Peapack-Gladstone Financial Corporation Reports First Quarter Results and Announces 5% Stock Repurchase Program

BEDMINSTER, NJ - (NewMediaWire) - April 25, 2023 - Peapack-Gladstone Financial Corporation (NASDAQ Global Select Market: PGC) (the “Company”) announces its first quarter 2023 results.

This earnings release should be read in conjunction with the Company’s Q1 2023 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. 

The Company recorded total revenue of $62.0 million, net income of $18.4 million and diluted earnings per share (“EPS”) of $1.01 for the quarter ended March 31, 2023, compared to revenue of $54.3 million, net income of $13.4 million and diluted EPS of $0.71 for the three months ended March 31, 2022.

The Company’s return on average assets, return on average equity, and return on average tangible equity were 1.16%, 13.50% and 14.78%, respectively, for the quarter ended March 31, 2023. Return on average tangible equity is a non-GAAP financial measure.  See the reconciliation tables included in this release.

The March 2023 quarter results reflect improvement in net interest income and net interest margin, which improved by $4.4 million and 19 basis points, respectively, when compared to the first quarter of 2022. On a linked quarter basis, the Company experienced net interest margin compression of 24 basis points resulting in a decline in net interest income of $4.1 million compared to the fourth quarter of 2022. The margin compression was primarily driven by an increase in our cost of funds during the first quarter of 2023, as clients moved funds from noninterest bearing accounts to higher yielding deposit accounts.

Deposits grew by $104 million (8% annualized growth) to $5.3 billion during the first quarter of 2023 compared to $5.2 billion as of December 31, 2022. The Company’s liquidity position also remains strong as on-balance sheet liquidity (investments available for sale, interest-earning deposits and cash) grew to $851 million as of March 31, 2023 driven by an increase in cash balances of $61 million during the first quarter.

Douglas L. Kennedy, President and CEO said, “Our first quarter results demonstrated a strong start to the year for our Company. Despite headwinds facing the industry, we grew deposits, loans, and capital during the first quarter. Liquidity and capital remain strong and I am proud of the strength of our balance sheet. We continue to closely monitor deposit balances and have proactively reached out to clients with larger uninsured balances to discuss alternative solutions if needed, including managing them into fully insured FDIC products.  I am pleased with the first quarter results and look forward to successfully navigating these turbulent times as we continue to focus on delivering the highest levels of client service."

During the first quarter of 2023, the Company authorized a new 5% stock repurchase program of up to 890,000 shares. Purchases will be conducted in accordance with SEC Rule 10b-18.

Mr. Kennedy noted, “We believe that repurchasing shares of our common stock at appropriate times will continue to drive additional shareholder value. While this repurchase plan was approved during the first quarter, we will proceed cautiously with regard to capital management as conditions continue to unfold.”

The following are select highlights for the period ended March 31, 2023:

 

Peapack Private Wealth Management:

 

·       AUM/AUA in our Peapack Private Wealth Management Division totaled $10.4 billion at March 31, 2023.

·       Gross new business inflows for Q1 2023 totaled $254 million ($237 million managed).

·       Wealth Management fee income of $13.8 million for Q1 2023 comprised 22% of total revenue for the quarter.

 

Commercial Banking and Balance Sheet Management:

 

·       The net interest margin ("NIM") improved by 19 basis points in Q1 2023 to 2.88% compared to Q1 2022 and declined 24 basis points when compared to Q4 2022.

·       Total deposits grew $104 million (2% linked quarter or 8% annualized) to $5.3 billion from $5.2 billion at December 31, 2022.

·       Noninterest-bearing demand deposits declined by $150 million during the first quarter, but still comprised 21% of total deposits as of March 31, 2023.

·       Core deposits (which includes noninterest-bearing demand and interest-bearing demand, savings and money market accounts) totaled 92% of total deposits at March 31, 2023.

·       Total loans were $5.4 billion at March 31, 2023 reflecting growth of $79 million (1% linked quarter or 6% annualized) when compared to $5.3 billion at December 31, 2022.

·       Commercial & industrial lending (“C&I”) loan/lease balances comprised 42% of the total loan portfolio at March 31, 2023.

·       Fee income on unused commercial lines of credit totaled $852,000 for Q1 2023.

 

Capital Management:

 

·       The Company repurchased 83,014 shares of Company stock for a total cost of $2.9 million during Q1 2023. The Company repurchased 930,977 shares of stock for a total cost of $32.7 million during the year ended December 31, 2022.

·       At March 31, 2023, Regulatory Tier 1 Leverage Ratio stood at 11.0% for Peapack-Gladstone Bank (the "Bank") and 9.0% for the Company; and Regulatory Common Equity Tier 1 Ratio (to Risk-Weighted Assets) stood at 13.9% for the Bank and 11.4% for the Company. These ratios are significantly above well capitalized standards, as capital has benefitted from strong net income generation.

 

Non-Core Items:


The March 2023 quarter included the following items, which management believes are non-core items:

 

·       $209,000 positive fair value adjustment on an equity security held for CRA investment.

·       $175,000 expense associated with three retail branch closures.

·       $300,000 of restricted stock expense associated with an executive retiring.

·       These items increased total revenue by $209,000, reduced net income by $193,000 and EPS by $0.01 for the March 2023 quarter.

SUMMARY INCOME STATEMENT DETAILS:

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

 

March 2023 Quarter Compared to Prior Year Quarter


hree Months Ended

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

March 31,

 

 

 

March 31,

 

 

Increase/

 

(Dollars in millions, except per share data)

 

2023

 

 

 

2022

 

 

(Decrease)

 

Net interest income

 

$

43.98

 

 

 

$

39.62

 

 

$

4.36

 

 

 

11

%

Wealth management fee income

 

 

13.76

 

 

 

 

14.83

 

 

 

(1.07

)

 

 

(7

)

Capital markets activity (A)

 

 

0.97

 

 

 

 

4.65

 

 

 

(3.68

)

 

 

(79

)

Other income (B)

 

 

3.33

 

 

 

 

(4.77

)

 

 

8.10

 

 

N/A

 

Total other income

 

 

18.06

 

 

 

 

14.71

 

 

 

3.35

 

 

 

23

 

Operating expenses (C)

 

 

35.57

 

 

 

 

34.17

 

 

 

1.40

 

 

 

4

 

Pretax income before provision for credit losses

 

 

26.47

 

 

 

 

20.16

 

 

 

6.31

 

 

 

31

 

Provision for credit losses

 

 

1.51

 

 

 

 

2.37

 

 

 

(0.86

)

 

 

(36

)

Pretax income

 

 

24.96

 

 

 

 

17.79

 

 

 

7.17

 

 

 

40

 

Income tax expense

 

 

6.60

 

 

 

 

4.35

 

 

 

2.25

 

 

 

52

 

Net income

 

$

18.36

 

 

 

$

13.44

 

 

$

4.92

 

 

 

37

%

Diluted EPS

 

$

1.01

 

 

 

$

0.71

 

 

$

0.30

 

 

 

42

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue (D)

 

$

62.04

 

 

 

$

54.33

 

 

$

7.71

 

 

 

14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets annualized

 

 

1.16

%

 

 

 

0.87

%

 

 

0.29

 

 

 

 

Return on average equity annualized

 

 

13.50

%

 

 

 

9.88

%

 

 

3.62

 

 

 

 

 

(A) Capital markets activity includes fee income from loan level back-to-back swaps, the SBA lending and sale program, corporate advisory and mortgage banking activities.

