ConnectOne Bancorp (CNOB) Q2 2026: Margin Streak Meets a Costly Charge-Off
As seen on the 24/7 Wall St. homepage on July 23, 2026.
ConnectOne Bancorp posted its seventh straight quarter of net interest margin expansion to 3.42%, but a $13.8 million charge-off in NYC rent-stabilized multifamily loans pushed nonperforming assets to 0.55% of total assets, exposing the real estate stress that regional lenders face even as deposit costs fall and core loans grow 5% annualized.
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ConnectOne Bancorp reported Q2 2026 earnings per share of $0.80, falling just short of the $0.816 consensus estimate by about 2%. Revenue came in at $121.6 million, a hair above the $121.5 million estimate. The slight EPS miss snaps what had been a strong run of beats, including back-to-back outperformances in Q4 2025 and Q1 2026 when the bank earned $0.83 and $0.79 respectively against estimates of $0.73 each time.
The headline story inside the quarter is a $13.8 million charge-off tied to New York City rent-stabilized multifamily loans. That single hit pushed nonperforming assets to 0.55% of total assets, a reminder that regulatory caps on rent increases have left some landlords unable to service debt even as broader credit conditions stabilize. The stress is concentrated enough to watch closely, particularly as NYC's rent-stabilized market continues to work through its post-pandemic adjustment.
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The offsetting positives are real. Net interest margin reached 3.42%, marking the seventh consecutive quarter of expansion as deposit costs fall and the bank continues to reprice its funding base. Core loans grew at a 5% annualized rate, suggesting underlying demand remains intact. The trajectory of the margin expansion streak and whether the multifamily charge-off proves isolated or the start of a broader series are the two key variables heading into the back half of 2026.