Connectone Bancorp, Inc. · NASDAQ:CNOB
Connectone Bancorp — Investor Presentation (June 2020)
34 slides from Connectone Bancorp's investor presentation, Jun 4, 2020
Slide 1: ConnectOne Bancorp, Inc. Investor Presentation
& ConnectOne Bancorp, Inc. CNOB Investor _ _
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, bu
Slide 3: About ConnectOne Bancorp, Inc.
About ConnectOne Bancorp, Inc. ConnectOne Bancorp, Inc. (NASDAQ: CNOB) is a high Strong pre-provision net revenue ("PPNR’), low dividend performing commercial bank serving the New York & New payout ratio (17% 2019), and controlled growth strategy in Jersey metropolitan market volatile market conditi
Slide 4: Experienced Leadership
Experienced Leadership Management Team with Over 20 Years of Experience On Average Frank Sorrentino III Chairman, President and CEO Years of Experience Founder of CNOB 15 Years Industry Prior Experience ™ President of FSS Construction Christopher Ewing Executive VP and Chief Operations Officer Years
Slide 5: COVID-19 Impact Update
COVID-19 Impact Update Organization and People ™@ 90% of our staff are working from home @ Retail offices pivoted to a leaner contactless environment @ Temporarily closed certain branch locations and directing branch clients to drive-thru windows and online banking services @ In the spirit of showin
Slide 6: Franchise Overview and Investment Highlights
Franchise Overview and Investment Highlights DL SHH HH HH H H«
Slide 7: Franchise Overview and Investment Highlights
| Franchise Overview and Investment Highlights 1 Robust Profitability and Capital Generation Solid Capital Base with Significant Cushion Above Well Capitalized Levels 3 Stable Core Net Interest Margin 4) Quality Deposit Franchise with Branch-Light Distribution Model 5 Best-In-Class Efficiency 6] Str
Slide 8: Robust Profitability and Capital Generation
| @ Robust Profitability and Capital Generation Pre-Provision Net Revenue! / Average Assets Tangible Book Value per Share Growth eal $16.06 sun | | GR 1.91% 1.91% e _ 1.83% 182% 1.84% 1.83% % 162% y 154% 154% 80% Tat 1.46% 2015Y — 2016Y 2017 2018Y = 2019Y 1020 20ISY 2016Y 2017Y 2018 2019Y 10420 —e-C
Slide 9: Solid Capital Base with Significant Cushion Above Well Capitalized Levels
@ Solid Capital Base with Significant Cushion Above Well Capitalized Levels ConnectOne Bancorp, Inc. Common Equity Tier 1 Resa Tier 1 Risk-Based Ratio Tier 1 Leverage Ratio Total Risk-Based Capital Ratio 13.15% 12.96% 4.46% 975% — 9.95% 9.69 9.86% — 10.08% 9.71% 5% 920% ail 2018Y 2019Y 1020 2018Y 20
Slide 10: Stable Core Net Interest Margin
© Stable Core Net Interest Margin Stable Core NIM Well Positioned for Current Rate Environment ields and Costs 451% ane% 5.08 % asa —— 412% 4.26% 417% 4.29% 449% 1.62% 1.29% 1.37 % 0.75% 0.84% 0.89% - © 2 2015Y 2016Y 2017Y 2018 2019 1020 —e-Loans —e-Interest-Earning Assets + —e~Cost of Funds Net Int
Slide 11: Quality Deposit Franchise with Branch-Light Distribution Model
4) Quality Deposit Franchise with Branch-Light Distribution Model ($ in millions) Average Deposit Balances! 6% $5,579 $4,637 $3,470 7 = L oO Stated Depoas OM)” eon ty’ 2016Y 2017Y 2018Y 2019Y 1020 CNOB $107.3 $ 128.6 $140.6 $141.1 $153.8 ‘$183.6 Peers? m4 83.5 85.7 89.6 99.9 106.7 Historical Funding
Slide 12: Best-In-Class Efficiency
