Exhibit 99.1
CNOB May 2018 Investor Presentation
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 through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases . Accordingly, these statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them . Our actual results could differ materially from those anticipated in such forward - looking statements as a result of several factors more fully described under “Risk Factors” in our Annual Report on Form 10 - K, Item 1 A, filed with the Securities and Exchange Commission . Any or all of our forward - looking statements in this presentation may turn out to be inaccurate . The inclusion of this forward - looking information should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will be achieved . We have based these forward - looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs . There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward looking statements including, but not limited to the risk factors described above and : ( 1 ) changes in general economic and financial market conditions ; ( 2 ) changes in the regulatory environment ; ( 3 ) economic conditions generally and in the financial services industry ; ( 4 ) changes in the economy affecting real estate values ; ( 5 ) our ability to achieve loan and deposit growth ; ( 6 ) the completion of our future acquisitions or business combinations and our ability to integrate the acquired business into our business model ; ( 7 ) projected population and income growth in our targeted market areas ; and ( 8 ) volatility and direction of market interest rates and a weakening of the economy which could materially impact credit quality trends and the ability to generate loans . All forward - looking statements are necessarily only estimates of future results and actual results may differ materially from expectations . You are, therefore, cautioned not to place undue reliance on such statements which should be read in conjunction with the other cautionary statements that are included elsewhere in this presentation . Further, any forward - looking statement speaks only as of the date on which it is made and we undertake no obligation to update or revise any forward - looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events . Forward Looking Statements
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 o Formed as a de novo in 2005 to take advantage of poor middle market customer service offered by other institutions $5.1 Billion in Total Assets ConnectOne is a high growth, high performing commercial bank serving the New York & New Jersey metro market. 3 o One of the most efficient banks in the US due to structure, leveraging technology & operating philosophy Best In - Class Efficiency o 90% of loan portfolio o 65% of deposit base Commercial Lending Focus
Strong Franchise, Attractive Markets Strategically placed offices throughout NY/NJ metro area 4 The market we operate in accounts for approximately $2 trillion of the $18 trillion United States GDP Market is largely dominated by the largest institutions in the country, leaving tremendous opportunity for banks catering to middle market businesses Expansion in the New York Market Densely populated, lucrative markets Demand for personalized service amongst small to midsize business owners o Currently represents approximately 20% of our balance sheet o More than 2 million small businesses in New York o Recent office additions in New York located in Manhattan, Long Island and Astoria
A History of Growth 5 $4.0 $4.4 $5.1 $5.2 $3.1 $3.6 $4.2 $4.2 $2.8 $3.3 $3.8 $3.7 12/31/2015 12/31/2016 12/31/2017 3/31/2018 Assets Loans Deposits $ Billions $15.49 $16.62 $17.63 12/31/2015 12/31/2016 12/31/2017 Projected 12/31/2018* Book Value Per Share $18.99 * Analyst consensus per S&P 144% 99% CNOB KBW Stock Price Performance Since Legacy CNOB IPO
