ConnectOne Bancorp, Inc.

Greetings and welcome to Connect One Bancorp Inc. Fourth Quarter 2021 Earnings Call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Sia Vansia, Vice President of Marketing Connect One Bank. Thank you. Please go ahead.

Good morning and welcome to today's conference call to review Connect One's results for the fourth quarter of 2021 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 call on a listen only basis over the internet were distributed this morning in 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 Reform Act of 1995. Such forward looking statements are subject to numerous assumptions, uncertainties, and known or unknown risks, which could cause actual results to differ materially from those anticipated. These risk factors are more fully discussed in the company's filings with the Securities and Exchange Commission. The forward-looking statements included in this conference call are only made as of the date of this 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 in the company's earnings release and accompanying tables or schedules which have been filed today on Form 8K with the SEC and may also be accessed through the company's website at ir.connectonebank.com. Each listener is encouraged to review those reconciliations provided in the earnings release together with all other information provided in the release. I will now turn the call over to Frank Sorrentino. Frank, please go ahead.

Thank you, Cian. Good morning, everyone. We appreciate you joining us today. We're very pleased to report another strong quarter, capping off what was truly an exceptional year for Connect One. And I'm extremely proud of our entire team's effort to help achieve these results. Highlights for this quarter include some of the best metrics evidenced by our strong return on assets and our strong return on tangible common equity. This resulted in our pre-provision net revenue metric exceeding 2% for the sixth quarter in a row. over 20 percent organic loan growth on an annualized basis, all while we improved our sub-40 percent best-in-class efficiency ratio. 2021 reaffirmed our operating philosophy that a focus on organically driven growth and efficiency through investment in technology coupled with a strong client-centric culture leads to greater financial strength and ultimately the creation of shareholder value. As many of you are aware, Stock price performance for the entire banking sector was strong over the course of 2021, with the BKX index rising by about 35%, while ConnectOne's stock price increased by over 60%. We saw our market capitalization increase from about $800 million at the start of 2021 to approximately $1.4 billion today. And tangible book value per share increased 3.5% for the quarter and by more than 15% for the year. Yet we still traded a discount to our peers, and we firmly believe we're still undervalued. We entered 2022 uniquely positioned to continue to deliver long-term sustainable growth and industry-leading returns. Our existing markets are growing, and we expect to further capitalize on opportunities to expand our valuable franchise. Additionally, the expansion of our team is paying dividends while gaining momentum, translating into meaningful organic growth. Looking ahead, our current pipeline remains robust across all business lines. The outlook for the economy remains relatively strong and client confidence seems to remain high. We continue to strengthen our position in the New York Metro market while also successfully expanding into new markets that are a natural progression for us, such as Eastern Long Island and Southeast Florida. Further, We have a solid team of bankers with a proven ability to execute, and we continue to be a first choice for top talent in the industry seeking a dynamic growth-focused organization. Additionally, our investments in BowFly continue to produce opportunities to deepen existing relationships and expand the potential of this platform. And lastly, we've built a strong technological foundation, and are well-positioned to take advantage of the competitive fintech environment. Expect to hear more about this as the year progresses. Notwithstanding all this, we certainly see several headwinds forming, which may slow some of the extraordinary growth rates we experienced in 2021. As we move through the new year, we expect competition to heat up, and the Fed's anticipated tightening could slow overall economic growth. Just to repeat, we're still experiencing strong growth in 2022, but it will likely be somewhat subdued from what we experienced in the latter half of 21 and probably land somewhere in the low double digits. On the deposit side, our focus has always been on core non-interest bearing demand. And in that regard, we expect those balances to keep pace with our loan growth. Connect One has a long standing and proven track record of prudent and profitable growth supported by our people first philosophy and a stellar reputation among our business lines. Additionally, the continued disruption caused by M&A is providing us even more opportunities to gain new clients and hire experienced bankers, from revenue generators to tech talent. Speaking of M&A, while our last transaction was completed in January of 2020, We expect that strategic acquisitions will continue to be a part of our long-term growth plans. We, of course, are maintaining our disciplined approach when evaluating potential partners that provide a number of synergies with Connect One and strengthen our franchise. So now let me turn to our capital base. We currently stand with capital levels and earnings strength to support our projected growth. We also plan to be opportunistic with regard to share repurchases. being mindful of market conditions and actual growth in our balance sheet. Further, as you may know, our Board increased Connect One's cash dividend twice during 2021 for a combined total of 44 percent in dividend increases during the year. Our Board will continue to evaluate future dividend increases during 22 and beyond. I want to reiterate that we're building on the solid momentum we've achieved and will continue to take an opportunistic approach to our growth, including continued strategic investments in technology and talent acquisition. As a result, expense growth is expected to accelerate at a pace that is faster than we have seen historically. Bill will provide a few more details on these projections in a minute. However, we continue to generate favorable operating leverage, which ultimately empowers us to continue to invest in Connect One while maintaining superior financial returns. In summary, I'm pleased to report that the company experienced a very successful year, both financially and operationally, and we believe Connect One is poised to deliver on its long-term objectives. I'll now turn the call over to Bill to provide some more details on this quarter's financial performance. Bill?