ConnectOne: 3 Key Takeaways for Long-Term Investors
Loan repricing tailwinds and margin expansion position the bank to grow earnings without taking on additional credit risk.
ConnectOne (CNOB) announced on its third-quarter 2026 earnings call that it has entered into a definitive agreement to sell $750 million of multifamily loans, improving its balance sheet liquidity and reducing exposure to rent-regulated commercial real estate assets. The strategic pivot allows the bank to focus resources on its core relationship clients.
Three key takeaways for long-term investors include the bank's ability to generate operating PPNR above 2% of average assets and operating return on tangible common equity exceeding 15%. Additionally, over $1 billion in loans have been repriced at higher rates, widening the bank's net interest margin, and management projects further margin expansion as additional loans reach their repricing dates over the next five quarters.
Lastly, ConnectOne enters the final quarter of 2026 with operational momentum across its client franchise, focusing on pricing discipline and mid-single-digit loan growth while maintaining a sub-100% loan-to-deposit ratio.
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