 14,400 | |||||||||||
| Noninterest expenses | |||||||||||||||
| Salaries and employee benefits | 16,483 | 14,581 | 64,072 | 58,758 | |||||||||||
| Occupancy and equipment | 2,762 | 3,689 | 11,638 | 13,882 | |||||||||||
| FDIC insurance | 625 | 948 | 2,665 | 4,002 | |||||||||||
| Professional and consulting | 1,996 | 2,210 | 8,286 | 7,383 | |||||||||||
| Marketing and advertising | 454 | 256 | 1,318 | 1,200 | |||||||||||
| Data processing | 1,585 | 1,479 | 6,265 | 6,008 | |||||||||||
| Merger expenses | - | - | - | 14,640 | |||||||||||
| Amortization of core deposit intangible | 483 | 628 | 1,981 | 2,559 | |||||||||||
| Increase in value of acquisition price | - | - | - | 2,333 | |||||||||||
| Other expenses | 3,696 | 2,611 | 12,786 | 10,236 | |||||||||||
| Total noninterest expenses | 28,084 | 26,402 | 109,011 | 121,001 | |||||||||||
| Income before income tax expense | 45,339 | 33,411 | 175,058 | 90,390 | |||||||||||
| Income tax expense | 12,301 | 7,770 | 44,705 | 19,101 | |||||||||||
| Net income | 33,038 | 25,641 | 130,353 | 71,289 | |||||||||||
| Preferred dividends | 1,717 | - | 1,717 | - | |||||||||||
| Net income available to common stockholders | $ | 31,321 | $ | 25,641 | $ | 128,636 | $ | 71,289 | |||||||
| Earnings per common share: | |||||||||||||||
| Basic | $ | 0.79 | $ | 0.64 | $ | 3.24 | $ | 1.80 | |||||||
| Diluted | 0.79 | 0.64 | 3.22 | 1.79 | |||||||||||
| ConnectOne's management believes that the supplemental financial information, including non-GAAP measures provided below, is useful to investors. The non-GAAP measures should not be viewed as a substitute for financial results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP financial measures presented by other companies. | ||||||||||||||||||||
| CONNECTONE BANCORP, INC. | ||||||||||||||||||||
| SUPPLEMENTAL GAAP AND NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||
| As of | ||||||||||||||||||||
| Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | ||||||||||||||||
| 2021 | 2021 | 2021 | 2021 | 2020 | ||||||||||||||||
| Selected Financial Data | (dollars in thousands) | |||||||||||||||||||
| Total assets | $ | 8,129,480 | $ | 7,949,514 | $ | 7,710,082 | $ | 7,449,639 | $ | 7,547,339 | ||||||||||
| Loans receivable: | ||||||||||||||||||||
| Commercial | $ | 1,163,442 | $ | 1,116,535 | $ | 1,046,965 | $ | 1,071,418 | $ | 1,092,404 | ||||||||||
| Paycheck Protection Program ("PPP") loans | 93,057 | 177,829 | 326,788 | 522,340 | 397,492 | |||||||||||||||
| Commercial real estate | 2,446,807 | 2,354,209 | 2,252,484 | 2,127,806 | 2,103,468 | |||||||||||||||
| Multifamily | 2,337,712 | 2,113,541 | 1,914,978 | 1,698,331 | 1,712,153 | |||||||||||||||
| Commercial construction | 540,178 | 552,896 | 587,121 | 565,872 | 617,747 | |||||||||||||||
| Residential | 255,269 | 270,793 | 286,907 | 306,376 | 322,564 | |||||||||||||||
| Consumer | 1,886 | 2,093 | 6,355 | 3,364 | 1,853 | |||||||||||||||
| Gross loans | 6,838,351 | 6,587,896 | 6,421,598 | 6,295,508 | 6,247,681 | |||||||||||||||
| Unearned net origination fees | (9,729 | ) | (11,457 | ) | (13,694 | ) | (18,317 | ) | (11,374 | ) | ||||||||||
