Business Combinations (Tables)

12 Months Ended

Dec. 31, 2016

Business combinations:

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The table below summarizes the amounts recognized as of the Merger date for each major class of assets acquired and liabilities assumed, the estimated fair value adjustments and the amounts recorded in the Company’s financial statements at fair value at the Merger date (in thousands):

Consideration paid through Company common stock issued to Legacy ConnectOne shareholders and fair value of stock options acceleration was: $ 264,231

	Legacy ConnectOne carrying value		Fair value adjustments			As recorded at acquisition
Cash and cash equivalents	$	70,318	$	-		$	70,318
Investment securities		28,436		16	(a)		28,452
Restricted investments		13,646		-			13,646
Loans held-for-sale		190		-			190
Loans		1,304,600		(5,316)	(b)		1,299,284
Bank owned life insurance		15,481		-			15,481
Premises and equipment, net		7,380		(905)	(c)		6,475
Accrued interest receivable		4,470		-			4,470
Core deposit intangible		-		5,308	(d)		5,308
Other real estate owned		2,455		-			2,455
Other assets		10,636		3,650	(e)		14,286
Deposits		(1,049,666)		(1,676)	(f)		(1,051,342)
Borrowings		(262,046)		(1,324)	(g)		(263,370)
Other liabilities		(10,527)		-			(10,527)
Total identifiable net assets	$	135,373	$	(247)		$	135,126
Goodwill recorded in the Merger						$	129,105

The following provides an explanation of certain fair value adjustments presented in the above table:

a) Represents the fair value adjustment on investment securities held-to-maturity.

b) Represents the elimination of Legacy ConnectOne’s allowance for loan and lease losses, deferred fees, deferred costs and an adjustment of the amortized cost of loans to estimated fair value, which includes an interest rate mark and credit mark.

c) Represent an adjustment to reflect the fair value of above-market rent on leased premises. The above-market rent adjustment will be amortized on a straight-line basis over the remaining term of the respective leases.

d) Represents intangible assets recorded to reflect the fair value of core deposits. The core deposit asset was recorded as an identifiable intangible asset and will be amortized on an accelerated basis over the estimated average life of the deposit base.

e) Consist primarily of adjustments in net deferred tax assets resulting from the fair value adjustments related to acquired assets, liabilities assumed and identifiable intangibles recorded.

f) Represents fair value adjustment on time deposits as the weighted average interest rates of time deposits assumed exceeded the costs of similar funding available in the market at the time of the Merger, as well as the elimination of fees paid on brokered time deposits.

g) Represents the fair value adjustment on FHLB borrowings as the weighted average interest rate of FHLB borrowings assumed exceeded the cost of similar funding available in the market at the time of the Merger.

Schedule of Accountable Loans for Business Combinations in Accordance with FASB ASC 310-30 [Table Text Block]

The acquired loan portfolio subject to purchased credit impairment accounting guidance (ASC 310-30) as of July 1, 2014 was comprised of collateral dependent loans with deteriorated credit quality as follows:

	ASC 310-30 Loans
Contractual principal and accrued interest at acquisition	$	23,284
Principal not expected to be collected (nonaccretable discount)		(6,942)
Expected cash flows at acquisition		16,342
Interest component of expected cash flows (accretable discount)		(5,013)
Fair value of acquired loans	$	11,329

Schedule of Operating Results Attributable to Business Combinations [Table Text Block]

The unaudited pro forma information set forth below reflects the adjustments related to (a) purchase accounting fair value adjustments; (b) amortization of core deposit and other intangibles; and (c) adjustments to interest income and expense due to amortization of premiums and accretion discounts. In the table below, merger-related expenses of $12.4 million were excluded from pro forma noninterest expenses for the year ended December 31, 2014. Income taxes were also adjusted to exclude income tax benefits of $5.6 million related to the merger expenses for the year ended December 31, 2014.

	2014
Net interest income	$	107,988
Noninterest income		8,244
Noninterest expense		(54,749)
Net income		45,981
Pro forma earnings per share from continuing operations:
Basic	$	1.55
Diluted		1.53