Exhibit 99.1

 

Contact:

Jeffrey J. Carfora, SEVP and CFO
Peapack-Gladstone Financial Corporation
T: 908-719-4308

 

PEAPACK-GLADSTONE FINANCIAL CORPORATION
REPORTS ANOTHER SOLID QUARTER OF GROWTH AND ACCOMPLISHMENT

 

Bedminster, N.J. – July 28, 2014 – Peapack-Gladstone Financial Corporation (NASDAQ Global Select Market:PGC) (the “Corporation” or the “Company”) recorded pretax income of $11.22 million, net income of $6.81 million and diluted earnings per share of $0.58 for the six months ended June 30, 2014. This compared to $7.99 million, $4.90 million and $0.55, respectively for the same six month period last year.

For the quarter ended June 30, 2014, the Corporation recorded pretax income of $6.32 million, net income of $3.78 million and diluted earnings per share of $0.32. This compared to $3.11 million, $2.01 million and $0.22, respectively, for the same quarter last year.

The following table summarizes earnings for the quarters ended:

		June				March 31,				June
		2014				2014				2013
(Dollars in millions, except EPS)		(1)(2)				(1)				(3)
Pretax income		$	6.32			$	4.90			$	3.11
Net income		$	3.78			$	3.03			$	2.01
Diluted EPS		$	0.32			$	0.26			$	0.22
Return on average assets			0.67	%			0.59	%			0.48	%
Return on average equity			8.44	%			7.01	%			6.41	%
Efficiency ratio			66.90	%			69.57	%			80.70	%
Total revenue		$	22.40			$	20.57			$	17.68

 

 

 

(1)	The June 2014 and March 2014 quarterly earnings per share calculations include all of the 2.47 million shares issued in the December 12, 2013 capital raise.
(2)	The June 2014 quarter included a $176 thousand gain on sale of residential first mortgage loans sold, as a component of balance sheet management.
(3)	The June 2013 quarter included a $930 thousand provision for loss on an REO property.

Doug Kennedy, President and CEO, said, “We continue to focus on executing our Strategic Plan – “Expanding Our Reach”, which focuses on the client experience and aggressively building and maintaining our private banking platform. Our growth and overall results reflect our continued success.” Q2 2014 highlights follow:

·

As reflected in the table above, earnings and performance ratios for the June 2014 quarter reflected improvement when compared to the March 2014 quarter and the June 2013 quarter.

·

Total loan balances at June 30, 2014 reached another record level for the Company - $1.87 billion. This level reflected growth when compared to $1.57 billion at December 31, 2013, and $1.25 billion one year ago at June 30, 2013. Year over year growth was 50 percent.

·

During the June 2014 quarter, Commercial & Industrial (C&I) loan originations totaled $63 million - a record quarter for the Company.

·

Total “customer” deposit balances (defined as deposits excluding brokered deposits) grew to a record $1.83 billion at June 30, 2014, from $1.63 billion at December 31, 2013 and $1.52 billion at June 30, 2013. Year over year growth totaled 21 percent.

·

Most notably on the deposit front, noninterest-bearing demand deposits grew to $411 million at the end of June 2014 from $356 million at year end 2013 and from $327 million one year ago at the end of June 2013. Year over year growth was 26 percent.

·

The Company’s net interest income for the June 2014 quarter reached another quarterly record level - $16.92 million. This level reflected improvement when compared to $15.57 million for the March 2014 quarter, and when compared to $12.45 million for the same quarter last year.

·

At June 30, 2014, the market value of assets under administration at the Private Wealth Management Division of Peapack-Gladstone Bank (“The Bank”) was $2.84 billion, also another record for the Company.

·

Fee income from the Private Wealth Management Division totaled $4.01 million for the June 2014 quarter growing from $3.75 million for the March 2014 quarter, and $3.63 million for the June 2013 quarter.

·

Total revenue (net interest income plus other income) of $22.40 million for the June 2014 quarter reflected improvement when compared to $20.57 million for the March 2014 quarter, and compared to $17.68 million for the June 2013 quarter.

·

Asset quality metrics demonstrated continued improvement at June 30, 2014 when compared to prior periods. For example, nonperforming assets stood at just $7.6 million or 0.32 percent of total assets as of June 30, 2014, compared to $8.6 million or 0.44 percent of total assets of December 31, 2013, and $11.4 million or 0.68 percent of total assets at June 30, 2013. Additionally, the Company’s nonperforming asset ratio compares favorably to the weighted average for all Mid-Atlantic banks of 0.90 percent (as of March 31, 2014).

·

The book value per share at June 30, 2014 of $15.48 reflected improvement when compared to $14.79 at December 31, 2013 and $13.93 at June 30, 2013.

·

Capital ratios remain strong as of June 30, 2014, even with asset growth over the six month period, as well as migration of lower risk weighted investment security cash flows into loans.