| Loans receivable | 6,828,622 | 6,576,439 | 6,407,904 | 6,277,191 | 6,236,307 | |||||||||||||||
| Loans held-for-sale | 250 | 5,596 | 6,159 | 6,900 | 4,710 | |||||||||||||||
| Total loans | $ | 6,828,872 | $ | 6,582,035 | $ | 6,414,063 | $ | 6,284,091 | $ | 6,241,017 | ||||||||||
| Investment and equity securities | $ | 548,301 | $ | 476,584 | $ | 472,156 | $ | 455,223 | $ | 501,342 | ||||||||||
| Goodwill and other intangible assets | 217,369 | 217,852 | 218,335 | 218,842 | 219,349 | |||||||||||||||
| Deposits: | ||||||||||||||||||||
| Noninterest-bearing demand | $ | 1,617,049 | $ | 1,500,754 | $ | 1,485,952 | $ | 1,384,961 | $ | 1,339,108 | ||||||||||
| Time deposits | 1,150,109 | 1,221,911 | 1,301,807 | 1,356,599 | 1,464,133 | |||||||||||||||
| Other interest-bearing deposits | 3,565,795 | 3,675,673 | 3,404,754 | 3,209,774 | 3,155,983 | |||||||||||||||
| Total deposits | $ | 6,332,953 | $ | 6,398,338 | $ | 6,192,513 | $ | 5,951,335 | $ | 5,959,224 | ||||||||||
| Borrowings | $ | 468,193 | $ | 253,225 | $ | 353,462 | $ | 359,710 | $ | 425,954 | ||||||||||
| Subordinated debentures (net of debt issuance costs) | 152,951 | 152,875 | 152,800 | 152,724 | 202,648 | |||||||||||||||
| Total stockholders' equity | 1,124,212 | 1,098,433 | 964,960 | 935,637 | 915,310 | |||||||||||||||
| Quarterly Average Balances | ||||||||||||||||||||
| Total assets | $ | 8,027,169 | $ | 7,837,997 | $ | 7,566,676 | $ | 7,500,034 | $ | 7,547,651 | ||||||||||
| Loans receivable: | ||||||||||||||||||||
| Commercial (including PPP loans) | $ | 1,278,048 | $ | 1,296,066 | $ | 1,485,918 | $ | 1,531,790 | $ | 1,557,303 | ||||||||||
| Commercial real estate (including multifamily) | 4,625,371 | 4,312,092 | 3,925,497 | 3,805,856 | 3,704,197 | |||||||||||||||
| Commercial construction | 547,038 | 572,920 | 553,396 | 595,466 | 615,439 | |||||||||||||||
| Residential | 268,112 | 279,063 | 293,633 | 316,233 | 332,403 | |||||||||||||||
| Consumer | 4,938 | 2,649 | 3,148 | 2,540 | 3,309 | |||||||||||||||
| Gross loans | 6,723,507 | 6,462,790 | 6,261,592 | 6,251,885 | 6,212,651 | |||||||||||||||
| Unearned net origination fees | (10,873 | ) | (13,064 | ) | (13,076 | ) | (13,163 | ) | (12,023 | ) | ||||||||||
| Loans receivable | 6,712,634 | 6,449,726 | 6,248,516 | 6,238,723 | 6,200,628 | |||||||||||||||
| Loans held-for-sale | 5,051 | 6,226 | 3,696 | 4,237 | 9,003 | |||||||||||||||
| Total loans | $ | 6,717,685 | $ | 6,455,952 | $ | 6,252,212 | $ | 6,242,960 | $ | 6,209,631 | ||||||||||
| Investment and equity securities | $ | 481,276 | $ | 465,103 | $ | 450,543 | $ | 481,802 | $ | 469,820 | ||||||||||
| Goodwill and other intangible assets | 217,685 | 218,170 | 218,662 | 219,171 | 219,761 | |||||||||||||||
| Deposits: | ||||||||||||||||||||
| Noninterest-bearing demand | $ | 1,537,316 | $ | 1,495,456 | $ | 1,432,707 | $ | 1,348,585 | $ | 1,294,447 | ||||||||||
| Time deposits | 1,204,374 | 1,252,818 | 1,324,510 | 1,422,295 | 1,577,338 | |||||||||||||||
| Other interest-bearing deposits | 3,672,311 | 3,582,261 | 3,320,400 | 3,225,751 | 3,094,536 | |||||||||||||||
