Breaking Down ConnectOne Bancorp, Inc. (CNOB) Financial Health: Key Insights for Investors

If you are looking at ConnectOne Bancorp, Inc. (CNOB), the headline numbers from the third quarter of 2025 definitely demand a closer look, especially after the mid-year volatility; the bank posted a net income available to common stockholders of $39.5 million, a massive swing from the $(21.8) million loss in the prior quarter, which translates to diluted earnings per share (EPS) of $0.78. This turnaround is largely due to the successful integration of The First of Long Island Corporation merger, which pushed total assets to $14.0 billion as of September 30, 2025, plus widened the net interest margin (NIM) to 3.11%. But, as a seasoned analyst, I'm focused on the fine print: while credit quality looks sound with nonperforming assets at just 0.28% of total assets, the firm's concentration in commercial real estate lending remains a key risk to map against the consensus price target of $29.50.

Revenue Analysis

You need a clear picture of where ConnectOne Bancorp, Inc. (CNOB)'s money is coming from, especially after a major acquisition. The direct takeaway is that the firm's revenue base is expanding significantly in 2025, driven almost entirely by its core lending business and a strategic merger, but you should watch the smaller, non-lending income streams for future diversification.

The consensus full-year 2025 revenue estimate for ConnectOne Bancorp, Inc. is projected to be around $369.55 million. This top-line growth is strong, reflecting a trailing twelve months (TTM) revenue increase of approximately 19.03% year-over-year as of the end of the third quarter of 2025. This kind of jump is defintely not organic-only; it signals a major shift in the company's operating scale.

For a bank like ConnectOne Bancorp, Inc., the revenue breakdown is straightforward: it's dominated by Net Interest Income (NII), which is the profit from lending money versus the cost of borrowing it (deposits). Noninterest income, while smaller, is where you find diversification and fee-based stability. Here's the quick math on the core segments:

• Net Interest Income (NII): The primary engine, representing the vast majority of revenue.
• Noninterest Income: Fees, service charges, and gains on sales of loans/securities.

The contribution of these segments shifted dramatically following the June 1, 2025, merger with The First of Long Island Corporation (FLIC). The merger immediately boosted the balance sheet and, critically, the NII. Fully taxable equivalent NII for Q3 2025 hit $103.2 million, a 29.3% increase just from the prior quarter. That's a huge sequential jump, and it shows the immediate impact of the acquired interest-earning assets.

Noninterest income, the smaller segment, is still important for long-term stability. This income stream, which includes fees from the fintech subsidiary BoeFly, Inc., was $5.2 million in the second quarter of 2025. Management is looking to accelerate growth here, specifically in gains on sales from Small Business Administration (SBA) loans, BoeFly, and residential mortgage operations, which is a clear action plan for revenue diversification.

The table below maps the recent quarterly performance, showing how the merger-fueled NII is driving the revenue story. This is the key insight for investors looking at Breaking Down ConnectOne Bancorp, Inc. (CNOB) Financial Health: Key Insights for Investors:

What this estimate hides is the one-time nature of the merger impact; the 19.03% TTM growth is not a sustainable organic run-rate, but it establishes a much higher base. The real opportunity is watching if the noninterest income streams can grow faster than the core NII in 2026, which would signal a healthier, more diversified business model.

Profitability Metrics

You need to know if ConnectOne Bancorp, Inc. (CNOB) is making money efficiently, especially after the merger with The First of Long Island Corporation (FLIC) in June 2025. The direct takeaway is that the merger has successfully driven a sharp turnaround in profitability, with key metrics now substantially outperforming regional bank peers, though a portion of the Q3 net income was nonrecurring.

The core health of a bank is not measured by a traditional Gross Profit Margin, but by its Net Interest Margin (NIM), which tracks the spread between what it earns on loans and what it pays for deposits. For the third quarter of 2025, ConnectOne Bancorp's NIM widened to a strong 3.11%. This is a clear upward trend, up from 2.67% in Q3 2024, and management projects the NIM will hit 3.25% or even above in the fourth quarter of 2025.

Here's the quick math on why this matters: a widening NIM means the bank is managing its cost of funds defintely better than its yield on assets, a crucial sign of financial discipline in a volatile rate environment. The fully taxable-equivalent Net Interest Income (NII), the bank's primary revenue stream, was $103.2 million for Q3 2025.

