ConnectOne Bancorp, Inc.

What they do

ConnectOne Bancorp is a one-bank holding company whose principal subsidiary, ConnectOne Bank, is a New Jersey-chartered commercial bank. The bank provides commercial banking products and services, including loans and deposits, to businesses and consumers in its market areas. The company has expanded through mergers, including the recent merger with The First of Long Island Corporation (FLIC), which closed in 2025.

Revenue drivers

• Net interest income — Primary revenue source; second quarter 2026 net interest income increased $4.8 million sequentially, with net interest margin widening to 3.42%.
• Loan portfolio — Sequential loan growth of approximately 5% annualized in Q2 2026; loans are the main earning asset.
• Core deposits — Sequential core deposit growth of approximately 8% annualized in Q2 2026; deposits fund the loan portfolio and generate fee income.
• Noninterest income — Includes deposit account fees and other banking service charges; Q2 2026 noninterest income increased $1.1 million sequentially.

Recent performance

For Q2 2026, net income available to common stockholders was $40.2 million, up from $36.3 million in Q1 2026 and a loss of $21.8 million in Q2 2025. Diluted EPS was $0.80 for Q2 2026, compared to $0.72 in Q1 2026 and a loss of $0.52 in Q2 2025. Operating PPNR as a percentage of average assets was 1.94% in Q2 2026, up from 1.81% in Q1 2026. Return on average assets was 1.17% for Q2 2026, and return on average tangible common equity was 13.79%. The year-over-year improvement was driven by the FLIC merger, including a $34.8 million increase in net interest income and a $27.4 million decrease in provision for credit losses.

Strategy

Management emphasizes disciplined execution of a relationship-banking model, focusing on loan and core deposit growth. The company is committed to enhancing operating efficiency through technological innovation, including agentic workflows. The recent merger with FLIC is part of a strategy to streamline operations and achieve organizational efficiencies, with Q1 2026 merger and restructuring charges of $2.1 million. Management also highlights strong capital levels and a substantial rise in tangible book value per share.

Risks

• Interest rate risk — Changes in the interest rate environment may reduce interest margins and adversely affect net interest income.
• Credit risk — Loan origination volumes, charge-offs, and loan loss provisions may vary substantially from period to period, as seen with the $27.4 million provision in Q2 2025 related to the FLIC merger.
• Integration risk — Difficulties in integrating acquired businesses, such as the FLIC merger, could increase expenses and delay expected benefits.
• Regulatory and economic risk — Legislative or regulatory changes or adverse economic conditions, including political developments or hostilities, could disrupt operations and impact financial results.

Outlook

Management is encouraged by the strength of the business and sees opportunities for the balance of the year and beyond. They expect continued momentum in loan and deposit growth, with net interest margin expansion for the seventh consecutive quarter. The company remains committed to further enhancing operating performance through productivity gains and technological innovation.