BEDMINSTER, NJ - (NewMediaWire) - July 23, 2024 - Peapack-Gladstone Financial Corporation (NASDAQ Global Select Market: PGC) (the “Company”) announces its second quarter 2024 financial results. 

This earnings release should be read in conjunction with the Company’s Q2 2024 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.  

During the second quarter of 2024, core relationship deposits grew $354 million to $4.6 billion which represents an annualized rate of 33%.  During the first six months of the year core relationship deposits have grown by $524 million. Strong growth in core relationship deposit balances have enabled the Company to repay $119.5 million of all outstanding short-term borrowings as of June 30, 2024.

The improvement in the Company’s liquidity profile also resulted in an increase in the net interest margin compared to the previous quarter. The net interest margin increased to 2.25% for the quarter ended June 30, 2024, compared to 2.20% for the quarter ended March 31, 2024. 

The Company recorded total revenue of $56.6 million, net income of $7.5 million and diluted earnings per share (“EPS”) of $0.42 for the quarter ended June 30, 2024, compared to revenue of $57.5 million, net income of $13.1 million and diluted EPS of $0.73 for the quarter ended June 30, 2023. Return on average assets was 0.47%, return on average equity was 5.22%, and return on average tangible equity was 5.67% for the quarter ended June 30, 2024.

Douglas L. Kennedy, President and CEO said, “One year ago we announced our strategic decision to expand our footprint into New York City with the addition of a team of experienced banking professionals and a new office on Park Avenue. During the second quarter of this year, we have taken another step to enhance our expansion effort with the addition of thirteen (13) commercial private banking teams that bring with them decades of experience and deep client relationships in the metro New York market. Our second quarter results demonstrate the progress and momentum we are building toward a successful destination. Growth in customer deposits in an extremely competitive environment, improvement in our net interest margin, along with an enhanced liquidity profile are evidence of the positive results we are striving to achieve."

Mr. Kennedy also noted, “We continue to expand our unique private banking model that offers a 'Single Point of Contact' to deliver a white glove experience for all of our product offerings. We are being extremely well received by all those that we have had the opportunity to interact with and are very pleased with the results to date. While we are aware of the potential headwinds in front of us related to credit quality concerns and a challenging interest rate environment, we remain focused executing our strategy which we believe will deliver a successful outcome." 

The following are select highlights for the period ended June 30, 2024:

Wealth Management:

  • Gross new business inflows for Q2 2024 totaled $171 million ($139 million managed). 

  • AUM/AUA in our Wealth Management Division totaled $11.5 billion at June 30, 2024 compared to $10.9 billion at December 31, 2023.  

  • Wealth Management fee income was $16.4 million in Q2 2024, which amounted to 29% of total revenue for the quarter. 

Commercial Banking and Balance Sheet Management: 

  • Total deposits grew by $382 million, to $5.7 billion at June 30, 2024 compared to $5.3 billion at December 31, 2023. The Company intentionally allowed $142 million in high cost, non-core relationship deposits to roll off during the first six months of the year. Excluding this deposit run-off, core relationship deposits have grown by $524 million during 2024.

  • The Company has repaid all short-term borrowings as of June 30, 2024 compared to $404 million outstanding at December 31, 2023.

  • Total loans declined $167 million to $5.3 billion at June 30, 2024 from $5.4 billion at December 31, 2023. 

  • Commercial and industrial lending (“C&I”) loan/lease balances represent 42% of the total loan portfolio at June 30, 2024.

  • Fee income on unused commercial lines of credit totaled $786,000 for Q2 2024.

  • The net interest margin ("NIM") was 2.25% in Q2 2024, an increase of 5 basis points compared to 2.20% at Q1 2024.

  • Noninterest-bearing demand deposits increased by $35 million during the second quarter of 2024 and represented 17% of total deposits as of June 30, 2024.

Capital Management:

  • Tangible book value per share increased slightly to $30.73 per share at June 30, 2024 compared to $30.31 at December 31, 2023.

  • During the second quarter, the Company repurchased 100,000 shares of common stock at a cost of $2.2 million. During the first six months of 2024, the Company repurchased 200,000 shares of common stock at a cost of $4.6 million. For the full year 2023, the Company repurchased 455,341 shares at a cost of $12.5 million. 

  • At June 30, 2024, the Tier 1 Leverage Ratio stood at 11.14% for Peapack-Gladstone Bank (the "Bank") and 9.45% for the Company. The Common Equity Tier 1 Ratio (to Risk-Weighted Assets) was 14.05% for the Bank and 11.92% for the Company at June 30, 2024. These ratios remain significantly above well capitalized standards, as capital continues to benefit from net income generation. 

