Q2 Results In Line With Estimates as Net Interest Margin Expands
ConnectOne Bancorp (NASDAQ:CNOB) reported operating results that came in slightly ahead of analyst expectations when it reported second-quarter earnings on July 23, 2026. The New Jersey-based regional bank posted net income available to common stockholders of $40.2 million for the quarter, swinging sharply from the $21.8 million loss recorded in the same period last year, which was heavily impacted by merger-related charges.
The operating performance this quarter reflects the ongoing benefits from the company's merger with The First of Long Island Corporation (FLIC) completed in 2025, combined with organic growth in loans and deposits. Management highlighted a seventh consecutive quarter of net interest margin expansion, which now stands at 3.42%.
Earnings and Revenue vs. Estimates
For the second quarter, ConnectOne reported operating diluted earnings per share, a non-GAAP metric that excludes merger and restructuring costs, of $0.84. This came in against the analyst consensus estimate of $0.83 per share. The deviation is below the 2% threshold, which means the result can be described as inline with expectations. On a GAAP basis, diluted EPS was $0.80.
Revenue for the quarter, measured as net interest income plus noninterest income, totaled $121.6 million. This compared with analyst estimates of approximately $115.99 million for total revenue, representing a modest beat that was driven largely by higher net interest income and increased gains on the sale of SBA loans. Total interest income climbed to $192.9 million for the quarter from $146.0 million in the year-ago period.
Underlying Business Performance
The bank's operating momentum was evident across several key metrics. Loan growth on an annualized sequential basis reached 5%, while core deposits grew at an annualized rate of 8%. The net interest margin widened to 3.42%, up from 3.39% in the first quarter and from 3.06% in the second quarter of 2025. Management attributed this margin expansion to loan repricing and a favorable shift in earning asset mix.
- Net interest income (FTE): $114.8 million, up 4.4% sequentially and 43.9% year-over-year.
- Noninterest income: $7.9 million, compared to $6.8 million in Q1 2026, supported primarily by SBA loan sale gains.
- Operating expenses (excluding merger costs): $55.3 million, flat sequentially and up from $42.9 million in the prior year quarter, reflecting the larger post-merger footprint.
A notable item during the quarter was a $13.8 million charge-off on a group of New York City rent-stabilized multi-family loans, which was partially offset by a $9.2 million release of related multifamily qualitative reserves. Nonperforming assets increased to $79.7 million from $41.6 million at the end of the first quarter, primarily due to these loans. However, the bank's overall criticized and classified loans as a percentage of total loans improved to 1.89% from 2.26%.
Tangible Book Value and Dividends
Tangible book value per share rose to $24.66 as of June 30, up from $23.52 at year-end 2025, reflecting retained earnings growth and a stable interest rate environment that limited further unrealized losses in the securities portfolio. The board declared a common dividend of $0.195 per share, payable on September 1, 2026.
No Formal Guidance Provided
ConnectOne did not issue specific forward-looking guidance in its earnings release. The company offered only qualitative commentary from management expressing confidence in continued profitable growth. As such, there is no formal outlook to compare against analyst estimates for the third quarter or full year.
Analysts currently estimate Q3 2026 revenue of $119.8 million and full-year 2026 revenue of $468.8 million, with estimated EPS for Q3 of $0.88 and full-year EPS of approximately $3.35.
Market Reaction
The stock has traded relatively flat in the pre-market session following the release. Over the past week, shares are essentially unchanged, down just 0.06%. Over the trailing two-week period, the stock is up roughly 5.1%, though it has slipped 0.2% over the last month. The lack of a strong directional move in the immediate aftermath suggests that the market is taking the in-line earnings result in stride, with investors likely weighing the solid operating momentum against the elevated credit quality concerns that surfaced during the quarter.
For a deeper dive into historical earnings trends and forward projections, you can view the full earnings history and future estimates at CNOB Earnings and CNOB Analyst Forecasts.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research before making investment decisions.
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ConnectOne Bancorp (NASDAQ:CNOB) Reports In-Line Q2 Results as Net Interest Margin Expands ConnectOne Bancorp (CNOB) Q2 Results In Line with Estimates as Net Interest Margin Expands
Q2 Results In Line With Estimates as Net Interest Margin Expands
ConnectOne Bancorp (NASDAQ:CNOB) reported operating results that came in slightly ahead of analyst expectations when it reported second-quarter earnings on July 23, 2026. The New Jersey-based regional bank posted net income available to common stockholders of $40.2 million for the quarter, swinging sharply from the $21.8 million loss recorded in the same period last year, which was heavily impacted by merger-related charges.
The operating performance this quarter reflects the ongoing benefits from the company's merger with The First of Long Island Corporation (FLIC) completed in 2025, combined with organic growth in loans and deposits. Management highlighted a seventh consecutive quarter of net interest margin expansion, which now stands at 3.42%.
Earnings and Revenue vs. Estimates
For the second quarter, ConnectOne reported operating diluted earnings per share, a non-GAAP metric that excludes merger and restructuring costs, of $0.84. This came in against the analyst consensus estimate of $0.83 per share. The deviation is below the 2% threshold, which means the result can be described as inline with expectations. On a GAAP basis, diluted EPS was $0.80.
Revenue for the quarter, measured as net interest income plus noninterest income, totaled $121.6 million. This compared with analyst estimates of approximately $115.99 million for total revenue, representing a modest beat that was driven largely by higher net interest income and increased gains on the sale of SBA loans. Total interest income climbed to $192.9 million for the quarter from $146.0 million in the year-ago period.
Underlying Business Performance
The bank's operating momentum was evident across several key metrics. Loan growth on an annualized sequential basis reached 5%, while core deposits grew at an annualized rate of 8%. The net interest margin widened to 3.42%, up from 3.39% in the first quarter and from 3.06% in the second quarter of 2025. Management attributed this margin expansion to loan repricing and a favorable shift in earning asset mix.
A notable item during the quarter was a $13.8 million charge-off on a group of New York City rent-stabilized multi-family loans, which was partially offset by a $9.2 million release of related multifamily qualitative reserves. Nonperforming assets increased to $79.7 million from $41.6 million at the end of the first quarter, primarily due to these loans. However, the bank's overall criticized and classified loans as a percentage of total loans improved to 1.89% from 2.26%.
Tangible Book Value and Dividends
Tangible book value per share rose to $24.66 as of June 30, up from $23.52 at year-end 2025, reflecting retained earnings growth and a stable interest rate environment that limited further unrealized losses in the securities portfolio. The board declared a common dividend of $0.195 per share, payable on September 1, 2026.
No Formal Guidance Provided
ConnectOne did not issue specific forward-looking guidance in its earnings release. The company offered only qualitative commentary from management expressing confidence in continued profitable growth. As such, there is no formal outlook to compare against analyst estimates for the third quarter or full year.
Analysts currently estimate Q3 2026 revenue of $119.8 million and full-year 2026 revenue of $468.8 million, with estimated EPS for Q3 of $0.88 and full-year EPS of approximately $3.35.
Market Reaction
The stock has traded relatively flat in the pre-market session following the release. Over the past week, shares are essentially unchanged, down just 0.06%. Over the trailing two-week period, the stock is up roughly 5.1%, though it has slipped 0.2% over the last month. The lack of a strong directional move in the immediate aftermath suggests that the market is taking the in-line earnings result in stride, with investors likely weighing the solid operating momentum against the elevated credit quality concerns that surfaced during the quarter.
For a deeper dive into historical earnings trends and forward projections, you can view the full earnings history and future estimates at CNOB Earnings and CNOB Analyst Forecasts.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research before making investment decisions.
Read full article here »