-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E0nJSqtfdQQGvRVjpHJfdlSD+br+t0wfLJpS0ll58TcVARiV0XwLL88QmkPP+xqL PH4lH5KSFO1hSKQ5Z3c97w== /in/edgar/work/0000950110-00-001270/0000950110-00-001270.txt : 20001116 0000950110-00-001270.hdr.sgml : 20001116 ACCESSION NUMBER: 0000950110-00-001270 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEAPACK GLADSTONE FINANCIAL CORP CENTRAL INDEX KEY: 0001050743 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 223537895 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-16197 FILM NUMBER: 768263 BUSINESS ADDRESS: STREET 1: PEAPACK GLADSTONE FINACIAL CORP STREET 2: 158 ROUTE 206 NORTH CITY: GLADSTONE STATE: NJ ZIP: 07934 BUSINESS PHONE: 9082340700 MAIL ADDRESS: STREET 1: PEAPACK GLADSTONE FINANCIAL CORP STREET 2: 158 ROUTE 206 NORTH CITY: GLADSTONE STATE: NJ ZIP: 07934 10-Q 1 0001.txt FORM 10-Q FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED SEPTEMBER 30, 2000 ------------------ PEAPACK-GLADSTONE FINANCIAL CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) NEW JERSEY 22-3537895 - ------------------------------- ---------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 158 ROUTE 206 NORTH, GLADSTONE, NEW JERSEY 07934 - ------------------------------------------ --------------- (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER (908) 234-0700 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No. ------ --- Number of shares of Common stock outstanding as of September 30, 2000: 3,018,140 1 PEAPACK-GLADSTONE FINANCIAL CORPORATION PART I. FINANCIAL INFORMATION Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the December 31, 1999 Annual Report on Form 10-K for Peapack-Gladstone Financial Corporation (the "Corporation"). The Corporation considers that all adjustments (all of which are normal recurring accruals) necessary for a fair statement of the financial position and results of operations for these periods have been made; however, results for such interim periods are subject to year-end adjustments. Results for such interim periods are not necessarily indicative of results for a full year. PEAPACK-GLADSTONE FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF CONDITION (Dollars in thousands) (Unaudited)
September 30, December 31, 2000 1999 -------------- ------------ ASSETS Cash and due from banks $ 15,093 $ 17,770 Federal funds sold 11,963 15,247 --------- --------- Total cash and cash equivalents 27,056 33,017 Investment Securities:(approximate market value $64,564 in 2000 and $61,033 in 1999) 69,450 61,672 Securities Available for Sale:(amortized cost $86,698 in 2000 and $104,386 in 1999) 82,878 101,324 Loans: Loans secured by real estate 303,270 261,946 Other loans 28,180 25,987 --------- --------- Total loans 331,450 287,933 Less: Allowance for loan losses 3,219 2,962 --------- --------- Net loans 328,231 284,971 Premises and equipment 11,673 9,718 Accrued interest receivable 3,937 3,444 Other assets 3,359 3,389 --------- --------- TOTAL ASSETS $ 526,584 $ 497,535 ========= ========= LIABILITIES Deposits: Noninterest-bearing demand deposits $ 97,529 $ 87,034 Interest-bearing deposits: Checking 93,266 98,699 Savings 75,816 82,962 Money market accounts 50,048 33,605 Certificates of deposit over $100,000 39,381 33,637 Certificates of deposit less than $100,000 114,024 108,151 --------- --------- Total deposits 470,064 444,088 Accrued expenses and other liabilities 3,643 5,872 --------- --------- TOTAL LIABILITIES 473,707 449,960 STOCKHOLDERS' EQUITY Common stock (no par value; stated value $1 2/3 per share; authorized 10,000,000 shares; issued at 9/30/00 3,038,455 shares; issued at 12/31/99 3,027,148 shares.) 5,059 4,599 Surplus 25,078 19,667 Treasury Stock at cost, 20,315 shares in 2000 and 12,493 shares in 1999 (944) (655) Retained Earnings 25,058 25,918 Accumulated other comprehensive income- net unrealized (losses) on securities available for sale (net of income taxes) (1,374) (1,954) --------- --------- TOTAL STOCKHOLDERS' EQUITY 52,877 47,575 --------- --------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 526,584 $ 497,535 ========= =========
See accompanying notes to consolidated financial statements. 3 PEAPACK-GLADSTONE FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except share data) (Unaudited)