Operational Efficiency and Operating Profit

For a bank, operational efficiency is best captured by the Efficiency Ratio and Pre-Provision Net Operating Revenue (PPNR). The PPNR-to-Average Assets ratio-a good proxy for operational profit margin before credit losses and taxes-was 1.61% in Q3 2025, a significant jump from 1.13% year-over-year.

ConnectOne Bancorp's non-GAAP Operating Efficiency Ratio for Q3 2025 was 47.5%. This metric shows non-interest expenses as a percentage of revenue, so a lower number is better. This is an excellent result. Honestly, most regional bank peers struggle to get below the 60% mark, so this 47.5% shows the merger synergies are already kicking in fast.

• Improve operational efficiency: Ratio dropped from 57.0% in Q3 2024 to 47.5% in Q3 2025.
• Boost core operating revenue: PPNR as a percentage of assets rose to 1.61%.
• Expect continued improvement: Q4 2025 operating expense guidance is tight at $55 million to $56 million.

Net Profitability and Industry Comparison

The bottom line, or net profitability, is measured by Return on Average Assets (ROAA) and Net Income. ConnectOne Bancorp reported a net income available to common stockholders of $39.5 million for Q3 2025, a massive turnaround from a loss of $(21.8) million in the previous quarter. The Q3 results included a few nonrecurring items, like a $6.6 million Employee Retention Tax Credit, but the core performance is what matters.

The Return on Average Assets (ROAA) was 1.16% for the quarter. This tells you how effectively the bank is using its assets to generate profit. To be fair, this is right in line with the aggregate ROA of 1.16% reported by the FDIC for the broader banking industry in Q1 2025, but the strength of the NIM and Efficiency Ratio suggests a better quality of earnings going forward.

Here is how ConnectOne Bancorp's Q3 2025 profitability stacks up against general industry benchmarks for the period:

The clear action here is to monitor the Q4 2025 NIM and operating expense guidance. If ConnectOne Bancorp can hit the projected 3.25%+ NIM while keeping expenses low, the stock will have a compelling story. For a deeper dive into the balance sheet and credit quality, check out the full post: Breaking Down ConnectOne Bancorp, Inc. (CNOB) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

You want to know how ConnectOne Bancorp, Inc. (CNOB) is funding its growth, and the quick answer is they lean heavily on equity and core deposits, keeping their overall debt load quite modest. This is the mark of a well-capitalized financial institution, especially after their recent merger activity.

As of late 2025, ConnectOne Bancorp, Inc. (CNOB) is operating with a total stockholders' equity of approximately $1.5 billion, following the merger with The First of Long Island Corporation (FLIC) in June 2025. The company's debt-to-equity ratio stands at a low 0.20. Here's the quick math: this ratio suggests total debt is roughly 20% of their equity, or about $300 million, which is a conservative figure in the banking sector. This low ratio is defintely a strength, showing a strong capital base supporting their assets.

The Debt-to-Equity Balance

For a bank, the debt-to-equity ratio (D/E) is a key measure of financial leverage (how much debt is used to finance assets). At 0.20, ConnectOne Bancorp, Inc.'s D/E is significantly lower than the average for many commercial sectors, reflecting the bank's traditional reliance on customer deposits-which are technically considered a liability, but not 'debt' in the same way a corporate bond is-as its primary source of funding. This low leverage signals stability, a critical factor for investors in a volatile interest rate environment.

The company's strategy is clear: prioritize stable, low-cost funding. This is evidenced by their success in reducing higher-cost wholesale funding, such as a $200 million reduction in Federal Home Loan Bank (FHLB) borrowings reported in the second quarter of 2025. This move strengthens their liquidity and reduces interest expense risk.

Recent Capital Actions and Credit Rating

ConnectOne Bancorp, Inc. has been active in managing its long-term debt structure in 2025, using the capital markets to optimize its funding mix and boost regulatory capital. This is a smart, proactive way to manage their balance sheet.

