ConnectOne to expand in NY with $284M deal
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Dive Brief:
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Englewood Cliffs, New Jersey-based ConnectOne Bancorp will merge with Melville, New York-based The First of Long Island Corp. in an all-stock transaction valued at $284 million, the companies announced Thursday.
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Following the deal, the combined company will operate under the ConnectOne brand with roughly $14 billion in total assets, $11 billion in total deposits and $11 billion in total loans.
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The transaction — expected to close in mid-2025 — has been approved by the boards of both companies but is pending shareholder and regulatory approvals.
Dive Insight:
The deal aims to create a premier middle-market bank focusing on the greater New York metro area, according to the press release. ConnectOne has already built a customer base in Long Island since opening its first branch there in 2018.
“Strategically, this is a compelling transaction which enhances our franchise value, solidifies ConnectOne’s presence in the New York City market and accelerates our Long Island growth strategy,” ConnectOne CEO Frank Sorrentino III said. “Adding over $3 billion in deposits, the combination will establish ConnectOne as one of the top 5 banks on Long Island, in terms of deposit market share.”
ConnectOne plans to raise roughly $100 million in subordinated debt before the deal closes, the net proceeds of which will be passed on as equity capital to ConnectOne Bank.
Upon the deal's completion, Chris Becker, CEO of The First National Bank of Long Island, will become vice chairman of ConnectOne’s board, while two independent members of First of Long Island’s board will join ConnectOne’s board.
“Together, we leverage the strengths, expertise, and resources of both companies to offer our clients the muscle and support of a $14 billion institution with a people-first culture backed by modern infrastructure,” Becker said in a statement.
The roughly $4.2 billion-asset First of Long Island has 40 branches in the New York metro area, with nearly 92% of its deposits in Nassau or Suffolk counties. It counts nearly $3.3 billion in loans and $3.4 billion in deposits.
The ConnectOne merger will create a company with a market capitalization exceeding $1.2 billion, with 30% of its deposit franchise in Nassau and Suffolk counties. The deal is projected to boost ConnectOne's earnings per share by roughly 36% in 2025 on an adjusted basis.