ConnectOne Bancorp, Inc. Reports Fourth Quarter and Full-Year 2025 Results

Net Interest Margin Widens By 16 Basis PointsPerformance Metrics Gain MomentumBranch Rationalization to Result In 5 ClosuresCredit Trends Remain SolidDeclares Common and Preferred Dividends

ENGLEWOOD CLIFFS, N.J., Jan. 29, 2026 (GLOBE NEWSWIRE) — ConnectOne Bancorp, Inc. (Nasdaq: CNOB) (the “Company” or “ConnectOne”), parent company of ConnectOne Bank (the “Bank”), today reported net income available to common stockholders of $38.0 million for the fourth quarter of 2025 compared with $39.5 million for the third quarter of 2025 and $18.9 million for the fourth quarter of 2024.  Diluted earnings per share were $0.75 for the fourth quarter of 2025 compared with $0.78 for the third quarter of 2025 and $0.49 for the fourth quarter of 2024.  Full-year 2025 net income available to common stockholders was $74.4 million, compared to $67.8 million for the full-year 2024.  Diluted earnings per share for the full-year 2025 were $1.63, compared with $1.76 for the full-year 2024.  Return on average assets was 1.12%, 1.16% and 0.84% for the three months ended December 31, 2025, September 30, 2025 and December 31, 2024, respectively.  Return on average tangible common equity was 13.66%, 14.74% and 8.27% for the three months ended December 31, 2025, September 30, 2025 and December 31, 2024, respectively.

Operating net income available to common stockholders was $42.0 million for the fourth quarter of 2025, $35.5 million for the third quarter of 2025 and $20.2 million for the fourth quarter of 2024.  Operating diluted earnings per share were $0.83 for the fourth quarter of 2025, $0.70 for the third quarter of 2025 and $0.52 for the fourth quarter of 2024.  Operating return on average assets was 1.24%, 1.05% and 0.90% for the three months ended December 31, 2025, September 30, 2025 and December 31, 2024, respectively.  Operating return on average tangible common equity was 14.27%, 12.55% and 8.77% for the three months ended December 31, 2025, September 30, 2025 and December 31, 2024, respectively.  See supplemental tables for a complete reconciliation of GAAP earnings to operating earnings, and other non-GAAP measures.

The decrease in net income available to common stockholders and diluted earnings per share during the fourth quarter of 2025 when compared to the third quarter of 2025 was primarily due to a $13.4 million decrease in noninterest income primarily due to nonrecurring benefits related to the employee retention tax credit (“ERTC”) of $6.6 million and a defined benefit pension plan curtailment gain of $3.5 million that were realized in the third quarter of 2025.  The decrease in noninterest income was partially offset by a $4.6 million increase in net interest income, a $3.2 million reduction in the provision for credit losses, a decrease in income tax expense of $2.4 million and a decrease in noninterest expenses of $1.7 million.  The increase in net income available to common stockholders and diluted earnings per share during the fourth quarter of 2025 when compared to the fourth quarter of 2024 was primarily due to a $41.9 million increase in net interest income, a $2.3 million increase in noninterest income and a reduction in the provision for credit losses of $1.2 million.  These were partially offset by an increase in noninterest expense of $18.4 million and an increase in income tax expense of $7.8 million.

“I’m pleased with ConnectOne’s strong fourth quarter performance underscored by robust core earnings and expanding margins,” stated Frank Sorrentino, ConnectOne’s Chairman and Chief Executive Officer.  “The Bank’s net interest margin widened by 16 basis points during the quarter, benefiting from an 18 basis-point improvement in our cost of interest-bearing deposits combined with virtually no change in our loan portfolio yield.  Our net interest margin is expected to continue its upward trend during 2026 with deposit and borrowing costs decreasing and loan yields increasing.”  Mr. Sorrentino added, “Loans and client deposits, which exclude a reduction of over $280 million of brokered deposits during the quarter, both grew sequentially by more than 5% annualized, while credit trends remained stable.  Our nonperforming asset ratio was just 0.33%, while annualized net charge-offs were 0.17%.  Performance metrics are gaining momentum, with operating returns on assets advancing by nearly 20 basis points to 1.24%, and average tangible common equity advancing by 172 basis points to 14.27%.  Further, our tangible book value per share increased by an additional 3% during the quarter to $23.52.”

“Operationally, with the merger integration behind us, we’re continuing to realize incremental synergies across the franchise.  ConnectOne’s scalable operating model, leading technology and robust business offerings are now driving both greater efficiency and accelerated growth.”

