Key Highlights for Investors

• Net Interest Margin Widens by 12 Basis Points: The company achieved a notable sequential expansion in its net interest margin, confirming a positive trend in core earnings.
• 10% Annualized Loan Growth: Loan growth accelerated at a double-digit annualized pace, underscoring strong demand and effective lending strategies.
• Operating Performance Accelerates: The quarter saw an overall improvement in operating metrics, with tangible book value per share increasing.
• Common Dividend Increased by 8.3%: The Board of Directors declared a higher quarterly cash dividend on common stock, up 8.3% from the previous level, reflecting confidence in sustainable earnings.
• Asset Quality Remained Solid: Credit metrics remained strong, with a decrease in the nonaccrual loan ratio, lower net charge-offs, and a stable level of criticized/classified assets.
• Share Repurchases Continue: ConnectOne repurchased 90,000 shares during the quarter, with 551,118 shares still authorized under the current repurchase program.

Detailed Financial Performance

Income Statement Highlights (Q1 2026)

• Net Interest Income: \$108.8 million
• Total Interest Income: \$124.8 million
• Provision for Credit Losses: \$5.2 million, up from \$2.3 million in Q4 2025 and \$3.5 million in Q1 2025. The increase reflects portfolio growth, charges for specific loans, and revised macroeconomic forecasts.
• Noninterest Income: \$3.3 million in deposit, loan, and other income, with \$427,000 in net gains on sale of loans and \$135,000 in net gains on equity securities. Noninterest income is gaining momentum, with \$1.1 million in additional gains already realized in April 2026.
• Noninterest Expense: Marketing/advertising costs totaled \$926,000, and merger/restructuring charges were \$2.1 million as the company continues to execute on strategic priorities.
• Net Income: \$37.8 million
• Net Income Available to Common Shareholders: \$36.3 million after preferred dividends of \$1.5 million

Balance Sheet Highlights (as of March 31, 2026)

• Total Assets: \$11.45 billion
• Investment Securities: \$1.20 billion
• Loans Held for Investment: \$8.20 billion
• Equity Securities: \$19.4 million
• Deposits: Noninterest-bearing deposits were \$2.39 billion
• Borrowings: \$827.5 million
• Subordinated Debentures: \$202 million
• Total Stockholders’ Equity: \$1.59 billion, with tangible book value per share increasing

Dividend Declarations

The Board declared a quarterly cash dividend of \$0.195 per share on common stock, representing an 8.3% increase (up \$0.015 per share). A cash dividend was also declared on outstanding preferred stock. This higher dividend payout signals the Board’s confidence in ConnectOne’s sustained earnings power and balance sheet strength.

Share Repurchase Program

ConnectOne repurchased 90,000 shares of common stock at an average price of \$26.21 during the first quarter of 2026. As of quarter-end, 551,118 shares remain authorized for repurchase under the current Board-approved program, which may be executed via open market purchases, privately negotiated transactions, or trading plans in accordance with SEC Rule 10b5-1. The program is discretionary and can be modified or suspended at any time.

Asset Quality and Credit Metrics

• Net charge-offs (excluding PCD loans) declined to just 8 basis points annualized, a recent low.
• Nonaccrual loan ratio decreased and criticized/classified asset metrics remained at historically low levels.
• Provision for credit losses increased to \$5.2 million in Q1 2026 from \$2.3 million in Q4 2025, reflecting net portfolio growth, specific charge-offs, and macroeconomic conditions.
• 30-59 day delinquencies increased due to one isolated credit relationship, but overall credit quality remains strong.

Non-GAAP Measures and Forward-looking Guidance

• The company continues to emphasize non-GAAP metrics, including tangible book value per share, which increased this quarter.
• Management expects continued strong performance, with a robust pipeline for SBA loan sales and strategic focus on long-term value creation.

“Looking ahead to the remainder of the year, we’re executing against our strategic priorities and remain well-positioned to deliver long-term value for our shareholders in 2026 and beyond.” – Chairman & CEO Frank Sorrentino III

What Investors and Shareholders Should Watch

• Dividend Increase: A higher dividend is a direct return to shareholders and a signal of management’s confidence.
• Share Repurchases: Continued buybacks may provide support for the share price and enhance shareholder value.
• Net Interest Margin Expansion: Suggests improved profitability, potentially driving future earnings growth.
• Accelerated Loan Growth: Indicates favorable demand and effective business development, though it also requires careful monitoring of credit risk.
• Solid Asset Quality: Diminished credit risk helps support valuation multiples and investor confidence.
• Merger/Restructuring Charges: May be a sign of ongoing strategic initiatives or integration activities, which could impact near-term earnings volatility.
• Price-Sensitive Developments: Dividend hikes, share repurchases, margin expansion, and loan growth are all potentially price-moving news items.

Investor Contacts

• William S. Burns – Senior Executive Vice President & CFO
  Phone: 201.816.4474
  Email: [email protected]
• More information at: https://www.connectonebank.com

Disclaimer

This article contains a summary and interpretation of ConnectOne Bancorp, Inc.’s first quarter 2026 results, based on public filings. The article contains forward-looking statements and non-GAAP financial measures, which are subject to risks and uncertainties. Actual results may differ materially from those indicated. Investors are urged to review the company’s full SEC filings and consult their financial advisor before making any investment decisions. The author claims no responsibility for investment actions taken based on this summary.