Connectone Bancorp, Inc. · NASDAQ:CNOB
Connectone Bancorp — Keefe, Bruyette & Woods Community Bank Investor Conference 2016
33 slides from Connectone Bancorp's conference presentation, Aug 2, 2016
Slide 1: Keefe, Bruyette & Woods Community Bank Investor Conference
& ConnectOne Bancorp, Inc. Keefe, Bruyette & Woods Community Bank Investor Conference August 2-3, 2016 New York, NY
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: ConnectOne Bancorp, Inc. Overview
ConnectOne Bancorp, Inc. Overview (NASD. “+ Holding company for ConnectOne Bank, headquartered in Englewood Cliffs, NJ “+ Approximately $4.3 billion in total assets, $3.4 billion in total loans and $3.2 billion in total deposits “21 locations across Manhattan, Bergen, Essex, Hudson, Mercer, Monmouth
Slide 4: ConnectOne Milestones
ConnectOne Milestones » '$4 Billion JANUARY 2016 JUNesog, Ne MARCH 2014 = FEBRUARY 2013 » © JUNE 2016 JULY 2015 JULY 2014 See JUNE 2013 FEBRUARY 2013 OCTOBER 2006 enon OCTOBER 2009 & ConnectOne Bancorp
Slide 5: Diluted EPS
Pe nee Tr Diluted EPS* $0.40 $0.38 $0.36 $0.36 $0.36 $0.36 $0.36, $0.35 $0.35 $0.34 $0.34 $0.33 $0.33 $0.32 $0.31 $0.28 $0.24 $0.20 -_ = = - 7 Qi 2015 Q2 2015 Q3 2015 Q4 2015 Qi 2016 Q2 2016 GAAP Diluted EPS ui Core Diluted EPS ‘Excludes non-operating items. See appendix for a reconciliation of GAAP
Slide 6: Tangible Book Value per Share
Tangible Book Value per Share $12.00 Consistently building shareholder value $11.09 $11.00 $10.78 $10.51 $10.26 $10.00 $9.86 $10.02 $9.00 $8.00 $7.00 $6.00 3/31/2015 6/30/2015 9/30/2015 12/31/2015 3/31/2016 —6/30/2016 See appendix for a reconciliation of GAAP and non-GAAP measures. 6 & ConnectOne Ba
Slide 7: Performance Trends: Return on Average Tangible Assets
Performance Trends (cont.) Return on Average Tangible Assets* 1.60% 1.29% 1.21% 1.20% 176% ram? a sex 1.20% : 1.13% 1 999, 513% 4 995 1.03% 0.80% 0.40% Qi 2015 Q22015 3 2015 24 2015 a1 2016 a2 2016 mCore Return Wi"GAAP" Return =m mm mm Peer Median 1) ‘Excludes non-operating items, See appendix for a
Slide 8: Performance Trends: Return on Average Tangible Common Equity
Performance Trends (cont.) Return on Average Tangible Common Equity* 16.00% 14.56% 14.11% 13.99% 14.00% 13.69% _— 13:47% 13.58% 13.53% 5 array 13.03% : 12.07% 12.00% 10.00% 8.00% 1.2015 2.2015 Q3 2015 4 2015 a1 2016 2.2016 Core Return Wi"GAAP" Return =m mm mm Peer Median 1) ‘Excludes non-operating i
Slide 9: Performance Trends: Efficiency Ratio
Includes investments in technology 85.0% and infrastructure to support our growth 75.0% 5 ee 55.0% 45.0% 41.8% 41.8% 41.5% 41.6% 43.5% 42.2% 25.0% Qi 2015 2 2015 Q3 2015 4.2015 Qi 2016 Q2 2016 — <= — Peer Median 1) ‘Excludes non-operating items. See appendix for a reconciliation of GAAP and non-GAAP
Slide 10: Capital Ratios at June 30, 2016
At June 30, 2016 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 9.62% 8.52% Leverage Ratio 11.44% 11.30% 10.43% 10.43% 9.10% 9.23% -— — CET 1 Ratio Tier 1 Ratio Risk-based Capital Ratio Bancorp Bank ==== Well Capitalized & ConnectOne Bancorp
Slide 11: Loan Portfolio Composition by Type
ae Rear fn ioe] fendenal ten <8 fee -cxhee/ mise 57 3 fometqury-2n8 ben toc) 331 > arebouse/ Indust 5107 3x], ome equy- 1s en Fed) ow krre—ottce 395 31f ome eauty-2nd Uen Fs) ae fee mtaed 3862 Fonsumer-Personal (Unsecured) $2 foe -tns anton rte e undtan(andOn-He gag F otal CRE. non Owner Oxupied $29