High Operating* Performance 6 Technology & Infrastructure 1.14% 1.18% 1.25% 1.32% 1.37% 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 ROAA ROATCE EPS Operating Efficiency Ratio * 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, deferred tax valuation charge, and tax benefits on employee share - based awards. See appendix for a reconciliation of GAAP and non - GAAP measures. 12.9% 13.4% 14.5% 15.6% 16.4% 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 $0.38 $0.41 $0.46 $0.51 $0.53 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 44.0% 41.6% 39.3% 38.0% 42.5% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0% 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018
The financial services arena is changing quickly - ConnectOne will always be an early adopter Empowering our staff with the best possible tools and resources that enhance our excellent reputation for “sense of urgency” wit h our clients nCino Leading Edge Technology Initiatives Building for the Future 7 o Provides ConnectOne with one of the most efficient and streamlined deposit & loan operating systems in the industry o Supports our best - in - class efficiency metrics and enhances our excellent reputation for “sense of urgency” with our clients Zelle o A consortium of the top 30 banks in the country to provide real - time payments right from your mobile banking app Other Initiatives o One of the first banks to go live on Oracle’s Fusion Cloud based general ledger system o Online account opening o Advanced branch office model
Investments in technology enhance our loan & deposit gathering abilities Reflects structural uniqueness of ConnectOne Per Median*: $6.5MM We are ~3x 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 efficiency ratios in the industry 42% Operating Efficiency Ratio 1) $ 16.9MM Assets Per Employee 3X Locations serve as “business hubs” supporting clients beyond geographic footprint * Peer group includes banks and thrifts between $1.0B and $7.5B in assets located in Northeast and Mid - Atlantic regions. Median r eflects the most recent 5 quarters of reported results. Data sourced from SNL Financial . 1) Non - GAAP measure, see appendix for a reconciliation of GAAP and non - GAAP measures. Technology offers ability to leverage offices to drive more business within our footprint 8
9 Diversified Loan Portfolio As of 3/31/18 - $4.2 Billion* *Reflects gross loans prior to adjusting for unearned net origination fees Other CRE 36% Multifamily 34% Business Loans 23% Residential/Co nsumer 7% Type Balance Percentage Type Balance Percentage CRE - Retail $340 OOC - Warehouse / Industrial $85 CRE - Other / Misc 186 OOC - Retail 75 CRE - Office 154 OOC - Office 59 CRE - Warehouse / Industrial 132 OOC - Office / Warehouse or Mixed Use 56 CRE - Land Loan for Future Development 122 OOC - Other 34 CRE - Mixed Use 79 Total CRE - Owner Occupied 309 CRE - Land Loan (Land Only) 25 Total CRE - Non - Owner Occupied 1,038 C&I - Service 232 C&I - Schools 161 Construction - Multifamily 207 C&I - Contactors 96 Construction - 1 to 4 Family 177 C&I - Residential 1 to 4 Family 77 Construction - Other 95 C&I - Other 47 Total Construction 479 C&I - Transportation 38 Total CRE - Other $1,517 C&I - Distribution 33 C&I - Manufacturing 9 Multifamily - 25 to 64 units $519 Total C&I 693 Multifamily - 10 to 24 unit 433 Total Business Loans $1,002 Multifamily - 100 units or more 245 Multifamily - 64 units to 99 units 142 Residential - 1st Lien $232 Multifamily - 5 to 9 units 113 Home Equity - 2nd Lien (LOC) 48 Total Multifamily $1,452 Total Residential & Consumer $280
C&I C&I Loan Portfolio 10 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 capabilities to further serve our niche market segments $396 MM $ 467 MM $554 MM $735 MM 12/31/14 12/31/15 12/31/16 12/31/17