Mr. Sorrentino concluded, “2025 was a very strong year for ConnectOne and we enter 2026 with solid operating momentum.  We look forward to building upon our client-first culture and relationship-driven strategy to drive growth and long-term value creation for all stakeholders.”

The Company announced that its Board of Directors declared a cash dividend on both its common stock and its outstanding preferred stock.  A cash dividend on common stock of $0.18 per share will be paid on March 2, 2026, to common stockholders of record on February 13, 2026.  A dividend of $0.328125 per depositary share, representing a 1/40th interest in a share of the Company’s 5.25% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A, will also be paid on March 2, 2026 to holders of record on February 13, 2026.

Fully taxable equivalent net interest income for the fourth quarter of 2025 was $107.8 million, an increase of $4.6 million, or 4.5%, from the third quarter of 2025.  The increase from the third quarter of 2025 was primarily due to a 16 basis-point widening of the net interest margin to 3.27% from 3.11%.  The margin benefited from stable rates on interest earning-assets, despite a declining-rate environment, combined with a 14 basis-point decrease in the average costs of deposits, including noninterest-bearing deposits and a 38 basis-point decrease in the cost of subordinated debentures and borrowings, reflecting the refinancing of higher coupon subordinated debentures in September 2025.

Fully taxable equivalent net interest income for the fourth quarter of 2025 increased $42.2 million, or 64.3%, from the fourth quarter of 2024, due to a 41 basis-point widening of the net interest margin to 3.27% from 2.86%, and a 43.6% increase in average interest-earning assets.  The increase in average interest-earning assets was primarily due to the merger with the First of Long Island Corporation (“FLIC”).  The margin benefited from a 58 basis-point decrease in the average costs of deposits, including noninterest-bearing deposits, partially offset by an increase in cost of subordinated debt and borrowings.

Noninterest income was $6.0 million in the fourth quarter of 2025, $19.4 million in the third quarter of 2025 and $3.7 million in the fourth quarter of 2024. During the third quarter of 2025, the Company realized a $6.6 million one-time benefit related to the ERTC, a federal program under the CARES Act intended to encourage employee retention during the COVID-19 pandemic. Additionally, the Company also recognized a $3.5 million defined benefit pension plan curtailment gain. The gain resulted from freezing the FLIC defined benefit pension plan on September 30, 2025. Excluding the impact of these two nonrecurring items, noninterest income decreased $3.3 million during the fourth quarter of 2025 compared to the third quarter of 2025. The decrease was due to a $2.5 million decrease in net (losses) gains on equity securities, a $0.5 million decrease in deposit, loan and other income, and a $0.2 million decrease in net gains on sale of loans held-for-sale, primarily SBA loans. The current pipeline for SBA loans, including those referred from our BoeFly subsidiary, remains robust and is expected to result in pretax gains exceeding $4 million during 2026. Excluding the aforementioned ERTC and defined pension plan curtailment gain, noninterest income increased by $2.3 million during the fourth quarter compared to the fourth quarter of 2024. The increase was due to a $1.5 million increase in deposit, loan and other income and a $1.3 million increase in BOLI income, which was partially offset by a $0.5 million decrease in net (losses) gains on equity securities. The increases in deposit, loan and other income and BOLI income were primarily due to the merger with FLIC.

Noninterest expenses were $56.9 million for the fourth quarter of 2025, $58.7 million for the third quarter of 2025 and $38.5 million for the fourth quarter of 2024. The decrease of $1.7 million during the fourth quarter of 2025 when compared to the third quarter of 2025 was primarily due to a $1.4 million decrease in merger expense, a $1.2 million decrease in salaries and employee benefits and a $1.0 million decrease in restructuring and exit charges, which was partially offset by $1.3 million of charges associated with the anticipated first quarter 2026 closure of five retail banking branches and a $0.2 million increase in marketing and advertising expenses. The $18.4 million increase in noninterest expenses for the fourth quarter of 2025 when compared to the fourth quarter of 2024 was primarily due to a $9.0 million increase in salaries and employee benefits, a $2.9 million increase in amortization of core deposit intangibles, a $2.4 million increase in occupancy and equipment expenses, a $1.3 million increase in other expenses, a $0.8 million increase in information technology and communication expenses, a $0.8 million increase in branch closing expenses, a $0.6 million increase in FDIC insurance expense, a $0.5 million increase in marketing and advertising expense and a $0.5 million increase in professional and consulting expense, which were partially offset by a decrease of $0.4 million in merger expense. The variances from the fourth quarter of 2025 to the fourth quarter of 2024 were primarily due to the merger with FLIC.

