EX-99.1 2 pgc-ex99_1.htm EX-99.1 EX-99.1

Exhibit 99.1

Contact:

Frank A. Cavallaro, SEVP and CFO

Peapack-Gladstone Financial Corporation

T: 908-306-8933

PEAPACK-GLADSTONE FINANCIAL CORPORATION

REPORTS THIRD QUARTER RESULTS

 

Bedminster, N.J. – October 22, 2024 – Peapack-Gladstone Financial Corporation (NASDAQ Global Select Market: PGC) (the "Company") announces its third quarter 2024 financial results.

This earnings release should be read in conjunction with the Company’s Q3 2024 Investor Update, a copy of which is available on our website at www.pgbank.com and via a current report on Form 8-K on the website of the Securities and Exchange Commission at www.sec.gov.

During the third quarter of 2024, deposits grew $279 million, to $5.9 billion, which represents an annualized growth rate of 20%. Nearly half of the deposit growth during the quarter was attributed to an increase in noninterest-bearing demand deposit balances which grew $130 million to $1.1 billion. Strong core relationship growth throughout 2024 has allowed the Company to repay all outstanding short-term borrowings and strengthen its liquidity position. The Company also saw an increase in loan demand during the third quarter. Outstanding loan balances increased by $51 million to $5.3 billion as of September 30, 2024.

The Company recorded net income of $7.6 million and diluted earnings per share (“EPS”) of $0.43 for the quarter ended September 30, 2024 compared to net income of $7.5 million and EPS of $0.42 for the quarter ended June 30, 2024.

Net interest income increased $2.6 million, or 8%, on a linked quarter basis to $37.7 million during the third quarter of 2024 compared to $35.0 million in the second quarter. The growth in net interest income was driven by continued improvement in the net interest margin. The net interest margin increased to 2.34% for the quarter ended September 30, 2024 compared to 2.25% for the quarter ended June 30, 2024 and 2.20% for the quarter ended March 31, 2024.

Douglas L. Kennedy, President and CEO said, “Our expansion into the metro New York market, leading with our "Single Point of Contact" private banking strategy, continues to deliver results ahead of plan. Our third quarter results reflect this success through strong core deposit growth, continued improvement in net interest income and enhanced liquidity profile. Our New York Commercial Private Banking initiative is currently managing over $730 million in customer relationship deposits, which includes 31% in noninterest-bearing demand deposits. We expect that our expansion will become accretive to earnings in early 2025."

Mr. Kennedy also noted, “During the third quarter of 2024, Moody's reaffirmed our investment grade ratings with a stable outlook after a thorough analysis of our business model and balance sheet. We are fully aware of the headwinds created by the current interest rate environment, and we are confident in our ability to manage through any of these issues that may arise as we execute our private banking strategy, which over time will deliver shareholder value."

The following are select highlights for the period ended September 30, 2024:

 

Wealth Management:

 

•
AUM/AUA in our Wealth Management Division totaled a record $12.1 billion at September 30, 2024 compared to $10.9 billion at December 31, 2023.
•
Gross new business inflows for Q3 2024 totaled $140 million ($130 million managed).
•
Wealth Management fee income was $15.2 million in Q3 2024, which amounted to 27% of total revenue for the quarter.

 

 

 

1

Commercial Banking and Balance Sheet Management:

 

•
Year-to-date total deposits have increased by $661 million, to $5.9 billion at September 30, 2024 compared to $5.3 billion at December 31, 2023. The Company intentionally allowed $121 million in high cost, non-core relationship deposits to roll off during the first nine months of 2024. Excluding this deposit run-off, core relationship deposits have grown by $782 million during 2024.
•
The Company has repaid $404 million in short-term borrowings as of September 30, 2024.
•
Total loans declined $116 million to $5.3 billion at September 30, 2024 from $5.4 billion at December 31, 2023. However, outstanding loans increased by $51 million during the three-month period ended September 30, 2024 after experiencing contraction during the first six months of 2024.
•
Commercial and industrial lending (“C&I”) drove a majority of the growth during the third quarter. C&I balances represent 42% of the total loan portfolio at September 30, 2024. A strong pipeline of new business has been built heading into Q4.
•
Fee income on unused commercial lines of credit totaled $845,000 for Q3 2024.
•
The net interest margin ("NIM") was 2.34% in Q3 2024, an increase of 9 basis points compared to 2.25% at Q2 2024.
•
Noninterest-bearing demand deposits increased by $130 million during the third quarter of 2024 and represented 18% of total deposits as of September 30, 2024.

 

 

Capital Management:

 

•
Tangible book value per share increased 6% to $32.00 per share at September 30, 2024 compared to $30.31 at December 31, 2023. Book value per share increased 5% to $34.57 per share at September 30, 2024 compared to $32.90 at December 31, 2023.
•
During the third quarter, the Company repurchased 100,000 shares of common stock at a total cost of $2.6 million, or an average cost of $25.92 per share. During the first nine months of 2024, the Company repurchased 300,000 shares of common stock at a cost of $7.2 million. For the full year 2023, the Company repurchased 455,341 shares at a cost of $12.5 million.
•
At September 30, 2024, the Tier 1 Leverage Ratio stood at 10.99% for Peapack-Gladstone Bank (the "Bank") and 9.33% for the Company. The Common Equity Tier 1 Ratio (to Risk-Weighted Assets) was 13.75% for the Bank and 11.67% for the Company at September 30, 2024. These ratios remain significantly above well capitalized standards, as capital continues to benefit from net income generation.

 

 

2

SUMMARY INCOME STATEMENT DETAILS:

The following tables summarize specified financial details for the periods shown.

Nine Months Ended September 30, 2024 Year Compared to Nine Months Ended September 30, 2023

 

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

Increase/

 

(Dollars in millions, except per share data) (unaudited)

 

2024

 

 

2023

 

 

 

(Decrease)

 

Net interest income

 

$

107.10

 

 

$

119.41

 

 

 

$

(12.31

)

 

 

(10

)%

Wealth management fee income

 

 

45.98

 

 

 

41.99

 

 

 

 

3.99

 

 

 

10

 

Capital markets activity

 

 

2.30

 

 

 

2.45

 

 

 

 

(0.15

)

 

 

(6

)

Other income

 

 

10.91

 

 

 

11.55

 

 

 

 

(0.64

)

 

 

(6

)

Total other income

 

 

59.19

 

 

 

55.99

 

 

 

 

3.20

 

 

 

6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

 

166.29

 

 

 

175.40

 

 

 

 

(9.11

)

 

 

(5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

127.82

 

 

 

110.68

 

 

 

 

17.14

 

 

 

15

 

Pretax income before provision for credit losses

 

 

38.47

 

 

 

64.72

 

 

 

 

(26.25

)

 

 

(41

)

Provision for credit losses

 

 

5.76

 

 

 

9.06

 

 

 

 

(3.30

)

 

 

(36

)

Pretax income

 

 

32.71

 

 

 

55.66

 

 

 

 

(22.95

)

 

 

(41

)

Income tax expense

 

 

8.96

 

 

 

15.40

 

 

 

 

(6.44

)

 

 

(42

)

Net income

 

$

23.75

 

 

$

40.26

 

 

 

$

(16.51

)

 

 

(41

)%

Diluted EPS

 

$

1.34

 

 

$

2.23

 

 

 

$

(0.89

)

 

 

(40

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

0.49

%

 

 

0.84

%

 

 

 

(0.35

)

 

 

 

Return on average equity

 

 

5.42

%

 

 

9.66

%

 

 

 

(4.24

)

 

 

 

 

September 2024 Quarter Compared to Prior Year Quarter

 

 

 

Three Months Ended

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

September 30,

 

 

 

September 30,

 

 

Increase/

 

(Dollars in millions, except per share data) (unaudited)

 

2024

 

 

 

2023

 

 

(Decrease)

 

Net interest income

 

$

37.68

 

 

 

$

36.52

 

 

$

1.16

 

 

 

3

%

Wealth management fee income

 

 

15.15

 

 

 

 

13.98

 

 

 

1.17

 

 

 

8

 

Capital markets activity

 

 

0.44

 

 

 

 

0.61

 

 

 

(0.17

)

 

 

(28

)

Other income

 

 

3.35

 

 

 

 

4.76

 

 

 

(1.41

)

 

 

(30

)

Total other income

 

 

18.94

 

 

 

 

19.35

 

 

 

(0.41

)

 

 

(2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

 

56.62

 

 

 

 

55.87

 

 

 

0.75

 

 

 

1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

44.65

 

 

 

 

37.41

 

 

 

7.24

 

 

 

19

 

Pretax income before provision for credit losses

 

 

11.97

 

 

 

 

18.46

 

 

 

(6.49

)

 

 

(35

)

Provision for credit losses

 

 

1.22

 

 

 

 

5.86

 

 

 

(4.64

)

 

 

(79

)

Pretax income

 

 

10.75

 

 

 

 

12.60

 

 

 

(1.85

)

 

 

(15

)

Income tax expense

 

 

3.16

 

 

 

 

3.84

 

 

 

(0.68

)

 

 

(18

)

Net income

 

$

7.59

 

 

 

$

8.76

 

 

$

(1.17

)

 

 

(13

)%

Diluted EPS

 

$

0.43

 

 

 

$

0.49

 

 

$

(0.06

)

 

 

(12

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets annualized

 

 

0.46

%

 

 

 

0.54

%

 

 

(0.08

)

 

 

 

Return on average equity annualized

 

 

5.12

%

 

 

 

6.20

%

 

 

(1.08

)

 

 

 

 

 

 

3

 

September 2024 Quarter Compared to Linked Quarter


 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

June 30,

 

 

 

Increase/

 

(Dollars in millions, except per share data) (unaudited)

 

2024

 

 

2024

 

 

 

(Decrease)

 

Net interest income

 

$

37.68

 

 

$

35.04

 

 

 

$

2.64

 

 

