Listen to this articleTHE BLUEPRINT:
- FDIC approves $284M ConnectOne–First of Long Island merger
- Combined bank to hold $14B in assets, $11B in deposits and loans
- Merger strengthens ConnectOne’s Long Island footprint
- Deal expected to close around June 1, pending final approvals
The parent companies of ConnectOne Bank and The First National Bank of Long Island received approval from the Federal Deposit Insurance Corp. to proceed with merger plans.
The transaction was valued at $284 million when it was announced last year. The May 6 clearance paves the way for a closing expected on or about June 1, the Englewood Cliffs and Melville, N.Y., parties announced Tuesday.
According to the parties, the merger will establish the ConnectOne brand as one of the top five community banks on Long Island, in terms of deposit market share.
Announced by ConnectOne Bancorp Inc. and The First Long Island Corp. last September, Long Island will merge into and with ConnectOne. According to the parties, the combination will boost ConnectOne to approximately $14 billion in total assets, $11 billion in deposits and $11 billion in loans.
“We are pleased to have received FDIC approval to combine two highly complementary, client focused banks,” said Frank Sorrentino III, chairman and CEO, ConnectOne. “By leveraging ConnectOne’s commercial expertise and modern infrastructure, we are well-positioned to serve First of Long Island’s distinguished client base.”
First National CEO Chris Becker said both teams were prepared to execute a seamless integration. “I am thrilled to partner with an organization that values client service in the same way we do, and I look forward to ensuring a smooth transition for our clients,” he said.
Growing presence
Headquartered in Mellville, N.Y., the Long Island financial institution operates 40 branches in the New York-metro area. According to the banks, Nassau and Suffolk counties account for more than 90% of its deposits.
Becker will become vice chairman of ConnectOne upon closing. Additionally, two current independent members of the target’s board will become ConnectOne directors.
Sorrentino previously called the combination “a natural fit.” He cited the banks’ shared “strong credit culture, a long-term track record of strong financial performance, and a deep commitment to putting clients at the center of our businesses.”
Announcing the deal in the fall, Sorrentino also noted it would enhance franchise value, solidify brand presence in New York City and accelerate ConnectOne’s Long Island Growth strategy. That institution opened its first outpost in the area in 2018. Its branch network also extends to Florida.
Highlights of the Long Island deal include:
Creates a premier middle-market bank focused on the greater New York metro area
Fosters significant scale, with a market capitalization of over $1.2 billion (based on ConnectOne’s closing stock price as of Sept. 4, 2024)
Transaction allows ConnectOne to surpass the $10 billion threshold with significant scale
Materially enhances Long Island brand presence, with 30% of pro forma deposit franchise set in Nassau and Suffolk counties
Low execution risk, due to ConnectOne’s self-described history as an experienced acquirer and integrator, as well as its extensive due diligence
The merger is expected to be approximately 36% accretive to ConnectOne’s earnings per share in 2025 as adjusted for an illustrative full phase-in of cost savings. Last fall, ConnectOne said it planned to raise approximately $100 million in subordinated debt prior as part of the transaction prior to closing. It planned to downstream the net proceeds in the form of equity capital to ConnectOne Bank.
Keefe, Bruyette & Woods Inc. and Stifel served as financial advisor to ConnectOne. Windels Marx Lane & Mittendorf LLP counseled that company. Piper Sandler & Co served as financial advisor to First of Long Island, while Luse Gorman PC served as legal counsel.
The boards of both banks previously, and unanimously, approved the deal. Closing is pending approvals or waivers from the New Jersey Department of Banking and Insurance as well as the Federal Reserve Bank of New York.
