ConnectOne Q3 2026 net income $29.9 million

ENGLEWOOD CLIFFS, N.J., Oct. 22. ConnectOne Bancorp, Inc. reported net income available to common stockholders of $29.9 million for the third quarter of 2026, a decline from $40.2 million in the second quarter of 2026 and $39.5 million in the third quarter of 2025. Diluted earnings per share stood at $0.59 for the period, compared with $0.80 in the prior quarter and $0.78 a year earlier.

The decrease in reported earnings was primarily driven by a $23.0 million pretax charge associated with a balance sheet restructuring and repositioning initiative. Excluding this charge and other non-operating items, operating net income available to common stockholders was $47.9 million for the third quarter of 2026, up from $42.2 million in the second quarter and $35.5 million in the third quarter of 2025. Operating diluted earnings per share reached $0.95, while operating return on average tangible common equity exceeded 15%.

ConnectOne completed a strategic review of its balance sheet during the third quarter, leading to a contract to divest a portfolio of non-relationship multifamily loans with an unpaid principal balance of up to approximately $750 million to a single third-party purchaser. The portfolio consists of loans originated by ConnectOne Bank and First National Bank of Long Island, which was acquired by ConnectOne in June 2025. Approximately 61% of the portfolio is secured by New York City rent-stabilized properties.

The loan pool was transferred to held-for-sale status at a fair value of $678.9 million as of September 30, 2026, resulting in the $23.0 million pretax loss recorded in noninterest income. The transaction is expected to close in late October 2026, with final loan balances determined at closing. Transaction costs of approximately $7 million to $8 million are expected to be recognized upon closing.

Proceeds from the sale are expected to be largely reinvested in government-guaranteed securities, with remaining funds used to pay down wholesale funding. The restructuring reduces the company's concentrations in commercial real estate and New York City rent-stabilized properties. The bank's regulatory commercial real estate concentration ratio is projected to decline to approximately 397% from 439% at June 30, 2026, while exposure to rent-stabilized assets is projected to fall to about 2% of total loans from 6%.

Frank Sorrentino, Chairman and Chief Executive Officer of ConnectOne, stated that core performance reflected successful execution of the company's relationship-driven banking strategy. He noted that total loans and average client deposits achieved approximately 11% sequential annualized growth, and the net interest margin expanded to 3.44%. The board of directors also declared cash dividends on common and preferred stock.