Connectone Bancorp, Inc. · NASDAQ:CNOB
Connectone Bancorp — Investor Presentation (November 2016)
36 slides from Connectone Bancorp's investor presentation, Nov 15, 2016
Slide 1: November 2016 Investor Presentation
November 2016 Investor Presentation
Slide 2: Forward-Looking Statements
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 o
Slide 3: ConnectOne Bancorp, Inc. Overview
ConnectOne Bancorp, Inc. Overview ( NASDAQ: CNOB) □ Holding company for ConnectOne Bank, headquartered in Englewood Cliffs, NJ □ Approximately $ 4.3 billion in total assets, $ 3.5 billion in total loans and $ 3.3 billion in total deposits □ 21 locations across Manhattan, Bergen, Essex, Hudson, Merce
Slide 4: Strategy and Vision
Strategy and Vision □ Offering high - quality, personal service which minimizes client turnover □ Capitalizing on banking dislocation in our region □ Maintaining solid asset quality through strong credit culture □ Utilizing our exceptional market area to grow a high - quality, loyal client base □ Op
Slide 5: Highly Attractive Operating Area
5 □ Strategically placed offices throughout the NJ/NY metro area □ Densely populated, high - growth markets □ $ 1.6 trillion on the United States $16 trillion GDP is in our market footprint □ New Jersey ranks 2 nd in the nation in median household income, 4 th in per capita income, and 2 nd in popul
Slide 6: nnectOne
nnectOne 2, » JANUARY 2016 UNE ‘each bon atts MARCH 2014 ‘eens ® JUNE 2016 JULY 2015 caine JULY 2014 =e él JUNE 2013 —— FEBRUARY 2013 OCTOBER 2009 JANUARY 2005 FEBRUARY 2013 OCTOBER 2006 & ConnectOne Bancorp
Slide 7: Performance Trends
7 Performance Trends *Excludes non - operating items. See appendix for a reconciliation of GAAP and non - GAAP measures. $0.34 $0.35 $0.36 $0.31 $0.34 $0.36 $0.39 $0.33 $0.33 $0.35 $0.36 $0.36 $0.38 $0.40 $0.24 $0.28 $0.32 $0.36 $0.40 $0.44 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Ear
Slide 8: Performance Trends (cont.)
8 Performance Trends (cont.) See appendix for a reconciliation of GAAP and non - GAAP measures. $9.86 $10.02 $10.26 $10.51 $10.78 $11.09 $11.60 $8.00 $8.50 $9.00 $9.50 $10.00 $10.50 $11.00 $11.50 $12.00 $12.50 3/31/2015 6/30/2015 9/30/2015 12/31/2015 3/31/2016 6/30/2016 9/30/2016 Tangible Book Value
Slide 9: Performance Trends (cont.)
9 Performance Trends (cont.) *Excludes non - operating items. See appendix for a reconciliation of GAAP and non - GAAP measures. 1 ) Peer group includes banks and thrifts between $1.0B and $7.5B in assets located in Northeast and Mid - Atlantic regions. Median reflects the most recent 5 quarters of
Slide 10: Performance Trends (cont.)
10 Performance Trends (cont.) *Excludes non - operating items. See appendix for a reconciliation of GAAP and non - GAAP measures. 1 ) Peer group includes banks and thrifts between $1.0B and $7.5B in assets located in Northeast and Mid - Atlantic regions. Median reflects the most recent 5 quarters of
Slide 11: Performance Trends (cont.)