(B)  Other income for the March 2023 and 2022 quarters included a fair value adjustment on a CRA equity security of positive $209,000 and negative $682,000, respectively.  Other income for the March 2022 quarter included a $6.6 million loss on sale of securities.

(C) The March 2023 quarter included $300,000 of expense related to accelerated vesting of restricted stock related to one executive and $175,000 of expense associated with three retail branch closures. The March 2022 quarter included $1.5 million of severance expense related to certain staff reorganizations.

(D) Total revenue equals the sum of net interest income plus total other income.


 March 2023 Quarter Compared to Linked Quarter



Three Months Ended

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

March 31,

 

 

December 31,

 

 

 

Increase/

 

(Dollars in millions, except per share data)

 

2023

 

 

2022

 

 

 

(Decrease)

 

Net interest income

 

$

43.98

 

 

$

48.04

 

 

 

$

(4.06

)

 

 

(8

)%

Wealth management fee income

 

 

13.76

 

 

 

12.98

 

 

 

 

0.78

 

 

 

6

 

Capital markets activity (A)

 

 

0.97

 

 

 

0.95

 

 

 

 

0.02

 

 

 

2

 

Other income (B)

 

 

3.33

 

 

 

2.88

 

 

 

 

0.45

 

 

 

16

 

Total other income

 

 

18.06

 

 

 

16.81

 

 

 

 

1.25

 

 

 

7

 

Operating expenses (C)

 

 

35.57

 

 

 

33.41

 

 

 

 

2.16

 

 

 

6

 

Pretax income before provision for credit losses

 

 

26.47

 

 

 

31.44

 

 

 

 

(4.97

)

 

 

(16

)

Provision for credit losses

 

 

1.51

 

 

 

1.93

 

 

 

 

(0.42

)

 

 

(22

)

Pretax income

 

 

24.96

 

 

 

29.51

 

 

 

 

(4.55

)

 

 

(15

)

Income tax expense (D)

 

 

6.60

 

 

 

8.93

 

 

 

 

(2.33

)

 

 

(26

)

Net income

 

$

18.36

 

 

$

20.58

 

 

 

$

(2.22

)

 

 

(11

)%

Diluted EPS

 

$

1.01

 

 

$

1.12

 

 

 

$

(0.11

)

 

 

(10

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue (E)

 

$

62.04

 

 

$

64.85

 

 

 

$

(2.81

)

 

 

(4

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets annualized

 

 

1.16

%

 

 

1.33

%

 

 

 

(0.17

)

 

 

 

Return on average equity annualized

 

 

13.50

%

 

 

15.73

%

 

 

 

(2.23

)

 


(A) Capital markets activity includes fee income from loan level back-to-back swaps, the SBA lending and sale program, corporate advisory and mortgage banking activities.

(B) Other income for the March 2023 and December 2022 quarters included a fair value adjustment on a CRA equity security of positive $209,000 and $28,000, respectively.  Other income for the December 2022 quarter included gain on sale of property of $275,000 and income from life insurance proceeds of $25,000.

(C) The March 2023 quarter included $300,000 of expense related to accelerated vesting of restricted stock related to one executive and $175,000 of expense associated with three retail branch closures. The December 2022 quarter included $200,000 of expense related to accelerated vesting of restricted stock related to one employee.

(D) The three months ended December 31, 2022 included $750,000 of income tax expense (net of Federal benefit) related to the recent approval of legislation that changed the nexus standard for New York City business tax ($563,000 of that amount related to the first nine months of 2022).

(E) Total revenue equals the sum of net interest income plus total other income.

SUPPLEMENTAL QUARTERLY DETAILS:

Peapack Private Wealth Management

AUM/AUA in the Bank’s Peapack Private Wealth Management (“PPWM”) Division totaled $10.4 billion at March 31, 2023.  For the March 2023 quarter, PPWM generated $13.8 million in fee income, compared to $13.0 million for the December 31, 2022 quarter and $14.8 million for the March 2022 quarter. The equity market generally improved during Q1 2023, growing 7%, but is still down almost 10% compared to a year ago.

 

John Babcock, President of Peapack Private Wealth Management noted, “Notwithstanding broad market forces that negatively impacted both the equity and bond markets in 2022, and with economic uncertainty ahead, our business remains sound and we continue to attract new clients as well as additional funds from existing relationships.  In Q1 2023, total new accounts and client additions totaled $254 million ($237 million managed), and net flows were positive. As we look ahead in 2023, our new business pipeline is healthy and we 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 and our high-touch client service model distinguishes PPWM in our market and continues to drive our growth and success.” 

Loans / Commercial Banking

Total loans were $5.4 billion at March 31, 2023, reflecting growth of $79 million (1% linked quarter or 6% annualized) when compared to $5.3 billion at December 31, 2022, and growth of $230 million (4%) when compared to $5.1 billion at March 31, 2022.

Total C&I loans and leases at March 31, 2023 were $2.3 billion or 42% of the total loan portfolio.

Mr. Kennedy noted, “Our loan growth has historically been strong, however, given economic uncertainty and rising interest rates, we believe loan demand will subside somewhat as we look further into 2023. We began tightening our initial underwriting in anticipation of a potential economic downturn in early 2022. Given the current environment, we believe we will achieve modest loan growth in 2023.”

Mr. Kennedy also noted, “We are proud to have built a leading middle market commercial banking franchise, as evidenced by our C&I Portfolio, Treasury Management services, and Corporate Advisory and SBA businesses. Additionally, we are encouraged by the expansion into the Life Insurance Premium Finance business and believe it will prove to be a safe and profitable business line that aligns with the Company's overall strategy.”

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

The Company’s NII of $44.0 million and NIM of 2.88% for Q1 2023 decreased $4.1 million and 24 basis points from NII of $48.0 million and NIM of 3.12%, for the linked quarter (Q4 2022) and increased $4.4 million and 19 basis points from NII of $39.6 million and NIM of 2.69% for the prior year quarter (Q1 2022). When comparing Q1 2023 to Q4 2022, the Company's net interest income benefitted from the increases in LIBOR and the Prime rate during 2022 and into 2023 increasing the yield on interest earning assets and from an increase of $92 million in the average balance of interest-earning assets. During Q1 2023 the cost of deposits and borrowings has increased at a more rapid pace than our yield on assets as a result of the significant increase in the fed funds rate over the last twelve months. The increase in our deposit betas during Q4 2022 and Q1 2023 has begun to accelerate as the competition for deposit balances intensifies. Interest expense also increased due to an increase of $206 million in the average balance of interest-bearing liabilities.

