ConnectOne Bancorp, Inc. (CNOB, Financial) reported a slight decrease in its total assets for the first quarter of 2025. As of March 31, the company's assets amounted to $9.759 billion, down from $9.880 billion at the end of 2024. During the same period, loans receivable slightly decreased, reaching $8.201 billion compared to $8.275 billion previously.
The company also experienced a small decline in total deposits, which stood at $7.767 billion as of the end of March, a decrease from the $7.820 billion recorded on December 31, 2024. Despite these reductions, ConnectOne's leadership expressed satisfaction with the company's performance at the beginning of the year, highlighting the effective execution of their strategic objectives.
Looking ahead, ConnectOne anticipates completing its merger with The First of Long Island Corporation in the upcoming second quarter. This move is set to unite two organizations with a strong focus on relationship banking, aiming to establish a leading community bank in the New York Metro area. The merger is expected to offer significant benefits to the combined customer base and enhance service in the markets they operate in.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for ConnectOne Bancorp Inc (CNOB, Financial) is $29.10 with a high estimate of $32.00 and a low estimate of $25.00. The average target implies an upside of 30.32% from the current price of $22.33. More detailed estimate data can be found on the ConnectOne Bancorp Inc (CNOB) Forecast page.
Based on the consensus recommendation from 4 brokerage firms, ConnectOne Bancorp Inc's (CNOB, Financial) average brokerage recommendation is currently 1.5, indicating "Buy" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for ConnectOne Bancorp Inc (CNOB, Financial) in one year is $32.16, suggesting a upside of 44.02% from the current price of $22.33. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the ConnectOne Bancorp Inc (CNOB) Summary page.
CNOB Key Business Developments
Release Date: January 30, 2025
- Quarterly Net Income: Increased 21% quarter-over-quarter and 6% year-over-year.
- Core Deposits Growth: Increased more than 3% quarter-over-quarter.
- Loan Portfolio Growth: 2% quarter-over-quarter.
- Net Interest Margin: Improved by nearly 20 basis points during the quarter.
- Loan-to-Deposit Ratio: Declined from 108% to 106%.
- Net Interest Margin Projection: Expected to improve to approximately 2.90% in the first quarter of 2025.
- Operating Expenses: Projected to increase 2% to 3% sequentially in the first quarter of 2025.
- Provision for Credit Losses: $3.5 million for the quarter.
- Effective Tax Rate: Expected to return to 26% to 27% in the first quarter.
- Merger Impact on Net Interest Margin: Expected to enhance by about 10 basis points post-merger.
- Return on Tangible Common Equity Projection: Expected to be in the 12% to 13% range post-merger.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ConnectOne Bancorp Inc (CNOB, Financial) reported a 21% quarter-over-quarter increase in net income available to common shareholders, driven by a wider net interest margin.
- The company experienced solid growth in both loans and core deposits, with a 3% increase in core deposits quarter-over-quarter.
- The merger with First National Bank of Long Island is progressing on schedule, expected to close in the second quarter of 2025, which is anticipated to enhance the net interest margin by about 10 basis points.
- ConnectOne Bancorp Inc (CNOB) has a strong loan pipeline and expects continued loan portfolio growth, with a projected 2% increase in average loans for the first quarter of 2025.
- The company has maintained sound and stable credit trends, with charge-offs at reasonable levels and a low delinquency rate of just 4 basis points.
Negative Points
- Non-accrual loans increased slightly during the quarter, although they are expected to trend down in the next quarter.
- The company's criticized and classified loans increased from 2.2% to 2.7% as a percentage of the portfolio, indicating some pressure on credit quality.
- Operating expenses are projected to increase by 2% to 3% sequentially in the first quarter of 2025, which could impact profitability.
- The effective tax rate is expected to return to the 26% to 27% level in the first quarter, after a decrease due to year-end adjustments.
- The company plans to raise $175 million to $200 million in sub debt, which may affect its capital structure and cost of capital.