 

8

%

Wealth management fee income

 

 

15.15

 

 

 

16.42

 

 

 

 

(1.27

)

 

 

(8

)

Capital markets activity

 

 

0.44

 

 

 

0.59

 

 

 

 

(0.15

)

 

 

(25

)

Other income

 

 

3.35

 

 

 

4.55

 

 

 

 

(1.20

)

 

 

(26

)

Total other income

 

 

18.94

 

 

 

21.56

 

 

 

 

(2.62

)

 

 

(12

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

 

56.62

 

 

 

56.60

 

 

 

 

0.02

 

 

 

0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

44.65

 

 

 

43.13

 

 

 

 

1.52

 

 

 

4

 

Pretax income before provision for credit losses

 

 

11.97

 

 

 

13.47

 

 

 

 

(1.50

)

 

 

(11

)

Provision for credit losses

 

 

1.22

 

 

 

3.91

 

 

 

 

(2.69

)

 

 

(69

)

Pretax income

 

 

10.75

 

 

 

9.56

 

 

 

 

1.19

 

 

 

12

 

Income tax expense

 

 

3.16

 

 

 

2.03

 

 

 

 

1.13

 

 

 

56

 

Net income

 

$

7.59

 

 

$

7.53

 

 

 

$

0.06

 

 

 

1

%

Diluted EPS

 

$

0.43

 

 

$

0.42

 

 

 

$

0.01

 

 

 

2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets annualized

 

 

0.46

%

 

 

0.47

%

 

 

 

(0.01

)

 

 

 

Return on average equity annualized

 

 

5.12

%

 

 

5.22

%

 

 

 

(0.10

)

 

 

 

 

 

SUPPLEMENTAL QUARTERLY DETAILS:

 

Wealth Management

AUM/AUA in the Bank’s Wealth Management Division reached a record high of $12.1 billion at September 30, 2024 compared to $10.9 billion at December 31, 2023. For the September 2024 quarter, the Wealth Management Team generated $15.2 million in fee income, compared to $16.4 million for the June 30, 2024 quarter and $14.0 million for the September 2023 quarter. The equity markets continued to improve during 2024, contributing to the increase in AUM/AUA along with gross new business inflows of $547 million.

John Babcock, President of the Bank's Wealth Management Division, noted, “Q3 2024 saw continued strong client inflows totaling new accounts and client additions of $140 million ($130 million managed). Our new business pipeline is healthy, and we continue to remain focused on delivering excellent service and advice to our clients. Our highly skilled wealth management professionals, our fiduciary powers and expertise, our financial planning capabilities combined with our high-touch client service model distinguishes us in our market and continues to drive our growth and success.”

Loans / Commercial Banking

Total loans declined $116 million, or 2%, to $5.3 billion at September 30, 2024 compared to December 31, 2023, primarily driven by repayments, maturities and tighter lending standards. Most of the decline in outstanding loans during the first nine months of 2024 was related to reductions in multifamily and commercial real estate balances. Total C&I loans and leases at September 30, 2024 were $2.2 billion or 42% of the total loan portfolio.

Mr. Kennedy noted, “Based on a more constructive economic backdrop, we recently began building our pipeline of C&I loans and leases and believe that loan demand will continue to show improvement as we look forward to coming periods ahead. We are proud to have built a leading middle market commercial banking franchise, as evidenced by our C&I Portfolio, Treasury Management services, Corporate Advisory and SBA businesses. We

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anticipate these business lines fit perfectly with our private banking business model and will generate solid production going forward. During the quarter we originated loans that carried an average spread of more than 4% above our cost of funds. Having this capability will help us in the near term as the real estate market adjusts to changing market conditions.”

Net Interest Income (NII)/Net Interest Margin (NIM)

The Company’s NII of $37.7 million and NIM of 2.34% for Q3 2024 increased $2.6 million and 9 basis points from NII of $35.0 million and NIM of 2.25% for the linked quarter (Q2 2024), and increased $1.2 million and 6 basis points from NII of $36.5 million and NIM of 2.28% compared to the prior year period (Q3 2023). Our single point of contact private banking strategy continues to deliver lower cost core deposit relationships. Noninterest-bearing checking deposits increased by $130 million during the third quarter of 2024, which also drove the improvement in NIM.

Funding / Liquidity / Interest Rate Risk Management

Total deposits increased $661 million to $5.9 billion at September 30, 2024 from $5.3 billion at December 31, 2023. The change in deposit balances included a decline in brokered deposits and non-core deposit relationships. The overall growth in deposits has strengthened balance sheet liquidity and reduced reliance on outside borrowings and other non-core funding sources. There were no outstanding overnight borrowings at September 30, 2024, compared to $404 million at December 31, 2023.

At September 30, 2024, the Company’s balance sheet liquidity (investments available for sale, interest-earning deposits and cash) totaled $1.2 billion, or 18% of assets. The Company maintains additional liquidity resources of approximately $3.0 billion through secured available borrowing facilities with the Federal Home Loan Bank and the Federal Reserve Discount Window. The available funding from the Federal Home Loan Bank and the Federal Reserve are secured by the Company’s loan and investment portfolios. The Company's total on and off-balance sheet liquidity totaled $4.2 billion, which amounts to 293% of the total uninsured/uncollateralized deposits currently on the Company’s balance sheet.

Income from Capital Markets Activities

Noninterest income from Capital Markets activities (detailed below) totaled $435,000 for the September 2024 quarter compared to $586,000 for the June 2024 quarter and $613,000 for the September 2023 quarter.

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

(Dollars in thousands, except per share data) (unaudited)

 

2024

 

 

2024

 

 

2023

 

Gain on loans held for sale at fair value (Mortgage banking)

 

$

15

 

 

$

34

 

 

$

37

 

Gain on sale of SBA loans

 

 

365

 

 

 

449

 

 

 

491

 

Corporate advisory fee income

 

 

55

 

 

 

103

 

 

 

85

 

Total capital markets activity

 

$

435

 

 

$

586

 

 

$

613

 

Other Noninterest Income (other than Wealth Management Fee Income and Income from Capital Markets Activities)

Other noninterest income was $3.4 million for Q3 2024 compared to $4.6 million for Q2 2024 and $4.8 million for Q3 2023. Q3 2024 included $225,000 of income recorded by the Equipment Finance Division related to equipment transfers to lessees upon the termination of leases, compared to $1.6 million in Q2 2024 and $2.3 million in Q3 2023, respectively. Additionally, Q3 2024 included $845,000 of unused line fees compared to $786,000 for Q2 2024 and $794,000 for Q3 2023.

5

Operating Expenses

The Company’s total operating expenses were $44.6 million for the third quarter of 2024, compared to $43.1 million for the second quarter of 2024 and $37.4 million for the quarter ended September 2023. The third quarter of 2024 reflects the full run rate of expenses associated with the Company’s expansion into New York City.

Mr. Kennedy noted, “We continue to make investments related to our strategic decision to expand into New York City and are confident that these investments will position us for future growth and profitability, which will ultimately translate to increased shareholder value. We continue to look for opportunities to create efficiencies and manage expenses throughout the Company while investing in enhancements to the client experience."

Income Taxes

 

The effective tax rate for the three months ended September 30, 2024 was 29.4%, as compared to 21.2% for the June 2024 quarter and 30.5% for the quarter ended September 30, 2023. The June 2024 quarter included a one-time benefit related to the Company’s deferred tax assets associated with a surtax imposed by the State of New Jersey in June 2024. Excluding such benefit, the effective tax rate for the June 2024 quarter would have been approximately 29.0%.

 

Asset Quality / Provision for Credit Losses

Nonperforming assets remained elevated at $80.5 million, or 1.18% of total assets, at September 30, 2024, as compared to $82.1 million, or 1.26% of total assets, at June 30, 2024. Loans past due 30 to 89 days and still accruing were $31.4 million, or 0.59% of total loans, at September 30, 2024 compared to $34.7 million, or 0.66% of total loans, at June 30, 2024. Criticized and classified loans totaled $261.1 million at September 30, 2024, reflecting a decrease of $8.0 million as compared to $269.1 million at June 30, 2024. The Company currently has no loans or leases on deferral and still accruing.

For the quarter ended September 30, 2024, the Company’s provision for credit losses was $1.2 million compared to $3.9 million for the June 2024 quarter and $5.9 million for the September 2023 quarter. The provision for credit losses in the third quarter of 2024 was driven by overall slower loan growth along with additional specific reserves related to certain isolated credits, of $1.8 million partially offset by a recovery of approximately $2.1 million. The higher provision for the second quarter of 2024 was primarily driven by charge-offs related to the sale of two problem loans, which were approaching foreclosure and transferred to other real estate owned.

At September 30, 2024, the allowance for credit losses was $71.3 million (1.34% of total loans), compared to $68.0 million (1.29% of total loans) at June 30, 2024, and $68.6 million (1.25% of total loans) at September 30, 2023.

Mr. Kennedy noted, “We are starting to see some of our asset quality metrics improve, which supports our position that most of our credit issues are isolated to a small number of specific borrowers and sponsors. We continue to work through each credit one at a time while building up reserve coverage. All of the multifamily loans that matured or repriced in 2024 have continued to make their scheduled payments despite the higher rate environment."

Capital

The Company’s capital position increased during the third quarter of 2024 due to net income of $7.6 million, which was partially offset by the repurchase of 100,000 shares through the Company's repurchase program at a total cost of $2.6 million and the quarterly dividend payment totaling $882,000. Additionally, during the third quarter of 2024, capital benefited from a reduction in accumulated other comprehensive losses of $13.5 million, net of tax. The total accumulated other comprehensive loss declined to $54.8 million as of September 30, 2024 ($57.6 million loss related to the available for sale securities portfolio partially offset by a $2.8 million gain on the cash flow hedges).