Nine months ended Three months ended September 30, September 30, ----------------------------- ----------------------------- 2000 1999 2000 1999 ---------- ---------- ---------- ---------- INTEREST INCOME Interest and fees on loans $ 18,240 $ 14,757 $ 6,228 $ 5,103 Interest on investment securities: Taxable 2,540 2,222 882 729 Tax-exempt 474 419 194 139 Interest on securities available for sale: Taxable 4,283 4,986 1,296 1,652 Interest on federal funds sold 869 1,134 272 416 Total interest income 26,406 23,518 8,872 8,039 ---------- ---------- ---------- ---------- INTEREST EXPENSE Interest on savings account deposits 3,129 2,670 1,101 907 Interest on certificates of deposit over $100,000 1,279 1,183 506 382 Interest on other time deposits 4,534 3,870 1,696 1,285 ---------- ---------- ---------- ---------- Total interest expense 8,942 7,723 3,303 2,574 ---------- ---------- ---------- ---------- NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 17,464 15,795 5,569 5,465 Provision for loan losses 378 339 126 111 ---------- ---------- ---------- ---------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 17,086 15,456 5,443 5,354 ---------- ---------- ---------- ---------- OTHER INCOME Service charges and fees for other services 1,382 1,577 505 501 Trust Department income 2,827 2,202 950 695 Securities (Losses) Gains (200) 16 (4) 16 Other income 274 119 47 53 ---------- ---------- ---------- ---------- Total other income 4,283 3,914 1,498 1,265 OTHER EXPENSES Salaries and employee benefits 6,678 5,902 2,243 1,987 Premises and equipment 2,162 2,074 646 747 Merger related charges 500 0 0 0 Other expense 3,036 3,197 820 1,220 ---------- ---------- ---------- ---------- Total other expenses 12,376 11,173 3,709 3,954 ---------- ---------- ---------- ---------- INCOME BEFORE INCOME TAX EXPENSE 8,993 8,197 3,232 2,665 Income tax expense 3,070 2,737 1,096 762 ---------- ---------- ---------- ---------- NET INCOME $ 5,923 $ 5,460 $ 2,136 $ 1,903 ========== ========== ========== ========== EARNINGS PER SHARE (Reflects 5% stock dividends effective November 1, 2000 and 1999) Basic $ 1.96 $ 1.80 $ 0.70 $ 0.62 Diluted $ 1.92 $ 1.75 $ 0.69 $ 0.60 Average basic shares outstanding 3,018,513 2,996,349 3,020,867 2,997,569 Average diluted shares outstanding 3,077,444 3,074,864 3,079,798 3,076,084
See accompanying notes to consolidated financial statements. 4 PEAPACK-GLADSTONE FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Dollars in thousands) (Unaudited)
Nine Months Ended September 30, ------------------------- 2000 1999 -------- -------- Balance, Beginning of Period $ 47,575 $ 44,461 Comprehensive income: Net Income 5,923 5,460 Unrealized holding gains/(losses) on securities arising during the period, net of tax 451 (2,349) Less: Reclassification adjustment for losses/gains included in net income 129 (10) -------- -------- Unrealized holding losses on securities arising during the period, net of tax 580 (2,339) -------- -------- Total Comprehensive income 6,503 3,121 Common Stock Options Exercised 139 20 Purchase of Treasury Stock (170) 0 Cash Dividends Declared (1,170) (919) -------- -------- Balance, September 30, $ 52,877 $ 46,683 ======== ========
See accompanying notes to consolidated financial statements. 5 PEAPACK-GLADSTONE FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited)
Nine Months Ended September 30, ------------------------- 2000 1999 -------- -------- OPERATING ACTIVITIES: Net Income: $ 5,923 $ 5,460 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 757 694 Amortization of premium and accretion of discount on securities, net 184 239 Provision for loan losses 378 339 Losses/(Gains) on security sales 200 (16) Increase in interest receivable (493) (218) Decrease in other assets 30 218 (Decrease) in other liabilities (1,576) (1,644) -------- -------- NET CASH PROVIDED BY OPERATING ACTIVITIES 5,403 5,072 -------- -------- INVESTING ACTIVITIES: Proceeds from maturities of investment securities 12,485 12,753 Proceeds from maturities of securities available for sale 24,815 6,280 Proceeds from calls of investment securities 10 4,600 Proceeds from sales and calls of securities available for sale 10,484 17,663 Purchase of investment securities (20,320) (17,871) Purchase of securities available for sale (17,263) (20,802) Net decrease in short term investments 0 1,911 Net increase in loans (43,638) (21,597) Purchase of premises and equipment (2,712) (634) -------- -------- NET CASH USED IN INVESTING ACTIVITIES (36,139) (17,697) -------- -------- FINANCING ACTIVITIES: Net increase in deposits 25,976 6,559 Dividends paid (1,170) (919) Exercise of stock options 139 24 Treasury stock options (170) 0 -------- -------- NET CASH PROVIDED BY FINANCING ACTIVITIES 24,775 5,664 -------- -------- Net decrease in cash and cash equivalents (5,961) (6,961) -------- -------- Cash and cash equivalents at beginning of period 33,017 55,629 -------- -------- Cash and cash equivalents at end of period $ 27,056 $ 48,668 ======== ======== Supplemental disclosures of cash flow information: Cash paid during the year for: Interest on deposits $ 8,081 $ 5,929 Income taxes 3,105 2,174
