ConnectOne Bancorp (CNOB) Stock Cheers Q3 Results Despite Loan Sale Hit

ConnectOne Bancorp just released Q3 2026 results and the stock immediately jumped 6.3% to US$32.82. That is a strong one day vote of confidence, yet the story is more complicated than a simple relief rally.

The headline is a clean profit picture on the surface and a pressure point in the background. Reported basic earnings per share came in at US$0.59 on revenue of US$97.8m, while a one time loan sale charge tied to balance sheet cleanup weighed on the gap between operating strength and stated earnings. Traders are cheering the move to shed non core multifamily loans, but the real question is whether this balance sheet strain is being priced with enough care.

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Q3 2026 Earnings Summary

• Revenue (Q3 2026 vs. Q3 2025): US$97.8m vs. US$115.9m (lower quarterly top line year on year)
• Net Income, excl. extra items (Q3 2026 vs. Q3 2025): US$29.9m vs. US$39.4m (lower quarterly profit year on year)
• Basic EPS (Q3 2026 vs. Q3 2025): US$0.59 vs. US$0.79 (earnings per share down on the prior comparable period)
• Net Interest Margin, or NIM (Q3 2026 vs. Q3 2025): 3.44% vs. 3.11% (spread on interest earning assets higher year on year)

Earnings tell you how Q3 landed for ConnectOne Bancorp, but cash flows show what the franchise is really generating underneath one quarter's loan sale charge and revenue dip.

When you focus on ConnectOne Bancorp's cash generation rather than just reported profit, the stock could be a hefty 49% undervalued.

ConnectOne Bull Case: Repricing And Efficiency On Trial

For the upbeat view on ConnectOne Bancorp to hold, loan resets and tech driven cost control need to show up clearly in the latest quarter.

"ConnectOne Bancorp is working through a large pipeline of adjustable rate and fixed loans that are repricing at higher yields, with about US$700m already repriced in 2026 at an average 255 basis point increase and similar volumes expected ahead. This can keep supporting net interest margin and earnings power as more of the book resets."

The quarter shows this thesis in motion. More than US$1b has repriced year to date and NIM reached 3.44%, with operating EPS at US$0.95 and ROA at 1.35%. Operating efficiency improved to 41% and pre provision earnings of 2.01% of assets back up the claim that repricing and expense controls are feeding into stronger underlying returns.

ConnectOne Bear Case: CRE, Funding And Scale Risks Tested

Worries around rent regulated multifamily, expensive funding and scale driven compliance need evidence in the current print before they dominate the story.

"The earlier concern about higher credit risk from commercial real estate exposure remains live. The recent charge off of US$13.8m on a single New York City rent stabilized multifamily relationship shows how concentrated exposures can quickly lift non performing assets and charge offs, which would pressure credit costs, net margins and earnings if similar issues emerge elsewhere in the portfolio."

Q3 points in the other direction for now. Net charge offs excluding purchased credit deteriorated loans and the sale were 7 bps, nonperforming loans were US$64m with an NPA ratio of 0.44%, and provision expense declined to US$5m. The held for sale reclassification created a US$23m pre tax hit, yet management chose to offload up to US$750m of non relationship multifamily loans, which directly reduces the very concentration that previously caused the US$13.8m charge off.

Not everyone reads the same price the same way. → See the higher figure this Narrative lands on, and how it gets there.

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