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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 2002 Commission File No. 000-23537
PEAPACK-GLADSTONE FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
New Jersey 22-2491488
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
158 Route 206
Peapack-Gladstone, New Jersey 07934
(Address of principal executive offices) (Zip Code)
Registrant's telephone number (908) 234-0700
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Exchange on which Registered
Common Stock, No par value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment of this
Form 10-K |X|.
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-d). Yes |X| No |_|.
As of February 28, 2003, 6,704,984 shares of no par value Common Stock were
outstanding and the aggregate market value of the shares held by unaffiliated
stockholders was approximately $186,063,306.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Corporation's 2002 Annual Report (the "2002 Annual Report") and
Definitive Proxy Statement for the Corporation's 2003 Annual Meeting of
Shareholders (the "2003 Proxy Statement") are incorporated by reference into
Parts II and III.
FORM 10-K
PEAPACK-GLADSTONE FINANCIAL CORPORATION
For the Year Ended December 31, 2002
Table of Contents
PART I
Item 1. Description of Business ............................................................. 3
Item 2. Description of Property ............................................................. 6
Item 3. Legal Proceedings ................................................................... 6
Item 4. Submission of Matters to a Vote of Security Holders ................................. 6
Item 4A. Executive Officers of the Registrant ................................................ 7
PART II
Item 5. Market for the Registrant's Common Stock and Related Shareholders Matters ........... 7
Item 6. Selected Financial Data ............................................................. 7
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 7
Item 7A. Quantitative and Qualitative Disclosure About Market Risk ........................... 7
Item 8. Financial Statements and Supplementary Data ......................................... 8
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 8
PART III
Item 10. Directors and Executive Officers of the Registrant .................................. 8
Item 11. Executive Compensation .............................................................. 8
Item 12. Security Ownership of Certain Beneficial Owners and Management ...................... 8
Item 13. Certain Relationships and Related Transactions ...................................... 9
PART IV
Item 14. Controls and Procedures ............................................................. 9
Item 15. Exhibits, Financial Statements, and Reports on Form 8-K ............................. 9
Signatures .......................................................................... 11
2
This document contains certain forward-looking statements with respect to the
financial condition, results of operations and business of the Corporation. Such
statements are not historical facts and include expressions about the
Corporation's confidence, strategies and expectations about earnings, new and
existing programs and products, relationships, opportunities, technology and
market conditions. These statements may be identified by forward-looking
terminology such as "expect," "believe," or "anticipate," or expressions of
confidence like "strong," or "on-going," or similar statements or variations of
such terms. Factors that may cause actual results to differ materially from
those contemplated by such forward looking statements include, among others, the
following possibilities:
o Competitive pressure in the banking and financial services industry
increases significantly.
o Changes in the interest rate environment may reduce interest rate margins.
o General economic conditions, either nationally or in the state of New
Jersey, are less favorable than expected.
The Corporation assumes no responsibility to update such forward-looking
statements in the future.
PART I
Item 1. DESCRIPTION OF BUSINESS
The Corporation
The Peapack-Gladstone Financial Corporation (the "Corporation") is a bank
holding company registered under the Bank Holding Company Act of 1956, as
amended ("Holding Company Act"). The Corporation was organized under the laws of
New Jersey in August, 1997, by the Board of Directors of Peapack-Gladstone Bank
(the "Bank"), its principal subsidiary, to become a holding company for the
Bank. The Bank is a state chartered commercial bank founded in 1921 under the
laws of the State of New Jersey. Deposits of the Bank are insured for up to
$100,000 per depositor by the Bank Insurance Fund administered by the FDIC. The
Bank is a member of the Federal Reserve System. The Bank offers financial
services through sixteen full-service banking offices, and one mini-branch. The
Bank maintains eight (8) branches and one (1) auxiliary office in Somerset
County, two (2) in Hunterdon County and six (6) in Morris County.
The Bank is primarily dedicated to providing quality, personalized financial,
trust and investment services to individuals and small businesses.
