ConnectOne Bancorp in Englewood Cliffs, N.J., has agreed to buy The First of Long Island in Melville, N.Y.
The $9.7 billion-asset ConnectOne said in a press release that it will pay $284 million in stock for the $4.2 billion-asset First of Long Island. The deal is expected to close in mid-2025.
As part of the deal, ConnectOne plans to raise about $100 million by issuing subordinated debt before closing. Net proceeds will be downstreamed in the form of equity capital to ConnectOne Bank.
First of Long Island has 40 branches, $3.3 billion of loans and $3.4 billion of deposits.
“This transaction is a natural fit as both ConnectOne and First of Long Island share a 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,” Frank Sorrentino III, ConnectOne’s chairman and CEO, said in the release.
“The all-stock transaction will be accretive to earnings and offers positive pro forma benefits while maintaining a rigorous risk management culture and a strong capital and liquidity position,” he added. “By combining our talents and resources we’re creating a significantly enhanced platform for continued growth while offering our clients an expanded range of services and enhanced capabilities.”
With the deal, ConnectOne will jump over $10 billion of assets, which triggers scrutiny by the Consumer Financial Protection Bureau and a cap on interchange fees under the Durbin Amendment.
The deal is expected to be about 36% accretive to ConnectOne’s 2025 earnings per share, taking into account full phase-in of cost savings. It should take about three years to earn back an estimatd 12% dilution to tangible book value.
Chris Becker, First of Long Island’s CEO, will become ConnectOne’s vice chairman. Two First of Long Island directors will join ConnectOne’s board.
Keefe, Bruyette & Woods and Windels Marx Lane & Mittendorf advised ConnectOne. Piper Sandler and Luse Gorman advised First of Long Island.