Net Interest Income / Net Interest Margin

Net interest income was $16.92 million for the second quarter of 2014, reflecting an increase of $1.35 million from the March 2014 quarter and an increase of $4.48 million from the same quarter last year. The net interest margin, on a fully tax-equivalent basis, was 3.14 percent for the June 2014 quarter compared to 3.18 percent for the March 2014 quarter and 3.22 percent for the June 2013 quarter.

Net interest income for the current 2014 quarter benefitted from loan growth during the first half of 2014 as well as the last half of 2013, principally multifamily and commercial mortgages.

Net interest margin for the June 2014 quarter declined slightly when compared to the March 2014 and June 2013 quarters due to the continued effect of low market yields, as well as competitive pressures in attracting new loans and deposits.

 

Loan Originations / Loans

Total loan originations were $551 million for the six months ended June 30, 2014. At June 30, 2014, loans totaled $1.87 billion as compared to $1.25 billion one year ago at June 30, 2013, resulting in an increase of $623 million or 50 percent. The multifamily and commercial mortgage loan portfolio more than doubled when comparing the June 2014 balance to the June 2013 balance. The increase was attributable to the addition of seasoned banking professionals over the course of 2013; a more concerted focus on the client service aspect of the lending process; more of a focus on New Jersey markets; and a focus on New York City multifamily markets beginning in mid-2013. The increase was also due to demand from borrowers looking to refinance multifamily and other commercial mortgages held by other institutions. Mr. Kennedy said, “As we have noted previously, our analysis showed that multifamily lending could be grown quickly, had strong credit metrics and that this lending provides solid risk-adjusted returns.” The multifamily and commercial mortgage pipeline continues to be strong as of June 30, 2014.

Mr. Kennedy also noted “As part of our Strategic Plan launched in March 2013, we introduced a comprehensive Commercial & Industrial (C&I) lending program. We closed $105 million of C&I loans in 2013, and an additional $79 million for the six months ended June 30, 2014. Our C&I pipeline also continues to be strong as of June 30, 2014.”

Deposits / Funding / Balance Sheet Management

The asset growth in the June 2014 quarter coupled with the reduction of $79 million of overnight wholesale borrowings was funded by a diversified source of funding alternatives. During the quarter, customer deposits grew $142 million - $60 million of which was noninterest-bearing demand deposits. Mr. Kennedy commented, “We will continue to place intense focus on providing high touch client service and growing our core deposit base. Our full array of treasury management products will help support both our core deposit growth and also our commercial lending opportunities. Our private bankers, commercial bankers, relationship bankers and our treasury management team have robust pipelines of client deposits.”

Investment securities cash flows of $23 million and capital growth of $6.5 million provided additional funding.

Further, during the June quarter, the following was accomplished as part of the Company’s overall balance sheet management strategy:

·

$67 million of longer duration, lower coupon residential first mortgage loans were sold, as part of the Company’s strategy to de-emphasize residential first mortgage lending, while benefitting its liquidity and interest rate risk positions. The sales also benefitted current earnings ($176 thousand gain recorded) and will benefit future earnings as the loans sold were / will be replaced by higher coupon, shorter duration loans.

·

A $61 million package of multifamily loan participations were executed. The $61 million represented a minority percentage of the principal balance of the package of loans. This benefitted the Company’s liquidity and interest rate risk positions, and also benefitted the diversification of credit risk. In all cases the Company retained the majority ownership of the loan, the client relationship and the servicing of the entire loan Mr. Kennedy said, “Given the Company’s ability to generate high quality multifamily loans, this participation strategy will likely be utilized on an ongoing basis. Such a strategy provides for an avenue to improve risk-adjusted returns through ongoing fees, coupled with risk diversification and mitigation.”

·

$80 million of longer term brokered certificates of deposit (“CDs”) were added principally to extend liabilities to benefit the Company’s interest rate risk position.

Excess cash on hand held as of June 30, 2014 resulted from the balance sheet management strategies noted above. This cash will be utilized to fund future growth.

Brokered interest-bearing demand deposits have been utilized in place of wholesale overnight borrowings as a more cost effective alternative. They stood at $138 million as of June 30, 2014, unchanged from the March 31, 2014 level. The Company does ensure ample available collateralized liquidity as a backup to these short term brokered deposits.

Wealth Management Business

In the June 2014 quarter, Peapack-Gladstone Bank’s Wealth Management business generated $4.01 million in fee income compared to $3.55 million for the December 2013 quarter, and compared to $3.63 million for the June 2013 quarter. The market value of the assets under administration (AUA) of the wealth management division was $2.84 billion at June 30, 2014, up from $2.52 billion at June 30, 2013. The growth in fee income and AUA was due to a combination of new business and market value improvement.