Commercial loan customers of the Bank are business people, including merchants,
architects, doctors, dentists, attorneys and building contractors as well as
various service firms and other local retailers. Most forms of commercial
lending are offered, including working capital lines of credit, term loans for
fixed asset acquisitions, commercial mortgages and other forms of asset-based
financing.
In addition to commercial lending activities, the Bank offers a wide range of
consumer banking services, including: checking and savings accounts, money
market and interest-bearing checking accounts, certificates of deposit, and
individual retirement accounts held in certificates of deposit. The Bank also
offers residential and construction mortgages, home equity lines of credit and
other second mortgage loans. For children, the Bank offers a special pony club
savings account. New Jersey Consumer Checking Accounts are offered to low income
customers. In addition, the Bank provides foreign and domestic travelers'
checks, personal money orders, cashier's checks and wire transfers. Automated
teller machines are available at sixteen (16) locations. Via the automatic
teller machine access card issued by the Bank, customers may pay for commodities
at point-of-sale merchant locations. Internet banking is available to customers
including an on-line bill payment option. The Corporation has no foreign
operations.
The Bank's Trust and Investment Department, PGB Trust and Investments, is an
important function of the Bank. PGB Trust and Investments offers personal
investment management services, personal trust administration services, estate
settlement, income tax services, custodial services and other financial planning
services. Since its inception in 1972, trust assets (book value) have increased
to more than $1 billion.
3
The Corporation does not make its Annual Report on Form 10-K, Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K, and amendments to such reports,
available on its website at www.pgbank.com.
Employees
As of December 31, 2002, the Corporation employed 205 full-time equivalent
persons. Management considers relations with employees to be satisfactory.
Principal Market Areas
The Bank's principal market for its deposit gathering activities includes
Somerset, Morris and Hunterdon Counties. The area is composed of upper-income
single family homes, moderate income properties, some low-income housing and
several large corporate campuses. There are numerous small retail businesses in
each of the towns as well as offices for various professionals, i.e. attorneys,
architects, interior decorators, physicians, etc. A portion of the market area
is bisected by Interstate Highways 287 and 78 where numerous corporate offices
have relocated over the past 25 years.
The Bank has expanded its service areas from one office in 1968 to the present
sixteen (16) full-service banking locations and one (1) mini-branch location by
steadily opening new branches. All of the communities that the Bank serves are
demographically similar and contiguous to the main office.
Competition
The market for banking and bank-related services is highly competitive. The
Corporation and its subsidiary compete with other providers of financial
services such as other bank holding companies, commercial and savings banks,
savings and loan associations, credit unions, money market and mutual funds,
mortgage companies, and a growing list of other local, regional and national
institutions which offer financial services. Mergers between financial
institutions within New Jersey and in neighboring states have added competitive
pressure. The Corporation and its subsidiary compete by offering quality
products and convenient services at competitive prices. In order to maintain and
enhance its competitive position, the Corporation regularly reviews its
products, locations and new branching prospects.
Governmental Policies and Legislation
The banking industry is highly regulated. Statutory and regulatory controls
increase a bank holding company's cost of doing business and limit the options
of its management to deploy assets and maximize income. Proposals to change the
laws and regulations governing the operations and taxation of banks, bank
holding companies and other financial institutions are frequently made in
Congress, in state legislatures and before various bank regulatory agencies. The
likelihood of any major changes and the impact such changes might have on the
Corporation or the Bank is impossible to predict. The following discussion is
not intended to be a complete list of all the activities regulated by the
banking laws or of the impact of such laws and regulations on the Bank. It is
intended only to briefly summarize some material provisions.
Capital Requirements
The Federal Reserve Board has adopted risk-based capital guidelines for banks
and bank holding companies. The minimum guideline for the ratio of total capital
to risk-weighted assets is 8%. At least half of the total capital is to be
comprised of common stock, retained earnings, minority interests in the equity
accounts of consolidated subsidiaries, noncumulative perpetual preferred stock
and a limited amount of qualifying cumulative perpetual preferred stock, less
goodwill and certain other intangibles ("Tier 1 Capital"). The remainder may
consist of other preferred stock, certain other instruments and a portion of the
loan loss allowance. At December 31, 2002, the Corporation's Tier 1 Capital and
Total Capital ratios were 19.51% and 20.81%, respectively.