11 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 o Focus on responsible growth Comprehensive underwriting standards and processes Lending within geographic footprint Multi - faceted stress testing Continued focus on loan monitoring o NYC metro market economically strong and diverse o Every loan tested during underwriting process o Quarterly modeling performed in conjunction with ALCO processes o Annual third - party testing conducted on approximately two - thirds of the portfolio o Team of portfolio managers and loan workout specialists
Deposit Franchise 12 Demand Noninterest - bearing 20% Demand interest - bearing 16% Money Market 26% Savings 5% Time 33% Deposit Composition 3/31/2018 Total Deposits $3.7 billion 2018 Cost of Total Deposits 0.83% $2,569 $3,093 $3,470 $3,748 Year Ended 2015 Year Ended 2016 Year Ended 2017 Quarter Ended March 31, 2018 Average Total Deposits ($mm) $537 $625 $681 $725 Year Ended 2015 Year Ended 2016 Year Ended 2017 Quarter Ended March 31, 2018 Average Demand Noninterest - bearing ($mm) CAGR 14% CAGR 18%
13 Business Generation Experienced CRE Lenders & Support Staff o Focus towards owner - occupied lending Broadening focus on C&I by building business niches o Independent Schools Division o ~40% of New Jersey Independent Schools are clients o Opportunities for expansion into NY & PA o Municipal Deposits o Amongst top 20 banks in New Jersey holding municipal deposits (based on deposit balance) o Law Firms o Newly established Escrow Division – attractive DDA capture Building our Residential Lending Portfolio o High net worth residential markets supported by strong NYC economy o Leveraging our asset sensitive balance sheet Building a Cash Management Enterprise o Hiring seasoned specialists o State of the art products & services Technology o Utilizing technology and online tools as an avenue for deposit generation
The right amount of capital o 8.31% TCE holding company o 10.20% leverage at bank o 12.31% total risk based at bank Operating ROATCE in excess of 16% Retained earnings supports growth, no equity offerings planned in foreseeable future Dividend of $0.075 per quarter; estimated payout ratio of 14%. No current plans for increase, or stock buybacks, but Board wi ll consider should performance returns exceed growth targets. Capital Allocation & Philosophy 14
15 A Compelling Investment Opportunity CNOB trades at an approximately 20% discount ($ 6.50 per share) to median peer P/E ratio. Further, given our growth profile, we arguably should be trading above median. o Proven track record in CRE; charge - offs near zero o Expansion of C&I, owner - occupied and residential lending o Annual regulatory exams o Skilled acquiror; completed complex MOE in 2014 o Desirable franchise in one of the best markets in the country o Since 2013, stock price appreciation ~144% vs. BKX up ~99% o Recent ROA (ex. taxis) 1.37%, ROATCE (ex. taxis) 16.4% o Well above average growth in operating EPS and Tangible Book Value per share o Client first o Sense of Urgency o Driving shareholder returns o Continued strength in deposit growth, specifically DDA o High loan - to - deposit ratio is typical in our operating region o Strong breadth and depth of on/off balance sheet liquidity Funding challenges CRE concentrations viewed negatively by regulators Operating plan is challenged Price performance/shareholder return is just average M&A participation unlikely Perceived Challenges Reality Market continues to present opportunities for an institution delivering on these values
Strategy & Vision Continued Growth The Company remains well - positioned to execute Achieving Continued Deposit Growth 16 Increasing & Expanding Commercial Client Relationships Expanding Our Presence in the New York Metro Market Expanding Cash Management Capabilities Utilizing a Modern Branch Office Model Continuing to Enhance Digital Channels