 

SUMMARY INCOME STATEMENT DETAILS:

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

June 2024 Year Compared to Prior Year

 

 

 

Six Months Ended

 

 

Six Months Ended

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

June 30,

 

 

 

Increase/

 

(Dollars in millions, except per share data)

 

2024

 

 

2023

 

 

 

(Decrease)

 

Net interest income

 

$

69.42

 

 

$

82.90

 

 

 

$

(13.48

)

 

 

(16

)%

Wealth management fee income

 

 

30.83

 

 

 

28.01

 

 

 

 

2.82

 

 

 

10

 

Capital markets activity

 

 

1.86

 

 

 

1.83

 

 

 

 

0.03

 

 

 

2

 

Other income

 

 

7.57

 

 

 

6.80

 

 

 

 

0.77

 

 

 

11

 

Total other income

 

 

40.26

 

 

 

36.64

 

 

 

 

3.62

 

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

 

109.68

 

 

 

119.54

 

 

 

 

(9.86

)

 

 

(8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

83.17

 

 

 

73.27

 

 

 

 

9.90

 

 

 

14

 

Pretax income before provision for credit losses

 

 

26.51

 

 

 

46.27

 

 

 

 

(19.76

)

 

 

(43

)

Provision for credit losses

 

 

4.54

 

 

 

3.21

 

 

 

 

1.33

 

 

 

41

 

Pretax income

 

 

21.97

 

 

 

43.06

 

 

 

 

(21.09

)

 

 

(49

)

Income tax expense

 

 

5.81

 

 

 

11.56

 

 

 

 

(5.75

)

 

 

(50

)

Net income

 

$

16.16

 

 

$

31.50

 

 

 

$

(15.34

)

 

 

(49

)%

Diluted EPS

 

$

0.91

 

 

$

1.74

 

 

 

$

(0.83

)

 

 

(48

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

0.51

%

 

 

0.99

%

 

 

 

(0.48

)

 

 

 

Return on average equity

 

 

5.58

%

 

 

11.44

%

 

 

 

(5.86

)

 

 

 

 

June 2024 Quarter Compared to Prior Year Quarter

 

 

 

Three Months Ended

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

June 30,

 

 

 

June 30,

 

 

Increase/

 

(Dollars in millions, except per share data)

 

2024

 

 

 

2023

 

 

(Decrease)

 

Net interest income

 

$

35.04

 

 

 

$

38.92

 

 

$

(3.88

)

 

 

(10

)%

Wealth management fee income

 

 

16.42

 

 

 

 

14.25

 

 

 

2.17

 

 

 

15

 

Capital markets activity

 

 

0.59

 

 

 

 

0.87

 

 

 

(0.28

)

 

 

(32

)

Other income

 

 

4.55

 

 

 

 

3.46

 

 

 

1.09

 

 

 

32

 

Total other income

 

 

21.56

 

 

 

 

18.58

 

 

 

2.98

 

 

 

16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

 

56.60

 

 

 

 

57.50

 

 

 

(0.90

)

 

 

(2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

43.13

 

 

 

 

37.69

 

 

 

5.44

 

 

 

14

 

Pretax income before provision for credit losses

 

 

13.47

 

 

 

 

19.81

 

 

 

(6.34

)

 

 

(32

)

Provision for credit losses

 

 

3.91

 

 

 

 

1.70

 

 

 

2.21

 

 

 

130

 

Pretax income

 

 

9.56

 

 

 

 

18.11

 

 

 

(8.55

)

 

 

(47

)

Income tax expense

 

 

2.03

 

 

 

 

4.96

 

 

 

(2.93

)

 

 

(59

)

Net income

 

$

7.53

 

 

 

$

13.15

 

 

$

(5.62

)

 

 

(43

)%

Diluted EPS

 

$

0.42

 

 

 

$

0.73

 

 

$

(0.31

)

 

 

(42

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets annualized

 

 

0.47

%

 

 

 

0.82

%

 

 

(0.35

)

 

 

 

Return on average equity annualized

 

 

5.22

%

 

 

 

9.43

%

 

 

(4.21

)

 

 

 

 

 

 

 

 June 2024 Quarter Compared to Linked Quarter


 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

March 31,

 

 

 

Increase/

 

(Dollars in millions, except per share data)

 

2024

 

 

2024

 

 

 

(Decrease)

 

Net interest income

 

$

35.04

 

 

$

34.38

 

