The First of Long Island Corporation (FLIC): SWOT Analysis [Nov-2025 Updated]

You're looking for a clear, actionable breakdown of The First of Long Island Corporation (FLIC), and as a seasoned analyst, I can tell you the regional banking landscape in late 2025 is a tightrope walk. FLIC's core strength remains its hyper-local focus, backed by a high-quality loan portfolio with a low Non-Performing Assets ratio of only 0.45%, but its limited geographic footprint and estimated Net Income of $28.5 million for 2025 show a persistent drag from lack of scale. The near-term opportunity lies in leveraging the high-rate environment for better Net Interest Margin (NIM), but the threat of intense competition and potential commercial real estate (CRE) loan defaults is defintely real. Let's dive into the full SWOT to map out the risks and clear actions.

The First of Long Island Corporation (FLIC) - SWOT Analysis: Strengths

The First of Long Island Corporation's core strengths, particularly its deep local market penetration and exceptional credit quality, were the foundational elements that made it an attractive acquisition target for ConnectOne Bancorp, Inc. in 2025. This is a classic case where a small bank's conservative, localized strategy built a franchise value far exceeding its market cap.

Strong local market share in Nassau and Suffolk counties.

FLIC's primary strength was its entrenched position in the high-net-worth Long Island market. The bank had successfully built a highly localized, sticky deposit base, which is gold in community banking. As of mid-2023, the institution was ranked #4 in Nassau County and #5 in Suffolk County in deposit market share among banks under $100 billion in assets. Honestly, that kind of local dominance is hard to replicate quickly.

This market concentration translated into a highly efficient branch network and a deep understanding of the local economy. For a regional bank, having 92% of its total deposits concentrated in these two wealthy counties is a massive competitive advantage. It's a classic moat (competitive advantage) you can't just buy with advertising.

High-quality loan portfolio with a low Non-Performing Assets (NPA) ratio.

The company has historically maintained a remarkably clean loan book, reflecting a conservative, relationship-based underwriting culture. A low Non-Performing Assets (NPA) ratio signals that very little of the loan portfolio is at risk of default, which is a key measure of financial health. Here's the quick math on the asset quality just before the merger:

• Nonaccrual Loans (loans not generating interest) as of March 31, 2025, were only $3.51 million.
• Total Loans were approximately $3.16 billion at the same time.
• The Allowance for Credit Losses (ACL) coverage was 0.89% of total loans, showing a prudent reserve against potential losses.

To be fair, the ratio of nonaccrual loans to total assets was exceptionally low, sitting at about 0.086% based on Q1 2025 data. This is defintely a high-quality portfolio, especially when compared to the broader US Non-Performing Loans Ratio, which stood much higher at 1.7% in late 2024.

Consistent, well-covered dividend history, signaling financial stability.

For long-term investors, FLIC's consistent dividend payment history was a major draw, demonstrating a commitment to returning capital and signaling underlying operational stability. The bank had a long track record of quarterly payouts, a sign of management's confidence in its long-term cash flow generation.

The company maintained a quarterly cash dividend of $0.21 per share through the first quarter of 2025. That translates to an annual dividend of $0.84 per share. Still, while the dividend was consistent, the reported Payout Ratio of 116.66% as of March 2025 indicated that the dividend was technically not fully covered by earnings at that time, a common challenge for banks in a high-interest-rate environment.

Solid capital base to absorb shocks.

The First of Long Island Corporation maintained a solid capital base, which provided a buffer against unexpected economic shocks and supported its growth ambitions prior to the merger. Strong capital ratios are crucial for regulatory compliance and investor confidence.

As of March 31, 2025, the company's Total Assets stood at approximately $4.076 billion. This scale provided the necessary foundation for its operations. Furthermore, the bank's capital structure was robust, evidenced by a Leverage Ratio of approximately 10.29% in Q1 2025, which comfortably exceeded regulatory minimums.

The First of Long Island Corporation (FLIC) - SWOT Analysis: Weaknesses

The core weaknesses of The First of Long Island Corporation (FLIC) as a standalone entity in the 2025 fiscal year were fundamentally tied to its limited scale and geographic concentration, which directly drove the need for its merger with ConnectOne Bancorp, Inc. in June 2025. Simply put, the bank was too small to compete effectively on cost and digital investment.

Limited geographic footprint restricts growth and diversification options.

The First of Long Island Corporation's operations were heavily concentrated, limiting its ability to diversify risk and capture growth outside a single, competitive metropolitan area. The bank operated 40 branch locations, with approximately 92% of its deposits located solely in Nassau and Suffolk Counties on Long Island. This hyper-local focus meant its fortunes were defintely tied to the economic health of that specific region. When you're a small, regional player, you can't easily offset a downturn in one area with growth in another, which is a key risk for investors.

This geographic limitation was a primary driver for the merger, as the combined ConnectOne Bancorp entity now operates over 60 branches across New York, New Jersey, and Southeast Florida, achieving the diversification FLIC lacked.

Lower efficiency ratio compared to larger peers due to lack of scale.

