ConnectOne Bancorp (CNOB) M&A Announcement summary

Deal rationale and strategic fit

• Merger creates a $14 billion bank holding company with a premier Greater New York franchise and top five deposit market share on Long Island, accelerating expansion and boosting local market share to #4 in Nassau and #5 in Suffolk counties.

• Both banks share strong credit cultures, client service focus, and community commitment, with minimal geographic overlap and strong CRA alignment.

• Enhances pro forma liquidity, reduces funding costs, and positions the combined company for further margin expansion.

• Provides access to broader markets, including Hudson Valley, South Florida, New Jersey, and deepens community engagement.

• Both boards unanimously approved the transaction, with leadership integration including new board members and significant talent retention.

Financial terms and conditions

• 100% stock merger with an exchange ratio of 0.5175 shares, valuing each share at $12.40 and an aggregate deal value of approximately $284 million.

• First of Long Island shareholders will own approximately 24% of the combined entity; pro forma ownership: 76% CNOB, 24% FLIC.

• Transaction metrics: 0.74x price/tangible book value, 10.8x price/2025 earnings, and 3.0% core deposit premium.

• Pro forma capital ratios remain strong, with a planned $100 million sub-debt issuance before closing.

• Deal is 36% accretive to EPS in 2025, with tangible book value dilution of 11.9%-12% and earn-back under three years.

Synergies and expected cost savings

• Targeted cost savings of 35% of FLIC noninterest expense, mainly from core system contracts, consultants, and resource reallocation, phased in 50% in 2025 and 100% thereafter.

• Combined efficiency ratio projected at 44-45% in 2025, with potential for further improvement.

• Meaningful EPS accretion: 36% in 2025 (including rate marks), with tangible book value earnback in under three years.

• Projected return on average tangible common equity is about 14% in 2025.

• Modest branch closures expected as part of cost savings.