EX-99.I 3 exhibit99-1.txt Contact: Arthur F. Birmingham Peapack-Gladstone Financial Corporation T: 908-719-4308 PEAPACK-GLADSTONE FINANCIAL CORPORATION REPORTS SECOND QUARTER RESULTS GLADSTONE, N.J.--(BUSINESS WIRE)--August 1, 2003 - Peapack-Gladstone Financial Corporation (AMEX:PGC) today reported net income of $3.3 million for the quarter ended June 30, 2003, an increase of $130 thousand or 4.1 percent over the $3.2 million reported for the same quarter of 2002. Net income per diluted share was $0.47 for the second quarter of 2003 compared to $0.46 for the second quarter of 2002, an increase of 2.2 percent. Annualized return on average assets ("ROA") was 1.44 percent and annualized return on average equity ("ROE") was 16.24 percent for the second quarter of 2003. For the six months ended June 30, 2003, net earnings were $6.5 million, an increase of 7.0 percent over the $6.1 million reported for the six months ended June 30, 2002. Net income per diluted share was $0.95, an increase of 5.6 percent over the $0.90 reported for the year ago period. Annualized return on average assets was 1.48 percent and annualized return on average equity was 16.43 percent for the first six months of 2003. Frank A. Kissel, Chairman and CEO, stated, "In spite of the historically low interest rate environment, we posted strong earnings in the second quarter of 2003. We have been careful to attempt to limit our interest rate risk by not extending long-term fixed rate assets during this low interest rate cycle. Average deposits continued to grow this quarter, rising 15.2 percent over last year and the market value of trust assets under management by PGB Trust and Investments reached $1.3 billion, an increase of 8.7 percent over June 30, 2002 levels. These growth patterns reflect our continuing commitment to meet and exceed our customers' needs and expectations". EARNINGS Net Interest Income Net interest income for the second quarter of 2003 was $7.8 million, with a net interest margin of 3.67 percent. That compares with net interest income of $8.2 million for the second quarter of 2002 with a net interest margin of 4.53 percent. The decline in net interest income during the second quarter of 2003 was primarily a result of declining interest rates on loans and investments due to refinancing and reinvestment activity. Deposit and borrowing rates also declined, but at a slower pace than the rates on loans and investments. Earning assets increased to $860.3 million on average, or 19.2 percent, from the second quarter of 2002 while the yield on interest earnings assets declined 131 basis points from 6.28 percent to 4.97 percent in the second quarter of 2003 from the second quarter of 2002. The growth in earnings assets during the second quarter of 2003 was primarily in the investment securities portfolio, as average investment securities rose $159.3 million or 56.4 percent, offset in part by lower average loans, which declined $27.6 million on average. This decline was primarily due to residential mortgage pay-offs, which resulted from the historically low interest rate environment. Total average deposits for the second quarter of 2003 grew to $789.9 million from $685.8 million, an increase of $104.1 million or 15.2 percent, and total average borrowings increased to $30.4 million from $5.5 million in the year ago period. The Corporation has begun to position some of its borrowings to try to take advantage of the low long-term interest rate environment that presently exists. This strategy of extending the maturities of borrowings and matching with lower yielding fixed rate loans is intended to reduce interest rate risk if interest rates begin to rise. The cost of funds fell to 1.30 percent in the second quarter of 2003 as compared to 1.75 percent in the second quarter of 2002. Other Income Other income before gains on securities sales and trust fee income rose 2.5 percent to $836 thousand for the second quarter of 2003 from $816 thousand for the second quarter of 2002. This increase was primarily due to additions to cash surrender value of Bank Owned Life Insurance. Net securities gains for the second quarter 2003 were $554 thousand as compared to $8 thousand for the second quarter of 2002. Trust fee income generated by PGB Trust and Investments rose $362 thousand or 28.8 percent to $1.6 million for the quarter ended June 30, 2003 as compared to $1.3 million for the same period in 2002. Other Expense For the second quarter of 2003, other expenses totaled $5.7 million, an increase of $413 thousand or 7.7 percent over the $5.3 million reported for the second quarter of 2002. Higher salary and benefit costs and premises and equipment expense relating to new branch locations and business expansion along with costs related to the installation of a new primary software program were the main reasons for the increase in other expenses. The efficiency ratio was 56.25 percent for the quarter ended June 30, 2003 as compared to 52.17 percent for the same period in 2002. ASSET QUALITY Non-performing