In addition, the Federal Reserve Board has established minimum leverage ratio
guidelines for banks and bank holding companies. These guidelines provide for a
minimum ratio of Tier 1 Capital to average total assets of 3% for banks that
4
meet certain specified criteria, including having the highest regulatory rating.
All other banks and bank holding companies generally are required to maintain a
leverage ratio of at least 3% plus an additional cushion of 100 to 200 basis
points. The Corporation's leverage ratio at December 31, 2002 was 9.19%.
FDICIA
Pursuant to the Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), each federal banking agency has promulgated regulations, specifying
the levels at which a financial institution would be considered "well
capitalized," "adequately capitalized," "undercapitalized," "significantly
undercapitalized," and "critically undercapitalized," and to take certain
mandatory and discretionary supervisory actions based on the capital level of
the institution. The regulations implementing these provisions of FDICIA provide
that a bank is defined to be "well capitalized" if it maintains a leverage ratio
of at least 5%, a risk-adjusted Tier 1 capital ratio of at least 6% and a
risk-adjusted total capital ratio of at least 10% and is not otherwise in a
"troubled condition" as specified by its appropriate federal regulatory agency.
A bank is defined to be "adequately capitalized" if it meets other minimum
capital requirements. In addition, a depository institution will be considered
"undercapitalized" if it fails to meet any minimum required measure,
"significantly undercapitalized" if it is significantly below such measure and
"critically undercapitalized" if it fails to maintain a level of tangible equity
equal to not less than 2% of total assets. A depository institution may be
deemed to be in a capitalization category that is lower than is indicated by its
actual capital position if it receives an unsatisfactory examination rating.
Insurance Funds Legislation
The Corporation's wholly-owned subsidiary, the Peapack-Gladstone Bank, is a
member of the Bank Insurance Fund ("BIF") of the FDIC. The FDIC also maintains
another insurance fund, the Savings Association Insurance Fund ("SAIF"), which
primarily covers savings and loan association deposits but also covers deposits
that are acquired by a BIF-insured institution from a savings and loan
association.
Restrictions on the Payment of Dividends
The holders of the Corporation's common stock are entitled to receive dividends,
when, as and if declared by the Board of Directors of the Corporation out of
funds legally available. The only statutory limitation is that such dividends
may not be paid when the Corporation is insolvent. Since the principal source of
income for the Corporation will be dividends on Bank common stock paid to the
Corporation by the Bank, the Corporation's ability to pay dividends to its
shareholders will depend on whether the Bank pays dividends to it. As a
practical matter, restrictions on the ability of the Bank to pay dividends act
as restrictions on the amount of funds available for the payment of dividends by
the Corporation. As a New Jersey chartered commercial bank, the Bank is subject
to the restrictions on the payment of dividends contained in the New Jersey
Banking Act of 1948, as amended (the "Banking Act"). Under the Banking Act, the
Bank may pay dividends only out of retained earnings, and out of surplus to the
extent that surplus exceeds 50% of stated capital. Under the Financial
Institutions Supervisory Act, the FDIC has the authority to prohibit a
state-chartered bank from engaging in conduct that, in the FDIC's opinion,
constitutes an unsafe or unsound banking practice. Under certain circumstances,
the FDIC could claim that the payment of a dividend or other distribution by the
Bank to the Corporation constitutes an unsafe or unsound practice. The
Corporation is also subject to FRB policies, which may, in certain
circumstances, limit its ability to pay dividends. The FRB policies require,
among other things, that a bank holding company maintain a minimum capital base.
The FRB would most likely seek to prohibit any dividend payment that would
reduce a holding company's capital below these minimum amounts.