Tangible book value per share increased 6% to $32.00 at September 30, 2024 from $30.31 at December 31, 2023. Tangible book value per share is a non-GAAP financial measure. See the reconciliation tables included in this release for further detail. Book value per share increased 5% to $34.57 per share at September 30, 2024 compared to $32.90 at December 31, 2023. The Company’s and Bank’s regulatory capital ratios as of September 30, 2024 remain strong and reflect increases from December 31, 2023 levels. Where applicable, such ratios remain well above regulatory well capitalized standards.

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The Company employs quarterly capital stress testing modeling of an adverse case and severely adverse case. In the most recently completed stress test (as of June 30, 2024), under the severely adverse case, and no growth scenario, the Bank remains well capitalized over a two-year stress period.

On September 25, 2024, the Company declared a cash dividend of $0.05 per share payable on November 22, 2024 to shareholders of record on November 7, 2024.

ABOUT THE COMPANY

Peapack-Gladstone Financial Corporation is a New Jersey based bank holding company with total assets of $6.8 billion and assets under management/administration of $12.1 billion as of September 30, 2024. Founded in 1921, Peapack-Gladstone Bank is a commercial bank that provides Private Banking customized solutions through its wealth management, commercial and retail solutions, including residential lending and online platforms, to businesses, not for profits and consumers. Peapack Private, the bank’s wealth management division, offers comprehensive financial, tax, fiduciary and investment advice and solutions to individuals, families, privately-held businesses, family offices and not-for-profit organizations, which help them to establish, maintain and expand their legacy. Together, Peapack-Gladstone Bank and Peapack Private offer an unparalleled commitment to client service. Visit www.pgbank.com and www.peapackprivate.com for more information.

FORWARD-LOOKING STATEMENTS

The foregoing may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management’s confidence and strategies and management’s expectations about new and existing programs and products, investments, relationships, opportunities and market conditions. These statements may be identified by such forward-looking terminology as “expect,” “look,” “believe,” “anticipate,” “may” or similar statements or variations of such terms. Actual results may differ materially from such forward-looking statements. Factors that may cause results to differ materially from such forward-looking statements include, but are not limited to:

•
our ability to successfully grow our business and implement our strategic plan, including our ability to generate revenues to offset the increased personnel and other costs related to the strategic plan;
•
the impact of anticipated higher operating expenses in 2024 and beyond;
•
our ability to successfully integrate wealth management firm and team acquisitions;
•
our ability to successfully integrate our expanded employee base;
•
an unexpected decline in the economy, in particular in our New Jersey and New York market areas, including potential recessionary conditions;
•
declines in our net interest margin caused by the interest rate environment and/or our highly competitive market;
•
declines in the value in our investment portfolio;
•
impact from a pandemic event on our business, operations, customers, allowance for credit losses and capital levels;
•
higher than expected increases in our allowance for credit losses;
•
higher than expected increases in credit losses or in the level of delinquent, nonperforming, classified and criticized loans or charge-offs;
•
inflation and changes in interest rates, which may adversely impact our margins and yields, reduce the fair value of our financial instruments, reduce our loan originations and lead to higher operating costs;
•
decline in real estate values within our market areas;
•
legislative and regulatory actions (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Basel III and related regulations) that may result in increased compliance costs;
•
successful cyberattacks against our IT infrastructure and that of our IT and third-party providers;
•
higher than expected FDIC insurance premiums;
•
adverse weather conditions;
•
the current or anticipated impact of military conflict, terrorism or other geopolitical events;
•
our inability to successfully generate new business in new geographic markets, including our expansion into New York City;
•
a reduction in our lower-cost funding sources;

7

•
changes in liquidity, including the size and composition of our deposit portfolio, including the percentage of uninsured deposits in the portfolio;
•
our inability to adapt to technological changes;
•
claims and litigation pertaining to fiduciary responsibility, environmental laws and other matters;
•
our inability to retain key employees;
•
demands for loans and deposits in our market areas;
•
adverse changes in securities markets;
•
changes in New York City rent regulation law;
•
changes in governmental regulation, including, but not limited to, any increase in FDIC insurance premiums and changes in the monetary policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System;
•
changes in accounting policies and practices; and/or
•
other unexpected material adverse changes in our financial condition, operations or earnings.

A discussion of these and other factors that could affect our results is included in our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2023. Except as may be required by the applicable law or regulation, we undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

(Tables to follow)

8

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in Thousands, except per share data)

(Unaudited)

 

 

For the Three Months Ended

 

 

 

Sept 30,

 

 

June 30,

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

 

 

2024

 

 

2024

 

 

2024

 

 

2023

 

 

2023

 

Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

83,203

 

 

$

79,238

 

 

$

79,194

 

 

$

80,178

 

 

$

78,489

 

Interest expense

 

 

45,522

 

 

 

44,196

 

 

 

44,819

 

 

 

43,503

 

 

 

41,974

 

Net interest income

 

 

37,681

 

 

 

35,042

 

 

 

34,375

 

 

 

36,675

 

 

 

36,515

 

Wealth management fee income

 

 

15,150

 

 

 

16,419

 

 

 

14,407

 

 

 

13,758

 

 

 

13,975

 

Service charges and fees

 

 

1,327

 

 

 

1,345

 

 

 

1,322

 

 

 

1,255

 

 

 

1,319

 

Bank owned life insurance

 

 

390

 

 

 

328

 

 

 

503

 

 

 

357

 

 

 

310

 

Gain on loans held for sale at fair value
   (Mortgage banking)

 

 

15

 

 

 

34

 

 

 

56

 

 

 

18

 

 

 

37

 

Gain on loans held for sale at lower
   of cost or fair value

 

 

—

 

 

 

23

 

 

 

—

 

 

 

—

 

 

 

—

 

Gain on sale of SBA loans

 

 

365

 

 

 

449

 

 

 

400

 

 

 

239

 

 

 

491

 

Corporate advisory fee income

 

 

55

 

 

 

103

 

 

 

818

 

 

 

39

 

 

 

85

 

Other income

 

 

1,162

 

 

 

2,938

 

 

 

1,306

 

 

 

1,339

 

 

 

3,541

 

Fair value adjustment for CRA equity security

 

 

474

 

 

 

(84

)

 

 

(111

)

 

 

585

 

 

 

(404

)

Total other income

 

 

18,938

 

 

 

21,555

 

 

 

18,701

 

 

 

17,590

 

 

 

19,354

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

 

56,619

 

 

 

56,597

 

 

 

53,076

 

 

 

54,265

 

 

 

55,869

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

31,050

 

 

 

29,884

 

 

 

28,476

 

 

 

24,320

 

 

 

25,264

 

Premises and equipment

 

 

5,633

 

 

 

5,776

 

 

 

5,081

 

 

 

5,416

 

 

 

5,214

 

FDIC insurance expense

 

 

870

 

 

 

870

 

 

 

945

 

 

 

765

 

 

 

741

 

Other expenses

 

 

7,096

 

 

 

6,596

 

 

 

5,539

 

 

 

7,115

 

 

 

6,194

 

Total operating expenses

 

 

44,649

 

 

 

43,126

 

 

 

40,041

 

 

 

37,616

 

 

 

37,413

 

Pretax income before provision for credit losses

 

 

11,970

 

 

 

13,471

 

 

 

13,035

 

 

 

16,649

 

 

 

18,456

 

Provision for credit losses

 

 

1,224

 

 

 

3,911

 

 

 

627

 

 

 

5,026

 

 

 

5,856

 

Income before income taxes

 

 

10,746

 

 

 

9,560

 

 

 

12,408

 

 

 

11,623

 

 

 

12,600

 

Income tax expense

 

 

3,159

 

 

 

2,030

 

 

 

3,777

 

 

 

3,024

 

 

 

3,845

 

Net income

 

$

7,587

 

 

$

7,530

 

 

$

8,631

 

 

$

8,599

 

 

$

8,755

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Common Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (basic)

 

$

0.43

 

 

$

0.42

 

 

$

0.49

 

 

$

0.48

 

 

$

0.49

 

Earnings per share (diluted)

 

 

0.43

 

 

 

0.42

 

 

 

0.48

 

 

 

0.48

 

 

 

0.49

 

Weighted average number of common
   shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

17,616,046

 

 

 

17,747,070

 

 

 

17,711,639

 

 

 

17,770,158

 

 

 

17,856,961

 

Diluted

 

 

17,700,042

 

 

 

17,792,296

 

 

 

17,805,347

 

 

 

17,961,400

 

 

 

18,010,127

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets annualized (ROAA)

 

 

0.46

%

 

 

0.47

%

 

 

0.54

%

 

 

0.53

%

 

 

0.54

%

Return on average equity annualized (ROAE)

 

 

5.12

%

 

 

5.22

%

 

 

5.94

%

 

 

6.13

%

 

 

6.20

%

Return on average tangible equity annualized (ROATCE) (A)

 

 

5.54

%

 

 

5.67

%

 

 

6.45

%

 

 

6.68

%

 

 

6.75

%

Net interest margin (tax-equivalent basis)

 

 

2.34

%

 

 

2.25

%

 

 

2.20

%

 

 

2.29

%

 

 

2.28

%

GAAP efficiency ratio (B)

 

 

78.86

%

 

 

76.20

%

 

 

75.44

%

 

 

69.32

%

 

 

66.97

%

Operating expenses / average assets annualized

 

 

2.73

%

 

 

2.70

%

 

 

2.51

%

 

 

2.33

%

 

 

2.31

%

 

(A) Return on average tangible equity is calculated by dividing tangible equity by annualized net income. See Non-GAAP financial measures reconciliation included in these tables.

(B) Calculated as total operating expenses as a percentage of total revenue. For Non-GAAP efficiency ratio, see the Non-GAAP financial measures reconciliation included in these tables.

