ConnectOne Bancorp(US:CNOB)2025-04-24 14:00Financial Data and Key Metrics Changes - ConnectOne reported a nearly 20% year-over-year increase in net income available to common shareholders [6] - The net interest margin expanded to 2.93, slightly higher than expected, with expectations to reach 3% in the second quarter [13][14] - Tangible book value per share increased by about 4% since the announcement of the merger with First of Long Island, reaching $24.16 [7][16] Business Line Data and Key Metrics Changes - The loan portfolio contracted slightly due to elevated payoff activity in the commercial real estate segment, but the loan pipeline remains robust with healthy demand [7][14] - Average demand deposits increased sequentially despite a decline in demand deposit balances since year-end [8] Market Data and Key Metrics Changes - Credit quality trends remain stable, with nonaccrual loans declining by 13% this quarter [17] - Thirty to eighty-nine day delinquencies increased slightly but remain low at 0.18% of total loans [17] Company Strategy and Development Direction - The company is focused on finalizing the merger with First of Long Island, which is expected to close in the second quarter, enhancing its scale and market reach [10][11] - ConnectOne aims to leverage its South Florida footprint to support First of Long Island clients, indicating a strategy of expanding into new markets [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating market uncertainties and believes the impact of tariff policies on clients will be limited [12] - The company anticipates loan growth of at least 2.5% for the second quarter and mid to high single-digit growth for the year [14][48] Other Important Information - The company is experiencing strong early synergies from the merger integration planning efforts [11] - All capital ratios have increased, with the tangible common equity ratio standing at 9.73% and the bank leverage ratio at 11.67% [15] Q&A Session Summary Question: Economic uncertainty and customer behavior changes - Management noted that while there are some changes in specific industries, overall client behavior remains stable with no dramatic shifts observed [22][24] Question: Update on cost savings from the merger - Management confirmed that they expect to achieve approximately $24 million in total cost savings, although the timeline for full realization may extend beyond initial projections [28][30] Question: Credit quality and repricing opportunities - Credit quality remains strong with low delinquencies, and there are ongoing opportunities for loan repricing, with about $1 billion of loans already repriced [36][37] Question: Loan growth expectations - Management indicated a strong loan pipeline and expects loan growth to be in the mid to high single digits for the year, with a robust pipeline supporting this outlook [48][52] Question: Regulatory conversations regarding the merger - Management reported positive relationships with regulators and noted that the process remains standard without significant changes in focus [58][60] Question: Expense growth expectations - Management anticipates a 4% to 5% growth in expenses on a standalone basis, with some cost savings already reflected in the current quarter [66][68] Question: Closing timing for the merger and capital raise - The merger is expected to close by the end of the second quarter, and the company plans to proceed with a subordinated debt raise prior to closing [78][81]