ConnectOne Bancorp (CNOB) risk factors, FY2025 10-K

ConnectOne Bancorp's FY2025 10-K, filed Feb 24, 2026, lists 28 risk factors. Against the prior year's 39: 2 new, 13 dropped, 4 substantially reworded.

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Risk factors listed
280 groups
New this year
2vs 39 last year
Dropped
13since the prior 10-K
Substantially reworded
4of those kept
Section length
6k wordsItem 1A

What the changes say

  • Interest rate resets on $2.4 billion in loans could harm borrower repayment ability.
  • New risks added regarding artificial intelligence adoption and legal uncertainty.
  • Merger-related risks were dropped following completion of the FLIC transaction.

What changed since the prior 10-K

New

  • New

    A significant portion of our loan portfolio has interest rates that will reset over the next 24 months. Applicable increases in interest rates could harm our borrowers’ abilities to repay their loans

    Approximately $2.4 billion in loans originated during low-rate 2021 and 2022 will reset in 2026 and 2027, risking borrower defaults from higher payments.

  • New

    The development and use of artificial intelligence (“AI”) present risks and challenges that may adversely impact our business

    Incorporating AI into business processes, products, and communications exposes the bank to rapidly evolving legal and regulatory uncertainties regarding privacy and intellectual property.

Dropped

  • Dropped

    These competitors may offer higher interest rates than we do, which could decrease the deposits that we attract or require us to increase our rates to retain existing deposits or attract new deposits

  • Dropped

    The Company will be subject to heightened regulatory requirements when total assets exceed $10 billion

  • Dropped

    Shareholders of ConnectOne will have less influence as shareholders of the combined company than as a shareholder of ConnectOne prior to the completion of the merger

  • Dropped

    Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that could have an adverse effect on the combined company following the Merger

  • Dropped

    ConnectOne may need to raise additional capital in connection with the merger

  • Dropped

    Failure to complete the merger could severely disadvantage ConnectOne

  • Dropped

    ConnectOne’s management’s and employees’ attention may be diverted from their day-to-day business and operational matters as a result of efforts relating to the attempt to consummate the merger

  • Dropped

    The expected benefits of the merger may not be realized if the combined company does not achieve cost savings and other benefits

  • Dropped

    ConnectOne will be subject to business uncertainties and contractual restrictions, while the merger is pending

  • Dropped

    Shareholder litigation could prevent or delay the completion of the merger or otherwise negatively impact the business and operations of ConnectOne

  • Dropped

    The combined company may be unable to retain ConnectOne and/or FLIC personnel successfully after the merger is completed

    Competition from New Jersey's proposed state-owned bank for municipal deposits.

  • Dropped

    Unanticipated costs relating to the merger could reduce ConnectOne’s future earnings per share

  • Dropped

    Issuance of shares of ConnectOne common stock in connection with the merger may adversely affect the market price of ConnectOne common stock

Reworded

  • 73% rewritten

    Our New York State multifamily loan portfolio could be adversely impacted by changes in legislation or regulation which, in turn, could have a material adverse effect on our financial condition and results of operations

    Added discussion of New York City's new mayoral administration policies discussing further rent increase limits and difficult tenant evictions.

  • 40% rewritten

    The banking business is subject to significant government regulations

    Removed a closing reference to Dodd-Frank Act compliance costs in the regulatory risk disclosure.

  • 38% rewritten

    A period of sustained high market interest rates could adversely affect our earnings if our cost of funds increases more rapidly than our yield on our earning assets and compresses our net interest margin. In addition, the economic value of portfolio equity would decline as interest rates increase

    The text for interest rate risk remained identical between the prior and current year.

  • 29% rewritten

    We may need to raise additional capital to execute our growth-oriented business strategy

    Added a specific reference to raising $200 million of capital through subordinated debt in connection with the FLIC merger.

All 28 risk factors

Headings as the filing states them, in filing order.

Other

  1. 01Our growth-oriented business strategy could be adversely affected if we are not able to attract and retain skilled employees or if we lose the services of our senior management team
  2. 02We may need to raise additional capital to execute our growth-oriented business strategy29% rewritten
  3. 03We have a significant concentration in commercial real estate loans
  4. 04Loans secured by owner-occupied real estate are reliant on the operating businesses to provide cash flow to meet debt service obligations, and as a result may be more susceptible to the general impact on the economic environment affecting those operating companies as well as the real estate
  5. 05If we are limited in our ability to originate loans secured by commercial real estate, we may face greater risk in our loan portfolio
  6. 06Our New York State multifamily loan portfolio could be adversely impacted by changes in legislation or regulation which, in turn, could have a material adverse effect on our financial condition and results of operations73% rewritten
  7. 07A significant portion of our loan portfolio has interest rates that will reset over the next 24 months. Applicable increases in interest rates could harm our borrowers’ abilities to repay their loansNew
  8. 08The small to medium-sized businesses that the Bank lends to may have fewer resources to weather a downturn in the economy, which may impair a borrower’s ability to repay a loan to the Bank that could materially harm our operating results
  9. 09The development and use of artificial intelligence (“AI”) present risks and challenges that may adversely impact our businessNew
  10. 10Our ability to maintain our reputation is critical to the success of our business and the failure to do so may materially adversely affect our performance
  11. 11Anti-takeover provisions in our corporate documents and in New Jersey corporate law may make it difficult and expensive to remove current management
  12. 12Competition in originating loans and attracting deposits may adversely affect our profitability
  13. 13Increased deposit competition could adversely affect our ability to generate the funds necessary for lending operations, which may increase our cost of funds
  14. 14External factors, many of which we cannot control, may result in liquidity concerns for us
  15. 15Liquidity is required to fund various obligations, including credit commitments to borrowers, mortgage and other loan originations, withdrawals by depositors, repayment of borrowings, operating expenses, capital expenditures and dividend payments to shareholders
  16. 16Declines in the value of our investment securities portfolio may adversely impact our results
  17. 17The Bank’s ability to pay dividends is subject to regulatory limitations, which, to the extent that the Company requires such dividends in the future, may affect the Company’s ability to honor its obligations and pay dividends
  18. 18We may not be able to pay dividends on our common stock if we have not made required dividend payments on our outstanding, noncumulative preferred stock
  19. 19We may incur impairment to goodwill
  20. 20We have grown and may continue to grow through acquisitions
  21. 21Attractive acquisition opportunities may not be available to us in the future
  22. 22Hurricanes or other adverse weather or health related events could negatively affect our local economies or disrupt our operations, which would have an adverse effect on our business or results of operations
  23. 23Our allowance for credit losses may not be adequate to cover actual losses
  24. 24Changes in interest rates, as well as other actions the Federal Reserve may take may adversely affect our earnings and financial condition
  25. 25A period of sustained high market interest rates could adversely affect our earnings if our cost of funds increases more rapidly than our yield on our earning assets and compresses our net interest margin. In addition, the economic value of portfolio equity would decline as interest rates increase38% rewritten
  26. 26The banking business is subject to significant government regulations40% rewritten
  27. 27The laws that regulate our operations are designed for the protection of depositors and the public, not our shareholders
  28. 28We cannot predict how changes in technology will impact our business; increased use of technology may expose us to service interruptions or breaches in security

Other ConnectOne Bancorp 10-Ks

  • FY2024 10-K risk factors
    39 risks

    Commercial real estate loan concentration and New York metropolitan market exposure dominate credit risk. Impending crossing of the $10 billion asset threshold via the FLIC acquisition adds heavy regulatory burdens and merger execution risks.

    Filed Feb 21, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.