Holding Company Supervision
The Corporation is a bank holding company within the meaning of the Holding
Company Act. As a bank holding company, the Corporation is supervised by the FRB
and is required to file reports with the FRB and provide such additional
information as the FRB may require.
5
The Holding Company Act prohibits the Corporation, with certain exceptions, from
acquiring direct or indirect ownership or control of more than five percent of
the voting shares of any company which is not a bank and from engaging in any
business other than that of banking, managing and controlling banks or
furnishing services to subsidiary banks, except that it may, upon application,
engage in, and may own shares of companies engaged in, certain businesses found
by the FRB to be so closely related to banking "as to be a proper incident
thereto." The Holding Company Act requires prior approval by the FRB of the
acquisition by the Corporation of more than five percent of the voting stock of
any additional bank. Satisfactory capital ratios, Community Reinvestment Act
ratings and anti-money laundering policies are generally prerequisites to
obtaining federal regulatory approval to make acquisitions. The policy of the
FRB provides that a bank holding company is expected to act as a source of
financial strength to its subsidiary bank and to commit resources to support the
subsidiary bank in circumstances in which it might not do so absent that policy.
Acquisitions through the Bank require the approval of the FDIC and the New
Jersey Department of Banking and Insurance ("NJDOBI").
Recent Legislation
The Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley Act"), which became law on July
30, 2002, added new legal requirements for public companies affecting corporate
governance, accounting and corporate reporting.
The Sarbanes-Oxley Act provides for, among other things:
o a prohibition on personal loans made or arranged by the issuer to its
directors and executive officers (except for loans made by a bank subject
to Regulation O);
o independence requirements for audit committee members;
o independence requirements for company auditors;
o certification of financial statements and Forms 10-K and 10-Q reports by
the chief executive officer and the chief financial officer;
o the forfeiture of bonuses or other incentive-based compensation and
profits from the sale of an issuer's securities by directors and senior
officers in the twelve month period following initial publication of any
financial statements that later require restatement due to corporate
misconduct;
o disclosure of off-balance sheet transactions;
o two-business day filing requirements for insiders filing Form 4s;
o disclosure of a code of ethics for financial officers and filing a Form
8-K for a change or waiver of such code;
o "real time" filing of periodic reports;
o posting of certain SEC filings and other information on the company
website;
o the reporting of securities violations "up the ladder" by both in-house
and outside attorneys;
o restrictions on the use of non-GAAP financial measures;
o the formation of a public accounting oversight board; and
o various increased criminal penalties for violations of securities laws.
The Sarbanes-Oxley Act contains provisions, which became effective upon
enactment on July 30, 2002 and provisions, which will become effective from
within 30 days to one year from enactment. The SEC has been delegated the task
of enacting rules to implement various provisions. In addition, each of the
national stock exchanges has proposed new corporate governance rules, including
rules strengthening director independence requirements for boards, the adoption
of corporate governance codes and charters for the nominating, corporate
governance and audit committees.
Item 2. DESCRIPTION OF PROPERTY
The Corporation owns six branches and leases 11 branches. The Corporation also
owns two properties adjacent to the Main Office in Peapack-Gladstone, a future
branch site in Tewksbury Township, and leases an administrative and operations
office building in Peapack-Gladstone.
Item 3. LEGAL PROCEEDINGS
6
There is no currently pending litigation against the Corporation or its
subsidiaries, which assert claims that if adversely decided, would have a
material adverse effect on the Corporation.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
7
Item 4A. EXECUTIVE OFFICERS OF THE REGISTRANT WHO ARE NOT DIRECTORS
Name Age Executive Officer Since Office
- ---------------------------------------------------------------------------------------------------------------------------------
Arthur F. Birmingham 51 1996 Executive Vice President and Chief Financial Officer
Garrett P. Bromley 58 1997 Executive Vice President and Chief Credit Officer
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Common Stock of Peapack-Gladstone Financial Corporation is traded on the
American Stock Exchange under the symbol of PGC since November 1, 2000. The
following table sets forth, for the periods indicated, the reported high and low
sale prices on known trades and cash dividends declared per share by the
Corporation.