 

 

9

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in Thousands, except per share data)

(Unaudited)

 

 

For the Nine Months Ended

 

 

 

 

 

 

 

 

 

September 30,

 

 

Change

 

 

 

2024

 

 

2023

 

 

$

 

 

%

 

Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

241,635

 

 

$

223,832

 

 

$

17,803

 

 

 

8

%

Interest expense

 

 

134,537

 

 

 

104,418

 

 

 

30,119

 

 

 

29

%

Net interest income

 

 

107,098

 

 

 

119,414

 

 

 

(12,316

)

 

 

-10

%

Wealth management fee income

 

 

45,976

 

 

 

41,989

 

 

 

3,987

 

 

 

9

%

Service charges and fees

 

 

3,994

 

 

 

3,897

 

 

 

97

 

 

 

2

%

Bank owned life insurance

 

 

1,221

 

 

 

912

 

 

 

309

 

 

 

34

%

Gain on loans held for sale at fair value (Mortgage banking)

 

 

105

 

 

 

73

 

 

 

32

 

 

 

44

%

Gain on loans held for sale at lower of cost or fair value

 

 

23

 

 

 

—

 

 

 

23

 

 

N/A

 

Gain on sale of SBA loans

 

 

1,214

 

 

 

2,194

 

 

 

(980

)

 

 

-45

%

Corporate advisory fee income

 

 

976

 

 

 

180

 

 

 

796

 

 

 

442

%

Other income

 

 

5,406

 

 

 

7,147

 

 

 

(1,741

)

 

 

-24

%

Fair value adjustment for CRA equity security

 

 

279

 

 

 

(404

)

 

 

683

 

 

 

-169

%

Total other income

 

 

59,194

 

 

 

55,988

 

 

 

3,206

 

 

 

6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

 

166,292

 

 

 

175,402

 

 

 

(9,110

)

 

 

-5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

89,410

 

 

 

76,204

 

 

 

13,206

 

 

 

17

%

Premises and equipment

 

 

16,490

 

 

 

14,317

 

 

 

2,173

 

 

 

15

%

FDIC insurance expense

 

 

2,685

 

 

 

2,181

 

 

 

504

 

 

 

23

%

Other expenses

 

 

19,231

 

 

 

17,977

 

 

 

1,254

 

 

 

7

%

Total operating expenses

 

 

127,816

 

 

 

110,679

 

 

 

17,137

 

 

 

15

%

Pretax income before provision for credit losses

 

 

38,476

 

 

 

64,723

 

 

 

(26,247

)

 

 

-41

%

Provision for credit losses

 

 

5,762

 

 

 

9,065

 

 

 

(3,303

)

 

 

-36

%

Income before income taxes

 

 

32,714

 

 

 

55,658

 

 

 

(22,944

)

 

 

-41

%

Income tax expense

 

 

8,966

 

 

 

15,403

 

 

 

(6,437

)

 

 

-42

%

Net income

 

$

23,748

 

 

$

40,255

 

 

$

(16,507

)

 

 

-41

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Common Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (basic)

 

$

1.34

 

 

$

2.25

 

 

$

(0.91

)

 

 

-40

%

Earnings per share (diluted)

 

 

1.34

 

 

 

2.23

 

 

 

(0.89

)

 

 

-40

%

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

17,691,309

 

 

 

17,876,316

 

 

 

(185,007

)

 

 

-1

%

Diluted

 

 

17,746,560

 

 

 

18,091,524

 

 

 

(344,964

)

 

 

-2

%

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (ROAA)

 

 

0.49

%

 

 

0.84

%

 

 

(0.35

)%

 

 

-41

%

Return on average equity (ROAE)

 

 

5.42

%

 

 

9.66

%

 

 

(4.24

)%

 

 

-44

%

Return on average tangible equity (ROATCE) (A)

 

 

5.88

%

 

 

10.55

%

 

 

(4.67

)%

 

 

-44

%

Net interest margin (tax-equivalent basis)

 

 

2.26

%

 

 

2.54

%

 

 

(0.28

)%

 

 

-11

%

GAAP efficiency ratio (B)

 

 

76.86

%

 

 

63.10

%

 

 

13.76

%

 

 

22

%

Operating expenses / average assets

 

 

2.65

%

 

 

2.31

%

 

 

0.34

%

 

 

15

%

 

(A) Return on average tangible equity is calculated by dividing tangible equity by annualized net income. See Non-GAAP financial measures reconciliation included in these tables.

(B) Calculated as total operating expenses as a percentage of total revenue. For Non-GAAP efficiency ratio, see the Non-GAAP financial measures reconciliation included in these tables.

10

PEAPACK-GLADSTONE FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in Thousands)

(Unaudited)

 

 

As of

 

 

 

Sept 30,

 

 

June 30,

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

 

 

2024

 

 

2024

 

 

2024

 

 

2023

 

 

2023

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

8,129

 

 

$

5,586

 

 

$

5,769

 

 

$

5,887

 

 

$

7,400

 

Federal funds sold

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Interest-earning deposits

 

 

484,529

 

 

 

310,143

 

 

 

189,069

 

 

 

181,784

 

 

 

180,469

 

Total cash and cash equivalents

 

 

492,658

 

 

 

315,729

 

 

 

194,838

 

 

 

187,671

 

 

 

187,869

 

Securities available for sale

 

 

682,713

 

 

 

591,884

 

 

 

550,870

 

 

 

550,617

 

 

 

521,005

 

Securities held to maturity

 

 

103,158

 

 

 

105,013

 

 

 

106,498

 

 

 

107,755

 

 

 

108,940

 

CRA equity security, at fair value

 

 

13,445

 

 

 

12,971

 

 

 

13,055

 

 

 

13,166

 

 

 

12,581

 

FHLB and FRB stock, at cost (A)

 

 

12,459

 

 

 

12,478

 

 

 

18,079

 

 

 

31,044

 

 

 

34,158

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage

 

 

591,374

 

 

 

579,057

 

 

 

581,426

 

 

 

578,427

 

 

 

585,295

 

Multifamily mortgage

 

 

1,784,861

 

 

 

1,796,687

 

 

 

1,827,165

 

 

 

1,836,390

 

 

 

1,871,853

 

Commercial mortgage

 

 

578,559

 

 

 

600,859

 

 

 

615,964

 

 

 

637,625

 

 

 

622,469

 

Commercial and industrial loans

 

 

2,247,853

 

 

 

2,185,827

 

 

 

2,235,342

 

 

 

2,284,940

 

 

 

2,321,917

 

Consumer loans

 

 

78,160

 

 

 

69,579

 

 

 

66,827

 

 

 

62,036

 

 

 

57,227

 

Home equity lines of credit

 

 

38,971

 

 

 

37,117

 

 

 

35,542

 

 

 

36,464

 

 

 

34,411

 

Other loans

 

 

389

 

 

 

172

 

 

 

184

 

 

 

238

 

 

 

265

 

Total loans

 

 

5,320,167

 

 

 

5,269,298

 

 

 

5,362,450

 

 

 

5,436,120

 

 

 

5,493,437

 

Less: Allowance for credit losses

 

 

71,283

 

 

 

67,984

 

 

 

66,251

 

 

 

65,888

 

 

 

68,592

 

Net loans

 

 

5,248,884

 

 

 

5,201,314

 

 

 

5,296,199

 

 

 

5,370,232

 

 

 

5,424,845

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premises and equipment

 

 

25,716

 

 

 

24,932

 

 

 

24,494

 

 

 

24,166

 

 

 

23,969

 

Accrued interest receivable

 

 

31,973

 

 

 

33,534

 

 

 

32,672

 

 

 

30,676

 

 

 

22,889

 

Bank owned life insurance

 

 

47,837

 

 

 

47,716

 

 

 

47,580

 

 

 

47,581

 

 

 

47,509

 

Goodwill and other intangible assets

 

 

45,198

 

 

 

45,470

 

 

 

45,742

 

 

 

46,014

 

 

 

46,286

 

Finance lease right-of-use assets

 

 

1,020

 

 

 

1,055

 

 

 

1,900

 

 

 

2,087

 

 

 

2,274

 

Operating lease right-of-use assets

 

 

41,650

 

 

 

38,683

 

 

 

16,035

 

 

 

12,096

 

 

 

12,800

 

Due from brokers

 

 

—

 

 

 

3,184

 

 

 

—

 

 

 

—

 

 

 

—

 

Other assets

 

 

47,081

 

 

 

71,387

 

 

 

60,591

 

 

 

53,752

 

 

 

76,456

 

TOTAL ASSETS

 

$

6,793,792

 

 

$

6,505,350

 

 

$

6,408,553

 

 

$

6,476,857

 

 

$

6,521,581

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

 

$

1,079,877

 

 

$

950,368

 

 

$

914,893

 

 

$

957,687

 

 

$

947,405

 

Interest-bearing demand deposits

 

 

3,316,217

 

 

 

3,229,814

 

 

 

3,029,119

 

 

 

2,882,193

 

 

 

2,871,359

 

Savings

 

 

103,979

 

 

 

105,602

 

 

 

108,305

 

 

 

111,573

 

 

 

117,905

 

Money market accounts

 

 

902,562

 

 

 

824,158

 

 

 

775,132

 

 

 

740,559

 

 

 

761,833

 

Certificates of deposit – Retail

 

 

515,297

 

 

 

502,810

 

 

 

486,079

 

 

 

443,791

 

 

 

422,291

 

Certificates of deposit – Listing Service

 

 

7,454

 

 

 

7,454

 

 

 

7,704

 

 

 

7,804

 

 

 

9,103

 

Subtotal “customer” deposits

 

 

5,925,386

 

 

 

5,620,206

 

 

 

5,321,232

 

 

 

5,143,607

 

 

 

5,129,896

 

IB Demand – Brokered

 

 

10,000

 

 

 

10,000

 

 

 

10,000

 

 

 

10,000

 

 

 

10,000

 

Certificates of deposit – Brokered

 

 

—

 

 

 

26,000

 

 

 

145,480

 

 

 

120,507

 

 

 

119,463

 

Total deposits

 

 

5,935,386

 