| Total deposits | $ | 6,414,001 | $ | 6,330,535 | $ | 6,077,617 | $ | 5,996,631 | $ | 5,966,321 | ||||||||||
| Borrowings | $ | 292,847 | $ | 276,183 | $ | 331,633 | $ | 375,511 | $ | 410,098 | ||||||||||
| Subordinated debentures (net of debt issuance costs) | 152,902 | 152,825 | 152,750 | 154,341 | 202,595 | |||||||||||||||
| Total stockholders' equity | 1,113,524 | 1,032,191 | 952,019 | 928,041 | 906,153 | |||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | ||||||||||||||||
| 2021 | 2021 | 2021 | 2021 | 2020 | ||||||||||||||||
| (dollars in thousands, except for per share data) | ||||||||||||||||||||
| Net interest income | $ | 70,461 | $ | 68,245 | $ | 63,009 | $ | 61,163 | $ | 61,371 | ||||||||||
| Provision for (reversal of) credit losses | 815 | 1,100 | (1,649 | ) | (5,766 | ) | 5,000 | |||||||||||||
| Net interest income after provision for credit losses | 69,646 | 67,145 | 64,658 | 66,929 | 56,371 | |||||||||||||||
| Noninterest income | ||||||||||||||||||||
| Deposit, loan and other income | 1,525 | 1,702 | 2,222 | 1,168 | 1,300 | |||||||||||||||
| Income on bank owned life insurance | 1,244 | 1,278 | 1,185 | 1,064 | 1,314 | |||||||||||||||
| Net gains on sale of loans held-for-sale | 1,139 | 1,114 | 847 | 707 | 841 | |||||||||||||||
| Gain on sale of branches | - | - | - | 674 | - | |||||||||||||||
| Net (losses) gains on equity securities | (131 | ) | (78 | ) | 23 | (187 | ) | (13 | ) | |||||||||||
| Net gains on sale/redemption of investment securities | - | - | 195 | - | - | |||||||||||||||
| Total noninterest income | 3,777 | 4,016 | 4,472 | 3,426 | 3,442 | |||||||||||||||
| Noninterest expenses | ||||||||||||||||||||
| Salaries and employee benefits | 16,483 | 16,740 | 15,284 | 15,565 | 14,581 | |||||||||||||||
| Occupancy and equipment | 2,762 | 2,656 | 2,916 | 3,304 | 3,689 | |||||||||||||||
| FDIC insurance | 625 | 525 | 580 | 935 | 948 | |||||||||||||||
| Professional and consulting | 1,996 | 2,217 | 2,117 | 1,956 | 2,210 | |||||||||||||||
| Marketing and advertising | 454 | 345 | 278 | 241 | 256 | |||||||||||||||
| Data processing | 1,585 | 1,541 | 1,603 | 1,536 | 1,479 | |||||||||||||||
| Amortization of core deposit intangible | 483 | 483 | 508 | 507 | 628 | |||||||||||||||
| Other expenses | 3,696 | 3,676 | 2,973 | 2,441 | 2,611 | |||||||||||||||
| Total noninterest expenses | 28,084 | 28,183 | 26,259 | 26,485 | 26,402 | |||||||||||||||
| Income before income tax expense | 45,339 | 42,978 | 42,871 | 43,870 | 33,411 | |||||||||||||||
| Income tax expense | 12,301 | 10,881 | 10,652 | 10,871 | 7,770 | |||||||||||||||
| Net income | 33,038 | 32,097 | 32,219 | 32,999 | 25,641 | |||||||||||||||
| Preferred dividends | 1,717 | - | - | - | - | |||||||||||||||
| Net income available to common stockholders | $ | 31,321 | $ | 32,097 | $ | 32,219 | $ | 32,999 | $ | 25,641 | ||||||||||
| Weighted average diluted common shares outstanding | 39,792,937 | 39,869,468 | 39,872,829 | 39,788,881 | 39,726,791 | |||||||||||||||
| Diluted EPS | $ | 0.79 | $ | 0.80 | $ | 0.81 | $ | 0.82 | $ | 0.64 | ||||||||||