John P. Babcock, President of Private Wealth Management, noted, “Our strategy includes incorporating wealth into every conversation we have with all of our Company’s clients, across all business lines. As we noted last quarter, three seasoned wealth advisors joined the Company from larger wealth management companies. And, this past quarter a seasoned two person team – a Portfolio Manager and a Trust Officer - from a larger wealth management company joined our Princeton Private Banking Team. These individuals complement our existing high-caliber team. We look forward to continuing to build-out and grow our Wealth Management team, and expand the products, service, and advice we deliver to our clients.”

Other Noninterest Income

The June 2014 quarter included $112 thousand of income from the sale of newly originated residential mortgage loans, down from $391 thousand in the same 2013 quarter.

Mr. Kennedy commented, “As noted in prior quarters, the rise in mortgage rates in the middle of 2013 caused a decrease in residential mortgage loan originations and resultant mortgage banking income. Reduced levels of mortgage banking income was expected and planned for, and reduced levels of mortgage banking income are expected to be ongoing. Fortunately, mortgage banking income is not a significant portion of our revenue. Further, we have reduced our overhead expense associated with mortgage banking; we have improved our loan volume on the commercial front which has and we believe will improve net interest income in the future; and we have introduced treasury management services/products, which we expect will contribute to noninterest income in the future.”

Securities gains were $79 thousand for the June 2014 quarter compared to $238 thousand for the June 2013 quarter. Sales of securities have been generally employed to benefit interest rate risk, prepayment risk, and/or liquidity risk. Given the short duration of the securities portfolio, sales have been employed much less often in recent periods.

Other income of $1.10 million for the June 2014 was $122 thousand higher than the June 2013 quarter. The current quarter included a slight increase in service charges and fees, as well as slight gains from dispositions of several REO properties.

Operating Expenses 

The Company’s total operating expenses were $14.93 million for the quarter ended June 30, 2014 compared to $14.08 million in the same 2013 quarter, reflecting a net increase of $851 thousand. Salary and benefits expense increased $1.15 million, due to strategic hiring in line with the Company’s Strategic Plan, including private bankers, relationship bankers, commercial lenders, wealth advisors, risk management professionals and various support staff. Additionally, normal salary increases and increased bonus/incentive accruals associated with the Company’s growth, contributed to the increase. Also, when comparing the June 2014 expense levels to those in June 2013, 2014 included increased occupancy costs associated with the new Princeton and Teaneck Private Banking offices, as well as various professional and other fees associated with training and consulting, some of which was associated with the Strategic Plan. These increases were partially offset by a $630 thousand decline in the provision for REO losses when comparing the June 2014 quarter to the June 2013 quarter.

Mr. Kennedy noted, “As I have said many times in the past, we expected higher operating expenses as we execute our Strategic Plan and we expect that the trend of higher operating expenses will continue in 2014 as we bring on high caliber revenue producers, and continue to invest in our infrastructure in line with our Strategic Plan. Further, we generally expect revenue and profitability related to new personnel to lag those expenses by several quarters. It is important to note, however, that we have seen an improvement in quarterly revenue since we launched our Plan, particularly in the recent quarters, as our Plan began to gain momentum. I am also pleased to have seen our Efficiency Ratio decline to 66.9 percent in the current quarter.” Mr. Kennedy went on to say, “Operating expenses remain in line with our Strategic Plan.”

Provision for Loan Losses / Asset Quality

For the quarter ended June 2014, the Company’s provision for loan losses was $1.15 million, $175 thousand less than the March 2014 provision, and up $650 thousand when compared to the $500 thousand provision for the June 2013 quarter. Charge-offs, net of recoveries, for the June 2014 quarter were $533 thousand.

At June 30, 2014 the allowance for loan losses was 263 percent of nonperforming loans and 0.92 percent of total loans.

Nonperforming assets totaled $7.6 million or just 0.32 percent of total assets at June 30, 2014 compared to $11.4 million or 0.68 percent of assets at June 30, 2013.

Capital / Dividends

Capital in the June 2014 quarter was benefitted by net income and by nearly $2 million of voluntary share purchases in the Dividend Reinvestment Plan.

During the June 2014 quarter, the Company continued to employ the capital raised in December 2013 by continuing to grow loans. At June 30, 2014, the Company’s leverage ratio, tier 1 and total risk based capital ratios were 8.01 percent, 13.05 percent and 14.30 percent, respectively. The Company’s ratios are all above the levels required to be considered well capitalized under regulatory guidelines applicable to banks.

As previously announced, on July 17, 2014, the Board of Directors declared a regular cash dividend of $0.05 per share payable on August 14, 2014 to shareholders of record on July 31, 2014.