“ ,, 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 17 President | James Beard Foundation Susan Ungaro “ ,, The responsiveness and general business acumen of the Executive Management and Client Service teams is unparalleled. I cant imagine a better bank to partner with to grow our firm. The ConnectOne team responds to client needs with a sense of urgency. The ability to craft timely, custom solutions is extremely valuable in our line of business. Bart Mongelli, ESQ DeCotiis, Fitzpatrick & Cole, LLP They understand construction, from the Chairman to the lending team. This has allowed us to fast track our projects in order to meet the current strong market. “ ,, Ken Hollenbeck Managing Partner | Scarini & Hollenbeck, LLC Joe Cotter Natural Resources
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19 Appendix
Commercial Real Estate Lending Focus 20 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 acceleration of our C&I capabilities o Risk management is a center piece of our strategy – Our policies and procedures have stood up to regulatory scrutiny o ConnectOne and Legacy ConnectOne regulated by the FDIC and NJ DOBI over the last 13+ years 436% 405% 398% 443% 399% 81% 110% 133% 125% 110% 0% 100% 200% 300% 400% 500% 600% 700% 2014 2015 2016 2017 1Q 2018 CRE as a Percentage of Total Risk Based Capital CRE Construction
Loan Funding Metrics 21
Credit Quality 0.30% 0.31% 0.28% 0.38% 0.42% 1.62% 1.36% 1.26% 1.29% 0.99% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3/31/17 6/30/17 9/30/17 12/31/17 3/31/18 NPAs/Total Assets (excluding taxi) NPAs/Total Assets 22
Appendix Reconciliation of GAAP and non - GAAP measures 23 Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, 2018 2017 2017 2017 2017 Reconciliation of GAAP Earnings to Earnings Excluding the Following Items: Net income 4,251$ 10,580$ 13,077$ 7,683$ 11,880$ Net gains on sales of securities (after taxes) - - - - (1,093) Deferred tax valuation charge - 5,574 - - - Tax benefit on employee share-based awards (ASU 2016-09) (541) - - (133) (47) Provision related to taxi medallion loans (after taxes) 13,430 - - - - Increase in valuation allowance, loans held-for-sale (after taxes) - 182 1,776 5,719 1,538 Net income-adjusted 17,140$ 16,336$ 14,853$ 13,269$ 12,278$ Weighted average diluted shares outstanding 32,238,048 32,252,759 32,182,016 32,255,770 32,192,643 Diluted EPS (GAAP) 0.13$ 0.33$ 0.41$ 0.24$ 0.37$ Diluted EPS-adjusted (Non-GAAP) (1) 0.53 0.51 0.46 0.41 0.38 Return on Assets Measures Net income-adjusted 17,140$ 16,336$ 14,853$ 13,269$ 12,278$ Average assets 5,088,823$ 4,916,549$ 4,713,487$ 4,494,978$ 4,381,707$ Less: average intangible assets (148,215) (148,383) (148,553) (148,737) (148,930) Average tangible assets 4,940,608$ 4,768,166$ 4,564,934$ 4,346,241$ 4,232,777$ Return on avg. assets (GAAP) 0.34 % 0.85 % 1.10 % 0.69 % 1.10 % Return on avg. assets-adjusted (non-GAAP) (2) 1.37 1.32 1.25 1.18 1.14 Three Months Ended (dollars in thousands, except for per share data)
24 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, 2018 2017 2017 2017 2017 Return on Equity Measures Net income-adjusted 17,140$ 16,336$ 14,853$ 13,269$ 12,278$ Average common equity 575,029$ 567,308$ 556,620$ 549,748$ 539,544$ Less: average intangible assets (148,215) (148,383) (148,553) (148,737) (148,930) Average tangible common equity 426,814$ 418,925$ 408,067$ 401,011$ 390,614$ Return on avg. common equity (GAAP) 3.00 % 7.40 % 9.32 % 5.61 % 8.93 % Return on avg. common equity-adjusted (non-GAAP) (3) 12.09 11.42 10.59 9.68 9.23 Return on avg. tangible common equity (non-GAAP) (4) 4.15 10.11 12.81 7.80 12.45 Return on avg. tangible common equity-adjusted (non-GAAP) (5) 16.40 15.57 14.54 13.39 12.87 Efficiency Measures Total noninterest expenses 17,059$ 16,566$ 18,641$ 25,303$ 18,249$ Increase in valuation allowance, loans held-for-sale - (267) (3,000) (9,725) (2,600) Foreclosed property expense (51) (32) (46) (71) (100) Operating noninterest expense 17,008$ 16,267$ 15,595$ 15,507$ 15,549$ Net interest income (tax equivalent basis) 38,610$ 40,744$ 37,929$ 35,839$ 33,956$ Noninterest income 1,407 2,024 1,756 1,422 3,002 Net gains on sales of investment securities - - - - (1,596) Operating revenue 40,017$ 42,768$ 39,685$ 37,261$ 35,362$ Operating efficiency ratio (non-GAAP) (6) 42.5 % 38.0 % 39.3 % 41.6 % 44.0 % (dollars in thousands) Three Months Ended