See accompanying notes to consolidated financial statements. 6 PEAPACK-GLADSTONE FINANCIAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. PRINCIPLES OF CONSOLIDATION The consolidated financial statements of Peapack-Gladstone Financial Corporation are prepared on the accrual basis and include the accounts of the Corporation and its wholly-owned subsidiary, the Peapack-Gladstone Bank. All significant intercompany balances and transactions have been eliminated from the accompanying consolidated financial statements. Effective January 7, 2000, the Corporation acquired Chatham Savings, FSB. The acquisition has been accounted for as a pooling-of-interests and, accordingly, the financial statements include the accounts and activities of Chatham for all periods presented. The transaction resulted in the issuance of 305,730 shares of the Corporation's common stock. Prior periods have been restated as follows: For the three months ended September 30, 1999
As Previously Reported As Restated ---------------------- ----------- Net Interest Income after Provision for Loan Losses $ 4,607,000 $ 5,354,000 =========== =========== Net Income $ 1,718,000 $ 1,903,000 =========== =========== For the nine months ended September 30, 1999 As Previously Reported As Restated ---------------------- ----------- Net Interest Income after Provision for Loan Losses $13,329,000 $15,456,000 =========== =========== Net Income $ 4,980,000 $ 5,460,000 =========== =========== As of December 31, 1999: Stockholders' Equity $40,715,000 $47,575,000 =========== ===========
In the first half of 2000, the Corporation recorded a pre-tax merger charge of $500,000 which primarily consisted of severance costs, professional fees and consolidation costs directly attributable to the merger. 2. ALLOWANCE FOR LOAN LOSSES The allowance for loan losses is maintained at a level that management considers adequate to reflect the risk of future losses inherent in the Corporation's loan portfolio. In its evaluation of the adequacy of the allowance for loan losses, management considers past loan loss experience, changes in the composition of non-performing loans, the condition of borrowers facing financial pressure, the relationship of the current level of the allowance to the credit portfolio and to non-performing loans and existing economic conditions. The process of determining the adequacy of the allowance is necessarily judgmental and subject to changes in external conditions. The allowance is increased by provisions charged to expense and reduced by net charge-offs. 3. EARNINGS PER COMMON SHARE - BASIC AND DILUTED Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share includes any additional common shares as if all potentially dilutive common shares were issued (i.e., stock options). 7 4. COMPREHENSIVE INCOME The Corporation's total comprehensive income for the nine months ended September 30, 2000 and 1999 was $6,503,000 and $3,121,000. Total comprehensive income for the three months ended September 30, 2000 and September 30, 1999 was $2,792,000 and $1,620,000. The difference between the Corporation's net income and total comprehensive income for the nine and three months ended September 30, 2000 and 1999 relates to the change in the net unrealized losses on securities available for sale during the applicable period of time less adjustments for realized gains and losses. 