The Corporation assesses its results among two operating segments, Banking and Peapack-Gladstone Bank’s Private Wealth Management Division. Management uses certain methodologies to allocate income and expense to the business segments. A funds transfer pricing methodology is used to assign interest income and interest expense. Certain indirect expenses are allocated to segments. These include support unit expenses such as technology and operations and other support functions. Taxes are allocated to each segment based on the effective rate for the period shown.

The Banking segment includes commercial (includes C&I and equipment finance), commercial real estate, multifamily, residential and consumer lending activities; treasury management services; C&I advisory services; escrow management; deposit generation; operation of ATMs; telephone and internet banking services; merchant credit card services and customer support and sales.

Peapack-Gladstone Bank’s Private Wealth Management Division, including PGB Trust & Investments of Delaware, MCM, Quadrant and Lassus Wherley, includes investment management services provided for individuals and institutions; personal trust services, including services as executor, trustee, administrator, custodian and guardian, and other financial planning, tax preparation and advisory services.

The following tables present the statements of income and total assets for the Corporation’s reportable segments for the three and six months ended June 30, 2019 and 2018.

	Three Months Ended June 30, 2019
			Wealth
			Management
(In thousands)	Banking		Division		Total
Net interest income	$	27,934	$	1,334	$	29,268
Noninterest income		3,151		9,875		13,026
Total income		31,085		11,209		42,294

Provision for loan and lease losses		1,150		—		1,150
Compensation and benefits		12,685		4,858		17,543
Premises and equipment expense		3,046		554		3,600
FDIC expense		277		—		277
Other noninterest expense		2,553		2,200		4,753
Total noninterest expense		19,711		7,612		27,323
Income before income tax expense		11,374		3,597		14,971
Income tax expense		2,581		840		3,421
Net income	$	8,793	$	2,757	$	11,550

	Three Months Ended June 30, 2018
			Wealth
			Management
(In thousands)	Banking		Division		Total
Net interest income	$	27,953	$	1,290	$	29,243
Noninterest income		3,353		8,387		11,740
Total income		31,306		9,677		40,983

Provision for loan and lease losses		300		—		300
Compensation and benefits		11,932		3,894		15,826
Premises and equipment expense		2,982		424		3,406
FDIC Expense		625		—		625
Other noninterest expense		3,145		1,939		5,084
Total noninterest expense		18,984		6,257		25,241
Income before income tax expense		12,322		3,420		15,742
Income tax expense		2,997		835		3,832
Net income	$	9,325	$	2,585	$	11,910

	Six Months Ended June 30, 2019
			Wealth
			Management
(In thousands)	Banking		Division		Total
Net interest income	$	56,500	$	2,775	$	59,275
Noninterest income		5,430		19,325		24,755
Total income		61,930		22,100		84,030

Provision for loan and lease losses		1,250		—		1,250
Compensation and benefits		24,682		10,017		34,699
Premises and equipment expense		5,971		1,017		6,988
FDIC expense		554		—		554
Other noninterest expense		5,311		4,336		9,647
Total noninterest expense		37,768		15,370		53,138
Income before income tax expense		24,162		6,730		30,892
Income tax expense		6,192		1,725		7,917
Net income	$	17,970	$	5,005	$	22,975

Total assets at period end	$	4,791,902	$	79,332	$	4,871,234

	Six Months Ended June 30, 2018
			Wealth
			Management
(In thousands)	Banking		Division		Total
Net interest income	$	54,801	$	2,835	$	57,636
Noninterest income		4,980		16,975		21,955
Total income		59,781		19,810		79,591

Provision for loan and lease losses		1,550		—		1,550
Compensation and benefits		22,263		8,142		30,405
Premises and equipment expense		5,821		855		6,676
FDIC Expense		1,205		—		1,205
Other noninterest expense		5,952		4,040		9,992
Total noninterest expense		36,791		13,037		49,828
Income before income tax expense		22,990		6,773		29,763
Income tax expense		5,442		1,604		7,046
Net income	$	17,548	$	5,169	$	22,717

Total assets at period end	$	4,208,731	$	56,443	$	4,265,174