Terms

Series

5.25% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A

Liquidation Preference

$25.00

Coupon Rate

5.25%

Rate Type

Fixed To Floating

Annual Dividend

$1.31

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

September 1, 2026

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness And Other Non-Equity Claims, Any Future Senior Preferred Stock Approved By Two-Thirds Of Series A Holders; Pari Passu With: Any Future Parity Preferred Stock Expressly Stated To Rank On Parity; Senior To: Common Stock, Any Junior Capital Stock

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.025

Shares Offered

4,000,000

Prospectus Summary

ConnectOne Bancorp, Inc. is offering 4,000,000 depositary shares, each representing a 1/40th interest in a share of its 5.25% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A, with a liquidation preference of $25.00 per depositary share ($1,000 per underlying preferred share). The initial fixed dividend rate of 5.25% per annum applies through August 31, 2026, after which the rate resets every five years to the then-current five-year Treasury rate plus 442 basis points, payable quarterly. The preferred stock is non-cumulative, meaning that if the board does not declare a dividend for any quarter, that dividend is permanently forfeited — holders have no right to recover it in a future period. The Series A Preferred Stock is issued at the holding company level (ConnectOne Bancorp, Inc.) and ranks senior to common stock and any future junior capital stock, but is subordinate to all of the issuer's existing and future indebtedness — including approximately $6.6 billion in total liabilities as of December 31, 2020. Holders face structural subordination: the holding company's primary income source is dividends upstreamed from ConnectOne Bank, which are subject to New Jersey banking law restrictions and federal regulatory capital adequacy requirements. The issuer may redeem the preferred stock in whole within 90 days of a 'regulatory capital treatment event' — triggered if a change in law or Federal Reserve regulation causes the Series A Preferred Stock to lose its Additional Tier 1 capital qualification — allowing early redemption before the September 2026 first call date. At the $25.00 offering price, the initial annual yield is 5.25% ($1.3125 per depositary share annually, or approximately $0.328 per quarter). Dividends are paid quarterly on March 1, June 1, September 1, and December 1, with a record date set 15 calendar days prior to each payment date. Dividends from a U.S. bank holding company generally qualify for the preferential qualified dividend income (QDI) tax rate for individual holders and the dividends-received deduction (DRD) for eligible corporate holders, though investors should confirm with their tax advisors. If ConnectOne Bancorp fails to pay full dividends on the Series A for any completed period, it is blocked from paying dividends on or repurchasing common stock or other junior securities — providing a partial protection mechanism, though the non-cumulative structure means missed payments are never recovered.

Summarized from the SEC prospectus filing.

Distribution History

Floating Rate Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If ConnectOne Bancorp fails to declare and pay full dividends on the Series A Preferred Stock for the most recently completed dividend period, it may not pay dividends on or repurchase common stock or any other junior-ranking capital stock, nor repurchase any parity stock.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 66 (Strong)