DIVIDEND
2002 HIGH LOW PER SHARE
- ---- ---- --- ---------
1st QUARTER $25.00 $18.13 $0.075
2nd QUARTER 31.50 24.75 0.075
3rd QUARTER 32.50 28.83 0.090
4th QUARTER 37.46 29.75 0.090
DIVIDEND
2001 HIGH LOW PER SHARE
- ---- ---- --- ---------
1st QUARTER $21.14 $17.73 $0.070
2nd QUARTER 18.18 16.14 0.070
3rd QUARTER 19.30 16.84 0.075
4th QUARTER 19.63 18.25 0.075
Future dividends payable by the Corporation will be determined by the Board of
Directors after consideration of earnings and financial condition of the
Corporation, need for capital and such other matters as the Board of Directors
deems appropriate. The payment of dividends is subject to certain restrictions,
see Part I, Item 1, "Description of Business - Restrictions on the Payment of
Dividends."
On December 31, 2002, the last reported sale price of the Common Stock was
$34.25. Also, on February 28, 2003, there were approximately 797 shareholders of
record.
Item 6. SELECTED CONSOLIDATED FINANCIAL DATA
The information set forth in the 2002 Annual Report under the heading "Selected
Consolidated Financial Data" is incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The information set forth in the 2002 Annual Report under the heading
"Management's Discussion and Analysis" is incorporated herein by reference.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
8
The information set forth in the 2002 Annual Report under the heading "Market
Risk Sensitive Instruments" is incorporated herein by reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements set forth in the 2002 Annual Report,
together with the report thereon by KPMG LLP and the Notes to the Consolidated
Financial Statements, are incorporated herein by reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information which will be set forth under the captions "Director
Information" and "Section 16(a) Beneficial Ownership Reporting Compliance" in
the 2003 Proxy Statement is incorporated herein by reference. Certain
information on Executive Officers of the registrant is included in Part I, Item
4A of this report, which is also incorporated herein by reference.
Item 11. EXECUTIVE COMPENSATION
Information with respect to executive compensation contained in the 2003 Proxy
Statement set forth under the caption "Executive Compensation" is incorporated
herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows information for all equity compensation plans:
NUMBER OF SECURITIES
REMAINING AVAILABLE
FOR FUTURE ISSUANCE
NUMBER OF SECURITIES UNDER EQUITY
TO BE ISSUED UPON WEIGHTED-AVERAGE COMPENSATION PLANS
EXERCISE OF EXERCISE PRICE OF (EXCLUDING SECURITIES
PLAN CATEGORY OUTSTANDING OPTIONS OUTSTANDING OPTIONS REFLECTED IN COLUMN (A)
- -------------------------------------------------------------------------------------------------------------------------------
EQUITY
COMPENSATION
PLANS APPROVED
BY SECURITY
HOLDERS 462,319 $15.68 339,144
--------------------------------------------------------------------------------------------------
EQUITY
COMPENSATION
PLANS NOT
APPROVED BY
SECURITY HOLDERS N/A N/A N/A
--------------------------------------------------------------------------------------------------
TOTAL 462,319 $15.68 339,144
==================================================================================================
Information with respect to beneficial ownership of persons known to the
Corporation to own beneficially more than five percent of the outstanding common
stock contained in the 2003 Proxy Statement set forth under the caption
"Beneficial Ownership of Common Stock" is incorporated herein by reference.
9
Information with respect to the security ownership of management contained in
the 2003 Proxy Statement set forth under the caption "Beneficial Ownership of
Common Stock" is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information with respect to certain relationships and related transactions
contained in the 2003 Proxy Statement set forth under the caption "Certain
Relationships and Related Transactions" is incorporated herein by reference.