5. RECENT ACCOUNTING PRONOUNCEMENTS In June 2000, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities, an Amendment to FASB Statement No. 133." SFAS No. 138 amends certain aspects of SFAS No. 133 to simplify the accounting for derivatives and hedges under SFAS No. 133. SFAS No. 138 is effective upon the Corporation's adoption of SFAS No. 133 (January 1, 2001). The initial adoption of SFAS No. 138 is not expected to have material impact on the Corporation's financial statements. In September 2000, the FASB issued SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (A Replacement of FASB Statement 125)." SFAS No. 140 supersedes and replaces the guidance in SFAS No. 125 and accordingly, provides guidance on the following topics: securitization transactions involving financial assets; sales of financial assets such as receivables, loans, and securities; factoring transactions; wash sales; servicing assets and liabilities; collateralized borrowing arrangements; securities lending transactions; repurchase agreements; loan participations, and extinguishments of liabilities. While most of the provisions of SFAS No. 140 are effective for transactions entered into after March 31, 2001, corporations with fiscal year ends that hold beneficial interest from previous securitizations will be required to make additional disclosures in their December 31, 2000 financial statements. The initial adoption of SFAS No. 140 is not expected to have a material impact on the Corporation's financial statements. 8 MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL: This Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which involve risks and uncertainties. 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, technology and market conditions. You can identify forward looking statements by looking for words such as "expect", "look", "believe", "anticipate", "may", "will", or similar statements or variations of such terms. These forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from the results the forward-looking statements contemplate because of, among others, the following factors: the direction of interest rates is different than anticipated, declines in the levels of loan quality and origination volume, relationships with major customers including sources for loans, a decline in trust business, as well as the adverse effects of economic conditions and legal and regulatory barriers and structure. The Corporation is under no obligation to update any forward looking statements at any time. RESULTS OF OPERATIONS: Net income for the nine months ended September 30, 2000 was $5,923,000, or $1.92 per diluted share including a merger related charge of $423,000, net of tax or $0.14 per diluted share. These results compare to net income of $5,460,000, or $1.75 per diluted share for the same period in 1999. (all data has been restated for the Chatham Savings, FSB merger and earnings per share amounts have been restated to give effect to 5 percent stock dividends issued November 1, 2000 and 1999). Excluding the merger related charge the annualized return on average assets was 1.63% while the annualized return on average equity was 17.13% Net income was $2,136,000 or $0.69 per diluted share for the three month period ended September 30, 2000, compared with $1,903,000 or $0.60 per diluted share for the same period in 1999. Net income for the nine month period ended September 30, 2000 reflected higher net interest income and other income, offset by higher other expenses, including merger-related charges. Net income for the three month period ended September 30, 2000 reflected higher net interest income, other income, and lower other expenses. EARNINGS ANALYSIS NET INTEREST INCOME: Net interest income is the largest source of the Corporation's operating income. Net interest income on a tax equivalent basis increased to $17,510,000 from $15,846,000, an increase of 10.5 percent for the nine months ended September 30, 2000 as compared to the nine months ended September 30, 1999. The increase in net interest income is due to higher average balances of loans and higher average interest rates earned on earning assets, partially offset by lower average investments and federal funds sold. Also contributing to the increase was higher interest bearing liabilities and demand deposits, partially offset by higher interest rates paid on interest bearing liabilities. The net interest margin was 4.68 percent for the nine months ended September 30, 2000 compared with 4.65 percent for the same period in 1999. Average interest earning assets increased $36.6 million, or 8.1 percent for the first nine months of 2000 over the comparable 1999 amount. This was primarily the result of increased average loans, up $57.1 million, offset in part by lower average investment securities and federal funds sold, lower by $13.2 million and $7.3 million, respectively. Average interest-bearing liabilities for the first nine months of 2000 increased $19.2 million or 5.5 percent from the same period in 1999. Average interest-bearing checking and money market accounts increased $4.2 million and $10.2 million, respectively. Average demand deposits increased by $8.4 million or 9.6 percent over the comparable 1999 average balance. Average interest rates on interest earning assets increased during the nine months ended September 30, 2000 to 7.24 percent from 7.00 percent for the comparable period in 1999. The largest increase in average rates was for federal funds sold and investment securities, which rose 162 and 8 basis points, respectively. Average rates earned on loans rose 5 basis points to 7.68 percent. Average interest rates on interest-bearing liabilities rose by 28 basis points to 3.23 percent from 2.95 percent. Overall, the growth in interest earning assets coupled with the increase in average interest rates earned, offset in part by higher interest rates paid on interest-bearing liabilities, as compared to 1999, caused the net interest margin to increase to 4.68 percent from 4.65 percent. Net interest income on a tax equivalent basis increased to $5,595,000 from $5,331,000 for the three months ended September 30, 2000 as compared with the same period in 1999. This can be attributed to a $40.6 million increase in average interest earning assets and a corresponding 24 basis point increase in rates earned on overall interest 9 earning assets. Offsetting this increase was higher interest rates paid on interest-bearing liabilities up 61 basis points from the third quarter of 1999. The net interest margin declined to 4.30 percent from 4.56 percent for the same period a year ago. OTHER INCOME: Other income continues to represent a considerable source of income for the Corporation. Excluding losses and gains on securities transactions, total other income amounted to $4,083,000 for the nine months ended September 30, 2000 compared with $3,898,000 for the nine months ended September 30, 1999. For the quarter ended September 30, 2000 total other income, excluding losses/gains on securities transactions, was $1,502,000 compared with $1,249,000 for the quarter ended September 30, 1999. The largest component of other income is Trust Department Income which rose $625,000 or 28 percent as compared to the first nine months of 1999. The book value of assets under management in the Trust Department increased by $57.9 million to $696.1 million at September 30, 2000 as compared to September 30, 1999. Service charges and fees for other services declined $195,000 for the first nine months of 2000 as compared to the same period a year ago. This reduction was due to mortgage banking activities related to residential mortgage loans at Chatham Savings, FSB, in 1999 that has been discontinued. During the second quarter, the Corporation sold a residential mortgage loan servicing portfolio for a pre-tax gain of $211,000. This portfolio, acquired in the Chatham Savings, FSB merger was not compatible with existing lines of business. In the second quarter of 2000, the Corporation sold securities at a loss in the amount of $197,000. The higher rate earned on the reinvestment of the proceeds is expected to increase interest income in future years in excess of the loss. OTHER EXPENSES: Other expenses totaled $12,376,000 and $3,709,000 for the nine and three months ended September 30, 2000. Excluding merger-related charges, other expenses totaled $11,876,000 for the first nine months of 2000, an increase of $703,000 or 6 percent for the same period in 1999. Salaries and benefits expense, the largest component of other expense increased $776,000 or 13 percent during the first nine months of 2000 as compared to the same period in 1999. This increase was primarily due to upward salary adjustments to attract and maintain qualified employees and additions to the professional staff. Other expenses declined $245,000 or 6 percent in the third quarter of 2000 as compared to the same period in 1999. This decline is primarily attributed to non-recurring consulting costs of $185,000 which were incurred during the third quarter of 1999. The significant components of other expense include advertising, data processing, trust department, telephone, postage, stationery and professional fees which totaled $1,825,000 and $543,000 for the nine and three months ended September 30, 2000. NON-PERFORMING ASSETS: Non-performing assets include loans past due in excess of 90 days and still accruing, non-accrual loans, and other real estate owned (OREO). Non-performing assets totaled $363,000 at September 30, 2000 compared with $591,000 at December 31, 1999, a decrease of $228,000 or 39 percent. The following table sets forth non-performing assets on the dates indicated, in conjunction with asset quality ratios:
