Connectone Bancorp, Inc. · NASDAQ:CNOB
Connectone Bancorp — Debt Investor Presentation (January 2018)
31 slides from Connectone Bancorp's debt investor presentation, Jan 11, 2018
Slide 1: Subordinated Debt Offering Presentation
© ConnectOne Bancorp, Inc. ‘9 Subordinated Debt Offering 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 often, bu
Slide 3: Potential Transaction Summary
Potential Transaction Summary Issuer / Exchange / Ticker ConnectOne Bancorp, Inc. (“HoldCo” or the “Company”) / NASDAQ / CNOB Security Offered HoldCo subordinated notes due in 2028 Credit Rating © Subordinated debt rated BBB- by KBRA Non-call 5-year at par Certain special events Coupon Frequency Sem
Slide 4: Corporate Profile
Corporate Profile Financial Snapshot — As of 9/30/2017 - — Headquarters: Englewood Cliffs, NJ ome Founded: 2005 (ConnectOne Bank) ue “i > ane ae IPO: February 2013 < Assets: $4,845 mm Gross Loans HFI $3,892 mm Deposits $3,624 mm oe Tangible Common Equity: $409 mm oes MRQ ROAA 1.10% ‘ Market Cap" $83
Slide 5: Investment Highlights
Investment Highlights Strong Core Fri Prudent Risk Management Experienced Management ‘Annualized fr the three months ended 0/20/2017. Please see the appendix for reconciliation of non-GAAP measures. Efficiency ratio calculated on an annualized basis for the nine month period ended, September 20, 201
Slide 6: Key Dates
Key Dates ‘anounced portrereio JANUARY 2016 minzeie $4 Billion JULY 2017 ii see $500mm JULY 2014 SEES Peres FEBRUARY 2013 all ncino. Rebrended to ComectOne Bank = JANUARY 2005, Founded as North Jersoy ‘Community Bank by Frank OCTOBER 2009 OCTOBER 2017, Announces strategie portnership wit scino DECEM
Slide 7: Operating in Desirable NJ and NY Markets
Operating in Desirable NJ and NY Markets + Our branches are strategically located in densely populated and wealthy markets across northern New Jersey and metro New York + These focus markets are dominated by global financial institutions, leaving tremendous opportunity for banks like ConnectOne, whi
Slide 8: Deposit Market Share
Deposit Market Share #9 New Jersey market share among institutions ~95% of deposits in the New York City MSA are held by headquartered in New Jersey international or large regional banks New Jersey New York City MSA (Community Banks*) Deposits Market Deposits Market #of in Market Share conanei fof i
Slide 9: Key Financial Performance: Profitability
Key Financial Performance: Profitability ConnectOne reports financial results on both a GAAP and non-GAAP adjusted basis to isolate historical volatility associated with the Company's taxi ‘medallion portfolio, and other non-operating items. As of September 30, 2017, the taxi medallion portfolio rep
Slide 10: Key Financial Performance: Capital Ratios
Key Financial Performance: Capital Ratios 8.93% ; ; 7 | I | 12/31/2015 12/31/2016 9/30/2017 12/31/2015 12/31/2016 9/30/2017 Tier 1 Ratio Total Risk Based Capital Ratio 9.61% 9.52% 77% 11-78% 11.34% 12/31/2015 12/31/2016 9/30/2017 12/31/2015 12/31/2016 9/30/2017 a
Slide 11: Consistent Organic Asset Growth
Consistent Organic Asset Growth Total Assets (8 in million) CAGR = 13% $4,845 $4,426 $4,016 $3,449
Slide 12: Commercial Lending Focus
Commercial Lending Focus Gross Loans HFI (9/30/2017) Gross Loans HFI ($mm) Residential CAGR: 14% 53.582 Commercial $3,479 net a | | 1213112015 1213112016 90/2017 Total Commercial Loans ($mm) CAGR: 14% $3,626 $3,245 Commercial RE. 66% Total Loans: $3.9bn YTD Yield on Loans: 4.42% CRE/ TRBC*: 551% $2,
Slide 13: CRE & Multifamily Lending
CRE & Multifamily Lending Owner- + ConnectOne has maintained elevated CRE concentration for an ‘occupied extended period of time CRE + Approximately 70% located in New Jersey and 24% located in New York + CRE loans are subject to our strict underwriting criteria including a maximum 75% LTV and a min
Slide 14: C&I Lending
C&lI Lending C&l Loans ($mm) C&l Lending CAGR: 20% : C&l teams target small and middle-market businesses $642 in a diverse set of industries including: manufacturing, professional services, and distributing $541 - Target businesses range from $2 to $100 million in annual revenues $466 ConnectOne pro
Slide 15: Credit Risk Management
Credit Risk Management Conservative Lending Culture + High-quality direct commercial lending with no reliance on participations or wholesale loan purchases + Relationship-based approach with focus on corresponding deposit opportunities + Lending primarily within our economically diverse local footpr
Slide 16: Asset Quality Review
Asset Quality Review Nonaccrual Loans / Loans Receivable PAs / Total Assets 157% H 1.26% 1.54% H poccens ; 0.67% H ' 0.58% : f i | 0.35%"! 1 | 0.28%"! 12/31/2015 12/31/2016 9/30/2017 12/31/2015, 12/31/2016 9/30/2017 NCOs / Average Loans Reserves / Nonaccrual Loans 1.18% H 217.2%" i 128.1% H H | 48.8
Slide 17: Taxi Medallion Portfolio