| Reconciliation of GAAP Earnings to Pre-tax and Pre-provision Net Revenue | ||||||||||||||||||||
| Net income | $ | 33,038 | $ | 32,097 | $ | 32,219 | $ | 32,999 | $ | 25,641 | ||||||||||
| Income tax expense | 12,301 | 10,881 | 10,652 | 10,871 | 7,770 | |||||||||||||||
| Provision for (reversal of) credit losses | 815 | 1,100 | (1,649 | ) | (5,766 | ) | 5,000 | |||||||||||||
| Pre-tax and pre-provision net revenue | $ | 46,154 | $ | 44,078 | $ | 41,222 | $ | 38,104 | $ | 38,411 | ||||||||||
| Return on Assets Measures | ||||||||||||||||||||
| Average assets | $ | 8,027,169 | $ | 7,837,997 | $ | 7,566,676 | $ | 7,500,034 | $ | 7,547,651 | ||||||||||
| Return on avg. assets | 1.63 | % | 1.62 | % | 1.71 | % | 1.78 | % | 1.35 | % | ||||||||||
| Return on avg. assets (pre-tax and pre-provision) | 2.28 | 2.23 | 2.19 | 2.06 | 2.02 | |||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | ||||||||||||||||
| 2021 | 2021 | 2021 | 2021 | 2020 | ||||||||||||||||
| Return on Equity Measures | (dollars in thousands) | |||||||||||||||||||
| Average stockholders' equity | $ | 1,113,524 | $ | 980,344 | $ | 952,019 | $ | 928,041 | $ | 906,153 | ||||||||||
| Less: average preferred stock | (110,927 | ) | - | - | - | - | ||||||||||||||
| Average common equity | $ | 1,002,597 | $ | 980,344 | $ | 952,019 | $ | 928,041 | $ | 906,153 | ||||||||||
| Less: average intangible assets | (217,685 | ) | (218,170 | ) | (218,662 | ) | (219,171 | ) | (219,761 | ) | ||||||||||
| Average tangible common equity | $ | 784,912 | $ | 762,174 | $ | 733,357 | $ | 708,870 | $ | 686,392 | ||||||||||
| Return on avg. common equity (GAAP) | 12.39 | % | 12.99 | % | 13.57 | % | 14.42 | % | 11.26 | % | ||||||||||
| Return on avg. tangible common equity ("TCE") (non-GAAP) (1) | 16.00 | 16.88 | 17.82 | 19.08 | 15.12 | |||||||||||||||
| Efficiency Measures | ||||||||||||||||||||
| Total noninterest expenses | $ | 28,084 | $ | 28,183 | $ | 26,259 | $ | 26,485 | $ | 26,402 | ||||||||||
| Amortization of core deposit intangibles | (483 | ) | (483 | ) | (508 | ) | (507 | ) | (628 | ) | ||||||||||
| Foreclosed property expense | - | - | - | - | (2 | ) | ||||||||||||||
| Operating noninterest expense | $ | 27,601 | $ | 27,700 | $ | 25,751 | $ | 25,978 | $ | 25,772 | ||||||||||
| Net interest income (tax equivalent basis) | $ | 70,890 | $ | 68,761 | $ | 63,418 | $ | 61,581 | $ | 61,840 | ||||||||||
| Noninterest income | 3,777 | 4,016 | 4,472 | 3,426 | 3,442 | |||||||||||||||
| Net gains on sale of branches | - | - | - | (674 | ) | - | ||||||||||||||
| Net gains on sale/redemption of investment securities | - | - | (195 | ) | - | - | ||||||||||||||
| Operating revenue | $ | 74,667 | $ | 72,777 | $ | 67,695 | $ | 64,333 | $ | 65,282 | ||||||||||
| Operating efficiency ratio (non-GAAP) (2) | 37.0 | % | 38.1 | % | 38.0 | % | 40.4 | % | 39.5 | % | ||||||||||
| Net Interest Margin | ||||||||||||||||||||
| Average interest-earning assets | $ | 7,508,973 | $ | 7,321,771 | $ | 7,059,965 | $ | 7,008,500 | $ | 7,031,662 | ||||||||||
| Net interest income (tax equivalent basis) | $ | 70,890 | $ | 68,761 | $ | 63,418 | $ | 61,581 | $ | 61,840 | ||||||||||
