ConnectOne - Don't Bank On The First National Deal

2025-05-21 17:54:07 ET

Summary

• ConnectOne Bancorp's acquisition of The First of Long Island offers a short-term earnings boost and scale, but doesn't fundamentally change its slow growth or high CRE exposure.
• The deal was attractively priced and should be executed smoothly, but long-term strategic benefits are limited, and loan growth outlook remains modest.
• Risks include CRE credit performance, integration execution, and economic headwinds that could hinder projected margin and loan growth improvements.
• Given these factors, I see CNOB as fairly valued and rate it a hold, expecting continued discount to peers due to slow growth and CRE concentration.

ConnectOne Bancorp ( CNOB ) is a New Jersey-based regional bank serving individuals and small to medium-sized businesses in New Jersey and Long Island. Main product lines include day to day personal and business banking, retirement accounts, commercial loans and commercial real-estate lending....

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