Connectone Bancorp, Inc. · NASDAQ:CNOB
Connectone Bancorp — Keefe, Bruyette & Woods Community Bank Investor Conference August 2017
31 slides from Connectone Bancorp's conference presentation, Aug 1, 2017
Slide 1: KBW Community Bank Investor Conference August 2017
Keefe, Bruyette & Woods Community Bank Investor Conference August 2017 New York, NY
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: Strategy & Vision
3 Strategy & Vision We position ourselves as “a better place to be” for clients, our communities, employees and shareholders through: • Minimizes client turnover • “Sense of urgency” culture that differentiates us from our competitors High Quality Client Service Model We continue to maintain solid a
Slide 4: Value Proposition and ConnectOne Bancorp Overview
Value Proposition One of the largest New Jersey - based banking institutions with increased scale, technology and lending capabilities serving middle market commercial businesses $4.7 Billion in Total Assets $3.8 billion in total loans* $3.4 billion in total deposits ConnectOne Bancorp, Inc. Overvie
Slide 5: OCTOBER 2009 iis
OCTOBER 2009 iis id FEBRUARY 2015 JANUARY 2005 @ OCTOBER 2006 JUNE 2013 MARCH 2014 ater FEBRUARY 2013 } $4 Billion ad DECEMBER 2016 e JANUARY 2016 Sectuttcaa a JUNE 2015 Feeded tteninanete SESSA Zelle JULY 2017 JUNE 2016 “ve JULY 2015 vont JULY 2014 ee ereenecwtone, Sitti
Slide 6: Highly Attractive Operating Area
Highly Attractive Operating Area Strategically placed offices throughout the NJ/NY metro area 6 Densely populated, lucrative markets The market we operate in accounts for approximately $2 trillion of the $18 trillion United States GDP New Jersey ranks amongst the highest in the nation by both median
Slide 7: Efficient Banking Model Leveraging Technology
42% Operating Efficiency Ratio 1 ) 8 5% Consument Active $16.1MM Assets Per Employee Efficient Banking Model L everaging Technology Locations serve as “business hubs” supporting clients beyond geographic footprint Focused locations in our affluent footprint allows for fewer locations by comparison.
Slide 8: Technology initiatives: nCino and Zelle
z initiatives new nCino • Provides ConnectOne with one of the most efficient and streamlined deposit & loan operating systems in the industry • Built on the Salesforce Platform • Supports our best - in - class efficiency metrics and enhances our excellent reputation for “sense of urgency” with our c
Slide 9: Growing the Deposit Franchise
Specialized focus on Independent Schools • ~ 40% of New Jersey Independent Schools are our clients • Opportunities for expansion into New York & Pennsylvania Municipal Deposits • Competitive products and niche focus • Amongst top 20 banks in New Jersey holding municipal deposits (based on Deposit
Slide 10: Noninterest-bearing Deposit Trend
Noninterest - bearing Deposit Trend 10 $- $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 2Q '16 2Q '17 Average Balance Period End Balance $ MM
Slide 11: Diversified Loan Portfolio
Diversified Loan Portfolio As of 6/30/17 - $3.8 Billion* 11 Other CRE 36 % Multifamily 33% Business Loans 24% Residential / Consumer 7% Type Balance % Type Balanc e % CRE - Retail $ 309 8% OOC - Retail $ 83 2% CRE - Office 161 4% OOC - Warehouse / Industrial 77 2% CRE - Other / Misc 133 4% OOC - Off
Slide 12: Loan Generation
12 Loan Generation CRE C&I Residential Empowering our staff with the best possible tools and resources that enhance our excellent reputation for “sense of urgency” with our clients 01 Experienced CRE Lenders & Support Staff • Focus towards owner - occupied lending 02 Developing C&I Capabilities • Te
Slide 13: C&I Loan Portfolio
$368mm $466mm $541mm $610mm 9/30/2014 9/30/2015 9/30/2016 6/30/2017 C&I C&I Loan Portfolio* 13 Technology & Infrastructure Improvements focus on keeping best in class service with the pace of work our clients are accustomed to at ConnectOne 20 + Team Members Key hires with focused C&I specialties *B
Slide 14: Commitment to Strong Credit Quality
14 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 • Stay away f
Slide 15: Commitment to Strong Credit Quality (continued)
Commitment to Strong Credit Quality (continued) 15 0.55% 0.24% 0.16% 0.36% 0.37% 0.01% 0.20% 0.06% 0.01% - 0.01% -0.10% 0.40% 0.90% 1.40% 1.90% 6/30/2016 9/30/2016 12/31/2016 3/31/2017 6/30/2017 Nonaccrual Loans/Loans Recievable* Net Charge-offs* *Non - GAAP measure which excludes taxi medallion loa
Slide 16: Taxi Medallion Portfolio
Taxi Medallion Portfolio $50.9 million at June 30, 2017, net of valuation allowance, or approximately $374,000 per medallion We have reduced our exposure to 1.3% of total loans and 11.3% of Bank’s Tier 1 capital, thus virtually no impact on our pursuit of strategic plans and goals Recent cash
Slide 17: A Compelling Investment Opportunity
17 A Compelling Investment Opportunity CNOB trades at an approximately 20% discount ($6 per share) to median peer P/E ratio. Further, given our growth profile, we arguably should be trading above median. • Proven track record in CRE; charge - offs near zero • Expansion of C&I, owner - occupied and r
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
Slide 19: © ConnectOne Bancory]
© ConnectOne Bancory]
Slide 20: ConnectOne Bancorp, Inc.