ABOUT THE COMPANY

Peapack-Gladstone Financial Corporation is a New Jersey bank holding company with total assets of $2.40 billion as of June 30, 2014. Founded in 1921, Peapack-Gladstone Bank is a commercial bank that provides innovative private banking services to businesses, non-profits and consumers which help them to establish, maintain and expand their legacy. Through its private banking locations in Bedminster, Morristown, Princeton and Teaneck, its wealth management division, and its branch network and online platforms, Peapack-Gladstone Bank offers an unparalleled commitment to client service.

 

 

 

The foregoing contains 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

·

inability to successfully grow our business and implement our strategic plan, including an inability to generate revenues to offset the increased personnel and other costs related to the strategic plan;

·

inability to manage our growth;

·

a continued or unexpected decline in the economy, in particular in our New Jersey and New York market areas;

·

declines in our net interest margin caused by the low interest rate and highly competitive market;

·

declines in value in our investment portfolio;

·

higher than expected increases in our allowance for loan losses;

·

higher than expected increases in loan losses or in the level of nonperforming loans;

·

unexpected changes in interest rates;

·

a continued or unexpected 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) subject us to additional regulatory oversight which may result in increased compliance costs;

·

successful cyber attacks against our IT infrastructure and that of our IT providers;

·

higher than expected FDIC insurance premiums;

·

lack of liquidity to fund our various cash obligations;

·

reduction in our lower-cost funding sources;

·

our inability to adapt to technological changes;

·

claims and litigation pertaining to fiduciary responsibility, environmental laws and other matters; 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, 2013. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Corporation’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.

(Tables to follow)

 

PEAPACK-GLADSTONE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in Thousands)
(Unaudited)

 

		As of
		June 30,				March 31,				Dec 31,				Sept 30,				June 30,
		2014				2014				2013				2013				2013
ASSETS
Cash and due from banks		$	5,757			$	6,373			$	6,534			$	5,886			$	5,978
Federal funds sold			101				101				101				101				101
Interest-earning deposits			209,768				95,059				28,512				33,528				60,783
Total cash and cash equivalents			215,626				101,533				35,147				39,515				66,862
Securities available for sale			225,270				248,070				268,447				273,952				270,334
FHLB and FRB Stock, at cost			9,946				12,765				10,032				7,707				4,729
Loans held for sale, at fair value			2.650				1,769				2,001				724				4,684
Loans held for sale, at lower of cost
or fair value			—				51,184				—				—				—
Residential mortgage			469,648				481,850				532,911				527,927				532,356
Commercial mortgage			1,166,747				1,063,470				831,997				680,762				534,371
Commercial loans			158,103				143,389				131,795				110,843				106,598
Construction loans			6,033				6,075				5,893				8,390				9,179
Consumer loans			23,414				20,945				21,852				19,932				19,552
Home equity lines of credit			48,740				45,820				47,905				47,020				47,583
Other loans			2,255				1,851				1,848				2,075				2,545
Total loans			1,874,940				1,763,400				1,574,201				1,396,949				1,252,184
Less: Allowances for loan losses			17,204				16,587				15,373				14,056				13,438
Net loans			1,857,736				1,746,813				1,558,828				1,382,893				1,238,746
Premises and equipment			31,095				31,087				28,990				29,022				29,021
Other real estate owned			1,036				2,062				1,941				2,759				3,347
Accrued interest receivable			4,858				4,788				4,086				4,017				3,972
Bank owned life insurance			32,258				32,065				31,882				31,691				31,490
Deferred tax assets, net			9,433				9,366				9,762				7,951				8,608
Other assets			11,063				9,983				15,832				17,473				17,797
TOTAL ASSETS		$	2,400,971			$	2,251,485			$	1,966,948			$	1,797,704			$	1,679,590
LIABILITIES
Deposits:
Noninterest-bearing demand deposits		$	410,609			$	350,987			$	356,119			$	345,736			$	326,916
Interest-bearing demand deposits			474,945				407,127				378,340				338,626				352,196
Savings			116,172				119,750				115,785				115,571				115,823
Money market accounts			673,375				660,691				630,173				611,498				559,439
Certificates of deposit – Retail			157,067				151,730				151,833				156,132				163,552
Subtotal deposits			1,832,168				1,690,285				1,632,250				1,567,563				1,517,926
IB Demand – Brokered			138,000				138,011				10,000				—				—
Certificates of deposit – Brokered			145,000				65,000				5,000				5,000				5,000
Total deposits			2,115,168				1,893,296				1,647,250				1,572,563				1,522,926
Overnight borrowings			—				79,400				54,900				30,361				—
Federal home loan bank advances			83,692				83,692				74,692				47,692				12,000
Capital lease obligation			9,836				9,917				8,754				8,809				8,864
Other liabilities			9,942				9,308				10,695				11,861				11,687
TOTAL LIABILITIES			2,218,638				2,075,613				1,796,291				1,671,286				1,555,477
Shareholders’ equity			182,333				175,872				170,657				126,418				124,113
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY		$	2,400,971			$	2,251,485			$	1,966,948			$	1,797,704			$	1,679,590
Assets under administration at
Peapack-Gladstone Bank’s
Wealth Management Division
(market value, not included
above)		$	2,843,310			$	2,745,955			$	2,690,601			$	2,581,813			$	2,520,424

