Connectone Bancorp, Inc. · NASDAQ:CNOB
Connectone Bancorp — Investor Presentation (July 2018)
30 slides from Connectone Bancorp's investor presentation, Jul 31, 2018
Slide 1: CNOB July 2018 Investor Presentation
CNOB July 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 $5.3 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 Analyst consensus per SNL Dollars in billions, except for per share data $4.0 $4.4 $5.1 $5.3 $3.1 $3.6 $4.2 $4.4 $2.8 $3.3 $3.8 $3.9 12/31/15 12/31/16 12/31/17 6/30/18 Assets Loans Deposits $10.51 $11.96 $13.01 $14.36 12/31/15 12/31/16 12/31/17 Projected 12/31/2018* Tangible Bo
Slide 6: High Operating Performance
High Operating* Performance 6 Technology & Infrastructure 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 sal es of securities, deferred tax valuation charge, and tax benefits
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 deposit & loan gathering abilities Reflects structural uniqueness of ConnectOne Peer 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 6/30/18 - $4.4 Billion* *Reflects gross loans prior to adjusting for unearned net origination fees $ MM Other CRE 34% Multifamily 34% Business Loans 25% Residential/ Consumer 7% Type Balance Percentage Type Balance Percentage CRE - Retail $342 ϴй Warehouse / Indust
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 $ MM Niche Markets Added capabiliti
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 Deposit Composition 6/30/2018 Total Deposits $3.9 billion 2018 Cost of Total Deposits 0.91% Demand Noninterest - bearing 20% Demand interest - bearing 19% Money Market 23% Savings 4% Time 34% $2,569 $3,093 $3,470 $3,756 Year Ended 2015 Year Ended 2016 Year Ended 2017 Six Months
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 8.40% TCE holding company o 10.43% leverage at bank o 12.42% 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%.
Slide 15: Merger With Greater Hudson Bank
Source: SNL Financial (1) As of and for the quarter ended March 31, 2018. (2) Core profitability excludes one - time personnel costs, legal expenses and a write - down to OREO all incurred during the quarter en ded March 31, 2018. (3) NPAs defined as nonaccrual loans and leases and real estate owned
Slide 16: Greater Hudson Transaction Delivers on Key Priorities
16 Greater Hudson Transaction Delivers on Key 2018/2019 Priorities for ConnectOne… ConnectOne Greater Hudson Qualifications • ConnectOne is a high growth, high performing commercial bank serving the New York and New Jersey metro market • Focus market within 75 mile radius of New York City – strategi
Slide 17: Summary Transaction Metrics
Strategically Compelling Financially Attractive Low Integration Risk 17 Summary Transaction Metrics (1) As of and for the quarter ended March 31, 2018. o Solidifies ConnectOne’s New York operations and meaningfully expedites organic growth plans in the Hudson Valley region o Establishes new lines of
Slide 18: A Compelling Investment Opportunity
18 A Compelling Investment Opportunity CNOB trades at an approximately 30% discount ($7.50 per share) to median peer P/E ratio. Further, given our growth profile, w e a rguably should be trading above median. o Proven track record in CRE; charge - offs near zero o Expansion of C&I, owner - occupied
Slide 19: Strategy & Vision
Strategy & Vision Continued Growth The Company remains well - positioned to execute Achieving Continued Deposit Growth 19 Increasing & Expanding Commercial Client Relationships Expanding Our Presence in the New York Metro Market Expanding Cash Management Capabilities Utilizing a Modern Branch Office
Slide 20: 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 20 President | James Beard Foundation Susan Ungaro “ ,, The responsi
Slide 21: ConnectOne Bancorp, Inc.
& ConnectOne Bancorp, Inc.
Slide 22: Appendix
& ConnectOne Bancorp, Inc. Appendix
Slide 23: Commercial Real Estate Lending Focus
Commercial Real Estate Lending Focus 23 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 24: Loan Funding Metrics
Loan Funding Metrics 24 $495 $415 $494 $323 $357 $318 $249 $276 $255 $245 $177 $166 $218 $68 $112 4.25% 4.37% 4.50% 4.74% 4.98% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% $- $100 $200 $300 $400 $500 $600 $700 $800 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Gross Loan Fundings Loans Paidoff Net Growth Av
Slide 25: Credit Quality
Credit Quality 25 0.31% 0.28% 0.38% 0.42% 0.41% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 6/30/17 9/30/17 12/31/17 3/31/18 6/30/18 NPAs/Total Assets (excluding taxi) NPAs/Total Assets 1.26% 1.29% .99% . 96% 1.36%
Slide 26: Reconciliation of GAAP and non-GAAP measures
Appendix Reconciliation of GAAP and non - GAAP measures 26 June 30, Mar. 31, Dec. 31, Sept. 30, June 30, 2018 2018 2017 2017 2017 Reconciliation of GAAP Earnings to Earnings Excluding the Following Items: Net income 17,527$ 4,251$ 10,580$ 13,077$ 7,683$ Net gains on sales of securities (after taxes)
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, 2018 2018 2017 2017 2017 Return on Equity Measures Net income-adjusted 17,478$ 17,140$ 16,336$ 14,853$ 13,269$ Average common equity 574,992$ 575,029$ 567,308$ 556,620$ 549,748$ Less: ave
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, 2018 2018 2017 2017 2017 Capital Ratios and Book Value per Share Common equity 578,557$ 564,266$ 565,437$ 557,691$ 546,173$ Less: intangible assets (147,936) (148,104) (148,273) (148,442)
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, 2018 2018 2017 2017 2017 Asset Quality Nonaccrual taxi medallion loans 28,944$ 29,405$ 46,765$ 47,430$ 48,884$ Nonaccrual loans (excluding taxi medallion loans) 20,771 20,631 18,848 13,75
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
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