ConnectOne Bancorp (CNOB) Q3 2025 earnings summary

Executive summary

• Net income available to common stockholders for Q3 2025 was $39.5M, up from $15.7M in Q3 2024 and a loss of $21.8M in Q2 2025; diluted EPS rose to $0.78 from $0.41 year-over-year.

• The FLIC merger, completed June 1, 2025, significantly increased average assets, loans, and deposits, driving much of the year-over-year growth and expense changes.

• Several nonrecurring items, including a $6.6M Employee Retention Tax Credit and a $3.5M pension plan curtailment gain, contributed to results.

• Franchise value is at its strongest, driven by prudent organic growth, technological focus, and solid credit quality.

• Operating net income available to common stockholders was $35.5M, with operating diluted EPS of $0.70.

Financial highlights

• Net interest margin (NIM) expanded to 3.11% from 3.06% sequentially and 2.67% year-over-year; spot margin at quarter end above 3.20%.

• Net interest income for Q3 2025 was $102.0M, up from $60.9M in Q3 2024; noninterest income was $19.4M, up from $4.7M, including $6.6M ERTC and $3.5M pension gain.

• Noninterest expenses for Q3 2025 rose to $58.7M from $38.6M, mainly due to higher salaries, merger, and amortization costs.

• Provision for credit losses for the nine months ended September 30, 2025 was $44.7M, up from $10.3M in the prior year, including $27.4M related to the FLIC merger.

• Total assets as of September 30, 2025 were $14.0B, loans receivable $11.3B, and total deposits $11.4B.

Outlook and guidance

• Expect fourth quarter NIM at 3.25% or above, with potential to reach 3.40-3.50% by end of next year.

• Loan growth expected to accelerate in Q4, with average loans increasing by more than 2% sequentially; 2026 loan growth could exceed 5%.

• Operating expenses guidance: $55-56 million in Q4, $56-57 million per quarter in first half of 2026.

• Effective tax rate for 2026 expected around 28%.

• Profitability targets for 2026 remain at 1.2% ROA and 15% ROTCE, with potential to reach 1.3% ROA by year-end.