|ConnectOne CEO Frank Sorrentino III|
Updated from 10:37 a.m. ET, with afternoon market action. NEW YORK ( TheStreet) -- ConnectOne Bancorp ( CNOB), fresh off the first successful initial public offering for a U.S. bank since 2011, reported strong first-quarter results on Friday. Shares were up 2% in afternoon trading, to $29.52. ConnectOne Bancorp of Englewood Cliffs, N.J., formerly known as North Jersey Community Bank, completed its IPO on Feb. 15, selling 1,600,000 share at a price of $28.00 a share, for $44.8 million. Net proceeds were $41.5 million. The company reported first-quarter net income of $2.4 million, or 58 cents a share, increasing from $1.7 million, or 76 cents a share, in the first quarter of 2012. ConnectOne Bancorp had $1.0 billion in total assets as of March 31, with eight ConnectOne Bank branches in Bergen, Hudson, and Monmouth Counties, in New Jersey.
First-quarter net interest income was $9.4 million, increasing from $7.7 million a year earlier, reflecting the company's balance sheet expansion. Average loans receivable grew 30% year-over-year, to $873.6 million in the first quarter. Average deposits were up 23% from a year earlier, to $607.8 million in the first quarter. ConnectOne CEO Frank Sorrentino, in a phone interview today, says the bank has "always been predominantly a commercial lender. We do some residential, but it is not a significant portion of the portfolio." "We have seen a resurgence in construction lending, along with some commercial and industrial loan growth as companies look to expand their businesses," Sorrentino says. "We are also seeing a resurgence of certain types of commercial real estate loans, with owner operators looking to own their own buildings." The company's net interest margin -- the difference between the average yield on loans and securities and the average cost for deposits and borrowings -- contracted to 4.01% in the first quarter from 4.07% in the fourth quarter and 4.22% in the first quarter of 2012. The narrowing the margin was in line with the industry in the prolonged low-rate environment, however, a margin above 4% is very impressive for a community bank under current market conditions. According to the most recent available data from the Federal Deposit Insurance Corp., the aggregate fourth-quarter net interest margin for all U.S. banks was 3.32%.