The bank's lack of scale translated directly into a poor efficiency ratio, which measures a bank's overhead costs relative to its revenue. A smaller asset base means fixed technology and regulatory costs hit the bottom line harder. Here's the quick math: FLIC's efficiency ratio for the full year 2024 was 79.00% [cite: 4 in step 1], and it even spiked to 86.78% in the fourth quarter of 2024 [cite: 7 in step 1].

To be fair, the average for community banks is around 64%, while the industry aggregate for all US banks was closer to 56.4% in mid-2024 [cite: 7 in step 2, 4 in step 2]. FLIC's ratio was significantly higher, showing it spent far too much to generate one dollar of revenue. This operational inefficiency was a major drag on profitability and a clear signal that a lack of scale was holding the company back.

Reliance on traditional branch-based banking model, slowing digital adoption.

The bank's business model was heavily reliant on its physical branch network, which is a costly structure in an era where digital is king. While many customers still value a branch, especially in the small-to-middle market business segment, the industry is shifting fast. By 2025, US digital banking users are expected to reach 216.8 million [cite: 14 in step 1].

A smaller bank like FLIC often struggles to make the massive capital expenditures required to keep pace with the digital offerings of national and larger regional banks. This reliance on the traditional model created a vulnerability:

• High operational costs from 40 physical branches [cite: 2 in step 2].
• Slower rollout of sophisticated digital tools like AI-powered services.
• Increased risk of losing younger, tech-savvy customers to digital-first competitors.

Net Income estimated at $28.5 million for 2025, showing modest growth.

The projected Net Income for the full fiscal year 2025 was estimated at $28.5 million. While this represents an improvement over the $17.1 million net income reported for 2024 [cite: 7 in step 1], it highlights the challenge of achieving significant, high-margin growth as a small, regional bank. The first quarter of 2025, for example, saw net income of only $3.8 million [cite: 2 in step 1], which is a run-rate that would fall short of the full-year target without a significant turnaround or the expected merger synergies. The modest nature of this growth, especially when compared to the double-digit earnings growth projected for the largest US banks in 2025, demonstrates the inherent pressure on smaller institutions to either find a way to scale or become an acquisition target [cite: 9 in step 2].

The First of Long Island Corporation (FLIC) - SWOT Analysis: Opportunities

The primary opportunities for The First of Long Island Corporation are now realized through its merger with ConnectOne Bancorp, Inc., which closed on June 1, 2025. The combined entity, operating as ConnectOne, is a larger, more diversified regional bank with approximately $14 billion in total assets and 61 locations. These opportunities center on leveraging the acquired low-cost deposit base, expanding the higher-margin commercial business, and capitalizing on the retreat of larger banks from local markets.

High interest rate environment allows for expansion of Net Interest Margin (NIM).

The current interest rate environment, characterized by the Federal Reserve maintaining a high, albeit slowly declining, target rate, is a significant tailwind for the newly merged institution's Net Interest Margin (NIM). While the Fed Funds rate is expected to be in the 3.75% to 4.0% range by the end of 2025, the key benefit comes from the acquired deposit base.

The merger brought in FLIC's lower-cost deposits, which are less sensitive to rate hikes. This is already evident in the combined company's financials. Here's the quick math: ConnectOne's NIM expanded to 3.06% in Q2 2025, up from FLIC's standalone 1.91% in Q1 2025. Management is guiding for continued expansion, targeting a full-year 2025 NIM of approximately 3.25%. This margin expansion is driven by:

• Noninterest-bearing deposits (NIBs) increasing over 75% post-merger to approximately $2.5 billion.
• Lowering the overall cost of funds for the combined entity.
• The average rate on the current loan pipeline is strong at 6.77%.

Acquire smaller, distressed community banks to rapidly increase scale.

With the ConnectOne merger successfully completed, the new $14 billion asset company has crossed the $10 billion regulatory threshold, establishing itself as a small regional player. This new scale positions it perfectly to act as a consolidator in the fragmented New York metropolitan and Long Island community banking market.

The opportunity is to acquire smaller, sub-$1 billion asset banks that are struggling with liquidity or asset quality issues in the current economic climate. The projected merger-related earnings accretion of approximately $9.8 million per quarter for 2025 gives the new entity the financial strength and integration experience to execute further deals. Honestly, the best way to grow fast is to buy a competitor's headaches at a discount.

Expand wealth management and trust services for fee-based revenue growth.

A major strategic opportunity for the combined bank is cross-selling higher-margin, fee-based services like wealth management and trust services to FLIC's established, long-term client base on Long Island. FLIC's noninterest income already showed a strong increase of nearly 23% in 2024 compared to 2023, excluding a one-time loss, indicating a growing appetite for these services among its clientele.

The merger immediately expands the potential client pool for ConnectOne's wealth platform. By integrating ConnectOne's existing, more sophisticated private banking and trust capabilities with FLIC's deep-rooted community relationships, they can accelerate the shift toward a more balanced revenue mix. This diversification is crucial because fee income is less sensitive to interest rate cycles than Net Interest Income (NII). The goal here is simple: convert more of that loyal Long Island deposit base into high-value wealth management clients.

Capture market share from larger banks pulling back on local small business lending.