 

 

5,656,206

 

 

 

5,476,712

 

 

 

5,274,114

 

 

 

5,259,359

 

Short-term borrowings

 

 

—

 

 

 

—

 

 

 

119,490

 

 

 

403,814

 

 

 

470,576

 

Finance lease liability

 

 

1,388

 

 

 

1,427

 

 

 

3,104

 

 

 

3,430

 

 

 

3,752

 

Operating lease liability

 

 

44,775

 

 

 

41,347

 

 

 

17,630

 

 

 

12,876

 

 

 

13,595

 

Subordinated debt, net

 

 

133,489

 

 

 

133,417

 

 

 

133,346

 

 

 

133,274

 

 

 

133,203

 

Due to brokers

 

 

—

 

 

 

9,981

 

 

 

—

 

 

 

—

 

 

 

—

 

Other liabilities

 

 

71,140

 

 

 

74,650

 

 

 

75,892

 

 

 

65,668

 

 

 

82,140

 

TOTAL LIABILITIES

 

 

6,186,178

 

 

 

5,917,028

 

 

 

5,826,174

 

 

 

5,893,176

 

 

 

5,962,625

 

Shareholders’ equity

 

 

607,614

 

 

 

588,322

 

 

 

582,379

 

 

 

583,681

 

 

 

558,956

 

TOTAL LIABILITIES AND

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY

 

$

6,793,792

 

 

$

6,505,350

 

 

$

6,408,553

 

 

$

6,476,857

 

 

$

6,521,581

 

Assets under management and / or administration at
   Peapack-Gladstone Bank’s Private Wealth Management
   Division (market value, not included above-dollars in billions)

 

$

12.1

 

 

$

11.5

 

 

$

11.5

 

 

$

10.9

 

 

$

10.4

 

 

(A) FHLB means "Federal Home Loan Bank" and FRB means "Federal Reserve Bank."

.

 

11

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED BALANCE SHEET DATA

(Dollars in Thousands)

(Unaudited)

 

 

As of

 

 

 

Sept 30,

 

 

June 30,

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

 

 

2024

 

 

2024

 

 

2024

 

 

2023

 

 

2023

 

Asset Quality:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans past due over 90 days and still accruing

 

$

—

 

 

$

—

 

 

$

35

 

 

$

—

 

 

$

—

 

Nonaccrual loans

 

 

80,453

 

 

 

82,075

 

 

 

69,811

 

 

 

61,324

 

 

 

70,809

 

Other real estate owned

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total nonperforming assets

 

$

80,453

 

 

$

82,075

 

 

$

69,846

 

 

$

61,324

 

 

$

70,809

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans to total loans

 

 

1.51

%

 

 

1.56

%

 

 

1.30

%

 

 

1.13

%

 

 

1.29

%

Nonperforming assets to total assets

 

 

1.18

%

 

 

1.26

%

 

 

1.09

%

 

 

0.95

%

 

 

1.09

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing modifications (A)(B)

 

$

51,796

 

 

$

26,788

 

 

$

12,311

 

 

$

248

 

 

$

248

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans past due 30 through 89 days and still accruing

 

$

31,446

 

 

$

34,714

 

 

$

73,699

 

 

$

34,589

 

 

$

9,780

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans subject to special mention

 

$

113,655

 

 

$

140,791

 

 

$

59,450

 

 

$

71,397

 

 

$

53,328

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Classified loans

 

$

147,422

 

 

$

128,311

 

 

$

117,869

 

 

$

84,372

 

 

$

94,866

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated loans

 

$

79,972

 

 

$

81,802

 

 

$

69,530

 

 

$

60,710

 

 

$

70,184

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses ("ACL"):

 

 

 

 

 

 

 

 

 

 

 

 

Beginning of quarter

 

$

67,984

 

 

$

66,251

 

 

$

65,888

 

 

$

68,592

 

 

$

62,704

 

Provision for credit losses (C)

 

 

1,227

 

 

 

3,901

 

 

 

615

 

 

 

5,082

 

 

 

5,944

 

(Charge-offs)/recoveries, net (D)

 

 

2,072

 

 

 

(2,168

)

 

 

(252

)

 

 

(7,786

)

 

 

(56

)

End of quarter

 

$

71,283

 

 

$

67,984

 

 

$

66,251

 

 

$

65,888

 

 

$

68,592

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACL to nonperforming loans

 

 

88.60

%

 

 

82.83

%

 

 

94.85

%

 

 

107.44

%

 

 

96.87

%

ACL to total loans

 

 

1.34

%

 

 

1.29

%

 

 

1.24

%

 

 

1.21

%

 

 

1.25

%

Collectively evaluated ACL to total loans (E)

 

 

1.16

%

 

 

1.14

%

 

 

1.15

%

 

 

1.13

%

 

 

1.10

%

(A) Amounts reflect modifications that are paying according to modified terms.

(B) Excludes modifications included in nonaccrual loans of $3.7 million at September 30, 2024, $3.2 million at June 30, 2024, $3.2 million at March 31, 2024, $3.0 million at December 31, 2023 and $3.1 million at September 30, 2023.

(C) Excludes a credit of $3,000 at September 30, 2024, a provision of $10,000 at June 30, 2024, a provision of $12,000 at March 31, 2024, a credit of $55,000 at December 31, 2023 and a credit of $88,000 at September 30, 2023 related to off-balance sheet commitments.

(D) Net charge-offs for the quarter ended December 31, 2023 included charge-offs of $2.2 million of a previously established reserve to loans individually evaluated on one multifamily loan and $5.6 million on one equipment finance relationship.

(E) Total ACL less reserves to loans individually evaluated equals collectively evaluated ACL.

12

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED BALANCE SHEET DATA

(Dollars in Thousands)

(Unaudited)

 

 

As of

 

 

 

September 30,

 

 

December 31,

 

 

September 30,

 

 

 

2024

 

 

2023

 

 

2023

 

Capital Adequacy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity to total assets (A)

 

 

 

 

8.94

%

 

 

 

 

9.01

%

 

 

 

 

8.57

%

Tangible equity to tangible assets (B)

 

 

 

 

8.33

%

 

 

 

 

8.36

%

 

 

 

 

7.92

%

Book value per share (C)

 

 

 

$

34.57

 

 

 

 

$

32.90

 

 

 

 

$

31.37

 

Tangible book value per share (D)

 

 

 

$

32.00

 

 

 

 

$

30.31

 

 

 

 

$

28.77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible equity to tangible assets excluding other comprehensive loss*

 

 

 

 

9.07

%

 

 

 

 

9.28

%

 

 

 

 

9.06

%

Tangible book value per share excluding other comprehensive loss*

 

 

 

$

35.11

 

 

 

 

$

33.97

 

 

 

 

$

33.36

 

 

*Excludes other comprehensive loss of $54.8 million for the quarter ended September 30, 2024, $64.9 million for the quarter ended December 31, 2023, and $81.7 million for the quarter ended September 30, 2023. See Non-GAAP financial measures reconciliation included in these tables.

 

(A) Equity to total assets is calculated as total shareholders’ equity as a percentage of total assets at quarter end.

(B) Tangible equity and tangible assets are calculated by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. Tangible equity as a percentage of tangible assets at quarter end is calculated by dividing tangible equity by tangible assets at quarter end. See Non-GAAP financial measures reconciliation included in these tables.

(C) Book value per common share is calculated by dividing shareholders’ equity by quarter end common shares outstanding.

(D) Tangible book value per share excludes intangible assets. Tangible book value per share is calculated by dividing tangible equity by quarter end common shares outstanding. See Non-GAAP financial measures reconciliation tables.

 

 

 

As of

 

 

September 30,

 

December 31,

 

September 30,

 

 

2024

 

2023

 

2023

Regulatory Capital – Holding Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier I leverage

 

$

615,486

 

 

9.33%

 

$

600,444

 

 

9.19%

 

$

592,061

 

 

9.05%

Tier I capital to risk-weighted assets

 

 

615,486

 

 

11.67

 

 

600,444

 

 

11.43

 

 

592,061

 

 

11.13

Common equity tier I capital ratio
   to risk-weighted assets

 

 

615,474

 

 

11.67

 

 

600,432

 

 

11.43

 

 

592,043

 

 

11.13

Tier I & II capital to risk-weighted assets

 

 

800,961

 

 

15.19

 

 

785,413

 

 

14.95

 

 

784,777

 

 

14.76

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory Capital – Bank

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier I leverage (E)

 

$

724,038

 

 

10.99%

 

$

707,446

 

 

10.83%

 

$

702,517

 

 

10.75%

Tier I capital to risk-weighted assets (F)

 

 

724,038

 

 

13.75

 

 

707,446

 

 

13.48

 

 

702,517

 

 

13.22

Common equity tier I capital ratio
   to risk-weighted assets (G)

 

 

724,026

 

 

13.75

 

 

707,434

 

 

13.47

 

 

702,499

 

 

13.22

Tier I & II capital to risk-weighted assets (H)

 

 

789,954

 

 

15.00

 

 

773,083

 

 

14.73

 

 

768,979

 

 

14.47

 

(E) Regulatory well capitalized standard (including capital conservation buffer) = 4.00% ($264 million)

(F) Regulatory well capitalized standard (including capital conservation buffer) = 8.50% ($448 million)

(G) Regulatory well capitalized standard (including capital conservation buffer) = 7.00% ($369 million)

(H) Regulatory well capitalized standard (including capital conservation buffer) = 10.50% ($553 million)

 

 

13

PEAPACK-GLADSTONE FINANCIAL CORPORATION

LOANS CLOSED

(Dollars in Thousands)

(Unaudited)

 

 

 

For the Quarters Ended

 

 

 

Sept 30,

 

 

June 30,

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

 

 

2024

 

 

2024

 

 

2024

 

 

2023

 

 

2023

 

Residential loans retained

 

$

26,955

 