Income tax expense was $13.9 million for the fourth quarter of 2025, $16.3 million for the third quarter of 2025 and $6.1 million for the fourth quarter of 2024. The effective tax rates were 26.0%, 28.4% and 23.0% for the fourth quarter of 2025, third quarter of 2025 and fourth quarter of 2024, respectively. The variances in expense and effective rates for these periods were primarily due to the merger with FLIC. For 2026, our effective tax rate is estimated to be approximately 28.0%, reflecting statutory rates for metropolitan New York City, book/tax permanent differences, organizational structure and investment tax credits.

The provision for credit losses was $2.3 million for the fourth quarter of 2025, $5.5 million for the third quarter of 2025 and $3.5 million for the fourth quarter of 2024. In each of the quarters presented, the provision for credit losses reflected net portfolio growth, charges related to individually evaluated loans, and changing macroeconomic forecasts and conditions.  The current quarter provision benefitted from lower loss drivers in our CECL model, slightly offset by increased qualitative factors, and a reserve release related to the favorable workout and repayment on loans with nonaccretable credit marks.

Nonperforming assets, which includes nonaccrual loans and other real estate owned (the Bank had no other real estate owned during the periods reported), were $45.9 million as of December 31, 2025, $39.7 million as of September 30, 2025 and $57.3 million as of December 31, 2024.  Nonperforming assets as a percentage of total assets were 0.33% as of December 31, 2025, 0.28% as of September 30, 2025 and 0.58% as of December 31, 2024. The ratio of nonaccrual loans to loans receivable was 0.40%, 0.35% and 0.69%, as of December 31, 2025, September 30, 2025 and December 31, 2024, respectively. The annualized net loan charge-offs ratio was 0.17% for the fourth quarter of 2025, 0.18% for the third quarter of 2025 and 0.16% for the fourth quarter of 2024.

The allowance for credit losses represented 1.35%, 1.38% and 1.00% of loans receivable as of December 31, 2025, September 30, 2025 and December 31, 2024, respectively. The allowance for credit losses related to the loan portfolio increased $71.6 million to $154.3 million, compared to $82.7 million as of December 31, 2024. The increase was primarily due to the FLIC merger: $43.3 million of allowance recorded through goodwill related to the purchased credit-deteriorated loans and $27.4 million reflecting the initial provision for credit losses. The allowance for credit losses as a percentage of nonaccrual loans was 336.1% as of December 31, 2025, 394.5% as of September 30, 2025 and 144.3% as of December 31, 2024. Criticized and classified loans as a percentage of loans receivable was 2.49% as of December 31, 2025, down from 2.57% as of September 30, 2025 and from 2.65% as of December 31, 2024. Loans delinquent 30 to 89 days were 0.26% of loans receivable as of December 31, 2025, 0.08% as of September 30, 2025 and 0.04% as of December 31, 2024.

Selected Balance Sheet Items

The Company’s total assets were $14.0 billion as of December 31, 2025, compared to $9.9 billion as of December 31, 2024. Loans receivable were $11.5 billion as of December 31, 2025 and $8.3 billion as of December 31, 2024. Total deposits were $11.2 billion as of December 31, 2025 and $7.8 billion as of December 31, 2024. The increase in total assets, loans receivable and total deposits were primarily due to the merger with FLIC.

The Company’s total stockholders’ equity was $1.6 billion as of December 31, 2025 and $1.2 billion as of December 31, 2024. The increase in total stockholders’ equity was primarily due to an increase in common stock of $270.8 million, which represented the fair value stock consideration issued for the FLIC merger, an increase in retained earnings of $42.5 million, and decrease in the accumulated other comprehensive loss of $16.0 million. As of December 31, 2025, the Company’s tangible common equity ratio and tangible book value per share were 8.62% and $23.52, respectively, compared to 9.49% and $23.92, respectively, as of December 31, 2024. Total goodwill and other intangible assets were $280.2 million as of December 31, 2025, and $213.0 million as of December 31, 2024.

Use of Non-GAAP Financial Measures

In addition to the results presented in accordance with Generally Accepted Accounting Principles (“GAAP”), ConnectOne routinely supplements its evaluation with an analysis of certain non-GAAP measures. ConnectOne believes these non-GAAP financial measures, in addition to the related GAAP measures, provide meaningful information to investors in understanding our operating performance and trends. These non-GAAP measures have inherent limitations and are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for an analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Reconciliations of non-GAAP financial measures disclosed in this earnings release to the comparable GAAP measures are provided in the accompanying tables.