• New Issuance: In May 2025, the company issued $200 million in 8.125% subordinated notes due 2035.
• Refinancing: The net proceeds of approximately $196.5 million were used in part to redeem $75 million of older 5.750% subordinated notes due 2030, effectively extending the maturity profile and strengthening their Tier 2 capital.
• Capital Contribution: A significant portion, $100 million, was contributed to ConnectOne Bank as regulatory capital, directly supporting their balance sheet growth and capital ratios post-merger.

In September 2025, KBRA affirmed the company's credit ratings, including a BBB+ for senior unsecured debt and a BBB for subordinated debt, with a Stable Outlook. This affirmation is a vote of confidence in the bank's financial stability and its ability to manage the integration of the recent merger while maintaining sound credit metrics.

For a deeper dive into the bank's overall performance, including its strategic frameworks and market analysis, you can read the full post: Breaking Down ConnectOne Bancorp, Inc. (CNOB) Financial Health: Key Insights for Investors

Liquidity and Solvency

You're looking for a clear read on ConnectOne Bancorp, Inc. (CNOB)'s ability to meet its short-term obligations and maintain a solid financial foundation, especially after the merger activity in 2025. The direct takeaway is that ConnectOne Bancorp, Inc. (CNOB) maintains a sound liquidity profile, anchored by strong capital ratios and a balanced loan-to-deposit ratio, despite the inherently low current ratios common to the banking sector.

For a traditional commercial bank like ConnectOne Bancorp, Inc. (CNOB), the standard current ratio (current assets divided by current liabilities) and quick ratio are less about a 2:1 ideal and more about the quality of its assets and funding structure. As of November 2025, the company reports a current ratio of 0.97 and an identical quick ratio of 0.97. This means the bank has nearly a dollar in highly liquid assets for every dollar of short-term obligation, which is a healthy position in the context of banking, where most liabilities are client deposits.

The analysis of working capital trends for ConnectOne Bancorp, Inc. (CNOB) is best viewed through its core banking metrics, not the manufacturing-style working capital. The company's total assets swelled to $14.024 billion as of September 30, 2025, up significantly from the end of 2024, largely due to the merger with The First of Long Island Corporation (FLIC) on June 1, 2025. This growth in the asset base is supported by a robust deposit base, which reached $11.369 billion in Q3 2025. The loan-to-deposit ratio, a key measure of a bank's liquidity management, stood at a strong 99% as of June 30, 2025, indicating that loan growth is well-funded by core deposits. This balance is defintely a strength.

A look at the cash flow statements shows a significant positive trend in operating performance. The net income available to common stockholders for the third quarter of 2025 was $39.5 million, a substantial turnaround from a net loss of $21.8 million in the second quarter of 2025. This dramatic swing points to a strong generation of operating cash flow following the merger integration. The company's cash and cash equivalents stood at $542.73 million as of September 30, 2025. A related metric, Cash Flow to Current Liabilities, is reported at 0.9%, which, while seemingly low, is in line with the capital-intensive Financials sector.

There are clear strengths in ConnectOne Bancorp, Inc. (CNOB)'s liquidity and solvency profile, with no immediate liquidity concerns apparent in the Q3 2025 data. The company's capital ratios are particularly strong, providing a significant buffer against unexpected losses:

• Total Risk-Based Capital Ratio: 13.88% (Q3 2025)
• Tangible Common Equity Ratio: 8.36% (Q3 2025)
• Net Interest Margin: Widened to 3.11% (Q3 2025)

Here's the quick math: a Total Risk-Based Capital Ratio of 13.88% is well above the regulatory minimums, giving the bank ample room to absorb credit shocks or pursue further growth. This capital strength, combined with a widening net interest margin, suggests the core business is generating cash effectively. For a deeper understanding of the bank's long-term strategy, you can review the Mission Statement, Vision, & Core Values of ConnectOne Bancorp, Inc. (CNOB).

Valuation Analysis

You want to know if ConnectOne Bancorp, Inc. (CNOB) is a good buy right now, and the short answer is that while its peer-relative price multiples look a little high, the underlying book value and strong analyst conviction suggest it is currently undervalued. The market is pricing in a premium for its growth, but the intrinsic value models point to significant upside.

