Merger Creates Major Community Bank on Long Island

The Long Island’s first national bank, founded in Glenhead, has now merged under the Connectone brand, continuing the trend towards small bank consolidations.

On Sunday, the parent company of Connectone Bank and Long Island’s first national bank finalized their merger, which has now resulted in one of the region’s largest community banks by deposit market share. This refers to the percentage of deposits held by federally insured banks in a specific area.

After the merger, the combined entity operates over 60 branches across New York, New Jersey, and southeastern Florida.

One spokesperson mentioned, “Long Island is a vibrant market, and having a community bank that understands the pace of business is crucial. Banks with a solid history of delivering these services really benefit the community.”

The merger plan was rolled out in September. Shareholders from Long Island’s first national bank will be compensated with 0.5175 shares of Connectone common stock for every share of FLIC they own, according to company announcements. The transaction is estimated at about $284 million.

Post-merger, Connectone’s total assets are roughly $14 billion, with around $11 billion each in deposits and loans.

Customers of the former First National Bank, which is based in Melville with most branches on Long Island, will now have access to enhanced digital services, like opening accounts online and managing cloud-based loans. Regarding staffing, around 20 positions may be cut from the original 246 employees at the First National Bank, although some reductions are linked to retirements and natural attrition, as stated by Sorrentino.

This merger is a response to broader industry challenges, including increasing technology and regulatory costs, and aims to improve overall efficiency, Sorrentino explained. Connectone, founded in 2005 and headquartered in Englewood Cliffs, New Jersey, has been strategically acquiring smaller banks since 2018, as noted by Anoop Rai, a finance professor at Hofstra University.

According to Rai, both Connectone and First National Bank need to implement cost-cutting measures. He noted that their assets and stock performance fall below the national average for similar-sized banks, yet there’s potential for growth stemming from this consolidation.

“They really should focus on cutting costs,” he remarked. “It’s crucial for them to do so.”

From 2022 to 2024, Connectone’s annual net profit plummeted by 41% to $73.8 million, while Long Island’s first national bank saw a staggering 64% drop to $17.1 million.

Before the merger, Connectone had 24 branches, including two on Long Island located in Melville and East Hampton, plus a loan production office in East Hampton. The First National Bank, established in 1927, operated 35 branches on Long Island and two in New York City.

Christopher Becker, who was previously the CEO of the First National Bank, now serves as the vice-chairman of Connectone.