or Locations utilize 5 ] Best-In-Class Efficiency codimelerintocennes “business hubs” supporting clients beyond Historical Operating Performance geographic footprint 41.0 “41-4 Ao 4 on 41.4 au 1.9 | 6 q g 4 6 9 $18.2M Investments in digital Assets Per banking and FinTech Eel oyed solutions allow | R
Slide 13: Strong Liquidity Profile
© Strong Liquidity Profile ($ in millions) a ED D GD @] @® $620 $487 $428 g 423, $506 | ii dl dls I 2015Y 2016Y + 2017Y = 2018Y §=— 2019Y 1 ‘= Cash and Cash Equivalents m= Total Liquid Assets’ Historical FHLB Borrowing Capacity $1,000 $1,000 ga43 $829 2015Y 2016Y = 2017Y-2018Y | 2019-1020 mmm Borrow
Slide 14: High Quality Asset Composition and Reserves
| @ High Quality Asset Composition and Reserves Additional Detail Opted to maintain Incurred Loss Method under the CARES Act and stand ready to implement at any point in time 1Q20 provision ($16.0M pre-tax) considers COVID-19 estimated impacts Current Expected Credit Losses ("CECL”) Included in comm
Slide 15: Strong Underwriting Culture
@ Strong Underwriting Culture Comprehensive Underw @ Disciplined LTV and DSC standards = Loan origination process supported by specialized teams of credit analysts High-quality direct commercial lending platform with little or no reliance on participants or wholesale purchases = Prudent growth Under
Slide 16: Diversified and Granular Loan Portfolio
© Diversified and Granular Loan Portfolio ($ in millions) Select Loan Portfolio Details as of 31 Segment Details sm ‘% of Total ec-2019 Underwriting Standards Multifamily $621 12% 30% 21% Project feasibility Developers background and expertise Stict lan to cost advances Rental fallback Plan and cost
Slide 17: Diversified and Granular Loan Portfolio
© Diversified and Granular Loan Portfolio ($ in millions) Loan Composition as of 31-Mar-2020 Residential Real Estate Commercial 20% Multifamily 29% @ Lending within geographic footprint — NY/NJ metro market economically strong and diverse @ Average loan size: ~$1.1M @ No single borrower exposure gre
Slide 18: Additional Detail on COVID-19 Loan Exposure
© Additional Detail on COVID-19 Loan Exposure ($ in millions) Potential Exposures Loan Deferral Activity Directly Exposed Industries! Deferrals by Loan Type” Deferals ‘ams ame adie S%Total Approved or Booked Under Review on a eer ee my es cae Fi Fi A coments (sw AK MnO] SOM TT ta oes sm meat 2 $2 st
Slide 19: Strategy & Vision
| Strategy & Vision ConnectOne believes it remains well-positioned to execute: ® Achieving Prudent Growth @ Increasing & Expanding Commercial Client Relationships @ Enhancing Our Presence in the New York & New Jersey Metro Market = Further Improving Best-in-Class Efficiency § Sustaining Robust Profi
Slide 20: ConnectOne Bancorp
oxe) ConnectOne Bancorp
Slide 21: Appendix
Appendix OHHH HHHHH
Slide 22: Overview of Results - Q1 2020 Income Statement
Overview of Results - Q1 2020 Income Statement ($ in thousands, except per share data) Margin expansion driven by additional | Income Statement Forthe quarters ended, 2020 _Dec.31,2019 Mar. 34,2019 purchase accounting accretion ‘rerst income S767 $6308 —«$ 65200 Core margin contraction by 6 bps driv
Slide 23: Overview of Results - Q1 2020 Balance Sheet
Overview of Results - Q1 2020 Balance Sheet ($ in thousands, except per share data) Forthe periods ended, ® Point-to-point annualized after adjusting for Mar. 34,2020 _Dec.31,2019 Mar. 31,2019 the acquisition was in the high single digits Assets sequentially Total Cash and Securities s7azgi0 $817,35
Slide 24: History of ConnectOne Bancorp, Inc.