The stock's valuation picture is mixed, which is common after a major event like the merger with The First of Long Island Corporation in June 2025. Here's the quick math on the key valuation multiples as of November 2025:

• Price-to-Earnings (P/E): The trailing P/E is around 18.56. To be fair, this is nearly double the average for the broader US Banks industry, which sits closer to 11.1 times, suggesting investors are paying a premium for ConnectOne Bancorp's future earnings. But look at the forward P/E: it drops sharply to just 7.79, which signals analysts expect a major jump in earnings per share (EPS) for the current fiscal year.
• Price-to-Book (P/B): This is where the value case gets compelling. The P/B ratio is a low 0.85. For a bank, a P/B under 1.0 means you are buying the assets for less than their accounting value on the balance sheet. This metric strongly suggests undervaluation.
• Enterprise Value-to-EBITDA (EV/EBITDA): The ratio stands at 12.52. This multiple is used to compare the total value of the company (Enterprise Value) to its operating cash flow proxy (EBITDA), and this figure is in a reasonable range for a growing regional bank, especially one that has just completed a major integration.

The stock price trend over the last 12 months tells a story of volatility and recent recovery. The 52-week trading range has been between a low of $20.61 and a high of $29.31. While the one-year total shareholder return is still negative at about -7.3%, the year-to-date return is positive, up around 7.1% as of November 2025. That's a defintely a sign of renewed momentum after the merger-related charges from Q2 2025 ($0.52 diluted loss per share) have been absorbed.

When you look at the income stream, ConnectOne Bancorp offers a solid dividend. The annual dividend is $0.72 per share, which translates to a current dividend yield of approximately 2.98%. The payout ratio-the percentage of earnings paid out as dividends-is a sustainable 58.06%, meaning the company has plenty of room to cover the payment and reinvest in the business.

The analyst consensus is firmly bullish. The average rating is a clear Buy, with some models even suggesting a 'Strong Buy' consensus. The average 12-month price target is set at $29.50, which implies an upside of over 25% from the current price. This consensus aligns with internal valuation models that suggest the stock is undervalued by anywhere from 16.4% to a significant 57.7%, depending on the model used. For a deeper dive into the risks and opportunities driving these numbers, you should read our full analysis: Breaking Down ConnectOne Bancorp, Inc. (CNOB) Financial Health: Key Insights for Investors.

The key takeaway is that while the trailing P/E looks rich, the low P/B ratio and the strong forward P/E suggest the market hasn't fully appreciated the post-merger earnings power. The analyst community is clearly betting on that upside. Your action item is to look closely at the commercial real estate exposure, as that's the main risk that could dampen the optimism.

Risk Factors

You're looking at ConnectOne Bancorp, Inc. (CNOB) right after a major strategic move, so the risks are less about their core banking model and more about execution and the broader economic environment. The direct takeaway is this: CNOB's near-term profitability hinges on successfully digesting the First of Long Island Corporation (FLIC) merger, but their credit quality metrics remain surprisingly solid despite market worries about commercial real estate (CRE).

The most immediate challenge is operational, tied directly to the FLIC merger completed in June 2025. The second quarter of 2025 (Q2 2025) reported a GAAP net loss of $(21.8) million and diluted earnings per share (EPS) of $(0.52). This wasn't a banking failure; it was the accounting hit from the merger, specifically a pre-tax charge of $58.1 million for merger-related expenses and the initial provision for credit losses (PCL). To be fair, the operating net income, which strips out these one-time costs, was a healthy $23.1 million for the quarter. The risk is that the projected earnings accretion of approximately $9.8 million per quarter for 2025 doesn't fully materialize if integration hiccups delay cost savings.

• Merger Integration: Failure to realize the projected revenue and cost synergies.
• Rate Sensitivity: Loan book exposure to continued interest rate fluctuations.
• CRE Concentration: Regulatory scrutiny on their commercial real estate exposure.

Credit Quality and Concentration Risk

In the banking world, credit risk is always the biggest elephant in the room. For CNOB, the concern is amplified by their concentration in commercial real estate (CRE). As of Q2 2025, their CRE concentration ratio stood at a high 438%, a level that draws extra attention from regulators (though it is expected to fall below regulatory thresholds by year-end 2025 through portfolio changes). Still, the actual credit metrics are defintely showing resilience.

