8-K: ConnectOne Bancorp's Merger with The First of Long Island Corporation Receives Final Regulatory Approval; FLIC Releases Audited and Unaudited Financial Statements

ConnectOne Bancorp is set to merge with The First of Long Island Corporation (FLIC) after receiving all required regulatory approvals, with the merger expected to close around June 1, 2025, and FLIC has released its historical audited and interim unaudited financial statements.

Summary

• ConnectOne Bancorp, Inc. and The First of Long Island Corporation (FLIC) are proceeding with their merger, expected to close on or about June 1, 2025.
• All required bank regulatory approvals have been received, including approval from the New Jersey Department of Banking and Insurance on May 12, 2025.
• FLIC's historical audited consolidated financial statements for 2022, 2023, and 2024, along with interim unaudited statements for the three months ended March 31, 2024 and 2025, are included in the report.
• FLIC's net income was $17.1 million in 2024, $26.2 million in 2023, and $46.9 million in 2022.
• FLIC's total assets were $4.12 billion as of December 31, 2024, and $4.24 billion as of December 31, 2023.
• FLIC's total deposits were $3.26 billion as of December 31, 2024, and $3.27 billion as of December 31, 2023.
• FLIC's loans outstanding were $3.22 billion as of December 31, 2024, and $3.25 billion as of December 31, 2023.
• For the three months ended March 31, 2025, FLIC's net income was $3.8 million, compared to $4.4 million for the same period in 2024.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the merger is progressing, the financial results of FLIC show a concerning downward trend in net income and assets.

Positives

• The merger between ConnectOne Bancorp and The First of Long Island Corporation has received all required regulatory approvals, clearing the path for completion.
• FLIC's investment securities available-for-sale portfolio includes a significant portion of securities issued by U.S. government and government-sponsored agencies, considered high investment grade.
• FLIC maintains a well-diversified loan portfolio across various sectors, including commercial and industrial, commercial mortgages, and residential mortgages.

Negatives

• FLIC's net income has decreased significantly from $46.9 million in 2022 to $17.1 million in 2024.
• FLIC's total assets have decreased from $4.24 billion in 2023 to $4.12 billion in 2024.
• FLIC's net income for the three months ended March 31, 2025, was lower than the same period in 2024 ($3.8 million vs $4.4 million).
• FLIC's past due loans increased $7.2 million from year-end 2024, primarily due to one multifamily loan with an amortized cost of $6.8 million.

Risks

• Credit risk within FLIC's loan portfolio stems from changes in borrowers' financial conditions, credit concentrations, collateral values, economic conditions, rent regulation, and environmental contamination.
• FLIC's commercial loans to small and medium-sized businesses involve a higher degree of risk due to their shorter operating histories and potential lack of financial sophistication.
• A lawsuit has been filed against the Corporation and the Bank claiming monetary damages of approximately $11.1 million related to suspicious wire transfer activity.

Future Outlook

The merger between ConnectOne Bancorp and The First of Long Island Corporation is expected to close in the second quarter of 2025.

Industry Context

The banking industry is currently experiencing a wave of consolidation as institutions seek to increase scale, improve efficiency, and expand their market presence. This merger aligns with that trend, potentially creating a stronger regional bank.

Comparison to Industry Standards

• Comparing FLIC's financial metrics to regional bank peers like New York Community Bancorp (NYCB) and Valley National Bancorp (VLY) reveals some differences.
• For example, NYCB has faced challenges related to commercial real estate exposure, while VLY has been focused on integrating recent acquisitions.
• FLIC's profitability metrics, such as return on assets (ROA) and return on equity (ROE), should be benchmarked against these peers to assess its relative performance.
• FLIC's loan portfolio composition, particularly its exposure to rent-stabilized multifamily properties, should be compared to industry standards and regulatory guidance.
• The allowance for credit losses (ACL) ratio should be assessed against peers to determine if it adequately covers potential loan losses.

Legal Proceedings

• A lawsuit has been filed against the Corporation and the Bank claiming monetary damages of approximately $11.1 million related to suspicious wire transfer activity.

Stakeholder Impact

• Shareholders of The First of Long Island Corporation will receive 0.5175 shares of ConnectOne common stock for each share of FLIC common stock.
• Employees of both companies may experience changes as a result of the merger, including potential restructuring.
• Customers of both banks will be integrated into the combined entity, potentially affecting service offerings and branch locations.

Next Steps

• Complete the remaining steps to finalize the merger between ConnectOne Bancorp and The First of Long Island Corporation.
• Integrate the operations of the two banks following the merger.

Key Dates

Keywords

merger, ConnectOne Bancorp, The First of Long Island Corporation, FLIC, financial statements, regulatory approvals, bank, banking