ConnectOne Bancorp (NASDAQ:CNOB) kicked off 2026 with a quarterly report that surpassed analyst expectations on both earnings and revenue, driven by a widening net interest margin and steady loan growth. The market responded favorably, with shares showing a pre-market gain of roughly 0.8%, though the stock has seen a slight pullback over the past week.
Earnings Beat Estimates
For the first quarter of 2026, ConnectOne Bancorp reported operating earnings per share (EPS) of $0.79, which came in ahead of the analyst consensus estimate of $0.7387. On a GAAP basis, diluted EPS was $0.72. The company also reported net interest income of $110.0 million on a fully taxable equivalent basis.
Revenue, measured as net interest income plus noninterest income, reached approximately $115.6 million for the quarter. This figure exceeded the analyst revenue estimate of $113.76 million. The outperformance was supported by a 12-basis-point expansion in the net interest margin to 3.39% and a 10% annualized increase in both loans and deposits.
Key Operational Highlights
The first-quarter results reflected the ongoing benefits from the merger with First of Long Island Corporation (FLIC), which closed in June 2025. Several metrics underscored the improving trajectory:
- Net Interest Margin: Expanded by 12 basis points sequentially to 3.39%, driven by higher portfolio loan yields and a 12-basis-point decline in average deposit costs.
- Loan Growth: Loans receivable grew to $11.7 billion, up from $11.5 billion at the end of 2025, representing an annualized growth rate of approximately 10%.
- Asset Quality: Nonperforming assets as a percentage of total assets improved to 0.29%, down from 0.33% in the prior quarter. Net charge-offs (excluding purchased credit deteriorated loans) fell to just 8 basis points annualized.
- Tangible Book Value: Tangible book value per share increased by 1.7% to $23.93, supported by retained earnings.
- Dividend Increase: The board declared an 8.3% increase in the quarterly common dividend, raising it to $0.195 per share.
The company also noted that it generated an additional $1.1 million in SBA loan sale gains in April, signaling continued momentum in noninterest income.
Outlook and Analyst Estimates
Management expressed confidence that the positive trends will continue. Chairman and CEO Frank Sorrentino stated that accelerating portfolio loan yields are expected to support further net interest margin expansion in the coming quarters, even without additional rate cuts. He also highlighted that the company is roughly one quarter away from returning to its pre-merger tangible book value per share of $24.16.
For the upcoming second quarter of 2026, analysts currently project EPS of $0.7925 on revenue of $118.1 million. For the full fiscal year 2026, the consensus calls for EPS of $3.26 on sales of $478.1 million. The company’s encouraging comments on margin expansion and expense control suggest it is tracking well against these targets.
Market Reaction
The stock’s pre-market gain of approximately 0.8% suggests a moderately positive reception to the earnings beat and the improved forward-looking commentary. However, the stock has seen a slight decline of about 1.4% over the past week. This mixed short-term price action may reflect some lingering caution regarding a $63.8 million pool of interrelated multifamily credits that went past due during the quarter, though management characterized the overall credit quality as solid and noted that criticized and classified loan metrics remain at historically low levels.
Dive Deeper into the Numbers
For a complete view of ConnectOne Bancorp’s historical earnings performance and to track future projections against analyst estimates, visit the company’s dedicated earnings page and analyst ratings page:
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research or consult with a qualified financial advisor before making investment decisions.