Funding / Liquidity / Interest Rate Risk Management

The Company actively manages its deposit base to reduce reliance on wholesale funding, volatility, and/or operational risk.  Total deposits increased $104 million to $5.3 billion at March 31, 2023 from $5.2 billion at December 31, 2022.  The Company saw limited deposit outflows during first quarter with most outflow activity related to larger deposit relationships utilizing their funds for normal business purposes such as deployment of excess liquidity into the equity or treasury markets, asset acquisitions or further investments into their businesses, and tax payments.

Mr. Kennedy noted, "Although we did see minimal outflows associated with clients concerned about deposit insurance, our team actively engaged with many of our deposit customers during the first quarter to discuss any concerns and provide peace of mind regarding the safety and soundness of our institution.  Additionally, we migrated $63 million of uninsured deposits into fully-insured FDIC products for those customers that desired that type of protection." 

Mr. Kennedy also noted, “92% of our deposits are demand, savings, or money market accounts, and our noninterest bearing deposits comprise 21% of our total deposits. These metrics reflect the core nature of the majority of our deposit base.”

At March 31, 2023, the Company’s balance sheet liquidity (investments available for sale, interest-earning deposits and cash) totaled $851.1 million (or 13% of assets).

The Company maintains additional liquidity resources of approximately $3.3 billion through secured available funding with the Federal Home Loan Bank ($1.5 billion) and secured funding from the Federal Reserve Discount Window ($1.8 billion).  The available funding from the Federal Home Loan Bank and the Federal Reserve are secured by the Company’s loan and investment portfolios. In addition, the Company also has access to the Bank Term Funding Program offered by the Federal Reserve Bank for the next twelve months if needed.

Income from Capital Markets Activities

Noninterest income from Capital Markets activities (detailed below) totaled $966,000 for the March 2023 quarter compared to $950,000 for the December 2022 quarter and $4.7 million for the March 2022 quarter. The March 2022 quarter results were driven by $2.8 million in gains on sales of SBA loans and $1.6 million in Corporate Advisory income.

Three Months Ended

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

(Dollars in thousands, except per share data)

 

2023

 

 

2022

 

 

2022

 

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

 

$

21

 

 

$

25

 

 

$

247

 

Fee income related to loan level, back-to-back swaps

 

 

 

 

 

293

 

 

 

 

Gain on sale of SBA loans

 

 

865

 

 

 

624

 

 

 

2,844

 

Corporate advisory fee income

 

 

80

 

 

 

8

 

 

 

1,561

 

Total capital markets activity

 

$

966

 

 

$

950

 

 

$

4,652

 

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

Other noninterest income was $3.3 million for Q1 2023 compared to $2.9 million for Q4 2022 and $1.8 million for Q1 2022 when excluding the $6.6 million loss on sale of securities. Q1 2023 included $852,000 of unused line fees compared to $732,000 for Q4 2022 and $122,000 for Q1 2022. Q4 2022 included a gain on sale of property of $275,000. Additionally, Q1 2023 included $145,000 of income recorded by the Equipment Finance Division related to equipment transfers to lessees while Q4 2022 and Q1 2022 included $294,000 and $426,000, respectively, of such income. The loss on the sale of securities in Q1 2022 was the result of a strategic decision to reposition the balance sheet.

Operating Expenses

The Company’s total operating expenses were $35.6 million for the first quarter of 2023, compared to $33.4 million for the December 2022 quarter and $34.2 million for the March 2022 quarter. The March 2023 quarter had increased costs related to restricted stock expense associated with additional shares being granted to executives due to performance measures exceeding peers; $300,000 of expense associated with one executive retiring; and $175,000 of expense associated with the closing of three retail branch locations.  The March 2023 quarter compared to the March 2022 quarter included increases associated with compensation related to the hiring of more full-time equivalent employees which grew from 478 at March 31, 2022 to 512 at March 31, 2023, as well as normal annual merit increases. The March 2022 quarter included $1.5 million of severance expense associated with certain staff reorganizations within several areas of the bank.

Mr. Kennedy noted, “While we continue to manage expenses closely and prudently, as demonstrated by the three retail branch locations we closed during the first quarter of 2023, we have and will continue to invest in our existing team in order to retain the talent we have acquired. We will also grow and expand our core wealth management and commercial banking businesses, including strategic hires and lift-outs if opportunities arise, and invest in digital and other enhancements to further enhance the client experience.”

Income Taxes

 

The effective tax rate for the three months ended March 31, 2023 was 26.4%, as compared to 30.3% for the December 2022 quarter and 24.5% for the quarter ended March 31, 2022.  The three months ended December 31, 2022 included $750,000 of income tax expense (net of Federal benefit) related to the approval of legislation that changed the nexus standard for New York City business tax ($563,000 of that amount related to the first nine months of 2022).  The March 31, 2023 and 2022 quarters benefitted from the vesting of restricted stock at prices higher than grant prices.

 

Asset Quality / Provision for Credit Losses

Nonperforming assets (which does not include modified loans that are performing in accordance with their terms) were $28.8 million, or 0.44% of total assets at March 31, 2023, as compared to $19.1 million at December 31, 2022. The increase was primarily due to one multifamily relationship of $9.7 million that transferred to a nonaccrual status during the quarter.  Loans past due 30 to 89 days and still accruing were $2.8 million, or 0.05% of total loans.

Criticized and classified loans totaled $104.6 million at March 31, 2023, reflecting declines from both March 31, 2022 and December 31, 2022 levels. The Company currently has no loans or leases on deferral and accruing.  

For the quarter ended March 31, 2023, the Company’s provision for credit losses was $1.5 million compared to $1.9 million for the December 2022 quarter and $2.4 million for the March 2022 quarter. The provision for credit losses in the March 2023 quarter was driven by loan growth, in addition to specific reserves on two loans that were transferred to non-accrual status during the first quarter. 

At March 31, 2023, the allowance for credit losses was $62.3 million (1.16% of total loans), compared to $60.8 million (1.15% of loans) at December 31, 2022, and $58.4 million (1.13% of loans) at March 31, 2022.

Capital

The Company’s capital position during the March 2023 quarter increased as a result of net income of $18.4 million, which was partially offset by the repurchase of 83,014 shares of common stock through the Company’s stock repurchase program at a total cost of $2.9 million and the quarterly dividend of $883,000. Additionally, during the first quarter of 2023 the Company recorded a net gain in accumulated other comprehensive income of $6.8 million ($8.7 million gain related to the available for sale portfolio partially offset by a $1.9 million loss on cash flow hedges) reducing the total accumulated other comprehensive loss amount to $67.4 million as of March 31, 2023 ($72.2 million loss related to the available for sale portfolio partially offset by a $4.8 million gain on the cash flow hedges). 

Tangible book value per share improved during Q1 2023 to $28.20 at March 31, 2023 from $27.26 at December 31, 2022. Tangible book value per share is a non-GAAP financial measure.  See the reconciliation tables included i this release. The Company’s and Bank’s regulatory capital ratios as of March 31, 2023 remain strong, and generally reflect increases from December 31, 2022 and March 31, 2022 levels. Where applicable, such ratios remain well above regulatory well capitalized standards.

