ConnectOne Bancorp, Inc. Q1 FY2025 earnings call

• Net income available to common shareholders up nearly 20% YOY. Net interest margin expanded. Tangible book value per share up ~4% since merger with First of Long Island announced. Credit quality stable. Lending portfolio contracted slightly due to commercial real estate payoffs but loan pipeline robust. Deposits: As-of demand deposits declined but average demand deposits increased sequentially. Merger with First of Long Island on track to close in Q2, with proactive engagement with First of Long Island clients and integration planning underway with early synergies. - Net interest margin at 2.93%, expense growth muted due to merger cost saves. Loan portfolio growth below guidance but large and diversified pipeline exists. Expect 2.5% loan growth in Q2. Net interest margin expected to reach 3% in Q2. Loan-to-deposit ratio below 106% at quarter-end. Capital ratios increased. Tangible book value per share up 4% to $24.16. Commercial real estate concentration down to 420% from 460% YOY. Charge-offs and provisioning low. Nonaccrual loans declined 13% QoQ. Net interest margin outlook: 5bps improvement per quarter independent of Fed cuts, plus 5bps per 25bps Fed cut post-merger.

No detailed breakdown of product segments' financial performance and revenue contribution % provided in the transcript.

• Net interest margin expected to reach 3% in Q2. - Projected return on assets exceeding 1.2% and return on tangible common equity ~15% upon full phase-in of cost saves. - Expect 2.5% loan growth in Q2, and ~5% loan growth for the year. - Merger with First of Long Island expected to close in latter part of Q2.

• Uncertainties related to tariff policy impact on economic growth and timing of rate cuts. - Regulatory approval process for merger could have delays.

Q: Economic uncertainty and customer behavior A: Frank said most issues are contained, some small changes in certain industries but not dramatic.

Q: First of Long Island merger cost saves and levers in worse macro A: William said cost saves ~$24M, margin accretion from deal could add 5-15bps, projections include return objectives.

Q: Credit quality and repricing A: Frank said credit quality steady, delinquencies low; William said ~$1B of loans repriced since Feb, ~$1B more to reprice by 2026.

Q: Loan growth and regulatory conversation A: Frank said loan pipeline strong, expecting 2.5% Q2 growth; Frank and William talked about regulatory relationship being good.

Q: Expenses, loan yields, deal close, capital A: William said expenses growing 4-5% standalone, loan pipeline rate 7.25%, deal expected to close in Q2, sub-debt planned.