Connectone Bancorp, Inc. · NASDAQ:CNOB
Connectone Bancorp — Investor Presentation (May 2018)
27 slides from Connectone Bancorp's investor presentation, May 15, 2018
Slide 1: CNOB May 2018 Investor Presentation
CNOB May 2018 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 the top of organization to the bottom Strong Culture o Formed as a de novo in 2005 to take advantage of poor middle market customer service offered by other institutions $5.1 Billion in Total Assets Co
Slide 4: Strong Franchise, Attractive Markets
Strong Franchise, Attractive Markets Strategically placed offices throughout NY/NJ metro area 4 The market we operate in accounts for approximately $2 trillion of the $18 trillion United States GDP Market is largely dominated by the largest institutions in the country, leaving tremendous opportunity
Slide 5: A History of Growth
A History of Growth 5 $4.0 $4.4 $5.1 $5.2 $3.1 $3.6 $4.2 $4.2 $2.8 $3.3 $3.8 $3.7 12/31/2015 12/31/2016 12/31/2017 3/31/2018 Assets Loans Deposits $ Billions $15.49 $16.62 $17.63 12/31/2015 12/31/2016 12/31/2017 Projected 12/31/2018* Book Value Per Share $18.99 * Analyst consensus per S&P 144% 99% C
Slide 6: High Operating Performance
High Operating* Performance 6 Technology & Infrastructure 1.14% 1.18% 1.25% 1.32% 1.37% 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 ROAA ROATCE EPS Operating Efficiency Ratio * Excludes the impact of charges related to the Bank's taxi medallion portfolio and non - operating items including net gains on
Slide 7: Building for the Future: Leading Edge Technology Initiatives
The financial services arena is changing quickly - ConnectOne will always be an early adopter Empowering our staff with the best possible tools and resources that enhance our excellent reputation for “sense of urgency” wit h our clients nCino Leading Edge Technology Initiatives Building for the Futu
Slide 8: Efficient Banking Model
Investments in technology enhance our loan & deposit gathering abilities Reflects structural uniqueness of ConnectOne Per Median*: $6.5MM We are ~3x 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 efficiency
Slide 9: Diversified Loan Portfolio
9 Diversified Loan Portfolio As of 3/31/18 - $4.2 Billion* *Reflects gross loans prior to adjusting for unearned net origination fees Other CRE 36% Multifamily 34% Business Loans 23% Residential/Co nsumer 7% Type Balance Percentage Type Balance Percentage CRE - Retail $340 OOC - Warehouse / Indus
Slide 10: C&I Loan Portfolio
C&I C&I Loan Portfolio 10 Technology & Infrastructure Improvements focus on keeping best in class service with the pace of work our clients are accustomed to at ConnectOne 25 + Team Members Key hires with focused C&I specialties Note: excludes taxi medallion loans Niche Markets Added capabilities to
Slide 11: Commitment to Strong Credit Quality
11 Commitment to Strong Credit Quality Maintaining a strong credit culture 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 Focus on re
Slide 12: Deposit Franchise
Deposit Franchise 12 Demand Noninterest - bearing 20% Demand interest - bearing 16% Money Market 26% Savings 5% Time 33% Deposit Composition 3/31/2018 Total Deposits $3.7 billion 2018 Cost of Total Deposits 0.83% $2,569 $3,093 $3,470 $3,748 Year Ended 2015 Year Ended 2016 Year Ended 2017 Quarter End
Slide 13: Business Generation
13 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 o Municipal Depos
Slide 14: Capital Allocation & Philosophy
The right amount of capital o 8.31% TCE holding company o 10.20% leverage at bank o 12.31% total risk based at bank Operating ROATCE in excess of 16% Retained earnings supports growth, no equity offerings planned in foreseeable future Dividend of $0.075 per quarter; estimated payout ratio of 14%. No
Slide 15: A Compelling Investment Opportunity
15 A Compelling Investment Opportunity CNOB trades at an approximately 20% discount ($ 6.50 per share) to median peer P/E ratio. Further, given our growth profile, we arguably should be trading above median. o Proven track record in CRE; charge - offs near zero o Expansion of C&I, owner - occupied a
Slide 16: Strategy & Vision
Strategy & Vision Continued Growth The Company remains well - positioned to execute Achieving Continued Deposit Growth 16 Increasing & Expanding Commercial Client Relationships Expanding Our Presence in the New York Metro Market Expanding Cash Management Capabilities Utilizing a Modern Branch Office
Slide 17: 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 17 President | James Beard Foundation Susan Ungaro “ ,, The responsi
Slide 18: ConnectOne Bancorp, Inc.
& ConnectOne Bancorp, Inc.
Slide 19: Appendix
& ConnectOne Bancorp, Inc. Appendix
Slide 20: Commercial Real Estate Lending Focus
Commercial Real Estate Lending Focus 20 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 21: Loan Funding Metrics
Loan Funding Metrics ing Quarterly Loan Fundings $700 5.00% ape 4.50% $600 4.21% $500 $494 4.00% $415 $400 = 318 $323 3.00% $300 262 - 276 —_ 218 177 $200 166 2.00% $100 $80. $68 s 1.00% su qi 2017 2.2017 93 2017 Q4 2017 a1 2018 lMmGross Loan Fundings Loans Paidoff Net Growth —*-Average Funding Rate
Slide 22: Credit Quality
Credit Quality 0.30% 0.31% 0.28% 0.38% 0.42% 1.62% 1.36% 1.26% 1.29% 0.99% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3/31/17 6/30/17 9/30/17 12/31/17 3/31/18 NPAs/Total Assets (excluding taxi) NPAs/Total Assets 22
Slide 23: Reconciliation of GAAP and non-GAAP measures
Appendix Reconciliation of GAAP and non - GAAP measures 23 Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, 2018 2017 2017 2017 2017 Reconciliation of GAAP Earnings to Earnings Excluding the Following Items: Net income 4,251$ 10,580$ 13,077$ 7,683$ 11,880$ Net gains on sales of securities (after taxes)
Slide 24: Reconciliation of GAAP and non-GAAP measures (cont.)
24 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, 2018 2017 2017 2017 2017 Return on Equity Measures Net income-adjusted 17,140$ 16,336$ 14,853$ 13,269$ 12,278$ Average common equity 575,029$ 567,308$ 556,620$ 549,748$ 539,544$ Less: ave
Slide 25: Reconciliation of GAAP and non-GAAP measures (cont.)
25 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, 2018 2017 2017 2017 2017 Capital Ratios and Book Value per Share Common equity 564,266$ 565,437$ 557,691$ 546,173$ 540,277$ Less: intangible assets (148,104) (148,273) (148,442) (148,611)
Slide 26: Reconciliation of GAAP and non-GAAP measures (cont.)
26 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, 2018 2017 2017 2017 2017 Asset Quality Nonaccrual taxi medallion loans 29,405$ 46,765$ 47,430$ 48,884$ 59,054$ Nonaccrual loans (excluding taxi medallion loans) 20,631 18,848 13,755 14,05
Slide 27: Reconciliation of GAAP and non-GAAP measures (cont.)
27 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
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