ConnectOne Bancorp's Dividend: A Beacon of Stability in Uncertain Times

As the world grapples with the aftermath of the COVID-19 pandemic and the subsequent market volatility, investors and retirees alike are seeking stability and security in their portfolios. One company that has stood out as a beacon of reliability and consistency is ConnectOne Bancorp (NASDAQ:CNOB). On February 17, 2025, the company announced that it would be paying a dividend of $0.18 per share, a testament to its financial strength and commitment to shareholders.



ConnectOne Bancorp's dividend payout ratio is at a healthy, sustainable level, below 75% of its earnings. This indicates that the company is distributing a reasonable portion of its earnings to shareholders while still maintaining a strong balance sheet. The company's dividend yield of 2.52% is also lower than the average for its industry peers, but this is not a cause for concern. Instead, it reflects the company's focus on maintaining a strong financial position and reinvesting in its business to drive long-term growth.

One of the key factors contributing to ConnectOne Bancorp's ability to maintain its dividend payout is its relationship-based lending model. This approach allows the company to build strong, long-lasting relationships with its clients, which in turn leads to stable deposit balances and loan growth. In the first quarter of 2024, the company reported that its team increased client deposit balances sequentially by an annualized 3.2%, driven by a 9.9% annualized noninterest-bearing demand deposit growth. This growth in deposits, combined with the company's disciplined approach to credit and spreads, has enabled ConnectOne Bancorp to maintain its sound approach to both credit and spreads, even in the face of market challenges.



Another factor contributing to ConnectOne Bancorp's dividend payout is its ability to manage its capitalization effectively. Despite the repurchase of 282,370 shares during the quarter, the company's tangible common equity ratio remained flat at 9.25%, and its tangible book value per share increased to $23.26. This stable capitalization allows the company to distribute more cash to shareholders in the form of dividends.



In conclusion, ConnectOne Bancorp's dividend payout is a reflection of the company's strong financial performance, stable capitalization, and commitment to shareholders. The company's relationship-based lending model and disciplined approach to credit and spreads have enabled it to maintain its dividend payout even in the face of market challenges. As the world continues to grapple with uncertainty, investors and retirees can take comfort in the stability and reliability of ConnectOne Bancorp's dividend.