ConnectOne Bancorp Reports $21.8 Million Net Loss Due to Merger-Related Costs

ConnectOne Bancorp, Inc. reported a net loss of $21.8 million for the three months ended June 30, 2025, compared to a profit of $17.5 million in the same period last year. This resulted in a diluted loss per share of $0.52, down from earnings of $0.46 per share in the prior year. The significant decline in profitability was attributed to a $36.1 million increase in noninterest expenses, primarily due to merger-related costs from the acquisition of The First of Long Island Corporation (FLIC), and a $33.2 million increase in the provision for credit losses. In contrast, net interest income rose by $17.4 million, reflecting the impact of the merger.

For the six months ending June 30, 2025, the company reported a net loss of $3.1 million, a stark contrast to the $33.2 million net income recorded in the same period of 2024. The diluted loss per share for this period was $0.08, compared to earnings of $0.86 in the previous year. The financial results were similarly affected by increased noninterest expenses and provisions for credit losses, which were significantly influenced by the FLIC merger.

The merger with FLIC, completed on June 1, 2025, was a pivotal strategic development for ConnectOne Bancorp. This acquisition added approximately $3.9 billion in assets and expanded the company's footprint with 36 new branch offices in Long Island and New York City. The merger also resulted in a substantial increase in the loan portfolio, which grew to $11.2 billion, a 34.9% increase from the end of 2024. The company’s total deposits also surged to $11.3 billion, up 44.2% from the previous period, driven by a significant rise in both interest-bearing and noninterest-bearing deposits.

Operationally, ConnectOne Bancorp saw a notable increase in its customer base and engagement metrics following the merger. The total number of loans increased significantly, with commercial real estate loans making up a substantial portion of the portfolio. The company reported a provision for credit losses of $39.2 million for the first half of 2025, reflecting the initial provision related to the acquisition and ongoing credit quality assessments. The allowance for credit losses rose to $156.2 million, up from $82.7 million at the end of 2024, indicating a proactive approach to managing potential credit risks.

Looking ahead, ConnectOne Bancorp aims to leverage the synergies from the FLIC merger to enhance its market position and operational efficiency. The company anticipates that the integration will lead to improved financial performance in the coming quarters, despite the immediate challenges posed by increased expenses and credit provisions. Management remains focused on maintaining a strong capital position, with regulatory capital ratios well above the minimum requirements, positioning the company for future growth and stability.