Slide 12: Loan Portfolio
Loan Portfolic $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $MM $0 $2,765 3/31/2015 6/30/2015 $2,641 $2,953 9/30/2015 $3,099 12/31/2015 $3,264 $3,376. 3/31/2016 6/30/2016 & ConnectOne Bancorp
Slide 13: Loan Originations and Paydowns
$200 $190 $164 $150 $102 $100 a $50 sum $- Q1 2015 92 2015 03 2015 mm Gross Loan Originations tes Loan Paydowns 4.14% 4.25% 4.00% 3.75% $233 3.50% $203 $18 sas gies 9182 3.25% pay $112 3.00% | 5 2.75% 2.50% 042015 texiNet Growth Qi 2016 2 2016 ~e-Average Origination Rate & ConnectOne Bancorp
Slide 14: Comprehensive underwriting standards and processes
Comprehensive underwriting standards and processes * Disciplined LTV and DSC standards * Loan origination process supported by specialized teams of credit analysts We stick to what we do best * High quality direct commercial lending * No reliance on participations or wholesale loan purchases * Stay
Slide 15: Commitment to Sound Credit: Non-Performing Assets & Charge-Offs
ommitment to So Non-Performing Assets & Charge-Offs 1.40% 1.20% 1.00% ox TTT ST TS wean 0.58% 0.57% 0.56% 0.48% 0.42% 0.40% 037% 0.20% aa 0.01% -% 0.02% -% 0.01% 0.00% 3/31/2015 6/30/2015 9/30/2015 12/31/2015 3/31/2016 ~— 6/30/2016 @NPARatio uNetC/ORatio = == == Peer Median 1) 1) Peer group includes
Slide 16: CRE as a Percentage of Total Risk Based Capital
CRE as a Percentage of Total Risk Based Capital 800% 700% 600% sox to j 2974 400% 300% 608% Pe oe 47794 5 h h 6394 100% 0% 2009 2010 2011 2012 2013 2014 2015 Q2 2016 MCRE Construction + ConnectOne has maintained high levels of CRE concentration for an extended period of time ¢ Our combination of str
Slide 17: Multifamily Loan Portfolio
am > Total portfolio $968 million; approximately 90% located in Northern New Jersey + Portfolio average loan size $1.9mm; approximate duration 3 years; yield ~3.70% “+ Targeted concentration: 25% to 35% of the total loan portfolio * We have been originating multifamily loans since the inception of t
Slide 18: Commercial & Industrial Lending
“+ Objective is to increase non-CRE lending and increase relationship deposits “ C&l teams are targeting both small and middle-market businesses, including manufacturing, service-related and distributors “ Business sizes range from $2 million to $100 million in average annual revenues. Credit extend
Slide 19: Taxi Medallion Portfolio
Taxi Med. n Por “Only NYC-Manhattan medallions; no exposure to non-NYC medallions > Exclusively first lien direct obligations of medallion owners “ Exposure, net of reserves, totals $95.3 million at June 30, 2016 ~ Just 2.82% of total loans and 24.4% of Bank's Tier 1 capital * No additional lending
Slide 20: Deposit Composition as of 06/30/16
As of 06/30/16- $3.2 Billion Brokered Noninterest 11% Demand 20% Listing 8% Interest Reciprocal 8% Transaction 41% & ConnectOne Bancorp
Slide 21: Noninterest-Bearing Deposit Balances
$700 $651 $649 $650 $608 $609 $615 $600 $587 $582 $558 $560 $550 $510 $500 $482 $480 $450 $400 $350 $300 $250 = s — iam 3/31/2015 6/30/2015 9/30/2015 12/31/2015 3/31/2016 -—«6/30/2016 Average Quarterly Balance As of Balance & ConnectOne Bancorp
Slide 22: Stock Price Performance