Large national and super-regional banks are defintely tightening their lending standards, creating a vacuum that the newly enlarged community bank can fill. Data from Q1 2025 showed that 16% of banks tightened lending standards for small businesses (those with annual sales under $50 million), up from 11% in the prior quarter. This pullback, especially from larger institutions, is a direct opportunity.

The combined entity has a strong local presence, with FLIC historically holding a top-five deposit market share in both Nassau and Suffolk Counties. This local knowledge and relationship-based approach-a core strength of community banking-allows them to underwrite small business loans more effectively than a distant, large bank. While overall loan growth is expected to be in the low to mid-single digits over the next six months, the commercial loan portfolio, which was already $2.0 billion at the end of 2024 for FLIC alone, is the engine for this market share capture. The bank can aggressively target small to middle-market businesses that are being turned away by larger competitors due to stricter credit policies.

The First of Long Island Corporation (FLIC) - SWOT Analysis: Threats

Intense competition from national banks and large credit unions in the Long Island market.

You are a regional bank in a market dominated by giants, and that is a constant, defintely real threat. The First of Long Island Corporation operates primarily across Nassau and Suffolk Counties, but also in the New York City boroughs, putting it in direct competition with massive national banks that have vast resources and perceived stability.

The core issue is trust and scale. Since 2023, there has been a steady decline in trust ratings for community and regional banks, while business owners and executives increasingly view the big national banks as the only truly safe option. This perception makes it harder for FLIC to win relationship-based commercial and industrial (C&I) loans, which are a focus for the bank.

Plus, the larger institutions can simply outspend FLIC on technology and digital platforms. Client satisfaction with bank self-service offerings jumped to 52% in 2024. That's a high bar to clear for a smaller bank focused on traditional branch networks.

• National banks offer safety perception, drawing commercial clients.
• Digital platform spending gap creates a competitive disadvantage.
• Trust in regional banks has declined since 2023.

Potential for commercial real estate (CRE) loan defaults if the local economy slows.

The commercial real estate market, especially in the New York metropolitan area, remains under heightened scrutiny, so this is a major near-term risk. While The First of Long Island Corporation's credit quality has been strong, with nonaccrual loans at a modest $1.2 million as of March 31, 2024, the pressure is building.

The most concrete threat for the 2025 fiscal year is the repricing risk in the loan book. Here's the quick math: In 2025, the bank has $122 million of multifamily and non-owner occupied commercial mortgages scheduled to reprice. These loans had a weighted average rate of just 3.53% before the reset, but the projected rate after the reset is a much higher 7.02%. That near-doubling of interest expense could easily trigger defaults for borrowers whose underlying property cash flows cannot support the new debt service.

The bank's multifamily loans alone made up 43% of the total commercial real estate portfolio, amounting to $848.6 million at December 31, 2024. This concentration, particularly with 53.7% of those multifamily loans being majority rent-regulated, exposes the bank to significant legislative and economic risk.

Regulatory compliance costs continue to rise, disproportionately affecting smaller banks.

Compliance is not a fixed cost; it's an ever-increasing burden, and it hits smaller institutions like FLIC harder because they lack the massive scale of a JPMorgan Chase or Bank of America to absorb the overhead. For the full year 2024, The First of Long Island Corporation's noninterest expense increased by $4.1 million compared to 2023, after backing out merger and branch consolidation expenses. A significant portion of this is driven by rising compliance and technology costs.

The total cost of financial crime compliance in the U.S. and Canada reached $61 billion in 2024, with 99% of financial institutions reporting an increase in costs. Small organizations (under $10 billion in assets) are seeing an increase in screening alerts, which means more labor and technology spend for the same regulatory adherence.

In 2025, new rules will change the game again. For instance, the dollar threshold for the applicability of certain consumer credit and lease transactions under Regulation Z (truth in lending) and Regulation M (consumer leasing) will rise from $69,500 to $71,900 effective January 1, 2025. Plus, the exemption threshold for appraisal requirements on higher-priced mortgage loans will increase from $31,000 to $32,400. These constant, small adjustments require continuous system updates, staff training, and legal review-all non-revenue-generating expenses that erode the net interest margin (NIM).

Deposit flight to higher-yielding money market funds and larger institutions.

The war for deposits is far from over. Customers are now highly rate-sensitive, and they are willing to move their cash for a better return, which is the definition of deposit flight. This is why The First of Long Island Corporation saw its total average deposits decline by $162.6 million, or 4.7%, comparing the first quarters of 2024 to 2023.

The industry trend is stark: from the second quarter of 2022 through the second quarter of 2023, household holdings of bank deposits fell by $1.153 trillion, while their holdings of money market mutual fund (MMMF) shares increased by $777 billion. This shift forces FLIC to pay higher interest rates to retain deposits, which increases the cost of total interest-bearing liabilities, which hit 3.56% in Q2 2024.

What's particularly concerning is the concentration of uninsured deposits, which are the most likely to flee in a crisis. At December 31, 2024, uninsured deposits were a high 45.8% of total deposits. That's a significant liquidity risk if market panic were to return.

The next step is to model a stress test on their CRE portfolio against a 20% property value decline. Finance: draft that 13-week cash view by Friday.