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Mar 31, 2021
ConnectOne Bancorp Q1 2021 Earnings Report
Reported strong first quarter results driven by margin expansion and industry-leading operating efficiency.
Key Takeaways
ConnectOne Bancorp reported a net income of $33.0 million for Q1 2021, a significant increase compared to $25.6 million in Q4 2020 and $6.0 million in Q1 2020. The diluted earnings per share were $0.82, up from $0.64 in the previous quarter and $0.15 in the same quarter last year. The increase in net income and diluted earnings per share from the fourth quarter of 2020 was primarily due to a $5.8 million recapture of credit loss reserves in the current quarter reflecting the impact of the improved economic outlook on the current expected credit losses (“CECL”) accounting estimate, compared with a $5.0 million provision in the fourth quarter of 2020.
Net income for the first quarter of 2021 was $33.0 million, compared to $6.0 million for the first quarter of 2020.
Diluted earnings per share were $0.82 for the first quarter of 2021, compared to $0.15 for the first quarter of 2020.
Fully taxable equivalent net interest income for the first quarter of 2021 was $61.6 million, an increase of 10.4% from the first quarter of 2020.
The Board of Directors declared a cash dividend on its common stock of $0.11 per share, a 22.2% increase from the prior common dividend.
Forward Guidance
ConnectOne expects net loan growth to accelerate in the quarters ahead and anticipates a significant uptick in client activity as vaccines continue to work through their core footprint.
Positive Outlook
- Strong demand for loans, bolstered by an improving operating environment in the New York Metropolitan area.
- Existing loan pipeline is at the highest level in the Company’s history.
- Anticipating a significant uptick in client activity as vaccines continue to work through their core footprint.
- Investments in infrastructure, communication tools and digital channels have been instrumental in success.
- Gaining momentum building out SBA leading platform.
Challenges Ahead
- First quarter loan growth was offset by paydowns, resulting from an excessive amount of liquidity in the marketplace.
- Overall interest-earning assets decreased.
- Yield on loans and investment securities is declining.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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