ConnectOne Bancorp (CNOB) Q4 2025 earnings summary

Executive summary

• Achieved strong profitability, efficiency, and asset quality metrics in 2025, surpassing $14 billion in assets and $1.4 billion market cap.

• Net income available to common stockholders was $38.0M for Q4 2025, up from $18.9M in Q4 2024; full-year 2025 net income was $74.4M.

• Diluted EPS for Q4 2025 was $0.75, with full-year 2025 diluted EPS at $1.63.

• Seamlessly integrated the largest acquisition in company history, completing a full systems conversion within two weeks and expanding competitive position in the New York Metro market.

• Announced closure of five branches as part of branch rationalization.

Financial highlights

• Operating earnings for Q4 2025 increased 18.6% sequentially over Q3; net interest margin widened by 16 bps to 3.27% in Q4 2025.

• Fully taxable equivalent net interest income for Q4 2025 was $107.8M, up 4.5% sequentially and 64.3% year-over-year.

• Tangible book value per share at year-end was $23.52, with a goal to return to pre-merger levels within a year.

• Non-interest-bearing demand deposits rose from 17% to over 21% of total deposits; brokered deposits reduced from 12% to 6% of assets.

• Non-performing asset ratio increased slightly to 0.33% due to one multifamily loan, but subsequent workout brought it back down.

Outlook and guidance

• Net interest margin expected to rise by 5 bps in Q1 2026, with further 5 bps improvement per 25 bps Fed rate cut and per quarter from higher loan yields starting mid-year.

• Margin guidance for year-end 2026 is 335-340 bps, assuming one rate cut.

• Operating expenses projected to increase 4% by Q4 2026, with branch closures and staff optimization offsetting some growth.

• Loan portfolio growth expected in the 3%-5% range for 2026, with higher payoffs due to repricing.

• SBA loan pipeline is robust, with expected pretax gains exceeding $4M in 2026.