Connectone Bancorp, Inc. · NASDAQ:CNOB
Connectone Bancorp — Investor Presentation (September 2019)
30 slides from Connectone Bancorp's investor presentation, Sep 4, 2019
Slide 1: CNOB September 2019 Investor Presentation
CNOB September 2019 Investor Presentation
Slide 2: 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, but not always, made th
Slide 3: About ConnectOne Bancorp, Inc.
About ConnectOne Bancorp, Inc. o Client first and sense of urgency in every business decision from top to bottom of organization Strong Culture Founded in 2005 to capitalize on poor customer service offered to middle market clients by other institutions $ 6.1 Billion in Total Assets ConnectOne is a
Slide 4: About ConnectOne Bancorp, Inc.
About ConnectOne Bancorp, Inc. 4
Slide 5: Strong Markets, Attractive Franchise
Strong Markets, Attractive Franchise Strategically placed offices throughout NY/NJ metro area 5 The market we operate in accounts for approximately $1.7 trillion of the $19 trillion United States GDP Market is largely dominated by the largest institutions in the country, leaving tremendous opportuni
Slide 6: Market Expansion Through M&A: Acquisition of Greater Hudson Bank
Market Expansion Through M &A Acquisition of Greater Hudson Bank 6 Completed transaction on January 2, 2019 and integrated systems less than 30 days after closing Transaction added approximately $375 million in loans and $425 in deposits Demonstrates ConnectOne’s expertise as a skilled acquiror - CN
Slide 7: Leverage Infrastructure Through M&A: Bancorp of New Jersey
Leverage Infrastructure Through M &A Announced Acquisition of Bancorp of New Jersey (BKJ) 7 Passaic Bergen Essex Hudson Manhattan Bronx Westchester Rockland Queens CNOB (28) BKJ (9) Branch Overlap Distance Branches % of Franchise < 1 mi: 5 55.6% < 2 mi: 8 88.9% < 5 mi: 9 100.0% ▪ Financially Savvy I
Slide 8: Innovation Through M&A: Acquisition of BoeFly
BoeFly is a Boston/New York City based privately held FinTech company. With dynamic patented technology, BoeFly q ualifies potential franchisees and provides access to funding through a digital marketplace. 8 Innovation Through M &A Acquisition of BoeFly, closed 2Q 2019 BoeFly will operate as an ind
Slide 9: High Operating Performance
High Operating* Performance ROAA 9 * Excludes the impact of charges related to the Bank's taxi medallion portfolio and non - operating items including net gains on sal es of securities, merger expenses, deferred tax valuation charge, and tax benefits on employee share - based awards. See appendix fo
Slide 10: Proven Track Record of Growth & Performance
Proven Track Record of Growth & Performance 10 Dollars in billions, except for per share data $3.3 $3.8 $4.1 $4.6 $3.6 $4.2 $4.5 $5.1 $4.4 $5.1 $5.5 $6.1 12/31/16 12/31/17 12/31/18 6/30/19 Deposits Loans Assets $10.51 $11.96 $13.01 $14.42 $15.01 12/31/15 12/31/16 12/31/17 12/31/18 6/30/19 Tangible B
Slide 11: Efficient Banking Model
Investments in technology enhance our deposit & loan gathering abilities Reflects structural uniqueness of ConnectOne Peer* Median: $8 MM We are ~2.5x peer median for: o Deposits per branch office o Loans per branch office o A ssets per branch office Efficient Banking Model One of the Best Efficienc
Slide 12: Diversified Loan Portfolio
12 Diversified Loan Portfolio As of 6 /30/ 19 - $ 5.1 Billion Type Balance Percentage Type Balance Percentage CRE - Retail $ 288 6% Warehouse / Industrial $ 125 3% CRE - Other / Misc. 281 5% OOC - Other 103 2% CRE - Land Loan for Future Development 132 3% OOC - Office 97 2% CRE - Warehouse / Industr
Slide 13: Diversification & Expansion Through C&I Lending
$469 $554 $735 $897 $991 12/31/15 12/31/16 12/31/17 12/31/18 6/30/19 Diversification & Expansion Through C&I Lending C&I Loan Portfolio 13 Formidable Competitor In 5 short years, we’ve built a profitable and valuable C&I lending platform 30 + Team Members Key hires with focused C&I specialties Note:
Slide 14: A Track Record of Solid Credit Underwriting
14 A Track Record of Solid Credit Underwriting o Disciplined LTV & DSC standards o Loan origination process supported by specialized teams of credit analysts o High quality direct commercial lending o No reliance on participations or wholesale loan purchases o Prudent growth Comprehensive underwriti
Slide 15: Deposit Franchise
Deposit Franchise 15 Deposit Composition 6/30/ 2019 Total Deposits $ 4.6 Billion 2019 YTD Cost of Total Deposits 1.41% Demand Noninterest - bearing 17% Demand Interest - bearing 21% Money Market 23% Savings 4% Time 35% $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 Year Ended
Slide 16: Business Generation
16 Business Generation Experienced CRE Lenders & Support Staff o Focus towards owner - occupied lending Broadening Focus on C&I by Building Business Niches o Independent Schools Division o ~40% of New Jersey Independent Schools are clients o Opportunities for expansion into NY, PA & CT o Municipal D
Slide 17: Capital Allocation & Philosophy
Strongly capitalized o 8.93 % TCE holding company o 10.42% leverage at bank o 12.40% total risk based at bank ROATCE target 15+% Stock buyback program commenced in 1 st quarter of 2019 o As of June 30, 2019, repurchased approximately 20% of 1.2 million authorized shares Capital Allocation & Philosop
Slide 18: Strategy & Vision
Strategy & Vision Continued Growth The Company remains well - positioned to execute Achieving Prudent Growth 18 Increasing & Expanding Commercial Client Relationships Expanding Our Presence in the New York & New Jersey Metro Market Maintaining Best - in - Class Efficiency Continuing Branch Rationali
Slide 19: Client Testimonials
“ ,, ,, ConnectOne Bank was our recipe for success! Their responsive and creative management team offered us all the necessary ingredients to expand and serve our community of chefs, restaurants & food lovers. “ Client Testimonials 19 President | James Beard Foundation Susan Ungaro “ ,, The responsi
Slide 20: ConnectOne Bancorp, Inc.