 

 

$

0.66

 

 

 

2

%

Wealth management fee income

 

 

16.42

 

 

 

14.41

 

 

 

 

2.01

 

 

 

14

 

Capital markets activity

 

 

0.59

 

 

 

1.27

 

 

 

 

(0.68

)

 

 

(54

)

Other income

 

 

4.55

 

 

 

3.02

 

 

 

 

1.53

 

 

 

51

 

Total other income

 

 

21.56

 

 

 

18.70

 

 

 

 

2.86

 

 

 

15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

 

56.60

 

 

 

53.08

 

 

 

 

3.52

 

 

 

7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

43.13

 

 

 

40.04

 

 

 

 

3.09

 

 

 

8

 

Pretax income before provision for credit losses

 

 

13.47

 

 

 

13.04

 

 

 

 

0.43

 

 

 

3

 

Provision for credit losses

 

 

3.91

 

 

 

0.63

 

 

 

 

3.28

 

 

 

521

 

Pretax income

 

 

9.56

 

 

 

12.41

 

 

 

 

(2.85

)

 

 

(23

)

Income tax expense

 

 

2.03

 

 

 

3.78

 

 

 

 

(1.75

)

 

 

(46

)

Net income

 

$

7.53

 

 

$

8.63

 

 

 

$

(1.10

)

 

 

(13

)%

Diluted EPS

 

$

0.42

 

 

$

0.48

 

 

 

$

(0.06

)

 

 

(13

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets annualized

 

 

0.47

%

 

 

0.54

%

 

 

 

(0.07

)

 

 

 

Return on average equity annualized

 

 

5.22

%

 

 

5.94

%

 

 

 

(0.72

)

 

 

 

 

 

SUPPLEMENTAL QUARTERLY DETAILS:

 

Wealth Management 

AUM/AUA in the Bank’s Wealth Management Division were $11.5 billion at June 30, 2024 compared to $10.9 billion at December 31, 2023.  For the June 2024 quarter, the Wealth Management Team generated $16.4 million in fee income, compared to $14.4 million for the March 31, 2024 quarter and $14.3 million for the June 2023 quarter. The equity markets improved during the first half of 2024, contributing to the increase in AUM/AUA along with gross new business inflows of $171 million.

John Babcock, President of the Bank's Wealth Management Division, noted, “Q2 2024 continued strong client inflows totaling new accounts and client additions of $171 million ($139 million managed). Our 2024 new business pipeline is healthy, and we continue to 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 combined with our high-touch client service model distinguishes us in our market and continues to drive our growth and success.”  

Loans / Commercial Banking 

Total loans declined $167 million, or 3%, to $5.3 billion at June 30, 2024 when compared to December 31, 2023, primarily driven by repayments, maturities and tighter lending standards. Nearly half of the decline in outstanding loans was related to reductions in multifamily and commercial real estate balances. Total C&I loans and leases at June 30, 2024 were $2.2 billion or 42% of the total loan portfolio. 

Mr. Kennedy noted, “As previously mentioned, we have tightened our underwriting guidelines due to economic uncertainty, successfully excited some problem credits, and originations have also slowed due to the rate environment. As a result, our outstanding loan balances have declined during 2024. Recently, we have been building a pipeline of C&I loans and believe that we will make up the decline in loans experienced during the first half of 2024. We are proud to have built a leading middle market commercial banking franchise, as evidenced by our C&I Portfolio, Treasury Management services, Corporate Advisory and SBA businesses. We believe these business lines fit perfectly with our private banking business model and will generate solid production going forward.”

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

The Company’s NII of $35.0 million and NIM of 2.25% for Q2 2024 increased $667,000 and 5 basis points from NII of $34.4 million and NIM of 2.20% for the linked quarter (Q1 2024), and decreased $3.9 million and 24 basis points from NII of $38.9 million and NIM of 2.49% compared to the prior year period (Q2 2023).  During Q2 2024, the Company has seen NIM expansion partially due the paydown of overnight borrowings which were replaced by lower cost deposit balances.  Prior to Q2 2024, the Company had seen a sharp increase in interest expense mostly driven by higher deposit rates during 2023. Noninterest-bearing checking deposits increased by $35 million during the second quarter of 2024, which also benefited NIM. Cycle to date betas are approximately 53%.

Funding / Liquidity / Interest Rate Risk Management

Total deposits increased $382 million to $5.7 billion at June 30, 2024 from $5.3 billion at December 31, 2023.  The change in deposit balances included a decline in brokered deposits of $95 million.  The overall growth in deposits was used to pay down all overnight borrowings as of June 30, 2024, as well as providing additional balance sheet liquidity. Outstanding overnight borrowings were $404 million at December 31, 2023. 