The Company employs quarterly capital stress testing modelling an adverse case and severely adverse case. In the most recently completed stress test (as of December 31, 2022), under the severely adverse case, and no growth scenario, the Bank remains well capitalized over a two-year stress period. With an additional stress overlay impacting the industries most affected by the Pandemic more severely, the Bank still remains well capitalized over the two-year stress period.

On April 24, 2023, the Company declared a cash dividend of $0.05 per share payable on May 22, 2023 to shareholders of record on May 8, 2023.

ABOUT THE COMPANY

Peapack-Gladstone Financial Corporation is a New Jersey bank holding company with total assets of $6.5 billion and assets under management/administration of $10.4 billion as of March 31, 2023.  Founded in 1921, Peapack-Gladstone Bank is a commercial bank that provides innovative wealth management, commercial and retail solutions, including residential lending and online platforms, to businesses 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.

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 2023 and beyond;

·       our ability to successfully integrate wealth management firm acquisitions;

·       our ability to manage our growth;

·       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;

·       the continuing impact of the COVID-19 pandemic on our business and results of operation;

·       higher than expected increases in our allowance for credit losses;

·       higher than expected increases in loan and lease losses or in the level of delinquent, nonperforming, classified and criticized loans;

·       inflation and changes in interest rates, which may adversely impact or 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;

·       a reduction in our lower-cost funding sources;

·       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 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

·       other unexpected material adverse changes in our 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, 2022.  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.

Contact:

Frank A. Cavallaro, SEVP and CFO

Peapack-Gladstone Financial Corporation

T: 908-306-8933

 (Tables to follow)



 

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands, except per share data)
(Unaudited)

 

 

For the Three Months Ended

 

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

 

June 30,

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

70,491

 

 

$

64,202

 

 

$

55,013

 

 

$

48,520

 

 

$

44,140

 

Interest expense

 

 

26,513

 

 

 

16,162

 

 

 

9,488

 

 

 

5,627

 

 

 

4,518

 

Net interest income

 

 

43,978

 

 

 

48,040

 

 

 

45,525

 

 

 

42,893

 

 

 

39,622

 

Wealth management fee income

 

 

13,762

 

 

 

12,983

 

 

 

12,943

 

 

 

13,891

 

 

 

14,834

 

Service charges and fees

 

 

1,258

 

 

 

1,150

 

 

 

1,060

 

 

 

1,063

 

 

 

952

 

Bank owned life insurance

 

 

297

 

 

 

321

 

 

 

299

 

 

 

310

 

 

 

313

 

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

 

 

21

 

 

 

25

 

 

 

60

 

 

 

151

 

 

 

247

 

Gain/(loss) on loans held for sale at lower of cost or
fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee income related to loan level, back-to-back
swaps (A)

 

 

 

 

 

293

 

 

 

 

 

 

 

 

 

 

Gain on sale of SBA loans (A)

 

 

865

 

 

 

624

 

 

 

622

 

 

 

2,675

 

 

 

2,844

 

Corporate advisory fee income (A)

 

 

80

 

 

 

8

 

 

 

102

 

 

 

33

 

 

 

1,561

 

Other income

 

 

1,567

 

 

 

1,380

 

 

 

1,868

 

 

 

860

 

 

 

1,254

 

Loss on securities sale, net (B)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,609

)

Fair value adjustment for CRA equity security

 

 

209

 

 

 

28

 

 

 

(571

)

 

 

(475

)

 

 

(682

)

Total other income

 

 

18,059

 

 

 

16,812

 

 

 

16,383

 

 

 

18,508

 

 

 

14,714

 

Salaries and employee benefits (C)

 

 

24,586

 

 

 

22,489

 

 

 

22,656

 

 

 

21,882

 

 

 

22,449

 

Premises and equipment

 

 

4,374

 

 

 

4,898

 

 

 

4,534

 

 

 

4,640

 

 

 

4,647

 

FDIC insurance expense

 

 

711

 

 

 

455

 

 

 

510

 

 

 

503

 

 

 

471

 

Swap valuation allowance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

673

 

Other expenses

 

 

5,903

 

 

 

5,570

 

 

 

5,860

 

 

 

5,634

 

 

 

5,929

 

Total operating expenses

 

 

35,574

 

 

 

33,412

 

 

 

33,560

 

 

 

32,659

 

 

 

34,169

 

Pretax income before provision for credit losses

 

 

26,463

 

 

 

31,440

 

 

 

28,348

 

 

 

28,742

 

 

 

20,167

 

Provision for credit losses

 

 

1,513

 

 

 

1,930

 

 

 

599

 

 

 

1,449

 

 

 

2,375

 

Income before income taxes

 

 

24,950

 

 

 

29,510

 

 

 

27,749

 

 

 

27,293

 

 

 

17,792

 

Income tax expense (D)

 

 

6,595

 

 

 

8,931

 

 

 

7,623

 

 

 

7,193

 

 

 

4,351

 

Net income

 

$

18,355

 

 

$

20,579

 

 

$

20,126

 

 

$

20,100

 

 

$

13,441

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue (E)

 

$

62,037

 

 

$

64,852

 

 

$

61,908

 

 

$

61,401

 

 

$

54,336

 

Per Common Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (basic)

 

$

1.03

 

 

$

1.15

 

 

$

1.11

 

 

$

1.10

 

 

$

0.73

 

Earnings per share (diluted)

 

 

1.01

 

 

 

1.12

 

 

 

1.09

 

 

 

1.08

 

 

 

0.71

 

Weighted average number of common
shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

17,841,203

 

 

 

17,915,058

 

 

 

18,072,385

 

 

 

18,325,605

 

 

 

18,339,013

 

Diluted

 

 

18,263,310

 

 

 

18,382,193

 

 

 

18,420,661

 

 

 

18,637,340

 

 

 

18,946,683

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets annualized (ROAA)

 

 

1.16

%

 

 

1.33

%

 

 

1.30

%

 

 

1.30

%

 

 

0.87

%

Return on average equity annualized (ROAE)

 

 

13.50

%

 

 

15.73

%

 

 

15.21

%

 

 

15.43

%

 

 

9.88

%

Return on average tangible common equity annualized (ROATCE) (F)

 

 

14.78

%

 

 

17.30

%

 

 

16.73

%

 

 

17.00

%

 

 

10.85

%

Net interest margin (tax-equivalent basis)

 

 

2.88

%

 

 

3.12

%

 

 

2.98

%

 

 

2.83

%

 

 

2.69

%

GAAP efficiency ratio (G)

 

 

57.34

%

 

 

51.52

%

 

 

54.21

%

 

 

53.19

%

 

 

62.88

%

Operating expenses / average assets annualized

 

 

2.26

%

 

 

2.15

%

 

 

2.17

%

 

 

2.11

%

 

 

2.22

%


(A) Gain on loans held for sale at fair value (mortgage banking), fee income related to loan level, back-to-back swaps, gain on sale of SBA loans and corporate advisory fee income are all included in “capital markets activity” as referred to within the earnings release.