tock Price Perfor nce Price Performance as of July 29, 2016 CNOB KBW Bank Index Since IPO* 57.0% 23.4% Since September 1, 2015 -9.6% -2.1% Recent Headwinds * CRE Concentrations * Proven track records as a longstanding strong CRE focused bank * Taxi Medallions * Reserves building, industry stabilizin
Slide 23: Liquidity Management
iq anagement “+ We focus on core deposit growth, particularly noninterest-bearing demand “+ Recent strategic initiatives have proven successful towards both growing upon existing relationships and attracting new clients * ConnectOne has historically managed a loan-to-deposit ratio over 100%. Our loa
Slide 24: Growth Strategy: Organic Growth, Acquisitions, Franchise Value
1. Organic Growth * Loan growth rates well in excess of market averages Increasing percentage of DDA to total deposits “+ Efficient operating structure, with potential to further leverage ‘+ Untapped sources of revenue 2. Expansion through Opportunistic Acquisition Skilled acquiror Attractive curren
Slide 25: A Compelling Investment Opportunity
Slide 26: , Inc.
& ConnectOne Bancorp, Inc. & ConnectOne Bancorp
Slide 27: Appendix
& ConnectOne Bancorp, Inc. APPENDIX & ConnectOne Bancorp
Slide 28: Reconciliation of GAAP and non-GAAP measures
pendix Reconciliation of GAAP and non-GAAP measures ‘Three Months Ended (Géllars in thousands, except share data) Tune 30, Mar.31, Dec.31, ‘Sept 30, Tune 30, GAAP Farnings Data 2016 2016 2015 2015 2015 ‘Net income (GAAP) S089 S$ los S$ 958 $§ 1082 $ 1052 Less: preferred dividends : 2 B B B [Net inco
Slide 29: Reconciliation of GAAP and non-GAAP measures (cont)
Reconciliation of GAAP and non-GAAP measures (cont) (ollars in thousands, except share data) urn on Assets a Core eamings available to common stockholders (non-GAAP) ‘Ada: preferred dividends Core net income (non-GAAP) Average assets, Less: average intangible assets Average tangible assets Retum on
Slide 30: Reconciliation of GAAP and non-GAAP measures (cont)
Reconciliation of GAAP and non-GAAP measures (cont) (Gottars in dousands, excep share dat) ‘NCODetall ‘Net oan charge-offs Charge-offs Recoveries Net loan charge-offs 5 4% of average total bans (anualized) Asset Quality ‘Nonacersal loans Otherreal estate owned ‘Totalnonperforming assets Performing t
Slide 31: Reconciliation of GAAP and non-GAAP measures (cont)
Reconciliation of GAAP and non-GAAP measures (cont) (Goltars in thousands, except share data) Capital Ratios and Book Value per Share ‘Common equity Less: intangible assets ‘Tangible common equiy Totalassets Less: intangible assets Tangible assets ‘Common shares outstanding ‘Common equity ratio (GAA
Slide 32: Reconciliation of GAAP and non-GAAP measures (cont)
Reconciliation of GAAP and non-GAAP measures (cont) Fane 30, co Dec. 31, Sone 30, Fane 30, 2016 2016 201s 2018 2018 [Net loan charge-off Chanze-off s ns ss wos 9 Soe Recoveries a9 as, 2 oy enn) ‘Net loan charge-offs = a Sa 1% S47 Ss 3 2 a% of average total loans (annualiced) oom 0.06% 0.00% 0.0m 0.0
Slide 33: Reconciliation of GAAP and non-GAAP measures (cont)
Reconciliation of GAAP and non-GAAP measures (cont) (1) Represents core earnings available to common stockholders divided by weighted average diluted shares ‘outstanding (2) Core net income divided by average assets, (3) Net income excluding amortization of intangible assets divided by average tangi
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