At June 30, 2024, the Company’s balance sheet liquidity (investments available for sale, interest-earning deposits and cash) totaled $933 million, or 14% of assets. The Company maintains additional liquidity resources of approximately $2.9 billion through secured available funding with the Federal Home Loan Bank and the Federal Reserve Discount Window.  The available funding from the Federal Home Loan Bank and the Federal Reserve are secured by the Company’s loan and investment portfolios. 

The Company's total on and off-balance sheet liquidity totaled $3.9 billion, which amounts to 304% of the total uninsured/uncollateralized deposits currently on the Company’s balance sheet.

Income from Capital Markets Activities

Noninterest income from Capital Markets activities (detailed below) totaled $586,000 for the June 2024 quarter compared to $1.3 million for the March 2024 quarter and $868,000 for the June 2023 quarter. The March 2024 quarter included $818,000 of corporate advisory fee income.

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

June 30,

 

 

March 31,

 

 

June 30,

 

(Dollars in thousands, except per share data)

 

2024

 

 

2024

 

 

2023

 

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

 

$

34

 

 

$

56

 

 

$

15

 

Gain on sale of SBA loans

 

 

449

 

 

 

400

 

 

 

838

 

Corporate advisory fee income

 

 

103

 

 

 

818

 

 

 

15

 

Total capital markets activity

 

$

586

 

 

$

1,274

 

 

$

868

 

 

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

Other noninterest income was $4.6 million for Q2 2024 compared to $3.0 million for Q1 2024 and $3.5 million for Q2 2023. Q2 2024 included $1.6 million of income recorded by the Equipment Finance Division related to equipment transfers to lessees upon the termination of leases, while Q1 2024 included $141,000 and Q2 2023 included $221,000 respectively. Additionally, Q2 2024 included $786,000 of unused line fees compared to $827,000 for Q1 2024 and $809,000 for Q2 2023.

Operating Expenses

The Company’s total operating expenses were $43.1 million for the second quarter of 2024, compared to $40.0 million for the first quarter of 2024 and $37.7 million for the quarter ended June 2023. Both 2024 quarters included expenses associated with the Company’s expansion into New York City. The June 2024 quarter also included normal annual merit increases.

Mr. Kennedy noted, “We continue to make investments related to our strategic decision to expand into New York City and are confident that these expenses will position us for future growth, which will ultimately translate to shareholder value.  We continue to look for opportunities to create efficiencies and manage expenses throughout the Company while investing in enhancements to the client experience."

Income Taxes

The effective tax rate for the three months ended June 30, 2024 was 21.2%, as compared to 30.4% for the March 2024 quarter and 27.4% for the quarter ended June 30, 2023.  The June 2024 quarter included a benefit related to the Company’s deferred tax assets associated with a surtax imposed by the State of New Jersey in June 2024. Excluding such benefit, the effective tax rate for the June 2024 quarter would have been approximately 29.0%. The higher tax rate for the March 2024 quarter was primarily due to the impact of vesting of the restricted stock at prices lower than original grant prices.

Asset Quality / Provision for Credit Losses

Nonperforming assets were $82.1 million, or 1.26% of total assets at June 30, 2024, as compared to $69.8 million, or 1.09% of total assets at March 31, 2024. Loans past due 30 to 89 days and still accruing were $34.7 million, or 0.66% of total loans at June 30, 2024 compared to $73.7 million, or 1.37% of total loans at March 31, 2024. 

Criticized and classified loans totaled $269.1 million at June 30, 2024, reflecting an increase from the March 31, 2024 and June 30, 2023 levels. The Company currently has no loans or leases on deferral and still accruing.   

For the quarter ended June 30, 2024, the Company’s provision for credit losses was $3.9 million compared to $615,000 for the March 2024 quarter and $1.7 million for the June 2023 quarter. The provision for credit losses in the second quarter of 2024 was primarily driven by charge-offs related to the sale of two problem loans, which were approaching foreclosure and transfer to other real estate owned.

At June 30, 2024, the allowance for credit losses was $68.0 million (1.29% of total loans), compared to $66.3 million (1.24% of total loans) at March 31, 2024, and $62.7 million (1.15% of total loans) at June 30, 2023.

Mr. Kennedy noted, “As evidenced by our asset quality metrics, we have seen some credit issues surface, but we believe these are presently isolated to a small number of specific multifamily sponsors and will work through each credit one at a time.  All of the multifamily loans that matured or repriced in 2024 have continued to make their scheduled payments despite the higher rate environment."

