Peapack-Gladstone Financial Corporation
                      Completes Balance Sheet Restructuring



GLADSTONE,  N.J. -  (Business  Wire) - September  26,  2006 -  Peapack-Gladstone
Financial  Corporation  ("Peapack")  (AMEX:PGC)  announced  today  that  it  has
completed   a  balance   sheet   restructuring   initiative.   As  part  of  the
restructuring,  Peapack  sold $61.9  million of  available-for-sale  securities,
which were yielding 4.14  percent.  The sale resulted in an after-tax  charge of
approximately $1.1 million,  or $0.13 per diluted share, in the third quarter of
2006.

         The majority of the proceeds  from the sale will be used to redeem high
cost,  short-term  borrowings  and  approximately  $20  million  will be used to
purchase floating rate securities.

         As a result of these actions,  the Bank expects its net interest margin
to improve by approximately 25 basis points.  In addition,  the Bank anticipates
that the restructuring will improve future net interest income, reduce wholesale
funding and decrease its overall interest rate risk.

         The resulting net realized  losses on the sale of the  securities  were
previously  reflected as net  unrealized  securities  losses within  accumulated
other  comprehensive  loss in the  shareholders'  equity  section of the balance
sheet.  Accordingly,  total shareholders'  equity will not change as a result of
these actions.

         Peapack-Gladstone  Financial Corporation is a bank holding company with
total assets of $1.34 billion as of August 31, 2006. Peapack-Gladstone Bank, its
wholly owned  community  bank was  established  in 1921,  and has 21 branches in
Somerset,  Hunterdon  and Morris  Counties.  Its Trust  Division,  PGB Trust and
Investments,  operates at the Bank's  main office  located at 190 Main Street in
Gladstone  and  at  233  South  Street  in  Morristown.   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  view of future
interest  income and net  loans,  management's  confidence  and  strategies  and
management's   expectations  about  new  and  existing  programs  and  products,
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, the  inability of  management  to  effectively
execute its balance sheet restructuring initiative, an unexpected decline in the
direction of the economy in New Jersey, an unexpected  decline or no increase in
interest rates,  unexpected loan prepayment  volume, a decline in levels of loan
quality and origination  volume and a decline in the volume of increase in trust
assets or deposits.  Peapack-Gladstone  assumes no  obligation  for updating any
such forward-looking statements at any time.

Contact:

Arthur F. Birmingham, Chief Financial Officer
Peapack-Gladstone Financial Corporation
T: 908-719-4308