Connectone Bancorp, Inc. · NASDAQ:CNOB

Connectone Bancorp — Investor Presentation (February 2021)

24 slides from Connectone Bancorp's investor presentation, Feb 11, 2021

  1. Slide 1: CNOB February 2021 Investor Presentation

    CNOB February 2021 Investor Presentation

  2. Slide 2: About ConnectOne Bancorp, Inc.

    About ConnectOne Bancorp, Inc. 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 Over $7.5 Billion in Total Assets 2 One of the m

  3. Slide 3: History of ConnectOne Bancorp, Inc.

    History of ConnectOne Bancorp, Inc. 3 JANUARY 2005 Founded as North Jersey Community Bank by Frank Sorrentino III & local businesses and civic leaders JULY 2014 Merged with Union Center National Bank; assets $3.1billion JULY 2015 Launched ConnectOne University, an Internal employee development & tra

  4. Slide 4: Franchise Overview and Investment Highlights

    Tech - Forward Leadership Franchise Overview 4 Robust Profitability and Capital Generation Solid Capital Base with Significant Cushion Above Well - Capitalized Levels Robust Core Net Interest Margin Quality Deposit Franchise with Branch - Lite Distribution Model Best - In - Class Efficiency Diversif

  5. Slide 5: Strong Markets, Attractive Franchise

    Strong Markets, Attractive Franchise Strategically placed offices throughout NY/NJ metro area 5 Market is largely dominated by the largest institutions in the country, leaving tremendous opportunity for banks catering to middle market businesses New York City Market Densely populated, lucrative mark

  6. Slide 6: Acquisitions: Greater Hudson Bank, Bancorp of New Jersey and BoeFly

    6  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 co

  7. Slide 7: High Operating Performance

    High Operating Performance PPNR * 7 1.96% 40.9% 3.46% 9.5% 2020 Return Metrics T1 Leverage Ratio NIM Efficiency Ratio * PPNR represents net income excluding the impacts of taxes, merger and restructuring charges and provisions for loan losses. See appendix for a reconciliation of GAAP and non - GAAP

  8. Slide 8: High Quality Asset Composition and Reserves

    8 Loan Loss Reserves / Loans Receivable Nonperforming Assets Additional Detail Current Expected Credit Losses (“CECL”)  Opted to maintain Incurred Loss Method under the CARES Act  While management is still evaluating its options, we currently anticipate CECL adoption to occur as of January 1, 2021

  9. Slide 9: Strong Underwriting Culture

    9 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

  10. Slide 10: Diversified and Granular Loan Portfolio

     Lending within geographic footprint — NY / NJ metro market economically strong and diverse  Average loan size: ~$1.1M  No borrower relationship exposure greater than 1.3% of total loan portfolio  ~99+% of portfolio through relationship lending 10 Diversified and Granular Loan Portfolio ($ in mi

  11. Slide 11: Diversified and Granular Loan Portfolio: Segment Details

     Project feasibility  Developer's 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 11 Diversified and Granular Loan Portfolio (excl. Paycheck

  12. Slide 12: Loan Portfolio Detail (excludes PPP)

    12 Loan Portfolio Detail (excludes PPP) ($ in millions) Note: Numbers may not sum to 100% due to rounding. Other CRE 36% Multifamily 29% Business Loans 30% Residential/ Consumer 5% Type Balance Percentage Type Balance Percentage CRE - Retail $402 ϳй OOC - Retail $153 ϯй CRE - Other / Misc 396 ϳй OOC

  13. Slide 13: Robust Profitability and Capital Generation

    13 Robust Profitability and Capital Generation Note: Please refer to Non - GAAP reconciliation in Appendix. 1 Excludes merger expenses, nonrecurring items and securities gains. 2 As reported by S&P Global Market Intelligence, peers include BDGE, BHLB, BMTC, BRKL, CUBI, EBTC, EGBN, FFIC, FLIC, INDB,

  14. Slide 14: Strong Core Net Interest Margin

    Yields and Costs 14 Strong Core Net Interest Margin Net Interest Margin 13.5 % 9.1 % 10.7 % 13.8 % 13.6 % 10.5 % 10.9 % 10.3 % 12.0 % 12.6 % 2015 2016 2017 2018 2019 CNOB Peers¹ Source: Company Filings, S&P Global Market Intelligence Note: Please refer to Non - GAAP reconciliation in Appendix. 1 . P

  15. Slide 15: Best-In-Class Efficiency

    15 Best - In - Class Efficiency $1 8.2 M Assets Per Employee Investments in digital banking and FinTech solutions allow ConnectOne to scale efficiently. Locations utilize technology to serve as “business hubs” supporting clients beyond geographic footprint Historical Operating Performance Source: Co

  16. Slide 16: Branch Rationalization

    Branch Rationalization 16 January 1 Assets ($B) # of Branches Acquired Opened Closed 2017 $4.4 21 0 0 0 2018 5.1 21 7 2 1 2019 6.0 29 9 0 1 2020 $7.5 37 0 0 11 2021 (est.) TBD 26 TBD TBD TBD* The Shift From Retail Branches to Banking Hubs *Sale of 2 branches in Hudson Valley in process and expected

  17. Slide 17: Strategy & Vision

    Strategy & Vision ConnectOne Is Well - Positioned To Execute: 17  Achieving Prudent Growth  Increasing & Expanding Commercial Client Relationships  Enhancing Our Presence in the New York & New Jersey Metro Market  Further Improving Best - in - Class Efficiency  Sustaining Robust Profitability &

  18. Slide 18: 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 18 President | James Beard Foundation Susan Ungaro “ ,, The responsi

  19. Slide 19: © ConnectOne Bancorp, Inc.

    © ConnectOne Bancorp, Inc.

  20. Slide 20: Appendix

    Appendix HH Hh HH HHH sp

  21. Slide 21: Reconciliation of GAAP and non-GAAP measures

    21 Appendix Reconciliation of GAAP and non - GAAP measures $ in Thousands 2020 2019 2018 2017 2016 ($s thousands, except per share data) Net income 71,289$ 73,395$ 60,352$ 43,220$ 31,082$ Income tax expense 19,101 20,631 10,782 25,294 11,776 Merger charges 14,640 8,955 1,335 - - Loss on Extinguishme

  22. Slide 22: Reconciliation of GAAP and non-GAAP measures (cont.)

    22 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) $ in Thousands 2020 2019 2018 2017 2016 Efficiency Measures Total noninterest expenses 121,001$ 92,228$ 70,454$ 78,759$ 58,507$ Amortization of core deposit intangibles (2,559) (1,408) (627) (724) (820) Merger expenses (14,640) (8,95

  23. Slide 23: Reconciliation of GAAP and non-GAAP measures (cont.)

    23 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) $ in Thousands 2020 2019 2018 2017 2016 Net Loan Charge-Off (Recoveries) Detail Average Loans - Including Loans Held-for-Sale 6,198,753$ 5,049,458$ 4,330,874$ 3,811,922$ 3,355,452$ Net loan charge-offs (recoveries) : Charge-offs 1,73

  24. Slide 24: Reconciliation of GAAP and non-GAAP measures (cont.)

    24 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) $ in Thousands (1) Tangible common equity divided by common shares outstanding at period-end. (2) Operating noninterest expense divided by operating revenue. 2020 2019 2018 2017 2016 Allowance for loan losses ("ALLL") 79,226$ 38,293$

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