CEO of ConnectOne May Foster More Business Deals in Warming Mergers and Acquisitions Environment
ConnectOne Bank, a New Jersey-based regional bank, is set to expand its footprint on Long Island with the acquisition of The First of Long Island for $284 million. The transaction, expected to close in the first half of 2025, will push ConnectOne's assets above the $10 billion threshold and instantly grow its exposure across Long Island with First of Long Island's 40-branch footprint.
The combined lender will have approximately $14 billion in assets, a substantial increase from ConnectOne's current portfolio. This acquisition is part of ConnectOne's strategic growth plan, which has seen the bank make acquisitions in the past to bolster its growth. The First of Long Island's market was one they had coveted, and the acquisition will make ConnectOne a more significant regional banking player.
First of Long Island has a substantial residential portfolio, which will help reduce ConnectOne's overall commercial real estate exposure. The $3.3 billion in deposits from First of Long Island will be brought into ConnectOne, providing a boost to its deposit base.
In the second quarter, ConnectOne had $2.5 billion in multifamily loans and a delinquency ratio of 1.06%, placing it among the top 14 U.S. banks with such loan concentrations. The bank's purchase of First of Long Island is not expected to significantly impact this ratio.
ConnectOne has been working to reduce its nonrelationship loans this year to improve its loan-to-deposit ratio. As a result, the acquisition will help lower ConnectOne's loan-to-deposit ratio, currently at 107.81%.
The bank's CEO, Frank Sorrentino III, maintains a positive outlook on commercial real estate. Despite the recent increase in the bank's provision for credit losses, which was $3.8 million for the third quarter, up from $2.5 million in Q2 and $1.5 million for the third quarter of 2023, Sorrentino expects a more favorable regulatory climate under the Trump administration for M&A in banking.
However, the actual M&A favorability depends heavily on multiple factors, including regulatory policies, interest rate environment, economic conditions, and market confidence, which evolve over time and may differ significantly between administrations.
ConnectOne has a strong underwriting team and takes a disciplined approach to lending. Notably, ConnectOne has been steadily adding to its loan-loss reserve. The bank doesn't view the loss of Durbin Amendment income as significant due to minimal consumer business.
Sorrentino anticipates a "more common sense approach" to regulation and enforcement in the banking industry. ConnectOne is open to considering future M&A transactions if they present a strategic fit and offer more products and services to clients.
[1] Searches conducted in August 2025 did not yield direct results comparing the M&A environment for regional banks under the Trump administration versus the Biden administration. However, the Trump administration generally pursued deregulation in the banking sector, which could have facilitated M&A activity among regional banks. The Biden administration has emphasized stronger regulatory oversight and consumer protections, which might lead to a more cautious environment for bank M&A. The actual M&A favorability depends heavily on multiple factors, including regulatory policies, interest rate environment, economic conditions, and market confidence, which evolve over time and may differ significantly between the two administrations.
- This acquisition, involving ConnectOne Bank and The First of Long Island, aligns with ConnectOne's strategic growth plan in business, which has previously involved making acquisitions to bolster growth.
- With the added assets from The First of Long Island, ConnectOne Bank's portfolio will grow significantly, increasing its finance base, and making it a more substantial regional banking player.
