Connectone Bancorp, Inc. · NASDAQ:CNOB
Connectone Bancorp — Investor Presentation (May 2019)
29 slides from Connectone Bancorp's investor presentation, May 14, 2019
Slide 1: CNOB May 2019 Investor Presentation
CNOB May 2019 Investor Presentation
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: About ConnectOne Bancorp, Inc.
About ConnectOne Bancorp, Inc. o Client first and sense of urgency in every business decision from the top of organization to the bottom Strong Culture Founded in 2005 to capitalize on poor customer service offered to middle market clients by other institutions $ 6.0 Billion in Total Assets ConnectO
Slide 4: Strong Franchise, Attractive Markets
Strong Franchise, Attractive Markets Strategically placed offices throughout NY/NJ metro area 4 The market we operate in accounts for approximately $2.5 trillion of the $19 trillion United States GDP Market is largely dominated by the largest institutions in the country, leaving tremendous opportuni
Slide 5: Expansion Through M&A: Acquisition of Greater Hudson Bank
Expansion Through M&A Acquisition of Greater Hudson Bank 5 Completed transaction on January 2 nd and integrated systems less than 30 days after closing Transaction added approximately $375 million in loans and $425 in deposits Demonstrates ConnectOne’s expertise as a skilled acquiror - CNOB Branches
Slide 6: Expansion Through M&A (cont.): Acquisition of BoeFly
BoeFly is a New York City/Boston based privately held FinTech company. With dynamic patented technology, BoeFly helps connect small to mid - sized businesses with professional loan brokers and lenders across the US. 6 Expansion Through M&A (cont.) Acquisition of BoeFly BoeFly will operate as a separ
Slide 7: BoeFly Acquisition
BoeFly Acquisition Turnkey SBA Lending Platform Incentive - Driven Structure Limited Downside Exposure Attractive Projected Return Profile Seasoned Team Scarcity Value Speed to Market vs. Building Internally ▪ Provides gain on sale and/or other noninterest revenue, as well as healthy spread income ▪
Slide 8: High Operating Performance
High Operating* Performance ROAA ROATCE NIM Efficiency Ratio 8 * Excludes the impact of charges related to the Bank's taxi medallion portfolio and non - operating items including net gains on sal es of securities, merger expenses, deferred tax valuation charge, and tax benefits on employee share - b
Slide 9: Proven Growth & Performance
$10.51 $11.96 $13.01 $14.42 $14.67 12/31/15 12/31/16 12/31/17 12/31/18 3/31/19 Tangible Book Value Per Share Proven Growth & Performance 9 Dollars in billions, except for per share data $3.3 $3.8 $4.1 $4.6 $3.6 $4.2 $4.5 $5.0 $4.4 $5.1 $5.5 $ 6.0 12/31/16 12/31/17 12/31/18 3/31/19 Deposits Loans Ass
Slide 10: Efficient Banking Model
Investments in technology enhance our deposit & loan gathering abilities Reflects structural uniqueness of ConnectOne Peer* Median: $8 MM We are ~2.5x peer median for: o Deposits per branch office o Loans per branch office o A ssets per branch office Efficient Banking Model One of the Best Efficienc
Slide 11: Diversified Loan Portfolio
11 Diversified Loan Portfolio As of 3 /31/19 - $5.0 Billion * Based on internal classifications Type Balance Percentage Type Balance Percentage CRE - Other / Misc $302 Warehouse / Industrial $106 CRE - Retail 284 OOC - Retail 104 CRE - Warehouse / Industrial 144 OOC - Office 77 CRE - Land Loan for F
Slide 12: C&I Loan Portfolio
C&I C&I Loan Portfolio 12 Technology & Infrastructure Improvements focus on keeping best - in - class service with the pace of work our clients are accustomed to at ConnectOne 25 + Team Members Key hires with focused C&I specialties Note: excludes taxi medallion loans Niche Markets Added capabilitie
Slide 13: Maintaining a Strong Credit Culture
13 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 o Prudent growth Comprehensive underwriting stand
Slide 14: Deposit Franchise
Deposit Franchise 14 Deposit Composition 3 /31/2019 Total Deposits $4.6 billion 2019 YTD Cost of Total Deposits 1.36% $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 Year Ended 2016 Year Ended 2017 Year Ended 2018 Quarter Ended 3/31/19 Average Total Deposits CAGR 19% $- $100 $
Slide 15: Business Generation
15 Business Generation Experienced CRE Lenders & Support Staff o Focus towards owner - occupied lending Broadening Focus on C&I B y Building Business Niches o Independent Schools Division o ~40% of New Jersey Independent Schools are clients o Opportunities for expansion into NY, PA & CT o Municipal
Slide 16: Capital Allocation & Philosophy
Strongly capitalized o 8.83% TCE holding company o 10.43% leverage at bank o 12.47% total risk based at bank ROATCE target 15% Stock buyback recently announced and commenced in 1 st q uarter of 2019 Capital Allocation & Philosophy 16 Increased quarterly cash dividend to $0.09 per share. Payout ratio
Slide 17: Strategy & Vision
Strategy & Vision Continued Growth The Company remains well - positioned to execute Achieving Prudent Growth 17 Increasing & Expanding Commercial Client Relationships Expanding Our Presence in the New York & New Jersey Metro Market Maintaining Best in Class Efficiency Continuing Branch Rationalizati
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 Bancorp, Inc.