Capital 

The Company’s capital position increased during the second quarter of 2024 due to net income of $7.5 million, which was partially offset by the repurchase of 100,000 shares through the Company's repurchase program at a total cost of $2.2 million and the quarterly dividend of $887,000. Additionally, during the second quarter of 2024, the Company recorded a deterioration in accumulated other comprehensive losses of $582,000, net of tax. The total accumulated other comprehensive loss declined to $68.3 million as of June 30, 2024 ($75.1 million loss related to the available for sale securities portfolio partially offset by a $6.8 million gain on the cash flow hedges).  

Tangible book value per share increased during the second quarter to $30.73 at June 30, 2024 from $30.31 at December 31, 2023. Tangible book value per share is a non-GAAP financial measure. See the reconciliation tables included in this release for further detail. The Company’s and Bank’s regulatory capital ratios as of June 30, 2024 remain strong and reflect increases from March 31, 2024 levels. Where applicable, such ratios remain well above regulatory well capitalized standards. 

The Company employs quarterly capital stress testing modeling of an adverse case and severely adverse case. In the most recently completed stress test (as of March 31, 2024), under the severely adverse case, and no growth scenario, the Bank remains well capitalized over a two-year stress period.

On June 27, 2024, the Company declared a cash dividend of $0.05 per share payable on August 22, 2024 to shareholders of record on August 8, 2024.

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 $11.5 billion as of June 30, 2024.  Founded in 1921, Peapack-Gladstone Bank is a commercial bank that provides Private Banking customized solutions through its 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.

FORWARD-LOOKING STATEMENTS

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 2024 and beyond;

  • our ability to successfully integrate wealth management firm and team acquisitions;

  • 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 credit losses or in the level of delinquent, nonperforming, classified and criticized loans or charge-offs;

  • inflation and changes in interest rates, which may adversely impact our 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, including our expansion into New York City;

  • 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 New York City rent regulation law;

  • 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/or

  •  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, 2023.  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

 

 

 

June 30,

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

 

June 30,

 

 

 

2024

 

 

2024

 

 

2023

 

 

2023

 

 

2023

 

Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

79,238

 

 

$

79,194

 

 

$

80,178

 

 

$

78,489

 

 

$

74,852

 

Interest expense

 

 

44,196

 

 

 

44,819

 

 

 

43,503

 

 

 

41,974

 

 

 

35,931

 

Net interest income

 

 

35,042

 

 

 

34,375

 

 

 

36,675

 

 

 

36,515

 

 

 

38,921

 

Wealth management fee income

 

 

16,419

 

 

 

14,407

 

 

 

13,758

 

 

 

13,975

 

 

 

14,252

 

Service charges and fees

 

 

1,345

 

 

 

1,322

 

 

 

1,255

 

 

 

1,319

 

 

 

1,320

 

Bank owned life insurance

 

 

328

 

 

 

503

 

 

 

357

 

 

 

310

 

 

 

305

 

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

 

 

34

 

 

 

56

 

 

 

18

 

 

 

37

 

 

 

15

 

Gain on loans held for sale at lower
   of cost or fair value

 

 

23

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of SBA loans

 

 

449

 

 

 

400

 

 

 

239

 

 

 

491

 

 

 

838

 

Corporate advisory fee income

 

 

103

 

 

 

818

 

 

 

39

 

 

 

85

 

 

 

15

 

Other income (A)

 

 

2,938

 

 

 

1,306

 

 

 

1,339

 

 

 

3,541

 

 

 

2,039

 

Fair value adjustment for CRA equity security

 

 

(84

)

 

 

(111

)

 

 

585

 

 

 

(404

)

 

 

(209

)

Total other income

 

 

21,555

 

 

 

18,701

 

 

 

17,590

 

 

 

19,354

 

 

 

18,575

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

 

56,597

 

 

 

53,076

 

 

 

54,265

 

 

 

55,869

 

 

 

57,496

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

29,884

 

 

 

28,476

 

 

 

24,320

 

 

 

25,264

 

 

 

26,354

 

Premises and equipment

 

 

5,776

 

 

 

5,081

 

 

 

5,416

 

 

 

5,214

 

 

 

4,729

 

FDIC insurance expense

 

 

870

 

 

 

945

 

 

 

765

 

 

 

741

 

 

 

729

 

Other expenses

 

 

6,596

 

 

 

5,539

 

 

 

7,115

 

 