(B) Loss on sale of securities was a result of a balance sheet repositioning employed in the March 2022 quarter.

(C) The March 2022 quarter included $1.5 million of severance expense related to corporate restructuring.

(D) The three months ended December 31, 2022 included $750,000 income tax expense (net federal benefit) related to a recent New York City nexus determination change which included $563,000 from prior quarters.

(E) Total revenue equals the sum of net interest income plus total other income.

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

(G) 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.

 

 

PEAPACK-GLADSTONE FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in Thousands)
(Unaudited)

 

 

As of

 

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

 

June 30,

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

6,514

 

 

$

5,937

 

 

$

5,066

 

 

$

6,203

 

 

$

8,849

 

Federal funds sold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning deposits

 

 

244,779

 

 

 

184,138

 

 

 

103,214

 

 

 

147,222

 

 

 

105,111

 

Total cash and cash equivalents

 

 

251,293

 

 

 

190,075

 

 

 

108,280

 

 

 

153,425

 

 

 

113,960

 

Securities available for sale

 

 

556,266

 

 

 

554,648

 

 

 

497,880

 

 

 

556,791

 

 

 

601,163

 

Securities held to maturity

 

 

111,609

 

 

 

102,291

 

 

 

103,551

 

 

 

105,048

 

 

 

106,816

 

CRA equity security, at fair value

 

 

13,194

 

 

 

12,985

 

 

 

12,957

 

 

 

13,528

 

 

 

14,003

 

FHLB and FRB stock, at cost (A)

 

 

30,338

 

 

 

30,672

 

 

 

14,986

 

 

 

13,710

 

 

 

18,570

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage

 

 

544,655

 

 

 

525,756

 

 

 

519,088

 

 

 

512,341

 

 

 

513,289

 

Multifamily mortgage

 

 

1,871,387

 

 

 

1,863,915

 

 

 

1,856,675

 

 

 

1,876,783

 

 

 

1,850,097

 

Commercial mortgage

 

 

613,911

 

 

 

624,625

 

 

 

638,903

 

 

 

657,812

 

 

 

669,899

 

Commercial and industrial loans

 

 

2,266,837

 

 

 

2,213,762

 

 

 

2,099,917

 

 

 

2,048,474

 

 

 

2,041,720

 

Consumer loans

 

 

49,002

 

 

 

38,014

 

 

 

37,412

 

 

 

37,675

 

 

 

35,322

 

Home equity lines of credit

 

 

33,294

 

 

 

34,496

 

 

 

36,375

 

 

 

36,023

 

 

 

38,604

 

Other loans

 

 

443

 

 

 

304

 

 

 

259

 

 

 

236

 

 

 

226

 

Total loans

 

 

5,379,529

 

 

 

5,300,872

 

 

 

5,188,629

 

 

 

5,169,344

 

 

 

5,149,157

 

Less: Allowances for credit losses

 

 

62,250

 

 

 

60,829

 

 

 

59,683

 

 

 

59,022

 

 

 

58,386

 

Net loans

 

 

5,317,279

 

 

 

5,240,043

 

 

 

5,128,946

 

 

 

5,110,322

 

 

 

5,090,771

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premises and equipment

 

 

23,782

 

 

 

23,831

 

 

 

23,781

 

 

 

22,804

 

 

 

22,960

 

Other real estate owned

 

 

116

 

 

 

116

 

 

 

116

 

 

 

116

 

 

 

 

Accrued interest receivable

 

 

19,143

 

 

 

25,157

 

 

 

17,816

 

 

 

23,468

 

 

 

22,890

 

Bank owned life insurance

 

 

47,261

 

 

 

47,147

 

 

 

47,072

 

 

 

46,944

 

 

 

46,805

 

Goodwill and other intangible assets

 

 

46,979

 

 

 

47,333

 

 

 

47,698

 

 

 

48,082

 

 

 

48,471

 

Finance lease right-of-use assets

 

 

2,648

 

 

 

2,835

 

 

 

3,021

 

 

 

3,209

 

 

 

3,395

 

Operating lease right-of-use assets

 

 

12,262

 

 

 

12,873

 

 

 

13,404

 

 

 

14,192

 

 

 

14,725

 

Due from brokers (B)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

120,245

 

Other assets (C)

 

 

47,848

 

 

 

63,587

 

 

 

67,753

 

 

 

39,528

 

 

 

30,890

 

TOTAL ASSETS

 

$

6,480,018

 

 

$

6,353,593

 

 

$

6,087,261

 

 

$

6,151,167

 

 

$

6,255,664

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

 

$

1,096,549

 

 

$

1,246,066

 

 

$

1,317,954

 

 

$

1,043,225

 

 

$

1,023,208

 

Interest-bearing demand deposits

 

 

2,797,493

 

 

 

2,143,611

 

 

 

2,149,629

 

 

 

2,456,988

 

 

 

2,362,987

 

Savings

 

 

132,523

 

 

 

157,338

 

 

 

166,821

 

 

 

168,441

 

 

 

162,116

 

Money market accounts

 

 

873,329

 

 

 

1,228,234

 

 

 

1,178,112

 

 

 

1,217,516

 

 

 

1,304,017

 

Certificates of deposit – Retail

 

 

357,131

 

 

 

318,573

 

 

 

345,047

 

 

 

375,387

 

 

 

384,909

 

Certificates of deposit – Listing Service

 

 

15,922

 

 

 

25,358

 

 

 

30,647

 

 

 

31,348

 

 

 

31,348

 

Subtotal “customer” deposits

 

 

5,272,947

 

 

 

5,119,180

 

 

 

5,188,210

 

 

 

5,292,905

 

 

 

5,268,585

 

IB Demand – Brokered

 

 

10,000

 

 

 

60,000

 

 

 

85,000

 

 

 

85,000

 

 

 

85,000

 

Certificates of deposit – Brokered

 

 

25,895

 

 

 

25,984

 

 

 

25,974

 

 

 

25,963

 

 

 

33,831

 

Total deposits

 

 

5,308,842

 

 

 

5,205,164

 

 

 

5,299,184

 

 

 

5,403,868

 

 

 

5,387,416

 

Short-term borrowings

 

 

378,800

 

 

 

379,530

 

 

 

32,369

 

 

 

 

 

 

122,085

 

Finance lease liability

 

 

4,385

 

 

 

4,696

 

 

 

5,003

 

 

 

5,305

 

 

 

5,573

 

Operating lease liability

 

 

13,082

 

 

 

13,704

 

 

 

14,101

 

 

 

14,756

 

 

 

15,155

 

Subordinated debt, net

 

 

133,059

 

 

 

132,987

 

 

 

132,916

 

 

 

132,844

 

 

 

132,772

 

Due to brokers

 

 

8,308

 

 

 

 

 

 

 

 

 

 

 

 

 

Other liabilities (C)

 

 

78,584

 

 

 

84,532

 

 

 

88,174

 

 

 

74,070

 

 

 

69,237

 

TOTAL LIABILITIES

 

 

5,925,060

 

 

 

5,820,613

 

 

 

5,571,747

 

 

 

5,630,843

 

 

 

5,732,238

 

Shareholders’ equity

 

 

554,958

 

 

 

532,980

 

 

 

515,514

 

 

 

520,324

 

 

 

523,426

 

TOTAL LIABILITIES AND

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY

 

$

6,480,018

 

 

$

6,353,593

 

 

$

6,087,261

 

 

$

6,151,167

 

 

$

6,255,664

 

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

 

$

10.4

 

 

$

9.9

 

 

$

9.3

 

 

$

9.5

 

 

$

10.7

 


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

(B) Includes $120 million due from FHLB related to securities sales at March 31, 2022.  The $120 million received on April 1, 2022, was used to reduce short term borrowings.

