ConnectOne Bancorp (CNOB) Q4 2024 earnings summary

Executive summary

• Q4 2024 net income available to common stockholders was $18.9M, up 21% sequentially and 6% year-over-year, with diluted EPS of $0.49, up from $0.41 in Q3 2024 and $0.46 in Q4 2023.

• Full-year 2024 net income was $67.8M, down from $81.0M in 2023; diluted EPS for 2024 was $1.76, compared to $2.07 in 2023.

• Achieved strong Q4 results driven by a wider net interest margin and improved deposit and loan growth.

• Progressing on schedule with the merger with The First National Bank of Long Island, expected to close in Q2 2025, aiming for significant revenue and efficiency synergies.

• Board declared a $0.18 per share common dividend and $0.328125 per depositary share preferred dividend, both payable March 3, 2025.

Financial highlights

• Net interest margin improved by 19 basis points sequentially, reaching 2.86% reported and 2.81% core, with projections for further expansion in Q1 2025.

• Net interest income for Q4 2024 was $64.7M, up 6.3% sequentially and 4.7% year-over-year.

• Core deposits grew over 3% quarter-over-quarter, with noninterest-bearing demand deposits up 3.6%.

• Loan portfolio grew 2% quarter-over-quarter, with annualized loan growth at 8%.

• Total assets at December 31, 2024 were $9.88B; loans receivable were $8.28B; total deposits were $7.82B.

Outlook and guidance

• Expect continued loan and deposit growth, with a robust pipeline and positive momentum into 2025.

• Projected Q1 2025 average loans to be 2% higher than Q4, with margin expected to improve to approximately 2.90%.

• After the merger, net interest margin projected to rise by 10 basis points, reaching 3.10% at closing and 3.20% in 2026.

• Operating ROA projected at 1.15% and return on tangible common equity at 12%-13% post-merger in 2026.

• Projected effective tax rate for 2025 is 26%-27%.