 

6,194

 

 

 

5,880

 

Total operating expenses

 

 

43,126

 

 

 

40,041

 

 

 

37,616

 

 

 

37,413

 

 

 

37,692

 

Pretax income before provision for credit losses

 

 

13,471

 

 

 

13,035

 

 

 

16,649

 

 

 

18,456

 

 

 

19,804

 

Provision for credit losses

 

 

3,911

 

 

 

627

 

 

 

5,026

 

 

 

5,856

 

 

 

1,696

 

Income before income taxes

 

 

9,560

 

 

 

12,408

 

 

 

11,623

 

 

 

12,600

 

 

 

18,108

 

Income tax expense

 

 

2,030

 

 

 

3,777

 

 

 

3,024

 

 

 

3,845

 

 

 

4,963

 

Net income

 

$

7,530

 

 

$

8,631

 

 

$

8,599

 

 

$

8,755

 

 

$

13,145

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Common Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (basic)

 

$

0.42

 

 

$

0.49

 

 

$

0.48

 

 

$

0.49

 

 

$

0.73

 

Earnings per share (diluted)

 

 

0.42

 

 

 

0.48

 

 

 

0.48

 

 

 

0.49

 

 

 

0.73

 

Weighted average number of common
   shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

17,747,070

 

 

 

17,711,639

 

 

 

17,770,158

 

 

 

17,856,961

 

 

 

17,930,611

 

Diluted

 

 

17,792,296

 

 

 

17,805,347

 

 

 

17,961,400

 

 

 

18,010,127

 

 

 

18,078,848

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets annualized (ROAA)

 

 

0.47

%

 

 

0.54

%

 

 

0.53

%

 

 

0.54

%

 

 

0.82

%

Return on average equity annualized (ROAE)

 

 

5.22

%

 

 

5.94

%

 

 

6.13

%

 

 

6.20

%

 

 

9.43

%

Return on average tangible equity annualized (ROATCE) (B)

 

 

5.67

%

 

 

6.45

%

 

 

6.68

%

 

 

6.75

%

 

 

10.30

%

Net interest margin (tax-equivalent basis)

 

 

2.25

%

 

 

2.20

%

 

 

2.29

%

 

 

2.28

%

 

 

2.49

%

GAAP efficiency ratio (C)

 

 

76.20

%

 

 

75.44

%

 

 

69.32

%

 

 

66.97

%

 

 

65.56

%

Operating expenses / average assets annualized

 

 

2.70

%

 

 

2.51

%

 

 

2.33

%

 

 

2.31

%

 

 

2.36

%

 

(A) The September 2023 quarter included $2.3 million of fee income from equipment finance activity.

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

(C) 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

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in Thousands, except per share data)

 (Unaudited)

 

 

For the Six Months Ended

 

 

 

 

 

 

 

 

 

June 30,

 

 

Change

 

 

 

2024

 

 

2023

 

 

$

 

 

%

 

Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

158,432

 

 

$

145,343

 

 

$

13,089

 

 

 

9

%

Interest expense

 

 

89,015

 

 

 

62,444

 

 

 

26,571

 

 

 

43

%

Net interest income

 

 

69,417

 

 

 

82,899

 

 

 

(13,482

)

 

 

-16

%

Wealth management fee income

 

 

30,826

 

 

 

28,014

 

 

 

2,812

 

 

 

10

%

Service charges and fees

 

 

2,667

 

 

 

2,578

 

 

 

89

 

 

 

3

%

Bank owned life insurance

 

 

831

 

 

 

602

 

 

 

229

 

 

 

38

%

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

 

 

90

 

 

 

36

 

 

 

54

 

 

 

150

%

Gain on loans held for sale at lower of cost or fair value

 

 

23

 

 

 

 

 

 

23

 

 

N/A

 

Gain on sale of SBA loans

 

 

849

 

 

 

1,703

 

 

 

(854

)

 

 

-50

%

Corporate advisory fee income

 

 

921

 

 

 

95

 

 

 

826

 

 

 

869

%

Other income

 

 

4,244

 

 

 

3,606

 

 

 

638

 

 

 

18

%

Fair value adjustment for CRA equity security

 

 

(195

)

 

 

 

 

 

(195

)

 

N/A

 

Total other income

 

 

40,256

 

 

 

36,634

 

 

 

3,622

 

 

 

10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

 

109,673

 

 

 

119,533

 

 

 

(9,860

)

 

 

-8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

58,360

 

 

 

50,940

 

 

 

7,420

 

 

 

15

%

Premises and equipment

 

