ConnectOne Bancorp, Inc. Commitments Disclosure

Note 13 – Commitments, Contingencies and Concentrations of Credit Risk

 

In the normal course of business, the Company has outstanding commitments and contingent liabilities, such as standby and commercial letters of credit, unused portions of lines of credit and commitments to extend various types of credit. Commitments to extend credit and standby letters of credit generally do not exceed one year.

 

These financial instruments involve, to varying degrees, elements of credit risk in excess of the amounts recognized in the consolidated financial statements. The commitment or contract amount of these financial instruments is an indicator of the Company’s level of involvement in each type of instrument as well as the exposure to credit loss in the event of nonperformance by the other party to the financial instrument.

 

The Company controls the credit risk of these financial instruments through credit approvals, limits and monitoring procedures. To minimize potential credit risk, the Company generally requires collateral and other credit-related terms and conditions from the client. In the opinion of management, the financial condition of the Company will not be materially affected by the final outcome of these commitments and contingent liabilities. A substantial portion of the Bank’s loans are secured by real estate located in New Jersey and New York. Accordingly, the collectability of a substantial portion of the loan portfolio of the Bank is susceptible to changes in the metropolitan New York real estate market.

 

The following table provides a summary of financial instruments with off-balance sheet risk as of December 31, 2025 and 2024:

 

		2025								2024
		Fixed				Variable				Fixed				Variable
		(dollars in thousands)
Commitments under commercial loans and lines of credit		$	101,841			$	997,861			$	100,430			$	647,652
Home equity and other revolving lines of credit			33				91,069				17				41,349
Outstanding commercial mortgage loan commitments			20,708				273,143				24,139				321,771
Standby letters of credit			152				21,203				190				41,276
Overdraft protection lines			1,644				1,098				640				178
Total		$	124,378			$	1,384,374			$	125,416			$	1,052,226

 

The Company is subject to claims and lawsuits that arise in the ordinary course of business. Based upon the information currently available in connection with such claims, it is the opinion of management that the disposition or ultimate determination of such claims will not have a material adverse impact on the consolidated financial position, results of operations, or liquidity of the Company.