PART IV
Item 14. CONTROLS AND PROCEDURES
Within the 90 days prior to the date of this report, the Corporation carried out
an evaluation, under the supervision and with the participation of the
Corporation's management, including the Corporation's Chairman and Chief
Executive Officer and the Corporation's Chief Financial Officer, of the
effectiveness of the design and operation of the Corporation's disclosure
controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon the
evaluation, they concluded that the Corporation's disclosure controls and
procedures are effective in timely alerting them to material information
relating to the Corporation (including its consolidated subsidiaries) required
to be included in this report. There have been no significant changes in the
Corporation's internal controls or in other factors that could significantly
affect internal controls subsequent to the date of the evaluation.
The Corporation's management, including the CEO and CFO, does not expect that
our disclosure controls and procedures or our internal controls will prevent all
error and all fraud. A control system, no matter how well conceived and
operated, provides reasonable, not absolute, assurance that the objectives of
the control system are met. The design of a control system reflects resource
constraints; the benefits of controls must be considered relative to their
costs. Because there are inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the Corporation have been or will be
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty and that breakdowns occur because of simple error
or mistake. Controls can be circumvented by the individual acts of some persons,
by collusion of two or more people, or by management override of the controls.
The design of any system of controls is based in part upon certain assumptions
about the likelihood of future events. There can be no assurance that any design
will succeed in achieving its stated goals under all future conditions; over
time, control may become inadequate because of changes in conditions or
deterioration in the degree of compliance with the policies or procedures.
Because of the inherent limitations in a cost-effective control system,
misstatements due to error or fraud may occur and not be detected.
Item 15. EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS ON FORM 8-K
(a) Financial Statements and Schedules:
Those portions of the 2002 Annual Report attached hereto as Exhibit 13
contain the financial statements incorporated herein by reference.
All financial statement schedules are omitted because they are either
inapplicable or not required, or because the required information is
included in the Consolidated Financial Statements or notes thereto
contained in the 2002 Annual Report.
(10) Exhibits
(3) Articles of Incorporation and By-Laws:
A. Certificate of Incorporation dated August 14, 1997 is
incorporated by reference to the Registrant's Form 10- K Annual
Report for the year ended December 31, 1997.
10
B. By-Laws of the Registrant adopted as of August 14, 1997 are
incorporated by reference to the Registrant's Form 10-K Annual
Report for the year ended December 31, 1997.
11
(10) Material Contracts:
A. "Change in Control Agreements" dated as of January 1, 1998 by and
among the Corporation, the Bank and Frank A. Kissel, Robert M.
Rogers, Craig C. Spengeman and Arthur F. Birmingham are incorporated
by reference to Registrant's Form 10-K Annual Report for the year
ended December 31, 1997.
B. Peapack-Gladstone Financial Corporation 1998 Stock Option Plan
and 1998 Stock Option Plan for Outside Directors are incorporated by
reference to Registrant's Registration Statement on Form S-8 dated
May 19, 1998.
C. "Change in Control Agreement" dated April 3, 1998 by and among
the Corporation, the Bank and Garrett P. Bromley is incorporated by
reference to Registrant's Form 10-K Annual Report for the year ended
December 31, 1998.
D. Agreement and Plan of Merger dated August 26, 1999 between
Peapack-Gladstone and Chatham Savings, FSB is incorporated herein by
reference to Peapack-Gladstone's Report on Form 8-K filed with the
Commission on September 7, 1999.
E. Peapack-Gladstone Financial Corporation 2002 Long-Term Stock
Incentive Plan and 2002 Stock Option Plan for Outside Directors are
incorporated by reference to Registrant's Registration Statement on
Form S-8 dated April 25, 2002.
F. "Employment Agreements" dated as of May 13, 2002 by and among the
Corporation, the Bank and Frank A. Kissel, Craig C. Spengeman,
Robert M. Rogers and Arthur F. Birmingham are incorporated by
reference to Registrant's Form 10-Q Quarterly Report for the quarter
ended June 30, 2002.