& ConnectOne Bancorp, Inc.
Slide 21: Appendix
& ConnectOne Bancorp, Inc. Appendix
Slide 22: Commercial Real Estate Lending Focus
Commercial Real Estate Lending Focus 22 o ConnectOne has maintained high levels of CRE concentration for an extended period of time o Our combination of strong organic growth and sound asset quality is our hallmark o We continue to focus on loan diversification – Concentration mitigated by accelerat
Slide 23: Credit Quality
Credit Quality 23 1.27% 0.99% 1.36% 0.99% 0.95% 0.42% 0.46% 0.44% 0.34% 0.39% .96% .99% 0.95% 0.79% 0.82% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 6/30/18 9/30/18 12/31/18 3/31/19 6/30/19 NPAs/Total Assets (excluding taxi) NPAs/Total Assets
Slide 24: Loan Funding Metrics
Loan Funding Metrics 24 Trailing Quarterly Loan Fundings Note: First Quarter 2019 includes Greater Hudson. Rate excludes impact of purchase accounting adjustments. $357 $316 $374 $759 $373 $245 $214 $295 $327 $256 $112 $102 $79 $432 $117 4.98% 5.27% 5.47% 5.53% 5.35% 0.00% 0.75% 1.50% 2.25% 3.00% 3.
Slide 25: Reconciliation of GAAP and non-GAAP measures
Appendix Reconciliation of GAAP and non - GAAP measures 25 25 June 30, Mar. 31, Dec. 31, Sept. 30, June 30, Trailing Twelve 2019 2019 2018 2018 2018 Months Reconciliation of GAAP Earnings to Adjusted Earnings: Net income 19,281$ 11,635$ 18,672$ 19,902$ 17,527$ 69,490$ Merger expenses (after taxes) 2
Slide 26: Reconciliation of GAAP and non-GAAP measures (cont.)
26 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) June 30, Mar. 31, Dec. 31, Sept. 30, June 30, Trailing Twelve 2019 2019 2018 2018 2018 Months Return on Equity Measures Net income-adjusted 20,179$ 17,132$ 19,148$ 18,604$ 17,511$ 75,063$ Average common equity 694,978$ 680,168$ 606,3
Slide 27: Reconciliation of GAAP and non-GAAP measures (cont.)
27 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) June 30, Mar. 31, Dec. 31, Sept. 30, June 30, 2019 2019 2018 2018 2018 Capital Ratios and Book Value per Share Common equity 699,224$ 682,395$ 613,927$ 594,871$ 578,557$ Less: intangible assets (168,714) (162,747) (147,646) (147,791)
Slide 28: Reconciliation of GAAP and non-GAAP measures (cont.)
28 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) June 30, Mar. 31, Dec. 31, Sept. 30, June 30, Trailing Twelve 2019 2019 2018 2018 2018 Months Net Interest Margin Average interest-earning assets 5,607,086$ 5,522,934$ 4,941,425$ 4,856,678$ 4,771,523$ 5,229,409$ Net interest income (
Slide 29: Reconciliation of GAAP and non-GAAP measures (cont.)
29 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) June 30, Mar. 31, Dec. 31, Sept. 30, June 30, 2019 2019 2018 2018 2018 Asset Quality Nonaccrual taxi medallion loans 26,498$ 27,287$ 28,043$ 28,482$ 28,944$ Nonaccrual loans (excluding taxi medallion loans) 23,419 20,393 23,812 24,53
Slide 30: Reconciliation of GAAP and non-GAAP measures (cont.)
30 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) (1) Represents adjusted earnings available to common stockholders divided by weighted average diluted shares outstanding. (2) Adjusted net income divided by average assets. (3) Adjusted earnings available to common stockholders divid
ConnectOne Bancorp — Investor Presentation (September 2019) on 6ix