ConnectOne Bancorp (CNOB) Q2 2025 earnings summary

Executive summary

• Completed the largest merger in company history with The First of Long Island Corporation (FLIC) on June 1, 2025, adding 36 branches and expanding presence in Long Island and NYC boroughs, with Q2 results including one month of FLIC activity.

• Achieved strong client and deposit retention, record organic deposit growth, and a robust lending pipeline across C&I, construction, SBA, and residential lending.

• Net loss available to common stockholders was $21.8M for Q2 2025, compared to net income of $17.5M in Q2 2024, driven by merger expenses and higher credit loss provisions.

• Operating net income (excluding merger-related and credit loss provisions) was $23.1M, up from $17.9M in Q2 2024.

• Flawless brand transition and full systems conversion completed within 30 days, emphasizing seamless client experience and relationship banking.

Financial highlights

• Assets reached nearly $14B at June 30, 2025, loans at $11.2B, and deposits at $11.3B; market capitalization exceeds $1.2B.

• Net interest income for Q2 2025 was $78.9M, up from $61.4M in Q2 2024; net interest margin widened to 3.06% from 2.72% in Q2 2024.

• Provision for credit losses was $35.7M in Q2 2025, including a $27.4M day-one provision for the merger.

• Noninterest expenses surged to $73.6M in Q2 2025, primarily due to $30.7M in merger expenses.

• Nonperforming asset ratio improved to 0.28% from 0.51% a year ago; allowance for credit losses rose to 1.4% of loans.

Outlook and guidance

• Projected quarterly earnings accretion from the merger: $9.8M in 2025, $9.2M in 2026, and $7.9M in 2027.

• Quarterly expenses expected at $55M in 2025, rising to $56–$57M in 2026, targeting 35% cost savings.

• Management expects further integration of FLIC to yield synergies and economies of scale, with improved loan/deposit mix and profitability ratios.

• Loan growth expected in the low to mid-single digits for the next six months, with strong demand but offset by elevated payoffs.

• Interest rate risk models indicate manageable exposure, with net interest income projected to decrease by 4.94% if rates rise 200 bps over one year.