 

$

16,087

 

 

$

11,661

 

 

$

5,895

 

 

$

21,310

 

Residential loans sold

 

 

1,853

 

 

 

2,361

 

 

 

4,025

 

 

 

1,449

 

 

 

2,503

 

Total residential loans

 

 

28,808

 

 

 

18,448

 

 

 

15,686

 

 

 

7,344

 

 

 

23,813

 

Commercial real estate

 

 

4,300

 

 

 

2,600

 

 

 

11,500

 

 

 

21,375

 

 

 

3,900

 

Multifamily

 

 

11,295

 

 

 

4,330

 

 

 

1,900

 

 

 

5,725

 

 

 

3,000

 

Commercial (C&I) loans (A) (B)

 

 

242,829

 

 

 

103,065

 

 

 

145,803

 

 

 

145,397

 

 

 

176,845

 

SBA

 

 

9,106

 

 

 

8,200

 

 

 

2,790

 

 

 

7,326

 

 

 

300

 

Wealth lines of credit (A)

 

 

11,675

 

 

 

10,950

 

 

 

3,850

 

 

 

350

 

 

 

6,875

 

Total commercial loans

 

 

279,205

 

 

 

129,145

 

 

 

165,843

 

 

 

180,173

 

 

 

190,920

 

Installment loans

 

 

8,137

 

 

 

1,664

 

 

 

6,868

 

 

 

2,946

 

 

 

6,999

 

Home equity lines of credit (A)

 

 

10,421

 

 

 

4,787

 

 

 

2,103

 

 

 

4,174

 

 

 

6,275

 

Total loans closed

 

$

326,571

 

 

$

154,044

 

 

$

190,500

 

 

$

194,637

 

 

$

228,007

 

 

 

 

For the Nine Months Ended

 

 

 

Sept 30,

 

 

Sept 30,

 

 

 

2024

 

 

2023

 

Residential loans retained

 

$

54,703

 

 

$

90,971

 

Residential loans sold

 

 

8,239

 

 

 

5,052

 

Total residential loans

 

 

62,942

 

 

 

96,023

 

Commercial real estate

 

 

18,400

 

 

 

66,125

 

Multifamily

 

 

17,525

 

 

 

59,812

 

Commercial (C&I) loans (A) (B)

 

 

491,697

 

 

 

543,631

 

SBA

 

 

20,096

 

 

 

23,963

 

Wealth lines of credit (A)

 

 

26,475

 

 

 

34,050

 

Total commercial loans

 

 

574,193

 

 

 

727,581

 

Installment loans

 

 

16,669

 

 

 

23,672

 

Home equity lines of credit (A)

 

 

17,311

 

 

 

15,303

 

Total loans closed

 

$

671,115

 

 

$

862,579

 

 

(A) Includes loans and lines of credit that closed in the period but not necessarily funded.

(B) Includes equipment finance.

 

 

14

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

(Tax-Equivalent Basis, Dollars in Thousands)

(Unaudited)

 

 

For the Three Months Ended

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

 

Average

 

 

Income/

 

 

Annualized

 

 

Average

 

 

Income/

 

 

Annualized

 

 

 

Balance

 

 

Expense

 

 

Yield

 

 

Balance

 

 

Expense

 

 

Yield

 

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable (A)

 

$

865,892

 

 

$

6,107

 

 

 

2.82

%

 

$

806,861

 

 

$

5,170

 

 

 

2.56

%

Tax-exempt (A) (B)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,198

 

 

 

11

 

 

 

3.67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (B) (C):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgages

 

 

579,949

 

 

 

5,834

 

 

 

4.02

 

 

 

580,951

 

 

 

5,208

 

 

 

3.59

 

Commercial mortgages

 

 

2,381,771

 

 

 

27,362

 

 

 

4.60

 

 

 

2,502,351

 

 

 

27,746

 

 

 

4.44

 

Commercial

 

 

2,159,648

 

 

 

37,588

 

 

 

6.96

 

 

 

2,298,723

 

 

 

37,357

 

 

 

6.50

 

Commercial construction

 

 

22,371

 

 

 

507

 

 

 

9.07

 

 

 

12,346

 

 

 

282

 

 

 

9.14

 

Installment

 

 

73,440

 

 

 

1,267

 

 

 

6.90

 

 

 

56,248

 

 

 

967

 

 

 

6.88

 

Home equity

 

 

38,768

 

 

 

814

 

 

 

8.40

 

 

 

34,250

 

 

 

680

 

 

 

7.94

 

Other

 

 

239

 

 

 

6

 

 

 

10.04

 

 

 

234

 

 

 

7

 

 

 

11.97

 

Total loans

 

 

5,256,186

 

 

 

73,378

 

 

 

5.58

 

 

 

5,485,103

 

 

 

72,247

 

 

 

5.27

 

Federal funds sold

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Interest-earning deposits

 

 

326,707

 

 

 

3,982

 

 

 

4.88

 

 

 

136,315

 

 

 

1,463

 

 

 

4.29

 

Total interest-earning assets

 

 

6,448,785

 

 

 

83,467

 

 

 

5.18

%

 

 

6,429,477

 

 

 

78,891

 

 

 

4.91

%

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

7,521

 

 

 

 

 

 

 

 

 

6,954

 

 

 

 

 

 

 

Allowance for credit losses

 

 

(70,317

)

 

 

 

 

 

 

 

 

(63,625

)

 

 

 

 

 

 

Premises and equipment

 

 

25,530

 

 

 

 

 

 

 

 

 

23,880

 

 

 

 

 

 

 

Other assets

 

 

139,042

 

 

 

 

 

 

 

 

 

85,582

 

 

 

 

 

 

 

Total noninterest-earning assets

 

 

101,776

 

 

 

 

 

 

 

 

 

52,791

 

 

 

 

 

 

 

Total assets

 

$

6,550,561

 

 

 

 

 

 

 

 

$

6,482,268

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

$

3,214,186

 

 

$

31,506

 

 

 

3.92

%

 

$

2,813,080

 

 

$

24,318

 

 

 

3.46

%

Money markets

 

 

833,325

 

 

 

6,419

 

 

 

3.08

 

 

 

771,781

 

 

 

4,458

 

 

 

2.31

 

Savings

 

 

104,293

 

 

 

117

 

 

 

0.45

 

 

 

118,718

 

 

 

75

 

 

 

0.25

 

Certificates of deposit – retail

 

 

512,794

 

 

 

5,540

 

 

 

4.32

 

 

 

415,665

 

 

 

3,459

 

 

 

3.33

 

Subtotal interest-bearing deposits

 

 

4,664,598

 

 

 

43,582

 

 

 

3.74

 

 

 

4,119,244

 

 

 

32,310

 

 

 

3.14

 

Interest-bearing demand – brokered

 

 

10,000

 

 

 

134

 

 

 

5.36

 

 

 

10,000

 

 

 

136

 

 

 

5.44

 

Certificates of deposit – brokered

 

 

7,913

 

 

 

106

 

 

 

5.36

 

 

 

102,777

 

 

 

1,183

 

 

 

4.60

 

Total interest-bearing deposits

 

 

4,682,511

 

 

 

43,822

 

 

 

3.74

 

 

 

4,232,021

 

 

 

33,629

 

 

 

3.18

 

Borrowings

 

 

—

 

 

 

—

 

 

 

—

 

 

 

470,616

 

 

 

6,569

 

 

 

5.58

 

Capital lease obligation

 

 

1,401

 

 

 

15

 

 

 

4.28

 

 

 

3,863

 

 

 

46

 

 

 

4.76

 

Subordinated debt

 

 

133,449

 

 

 

1,685

 

 

 

5.05

 

 

 

133,163

 

 

 

1,730

 

 

 

5.20

 

Total interest-bearing liabilities

 

 

4,817,361

 

 

 

45,522

 

 

 

3.78

%

 

 

4,839,663

 

 

 

41,974

 

 

 

3.47

%

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

1,016,014

 

 

 

 

 

 

 

 

 

990,854

 

 

 

 

 

 

 

Accrued expenses and other liabilities

 

 

124,399

 

 

 

 

 

 

 

 

 

86,598

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

1,140,413

 

 

 

 

 

 

 

 

 

1,077,452

 

 

 

 

 

 

 

Shareholders’ equity

 

 

592,787

 

 

 

 

 

 

 

 

 

565,153

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

6,550,561

 

 

 

 

 

 

 

 

$

6,482,268

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

37,945

 

 

 

 

 

 

 

 

$

36,917

 

 

 

 

Net interest spread

 

 

 

 

 

 

 

 

1.40

%

 

 

 

 

 

 

 

 

1.44

%

Net interest margin (D)

 

 

 

 

 

 

 

 

2.34

%

 

 

 

 

 

 

 

 

2.28

%

 

(A) Average balances for available for sale securities are based on amortized cost.

(B) Interest income is presented on a tax-equivalent basis using a 21% federal tax rate.

(C) Loans are stated net of unearned income and include nonaccrual loans.

