ConnectOne Bank CEO talks completed merger, macro uncertainty

Yahoo

11-06-2025

ConnectOne Bancorp (CNOB) has completed its merger with the First of Long Island Corp., expanding its total assets under management to $14 billion.
ConnectOne Bank Founder and CEO Frank Sorrentino speaks with Josh Lipton about his company's expansion, new product offerings in the New York Metro market, banking and M&A regulations under the Trump administration, and how the regional bank is viewing the commercial real estate market and the odds of an economic soft landing.
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ConnectOne Bancorp is merging with the First of Long Island Corporation. The move coming against the backdrop of an M&A landscape that's starting to show some signs of life. Joining me now is Frank Sorrentino, founder and CEO of ConnectOne Bank. Frank, it is good to see you. Uh, let's talk about this deal, uh, Frank, because you did complete the merger. Walk us through what it's going to mean for ConnectOne and your clients, Frank.
Well, for, you know, for all of us, uh, it means we're now a $14 billion asset bank in the greater New York metro market with a phenomenal footprint across all of Northern New Jersey, the five boroughs, out on the Long Island, and into the Hudson Valley. Uh, and having a larger balance sheet allows us to do more for our clients. It allows us to invest more in technology for products and services for them. It allows us to do bigger loan products and more diversified types of, uh, product offerings for all of our clients within that market. As you know, the New York metro market is probably the largest in the United States. It represents some, somewhere around 10 or 11% of our GDP. So, uh, being bigger and, uh, being able to stand up against all the other institutions that are here is, I think, uh, a, a good thing for us to be doing.
More broadly, Frank, you know, there was this expectation with Trump back in the White House that, uh, listen, you were going to see cut regulation, cut the red tape, it was just going to get easier to get deals done. Is that what you've been sort of seeing and experiencing here?
Look, I, I didn't think it was difficult to get this deal done. Uh, we've had a really terrific relationship with our regulators going forward. Uh, yes, I do think we are going to see a change in the regulatory framework. Um, you know, I don't like to think about things in terms of too, you know, big regulation, small regulation, too much, too little. I like to think about appropriate sized regulation for institutions based on their size, their complexity, what they need to do. I do think that there will be a focus on permitting more M&A activity as the banking system changes. And I think that's smart regulation, and I think that's what we really need to focus more on. Smarter regulation to allow our economy to function. Banks are the, you know, they're the oil, the grease that, you know, makes the economy run. And so having a smartly regulated industry is probably a good place to go to.
Frank, let's talk about the macro as well here. You know, Bloomberg did a report, I'm sure you saw this, that City is set to put aside hundreds of millions of dollars more than it did last quarter to account for potential losses on loans. So, a sign there that maybe big banks were preparing for what they see as a weaker, just weakening economic health. And I'm just curious what you see, Frank.
You know, I've been hearing for probably 18 to 24 months that we are either in a recession, going to a recession, thinking about a recession. Soft landing, not so soft landing, whatever. From my perspective, we've been in a pretty robust economy for the last, I don't know how many years. And as I speak to our clients today on the ground, and it really doesn't matter what businesses they're in. Generally, things are pretty good. Now, again, I'm speaking about the New York Metro market, but people are feeling pretty good. Employment is strong, and that is the biggest, you know, variable in all of this. People have jobs, they have money, their, you know, their earnings are going up, their wages are going up. Uh, people are feeling good, they spend money, and the economy does well. Are there, you know, sort of some bubbles here and there? Things that we should be concerned about? Yes. Have there been some issues relative to whether it's liberation day, the tariffs, uh, you know, some apprehension about where the economy is going? Sure. But overall, our clients I think are doing quite well in this economy, and it's showing up in all the numbers. It's showing up in the employment numbers. It's showing up in consumer spending. It's showing up in credit trends. Even though some of those institutions you mentioned may have been putting away reserves, the credit trends have been quite benign.
What about the commercial real estate market, Frank? I'm curious what you're seeing there in the tri-state area.
So I love when people ask me about commercial real estate, so that's like walking into Baskin-Robbins and asking for an ice cream. Like, what part of it are we talking about? Are we talking about the multi-family portfolios, the office portfolios, retail portfolios? They all have a different, you know, sort of flavor to them. The office market, which is what's been really in focus, uh, past COVID, from because of remote work, has really made a stunning comeback. There's an enormous amount of activity within the office space. We're seeing buildings trade, we're seeing credit loosening up. We're seeing office buildings in central business, uh, New York City, getting record rents. So, definitely a change in the trend there. There are still some troubled assets, there are still some places where there are pockets of weakness, uh, but overall that is healing itself well. And the multi-family sector, right now the market's pretty tight. And so a lot of those buildings are still trading at, at, you know, really, uh, high valuations. The one place where there's a little bit of weakness is in the rent regulated portfolios, and hopefully there'll be some changes in that 2019 regulation to loosen up some of the challenges that are there.
Yeah, Frank, Frank, I got to tell you, on that train I take every morning from New Jersey to New York City, it is jam-packed, Frank. People are back in the office. Thank you, sir. It's always great to have you on the show.
You're welcome. Great to be with you.
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