ConnectOne Bancorp, Inc. reported net income of $29.9 million for the third quarter of 2026, a decrease from the $40.2 million recorded in the prior quarter. The company attributed this decline to a $23.0 million pretax charge related to a balance sheet restructuring and repositioning. Excluding this one-time item, operating net income was $47.9 million, with diluted earnings per share reaching $0.95.
Key financial metrics for the third quarter included an operating return on average tangible common equity of 15.2% and a pre-provision net operating revenue (Operating PPNR) ratio of 2.01% of average assets. The net interest margin expanded to 3.44% from 3.42% in the second quarter, driven by a 5 basis-point increase in the yield on interest-earning assets and a 17 basis-point decrease in the average cost of deposits.
In a strategic move to reduce concentrations in commercial real estate (CRE) and New York City rent-stabilized properties, ConnectOne entered into an agreement to sell a pool of up to approximately $750 million in unpaid principal balance of non-relationship multifamily loans. The transaction is expected to close in late October 2026. At September 30, 2026, the pool was transferred to held-for-sale at a value of $678.9 million, resulting in the $23.0 million pretax loss. Following the sale, the company projects its regulatory CRE concentration ratio will fall to approximately 397% from 439% as of June 30, 2026, and exposure to NYC rent-stabilized assets will drop to about 2% of total loans.
ConnectOne also reported that total loans and average client deposits both achieved sequential annualized growth of 11%. The company’s balance sheet strength was further highlighted by a loan-to-deposit ratio of 97.1% as of September 30, 2026. On the dividend front, the Board of Directors declared a cash dividend of $0.195 per share on common stock, payable on December 1, 2026, to shareholders of record on November 13, 2026.