& ConnectOne Bancorp, Inc.
Slide 21: Performance Trends: Adjusted Diluted EPS
21 Performance Trends Adjusted Diluted EPS* $0.39 $0.40 $0.40 $0.38 $0.42 $- $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 *Non - GAAP measure which excludes securities gains and charges related to the Bank’s taxi medallion portfolio . See appendix for a reconciliation
Slide 22: Performance Trends: Tangible Book Value Per Share
22 Performance Trends (cont.) Tangible Book Value Per Share* $11.09 $11.60 $11.96 $12.23 $12.42 $- $2.50 $5.00 $7.50 $10.00 $12.50 $15.00 6/30/2016 9/30/2016 12/31/2016 3/31/2017 6/30/2017 Consistently building shareholder value * Non - GAAP measure, see appendix for a reconciliation of GAAP and non
Slide 23: Performance Trends: Adjusted Return on Equity
23 Performance Trends (cont.) Adjusted* Return on Equity 14.24% 14.13% 13.48% 12.91% 13.52% 0.00% 3.00% 6.00% 9.00% 12.00% 15.00% 18.00% Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Peer Median 1) *Non - GAAP measure which excludes securities gains and charges related to the Bank’s taxi medallion portfol
Slide 24: Capital Strength
24 Capital Strength At June 30, 2017 8.77% 9.33% 9.48% 9.60% 11.46% 9.85% 10.34% 10.64% 10.64% 11.32% 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 Bancorp Bank Well Capitalized
Slide 25: Loan Funding Metrics
Loan Funding Metrics $238 $229 $374 $342 $495 $126 $144 $244 $262 $305 $112 $85 $130 $80 $190 4.17% 4.28% 4.00% 4.21% 4.25% 2.50% 2.75% 3.00% 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% $- $100 $200 $300 $400 $500 $600 $700 Q2 2016 Q3 2016 Q4 2016* Q1 2017 Q2 2017 Gross Loan Fundings Loans Paidoff Net Growt
Slide 26: Appendix: Reconciliation of GAAP Earnings
Appendix June 30, Mar. 31, Dec. 31, Sept. 30, June 30, (dollars in thousands, except share data) 2017 2017 2016 2016 2016 Reconciliation of GAAP Earnings to Earnings excluding Net Securities Gains and Expenses Related to the Taxi Medallion Portfolio Net income (loss) available to common stockholders
Slide 27: Reconciliation of GAAP and non-GAAP measures (cont.)
27 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) June 30, Mar. 31, Dec. 31, Sept. 30, June 30, (dollars in thousands, except share data) 2017 2017 2016 2016 2016 Return on Assets Measures Net income available to common stockholders-adjusted 13,402$ 12,325$ 12,172$ 12,171$ 11,828$ A
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, (dollars in thousands, except share data) 2017 2017 2016 2016 2016 Efficiency Measures Total noninterest expenses 25,303$ 18,249$ 15,252$ 14,551$ 14,352$ Increase in valuation allowance,
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, (dollars in thousands, except share data) 2017 2017 2016 2016 2016 Capital Ratios and Book Value per Share Common equity 546,173$ 540,277$ 531,032$ 499,588$ 484,414$ Less: intangible asse
Slide 30: Reconciliation of GAAP and non-GAAP measures (cont.)
30 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) June 30, Mar. 31, Dec. 31, Sept. 30, June 30, 2017 2017 2016 2016 2016 NCO Detail Net loan charge-offs: Charge-offs 10$ 72$ 37,074$ 1,910$ 77$ Recoveries (60) (129) (2) (12) (16) Net loan charge-offs (50)$ (57)$ 37,072$ 1,898$ 61$ as
Slide 31: Reconciliation of GAAP and non-GAAP measures (cont.)
31 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) Net income excluding amortization of intangible assets d
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