Fourth Quarter 2025 Results Conference Call

Management will also host a conference call and audio webcast at 10:00 a.m. ET on January 29, 2026, to review the Company’s financial performance and operating results. The conference call dial-in number is 1 (646) 307-1963, access code 8645811. Please dial in at least five minutes before the start of the call to register. An audio webcast of the conference call will be available to the public, on a listen-only basis, via the “Investor Relations” link on the Company’s website https://www.ConnectOneBank.com or at http://ir.connectonebank.com.

A replay of the conference call will be available beginning at approximately 1:00 p.m. ET on Thursday, January 29, 2026 and ending on Thursday, February 5, 2026, by dialing 1 (609) 800-9909, access code 8645811. An online archive of the webcast will be available following the completion of the conference call at https://www.ConnectOneBank.com or at http://ir.connectonebank.com.

About ConnectOne Bancorp, Inc.

ConnectOne Bancorp, Inc., is a modern financial services company that operates, through its subsidiary, ConnectOne Bank, and the Bank’s fintech subsidiary, BoeFly, Inc. ConnectOne Bank is a high-performing commercial bank offering a full suite of banking & lending products and services that focus on small to middle-market businesses. BoeFly, Inc. is a fintech marketplace that connects borrowers in the franchise space with funding solutions through a network of partner banks. ConnectOne Bancorp, Inc. is traded on the Nasdaq Global Market under the trading symbol “CNOB,” and information about ConnectOne may be found at https://www.connectonebank.com.

This news release contains certain forward-looking statements which are based on certain assumptions and describe future plans, strategies, and expectations of the Company. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, those factors set forth in Item 1A – Risk Factors of the Company’s Annual Report on Form 10-K, as filed with the U.S. Securities and Exchange Commission, as supplemented by the Company’s subsequent filings with the U.S. Securities and Exchange Commission, and changes in interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area, changes in accounting principles and guidelines and the impact of the health emergencies and natural disasters on the Company, its employees and operations, and its customers. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Investor Contact:William S. BurnsSenior Executive Vice President & CFO201.816.4474; [email protected]

Media Contact:Shannan Weeks MikeWorldWide732.299.7890; [email protected]

CONNECTONE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION

Interest-bearing deposits with banks

Less: Allowance for credit losses – loans

Investment in restricted stock, at cost

Bank premises and equipment, net

Accrued interest receivable

Right of use operating lease assets

Subordinated debentures, net

Operating lease liabilities

COMMITMENTS AND CONTINGENCIES

Additional paid-in capital

Accumulated other comprehensive loss

Total stockholders’ equity

Total liabilities and stockholders’ equity

CONNECTONE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except for per share data)

Interest and fees on loans

Interest and dividends on investment securities:

Interest on federal funds sold and other short-term investments

Provision for credit losses

Net interest income after provision for credit losses

Deposit, loan and other income

Defined benefit pension plan curtailment gain

Employee retention tax credit

Income on bank owned life insurance

Net gains on sale of loans held-for-sale

Net (losses) gains on equity securities

Salaries and employee benefits

Professional and consulting

Information technology and communications

Restructuring and exit charges

Bank owned life insurance restructuring charge

Amortization of core deposit intangibles

Total noninterest expenses

Income before income tax expense

Net income available to common stockholders

Earnings per common share:

ConnectOne’s management believes that the supplemental financial information, including non-GAAP measures provided below, is useful to investors. The non-GAAP measures should not be viewed as a substitute for financial results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP financial measures presented by other companies.

SUPPLEMENTAL GAAP AND NON-GAAP FINANCIAL MEASURES

Investment and equity securities

Goodwill and other intangible assets

Noninterest-bearing demand

Other interest-bearing deposits

Subordinated debentures (net of debt issuance costs)

Total stockholders’ equity

Quarterly Average Balances

Commercial real estate (including multifamily)

Investment and equity securities

Goodwill and other intangible assets

Noninterest-bearing demand

Other interest-bearing deposits

Subordinated debentures (net of debt issuance costs)

Total stockholders’ equity

(dollars in thousands, except for per share data)

