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ConnectOne Bancorp (CNOB) Q3 Earnings call transcript Oct 24, 2024

Daily EarningsMonday, Oct 28, 2024 8:25 pm ET

1min read

CNOB -- FLIC --

ConnectOne Bancorp's third quarter earnings call for 2024 offered a comprehensive update on the company's financial health, strategic moves, and future prospects. The call, led by Frank Sorrentino, Chairman and CEO, and William Burns, Senior Executive Vice President and CFO, provided valuable insights into ConnectOne's performance and growth strategies.

Strategic Merger with First of Long Island Corporation

A significant highlight of the call was the announcement of ConnectOne's proposed merger with First of Long Island Corporation. This transaction is expected to create a more robust platform for future growth, with the combined entity boasting over $14 billion in assets and $11 billion in loans and deposits. The merger aims to strengthen ConnectOne's presence on Long Island, positioning it as a leading community bank in the region.

Financial Performance and Outlook

Despite a slight reduction in portfolio this quarter, ConnectOne's loan originations remain solid, and the company anticipates loan growth to return to mid- to high single-digit rates beyond the next two quarters. The third quarter net interest margin remained flat on a core basis, but the Federal Reserve's 50 basis point cut in September widened the spot margin, signaling potential for increased profitability.

Credit and Risk Management

ConnectOne's credit performance has been commendable, with a solid underwriting approach and proactive portfolio management. The company fared well amidst industry challenges, reflecting a strong credit track record. The strategic merger with First of Long Island is expected to further bolster ConnectOne's credit reserve position.

Expansion and Growth Opportunities

The merger with First of Long Island presents significant growth opportunities, particularly in residential mortgage origination, SBA lending, and commercial lending. ConnectOne aims to leverage geographical synergies between its Southeast Florida team and First of Long Island's clients, enhancing its ability to offer robust treasury solutions and expand its commercial deposits.

Conclusion

ConnectOne Bancorp's third quarter earnings call underscored the company's commitment to strategic growth, robust financial performance, and a proactive approach to risk management. The proposed merger with First of Long Island Corporation is a testament to ConnectOne's strategic vision and its focus on expanding its footprint and enhancing its service offerings. With a strong balance sheet and a positive outlook for the future, ConnectOne is well-positioned to capitalize on growth opportunities and continue delivering value to its stakeholders.

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