 

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

 

		As of
		June 30,				March 31,				Dec 31,				Sept 30,				June 30,
		2014				2014				2013				2013				2013
Asset Quality:
Loans past due over 90 days
and still accruing		$	—			$	—			$	—			$	—			$	—
Nonaccrual loans			6,536				7,473				6,630				6,891				8,075
Other real estate owned			1,036				2,062				1,941				2,759				3,347
Total nonperforming assets		$	7,572			$	9,535			$	8,571			$	9,650			$	11,422
Nonperforming loans to
total loans			0.35	%			0.42	%			0.42	%			0.49	%			0.64	%
Nonperforming assets to
total assets			0.32	%			0.42	%			0.44	%			0.54	%			0.68	%
Accruing TDR’s (A)		$	12,730			$	12,340			$	11,114			$	6,133			$	6,131
Loans past due 30 through 89
days and still accruing		$	1,536			$	5,027			$	2,953			$	2,039			$	1,544
Classified loans		$	34,929			$	35,075			$	33,828			$	32,430			$	32,123
Impaired loans		$	19,813			$	19,814			$	17,744			$	16,794			$	17,977
Allowance for loan losses:
Beginning of period		$	16,587			$	15,373			$	14,056			$	13,438			$	13,279
Provision for loan losses			1,150				1,325				1,325				750				500
Charge-offs, net			(533	)			(111	)			(8	)			(132	)			(341	)
End of period			17,204				16,587				15,373				14,056				13,438
ALLL to nonperforming loans			263.22	%			221.96	%			231.87	%			203.98	%			166.41	%
ALLL to total loans			0.92	%			0.94	%			0.98	%			1.01	%			1.07	%
Capital Adequacy
Tier 1 leverage			8.01	%			8.48	%			9.00	%			7.20	%			7.39	%
Tier I capital to risk weighted assets			13.05	%			13.09	%			14.07	%			11.30	%			11.84	%
Tier I & II capital to
risk-weighted assets			14.30	%			14.34	%			15.33	%			12.55	%			13.09	%
Common equity to total assets			7.59	%			7.81	%			8.68	%			7.03	%			7.39	%
(End of period)
Book value per share (B)		$	15.48			$	15.08			$	14.79			$	14.12			$	13.93

 

(A)

Does not include $2.5 million at June 30, 2014, $3.0 million at March 31, 2014, $2.9 million at December 31, 2013, $3.3 million at September 30, 2013, and $3.3 million at June 30, 2013 of TDR’s included in nonaccrual loans.

(B)

Tangible book value per share was $15.43 at June 30, 2014, $15.03 at March 31, 2014, $14.75 at December 31, 2013, $14.02 at September 30, 2013, and $13.84 at June 30, 2013. Tangible book value per share is different than book value per share because it excludes intangible assets.

 

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

  

		For the Quarters Ended
		June 30,				March 31,				Dec 31,				Sept 30,				June 30,
		2014				2014				2013				2013				2013
Residential loans retained		$	17,245			$	11,653			$	20,135			$	31,517			$	37,352
Residential loans sold			7,344				7,011				11,743				13,516				26,651
Total residential loans			24,589				18,664				31,878				45,033				64,003
CRE			20,175				15,841				11,972				20,357				17,080
Multifamily			149,937				225,143				152,456				143,727				70,645
Commercial loans (includes
Community banking)			62,668	(A)			15,957				39,534				40,654				8,788
Total commercial loans			232,780				256,941				203,962				204,738				96,513
Installment loans			5,184				1,877				3,081				2,489				1,198
Home equity lines of credit			6,709	(A)			4,668				3,746				3,982				2,619
Total loan originations		$	269,262			$	282,150			$	242,667			$	256,242			$	164,333

 

 

		For the Six Months Ended
		June 30,				June 30,
		2014				2013
Residential loans retained		$	28,898			$	68,782
Residential loans sold			14,355				52,053
Total residential loans			43,253				120,835
CRE			36,016				26,570
Multifamily			375,080				98,525
Commercial loans (includes
Community banking)			78,625	(A)			24,746
Total commercial loans			489,721				149,841
Installment loans			7,061				2,426
Home equity lines of credit			11,377	(A)			7,071
Total loan originations		$	551,412			$	280,173

 

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

 

PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands, except share data)
(Unaudited)

 