History of ConnectOne Bancorp, Inc. JANUARY 2005 OCTOBER 2017 Founded as North Announced strategic partnership with nCino fefeay Commun JULY 2014 JULY 2015 JANUARY 2019 Merged with Greater Hudson Bank Bank by Frank ‘Merged with Union Sorrentino Il & local ic i CCenter National Bank; businesses and c
Slide 25: Disciplined Expansion Through M&A with Demonstrated Expertise as a Skilled Acquiror
Disciplined Expansion Through M&A with Demonstrated Expertise as a Skilled Acquiror Completed transaction on January 2, 2019 and integrated systems less than 30 days after closing 1 Value-add transaction; many benefits realized — Loan-to-deposit ratio improved — CRE concentration reduced — Net inter
Slide 26: Interest Coverage & Double Leverage
ieceeeel Interest Coverage & Double Levera in mil if For the Years Ended, ‘For the Quarter Ended, t.oe02018 _st.mee017 St tee2018 _st-n62018 Sata 2020 Ely mesinet nBankSubsday sso sew SaaS 303s conacted Ey ssi sees SSeS 7H sos porcine intrest Conrage cari: lea rom Cantino Cerin Eos anes seo seas mis
Slide 27: Schedule of Parent Company Debt
Schedule of Parent Company Debt Outstanding a Optional Date Redemption Total Debt Coupon Name Issued Maturity Date Outstanding Structure [Subsidiary Trust Preferred Center Bancorp Statutory Trust Il 12/19/2003 1123/2034 1123/2009! $5,000 3.month USD LIBOR + 285 bps Trust Preferred Total $5,000 [Subo
Slide 28: Credit Ratings Profile
Credit Ratings Profile Kroll Ratings Rating Outlook ‘Senior Unsecured Debt BBB Stable ‘Subordinated Debt’ BBB- Stable ‘Short-Term Debt 3 NIA Deposit BBB+ Stable ‘Senior Unsecured Debt BBB+ Stable ‘Subordinated Debt BBB Stable ‘Short-Term Deposit k2 NIA Short-Term Debt K2 NIA
Slide 29: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures ($ in thousands, except per share data) ‘As of or For the Quarters Ended, ‘As of or For the Years Ended December 34, 34-Mar-2019 34-Dec-2019 31-Mar-2020 ___34-Deo-2015 34-Dec-2016 31-Dec-2017 31-Dec-2018 31-Dec-2019 Reconciliation of GAAP Earnings to Eami
Slide 30: Reconciliation of GAAP and Non-GAAP Measures, Continued
Reconciliation of GAAP and Non-GAAP Measures, Continued in thousands) For the Quarter Ended, ‘As of of For the Years Ended December 31, 31-Mar-2020 34-Dec-2015 31-Dec-2016 31-Dec-2017 31-Dec-2018 31-Dec-2019 Net Loan Charge-Off (Recoveries) Detail Chargeoffs, $127 $538 $39573 $239 $18011 $5076 Recov
Slide 31: Reconciliation of GAAP and Non-GAAP Measures, Continued
Reconciliation of GAAP and Non-GAAP Measures, ontinued in thousands) For the Quarter Ended, ‘As of or For the Years Ended December 31, 34-Mar-2020 34-Dec-2015 31-Dec-2016 31-Dec-2017 31-Dec-2018 31-Dec-2019 ‘Allowance for Loan Losses Allowance for Loan Losses ("ALLL") $ 54,169 $26572 $25,744 $31,748
Slide 32: Reconciliation of GAAP and Non-GAAP Measures, Continued
Reconciliation of GAAP and Non-GAAP Measures, Continued in thousands) ‘As of or For the Quarters Ended, ‘As of or For the Years Ended December 34, ‘34-Mar-2019 34-Dec-2019 31-Mar-2020 ___34-Deo-2015 34-Dec-2016 31-Dec-2017 31-Dec-2018 31-Dec-2019 Efficiency Measures ‘otal Noninterest Expenses $2062
Slide 33: Reconciliation of GAAP and Non-GAAP Measures, Continued
Reconciliation of GAAP and Non-GAAP Measures, ontinued in thousands) ‘As of or For the Quarters Ended, 34-Mar-2019 31-Dec-2019 31-Mar-2020 Return on Equity Measures Net Income $11,635 $20,783 $6,030 Amortization of Core Deposit Intangible -After-Tax 255 238 461 Net Income Adjusted for Intangible Exp
Slide 34: Reconciliation of GAAP and Non-GAAP Measures, Continued
Reconciliation of GAAP and Non-GAAP Measures, Continued ‘Tangible common equity divided by common shares outstanding at period-end. ? Operating noninterest expense divided by operating revenue. ® Eamings available to common stockholders excluding amortization of intangible assets divided by average
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