Updated 4/25/25
ConnectOne Bancorp (CNOB), a regional bank headquartered in New Jersey, has steadily built a reputation for disciplined management, stable financial performance, and a growing dividend. With a current yield around 3.16% and a payout ratio under 40%, the dividend appears well-supported by earnings and free cash flow. Recent earnings highlighted a 20% quarter-over-quarter jump in net income, improving margins, and positive loan and deposit growth.
The management team, led by Frank Sorrentino, has demonstrated a consistent focus on growth, risk control, and community-based banking. With the stock trading below book value and analysts setting a consensus target above $30, there’s growing sentiment that CNOB is undervalued. The upcoming merger with The First of Long Island Corporation adds a layer of strategic expansion that could strengthen its regional presence further. For those tracking stable financials and shareholder returns, ConnectOne continues to show deliberate progress on multiple fronts.
Recent Events
Lately, ConnectOne has been putting up consistent, if not headline-grabbing, numbers. Its most recent quarterly report showed a 2.6% bump in revenue year-over-year. Net income moved up modestly as well, with diluted earnings per share hitting $1.84. Not fireworks—but steady, which is exactly what you want in a dividend payer.
Margins are holding up impressively. Profit margins came in at nearly 30%, and operating margins are even better—just above 46%. That kind of efficiency is rare in the regional banking space, where costs often balloon and compress returns. What we’re seeing here is a management team that runs a tight, focused operation.
Liquidity remains strong. The bank is sitting on nearly $394 million in cash. With a price-to-book ratio under 0.80, the stock still looks undervalued based on equity. Shares have risen over 24% in the last year, which isn’t speculative euphoria—it’s a sign of the market gradually warming up to a consistent performer.
Key Dividend Metrics
📈 Forward Yield: 3.16%
💵 Annual Dividend: $0.72 per share
🧮 Payout Ratio: 39.13%
📅 Next Ex-Dividend Date: May 15, 2025
🔁 5-Year Average Yield: 2.49%
📆 Last Dividend Date: March 3, 2025
These numbers don’t scream high-yield, but they do speak to a well-managed, sustainable dividend.
Dividend Overview
At 3.16%, CNOB’s current yield is sitting comfortably above its five-year average. That’s not a coincidence. It likely reflects either a dip in the stock price earlier in the cycle or a quiet improvement in the dividend policy itself. Either way, it’s worth a closer look from income-minded investors.
The payout ratio sits just below 40%. That’s conservative, and that’s a good thing. This isn’t a company stretching to maintain its dividend. It’s paying out a reasonable portion of earnings while keeping plenty of capital in reserve. That’s the kind of approach that helps weather tough cycles.
Dividend payouts have held steady at $0.18 per quarter for a while now. It’s not a flashy number, but when it shows up like clockwork every few months, that consistency becomes part of your portfolio’s backbone. The next key date is May 15, when the stock goes ex-dividend. You’ll need to own it by then to lock in the next payout.
Dividend Growth and Safety
Let’s talk about safety first. ConnectOne’s dividend is backed by real earnings and a strong capital position. There’s no red flag here. Earnings are growing—up 5.7% year-over-year. Margins are healthy. And that payout ratio? It leaves more than enough room to continue supporting and even growing the dividend.
This isn’t the kind of stock that doubles its payout every year. But the management team has shown a willingness to increase the dividend when it makes sense, without overcommitting. It’s a slow burn, not a sparkler—and sometimes, that’s exactly what income-focused investors are after.
The balance sheet backs it up. With a book value of nearly $30 per share and the stock trading around $22.80, there’s a cushion. Investors aren’t overpaying here, and the market isn’t pricing in anything wild. That means the dividend you’re getting is grounded in reality—not propped up by inflated expectations.
Short interest is modest, sitting at just under 3% of the float. It’s not a pressing concern, but it’s something to keep on the radar. If sentiment improves and the fundamentals stay strong, any upward movement could get an extra push.
From a dividend standpoint, ConnectOne is doing a lot right. The yield is competitive, the payouts are sustainable, and the company has shown the discipline to grow without overextending. For those building a portfolio focused on income and consistency, this is a name worth watching.
Cash Flow Statement
Over the trailing twelve months, ConnectOne Bancorp generated $60.7 million in operating cash flow, a notable drop from prior years when it peaked above $200 million in 2021. While the decline reflects broader shifts in the banking environment and margin compression, the bank has still managed to maintain positive cash flow from operations, which supports its dividend-paying capacity and core business functions.