Taxi Medallion Portfolio O° Carrying value of $47.4 million at September 30, 2017 down from peak of $103.3 million at September 30, 2015 Portfolio consists of New York City, primarily corporate, taxi medallions During the fourth quarter of 2017, we returned all taxi loans to the held-for-investment
Slide 18: Deposit Profile
Deposit Profile Deposits ($mm) Deposit Portfolio (9/30/2017) CAGR: 16% Demand, 3,624 Noninterest- $3,344 bed bearing $2,791 Time 20% 30% a Demand Interest- 12/31/2015 1283112016 9930/2017 bearing Savings 1s Noninterest-bearing Deposits ($mm) am CAGR: 6% Money Market 720 9695 si 28% a Total Deposits:
Slide 19: Securities Portfolio Overview
Securities Portfolio Overview (9/30/2017) $401 million, or 8% of total assets Other Securities Average Yield: 3.22% om US Govt and Federal Agency Weighted Average Life: 5.0 years Obiigations* Obligations of oe Modified Duration: 3.7 years US Sites and ‘Subdivisions Over 90% of holdings have an S&P r
Slide 20: Executive Management
Executive Management Title Joined Previous CNOB Experience Frank S. Sorrentino itl William S. Bums Elizabeth Magennis Christopher J. Ewing Michael McGrover Chairman, President & CEO EVP & CFO EVP & CLO EVP & COO First SVP & CCO. 55 87 2005 2012 2006 2015 2014 Founding Chairman of ConnectOne Bancorp
Slide 21: Summary Considerations
Summary Considerations Significant size and scale value in dense, dynamic and desirable northern New Jersey / metro New York markets + 6" largest publicly traded bank headquartered in New Jersey Comprehensive product offerings to service middle market commercial businesses Strong Core Fri Sophistica
Slide 22: ConnectOne Bank
ConnectOne Bai
Slide 23: Pro Forma Capital Ratios
Appendix Pro Forma Capital Ratios ConnectOne Bancorp Capital Ratios Pro Forma As Of $75.0 million September 30, 2017 Sub Debt Raise * Common Equity / Assets 11.51% 11.34% TCE/TA™ 8.71% 8.58% Tier 1 Leverage Ratio 9.13% 8.999 Common Equity Tier 1 Ratio 9.40% 9.37% Tier 1 Capital Ratio 9.52% 9.49% Tot
Slide 24: Holding Company Liquidity
Appendix Holding Company Liquidity Sources of Liqu ($ mil) Uses of ry ($ mil) Parent Operating Income $ 3.0 Holding Company Overhead $ 0.1 Total Sources of Liquidity $ 3.0 Existing Subordinated Debt Interest $ 0.8 New Subordinated Debt Interest * $ 0.9 Parent Common Dividend $ 24 Total Uses of Liqui
Slide 25: Interest Coverage
Appendix Interest Coverage Quarterly Interest Coverage ($000) CNOB Est. Sub Debt Forma 9/30/2017 Adjustment * 9/30/2017 A Total Deposit Interest $6,113 $6,113 B Total Debt Interest $3,206 $938 $4,144 A+B=C Total Interest Expense $9,319 $10,257 D Pre-Tax Income $18,684 ($938) $17,747 Interest Coverag
Slide 26: Reconciliation of GAAP and non-GAAP measures
Appendix Reconciliation of GAAP and non-GAAP measures For the Nine Months Ended, For the Tweleve Months Ended, ‘Sept. 30, Dec. 31, Dec. 31, 2017 2016 2015 (dollars in thousands) ‘Net income available to common stockholders $ 32,640 $ 31,060 $ 41,199 Loss on debt extinguishment (after taxes) = - 1418
Slide 27: Reconciliation of GAAP and non-GAAP measures (cont.)
Appendix Reconciliation of GAAP and non-GAAP measures (cont.) Return on Equity Measures ‘Net income (Joss) available to common stockholders ‘Net income available to common stockholders-adjusted Average stockhholders' equity Less: average preferred stock Average common equity Less: average intangible
Slide 28: Reconciliation of GAAP and non-GAAP measures (cont.)
Appendix Reconciliation of GAAP and non-GAAP measures (cont.) For the Nine Months Ended, For the Tweleve Months Ended, ‘Sept. 30, Dec. 31, Dec. 31, 2017 2016 2015 (dollars in thousands) Efficiency Measures Total noninterest expenses $ 62,193 $ 58,507 $ ‘54,484 Increase in valuation allowance, loans
Slide 29: Reconciliation of GAAP and non-GAAP measures (cont.)
Appendix Reconciliation of GAAP and non-GAAP measures (cont.) For the Nine Months Ended, For the Tweleve Months Ended, ‘Sept. 30, Dec. 31, Dec. 31, 2017 2016 2015 (dollars in thousands) Net Loan Charge-offs Detail Net loan charge-offs (recoveries): Charge-offs $s B Ss 293 538 ‘Charge-offs for taxi m
Slide 30: Reconciliation of GAAP and non-GAAP measures (cont.)
Appendix Reconciliation of GAAP and non-GAAP measures (cont.) As of Sept. 30, Dec. 31, Dec. 31, 2017 2016 2015 (Gollars in thousands) Asset Quality Loans receivable $ 3,880,289 § 3475832 $ 3,099,007 Loans held-for-sale 89,386 78,005 - Total loans $ 3.978.675 $ 3.553837 $ 3,099,007 ‘Nonaccrual taxi m
Slide 31: Reconciliation of GAAP and non-GAAP measures (cont.)
Appendix Reconciliation of GAAP and non-GAAP measures (cont.) As of Sept. 30, Dec. 31, Dec. 31, 2017 2016 2015 (Gollars in thousands) Capital Total stockholder’s equity is 557691 531,032 ATI Less: preferred stock - - (11,250) Common equity $ 557691 531032 466,094 Less: intangible assets (048,442) (0
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