(D) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

 

 

 

 

 

15

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

(Tax-Equivalent Basis, Dollars in Thousands)

(Unaudited)

 

 

For the Three Months Ended

 

 

 

September 30, 2024

 

 

June 30, 2024

 

 

 

Average

 

 

Income/

 

 

Annualized

 

 

Average

 

 

Income/

 

 

Annualized

 

 

 

Balance

 

 

Expense

 

 

Yield

 

 

Balance

 

 

Expense

 

 

Yield

 

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable (A)

 

$

865,892

 

 

$

6,107

 

 

 

2.82

%

 

$

801,715

 

 

$

5,168

 

 

 

2.58

%

Tax-exempt (A) (B)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (B) (C):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgages

 

 

579,949

 

 

 

5,834

 

 

 

4.02

 

 

 

576,944

 

 

 

5,582

 

 

 

3.87

 

Commercial mortgages

 

 

2,381,771

 

 

 

27,362

 

 

 

4.60

 

 

 

2,420,570

 

 

 

26,881

 

 

 

4.44

 

Commercial

 

 

2,159,648

 

 

 

37,588

 

 

 

6.96

 

 

 

2,191,370

 

 

 

37,067

 

 

 

6.77

 

Commercial construction

 

 

22,371

 

 

 

507

 

 

 

9.07

 

 

 

21,628

 

 

 

489

 

 

 

9.04

 

Installment

 

 

73,440

 

 

 

1,267

 

 

 

6.90

 

 

 

67,034

 

 

 

1,143

 

 

 

6.82

 

Home equity

 

 

38,768

 

 

 

814

 

 

 

8.40

 

 

 

36,576

 

 

 

748

 

 

 

8.18

 

Other

 

 

239

 

 

 

6

 

 

 

10.04

 

 

 

200

 

 

 

6

 

 

 

12.00

 

Total loans

 

 

5,256,186

 

 

 

73,378

 

 

 

5.58

 

 

 

5,314,322

 

 

 

71,916

 

 

 

5.41

 

Federal funds sold

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Interest-earning deposits

 

 

326,707

 

 

 

3,982

 

 

 

4.88

 

 

 

207,287

 

 

 

2,418

 

 

 

4.67

 

Total interest-earning assets

 

 

6,448,785

 

 

 

83,467

 

 

 

5.18

%

 

 

6,323,324

 

 

 

79,502

 

 

 

5.03

%

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

7,521

 

 

 

 

 

 

 

 

 

7,537

 

 

 

 

 

 

 

Allowance for credit losses

 

 

(70,317

)

 

 

 

 

 

 

 

 

(67,568

)

 

 

 

 

 

 

Premises and equipment

 

 

25,530

 

 

 

 

 

 

 

 

 

24,820

 

 

 

 

 

 

 

Other assets

 

 

139,042

 

 

 

 

 

 

 

 

 

99,838

 

 

 

 

 

 

 

Total noninterest-earning assets

 

 

101,776

 

 

 

 

 

 

 

 

 

64,627

 

 

 

 

 

 

 

Total assets

 

$

6,550,561

 

 

 

 

 

 

 

 

$

6,387,951

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

$

3,214,186

 

 

$

31,506

 

 

 

3.92

%

 

$

3,094,386

 

 

$

29,252

 

 

 

3.78

%

Money markets

 

 

833,325

 

 

 

6,419

 

 

 

3.08

 

 

 

791,385

 

 

 

6,016

 

 

 

3.04

 

Savings

 

 

104,293

 

 

 

117

 

 

 

0.45

 

 

 

105,825

 

 

 

96

 

 

 

0.36

 

Certificates of deposit – retail

 

 

512,794

 

 

 

5,540

 

 

 

4.32

 

 

 

504,313

 

 

 

5,367

 

 

 

4.26

 

Subtotal interest-bearing deposits

 

 

4,664,598

 

 

 

43,582

 

 

 

3.74

 

 

 

4,495,909

 

 

 

40,731

 

 

 

3.62

 

Interest-bearing demand – brokered

 

 

10,000

 

 

 

134

 

 

 

5.36

 

 

 

10,000

 

 

 

134

 

 

 

5.36

 

Certificates of deposit – brokered

 

 

7,913

 

 

 

106

 

 

 

5.36

 

 

 

98,642

 

 

 

1,242

 

 

 

5.04

 

Total interest-bearing deposits

 

 

4,682,511

 

 

 

43,822

 

 

 

3.74

 

 

 

4,604,551

 

 

 

42,107

 

 

 

3.66

 

Borrowings

 

 

—

 

 

 

—

 

 

 

—

 

 

 

27,247

 

 

 

381

 

 

 

5.59

 

Capital lease obligation

 

 

1,401

 

 

 

15

 

 

 

4.28

 

 

 

2,869

 

 

 

22

 

 

 

3.07

 

Subordinated debt

 

 

133,449

 

 

 

1,685

 

 

 

5.05

 

 

 

133,377

 

 

 

1,686

 

 

 

5.06

 

Total interest-bearing liabilities

 

 

4,817,361

 

 

 

45,522

 

 

 

3.78

%

 

 

4,768,044

 

 

 

44,196

 

 

 

3.71

%

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

1,016,014

 

 

 

 

 

 

 

 

 

945,231

 

 

 

 

 

 

 

Accrued expenses and other liabilities

 

 

124,399

 

 

 

 

 

 

 

 

 

97,470

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

1,140,413

 

 

 

 

 

 

 

 

 

1,042,701

 

 

 

 

 

 

 

Shareholders’ equity

 

 

592,787

 

 

 

 

 

 

 

 

 

577,206

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

6,550,561

 

 

 

 

 

 

 

 

$

6,387,951

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

37,945

 

 

 

 

 

 

 

 

$

35,306

 

 

 

 

Net interest spread

 

 

 

 

 

 

 

 

1.40

%

 

 

 

 

 

 

 

 

1.32

%

Net interest margin (D)

 

 

 

 

 

 

 

 

2.34

%

 

 

 

 

 

 

 

 

2.25

%

(A) Average balances for available for sale securities are based on amortized cost.

(B) Interest income is presented on a tax-equivalent basis using a 21% federal tax rate.

(C) Loans are stated net of unearned income and include nonaccrual loans.

(D) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

16

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

(Tax-Equivalent Basis, Dollars in Thousands)

(Unaudited)

 

 

For the Nine Months Ended

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

 

Average

 

 

Income/

 

 

 

 

 

Average

 

 

Income/

 

 

 

 

 

 

Balance

 

 

Expense

 

 

Yield

 

 

Balance

 

 

Expense

 

 

Yield

 

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable (A)

 

$

820,594

 

 

$

16,411

 

 

 

2.67

%

 

$

801,535

 

 

$

14,541

 

 

 

2.42

%

Tax-exempt (A) (B)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,637

 

 

 

49

 

 

 

3.99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (B) (C):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgages

 

 

578,187

 

 

 

16,836

 

 

 

3.88

 

 

 

556,220

 

 

 

14,433

 

 

 

3.46

 

Commercial mortgages

 

 

2,420,772

 

 

 

81,783

 

 

 

4.50

 

 

 

2,495,175

 

 

 

80,503

 

 

 

4.30

 

Commercial

 

 

2,196,921

 

 

 

112,214

 

 

 

6.81

 

 

 

2,247,803

 

 

 

106,182

 

 

 

6.30

 

Commercial construction

 

 

20,981

 

 

 

1,425

 

 

 

9.06

 

 

 

7,903

 

 

 

536

 

 

 

9.04

 

Installment

 

 

68,605

 

 

 

3,524

 

 

 

6.85

 

 

 

49,214

 

 

 

2,416

 

 

 

6.55

 

Home equity

 

 

37,255

 

 

 

2,298

 

 

 

8.22

 

 

 

33,914

 

 

 

1,903

 

 

 

7.48

 

Other

 

 

218

 

 

 

19

 

 

 

11.62

 

 

 

260

 

 

 

22

 

 

 

11.28

 

Total loans

 

 

5,322,939

 

 

 

218,099

 

 

 

5.46

 

 

 

5,390,489

 

 

 

205,995

 

 

 

5.10

 

Federal funds sold

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Interest-earning deposits

 

 

225,070

 

 

 

7,922

 

 

 

4.69

 

 

 

147,071

 

 

 

4,452

 

 

 

4.04

 

Total interest-earning assets

 

 

6,368,603

 

 

 

242,432

 

 

 

5.08

%

 

 

6,340,732

 

 

 

225,037

 

 

 

4.73

%

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

8,384

 

 

 

 

 

 

 

 

 

8,388

 

 

 

 

 

 

 

Allowance for credit losses

 

 

(68,337

)

 

 

 

 

 

 

 

 

(62,753

)

 

 

 

 

 

 

Premises and equipment

 

 

24,917

 

 

 

 

 

 

 

 

 

23,850

 

 

 

 

 

 

 

Other assets

 

 

109,152

 

 

 

 

 

 

 

 

 

76,992

 

 

 

 

 

 

 

Total noninterest-earning assets

 

 

74,116

 

 

 

 

 

 

 

 

 

46,477

 

 

 

 

 

 

 

Total assets

 

$

6,442,719

 

 

 

 

 

 

 

 

$

6,387,209

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

$

3,088,218

 

 

$

88,192

 

 

 

3.81

%

 

$

2,739,115

 

 

$

63,018

 

 

 

3.07

%

Money markets

 

 

794,297

 

 

 

17,959

 

 

 

3.01

 

 

 

893,567

 

 

 

13,185

 

 

 

1.97

 

Savings

 

 

106,200

 

 

 

302

 

 

 

0.38

 

 

 

128,437

 

 

 

148

 

 

 

0.15

 

Certificates of deposit – retail

 

 

498,353

 

 

 

15,762

 

 

 

4.22

 

 

 

386,488

 

 

 

7,650

 

 

 

2.64

 

Subtotal interest-bearing deposits

 

 

4,487,068

 

 

 

122,215

 

 

 

3.63

 

 

 

4,147,607

 

 

 

84,001

 

 

 

2.70

 

Interest-bearing demand – brokered

 

 

10,000

 

 

 

394

 

 

 

5.25

 

 

 

15,311

 

 

 

469

 

 

 

4.08

 

Certificates of deposit – brokered

 

 

78,042

 

 

 

2,950

 

 

 

5.04

 

 

 

51,916

 

 

 

1,584

 

 

 

4.07

 

Total interest-bearing deposits

 

 

4,575,110

 

 

 

125,559

 

 

 

3.66

 

 

 

4,214,834

 

 

 

86,054

 

 

 

2.72

 

Borrowings

 

 

87,224

 

 

 

3,848

 

 

 

5.88

 

 

 

331,170

 

 

 

13,249

 

 

 

5.33

 

Capital lease obligation

 

 

2,491

 

 

 

75

 

 

 

4.01

 

 

 

4,179

 

 

 

149

 

 

 

4.75

 

Subordinated debt

 

 

133,377

 

 

 

5,055

 

 

 

5.05

 

 

 

133,090

 

 

 

4,966

 

 

 

4.98

 

Total interest-bearing liabilities

 

 

4,798,202

 

 

 

134,537

 

 

 

3.74

%

 

 

4,683,273

 

 

 

104,418

 

 

 

2.97

%

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

959,571

 

 

 

 

 

 

 

 

 

1,066,162

 

 

 

 

 

 

 

Accrued expenses and other liabilities

 

 

101,247

 

 

 

 

 

 

 

 

 

82,215

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

1,060,818

 

 

 

 

 

 

 

 

 

1,148,377

 

 

 

 

 

 

 

Shareholders’ equity

 

 

583,699

 

 

 

 

 

 

 

 

 

555,559

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

6,442,719

 

 

 

 

 

 

 

 

$

6,387,209

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

107,895

 

 

 

 

 

 

 

 

$

120,619

 

 

 

 

Net interest spread

 

 

 

 

 

 

 

 

1.34

%

 

 

 

 

 

 

 

 

1.76

%

Net interest margin (D)

 

 

 

 

 

 

 

 

2.26

%

 

 

 

 

 

 

 

 

2.54

%

(A) Average balances for available for sale securities are based on amortized cost.