		For the Three Months Ended
		June 30,				March 31,				Dec 31,				Sept 30,				June 30,
		2014				2014				2013				2013				2013
Income Statement Data:
Interest income		$	18,630			$	16,949			$	15,738			$	14,423			$	13,460
Interest expense			1,707				1,378				1,210				1,050				1,012
Net interest income			16,923				15,571				14,528				13,373				12,448
Provision for loan losses			1,150				1,325				1,325				750				500
Net interest income after
provision for loan losses			15,773				14,246				13,203				12,623				11,948
Wealth management fee income			4,005				3,754				3,547				3,295				3,628
Gain on loans held for sale at fair value
(Mortgage banking)			112				112				171				277				391
Gain on loans held for sale at
lower of cost or fair value			176				—				—				—				—
Other income			1,101				1,031				1,130				1,022				979
Securities gains, net			79				98				125				188				238
Total other income			5,473				4,995				4,973				4,782				5,236
Salaries and employee benefits			9,089				8,848				8,308				8,927				7,935
Premises and equipment			2,334				2,438				2,947				2,325				2,338
FDIC insurance expense			303				275				286				275				280
Other expenses			3,204				2,778				3,105				2,638				3,526
Total operating expenses			14,930				14,339				14,646				14,165				14,079
Income before income taxes			6,316				4,902				3,530				3,240				3,105
Income tax expense			2,533				1,871				1,135				1,276				1,096
Net income		$	3,783			$	3,031			$	2,395			$	1,964			$	2,009
Total revenue		$	22,396			$	20,566			$	19,501			$	18,155			$	17,684
Per Common Share Data:
Earnings per share (basic)		$	0.32			$	0.26			$	0.25			$	0.22			$	0.23
Earnings per share (diluted)			0.32				0.26				0.25				0.22				0.22
Weighted average number of
Common shares outstanding:
Basic			11,721,256				11,606,933				9,638,913				8,950,931				8,909,170
Diluted			11,844,338				11,710,940				9,746,550				9,013,419				8,955,384
Performance Ratios:
Return on average assets
annualized			0.67	%			0.59	%			0.51	%			0.45	%			0.48	%
Return on average common
equity annualized			8.44	%			7.01	%			7.42	%			6.28	%			6.41	%
Net interest margin
(Taxable equivalent basis)			3.14	%			3.18	%			3.26	%			3.28	%			3.22	%
Efficiency ratio (A)			66.90	%			69.57	%			75.59	%			78.84	%			80.70	%
Operating expenses / average
assets annualized			2.65	%			2.78	%			3.10	%			3.26	%			3.39	%

 

(A)	Calculated as (total operating expenses) as a percentage of (net interest income plus noninterest income less gain on securities).

 

PEAPACK-GLADSTONE FINANCIAL CORPORATION

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

 

		For the
		Six Months Ended
		June 30,
Income Statement Data:		2014				2013
Interest income		$	35,579			$	26,892
Interest expense			3,085				2,017
Net interest income			32,494				24,875
Provision for loan losses			2,475				1,350
Net interest income after
provision for loan losses			30,019				23,525
Wealth management fee income			7,759				6,996
Gain on loans held for sale at fair value
(Mortgage banking)			224				861
Gain on loans held for sale at lower of
cost or fair value			176				522
Other income			2,132				1,934
Securities gains, net			177				527
Total other income			10,468				10,840
Salaries and employee benefits			17,937				15,014
Premises and equipment			4,772				4,642
FDIC insurance expense			578				560
Other expenses			5,982				6,156
Total operating expenses			29,269				26,372
Income before income taxes			11,218				7,993
Income tax expense			4,404				3,091
Net income		$	6,814			$	4,902
Total revenue  (See footnote (A) below)		$	42,962			$	35,715
Per Common Share Data:
Earnings per share (basic)		$	0.58			$	0.55
Earnings per share (diluted)			0.58				0.55
Weighted average number of
Common Shares outstanding
Basic			11,664,410				8,889,971
Diluted			11,813,686				8,942,267
Performance Ratios:
Return on average assets annualized			0.63	%			0.60	%
Return on average common equity annualized			7.74	%			7.89	%
Net interest margin  (Taxable equivalent basis)			3.16	%			3.25	%
Efficiency ratio (B)			68.41	%			74.95	%
Operating expenses / average assets annualized			2.72	%			3.20	%

 

(A)	Total revenue includes a $176 thousand gain (for 2014) and a $522 thousand gain (for 2013) from sale of loans held for sale at lower of cost or fair value.  Excluding these gains, total revenue was $42,786 (for 2014) and $35,193 (for 2013).
(B)	Calculated as (total operating expenses) as a percentage of (net interest income plus noninterest income less gain on securities).