25 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, 2018 2017 2017 2017 2017 Capital Ratios and Book Value per Share Common equity 564,266$ 565,437$ 557,691$ 546,173$ 540,277$ Less: intangible assets (148,104) (148,273) (148,442) (148,611) (148,804) Tangible common equity 416,162$ 417,164$ 409,249$ 397,562$ 391,473$ Total assets 5,158,368$ 5,108,442$ 4,844,755$ 4,681,280$ 4,460,816$ Less: intangible assets (148,104) (148,273) (148,442) (148,611) (148,804) Tangible assets 5,010,264$ 4,960,169$ 4,696,313$ 4,532,669$ 4,312,012$ Common shares outstanding 32,175,233 32,071,860 32,015,317 32,015,317 32,004,471 Common equity ratio (GAAP) 10.94 % 11.07 % 11.51 % 11.67 % 12.11 % Tangible common equity ratio (non-GAAP) (7) 8.31 8.41 8.71 8.77 9.08 Regulatory capital ratios (Bancorp): Leverage ratio 8.65 % 8.92 % 9.13 % 9.33 % 9.44 % Common equity Tier 1 risk-based ratio 9.14 9.15 9.40 9.48 9.79 Risk-based Tier 1 capital ratio 9.25 9.26 9.52 9.60 9.92 Risk-based total capital ratio 12.66 11.04 11.34 11.46 11.83 Regulatory capital ratios (Bank): Leverage ratio 10.20 % 9.84 % 10.11 % 10.34 % 10.50 % Common equity Tier 1 risk-based ratio 10.91 10.21 10.54 10.64 11.03 Risk-based Tier 1 capital ratio 10.91 10.21 10.54 10.64 11.03 Risk-based total capital ratio 12.31 10.90 11.22 11.32 11.70 Book value per share (GAAP) 17.54$ 17.63$ 17.42$ 17.06$ 16.88$ Tangible book value per share (non-GAAP) (8) 12.93 13.01 12.78 12.42 12.23 As of (dollars in thousands, except for per share data)
26 Appendix Reconciliation of GAAP and non - GAAP measures (cont.) Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, 2018 2017 2017 2017 2017 Asset Quality Nonaccrual taxi medallion loans 29,405$ 46,765$ 47,430$ 48,884$ 59,054$ Nonaccrual loans (excluding taxi medallion loans) 20,631 18,848 13,755 14,055 12,790 Other real estate owned 1,076 538 - 580 580 Total nonperforming assets 51,112$ 66,151$ 61,185$ 63,519$ 72,424$ Performing troubled debt restructurings 14,349$ 14,920$ 12,749$ 10,221$ 10,005$ Allowance for loan losses ("ALLL") 32,529$ 31,748$ 29,870$ 28,401$ 26,901$ Loans receivable 4,202,679$ 4,171,456$ 3,889,289$ 3,761,572$ 3,571,663$ Less: taxi medallion loans 29,405 46,765 - - - Loans receivable (excluding taxi medallion loans) 4,173,274$ 4,124,691$ 3,889,289$ 3,761,572$ 3,571,663$ Loans held-for-sale (taxi medallion loans) -$ -$ 47,430$ 50,891$ 61,319$ Nonaccrual loans (excluding taxi medallion loans) as a % of loans receivable (excluding taxi medallion loans) 0.49 % 0.46 % 0.35 % 0.37 % 0.36 % Nonaccrual loans as a % of loans receivable 1.19 1.57 1.57 1.67 2.01 Nonperforming assets as a % of total assets 0.99 1.29 1.26 1.36 1.62 Nonperforming assets (excluding taxi medallion loans) as a % of total assets 0.42 0.38 0.28 0.31 0.30 ALLL as a % of loans receivable 0.77 0.76 0.77 0.76 0.75 ALLL as a % of nonaccrual loans (excluding taxi medallion loans) 157.7 168.4 217.2 202.1 210.3 ALLL as a % of nonaccrual loans 65.0 48.4 48.8 45.1 37.4 (dollars in thousands) As of
27 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 divided by average common equity. (4) Earnings available to common stockholders excluding amortization of intangibles assets divided by average tangible common equity. (5) Adjusted earnings available to common stockholders divided by average tangible common equity. (6) Operating noninterest expense divided by operating revenue. (7) Tangible common equity divided by tangible assets. (8) Tangible common equity divided by common shares outstanding at period-end.