(C) The change in other assets and other liabilities was primarily due to the change in the fair value of our back-to-back swap program.

 

PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED BALANCE SHEET DATA
(Dollars in Thousands)
(Unaudited)

 

 

As of

 

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

 

June 30,

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

Asset Quality:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans past due over 90 days and still accruing

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

Nonaccrual loans

 

 

28,659

 

 

 

18,974

 

 

 

15,724

 

 

 

15,078

 

 

 

15,884

 

Other real estate owned

 

 

116

 

 

 

116

 

 

 

116

 

 

 

116

 

 

 

 

Total nonperforming assets

 

$

28,775

 

 

$

19,090

 

 

$

15,840

 

 

$

15,194

 

 

$

15,884

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans to total loans

 

 

0.53

%

 

 

0.36

%

 

 

0.30

%

 

 

0.29

%

 

 

0.31

%

Nonperforming assets to total assets

 

 

0.44

%

 

 

0.30

%

 

 

0.26

%

 

 

0.25

%

 

 

0.25

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing modifications (A)

 

$

248

 

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing TDRs (B)(C)

 

$

 

 

$

965

 

 

$

2,761

 

 

$

2,272

 

 

$

2,375

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans past due 30 through 89 days and still accruing (D)

 

$

2,762

 

 

$

7,592

 

 

$

7,248

 

 

$

3,126

 

 

$

606

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans subject to special mention

 

$

46,566

 

 

$

64,842

 

 

$

82,107

 

 

$

98,787

 

 

$

110,252

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Classified loans

 

$

58,010

 

 

$

42,985

 

 

$

27,507

 

 

$

27,167

 

 

$

47,386

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated loans

 

$

27,736

 

 

$

16,732

 

 

$

13,047

 

 

$

13,227

 

 

$

16,147

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses ("ACL"):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning of quarter

 

$

60,829

 

 

$

59,683

 

 

$

59,022

 

 

$

58,386

 

 

$

61,697

 

Day one CECL adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,536

)

Provision for credit losses (E)

 

 

1,464

 

 

 

2,103

 

 

 

665

 

 

 

646

 

 

 

2,489

 

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

 

 

(43

)

 

 

(957

)

 

 

(4

)

 

 

(10

)

 

 

(264

)

End of quarter

 

$

62,250

 

 

$

60,829

 

 

$

59,683

 

 

$

59,022

 

 

$

58,386

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACL to nonperforming loans

 

 

217.21

%

 

 

320.59

%

 

 

379.57

%

 

 

391.44

%

 

 

367.58

%

ACL to total loans

 

 

1.16

%

 

 

1.15

%

 

 

1.15

%

 

 

1.14

%

 

 

1.13

%

General ACL to total loans (G)

 

 

1.11

%

 

 

1.12

%

 

 

1.10

%

 

 

1.09

%

 

 

1.09

%


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

(B) Amounts reflect troubled debt restructurings (“TDRs”) that are paying according to restructured terms.

(C) Excludes TDRs included in nonaccrual loans in the following amounts:  $13.4 million at December 31, 2022; $12.9 million at September 30, 2022; $13.5 million at June 30, 2022 and $13.6 million at March 31, 2022. On January 1, 2023, the Company adopted Accounting Standards Update 2022-02, which replaced the accounting and recognition of TDRs.

(D) Includes $4.5 million outstanding to U.S. governmental entities at December 31, 2022.

(E) Provision to roll forward the ACL excludes a provision of $49,000 at March 31, 2023, a credit of $173,000 at December 31, 2022, a credit of $66,000 at September 30, 2022, a provision of $803,000 at June 30, 2022 and a credit of $114,000 at March 31, 2022 related to off-balance sheet commitments.

(F) Net charge-offs for the quarter ended December 31, 2022 included a charge-off of $1.2 million of a previously established specific reserve on one commercial real estate loan.

(G) Total ACL less specific reserves equals general ACL.

 

PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED BALANCE SHEET DATA
(Dollars in Thousands)
(Unaudited)

 

 

As of

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

2022

 

Capital Adequacy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity to total assets (A)

 

 

 

 

8.56

%

 

 

 

 

8.39

%

 

 

 

 

8.37

%

Tangible equity to tangible assets (B)

 

 

 

 

7.90

%

 

 

 

 

7.70

%

 

 

 

 

7.65

%

Book value per share (C)

 

 

 

$

30.81

 

 

 

 

$

29.92

 

 

 

 

$

28.49

 

Tangible book value per share (D)

 

 

 

$

28.20

 

 

 

 

$

27.26

 

 

 

 

$

25.85

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible equity to tangible assets excluding other comprehensive loss*

 

 

 

 

8.85

%

 

 

 

 

8.77

%

 

 

 

 

8.26

%

Tangible book value per share excluding other comprehensive loss*

 

 

 

$

31.94

 

 

 

 

$

31.43

 

 

 

 

$

28.08


*Excludes other comprehensive loss of $67.4 million for the quarter ended March 31, 2023, $74.2 million for the quarter ended December 31, 2022, and $40.9 million for the quarter ended March 31, 2022.  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

 

 

March 31,

 

December 31,

 

March 31,

 

 

2023

 

 

2022

 

 

2022

 

Regulatory Capital – Holding Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier I leverage

 

$

573,154

 

 

9.02

%

 

$

557,627

 

 

8.90

%

 

$

513,838

 

 

8.37

%

Tier I capital to risk-weighted assets

 

 

573,154

 

 

11.39

 

 

 

557,627

 

 

11.02

 

 

 

513,838

 

 

10.16

 

Common equity tier I capital ratio
to risk-weighted assets

 

 

573,136

 

 

11.39

 

 

 

557,609

 

 

11.02

 

 

 

513,814

 

 

10.16

 

Tier I & II capital to risk-weighted assets

 

 

762,095

 

 

15.15

 

 

 

745,197

 

 

14.73

 

 

 

705,184

 

 

13.94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory Capital – Bank

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier I leverage (E)

 

$

700,858

 

 

11.03

%

 

$

680,137

 

 

10.85

%

 

$

631,522

 

 

10.29

%

Tier I capital to risk-weighted assets (F)

 

 

700,858

 

 

13.93

 

 

 

680,137

 

 

13.45

 

 

 

631,522

 

 

12.49

 

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

 

 

700,840

 

 

13.93

 

 

 

680,119

 

