ConnectOne Agrees to Sell $750 Million Multifamily Loan Pool to a Single Buyer

ConnectOne Bancorp announced a definitive agreement to sell $750 million of performing nonrelationship multifamily loans to a single buyer, cutting its rent-regulated loan exposure to 2% of total loans. The Motley Fool covered the announcement from the bank's third-quarter 2026 earnings call, held on October 22, 2026.

ConnectOne's $750 Million Multifamily Loan Sale

ConnectOne said the pool consists of performing nonrelationship multifamily loans and that the buyer is a single, unnamed counterparty. The bank described the transaction as a way to improve balance sheet liquidity and reduce exposure to rent-regulated commercial real estate assets, and said it allows resources to go toward core relationship clients.

"We entered into a contractual agreement to sell $750 million pool of performing non relationship multifamily loans to a single buyer at a price north of 90%," said William S. Burns, senior executive vice president and chief financial officer.

The bank did not state in the report how the price is to be paid or when the sale is expected to close. ConnectOne reported pre-provision net revenue above 2% of average assets and an operating efficiency ratio of 41%. "Operating PPNR crossed 2% of average assets and operating return on tangible common equity exceeded 15%," said Frank S. Sorrentino, chairman and chief executive officer.

ConnectOne's Balance Sheet After First of Long Island

ConnectOne Bank is a regional commercial bank serving Northern New Jersey, New York Metro and South Florida, according to akta.pro company records. The same records show the bank completed its merger with The First of Long Island Corporation on June 2, 2025, creating a combined entity with approximately $14 billion in total assets and $11 billion in deposits. ConnectOne reported total assets of nearly $15 billion as of Q1 2026 following completion of that merger.

ConnectOne's Path to the Loan Sale

ConnectOne reported third-quarter 2026 net income of $29.9 million, down from $40.2 million in the second quarter, with diluted earnings per share of $0.59 versus $0.80, Stock Titan reported. In the second quarter, the bank posted net income available to common stockholders of $40.2 million and diluted earnings per share of $0.80, up from $36.3 million in the first quarter, according to Quiver Quantitative. ConnectOne announced in July 2026 that it was deploying nCino's embedded AI capabilities and building custom AI agents across its commercial lending operations, Globalfintechseries reported.

ConnectOne's Loan Repricing Outlook

More than $1 billion in loans repriced year to date at higher rates, and management projects further net interest margin expansion as additional loans reach their repricing dates over the next five quarters, the bank said. Burns said that of the loan balances that came up for repricing, 20% paid off while the remainder stayed on the books.