| Impact of purchase accounting fair value marks | (1,674 | ) | (1,849 | ) | (2,012 | ) | (2,074 | ) | (2,237 | ) | ||||||||||
| Adjusted net interest income (tax equivalent basis) | $ | 69,216 | $ | 66,912 | $ | 61,406 | $ | 59,507 | $ | 59,603 | ||||||||||
| Net interest margin (GAAP) | 3.75 | % | 3.73 | % | 3.60 | % | 3.56 | % | 3.50 | % | ||||||||||
| Adjusted net interest margin (non-GAAP) (3) | 3.66 | 3.63 | 3.49 | 3.44 | 3.37 | |||||||||||||||
| (1) Earnings available to common stockholders excluding amortization of intangible assets divided by average tangible common equity. | ||||||||||||||||||||
| (2) Operating noninterest expense divided by operating revenue. | ||||||||||||||||||||
| (3) Adjusted net interest margin excludes impact of purchase accounting fair value marks. | ||||||||||||||||||||
| As of | ||||||||||||||||||||
| Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | ||||||||||||||||
| 2021 | 2021 | 2021 | 2021 | 2020 | ||||||||||||||||
| Capital Ratios and Book Value per Share | (dollars in thousands, except for per share data) | |||||||||||||||||||
| Stockholders equity | $ | 1,124,212 | $ | 987,506 | $ | 964,960 | $ | 935,637 | $ | 915,310 | ||||||||||
| Less: preferred stock | (110,927 | ) | - | - | - | - | ||||||||||||||
| Common equity | $ | 1,013,285 | $ | 987,506 | $ | 964,960 | $ | 935,637 | $ | 915,310 | ||||||||||
| Less: intangible assets | (217,369 | ) | (217,852 | ) | (218,335 | ) | (218,842 | ) | (219,349 | ) | ||||||||||
| Tangible common equity | $ | 795,916 | $ | 769,654 | $ | 746,625 | $ | 716,795 | $ | 695,961 | ||||||||||
| Total assets | $ | 8,129,480 | $ | 7,949,514 | $ | 7,710,082 | $ | 7,449,639 | $ | 7,547,339 | ||||||||||
| Less: intangible assets | (217,369 | ) | (217,852 | ) | (218,335 | ) | (218,842 | ) | (219,349 | ) | ||||||||||
| Tangible assets | $ | 7,912,111 | $ | 7,731,662 | $ | 7,491,747 | $ | 7,230,797 | $ | 7,327,990 | ||||||||||
| Common shares outstanding | 39,568,090 | 39,602,199 | 39,794,815 | 39,773,602 | 39,785,398 | |||||||||||||||
| Common equity ratio (GAAP) | 12.46 | % | 12.42 | % | 12.52 | % | 12.56 | % | 12.13 | % | ||||||||||
| Tangible common equity ratio (non-GAAP) (4) | 10.06 | 9.95 | 9.97 | 9.91 | 9.50 | |||||||||||||||
| Regulatory capital ratios (Bancorp): | ||||||||||||||||||||
| Leverage ratio | 11.65 | % | 11.60 | % | 10.19 | % | 9.89 | % | 9.51 | % | ||||||||||
| Common equity Tier 1 risk-based ratio | 10.64 | 10.73 | 11.09 | 11.36 | 10.79 | |||||||||||||||
| Risk-based Tier 1 capital ratio | 12.19 | 12.35 | 11.17 | 11.44 | 10.87 | |||||||||||||||
| Risk-based total capital ratio | 15.26 | 15.54 | 14.58 | 15.08 | 15.08 | |||||||||||||||
| Regulatory capital ratios (Bank): | ||||||||||||||||||||
| Leverage ratio | 11.43 | % | 11.33 | % | 11.34 | % | 11.06 | % | 10.63 | % | ||||||||||
| Common equity Tier 1 risk-based ratio | 11.96 | 12.06 | 12.42 | 12.78 | 12.24 | |||||||||||||||
| Risk-based Tier 1 capital ratio | 11.96 | 12.06 | 12.42 | 12.78 | 12.24 | |||||||||||||||
| Risk-based total capital ratio | 13.44 | 13.61 | 14.07 | 14.55 | 10.00 | |||||||||||||||
