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Nature of Operations and Principles of Consolidation
6 Months Ended
Jun. 30, 2015
Disclosure Text Block [Abstract]  
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 1. Nature of Operations and Principles of Consolidation


The consolidated financial statements of ConnectOne Bancorp, Inc. (the “Parent Corporation”) are prepared on an accrual basis and include the accounts of the Parent Corporation and its wholly-owned subsidiary, ConnectOne Bank (the “Bank” and, collectively with the Parent Corporation and the Parent Corporation’s other direct and indirect subsidiaries, the “Company”). All significant intercompany accounts and transactions have been eliminated from the accompanying consolidated financial statements.


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 twenty-three other banking offices. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from business operations. There are no significant concentrations of loans to any one industry or client. However, the clients’ ability to repay their loans is dependent on the cash flows, real estate and general economic conditions in the area.


The following unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, and, accordingly, do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. However, in the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2015, or for any other interim period. The Company’s 2014 Annual Report on Form 10-K, should be read in conjunction with these financial statements.


In preparing the consolidated financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the consolidated statements of condition and that affect the results of operations for the periods presented. Actual results could differ significantly from those estimates.


The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Some items in the prior year financial statements were reclassified to conform to current presentation. Reclassifications had no effect on prior year net income for stockholders’ equity.


Note 1a. Restatement


In connection with the Company’s review of its loan portfolio in connection with the preparation of its Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, the Company identified that approximately $75.4 million of loans secured by New York City taxi medallions which were modified during the second quarter of 2015 should have been classified as troubled debt restructurings (“TDRs”) at June 30, 2015. The Company originally determined that the loans secured by taxi medallions were not TDRs, and reported only $2.8 million in TDRs at June 30, 2015. No specific allowance for loan loss allocations were required for the loans newly classified as TDRs and the change in classification does not affect the Registrant’s reported results of operations for the three and six months ended June 30, 2015. The Company originally determined that $56.8 million of the loans were pass rated and has also modified disclosures related to $56.8 million of these loans that are deemed to be special mention as of June 30, 2015. The remaining $18.6 million of loans were originally classified as special mention at June 30, 2015.


None of the modified loans involved a rate reduction or an extension of maturity. The modifications involved (i) changing the amortization schedule from 25 or 30 years to “interest-only” (ii) increasing the interest rate from approximately 3% - 3.25% to 3.75% while (iii) not revising the applicable maturity dates or forgiving any principal. All of the modified loans are fully performing in accordance with their modified terms, and there have been no missed payments regarding any of the modified loans.


As a result of the forgoing changes, the Company has revised Note 6 to the financial statements. The financial information contained herein reflects the changes described above.