 

 

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

THREE MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)

		June 30, 2014												June 30, 2013
		Average				Income/								Average				Income/
		Balance				Expense				Yield				Balance				Expense				Yield
ASSETS:
Interest-Earning Assets:
Investments:
Taxable (1)		$	189,254			$	977				2.06	%		$	220,954			$	1,085				1.96	%
Tax-exempt (1) (2)			57,847				312				2.16				50,479				322				2.55
Loans held for sale			1,026				15				5.89				2,512				50				8.12
Loans (2) (3):
Mortgages			496,232				4,203				3.39				535,533				4,714				3.52
Commercial mortgages			1,155,360				11,108				3.85				485,299				5,473				4.51
Commercial			143,988				1,443				4.01				101,790				1,181				4.64
Commercial construction			6,065				65				4.29				9,179				107				4.66
Installment			22,154				233				4.21				20,097				224				4.46
Home equity			47,489				382				3.22				46,745				373				3.19
Other			558				13				9.32				592				15				10.14
Total loans			1,871,846				17,447				3.73				1,199,235				12,087				4.03
Federal funds sold			101				—				0.10				101				—				0.10
Interest-earning deposits			51,177				21				0.17				92,319				66				0.29
Total interest-earning assets			2,171,251				18,772				3.46	%			1,565,600				13,610				3.48	%
Noninterest-Earning Assets:
Cash and due from banks			6,990												5,865
Allowance for loan losses			(17,310	)											(13,523	)
Premises and equipment			31,161												29,248
Other assets			58,926												71,862
Total noninterest-earning assets			79,767												93,452
Total assets		$	2,251,018											$	1,659,052
LIABILITIES:
Interest-Bearing deposits:
Checking		$	431,656			$	115				0.11	%		$	356,060			$	74				0.08	%
Money markets			657,216				374				0.23				551,150				239				0.17
Savings			116,946				15				0.05				114,028				15				0.05
Certificates of deposit - retail			154,245				369				0.96				166,931				471				1.13
Subtotal interest-bearing deposits			1,360,063				873				0.26				1,188,169				799				0.27
Interest-bearing demand - brokered			138,000				70				0.20				—				—				—
Certificates of deposit - brokered			100,934				264				1.05				5,000				15				1.20
Total interest-bearing deposits			1,598,997				1,207				0.30				1,193,169				814				0.27
Borrowings			93,152				382				1.64				12,025				92				3.06
Capital lease obligation			9,867				118				4.78				8,884				106				4.77
Total interest-bearing liabilities			1,702,016				1,707				0.40				1,214,078				1,012				0.33
Noninterest –bearing liabilities
Demand deposits			360,096												311,227
Accrued expenses and
other liabilities			9,606												8,298
Total noninterest-bearing liabilities			369,702												319,525
Shareholders’ equity			179,300												125,449
Total liabilities and
shareholders’ equity		$	2,251,018											$	1,659,052
Net interest income						$	17,065											$	12,598
Net interest spread											3.06	%											3.15	%
Net interest margin (4)											3.14	%											3.22	%

 

(1)	Average balances for available for sale securities are based on amortized cost.
(2)	Interest income is presented on a tax-equivalent basis using a 35 percent federal tax rate.
(3)	Loans are stated net of unearned income and include nonaccrual loans.
(4)	Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

 

 

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

THREE MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)

		June 30, 2014												March 31, 2014
		Average				Income/								Average				Income/
		Balance				Expense				Yield				Balance				Expense				Yield
ASSETS:
Interest-Earning Assets:
Investments:
Taxable (1)		$	189,254			$	977				2.06	%		$	207,649			$	1,061				2.04	%
Tax-exempt (1) (2)			57,847				312				2.16				60,217				337				2.24
Loans held for sale			1,026				15				5.89				1,324				10				3.04
Loans (2) (3):
Mortgages			496,232				4,203				3.39				533,377				4,553				3.41
Commercial mortgages			1,155,360				11,108				3.85				935,784				9,045				3.87
Commercial			143,988				1,443				4.01				132,549				1,402				4.23
Commercial construction			6,065				65				4.29				5,872				67				4.58
Installment			22,154				233				4.21				21,563				228				4.24
Home equity			47,489				382				3.22				46,832				373				3.18
Other			558				13				9.32				563				13				8.94
Total loans			1,871,846				17,447				3.73				1,676,540				15,681				3.74
Federal funds sold			101				—				0.10				101				—				0.10
Interest-earning deposits			51,177				21				0.17				31,652				12				0.15
Total interest-earning assets			2,171,251				18,772				3.46	%			1,977,483				17,101				3.46	%
Noninterest-Earning Assets:
Cash and due from banks			6,990												6,395
Allowance for loan losses			(17,310	)											(15,988	)
Premises and equipment			31,161												30,748
Other assets			58,926												61,009
Total noninterest-earning assets			79,767												82,164
Total assets		$	2,251,018											$	2,059,647
LIABILITIES:
Interest-Bearing deposits:
Checking		$	431,656			$	115				0.11	%			401,310			$	92				0.09	%
Money markets			657,216				374				0.23				653,624				333				0.20
Savings			116,946				15				0.05				116,518				15				0.05
Certificates of deposit - retail			154,245				369				0.96				149,458				355				0.95
Subtotal interest-bearing deposits			1,360,063				873				0.26				1,320,910				795				0.24
Interest-bearing demand - brokered			138,000				70				0.20				75,356				43				0.23
Certificates of deposit - brokered			100,934				264				1.05				13,711				31				0.90
Total interest-bearing deposits			1,598,997				1,207				0.30				1,409,977				869				0.25
Borrowings			93,152				382				1.64				115,585				390				1.35
Capital lease obligation			9,867				118				4.78				9,947				119				4.79
Total interest-bearing liabilities			1,702,016				1,707				0.40				1,535,509				1,378				0.36
Noninterest –bearing liabilities
Demand deposits			360,096												341,196
Accrued expenses and
other liabilities			9,606												9,999
Total noninterest-bearing liabilities			369,702												351,195
Shareholders’ equity			179,300												172,943
Total liabilities and
shareholders’ equity		$	2,251,018											$	2,059,647
Net interest income						$	17,065											$	15,723
Net interest spread											3.06	%											3.10	%
Net interest margin (4)											3.14	%											3.18	%