| Book value per share (GAAP) | $ | 25.61 | $ | 24.94 | $ | 24.25 | $ | 23.52 | $ | 23.01 | ||||||||||
| Tangible book value per share (non-GAAP) (5) | 20.12 | 19.43 | 18.76 | 18.02 | 17.49 | |||||||||||||||
| Net Loan (Recoveries) Charge-Off Detail | ||||||||||||||||||||
| Net loan charge-offs (recoveries): | ||||||||||||||||||||
| Charge-offs | $ | 458 | $ | 1,727 | $ | 212 | $ | - | $ | 67 | ||||||||||
| Recoveries | (217 | ) | (113 | ) | (14 | ) | (61 | ) | (26 | ) | ||||||||||
| Net loan charge-offs (recoveries) | $ | 241 | $ | 1,614 | $ | 198 | $ | (61 | ) | $ | 41 | |||||||||
| Net loan charge-offs (recoveries) as a % of average loans receivable (annualized) | 0.01 | % | 0.10 | % | 0.01 | % | (0.00 | ) | % | 0.00 | % | |||||||||
| Asset Quality | ||||||||||||||||||||
| Nonaccrual loans | $ | 61,700 | $ | 65,959 | $ | 56,213 | $ | 60,940 | $ | 61,696 | ||||||||||
| OREO | - | - | - | - | - | |||||||||||||||
| Nonperforming assets | $ | 61,700 | $ | 65,959 | $ | 56,213 | $ | 60,940 | $ | 61,696 | ||||||||||
| Performing troubled debt restructurings | $ | 43,587 | $ | 41,256 | $ | 33,021 | $ | 25,505 | $ | 23,655 | ||||||||||
| Allowance for credit losses - loans ("ACL") | 78,773 | 77,986 | 78,684 | 80,568 | 79,226 | |||||||||||||||
| Loans receivable | $ | 6,828,622 | $ | 6,576,439 | $ | 6,407,904 | $ | 6,277,191 | $ | 6,236,307 | ||||||||||
| Less: PPP loans | 93,057 | 177,829 | 326,788 | 522,340 | 397,492 | |||||||||||||||
| Loans receivable (excluding PPP loans) | $ | 6,735,565 | $ | 6,398,610 | $ | 6,081,116 | $ | 5,754,851 | $ | 5,838,815 | ||||||||||
| Nonaccrual loans as a % of loans receivable | 0.90 | % | 1.00 | % | 0.88 | % | 0.97 | % | 0.99 | |||||||||||
| Nonperforming assets as a % of total assets | 0.76 | 0.83 | 0.73 | 0.82 | 0.82 | |||||||||||||||
| ACL as a % of loans receivable | 1.15 | 1.19 | 1.23 | 1.28 | 1.27 | |||||||||||||||
| ACL as a % of loans receivable (excluding PPP loans) | 1.17 | 1.22 | 1.29 | 1.40 | 1.36 | |||||||||||||||
| ACL as a % of nonaccrual loans | 127.7 | 118.2 | 140.0 | 132.2 | 128.4 | |||||||||||||||
| (4) Tangible common equity divided by tangible assets. | ||||||||||||||||||||
| (5) Tangible common equity divided by common shares outstanding at period-end. | ||||||||||||||||||||
| CONNECTONE BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||
| NET INTEREST MARGIN ANALYSIS | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||||||||
| December 31, 2021 | September 30, 2021 | December 31, 2020 | ||||||||||||||||||||||||
| Average | Average | Average | ||||||||||||||||||||||||
| Interest-earning assets: | Balance | Interest | Rate (7) | Balance | Interest | Rate (7) | Balance | Interest | Rate (7) | |||||||||||||||||
| Investment securities (1) (2) | $ | 480,143 | $ | 1,921 | 1.59 | % | $ | 459,559 | $ | 1,712 | 1.48 | % | $ | 460,471 | $ | 2,194 | 1.90 | % | ||||||||
| Loans receivable and loans held-for-sale (2) (3) (4) | 6,717,685 | 77,220 | 4.56 | 6,455,952 | 75,434 | 4.64 | 6,209,631 | 73,420 | 4.70 | |||||||||||||||||
