ConnectOne Reports Q4 Net Interest Income of $107.8 Million
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. 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. Reports CET1 ratio 10.24%. "I'm pleased with ConnectOne's strong fourth quarter performance underscored by robust core earnings and expanding margins," stated Frank Sorrentino, CEO. "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. 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. 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."
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ConnectOne Bancorp Q4 2025 Earnings Call Highlights
- Asset Growth: ConnectOne Bancorp achieved $14 billion in assets and surpassed a $1.4 billion market cap in 2025, demonstrating the strength of its business model and the value of its client-first culture.
- Deposit and Loan Growth: Client deposits increased by approximately 5% on an annualized basis in the second half of 2025, with loan portfolio growth at a similar rate, although offset by higher payoffs due to refinancing.
- Operating Earnings Increase: Operating earnings for the quarter rose 18.6% sequentially, driving quarterly return on assets to 1.24%, which enhances the company's overall financial performance.
- Future Outlook: The company expects net interest margin to rise by 5 basis points in Q1 2026, with loan portfolio growth anticipated in the 3% to 5% range, and management is optimistic about future capital deployment and dividend increases.
ConnectOne Bancorp Declares Quarterly Dividend of $0.18
- Quarterly Dividend Announcement: ConnectOne Bancorp declares a quarterly dividend of $0.18 per share, consistent with previous distributions, indicating the company's stable cash flow and profitability.
- Dividend Yield: The forward yield of 2.59% provides investors with a relatively stable return, enhancing market attractiveness for its stock.
- Payment Schedule: The dividend will be payable on March 2, with a record date of February 13 and an ex-dividend date also on February 13, ensuring shareholders receive their earnings promptly.
- Financial Health Indicators: Based on ConnectOne Bancorp's historical earnings data and dividend scorecard, the company's financial condition appears robust, and its ongoing dividend policy reflects a commitment to shareholders and confidence in future growth.