 

(1)	Average balances for available for sale securities are based on amortized cost.
(2)	Interest income is presented on a tax-equivalent basis using a 35 percent federal tax rate.
(3)	Loans are stated net of unearned income and include nonaccrual loans.
(4)	Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

 

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

SIX MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)

		June 30, 2014												June 30, 2013
		Average				Income/								Average				Income/
		Balance				Expense				Yield				Balance				Expense				Yield
ASSETS:
Interest-Earning Assets:
Investments:
Taxable (1)		$	198,401			$	2,038				2.05			$	234,721			$	2,362				2.01	%
Tax-exempt (1) (2)			59,025				649				2.20				50,116				646				2.58
Loans held for sale			1,174				25				4.29				9,661				246				5.10
Loans (2) (3):
Mortgages			514,702				8,756				3.40				528,602				9,454				3.58
Commercial mortgages			1,046,179				20,153				3.85				458,378				10,436				4.55
Commercial			138,300				2,845				4.11				106,614				2,488				4.67
Commercial construction			5,969				132				4.42				9,198				211				4.59
Installment			21,860				461				4.22				20,511				454				4.43
Home equity			47,162				755				3.20				47,388				752				3.17
Other			561				26				9.27				609				30				9.85
Total loans			1,774,733				33,128				3.73				1,171,300				23,825				4.07
Federal funds sold			101				—				0.10				101				—				0.10
Interest-earning deposits			41,468				33				0.16				85,006				114				0.27
Total interest-earning assets			2,074,902				35,873				3.46				1,550,905				27,193				3.51	%
Noninterest-Earning Assets:
Cash and due from banks			6,694												5,849
Allowance for loan losses			(16,653	)											(13,300	)
Premises and equipment			30,956												29,526
Other assets			59,961												73,475
Total noninterest-earning assets			80,958												95,550
Total assets		$	2,155,860											$	1,646,455
LIABILITIES:
Interest-Bearing deposits:
Checking		$	416,568			$	207				0.10			$	353,286			$	153				0.09	%
Money markets			655,430				707				0.22				552,003				454				0.16
Savings			116,733				30				0.05				112,354				28				0.05
Certificates of deposit - retail			151,864				724				0.95				169,228				956				1.13
Subtotal interest-bearing deposits			1,340,595				1,668				0.25				1,186,871				1,591				0.27
Interest-bearing demand - brokered			106,851				113				0.21				—				—				—
Certificates of deposit  - brokered			57,564				295				1.02				5,000				30				1.24
Total interest-bearing deposits			1,505,010				2,076				0.28				1,191,871				1,621				0.27
Borrowings			104,306				772				1.48				12,082				184				3.05
Capital lease obligation			9,907				237				4.78				8,910				212				4.76
Total interest-bearing liabilities			1,619,223				3,085				0.38				1,212,863				2,017				0.33
Noninterest –bearing liabilities
Demand deposits			350,698												301,087
Accrued expenses and
other liabilities			9,800												8,199
Total noninterest-bearing liabilities			360,498												309,286
Shareholders’ equity			176,139												124,306
Total liabilities and
shareholders’ equity		$	2,155,860											$	1,646,455
Net interest income						$	32,788											$	25,176
Net interest spread											3.08	%											3.18	%
Net interest margin (4)											3.16	%											3.25	%

 

(1)	Average balances for available for sale securities are based on amortized cost.
(2)	Interest income is presented on a tax-equivalent basis using a 35 percent federal tax rate.
(3)	Loans are stated net of unearned income and include nonaccrual loans.
(4)	Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.