| Federal funds sold and interest-bearing deposits with banks | 291,243 | 121 | 0.16 | 387,155 | 151 | 0.15 | 337,172 | 69 | 0.08 | |||||||||||||||||
| Restricted investment in bank stock | 19,902 | 207 | 4.13 | 19,105 | 245 | 5.09 | 24,388 | 374 | 6.10 | |||||||||||||||||
| Total interest-earning assets | 7,508,973 | 79,469 | 4.20 | 7,321,771 | 77,542 | 4.20 | 7,031,662 | 76,057 | 4.30 | |||||||||||||||||
| Allowance for credit losses - loans | (79,074 | ) | (78,327 | ) | (74,943 | ) | ||||||||||||||||||||
| Noninterest-earning assets | 597,270 | 594,553 | 584,145 | |||||||||||||||||||||||
| Total assets | $ | 8,027,169 | $ | 7,837,997 | $ | 7,540,864 | ||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||
| Time deposits | 1,204,374 | 2,717 | 0.90 | $ | 1,252,818 | $ | 2,982 | 0.94 | 1,577,338 | 6,682 | 1.69 | |||||||||||||||
| Other interest-bearing deposits | 3,672,311 | 2,563 | 0.28 | 3,582,261 | 2,495 | 0.28 | 3,094,536 | 2,948 | 0.38 | |||||||||||||||||
| Total interest-bearing deposits | 4,876,685 | 5,280 | 0.43 | 4,835,079 | 5,477 | 0.45 | 4,671,874 | 9,630 | 0.82 | |||||||||||||||||
| Borrowings | 292,847 | 1,102 | 1.49 | 276,183 | 1,105 | 1.59 | 410,098 | 1,856 | 1.80 | |||||||||||||||||
| Subordinated debentures | 152,902 | 2,167 | 5.62 | 152,825 | 2,168 | 5.63 | 202,595 | 2,699 | 5.30 | |||||||||||||||||
| Capital lease obligation | 1,967 | 30 | 6.05 | 2,018 | 30 | 5.90 | 2,164 | 32 | 5.88 | |||||||||||||||||
| Total interest-bearing liabilities | 5,324,401 | 8,579 | 0.64 | 5,266,105 | 8,780 | 0.66 | 5,286,731 | 14,217 | 1.07 | |||||||||||||||||
| Noninterest-bearing demand deposits | 1,537,316 | 1,495,456 | 1,294,447 | |||||||||||||||||||||||
| Other liabilities | 51,928 | 44,245 | 53,533 | |||||||||||||||||||||||
| Total noninterest-bearing liabilities | 1,589,244 | 1,539,701 | 1,347,980 | |||||||||||||||||||||||
| Stockholders' equity | 1,113,524 | 1,032,191 | 906,153 | |||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 8,027,169 | $ | 7,837,997 | $ | 7,540,864 | ||||||||||||||||||||
| Net interest income (tax equivalent basis) | 70,890 | 68,762 | 61,840 | |||||||||||||||||||||||
| Net interest spread (5) | 3.56 | % | 3.54 | % | 3.23 | % | ||||||||||||||||||||
| Net interest margin (6) | 3.75 | % | 3.73 | % | 3.50 | % | ||||||||||||||||||||
| Tax equivalent adjustment | (429 | ) | (516 | ) | (469 | ) | ||||||||||||||||||||
| Net interest income | $ | 70,461 | $ | 68,246 | $ | 61,371 | ||||||||||||||||||||
| (1) Average balances are calculated on amortized cost. | ||||||||||||||||||||||||||
| (2) Interest income is presented on a tax equivalent basis using 21% federal tax rate. | ||||||||||||||||||||||||||
| (3) Includes loan fee income and accretion of purchase accounting adjustments. | ||||||||||||||||||||||||||
| (4) Loans include nonaccrual 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 tax equivalent basis. | ||||||||||||||||||||||||||
| (6) Represents net interest income on a tax equivalent basis divided by average total interest-earning assets. | ||||||||||||||||||||||||||
| (7) Rates are annualized. | ||||||||||||||||||||||||||