 

13.45

 

 

 

631,498

 

 

12.49

 

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

 

 

763,732

 

 

15.18

 

 

 

741,719

 

 

14.67

 

 

 

690,096

 

 

13.65

 

 

 

(E) Regulatory well capitalized standard (including capital conservation buffer) = 4.00% ($254 million)

(F) Regulatory well capitalized standard (including capital conservation buffer) = 8.50% ($428 million)

(G) Regulatory well capitalized standard (including capital conservation buffer) = 7.00% ($352 million)

(H) Regulatory well capitalized standard (including capital conservation buffer) = 10.50% ($528 million)

 

 

PEAPACK-GLADSTONE FINANCIAL CORPORATION
LOANS CLOSED
(Dollars in Thousands)
(Unaudited)

 

 

For the Quarters Ended

 

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

 

June 30,

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

Residential loans retained

 

$

30,303

 

 

$

28,051

 

 

$

17,885

 

 

$

35,172

 

 

$

41,547

 

Residential loans sold

 

 

1,477

 

 

 

1,840

 

 

 

4,898

 

 

 

9,886

 

 

 

15,669

 

Total residential loans

 

 

31,780

 

 

 

29,891

 

 

 

22,783

 

 

 

45,058

 

 

 

57,216

 

Commercial real estate

 

 

18,990

 

 

 

6,747

 

 

 

7,320

 

 

 

13,960

 

 

 

25,575

 

Multifamily

 

 

30,150

 

 

 

37,500

 

 

 

4,000

 

 

 

74,564

 

 

 

265,650

 

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

 

 

207,814

 

 

 

238,568

 

 

 

251,249

 

 

 

332,801

 

 

 

143,029

 

SBA

 

 

9,950

 

 

 

17,431

 

 

 

5,682

 

 

 

10,534

 

 

 

26,093

 

Wealth lines of credit (A)

 

 

23,225

 

 

 

7,700

 

 

 

4,450

 

 

 

12,575

 

 

 

9,400

 

Total commercial loans

 

 

290,129

 

 

 

307,946

 

 

 

272,701

 

 

 

444,434

 

 

 

469,747

 

Installment loans

 

 

12,086

 

 

 

1,845

 

 

 

1,253

 

 

 

100

 

 

 

131

 

Home equity lines of credit (A)

 

 

2,921

 

 

 

3,815

 

 

 

5,614

 

 

 

3,897

 

 

 

1,341

 

Total loans closed

 

$

336,916

 

 

$

343,497

 

 

$

302,351

 

 

$

493,489

 

 

$

528,435

 


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

(B) Includes equipment finance.

 

 

PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
(Tax-Equivalent Basis, Dollars in Thousands)
(Unaudited)

 

 

For the Three Months Ended

 

 

 

March 31, 2023

 

 

March 31, 2022

 

 

 

Average

 

 

Income/

 

 

 

 

 

Average

 

 

Income/

 

 

 

 

 

 

Balance

 

 

Expense

 

 

Yield

 

 

Balance

 

 

Expense

 

 

Yield

 

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable (A)

 

$

791,125

 

 

$

4,471

 

 

 

2.26

%

 

$

928,828

 

 

$

3,606

 

 

 

1.55

%

Tax-exempt (A) (B)

 

 

1,864

 

 

 

19

 

 

 

4.08

 

 

 

4,701

 

 

 

48

 

 

 

4.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (B) (C):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgages

 

 

529,570

 

 

 

4,283

 

 

 

3.24

 

 

 

508,408

 

 

 

3,656

 

 

 

2.88

 

Commercial mortgages

 

 

2,478,645

 

 

 

25,917

 

 

 

4.18

 

 

 

2,353,032

 

 

 

18,175

 

 

 

3.09

 

Commercial

 

 

2,201,801

 

 

 

33,369

 

 

 

6.06

 

 

 

2,008,464

 

 

 

18,203

 

 

 

3.63

 

Commercial construction

 

 

4,296

 

 

 

88

 

 

 

8.19

 

 

 

18,087

 

 

 

160

 

 

 

3.54

 

Installment

 

 

39,945

 

 

 

609

 

 

 

6.10

 

 

 

34,475

 

 

 

254

 

 

 

2.95

 

Home equity

 

 

33,839

 

 

 

591

 

 

 

6.99

 

 

 

40,245

 

 

 

324

 

 

 

3.22

 

Other

 

 

276

 

 

 

7

 

 

 

10.14

 

 

 

283

 

 

 

6

 

 

 

8.48

 

Total loans

 

 

5,288,372

 

 

 

64,864

 

 

 

4.91

 

 

 

4,962,994

 

 

 

40,778

 

 

 

3.29

 

Federal funds sold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning deposits

 

 

163,225

 

 

 

1,538

 

 

 

3.77

 

 

 

127,121

 

 

 

29

 

 

 

0.09

 

Total interest-earning assets

 

 

6,244,586

 

 

 

70,892

 

 

 

4.54

%

 

 

6,023,644

 

 

 

44,461

 

 

 

2.95

%

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

10,449

 

 

 

 

 

 

 

 

 

7,455

 

 

 

 

 

 

 

Allowance for credit losses

 

 

(61,567

)

 

 

 

 

 

 

 

 

(61,001

)

 

 

 

 

 

 

Premises and equipment

 

 

23,927

 

 

 

 

 

 

 

 

 

23,022

 

 

 

 

 

 

 

Other assets

 

 

84,800

 

 

 

 

 

 

 

 

 

168,239

 

 

 

 

 

 

 

Total noninterest-earning assets

 

 

57,609

 

 

 

 

 

 

 

 

 

137,715

 

 

 

 

 

 

 

Total assets

 

$

6,302,195

 

 

 

 

 

 

 

 

$

6,161,359

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

$

2,567,426

 

 

$

16,481

 

 

 

2.57

%

 

$

2,330,340

 

 

$

1,238

 

 

 

0.21

%

Money markets

 

 

1,124,047

 

 

 

4,874

 

 

 

1.73

 

 

 

1,294,100

 

 

 

539

 

 

 

0.17

 

Savings

 

 

141,285

 

 

 

28

 

 

 

0.08

 

 

 

156,554

 

 

 

5

 

 

 

0.01

 

Certificates of deposit – retail

 

 

357,953

 

 

 

1,729

 

 

 

1.93

 

 

 

426,166

 

 

 

606

 

 

 

0.57

 

Subtotal interest-bearing deposits

 

 

4,190,711

 

 

 

23,112

 

 

 

2.21

 

 

 

4,207,160

 

 

 

2,388

 

 

 

0.23

 

Interest-bearing demand – brokered

 

 

26,111

 

 

 

208

 

 

 

3.19

 

 

 

85,000

 

 

 

373

 

 

 

1.76

 

Certificates of deposit – brokered

 

 

25,961

 

 

 

205

 

 

 

3.16

 

 

 

33,823

 

 

 

261

 

 

 

3.09

 

Total interest-bearing deposits

 

 

4,242,783

 

 

 

23,525

 

 

 

2.22

 

 

 

4,325,983

 