loans totaled $168 thousand or 0.04 percent of total loans at June 30, 2003 as compared to $394 thousand or 0.09 percent at June 30, 2002. The allowance for loan losses was $5.1 million or 1.25 percent of total loans at June 30, 2003 as compared to $4.4 million or 1.02 percent of total loans at June 30, 2002. Net charge-offs of $8 thousand were recorded in the second quarter of 2003 as compared to $20 thousand of net recoveries in the second quarter of 2002. CAPITAL Shareholders' equity totaled $83.2 million at June 30, 2003, an increase of $12.9 million or 18.3 percent over the $70.4 million reported at June 30, 2002. The Corporation's leverage ratio, tier 1 and total risk based capital ratios at June 30, 2003 were 8.71 percent, 19.87 percent and 21.19 percent, respectively. Peapack-Gladstone Financial Corporation, headquartered in Peapack-Gladstone, New Jersey, and listed on the American Stock Exchange under the symbol "PGC", is the holding company for the Peapack-Gladstone Bank. Peapack-Gladstone Bank, a community bank, was established in 1921, and has 17 branches in Somerset, Hunterdon and Morris Counties. Its Trust Division, PGB Trust and Investments, with $1.3 billion in assets at market value under management at June 30, 2003, operates at the Bank's main office located at 190 Main Street in Gladstone, New Jersey. To learn more about Peapack-Gladstone Financial Corporation and its services please visit our web site at www.pgbank.com or call 908-234-0700. -------------- The foregoing contains 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, relationships, opportunities, taxation, technology and market conditions. These statements may be identified by such forward-looking terminology as "expect", "look", "believe", "anticipate", "may", "will", 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, changes in the direction of the economy in New Jersey, the direction of interest rates, effective income tax rates, loan prepayment assumptions, continued levels of loan quality and origination volume, continued relationships with major customers including sources for loans, as well as the effects of general economic conditions and legal and regulatory barriers and structure. Peapack-Gladstone assumes no obligation for updating any such forward-looking statements at any time. PEAPACK-GLADSTONE FINANCIAL CORPORATION SELECTED CONSOLIDATED FINANCIAL DATA UNAUDITED (Dollars in Thousands, Except Per Share Amounts)
At or For The Three Months Ended At or For The Six Months Ended June 30, June 30, 2003 2002 2003 2002 ----------------------- ----------------------- Income Statement Data: Interest income $ 10,428 $ 11,174 $ 21,032 $ 21,865 Interest expense 2,666 3,022 5,350 6,005 Net interest income 7,762 8,152 15,682 15,860 Provision for loan losses 150 201 300 400 Net interest income after provision for loan losses 7,612 7,951 15,382 15,460 Other income 836 816 1,676 1,620 Securities Gains 554 8 827 26 Trust Fees 1,621 1,259 3,064 2,405 Other expense 5,748 5,335 11,231 10,465 Income before income taxes 4,875 4,699 9,718 9,046 Income tax expense 1,592 1,546 3,175 2,931 Net income $ 3,283 $ 3,153 $ 6,543 $ 6,115 Balance Sheet Data: Total assets $ 957,294 $ 797,657 Federal funds sold 3,621 2,081 Short-term investments 523 526 Securities held to maturity 146,355 102,517 Securities available for sale 344,968 204,799 Loans 409,249 435,180 Allowance for Loan Losses 5,125 4,421 Deposits 800,545 710,832 Borrowings 64,428 8,000 Shareholders' equity 83,202 70,352 Trust Department Assets (book value, not included above) 1,050,565 $ 973,174 Average Balance Sheet Data: Total Assets $ 909,687 $ 765,632 $ 887,125 $ 743,513 Earning Assets 860,275 721,809 837,437 699,166 Loans, net 395,976 424,005 396,282 419,561 Interest-Bearing Deposits 650,607 571,543 648,153 551,077 Demand Deposits 139,315 114,290 131,979 113,012 Borrowings 30,377 5,544 19,433 6,782 Shareholders' equity 80,883 66,707 79,631 65,678 Performance Ratios: Return on average assets 1.44% 1.65% 1.48% 1.64% Return on average equity 16.24 18.91 16.43 18.62 Efficiency Ratio 56.25% 52.17% 54.99% 52.63% Net Interest Margin (Taxable Equivalent Basis) 3.67% 4.53% 3.83% 4.58%
PEAPACK-GLADSTONE FINANCIAL CORPORATION SELECTED CONSOLIDATED FINANCIAL DATA UNAUDITED (Dollars in Thousands, Except Per Share Amounts)
At or For The Three Months Ended At or For The Six Months Ended June 30, June 30, 2003 2002 2003 2002 ----------------------- ----------------------- Asset Quality: Loans past due over 90 days and still accruing $ 1 $ 308 Non-accrual loans 167 86 Net recoveries/(charge-offs) (8) 20 27 (2) Allowance for loan losses to total loans 1.25% 1.02% Per Share Data: (1) Earnings per share (Basic) $ 0.49 $ 0.47 $ 0.98 $ 0.91 Earnings per share (Diluted) 0.47 0.46 0.95 0.90 Book Value per share 12.40 10.52 Capital Adequacy: Tier I Leverage 8.71% 9.02% Tier I Capital to Risk-Weighted Assets 19.87 19.04 Tier I & Tier II Capital to Risk-Weighted Assets 21.19 20.30 (1) Restated for the 2 for 1 stock split declared September 12, 2002.