On the investing side, the picture has shifted significantly. CNOB moved into positive territory with $55.1 million in inflows—an abrupt change from heavy outflows in previous years, particularly 2021 when investing activities drew down over $1.5 billion. This swing likely signals reduced security purchases or a repositioning of the investment portfolio. Financing cash flow turned negative at -$2.1 million, a reversal from the substantial inflows of the past few years, suggesting the bank has dialed back on debt issuance and is focusing more on balance sheet stability. Despite these shifts, the bank’s cash position ended strong at $356.5 million, reinforcing its liquidity stance.
Analyst Ratings
ConnectOne Bancorp has recently moved up the ladder in the eyes of analysts. One notable upgrade came from a well-followed regional banking analyst who shifted the rating from “Market Perform” to “Outperform” and nudged the price target from $31 to $32. This adjustment wasn’t random—there’s a clear signal that the underlying fundamentals of the bank are gaining strength, especially as it continues to deliver steady earnings and manage risk effectively.
📊 The current consensus 12-month price target for CNOB sits at $30.40. Price estimates from analysts range between $25.25 on the low end and $33.60 on the high, which puts the midpoint comfortably above current levels. With the stock trading around $22.80, that implies a possible upside of about 33%, assuming the company maintains its performance trajectory and market sentiment remains favorable.
🔼 The recent upgrade appears driven by confidence in ConnectOne’s disciplined cost structure, improving credit quality, and an outlook for stable net interest income in the near term. Analysts are seeing it as better positioned than many of its peers in the regional banking space, thanks to its focus on relationship banking and smart capital allocation.
Earnings Report Summary
Solid Quarter with Earnings Momentum
ConnectOne Bancorp closed out the fourth quarter of 2024 with some momentum, posting results that reflected a disciplined and focused approach in what’s been a tricky environment for regional banks. Net income available to common shareholders came in at $18.9 million, which was a meaningful jump from the previous quarter and a nice bump compared to the same period last year. Earnings per share ticked up to $0.49—up from $0.41 in Q3 and slightly higher than the $0.46 posted in the fourth quarter of 2023.
A big part of the story was the improvement in net interest margin. The bank saw nearly a 20 basis-point expansion, bringing it up to 2.86%. That was helped along by better deposit pricing, including a 27 basis-point drop in the average cost of deposits. On top of that, noninterest-bearing demand deposits saw a healthy 3.6% increase, which helped support the margin growth.
Management’s Take and Looking Ahead
CEO Frank Sorrentino had a positive tone in his remarks, pointing to strong operational performance and growth across both the loan book and core deposits. Loans grew 2.0% from the prior quarter, while core deposits rose 3.2%. For a bank of this size, that kind of steady quarter-over-quarter growth signals that the business is moving in the right direction, and doing it in a controlled, risk-aware way.
He also brought attention to the upcoming merger with The First of Long Island Corporation, which is on track to close in the second quarter of 2025. Sorrentino emphasized the strategic value of the deal, especially how it will strengthen ConnectOne’s presence on Long Island and build out its footprint across the broader New York Metro area. From his tone, it’s clear leadership sees this as a significant step in the bank’s next phase of expansion.
Dividend Remains Steady
On the shareholder return side, the bank declared a quarterly dividend of $0.18 per share, payable in early March. That payout level has been consistent, reflecting the company’s commitment to maintaining a reliable income stream for investors while continuing to reinvest in the business.
All in all, ConnectOne wrapped the year with a confident showing. The fundamentals look intact, and leadership seems to be steering with clarity as they head into a period that includes both organic growth and strategic expansion.
Chart Analysis
Price Trend and Moving Averages
Looking at the one-year chart for CNOB, the stock shows a clear rally from the early summer months, gaining solid upward momentum from around June through November. During that stretch, the 50-day moving average (red line) remained comfortably above the 200-day moving average (blue line), signaling a strong intermediate trend. But around February, the 50-day started turning lower and has now crossed below the 200-day average, forming a classic moving average crossover that often points to weakening short-term momentum.
Price action in recent weeks shows some recovery off the lows, but the stock is still trading slightly below both moving averages, which could act as near-term resistance. The bounce off the $21 level toward the end of April looks constructive, but sustained strength will depend on the stock’s ability to regain and hold above the moving averages.