11 Performance Trends (cont.) *Excludes non - operating items. See appendix for a reconciliation of GAAP and non - GAAP measures. 1 ) Peer group includes banks and thrifts between $1.0B and $7.5B in assets located in Northeast and Mid - Atlantic regions. Median reflects the most recent 5 quarters of
Slide 12: Capital Strength
12 Capital Strength 8.39% 8.49% 9.25% 9.38% 11.69% 9.59% 9.57% 10.58% 10.58% 11.57% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% TCE Ratio Leverage Ratio CET 1 Ratio Tier 1 Ratio Risk-based Capital Ratio At September 30, 2016 Bancorp Bank Well Capitalized
Slide 13: Loan Portfolio Diversification
13 Loan Portfolio Diversification As of 9/30/16 - $ 3.5 Billion Type Balance Percentage Type Balance Percentage CRE- Retail 324$ 9% OOC – Retail 77$ 2% CRE – Office 146 4% OOC - Warehouse / Industrial 63 2% CRE - Warehouse / Industrial 113 3% OOC – Office 57 2% CRE - Other / Misc 95 3% OOC - Office
Slide 14: Loan Portfolio and Loan-to-Deposit Ratio Trends
14 Loan Portfolio and Loan - to - Deposit Ratio - Trends $2,642 $2,765 $2,954 $3,099 $3,264 $3,376 $3,461 105.8% 107.6% 110.8% 111.0% 112.8% 105.3% 105.8% 85.0% 95.0% 105.0% 115.0% 125.0% 135.0% $0 $600 $1,200 $1,800 $2,400 $3,000 $3,600 $4,200 3/31/2015 6/30/2015 9/30/2015 12/31/2015 3/31/2016 6/30
Slide 15: Loan Funding Metrics
15 Loan Funding Metrics $237 $279 $238 $229 $91 $114 $126 $141 $146 $165 $112 $88 4.02% 4.00% 4.17% 4.28% 2.50% 2.75% 3.00% 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% $- $50 $100 $150 $200 $250 $300 $350 $400 $450 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Gross Loan Fundings Loans Paid-off Net Growth Average Funding
Slide 16: Commitment to Solid Credit Quality
16 Commitment to Solid Credit Quality □ Comprehensive underwriting standards and processes Disciplined LTV and DSC standards Loan origination process supported by specialized teams of credit analysts □ We stick to what we do best High quality direct commercial lending No reliance on particip
Slide 17: Commitment to Solid Credit Quality (cont.)
17 Commitment to Solid Credit Quality (cont.) 1 ) Peer group includes banks and thrifts between $1.0B and $7.5B in assets located in Northeast and Mid - Atlantic regions. Median reflects the most recent 5 quarters of reported results. Data sourced from SNL Financial. 0.44% 0.37% 0.42% 0.58% 0.57% 0.
Slide 18: CRE Concentrations - Positive Trends
18 CRE Concentrations - Positive Trends □ ConnectOne has maintained high levels of CRE concentration for an extended period of time □ Our combination of strong organic growth and sound asset quality is our hallmark □ We continue to focus on loan diversification □ Our policies and procedures have sto
Slide 19: CRE Portfolio
19 CRE Portfolio □ Approximately 70% located in New Jersey and 24% is located in New York □ Relationship based lending to seasoned sponsors with strong track records □ Underwriting standards require a minimum LTV of 75% and debt service coverage ratio of 1.25x on all CRE loans □ Average LTV on CRE p
Slide 20: Multifamily Portfolio
20 Multifamily Portfolio □ Total portfolio $961 million; approximately 90% located in Northern New Jersey □ Portfolio average loan size $1.9mm; approximate duration 3 years; yield ~3.70% □ Targeted concentration: 25% to 35% of the total loan portfolio □ We have been originating multifamily loans sin
Slide 21: C&I Lending
21 C&I Lending □ Objective is to increase non - CRE lending and increase relationship deposits □ C&I teams are targeting both small and middle - market businesses, including manufacturing, service - related and distributors □ Business sizes range from $2 million to $100 million in average annual rev
Slide 22: Taxi Medallion Portfolio
22 Taxi Medallion Portfolio □ Exposure, net of reserves, totaled $ 90.2 million at September 30 , 2016; 2.61% of total loans and 22.4% of Bank’s Tier 1 capital □ Only NYC - Manhattan medallions; no exposure to non - NYC medallions □ Exclusively first lien direct obligations of medallion owners □ Low
Slide 23: Total Deposit Composition
23 Total Deposit Composition Wholesale 18% Interest Transaction 60% CDs 15% Noninterest Demand 25% Franchise Deposits 82% As of 09/30/16 - $3.3 Billion Note: Wholesale deposits include brokered deposits, excluding reciprocal, and listing services.
