Stock Analysis & Valuation ConnectOne Bancorp, Inc. (CNOBP)

• Previous Close: $24.56
• Sector Valuation Confidence Level: High

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	27.65	13
Intrinsic value (DCF)	46.00	87
Graham-Dodd Method	23.58	-4
Graham Formula	26.74	9

Strategic Investment Analysis

Company Overview

ConnectOne Bancorp, Inc. (NASDAQ: CNOBP) is a regional bank holding company operating through its subsidiary, ConnectOne Bank, serving small and mid-sized businesses, professionals, and individuals in the Northern New Jersey, New York Metropolitan, and South Florida markets. The company offers a comprehensive suite of commercial and personal banking products, including checking, savings, money market accounts, and a variety of loan products such as commercial mortgages, residential mortgages, and home equity loans. With a network of strategically located branches across New Jersey, New York, and Florida, ConnectOne Bancorp emphasizes relationship-driven banking, leveraging digital solutions like mobile banking and remote deposit capture to enhance customer convenience. As a key player in the regional banking sector, ConnectOne Bancorp focuses on community-oriented financial services, supporting local businesses and fostering economic growth in its markets. The company’s strong presence in high-growth metropolitan areas positions it well to capitalize on regional economic trends.

Investment Summary

ConnectOne Bancorp presents a stable investment opportunity within the regional banking sector, supported by its diversified loan portfolio and strong presence in economically vibrant markets. The company’s net income of $73.8M and diluted EPS of $1.76 reflect solid profitability, while its dividend yield of ~1.31% offers income potential. However, risks include exposure to commercial real estate loans and regional economic fluctuations, compounded by a beta of 1.109, indicating higher volatility than the broader market. Investors should weigh its growth potential in South Florida and New York against competitive pressures and interest rate sensitivity.

Competitive Analysis

ConnectOne Bancorp competes in the crowded regional banking space, differentiating itself through a focus on small and mid-sized businesses and personalized service. Its competitive advantage lies in its deep regional roots, particularly in Northern New Jersey and New York, where it has built long-term client relationships. The bank’s digital offerings, such as mobile banking and remote deposit capture, enhance its appeal to tech-savvy customers. However, its smaller scale compared to national banks limits its ability to compete on pricing and product breadth. The company’s expansion into South Florida provides growth opportunities but also intensifies competition with established regional players like BankUnited and Valley National Bank. ConnectOne’s loan portfolio, heavily weighted toward commercial real estate, exposes it to sector-specific risks, though its conservative underwriting mitigates some concerns. Its capital position remains adequate, with a moderate debt-to-equity ratio, but rising interest rates could pressure net interest margins.

Major Competitors

• Valley National Bancorp (VLY): Valley National Bancorp operates across New Jersey, New York, and Florida, overlapping significantly with ConnectOne’s markets. It boasts a larger branch network and more diversified revenue streams, including wealth management. However, its higher operational complexity may reduce agility compared to ConnectOne’s leaner model.
• BankUnited, Inc. (BKU): BankUnited dominates the Florida market, where ConnectOne is expanding. Its strong commercial lending focus and larger scale give it a cost advantage, but ConnectOne’s niche in community banking allows for more personalized customer relationships.
• Provident Financial Services, Inc. (PFS): A direct New Jersey competitor, Provident Financial offers similar products but with a stronger emphasis on retail banking. Its higher dividend yield may attract income investors, though ConnectOne’s commercial lending focus provides better growth potential.
• Bank OZK (OZK): Bank OZK excels in commercial real estate lending, posing a threat to ConnectOne’s core business. Its national reach and lower funding costs are strengths, but ConnectOne’s local market expertise offers a counterbalance in its primary regions.