Volume Activity
Volume has remained fairly steady throughout the year, with a few spikes during sharp price movements—especially during October and early February. These bursts tend to correspond with meaningful buying or selling activity, often around earnings or key announcements. Recent volume doesn’t indicate any capitulation or extreme investor behavior, which is a good sign for price stability going forward.
RSI and Momentum
The Relative Strength Index (RSI) at the bottom of the chart shows CNOB dipped near oversold territory in mid-April, brushing the 30 level before bouncing sharply. That kind of movement can indicate that sellers were exhausted and buyers started stepping in. The current RSI value is climbing, nearing the midpoint, which suggests building momentum but not yet in overbought territory. It supports the idea of a rebound phase, though it hasn’t confirmed a full shift in sentiment yet.
Overall, the technical setup shows the stock is trying to stabilize after a few months of declining trend pressure. The moving averages suggest a cautious stance in the near term, while the volume and RSI hint that the worst of the recent selloff may be behind it—at least for now.
Management Team
ConnectOne Bancorp is led by a seasoned management team with deep roots in the banking industry. At the helm is Frank S. Sorrentino III, who serves as Chairman, President, and CEO. Sorrentino has been with the company since its inception and has played a pivotal role in its growth and strategic direction. His leadership style emphasizes community engagement and a client-first approach, which has been instrumental in building the bank’s reputation in the New Jersey and New York markets.
Supporting Sorrentino is William S. Burns, the Senior Executive Vice President and Chief Financial Officer. Burns brings extensive experience in financial management and has been crucial in maintaining the bank’s fiscal health. His oversight ensures that ConnectOne maintains a strong balance sheet and adheres to prudent financial practices.
The management team’s collective experience and commitment to the bank’s core values have fostered a culture of accountability and customer-centric service. Their strategic vision continues to guide ConnectOne through the evolving financial landscape, positioning the bank for sustained growth and stability.
Valuation and Stock Performance
ConnectOne Bancorp’s stock has demonstrated resilience and steady performance over the past year. Trading under the ticker symbol CNOB, the stock has seen a 13.7 percent increase over the last 12 months, outperforming many peers in the regional banking sector. This growth reflects investor confidence in the bank’s strategic initiatives and financial health.
From a valuation standpoint, CNOB is considered attractively priced. With a price-to-earnings ratio of approximately 12.2x, it trades below the peer average, suggesting potential undervaluation. Additionally, the price-to-book ratio stands at 0.7x, indicating that the stock is trading at a discount relative to its book value.
The bank’s consistent dividend payout, currently yielding around 3.26 percent, adds to its appeal for income-focused investors. Analysts have set a consensus price target of 30.13 dollars, implying a potential upside from current levels. This target reflects expectations of continued earnings growth and successful execution of strategic initiatives, including the pending merger with The First of Long Island Corporation.
Risks and Considerations
While ConnectOne Bancorp presents a compelling investment case, it’s essential to consider potential risks. The bank’s operations are concentrated in the New Jersey and New York metropolitan areas, which could expose it to regional economic fluctuations. Economic downturns or adverse local market conditions could impact loan demand and asset quality.
Interest rate volatility remains a significant risk factor. Changes in interest rates can affect net interest margins and, consequently, profitability. While the bank has managed interest rate risks effectively, unexpected rate shifts could pose challenges.
The pending merger with The First of Long Island Corporation introduces integration risks. Mergers can present challenges related to cultural alignment, systems integration, and customer retention. Successful integration will be crucial to realizing the anticipated benefits of the merger.
Regulatory compliance is another area of consideration. The banking industry is subject to stringent regulations, and any changes in the regulatory environment could impact operations. ConnectOne must continue to navigate these complexities to maintain compliance and avoid potential penalties.
Final Thoughts
ConnectOne Bancorp stands out as a well-managed regional bank with a solid track record of performance. The leadership team’s experience and strategic vision have positioned the bank for continued growth. The stock’s attractive valuation and consistent dividend yield make it an appealing option for investors seeking stable returns.
While there are inherent risks associated with regional banking and pending mergers, ConnectOne’s proactive risk management and focus on operational excellence provide a level of assurance. As the bank continues to execute its strategic initiatives, including the integration of The First of Long Island Corporation, it remains poised to deliver value to its stakeholders.