 

 

3,022

 

 

 

0.28

 

Borrowings

 

 

104,915

 

 

 

1,296

 

 

 

4.94

 

 

 

55,513

 

 

 

64

 

 

 

0.46

 

Capital lease obligation

 

 

4,493

 

 

 

53

 

 

 

4.72

 

 

 

5,662

 

 

 

68

 

 

 

4.80

 

Subordinated debt

 

 

133,017

 

 

 

1,639

 

 

 

4.93

 

 

 

132,731

 

 

 

1,364

 

 

 

4.11

 

Total interest-bearing liabilities

 

 

4,485,208

 

 

 

26,513

 

 

 

2.36

%

 

 

4,519,889

 

 

 

4,518

 

 

 

0.40

%

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

1,176,495

 

 

 

 

 

 

 

 

 

978,288

 

 

 

 

 

 

 

Accrued expenses and other liabilities

 

 

96,631

 

 

 

 

 

 

 

 

 

119,003

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

1,273,126

 

 

 

 

 

 

 

 

 

1,097,291

 

 

 

 

 

 

 

Shareholders’ equity

 

 

543,861

 

 

 

 

 

 

 

 

 

544,179

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

6,302,195

 

 

 

 

 

 

 

 

$

6,161,359

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

44,379

 

 

 

 

 

 

 

 

$

39,943

 

 

 

 

Net interest spread

 

 

 

 

 

 

 

 

2.18

%

 

 

 

 

 

 

 

 

2.55

%

Net interest margin (D)

 

 

 

 

 

 

 

 

2.88

%

 

 

 

 

 

 

 

 

2.69

%


(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.


 

PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
(Tax-Equivalent Basis, Dollars in Thousands)
(Unaudited)

 

 

For the Three Months Ended

 

 

 

March 31, 2023

 

 

December 31, 2022

 

 

 

Average

 

 

Income/

 

 

 

 

 

Average

 

 

Income/

 

 

 

 

 

 

Balance

 

 

Expense

 

 

Yield

 

 

Balance

 

 

Expense

 

 

Yield

 

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable (A)

 

$

791,125

 

 

$

4,471

 

 

 

2.26

%

 

$

761,164

 

 

$

3,859

 

 

 

2.03

%

Tax-exempt (A) (B)

 

 

1,864

 

 

 

19

 

 

 

4.08

 

 

 

1,999

 

 

 

20

 

 

 

4.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (B) (C):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgages

 

 

529,570

 

 

 

4,283

 

 

 

3.24

 

 

 

516,721

 

 

 

4,017

 

 

 

3.11

 

Commercial mortgages

 

 

2,478,645

 

 

 

25,917

 

 

 

4.18

 

 

 

2,497,847

 

 

 

25,007

 

 

 

4.00

 

Commercial

 

 

2,201,801

 

 

 

33,369

 

 

 

6.06

 

 

 

2,136,355

 

 

 

29,314

 

 

 

5.49

 

Commercial construction

 

 

4,296

 

 

 

88

 

 

 

8.19

 

 

 

4,213

 

 

 

68

 

 

 

6.46

 

Installment

 

 

39,945

 

 

 

609

 

 

 

6.10

 

 

 

36,648

 

 

 

496

 

 

 

5.41

 

Home equity

 

 

33,839

 

 

 

591

 

 

 

6.99

 

 

 

36,067

 

 

 

550

 

 

 

6.10

 

Other

 

 

276

 

 

 

7

 

 

 

10.14

 

 

 

292

 

 

 

8

 

 

 

10.96

 

Total loans

 

 

5,288,372

 

 

 

64,864

 

 

 

4.91

 

 

 

5,228,143

 

 

 

59,460

 

 

 

4.55

 

Federal funds sold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning deposits

 

 

163,225

 

 

 

1,538

 

 

 

3.77

 

 

 

161,573

 

 

 

1,258

 

 

 

3.11

 

Total interest-earning assets

 

 

6,244,586

 

 

 

70,892

 

 

 

4.54

%

 

 

6,152,879

 

 

 

64,597

 

 

 

4.20

%

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

10,449

 

 

 

 

 

 

 

 

 

6,723

 

 

 

 

 

 

 

Allowance for credit losses

 

 

(61,567

)

 

 

 

 

 

 

 

 

(60,070

)

 

 

 

 

 

 

Premises and equipment

 

 

23,927

 

 

 

 

 

 

 

 

 

23,682

 

 

 

 

 

 

 

Other assets

 

 

84,800

 

 

 

 

 

 

 

 

 

83,641

 

 

 

 

 

 

 

Total noninterest-earning assets

 

 

57,609

 

 

 

 

 

 

 

 

 

53,976

 

 

 

 

 

 

 

Total assets

 

$

6,302,195

 

 

 

 

 

 

 

 

$

6,206,855

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

$

2,567,426

 

 

$

16,481

 

 

 

2.57

%

 

$

2,222,130

 

 

$

9,165

 

 

 

1.65

%

Money markets

 

 

1,124,047

 

 

 

4,874

 

 

 

1.73

 

 

 

1,246,179

 

 

 

3,438

 

 

 

1.10

 

Savings

 

 

141,285

 

 

 

28

 

 

 

0.08

 

 

 

161,569

 

 

 

12

 

 

 

0.03

 

Certificates of deposit – retail

 

 

357,953

 

 

 

1,729

 

 

 

1.93

 

 

 

360,589

 

 

 

922

 

 

 

1.02

 

Subtotal interest-bearing deposits

 

 

4,190,711

 

 

 

23,112

 

 

 

2.21

 

 

 

3,990,467

 

 

 

13,537

 

 

 

1.36

 

Interest-bearing demand – brokered

 

 

26,111

 

 

 

208

 

 

 

3.19

 

 

 

81,739

 

 

 

497

 

 

 

2.43

 

Certificates of deposit – brokered

 

 

25,961

 

 

 

205

 

 

 

3.16

 

 

 

25,979

 

 

 

210

 

 

 

3.23

 

Total interest-bearing deposits

 

 

4,242,783

 

 

 

23,525

 

 

 

2.22

 

 

 

4,098,185

 

 

 

14,244

 

 

 

1.39

 

Borrowings

 

 

104,915

 

 

 

1,296

 

 

 

4.94

 

 

 

43,710

 

 

 

497

 

 

 

4.55

 

Capital lease obligation

 

 

4,493

 

 

 

53

 

 

 

4.72

 

 

 

4,803

 

 

 

58

 

 

 

4.83

 

Subordinated debt

 

 

133,017

 

 

 

1,639

 

 

 

4.93

 

 

 

132,947

 

 

 

1,363

 

 

 

4.10

 

Total interest-bearing liabilities

 

 

4,485,208

 

 

 

26,513

 

 

 

2.36

%

 

 

4,279,645

 

 

 

16,162

 

 

 

1.51

%

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

1,176,495

 

 

 

 

 

 

 

 

 

1,303,432

 

 

 

 

 

 

 

Accrued expenses and other liabilities

 

 

96,631

 

 

 

 

 

 

 

 

 

100,372