ConnectOne Bancorp, Inc. reported first‑quarter 2026 results that included net income of $36.3 million, a slight decline from $38.0 million in the fourth quarter of 2025 but a jump from $18.7 million in the same period a year earlier. GAAP diluted earnings per share were $0.72, narrowly missing the consensus estimate of $0.73, while operating diluted EPS of $0.79 surpassed the $0.78 estimate, reflecting the company’s ability to generate higher operating income from its expanded loan book.
Net interest income rose $2.2 million, or 2.1%, to $110.0 million, and the net interest margin widened to 3.39% from 3.27% sequentially. The margin expansion was driven by contractual loan repricings and a reduction in the average cost of deposits, as CFO Bill Burns noted that the quarter “exceeded our initial projections and was primarily driven by contractual loan repricings and improved deposit costs.” The First of Long Island merger, closed in June 2025, added $2 billion in annual revenue and contributed to a 10% annualized growth in loans and deposits, generating a $2.2 million increase in net interest income and a $1.1 million gain from SBA loan sales in April.
Operating income fell to $39.6 million from $42.0 million in Q4 2025, largely due to a $2.9 million increase in the provision for credit losses and a $0.9 million rise in non‑interest expenses. The higher provision was driven by delinquencies in a New York City rent‑regulated portfolio, a headwind that the company is monitoring closely. Despite the expense increase, the company’s tangible common equity ratio improved to 8.64% from 8.62%, indicating a strengthening capital position.
The company raised its quarterly cash dividend to $0.195 per share, an 8.3% increase from the previous $0.180, signaling confidence in future cash flows. Management emphasized that the dividend hike reflects the firm’s solid earnings and capital strength, while the dividend policy remains consistent with the company’s long‑term value creation strategy.
Frank Sorrentino, Chairman and CEO, said the company “kick[s] off 2026 with strong momentum, firing on all cylinders, as demonstrated by our results.” He added that the merger “expanding the ConnectOne mission…with greater scale, enhanced capabilities, and a shared client‑first culture” positions the bank to accelerate growth and strengthen franchise value. CFO Bill Burns highlighted that “advancing loan portfolio yields are expected to support continued margin expansion even without the benefit of further rate cuts.”
Investors reacted positively to the margin expansion and revenue beat, while some tempered enthusiasm due to the GAAP EPS miss. The revenue of $115.6 million beat analyst estimates ranging from $109.70 million to $116.22 million, underscoring the strength of the bank’s loan and deposit growth post‑merger.
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