Here's the quick math on asset quality: nonperforming assets (NPA) dropped to $39.2 million, or just 0.28% of total assets, as of June 30, 2025. That's a significant improvement from the 0.58% NPA ratio at the end of 2024. The allowance for credit losses (ACL) is also robust, increasing by $73.5 million to a total of $156.2 million in Q2 2025, largely due to the merger's day-one PCL of $27.4 million. This proactive provisioning provides a solid buffer against future loan losses.

External and Mitigation Strategies

External risks are the classic banking headwinds: interest rate volatility and competition. The Federal Reserve's policy direction will continue to pressure the net interest margin (NIM), which CNOB is working to expand, targeting approximately 3.25% by the end of 2025. On the funding side, they've made a smart move by improving the loan-to-deposit ratio to a near-perfect 99% in Q2 2025, down from 106% in the prior quarter. This is a key mitigation action, showing less reliance on more expensive wholesale funding.

The core mitigation strategy is simple: execute the merger flawlessly. The quick, two-week system conversion post-merger is a good sign of operational discipline. Plus, management actively worked out three major CRE relationships totaling $22.0 million, directly contributing to the NPA reduction. That's a clear action that changes the risk profile. For a deeper dive into who is betting on this strategy, you might want to check out Exploring ConnectOne Bancorp, Inc. (CNOB) Investor Profile: Who's Buying and Why?

Growth Opportunities

You're looking for a clear path forward with ConnectOne Bancorp, Inc. (CNOB), and the direct takeaway is this: the heavy lifting from the recent merger is done, and the focus is now squarely on leveraging the expanded footprint for profitable growth. The successful integration of The First of Long Island Corporation (FLIC) is the single biggest driver, setting the stage for a stronger net interest margin (NIM) and substantial earnings accretion in 2025.

Merger Catalyst and Market Expansion

The core of ConnectOne Bancorp's near-term growth strategy is the June 1, 2025, merger with FLIC. This move immediately enhanced the company's scale and provided a significant expansion into the attractive Long Island market. This isn't just about size; it's about better fundamentals. Here's the quick math: the net interest margin widened to 3.11% in the third quarter of 2025, up from 3.06% sequentially, with management expecting the spot margin to hit 3.25% or even above in the fourth quarter. That's a defintely strong trajectory.

The expanded franchise is already showing its value through organic growth. Since the end of June 2025, client deposits have increased at an annualized rate of 4.0%, and loan growth is running over 5.0% annualized. This balance sheet expansion, coupled with a healthy loan pipeline, means the company is well-positioned to accelerate loan growth by more than 2% quarter-over-quarter in Q4 2025.

Future Revenue and Earnings Estimates

Analysts are pricing in a clear financial benefit from the merger and organic momentum for the full 2025 fiscal year. The consensus is projecting a total revenue of approximately $369.55 million. This is a material step up, and it's backed by the projected earnings accretion-the extra profit-from the merger, which is estimated at about $9.8 million per quarter for 2025.

What this estimate hides is the Q3 2025 turnaround: net income available to common stockholders was a robust $39.5 million, a massive improvement from the $21.8 million net loss in the second quarter. That's a real swing in profitability. The full-year earnings per share (EPS) consensus estimate sits at $1.35.

Strategic Initiatives and Competitive Edge

ConnectOne Bancorp, Inc. isn't just a bank; they operate with a fintech subsidiary, BoeFly, Inc., which is central to their strategy of boosting noninterest income. The goal is to diversify revenue beyond traditional lending. They expect growth, especially in gains on sales, as they build out their Small Business Administration (SBA) lending, BoeFly, and residential mortgage operations. This is a smart move to smooth out revenue volatility.

Also, the bank's credit quality is a significant competitive advantage. In a market where credit risk is a constant concern, ConnectOne Bancorp's metrics are exceptionally strong.

• Nonperforming assets are just 0.28% of total assets.
• Annualized net charge-offs remain below 0.20%.
• The total risk-based capital ratio is a healthy 13.88%.

This low credit risk profile, combined with a tangible common equity ratio of 8.36%, gives management flexibility to support future loan growth and capital deployment. If you want to dig deeper into who is buying in, take a look at Exploring ConnectOne Bancorp, Inc. (CNOB) Investor Profile: Who's Buying and Why?