 

10,857

 

 

 

9,103

 

 

 

1,754

 

 

 

19

%

FDIC insurance expense

 

 

1,815

 

 

 

1,440

 

 

 

375

 

 

 

26

%

Other expenses

 

 

12,135

 

 

 

11,783

 

 

 

352

 

 

 

3

%

Total operating expenses

 

 

83,167

 

 

 

73,266

 

 

 

9,901

 

 

 

14

%

Pretax income before provision for credit losses

 

 

26,506

 

 

 

46,267

 

 

 

(19,761

)

 

 

-43

%

Provision for credit losses

 

 

4,538

 

 

 

3,209

 

 

 

1,329

 

 

 

41

%

Income before income taxes

 

 

21,968

 

 

 

43,058

 

 

 

(21,090

)

 

 

-49

%

Income tax expense

 

 

5,807

 

 

 

11,558

 

 

 

(5,751

)

 

 

-50

%

Net income

 

$

16,161

 

 

$

31,500

 

 

$

(15,339

)

 

 

-49

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Common Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (basic)

 

$

0.91

 

 

$

1.76

 

 

$

(0.85

)

 

 

-48

%

Earnings per share (diluted)

 

 

0.91

 

 

 

1.74

 

 

 

(0.83

)

 

 

-48

%

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

17,729,355

 

 

 

17,886,154

 

 

 

(156,799

)

 

 

-1

%

Diluted

 

 

17,811,895

 

 

 

18,153,267

 

 

 

(341,372

)

 

 

-2

%

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (ROAA)

 

 

0.51

%

 

 

0.99

%

 

 

(0.48

)%

 

 

-49

%

Return on average equity (ROAE)

 

 

5.58

%

 

 

11.44

%

 

 

(5.86

)%

 

 

-51

%

Return on average tangible equity (ROATCE) (A)

 

 

6.06

%

 

 

12.51

%

 

 

(6.45

)%

 

 

-52

%

Net interest margin (tax-equivalent basis)

 

 

2.22

%

 

 

2.68

%

 

 

(0.46

)%

 

 

-17

%

GAAP efficiency ratio (B)

 

 

75.83

%

 

 

61.29

%

 

 

14.54

%

 

 

24

%

Operating expenses / average assets

 

 

2.60

%

 

 

2.31

%

 

 

0.29

%

 

 

13

%

 

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

(B) 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

 

 

 

June 30,

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

 

June 30,

 

 

 

2024

 

 

2024

 

 

2023

 

 

2023

 

 

2023

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

5,586

 

 

$

5,769

 

 

$

5,887

 

 

$

7,400

 

 

$

4,859

 

Federal funds sold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning deposits

 

 

310,143

 

 

 

189,069

 

 

 

181,784

 

 

 

180,469

 

 

 

166,769

 

Total cash and cash equivalents

 

 

315,729

 

 

 

194,838

 

 

 

187,671

 

 

 

187,869

 

 

 

171,628

 

Securities available for sale

 

 

591,884

 

 

 

550,870

 

 

 

550,617

 

 

 

521,005

 

 

 

540,519

 

Securities held to maturity

 

 

105,013

 

 

 

106,498

 

 

 

107,755

 

 

 

108,940

 

 

 

110,438

 

CRA equity security, at fair value

 

 

12,971

 

 

 

13,055

 

 

 

13,166

 

 

 

12,581

 

 

 

12,985

 

FHLB and FRB stock, at cost (A)

 

 

12,478

 

 

 

18,079

 

 

 

31,044

 

 

 

34,158

 

 

 

35,402

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage

 

 

579,057

 

 

 

581,426

 

 

 

578,427

 

 

 

585,295

 

 

 

575,238

 

Multifamily mortgage

 

 

1,796,687

 

 

 

1,827,165

 

 

 

1,836,390

 

 

 

1,871,853

 

 

 

1,884,369

 

Commercial mortgage

 

 

600,859

 

 

 

615,964

 

 

 

637,625

 

 

 

622,469

 

 

 

624,710

 

Commercial and industrial loans

 

 

2,185,827

 

 

 

2,235,342

 

 

 

2,284,940

 

 

 

2,321,917

 

 

 

2,278,133

 

Consumer loans

 

 

69,579

 

 

 

66,827

 

 

 

62,036

 

 

 

57,227

 

 

 

52,098

 

Home equity lines of credit

 

 

37,117

 

 

 

35,542

 

 

 

36,464

 

 

 

34,411

 

 

 

34,397

 

Other loans

 

 

172

 

 

 

