ConnectOne Q2 Earnings: Net Income Surges to $40.2M, NIM Hits 3.42%, but Nonperformers Spike on NYC Multifamily Charge-Off
CNOB sits 50% above its 52-week low of $22.065.
Summary
ConnectOne Bancorp reported Q2 2026 net income of $40.2 million ($0.80/share), driven by a widening net interest margin and strong loan and deposit growth. Nonperforming assets jumped to $79.7 million after a $13.8 million charge-off on NYC multifamily loans, partially offset by reserve releases.
Key Events · Earnings and Guidance · CNOB
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Q2 Earnings Beat
Net income available to common stockholders reached $40.2M ($0.80 diluted EPS), up from $36.3M in Q1 2026 and a loss of $(21.8)M in Q2 2025. Operating diluted EPS was $0.84.
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Net Interest Margin Expansion
NIM widened to 3.42%, the 7th consecutive quarterly increase, driven by loan repricing and a 2.2% rise in average interest-earning assets.
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Loan and Deposit Growth
Loans grew 5% annualized sequentially to $11.9B; core deposits grew 8% annualized. Total deposits reached $11.7B.
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Asset Quality Deterioration
Nonperforming assets rose to $79.7M (0.55% of assets) from $41.6M, primarily due to a $13.8M charge-off on NYC rent-stabilized multifamily loans. $9.2M in related qualitative reserves were released.
Analysis · CNOB · Finance
ConnectOne delivered strong operating momentum — net income nearly doubled year-over-year, the net interest margin expanded for the seventh straight quarter, and tangible book value grew. However, a $13.8 million charge-off on a previously disclosed group of New York City rent-stabilized multifamily loans pushed nonperforming assets to 0.55% of total assets, a notable deterioration from 0.29% last quarter. The bank released $9.2 million in related qualitative reserves, softening the capital hit, but the credit event underscores lingering risk in that portfolio. The results are a mixed bag: core profitability is accelerating, but asset quality bears watching.
At the time of this filing, CNOB was trading at $33.00 on NASDAQ in the Finance sector, with a market capitalization of approximately $1.7B. The 52-week trading range was $22.07 to $34.14. This filing was assessed with neutral market sentiment and an importance score of 8 out of 10.