(13) Annual Report to Shareholders
(21) List of Subsidiaries:
(a) Subsidiaries of the Corporation:
Percentage of Voting
Jurisdiction Securities Owned by the
Name of Incorporation Parent
---------------------------------------------------------------------------------------
Peapack-Gladstone Bank New Jersey 100%
(b) Subsidiaries of the Bank:
Name
-----------------------------------
Peapack-Gladstone Investment
Company, Inc. New Jersey 100%
Peapack-Gladstone Financial
Services, Inc. (Inactive) New Jersey 100%
(c) Subsidiaries of Peapack-Gladstone Investment Company, Inc.:
Name
-----------------------------------
Peapack-Gladstone Mortgage
Group, Inc. New Jersey 100%
(23) Consents of Experts and Counsel:
12
Consent of KPMG LLP
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
(Registrant)
By FRANK A. KISSEL
-----------------------------------------------
Frank A. Kissel, Chairman of the Board
Dated March 13, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Signature Date
T. LEONARD HILL March 13, 2003
- ---------------------------------------------------------
T. Leonard Hill, Director
FRANK A. KISSEL March 13, 2003
- ---------------------------------------------------------
Frank A. Kissel, Chairman of the Board
ARTHUR F. BIRMINGHAM March 13, 2003
- ---------------------------------------------------------
Arthur F. Birmingham, Executive Vice President and CFO
(Principal Financial and Accounting Officer)
ANTHONY J. CONSI II March 13, 2003
- ---------------------------------------------------------
Anthony J. Consi II, Director
PAMELA HILL March 13, 2003
- ---------------------------------------------------------
Pamela Hill, Director
JOHN D. KISSEL March 13, 2003
- ---------------------------------------------------------
John D. Kissel, Director
JAMES R. LAMB March 13, 2003
- ---------------------------------------------------------
James R. Lamb, Director
GEORGE R. LAYTON March 13, 2003
- ---------------------------------------------------------
George R. Layton, Director
EDWARD A. MERTON March 13, 2003
- ---------------------------------------------------------
Edward A. Merton, Director
13
F. DUFFIELD MEYERCORD March 13, 2003
- ---------------------------------------------------------
F. Duffield Meyercord, Director
JOHN R. MULCAHY March 13, 2003
- ---------------------------------------------------------
John R. Mulcahy, Director
ROBERT M. ROGERS March 13, 2003
- ---------------------------------------------------------
Robert M. Rogers, President and COO
PHILIP W. SMITH III March 13, 2003
- ---------------------------------------------------------
Philip W. Smith III, Director
CRAIG C. SPENGEMAN March 13, 2003
- ---------------------------------------------------------
Craig C. Spengeman, President, PGB Trust and Investments
JACK D. STINE March 13, 2003
- ---------------------------------------------------------
Jack D. Stine, Director
14
INDEPENDENT ACCOUNTANTS' CONSENT
The Board of Directors
Peapack-Gladstone Financial Corporation:
We consent to incorporation by reference in the Registration Statements No.
333-51187 and No. 333-53001 on Form S-8 of Peapack-Gladstone Financial
Corporation of our report dated January 22, 2003, relating to the consolidated
statements of condition of Peapack-Gladstone Financial Corporation and
subsidiary as of December 31, 2002 and 2001, and the related consolidated
statements of income, changes in stockholders' equity, and cash flows for each
of the years in the three-year period ended December 31, 2002, which report is
incorporated by reference in the December 31, 2002 Annual Report on Form 10-K of
Peapack-Gladstone Financial Corporation.
KPMG LLP
Short Hills, New Jersey
March 26, 2003
15
CERTIFICATIONS
I, Frank A. Kissel, certify that:
1. I have reviewed this annual report on Form 10-K of Peapack-Gladstone
Financial Corporation;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: March 13, 2003
- -------------------------------------------------
Frank A. Kissel
Chairman of the Board and Chief Executive Officer
16
I, Arthur F. Birmingham, certify that:
1. I have reviewed this annual report on Form 10-K of Peapack-Gladstone
Financial Corporation;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: March 13, 2003
- ----------------------------------------------------
Arthur F. Birmingham
Executive Vice President and Chief Financial Officer
17