Connectone Bancorp, Inc. · NASDAQ:CNOB
Connectone Bancorp — Raymond James Conference 2016
33 slides from Connectone Bancorp's conference presentation, Sep 7, 2016
Slide 1: Raymond James September 7, 2016 Chicago, IL
Raymond James September 7, 2016 Chicago, IL
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives,assumptionsorfutureeventsorperformancearenothistoricalfactsandmaybeforward-looking.Thesestatementsareoften, butnotalways,madethr
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, $3.4 billion in total loans and $3.2billion in total deposits □21 locations across Manhattan, Bergen, Essex, Hudson, Mercer, Monmo
Slide 4: ConnectOne Milestones
ConnectOne Milestones e ¥® JANUARY 2016 ® JUNE 2016 JULY 2015 — JULY 2014 (State wanna ean JUNE 2013 Serena FEBRUARY 2013 JUNE 2015 Ze Eanes SS OCTOBER 2009 JANUARY 2005 ocToBER 2006 “Sennen & ConnectOne Bancorp
Slide 5: Performance Trends
5 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 $0.33 $0.33 $0.35 $0.36 $0.36 $0.38 $0.20 $0.24 $0.28 $0.32 $0.36 $0.40 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Earnings Per Share GAAP Dil
Slide 6: Performance Trends (cont.)
6 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 $8.00 $8.50 $9.00 $9.50 $10.00 $10.50 $11.00 $11.50 $12.00 3/31/2015 6/30/2015 9/30/2015 12/31/2015 3/31/2016 6/30/2016 Tangible Book Value per Share Consistently bui
Slide 7: Performance Trends (cont.)
7 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 reporte
Slide 8: Performance Trends (cont.)
8 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 reporte
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 reporte
Slide 10: Capital Strength
10 Capital Strength 8.52% 9.10% 9.23% 11.44% 9.62% 10.43% 10.43% 11.30% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% Leverage Ratio CET 1 Ratio Tier 1 Ratio Risk-based Capital Ratio At June 30, 2016 Bancorp Bank Well Capitalized
Slide 11: Loan Portfolio Diversification
11 Loan Portfolio Diversification As of 6/30/16 -$3.4 Billion Type Balance Percentage Type BalancePercentage CRE-Retail $323 10% Own Occ-Office / Warehouse or Mixed Use $50 1% CRE -Other / Misc $117 3% Own Occ-–Retail $84 2% CRE -Warehouse / Industrial $107 3% Own Occ-–Office $61 2% CRE –Office $95
Slide 12: Loan Portfolio Growth
12 Loan Portfolio Growth $2,641 $2,765 $2,953 $3,099 $3,264 $3,376 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 3/31/2015 6/30/2015 9/30/2015 12/31/2015 3/31/2016 6/30/2016 $ MM
Slide 13: Loan Origination Metrics
13 Loan Origination Metrics $164 $190 $307 $203 $233 $181 $62 $66 $119 $57 $68 $69 $102 $124 $188 $146 $165 $112 3.74% 3.73% 3.97% 3.88% 3.97% 4.14% 2.50% 2.75% 3.00% 3.25% 3.50% 3.75% 4.00% 4.25% $- $50 $100 $150 $200 $250 $300 $350 $400 $450 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Gross Lo
Slide 14: Commitment to Solid Credit Quality
14 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 15: Commitment to Solid Credit Quality (cont.)
15 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% 0.56%
Slide 16: CRE Concentrations-Positive Trends
16 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 stood
Slide 17: Multifamily Portfolio
17 Multifamily Portfolio □Total portfolio $968 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 since t
Slide 18: C&I Lending
18 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 revenues.
Slide 19: Taxi Medallion Portfolio
19 Taxi Medallion Portfolio □ Exposure, net of reserves, totals $95.3 million at June 30, 2016; 2.82% of total loans and 24.4% 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 level of de
Slide 20: Total Deposit Composition
20 Total Deposit Composition Noninterest Demand 20% Interest Transaction 41% Listing 8% Retail CDs 12% Reciprocal 8% Brokered 11% As of 06/30/16 -$3.2 Billion
Slide 21: Noninterest-bearing Deposit Trends
21 Noninterest-bearing Deposit Trends $482 $510 $560 $608 $609 $582 $480 $558 $587 $651 $615 $649 $250 $300 $350 $400 $450 $500 $550 $600 $650 $700 $750 3/31/2015 6/30/2015 9/30/2015 12/31/2015 3/31/2016 6/30/2016 Average Quarterly Balance As of Balance $ MM
Slide 22: Stock Price Performance
22 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 2Q 2016 deposit growth, LTD ratio stable □ Liq
Slide 23: Liquidity Management
23 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 over 100%.
Slide 24: Three Ways To Win
24 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 25: 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 experienced ma
Slide 26: ConnectOne Bancorp, Inc.
& ConnectOne Bancorp, Inc. & ConnectOne Bancorp
Slide 27: Appendix
& ConnectOne Bancorp, Inc. APPENDIX & ConnectOne Bancorp
Slide 28: Appendix Reconciliation of GAAP and non-GAAP measures
28 Appendix Reconciliation of GAAP and non-GAAP measures (dollars in thousands, except share data) June 30, Mar. 31, Dec. 31, Sept. 30, June 30, GAAP Earnings Data 2016 2016 2015 2015 2015 Net income (GAAP) 10,859$ 10,391$ 9,568$ 10,842$ 10,521$ Less: preferred dividends - 22 28 28 28 Net income ava
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) 2016 2016 2015 2015 2015 Return on Assets Measures Core earnings available to common stockholders (non-GAAP) 11,436$ 10,905$ 10,874$ 10,538$ 10,126
Slide 30: Reconciliation of GAAP and non-GAAP measures (cont.)
30 Appendix Reconciliation of GAAP and non-GAAP measures (cont.) (dollars in thousands, except share data) June 30, Mar. 31, Dec. 31, Sept. 30, June 30, NCO Detail 2016 2016 2015 2015 2015 Net loan charge-offs: Charge-offs 77$ 512$ 18$ 519$ 334$ Recoveries (16) (15) (2) (342) (331) Net loan charge-o
Slide 31: Reconciliation of GAAP and non-GAAP measures (cont.)
31 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) 2016 2016 2015 2015 2015 Capital Ratios and Book Value per Share Common equity 484,414$ 474,727$ 466,094$ 459,896$ 452,732$ Less: intangible assets
Slide 32: Reconciliation of GAAP and non-GAAP measures (cont.)
32 Appendix Reconciliation of GAAP and non-GAAP measures (cont.) June 30, Mar. 31, Dec. 31, Sept. 30, June 30, 2016 2016 2015 2015 2015 NCO Detail Net loan charge-offs: Charge-offs 77$ 512$ 18$ 519$ 334$ Recoveries (16) (15) (2) (342) (331) Net loan charge-offs 61$ 497$ 16$ 177$ 3$ as a % of average
Slide 33: Reconciliation of GAAP and non-GAAP measures (cont.)
33 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 by