& ConnectOne Bancorp, Inc.
Slide 20: Appendix
& ConnectOne Bancorp, Inc. Appendix
Slide 21: Commercial Real Estate Lending Focus
Commercial Real Estate Lending Focus 21 o ConnectOne has maintained high levels of CRE concentration for an extended period of time o Our combination of strong organic growth and sound asset quality is our hallmark o We continue to focus on loan diversification – Concentration mitigated by accelerat
Slide 22: Credit Quality
Credit Quality 22 1.27% 0.99% 1.36% 0.99% 0.95% 0.42% 0.42% 0.46% 0.44% 0.34% 0.99% 0.96% 0.99% 0.95% 0.79% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3/31/18 6/30/18 9/30/18 12/31/18 3/31/19 NPAs/Total Assets (excluding taxi) NPAs/Total Assets
Slide 23: Loan Funding Metrics
Loan Funding Metrics 23 Trailing Quarterly Loan Fundings Note: First Quarter 2019 includes Greater Hudson. Rate excludes impact of purchase accounting adjustments. $323 $357 $316 $374 $759 $255 $245 $214 $295 $327 $68 $112 $102 $79 $432 4.74% 4.98% 5.27% 5.47% 5.53% 0.00% 0.75% 1.50% 2.25% 3.00% 3.7
Slide 24: Reconciliation of GAAP and non-GAAP measures
Appendix Reconciliation of GAAP and non - GAAP measures 24 Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, Trailing Twelve 2019 2018 2018 2018 2018 Months Reconciliation of GAAP Earnings to Adjusted Earnings: Net income 11,635$ 18,672$ 19,902$ 17,527$ 4,251$ 67,736$ Merger expenses (after taxes) 5,597
Slide 25: Reconciliation of GAAP and non-GAAP measures (cont.)
25 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, Trailing Twelve 2019 2018 2018 2018 2018 Months Return on Equity Measures Net income-adjusted 17,206$ 19,188$ 18,494$ 17,497$ 17,140$ 72,385$ Average common equity 680,168$ 606,378$ 590,1
Slide 26: Reconciliation of GAAP and non-GAAP measures (cont.)
26 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, 2019 2018 2018 2018 2018 Capital Ratios and Book Value per Share Common equity 682,395$ 613,927$ 594,871$ 578,557$ 564,266$ Less: intangible assets (162,747) (147,646) (147,791) (147,936)
Slide 27: Reconciliation of GAAP and non-GAAP measures (cont.)
27 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, Trailing Twelve 2019 2018 2018 2018 2018 Months Net Interest Margin Average interest-earning assets 5,522,934$ 4,941,425$ 4,856,678$ 4,771,523$ 4,799,453$ 5,021,091$ Net interest income (
Slide 28: Reconciliation of GAAP and non-GAAP measures (cont.)
28 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, 2019 2018 2018 2018 2018 Asset Quality Nonaccrual taxi medallion loans 27,287$ 28,043$ 28,482$ 28,944$ 29,405$ Nonaccrual loans (excluding taxi medallion loans) 20,393 23,812 24,533 20,77
Slide 29: Reconciliation of GAAP and non-GAAP measures (cont.)
29 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) Adjusted earnings available to common stockholders divid
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