Provision for credit losses

Net interest income after provision for credit losses

Deposit, loan and other income

Defined benefit pension plan curtailment gain

Employee retention tax credit

Income on bank owned life insurance

Net gains on sale of loans held-for-sale

Net (losses) gains on equity securities

Salaries and employee benefits

Professional and consulting

Information technology and communications

Restructuring and exit charges

Bank owned life insurance restructuring charge

Amortization of core deposit intangible

Total noninterest expenses

Income (loss) before income tax expense

Income tax expense (benefit)

Net income (loss) available to common stockholders

Weighted average diluted common shares outstanding

Reconciliation of GAAP Net Income to Operating Net Income:

Restructuring and exit charges

Estimated state tax liability on intercompany dividends

Initial provision for credit losses related to merger

Bank owned life insurance restructuring charge

Amortization of core deposit intangibles

Net losses (gains) on equity securities

Defined benefit pension plan curtailment gain

Employee retention tax credit

Operating net income available to common stockholders

Operating diluted EPS (non-GAAP) (1)

Operating return on avg. assets (non-GAAP) (2)

Pre-provision net operating revenue (“PPNR”) return on avg. assets (non-GAAP) (3)

Operating net income available to common stockholders divided by weighted average diluted shares outstanding.

Operating net income divided by average assets.

Net income before income tax expense, provision for credit losses, merger charges, BOLI restructuring charges, restructuring and exit charges, employee retention tax credit, defined benefit pension plan curtailment gain, amortization of core deposit intangibles and net gains on equity securities divided by average assets.

Average stockholders’ equity

Less: average preferred stock

Less: average intangible assets

Average tangible common equity

Return on avg. common equity (GAAP)

Operating return on avg. common equity (non-GAAP) (4)

Return on avg. tangible common equity (non-GAAP) (5)

Operating return on avg. tangible common equity (non-GAAP) (6)

Total noninterest expenses

Restructuring and exit charges

Bank owned life insurance restructuring charge

Amortization of core deposit intangibles

Operating noninterest expense

Net interest income (tax equivalent basis)

Defined benefit pension plan curtailment gain

Employee retention tax credit

Net losses (gains) on equity securities

Operating efficiency ratio (non-GAAP) (7)

Average interest-earning assets

Net interest income (tax equivalent basis)

Net interest margin (non-GAAP)

Operating net income available to common stockholders divided by average common equity.

Net income available to common stockholders, excluding amortization of intangible assets, divided by average tangible common equity.

Operating net income available to common stockholders, divided by average tangible common equity.

Operating noninterest expense divided by operating revenue.

Capital Ratios and Book Value per Share

(dollars in thousands, except for per share data)

Common equity ratio (GAAP)

Tangible common equity ratio (non-GAAP) (8)

Regulatory capital ratios (Bancorp):

Common equity Tier 1 risk-based ratio

Risk-based Tier 1 capital ratio

Risk-based total capital ratio

Regulatory capital ratios (Bank):

Common equity Tier 1 risk-based ratio

Risk-based Tier 1 capital ratio

Risk-based total capital ratio

Book value per share (GAAP)

Tangible book value per share (non-GAAP) (9)

Net Loan Charge-offs (Recoveries):

Net loan charge-offs (recoveries):

Net loan charge-offs as a % of average loans receivable (annualized)

Allowance for credit losses – loans (“ACL”)

Less: nonaccretable credit marks

ACL excluding nonaccretable credit marks

Nonaccrual loans as a % of loans receivable

Nonperforming assets as a % of total assets

ACL as a % of loans receivable

ACL as a % of nonaccrual loans

Tangible common equity divided by tangible assets.

Tangible common equity divided by common shares outstanding at period-end.

NET INTEREST MARGIN ANALYSIS

For the Three Months Ended

Investment securities (1) (2)

Loans receivable and loans held-for-sale (2) (3) (4)

Federal funds sold and interest-

bearing deposits with banks

Restricted investment in bank stock

Total interest-earning assets

Noninterest-earning assets

Interest-bearing liabilities:

Other interest-bearing deposits

Total interest-bearing deposits

Total interest-bearing liabilities

Noninterest-bearing demand deposits

Total noninterest-bearing liabilities

Total liabilities and stockholders’ equity

Net interest income (tax equivalent basis)

Average balances are calculated on amortized cost.

Interest income is presented on a tax equivalent basis using 21% federal tax rate.

Loans include nonaccrual loans.

Represents difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities and is presented on a tax equivalent basis.

Represents net interest income on a tax equivalent basis divided by average total interest-earning assets.