Slide 24: Noninterest-bearing Deposit Trends
24 Noninterest - bearing Deposit Trends $482 $510 $560 $608 $609 $582 $640 $480 $558 $587 $651 $615 $649 $656 $250 $350 $450 $550 $650 $750 3/31/2015 6/30/2015 9/30/2015 12/31/2015 3/31/2016 6/30/2016 9/30/2016 Average Quarterly Balance As of Balance
Slide 25: Stock Price Performance
25 Stock Price Performance □ CRE Concentrations Proven track records as a longstanding strong CRE focused bank □ Taxi Medallions Reserves building, industry stabilizing, proactive internal approach □ Deposit Growth and Loan - to - Deposit ratio Strong 3Q 2016 d eposit growth, LTD ratio stable
Slide 26: Liquidity Management
26 Liquidity Management □ We focus on core deposit growth, particularly noninterest - bearing demand Recent strategic initiatives have proven successful towards both growing upon existing relationships and attracting new clients □ ConnectOne has historically managed a loan - to - deposit ratio ove
Slide 27: Three Ways To Win
27 Three Ways To Win 1. Organic Growth □ Loan growth rates well in excess of market averages □ Increasing percentage of DDA to total deposits □ Efficient operating structure, with potential to further leverage □ Untapped sources of revenue 2. Expansion through Opportunistic Acquisition □ Skilled acq
Slide 28: A Compelling Investment Opportunity
Proven growth - oriented investment Highly attractive franchise with enhanced size, scale and geographic footprint in key NJ/NY metro market Robust organic loan generator with history of strong credit quality Skilled acquiror - Poised to benefit from opportunistic transactions Engaged and experience
Slide 29: ConnectOne Bancorp, Inc.
& ConnectOne Bancorp, Inc.
Slide 30: Appendix
& ConnectOne Bancorp, Inc. APPENDIX
Slide 31: Reconciliation of GAAP and non-GAAP measures
31 Appendix Reconciliation of GAAP and non - GAAP measures Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30, (dollars in thousands, except share data) 2016 2016 2016 2015 2015 Net income (GAAP) 11,856 10,859 10,391 9,568 10,842 Less: preferred dividends - - 22 28 28 Net income available to common stock
Slide 32: Reconciliation of GAAP and non-GAAP measures (cont.)
32 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30, (dollars in thousands, except share data) 2016 2016 2016 2015 2015 Return on Assets Measures Core earnings available to common stockholders (non-GAAP) 12,031$ 11,436$ 10,905$ 10,874$ 10,
Slide 33: Reconciliation of GAAP and non-GAAP measures (cont.)
33 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30, (dollars in thousands, except share data) 2016 2016 2016 2015 2015 Efficiency Measures Total noninterest expenses 14,551$ 14,352$ 14,353$ 13,579$ 13,301$ Partial settlements of pension o
Slide 34: Reconciliation of GAAP and non-GAAP measures (cont.)
34 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30, (dollars in thousands, except share data) 2016 2016 2016 2015 2015 Capital Ratios and Book Value per Share Common equity 499,588$ 484,414$ 474,727$ 466,094$ 459,896$ Less: intangible ass
Slide 35: Reconciliation of GAAP and non-GAAP measures (cont.)
35 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30, (dollars in thousands, except share data) 2016 2016 2016 2015 2015 NCO Detail Net loan charge-offs: Charge-offs 1,910$ 77$ 512$ 18$ 519$ Recoveries (12) (16) (15) (2) (342) Net loan char
Slide 36: Reconciliation of GAAP and non-GAAP measures (cont.)
36 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) (1) Represents core earnings available to common stockholders divided by weighted average diluted shares outstanding. (2) Core net income divided by average assets. (3) Net income excluding amortization of intangible assets divided b
ConnectOne Bancorp — Investor Presentation (November 2016) on 6ix