Q3 2024 ConnectOne Bancorp Inc Earnings Call Transcript
Key Points
- ConnectOne Bancorp Inc (CNOB) announced a merger with First of Long Island Corporation, expected to close in the first half of 2025, which is anticipated to create meaningful synergies and enhance growth opportunities.
- The merger will increase ConnectOne's assets to over $14 billion and improve its market cap to $1.3 billion, placing it in a higher valuation peer group.
- The transaction is expected to improve the balance sheet mix, expand market reach, and enhance ConnectOne's presence on Long Island.
- ConnectOne Bancorp Inc (CNOB) has been successful in growing core deposits, with average client deposits increasing by approximately $130 million or 8% on an annualized basis.
- The company is well-positioned to benefit from lower short-term rates, with a projected net interest margin improvement due to the Fed's interest rate cuts.
- Loan growth is expected to be muted in the near term, with potential for only slight increases or decreases over the next two quarters.
- The net interest margin compressed slightly during the third quarter on a GAAP basis, although it was up slightly on a core basis.
- There was an uptick in criticized and classified loans, which increased to 2.2% of total loans, largely due to loan modifications.
- ConnectOne Bancorp Inc (CNOB) faces competitive pressures that could impact deposit betas in a decreasing rate environment.
- The company anticipates a modest increase in core noninterest income and expenses in the fourth quarter and into early 2025, which could impact profitability.
Hello, and welcome to ConnectOne Bancorp Third Quarter 2024 earnings call. (Operator Instructions)
At this time, it is now my pleasure to turn the call over to Siya Vansia, Chief Brand and Innovation Officer. You may begin.
Good morning, and welcome to today's conference call to review ConnectOne's results for the third quarter of 2024 and to update you on recent developments. On today's conference call will be Frank Sorrentino, Chairman and Chief Executive Officer; and Bill Burns, Senior Executive Vice President and Chief Financial Officer.
I'd also like to caution you that we may make forward-looking statements during today's conference call that are subject to risks and uncertainties. Factors that may cause actual results to differ materially from expectations are detailed in our SEC filings. The forward-looking statements included in this conference call are only made as of the date of the call, and the company is not obligated to publicly update or revise them.
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