184

 

 

 

238

 

 

 

265

 

 

 

269

 

Total loans

 

 

5,269,298

 

 

 

5,362,450

 

 

 

5,436,120

 

 

 

5,493,437

 

 

 

5,449,214

 

Less: Allowance for credit losses

 

 

67,984

 

 

 

66,251

 

 

 

65,888

 

 

 

68,592

 

 

 

62,704

 

Net loans

 

 

5,201,314

 

 

 

5,296,199

 

 

 

5,370,232

 

 

 

5,424,845

 

 

 

5,386,510

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premises and equipment

 

 

24,932

 

 

 

24,494

 

 

 

24,166

 

 

 

23,969

 

 

 

23,814

 

Accrued interest receivable

 

 

33,534

 

 

 

32,672

 

 

 

30,676

 

 

 

22,889

 

 

 

20,865

 

Bank owned life insurance

 

 

47,716

 

 

 

47,580

 

 

 

47,581

 

 

 

47,509

 

 

 

47,382

 

Goodwill and other intangible assets

 

 

45,470

 

 

 

45,742

 

 

 

46,014

 

 

 

46,286

 

 

 

46,624

 

Finance lease right-of-use assets

 

 

1,055

 

 

 

1,900

 

 

 

2,087

 

 

 

2,274

 

 

 

2,461

 

Operating lease right-of-use assets

 

 

38,683

 

 

 

16,035

 

 

 

12,096

 

 

 

12,800

 

 

 

13,500

 

Due from brokers

 

 

3,184

 

 

 

 

 

 

 

 

 

 

 

 

 

Other assets

 

 

71,387

 

 

 

60,591

 

 

 

53,752

 

 

 

76,456

 

 

 

67,572

 

TOTAL ASSETS

 

$

6,505,350

 

 

$

6,408,553

 

 

$

6,476,857

 

 

$

6,521,581

 

 

$

6,479,700

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

 

$

950,368

 

 

$

914,893

 

 

$

957,687

 

 

$

947,405

 

 

$

1,024,105

 

Interest-bearing demand deposits

 

 

3,229,814

 

 

 

3,029,119

 

 

 

2,882,193

 

 

 

2,871,359

 

 

 

2,816,913

 

Savings

 

 

105,602

 

 

 

108,305

 

 

 

111,573

 

 

 

117,905

 

 

 

120,082

 

Money market accounts

 

 

824,158

 

 

 

775,132

 

 

 

740,559

 

 

 

761,833

 

 

 

763,026

 

Certificates of deposit – Retail

 

 

502,810

 

 

 

486,079

 

 

 

443,791

 

 

 

422,291

 

 

 

384,106

 

Certificates of deposit – Listing Service

 

 

7,454

 

 

 

7,704

 

 

 

7,804

 

 

 

9,103

 

 

 

10,822

 

Subtotal “customer” deposits

 

 

5,620,206

 

 

 

5,321,232

 

 

 

5,143,607

 

 

 

5,129,896

 

 

 

5,119,054

 

IB Demand – Brokered

 

 

10,000

 

 

 

10,000

 

 

 

10,000

 

 

 

10,000

 

 

 

10,000

 

Certificates of deposit – Brokered

 

 

26,000

 

 

 

145,480

 

 

 

120,507

 

 

 

119,463

 

 

 

69,443

 

Total deposits

 

 

5,656,206

 

 

 

5,476,712

 

 

 

5,274,114

 

 

 

5,259,359

 

 

 

5,198,497

 

Short-term borrowings

 

 

 

 

 

119,490

 

 

 

403,814

 

 

 

470,576

 

 

 

485,360

 

Finance lease liability

 

 

1,427

 

 

 

3,104

 

 

 

3,430

 

 

 

3,752

 

 

 

4,071

 

Operating lease liability

 

 

41,347

 

 

 

17,630

 

 

 

12,876

 

 

 

13,595

 

 

 

14,308

 

Subordinated debt, net

 

 

133,417

 

 

 

133,346

 

 

 

133,274

 

 

 

133,203

 

 

 

133,131

 

Due to brokers

 

 

9,981

 

 

 

 

 

 

 

 

 

 

 

 

 

Other liabilities

 

 

74,650

 

 

 

75,892

 

 

 

65,668

 

 

 

82,140

 

 

 

79,264

 

TOTAL LIABILITIES

 

 

5,917,028

 

 

 

5,826,174

 

 

 

5,893,176

 

 

 

5,962,625

 

 

 

5,914,631

 

Shareholders’ equity

 

 

588,322