Parent Corporation Only Financial Statements

12 Months Ended

Dec. 31, 2021

Condensed Financial Information Disclosure [Abstract]

Parent Corporation Only Financial Statements

Note 21 – Parent Corporation Only Financial Statements

The Parent Corporation operates its wholly-owned subsidiary, the Bank. The earnings of this subsidiary are recognized by the Parent Corporation using the equity method of accounting. Accordingly, earnings are recorded as increases in the Parent Corporation’s investment in the subsidiaries and dividends paid reduce the investment in the subsidiaries. The ability of the Parent Corporation to pay dividends will largely depend upon the dividends paid to it by the Bank. Dividends payable by the Bank to the Parent Corporation are restricted under supervisory regulations (see Note 18 of the Notes to Consolidated Financial Statements).

Condensed financial statements of the Parent Corporation only are as follows:

Condensed Statements of Condition

	As of December 31,
	2021		2020
	(dollars in thousands)
ASSETS
Cash and cash equivalents	$	133,648	$	34,388
Investment in subsidiaries		1,111,520		1,001,998
Investment securities		32,405		32,405
Equity securities		725		-
Other assets		699		51,288
Total assets	$	1,278,997	$	1,120,079
LIABILITIES AND STOCKHOLDERS’ EQUITY
Other liabilities	$	1,834	$	2,121
Subordinated debentures, net		152,951		202,648
Stockholders’ equity		1,124,212		915,310
Total liabilities and stockholders’ equity	$	1,278,997	$	1,120,079

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Table of Contents

CONNECTONE BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 21 – Parent Corporation Only Financial Statements – (continued)

Condensed Statements of Income

	For Years Ended December 31,
	2021			2020			2019
	(dollars in thousands)
Income:
Dividend income from subsidiaries	$	24,071		$	15,200		$	30,050
Other income		1,627			1,683			1,652
Total Income		25,698			16,883			31,702
Expenses		(8,741	)		(9,263	)		(7,386	)
Income before equity in undistributed earnings of subsidiaries		16,957			7,620			24,316
Equity in undistributed earnings of subsidiaries		113,396			63,669			49,079
Net Income		130,353			71,289			73,395
Preferred dividends		1,717			-			-
Net income available to common stockholders	$	128,636		$	71,289		$	73,395

Condensed Statements of Cash Flows

	For Years Ended December 31
	2021			2020			2019
	(dollars in thousands)
Cash flows from operating activities:
Net income	$	130,353		$	71,289		$	73,395
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings of subsidiary		(113,396	)		(63,669	)		(49,079	)
Loss on equity securities, net		55			-			38
Amortization of subordinated debt issuance costs		303			323			329
Decrease (increase) in other assets		50,590			(50,001	)		-
(Decrease) increase in other liabilities		(287	)		(391	)		(1,509	)
Net cash provided by (used in) operating activities		67,618			(42,449	)		23,174

Cash flows from investing activities:
Purchase of available-for-sale securities		-			-			(2	)
Sales of available-for-sale securities		-			-			23
Purchase of equity securities		(780	)		-			-
Sale of equity securities		-			-			569
Repayment of short-term borrowing		-			(3,000	)		-
Capital infusion to subsidiary		-			-			-
Net cash (used in) provided by investing activities		(780	)		(3,000	)		590

Cash flows from financing activities:
(Repayment of) proceeds from subordinated debt		(50,000	)		73,440			-
Cash dividends paid on preferred stock		(1,717	)		-			-
Cash dividends paid on common stock		(17,493	)		(14,317	)		(12,160	)
Purchase of treasury stock		(9,401	)		(911	)		(12,643	)
Proceeds from preferred stock offering		110,927			-			-
Proceeds from exercise of stock options		106			233			360
Net cash provided by (used in) financing activities		32,422			58,445			(24,443	)

Increase (decrease) in cash and cash equivalents		99,260			12,996			(679	)
Cash and cash equivalents as of January 1,		34,388			21,392			22,071
Cash and cash equivalents as of December 31,	$	133,648		$	34,388		$	21,392