ConnectOne Bancorp (NASDAQ:CNOB) Issues Earnings Results, Beats Estimates By $0.10 EPS

ConnectOne Bancorp (NASDAQ:CNOB) announced its earnings results on Thursday. The financial services provider reported $0.95 EPS for the quarter, beating analysts’ consensus estimates of $0.85 by $0.10, Zacks reports. The business had revenue of $127.23 million during the quarter, compared to analysts’ expectations of $125.36 million. ConnectOne Bancorp had a net margin of 20.21% and a return on equity of 11.24%.

Here are the key takeaways from ConnectOne Bancorp’s conference call:

• Core profitability continued to improve: Operating EPS rose 13% sequentially to $0.95, operating return on tangible common equity exceeded 15%, and the efficiency ratio improved to 41% from 43%.
• Balance-sheet restructuring reduces risk: ConnectOne agreed to sell up to $750 million of non-relationship multifamily loans, lowering regulatory CRE concentration to 397%, reducing rent-regulated exposure to approximately 2% of loans, and improving liquidity and capital flexibility.
• Net interest margin and deposits remained favorable: The margin widened for an eighth consecutive quarter to 3.44%, with management forecasting approximately 3.50% in the fourth quarter; average client deposits grew at an 11% annualized rate and non-interest-bearing deposits rose 14%.
• The loan sale carries near-term earnings costs: A $23 million non-operating pretax charge was recognized in the third quarter, with an additional $7 million to $8 million of transaction costs expected in the fourth quarter. The preferred stock dividend reset to approximately 8.8%, and redemption may be delayed for another quarter.
• Credit trends improved broadly: Annualized operating net charge-offs fell to 7 basis points from 56 basis points, non-accrual loans declined to $64 million, and non-performing assets decreased to 0.44% of total assets.

ConnectOne Bancorp Stock Down 0.3%

Shares of NASDAQ:CNOB opened at $32.71 on Friday. The company has a debt-to-equity ratio of 0.61, a quick ratio of 1.04 and a current ratio of 1.04. The company’s fifty day moving average is $31.30 and its two-hundred day moving average is $31.18. ConnectOne Bancorp has a 1-year low of $23.20 and a 1-year high of $34.14. The stock has a market capitalization of $1.65 billion, a price-to-earnings ratio of 10.71 and a beta of 1.08.

ConnectOne Bancorp Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Tuesday, December 1st. Shareholders of record on Friday, November 13th will be issued a dividend of $0.1950 per share. This represents a $0.78 dividend on an annualized basis and a dividend yield of 2.4%. The ex-dividend date of this dividend is Friday, November 13th. ConnectOne Bancorp’s dividend payout ratio is 25.57%.

Key ConnectOne Bancorp News

Here are the key news stories impacting ConnectOne Bancorp this week:

• Positive Sentiment: Balance-sheet restructuring reduces credit risk. ConnectOne completed a multifamily loan sale that lowered commercial real estate concentration below regulatory thresholds and reduced rent-stabilized loan exposure to approximately 2% of assets. The transaction removes a major risk overhang and improves the company’s credit profile. ConnectOne: Further Upside After Resolving Rent-Stabilized Loans
• Positive Sentiment: Third-quarter earnings exceeded expectations. CNOB reported adjusted earnings of $0.95 per share, above the $0.85 consensus estimate and up from $0.70 a year earlier. Net interest margin expanded to 3.44%, while loans and average client deposits each grew at an 11% sequential annualized rate. Operating performance also strengthened, with the pre-provision net revenue ratio above 2% and operating return on tangible common equity above 15%. ConnectOne Bancorp Q3 Earnings
• Positive Sentiment: Quarterly dividend maintained. The company declared a $0.195 per-share dividend, or $0.78 annualized, payable December 1 to shareholders of record November 13. The indicated yield is approximately 2.4%, supporting income-oriented investors. ConnectOne Dividend Announcement
• Neutral Sentiment: Reported results contain mixed signals. Although EPS and the primary revenue figure of $127.23 million exceeded estimates, net income available to common shareholders fell to $29.9 million from $40.2 million in the second quarter and $39.5 million a year earlier. Separate coverage cited operating revenue of $102.8 million, adding uncertainty around how revenue performance is being measured. ConnectOne Third-Quarter Results

Analyst Ratings Changes

Several brokerages have issued reports on CNOB. Weiss Ratings reaffirmed a “buy (b)” rating on shares of ConnectOne Bancorp in a report on Monday, August 17th. Raymond James Financial reaffirmed a “market perform” rating on shares of ConnectOne Bancorp in a research note on Wednesday, July 1st. Finally, Piper Sandler boosted their price objective on shares of ConnectOne Bancorp from $34.00 to $38.00 and gave the stock an “overweight” rating in a research note on Friday, June 26th. Four research analysts have rated the stock with a Buy rating and one has assigned a Hold rating to the company. According to MarketBeat, ConnectOne Bancorp currently has a consensus rating of “Moderate Buy” and an average target price of $35.00.

About ConnectOne Bancorp

ConnectOne Bancorp, Inc is the parent company of ConnectOne Bank, a full-service commercial bank headquartered in Englewood Cliffs, New Jersey. The bank primarily serves businesses, entrepreneurs, professionals, nonprofit organizations and individuals in the New York metropolitan area and surrounding communities.

ConnectOne Bank provides a range of commercial and personal banking products, including checking and savings accounts, certificates of deposit, commercial and industrial loans, commercial real estate financing, construction loans, residential mortgage loans and consumer lending.