(in thousands) September 30, 2000 December 31, 1999 ------------------ ----------------- Loans past due in excess of 90 days and still accruing $171 $205 Non-accrual loans 192 386 Other real estate owned 0 0 ---- ---- Total non-performing assets $363 $591 ==== ==== Non-performing loans as a % of loans 0.11% 0.21% Non-performing assets as a % of loans plus other real estate owned 0.11% 0.21% Allowance as a % of loans 0.97% 1.03%
PROVISION FOR LOAN LOSSES: For the nine months ended September 30, 2000, the provision for loan losses was $378,000, compared to $339,000 for the same period last year. The amount of the loan loss provision and the level of the allowance for possible loan losses are based upon a number of factors including Management's evaluation of potential losses in the portfolio, after consideration of appraised collateral values, financial condition and past credit history of the borrowers as well as prevailing and anticipated economic conditions. Net charge-offs were $119,000 during the first nine months of 2000 as compared with net recoveries of $9,000 during the same period in 1999. 10 A summary of the allowance for loan losses for the nine month period ended September 30, follows: (In thousands) 2000 1999 ------- ------- Balance, January 1, $ 2,962 $ 2,428 Provision charged to expense 378 339 Loans charged off (162) (70) Recoveries 41 79 ------- ------- Balance, September 30, $ 3,219 $ 2,776 ======= ======= INCOME TAXES: Income tax expense as a percentage of pre-tax income was 34 percent for both the nine and three months ended September 30, 2000, as compared to 33 percent and 29 percent for the same periods in 1999. The lower effective tax rate in 1999 is attributable to a tax strategy implemented in July 1999 to minimize state tax expense. CAPITAL RESOURCES: Maintaining a strong capital position is an important goal of the Corporation. At September 30, 2000, total shareholders' equity (including net unrealized (losses)) was $52,877,000, representing a 13.3% increase over the same period in 1999. The Federal Reserve Board has adopted risk-based capital guidelines for banks. The minimum guidelines for the ratio of total capital to risk-weighted assets is 8%. At least half of the total capital is to be comprised of common stock, retained earnings, minority interests in the equity accounts of consolidated subsidiaries, non-cumulative preferred stock, less goodwill and certain other intangibles ("Tier 1 Capital"). The remainder may consist of other preferred stock, certain other instruments and a portion of the loan loss allowance. At September 30, 2000, the Bank's Tier 1 Capital and Total Capital ratios were 19.80% and 21.10%, respectively. In addition, the Federal Reserve Board has established minimum leverage ratio guidelines. These guidelines provide for a minimum ratio of Tier 1 Capital to average total assets of 3% for banks that meet certain specified criteria, including having the highest regulatory rating. All other banks are generally required to maintain a leverage ratio of at least 3% plus an additional cushion of 100 to 200 basis points. The Bank's leverage ratio at September 30, 2000 was 9.55% and the Corporation's leverage ratio was 10.34%. MARKET RISK: The Corporation continues to monitor its exposure to various market risk sensitive instruments. These instruments and procedures employed to monitor market risks are listed in the Corporation's 1999 Annual Report. There has been no significant change in market risk since December 31, 1999. 11 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits (27) Financial Data Schedule (b) Reports on Form 8-K None 12 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 9th day of November 2000. PEAPACK-GLADSTONE FINANCIAL CORPORATION (Registrant) BY ----------------------------- (FRANK A. KISSEL, PRESIDENT AND CHIEF EXECUTIVE OFFICER) ------------------------------ (ARTHUR F. BIRMINGHAM, SENIOR VICE PRESIDENT AND TREASURER) 13 EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
9 1,000 9-MOS DEC-31-2000 SEP-30-2000 15,093 0 11,963 0 69,450 0 82,878 331,450 3,219 526,584 470,064 0 3,643 0 0 0 5,059 47,818 526,584 18,240 8,166 4,483 30,689 8,942 0 17,464 378 (200) 12,376 8,993 8,993 0 0 5,923 1.96 1.92 0 192 171 0 0 0 162 41 0 0 0 0
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