ConnectOne Bancorp, Inc.

Thank you for standing by. This is the conference operator. Welcome to Connect One first quarter 2020 conference call. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Joe Calabrese with MWWPR. Please go ahead.

Thank you. Good morning and welcome to today's conference call to review Connect One's results for the first quarter of 2020 and to update you on recent developments. On today's conference call will be Frank Sorrentino, Chairman and Chief Executive Officer, and Bill Burns, Executive Vice President and Chief Financial Officer. The results, as well as notice of this conference call on a listen-only basis over the internet, were distributed this morning at a press release that has been covered by the financial media. At this time, let me remind you that certain statements and assumptions in this conference call contain or are based upon forward-looking information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Form Act of 1995. Such forward-looking statements are subject to numerous assumptions, uncertainties, and known or unknown risks which could cause actual results of different material if one knows what is anticipated. These risk factors were fully discussed in the company's filings with the Securities and Exchange Commission. The forwarding statements included in this conference call are only made as the date of the call, and the company is not obligated to publicly update or revise them. In addition, certain terms used in this call are non-GAAP financial measures, reconciliations of which are provided by the company's earnings release and accompanying tables of schedules, which have been filed today on Form 8K with the SEC and Thank you, Joe, and thank you, everyone, for joining our conference call today. I'd like to begin by expressing our sincere hope that you and your families are all safe and doing well.

These are challenging times and our thoughts are with those who have been affected by this health crisis. Given these unique circumstances, I'd like to begin today's conference call by addressing our response to the COVID-19 pandemic. We took a proactive stance as the outbreak reached the New York area, taking immediate actions in order to safeguard the health and wellbeing of our team members and our clients. The investments we've made in infrastructure and technology played a critical role in transitioning to a virtual bank model, with 90% of our team shifting to a remote work-at-home environment seamlessly. We leveraged these tools to continue to support our relationship banking model, allowing our clients direct connection to the dedicated bankers who continue to serve them without skipping a beat. Through the use of our digital channels, technological tools, and our dedicated call center, our clients are primarily conducting day-to-day banking activities remotely. Simultaneously, our retail offices pivoted to a leaner, contactless environment. All said, our team is doing well. They've responded to the changing work environment with resiliency and their health and spirits are good. We're proud of these efforts and to demonstrate our support for our teams during this crisis. We've increased certain employee benefits to help address their needs. We also quickly transitioned and mobilized our team to be an early and active participant in the SBA's Paycheck Protection Program. Through the initial PPP funding round, Connect One has assisted approximately 1,400 companies and their 30,000 workers to ultimately secure nearly $400 million in needed funding for borrowers. We are adding to that in this now second round. We're proud of the fact that our capabilities allowed Connect One to be one of the first banks in the nation to close and fund an SBA PPP loan and recognize the importance the CARES program to our clients, their employees, and our communities. This program truly is larger than the banking industry itself, and we believe it was a service necessary to provide in order to ensure the continuity of our clients' businesses, keeping their staff employed, In the immediate future and ensuring we do everything in our power to make sure our clients get the funding that they need. We look forward to being able to continue to assist in this effort. Bill will speak to the economic impacts of the program momentarily. I also wanted to take a moment to touch upon SBA lending activity at our FinTech subsidiary, BowFly. As we discussed on prior calls, we acquired this online platform in June of 2019 and focused on building its operating scale and infrastructure. We implemented growth investments over the past few quarters. Bofly's transaction flow has increased tremendously, and we believe this will continue beyond the PPP program. Visits by small businesses to Bofly's websites, including the sbacares.bofly.com site, have risen tenfold, and they've established relationships with several new banks. Apart from ConnectOne, Bofly has facilitated over 3,500 applications through their online lending platform, while successfully agenting Over 2,000 PPP loans for borrowers totaling over $750 million through a number of financial institutions. We're extremely proud of Beaufly's ability to meaningfully address the increased need for small business funding during these very challenging times. Beaufly operates as an independent brand and generates revenue primarily through referral fees. Looking beyond the PPP, ConnectOne has joined the roster of banks funding Beaufly's secure loans. I'd now like to take a look at another important focus, which would be credit. We've taken a thorough approach to evaluating risk across our loan portfolio and have decided that postponing the adoption of CECL and utilizing our loan loss reserve model for the time being was the most appropriate path for Connect One. Bill will discuss our approach and its impact to our financials in greater detail. Taking a look at our loan portfolio, we have low levels of exposures, and many of the most impacted industries. For example, our hospitality and hotel exposure represents just 1.2% of our loan portfolio and transportation represents 1.5% and our direct restaurant exposure is approximately 1%. Additionally, we have virtually no direct exposure to casinos, aviation, cruise lines, movie theaters or energy and no credit card exposure. Nonetheless, we still have clients seeking assistance and we're proactively communicating with them to ensure that they're aware of federal and state financial assistance programs available. Many of our borrowers are taking advantage of deferment opportunities that have effectively been afforded by legislative, regulatory and accounting governing bodies. Regarding loan modifications and deferment requests, we're actively engaging with clients on a case-by-case scenario and right now total deferments under review currently represent Roughly 15% of total loans, or approximately $900 million, although our review process is showing that about a third of those are probably not necessary. Of the total deferments under review, a majority are in the CRE or multifamily segments, all very well secured, strong LTV loans within our operating markets. As Bill walks through those numbers, you'll see why I believe we're taking a conservative approach and we're all optimistic that if a return to work effort continues and we begin to move back to a functioning economy, the majority of our borrowers will be back on their feet. Additionally, we are and always have been a relationship lender with virtually no brokered loans, employing a culture of strict underwriting standards with an objective of creating and growing a diversified loan portfolio and funding it. Our capital base remains strong and our board of directors recently declared a quarterly dividend payable on May 4th. However, we did suspend our share repurchase program until further notice. While we had another 600,000 shares available to purchase and believe the stock price is attractive and not reflective of the long-term prospects of Connect One, we and most in the industry would agree that now is just not the right time. Finally, I want to highlight that on January 2nd, we completed the in-market acquisition of Bancorp, Inc. The final phase of our integration and conversion will be completed on May 4th with no delays, and we're on track to meet or exceed the financial metrics disclosed when the transaction was announced. I'll now turn the call over to Bill.