Connectone Bancorp, Inc. · NASDAQ:CNOB
Connectone Bancorp — Investor Presentation (September 2022)
28 slides from Connectone Bancorp's investor presentation, Sep 7, 2022
Slide 1: CNOB Investor Presentation September 2022
CNOB Investor Presentation September 2022
Slide 2: About ConnectOne Bancorp, Inc.
About ConnectOne Bancorp, Inc. $ 8.8 Billion in Total Assets Founded in 2005 to capitalize on poor customer service offered to middle market clients by other institutions Commercial Clients a Primary Focus 90% of loan portfolio 65% of deposit base 2 $8.8B in assets June 30, 2022 $6.6B in deposits Ju
Slide 3: High Operating Performance: 2022 Q2 Financial Highlights
High Operating Performance 3 2022 Q2 Financial Highlights Note: See Appendix 1. PPNR represents pre - tax net income excluding the impact of merger and restructuring charges and provision for loan losses. See appendix for a reconciliation of GAAP and non - GAAP measures. 2. As reported by S&P Global
Slide 4: Strong Core Net Interest Margin
4 Strong Core Net Interest Margin Source: Company Filings, S&P Global Market Intelligence 1. Represents average rates for the full year periods 2. Represents annualized metrics for the quarters ended March 31, 2022 and June 20, 2022, respectively 3. Net Interest Margin and Interest - Earnings Assets
Slide 5: Robust Profitability and Capital Generation
Robust Profitability and Capital Generation Source: Company Filings, S&P Global Market Intelligence Note: Please refer to Non - GAAP reconciliation in Appendix. . 1 As reported by S&P Global Market Intelligence, peers include BHLB, BRKL, CUBI, EBTC, EGBN, FFIC, FLIC, INDB, LBAI, OCFC, PFS, PGC, SASR
Slide 6: Non-Interest Income Diversification of Revenue
Non - Interest Income Diversification of Revenue BoeFly 6 Gains on Sale Minimal dependency on income streams subject to regulatory pressures • SBA Division • Commercial • Residential • Strong fee income momentum • Growing opportunities to expand product set • Interchange fees • Overdraft fees • Main
Slide 7: Diversified and Granular Loan Portfolio
■ Project feasibility ■ Developers background and expertise ■ Strict loan to cost advances ■ Rental fallback ■ Plan and cost review ■ Interest reserve ■ Personal guarantees with reliance on liquidity ■ Bank engineer oversight and inspection ■ Leveraging technology using built software in the constru
Slide 8: Loan Portfolio Detail
8 Loan Portfolio Detail Note: Numbers may not sum to 100% due to rounding Source: Company Filings, Regulatory Filings, and Company Designations Type Balance Percentage Type Balance Percentage CRE - Other / Misc $ 608 8% OOC - Retail $ 138 2% CRE - Retail 570 8% OOC - Warehouse / Industrial 136 2% CR
Slide 9: High Quality Asset Composition and Reserves
9 High Quality Asset Composition and Reserves Nonperforming Assets / Total Assets Net Charge - Offs / Avg. Loans Loan Loss Reserves / Loans Receivable ACL By Segment Type as of June 30, 2022 * Reflects “Allowance for Credit Losses” in accordance with the Company’s adoption of CECL in 2021, prior per
Slide 10: Strong Underwriting Culture
Strong Underwriting Culture ■ 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 Multi - Faceted Stress T
Slide 11: Deposit Franchise
Demand Noninterest - bearing 26% Nonmaturity interest - bearing 55% Time 19% Deposit Franchise Deposit Composition as of 6/30/2022 Total Deposits $6.6 billion 2022 YTD Average Cost of Total Deposits 0.33% $8 ,000 $7 ,000 $6 ,000 $5 ,000 $4 ,000 $3 ,000 $2 ,000 $1 ,000 $ - 2017 2018 2019 2020 2021 Ye
Slide 12: Organic Growth
Organic Growth Opportunities to expand as a result of post - pandemic trends Densely populated, lucrative markets Strong demand for personalized service among small to mid - sized business owners Our target market is largely dominated by the largest institutions in the country, leaving tremendous op
Slide 13: Dynamic Expansion
Dynamic Expansion Leveraging technology to drive new opportunities Roots in NY/NJ metro area allow the bank to expand with clients as they build out - of - state outposts Digital investments coupled with ability to attract top talent allows for dynamic expansion Banking Hub model allows ConnectOne t
Slide 14: Enhancing Our Deposit Franchise