(B) Interest income is presented on a tax-equivalent basis using a 21% federal tax rate.

(C) Loans are stated net of unearned income and include nonaccrual loans.

(D) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

 

17

PEAPACK-GLADSTONE FINANCIAL CORPORATION

NON-GAAP FINANCIAL MEASURES RECONCILIATION

Tangible book value per share and tangible equity as a percentage of tangible assets at period end are non-GAAP financial measures derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. We calculate tangible book value per share by dividing tangible equity by common shares outstanding, as compared to book value per common share, which we calculate by dividing shareholders’ equity by common shares outstanding at period end. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios.

The efficiency ratio is a non-GAAP measure of expense control relative to recurring revenue. We calculate the efficiency ratio by dividing total noninterest expenses, excluding other real estate owned provision, as determined under GAAP, by net interest income and total noninterest income as determined under GAAP, but excluding net gains/(losses) on loans held for sale at lower of cost or fair value and excluding net gains on securities from this calculation, which we refer to below as recurring revenue. We believe that this provides a reasonable measure of core expenses relative to core revenue.

We believe these non-GAAP financial measures provide information that is important to investors and useful in understanding our financial position, results and ratios because our management internally assesses our performance based, in part, on these measures. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titles measures reported by other companies. A reconciliation of the non-GAAP measures of tangible common equity, tangible book value per share and efficiency ratio to the underlying GAAP numbers is set forth below.

(Dollars in thousands, except per share data)

 

 

Three Months Ended

 

 

 

Sept 30,

 

 

June 30,

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

Tangible Book Value Per Share

 

2024

 

 

2024

 

 

2024

 

 

2023

 

 

2023

 

Shareholders’ equity

 

$

607,614

 

 

$

588,322

 

 

$

582,379

 

 

$

583,681

 

 

$

558,956

 

Less: Intangible assets, net

 

 

45,198

 

 

 

45,470

 

 

 

45,742

 

 

 

46,014

 

 

 

46,286

 

Tangible equity

 

$

562,416

 

 

$

542,852

 

 

$

536,637

 

 

$

537,667

 

 

$

512,670

 

Less: other comprehensive loss

 

 

(54,820

)

 

 

(68,342

)

 

 

(67,760

)

 

 

(64,878

)

 

 

(81,653

)

Tangible equity excluding other comprehensive loss

 

$

617,236

 

 

$

611,194

 

 

$

604,397

 

 

$

602,545

 

 

$

594,323

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period end shares outstanding

 

 

17,577,747

 

 

 

17,666,490

 

 

 

17,761,538

 

 

 

17,739,677

 

 

 

17,816,922

 

Tangible book value per share

 

$

32.00

 

 

$

30.73

 

 

$

30.21

 

 

$

30.31

 

 

$

28.77

 

Tangible book value per share excluding other comprehensive loss

 

$

35.11

 

 

$

34.60

 

 

$

34.03

 

 

$

33.97

 

 

$

33.36

 

Book value per share

 

 

34.57

 

 

 

33.30

 

 

 

32.79

 

 

 

32.90

 

 

 

31.37

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Equity to Tangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

6,793,792

 

 

$

6,505,350

 

 

$

6,408,553

 

 

$

6,476,857

 

 

$

6,521,581

 

Less: Intangible assets, net

 

 

45,198

 

 

 

45,470

 

 

 

45,742

 

 

 

46,014

 

 

 

46,286

 

Tangible assets

 

$

6,748,594

 

 

$

6,459,880

 

 

$

6,362,811

 

 

$

6,430,843

 

 

$

6,475,295

 

Less: other comprehensive loss

 

 

(54,820

)

 

 

(68,342

)

 

 

(67,760

)

 

 

(64,878

)

 

 

(81,653

)

Tangible assets excluding other comprehensive loss

 

$

6,803,414

 

 

$

6,528,222

 

 

$

6,430,571

 

 

$

6,495,721

 

 

$

6,556,948

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible equity to tangible assets

 

 

8.33

%

 

 

8.40

%

 

 

8.43

%

 

 

8.36

%

 

 

7.92

%

Tangible equity to tangible assets excluding other comprehensive loss

 

 

9.07

%

 

 

9.36

%

 

 

9.40

%

 

 

9.28

%

 

 

9.06

%

Equity to assets

 

 

8.94

%

 

 

9.04

%

 

 

9.09

%

 

 

9.01

%

 

 

8.57

%

 

 

18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

 

 

Three Months Ended

 

 

 

Sept 30,

 

 

June 30,

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

Return on Average Tangible Equity

 

2024

 

 

2024

 

 

2024

 

 

2023

 

 

2023

 

Net income

 

$

7,587

 

 

$

7,530

 

 

$

8,631

 

 

$

8,599

 

 

$

8,755

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average shareholders’ equity

 

$

592,787

 

 

$

577,206

 

 

$

581,003

 

 

$

561,055

 

 

$

565,153

 

Less: Average intangible assets, net

 

 

45,350

 

 

 

45,624

 

 

 

45,903

 

 

 

46,167

 

 

 

46,468

 

Average tangible equity

 

$

547,437

 

 

$

531,582

 

 

$

535,100

 

 

$

514,888

 

 

$

518,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average tangible common equity

 

 

5.54

%

 

 

5.67

%

 

 

6.45

%

 

 

6.68

%

 

 

6.75

%

 

 

 

For the Nine Months Ended

 

 

 

Sept 30,

 

 

Sept 30,

 

Return on Average Tangible Equity

 

2024

 

 

2023

 

Net income

 

$

23,748

 

 

$

40,255

 

 

 

 

 

 

 

 

Average shareholders’ equity

 

$

583,699

 

 

$

555,559

 

Less: Average intangible assets, net

 

 

45,625

 

 

 

46,825

 

Average tangible equity

 

 

538,074

 

 

 

508,734

 

 

 

 

 

 

 

 

Return on average tangible common equity

 

 

5.88

%

 

 

10.55

%

 

 

(Dollars in thousands)

 

19

 

 

Three Months Ended

 

 

 

Sept 30,

 

 

June 30,

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

Efficiency Ratio

 

2024

 

 

2024

 

 

2024

 

 

2023

 

 

2023

 

Net interest income

 

$

37,681

 

 

$

35,042

 

 

$

34,375

 

 

$

36,675

 

 

$

36,515

 

Total other income

 

 

18,938

 

 

 

21,555

 

 

 

18,701

 

 

 

17,590

 

 

 

19,354

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair value adjustment for CRA equity security

 

 

(474

)

 

 

84

 

 

 

111

 

 

 

(585

)

 

 

404

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on loans held for sale at lower of cost or fair value

 

 

—

 

 

 

(23

)

 

 

—

 

 

 

—

 

 

 

—

 

Income from life insurance proceeds

 

 

(55

)

 

 

—

 

 

 

(181

)

 

 

—

 

 

 

—

 

Total recurring revenue

 

 

56,090

 

 

 

56,658

 

 

 

53,006

 

 

 

53,680

 

 

 

56,273

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

44,649

 

 

 

43,126

 

 

 

40,041

 

 

 

37,616

 

 

 

37,413

 

Total operating expense

 

 

44,649

 

 

 

43,126

 

 

 

40,041

 

 

 

37,616

 

 

 

37,413

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio

 

 

79.60

%

 

 

76.12

%

 

 

75.54

%

 

 

70.07

%

 

 

66.48

%

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

 

 

For the Nine Months Ended

 

 

 

Sept 30,

 

 

Sept 30,

 

Efficiency Ratio

 

2024

 

 

2023

 

Net interest income

 

$

107,098

 

 

$

119,414

 

Total other income

 

 

59,194

 

 

 

55,988

 

Add:

 

 

 

 

 

 

Fair value adjustment for CRA equity security

 

 

(279

)

 

 

404

 

Less:

 

 

 

 

 

 

Gain on loans held for sale at lower of cost or fair value

 

 

(23

)

 

 

—

 

Income from life insurance proceeds

 

 

(236

)

 

 

—

 

Total recurring revenue

 

 

165,754

 

 

 

175,806

 

 

 

 

 

 

 

 

Operating expenses

 

 

127,816

 

 

 

110,679

 

Less:

 

 

 

 

 

 

Accelerated Expense for Retirement

 

 

—

 

 

 

1,965

 

Branch Closure Expense

 

 

—

 

 

 

175

 

Total operating expense

 

 

127,816

 

 

 

108,539

 

 

 

 

 

 

 

 

Efficiency ratio

 

 

77.11

%

 

 

61.74

%

 

20