Enhancing Our Deposit Franchise Tech Investments Partnerships with Mantl and Nymbus provide opportunities to leverage modern tech to efficiently grow deposits and continue to expand our reach Mantl will replace our current in branch and online deposit origination software enhancing client experience
Slide 15: Acquisitions and Integration Track Record
■ Completed transaction on January 2, 2019 and integrated systems less than 30 days after closing ■ Value - add transaction; many benefits realized — Loan - to - deposit ratio improved — CRE concentration reduced — Net interest margin widened — Upward trajectory of tangible book value per share cont
Slide 16: Active M&A Environment
Active M&A Environment Opportunities in Market Disruption Talent • We’ve experienced increased success in attracting revenue generating talent. • Due to disruption, individuals are seeking out ConnectOne. New Business Lines • The opportunity to pick up clients who have been displaced by transactions
Slide 17: Acceleration of Growth: Tech-Forward Leadership
Acceleration of Growth: Tech - Forward Leadership Building the Future of Banking ■ Investments in technology support the growth of ConnectOne’s high performance, low efficiency model ■ Continued investments to enhance the bank’s online and mobile channels ■ Investments in solutions that reimagine ba
Slide 18: Capitalizing on Niche Specific Opportunities: BoeFly
Acceleration of Growth: Tech - Forward Leadership Capitalizing on Niche Specific Opportunities Franchisors Banks Potential Franchisees Completed small business loan packages BoeFly ■ BoeFly operates as a separate, independent division ■ Established digital loan origination platform with opportunitie
Slide 19: Best-In-Class Efficiency
Best - In - Class Efficiency One of the Best Efficiency Ratios in the Industry Historical Operating Performance Historical Operating Performance Locations utilize technology to serve as “business hubs” supporting clients beyond geographic footprint $17.5MM Assets Per Employee Efficiency ratio includ
Slide 20: A People First Culture with Recognized Success
A People First Culture with Recognized Success 20
Slide 21: CNOB: A Compelling Investment Opportunity
Strategy & Vision CNOB: A Compelling Investment Opportunity Consistent Financial Performance - Among Best - in - Class Solid Credit Culture with Disciplined Lending Philosophy Track Record of Superior Organic Growth Financially Prudent Acquiror and Experienced & Efficient Merger Integrator Benefitti
Slide 22: ConnectOne Bancorp, Inc.
& ConnectOne Bancorp, Inc.
Slide 23: Appendix
DHH HH HHH HB Appendix &} ConnectOne Bancorp, Inc.
Slide 24: Loan Portfolio & Origination Metrics
$708 $714 $879 $585 $924 $544 $397 $593 $386 $322 $399 $315 $335 $188 $331 3.83% 3.90% 3.77% 4.02% 4.68% 4.58% 4.64% 4.56% 4.50% 4.67% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% $ - $500 $1,000 $1,500 $2,000 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 Gro ss Loan Fundings Loans Paidoff Net Growth Average Fundi
Slide 25: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non - GAAP Measures 25 Source: Company Filings 1 Earnings available to common stockholders excluding amortization of intangible assets divided by average tangible common equity. 2 Adjusted net interest margin excludes impact of purchase accounting fair value marks. ($'s in
Slide 26: Reconciliation of GAAP and Non-GAAP Measures, Continued
Reconciliation of GAAP and Non - GAAP Measures, Continued 26 Source: Company Filings 1 Operating noninterest expense divided by operating revenue. Jun. 30, 2022 Mar. 31, 2022 Jun. 30, 2021 2017 2018 2019 2020 2021 Efficiency Measures Total Noninterest Expenses $ 31,703 $ 29,230 $ 26,259 $ 78,759 $ 7
Slide 27: Reconciliation of GAAP and Non-GAAP Measures, Continued
Reconciliation of GAAP and Non - GAAP Measures, Continued 27 Source: Company Filings 1 Tangible common equity divided by common shares outstanding at period end. Jun. 30, 2022 Mar. 31, 2022 Jun. 30, 2021 2017 2018 2019 2020 2021 Book Value Per Share : Stockholders equity $ 1,143,147 $ 1,138,519 $ 56
Slide 28: Reconciliation of GAAP and Non-GAAP Measures, Continued
Reconciliation of GAAP and Non - GAAP Measures, Continued 28 Jun. 30, 2022 Mar. 31, 2022 2017 2018 2019 2020 2021 Net Loan Charge - Off (Recoveries) Detail : Average Loans (Including Loans Held - for - Sale and Nonaccrual Loans) $ 7,008,174 $ 6,871,477 $ 3,811,922 $ 4,330,874 $ 5,049,458 $ 6,198,753
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