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

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

The Company recorded total revenue of $53.1 million, net income of $8.6 million and diluted earnings per share (“EPS”) of $0.48 for the quarter ended March 31, 2024, compared to revenue of $62.0 million, net income of $18.4 million and diluted EPS of $1.01 for the quarter ended March 31, 2023.

The Company’s return on average assets was 0.54%, return on average equity was 5.94%, and return on average tangible equity was 6.45% for the quarter ended March 31, 2024.

The net interest margin declined to 2.20% for the quarter ended March 31, 2024, compared to 2.29% for the quarter ended December 31, 2023 and 2.88% for the quarter ended March 31, 2023.

During the first quarter of 2024, deposits grew $202.6 million to $5.48 billion, loans decreased $73.7 million to $5.36 billion and overnight borrowings were reduced by $284.3 million. The Company’s liquidity position remains stable as balance sheet liquidity, as a percentage of total assets, increased to 12.1% or $776.8 million. The Company also had $2.9 billion of external borrowing capacity available, which, when combined with on balance sheet liquidity, provides us with 303% coverage of our uninsured deposits.

Douglas L. Kennedy, President and CEO said, “The first quarter continued to present headwinds for our organization with margin compression and credit quality our primary areas of concern.  As we work through this challenging economic environment, we continue to thoroughly analyze our loan portfolio for areas of potential stress. We are fortunate to be able to rely on a consistent stream of fee revenue in this difficult interest rate environment led by Wealth Management fees and other noninterest income which represented 35% of total revenue in the first quarter of 2024."

Mr. Kennedy also noted, “Despite the economic challenges facing the financial services industry, we are moving forward with our expansion into New York City. We recently announced that we have successfully recruited and hired over 10 commercial private banking teams to work alongside the existing New York City teams hired during 2023. These new teams will be led by Andrew Corrado, who is a seasoned leader with more than 35 years of experience in this space. We believe that this ongoing strategic expansion will enhance our liquidity, enable us to diversify our balance sheet, improve profitability and provide favorable operating leverage in the years to come."

The following are select highlights for the period ended March 31, 2024:

Wealth Management:

  • Gross new business inflows for Q1 2024 totaled $236 million ($138 million managed).
  • AUM/AUA in our Wealth Management Division totaled $11.5 billion at March 31, 2024 compared to $10.9 billion at December 31, 2023, which represents an increase of 6% on a linked quarter basis.
  • Wealth Management fee income was $14.4 million in Q1 2024, which amounted to 27% of total revenue for the quarter.
     

Commercial Banking and Balance Sheet Management:

  • Total deposits grew by $202.6 million to $5.48 billion at March 31, 2024 compared to $5.27 billion at December 31, 2023.
  • Borrowings decreased $284.3 million to $119.5 million at March 31, 2024 from $403.8 million at December 31, 2023.
  • Total loans declined $73.7 million to $5.36 billion for March 31, 2024 from $5.44 billion at December 31, 2023.
  • Commercial and industrial lending (“C&I”) loan/lease balances represent 42% of the total loan portfolio at March 31, 2024.
  • Fee income on unused commercial lines of credit totaled $827,000 for Q1 2024.
  • The net interest margin ("NIM") was 2.20% in Q1 2024, a decrease from 2.29% at Q4 2023 and 2.88% at Q1 2023.
  • Noninterest-bearing demand deposits amounted to 17% of total deposits as of March 31, 2024.
  • Core deposits (which includes noninterest-bearing demand and interest-bearing demand, savings and money market accounts) totaled 88% of total deposits at March 31, 2024.

Capital Management:

  • Tangible book value per share remained relatively flat at $30.21 per share at March 31, 2024 compared to $30.31 at December 31, 2023.
  • During the first quarter, the Company repurchased 100,000 shares of Company stock at a cost of $2.4 million. For the full year 2023, the Company repurchased 455,341 shares at a cost of $12.5 million.
  • At March 31, 2024, the Tier 1 Leverage Ratio stood at 11.02% for Peapack-Gladstone Bank (the "Bank") and 9.36% for the Company. The Common Equity Tier 1 Ratio (to Risk-Weighted Assets) was 13.86% for the Bank and 11.76% for the Company at March 31, 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.

March 2024 Quarter Compared to Prior Year Quarter

    Three Months Ended       Three Months Ended              
    March 31,       March 31,     Increase/  
(Dollars in millions, except per share data)   2024       2023     (Decrease)  
Net interest income   $ 34.38       $ 43.98     $ (9.60 )     (22 )%
Wealth management fee income     14.41         13.76       0.65       5  
Capital markets activity     1.27         0.97       0.30       31  
Other income (a)     3.02         3.33       (0.31 )     (9 )
Total other income     18.70         18.06       0.64       4  
                           
Total Revenue     53.08         62.04       (8.96 )     (14 )%
                           
Operating expenses (b)     40.04         35.57       4.47       13  
Pretax income before provision for credit losses     13.04         26.47       (13.43 )     (51 )
Provision for credit losses     0.63         1.51       (0.88 )     (58 )
Pretax income     12.41         24.96       (12.55 )     (50 )
Income tax expense     3.78         6.60       (2.82 )     (43 )
Net income   $ 8.63       $ 18.36     $ (9.73 )     (53 )%
Diluted EPS   $ 0.48       $ 1.01     $ (0.53 )     (52 )%
                           
Return on average assets annualized     0.54 %       1.16 %     (0.62 )      
Return on average equity annualized     5.94 %       13.50 %     (7.56 )      


(a) Other income for the quarter ended March 31, 2024 included a negative fair value adjustment on a CRA equity security of $111,000 and $181,000 of income from life insurance proceeds. Other income for the three months ended March 31, 2023 included a positive fair value adjustment on a CRA equity security of $209,000.
(b) The quarter ended March 31, 2023 included one-time charges totaling $300,000 related to the retirement of certain employees and $175,000 of expense associated with three retail branch closures.

March 2024 Quarter Compared to Linked Quarter

    Three Months Ended     Three Months Ended                
    March 31,     December 31,       Increase/  
(Dollars in millions, except per share data)   2024     2023       (Decrease)  
Net interest income   $ 34.38     $ 36.68       $ (2.30 )     (6 )%
Wealth management fee income     14.41       13.76         0.65       5  
Capital markets activity     1.27       0.30         0.97       323  
Other income (a)     3.02       3.53         (0.51 )     (14 )
Total other income     18.70       17.59         1.11       6  
                           
Total Revenue     53.08       54.27         (1.19 )     (2 )%
                           
Operating expenses     40.04       37.62         2.42       6  
Pretax income before provision for credit losses     13.04       16.65         (3.61 )     (22 )
Provision for credit losses     0.63       5.03         (4.40 )     (87 )
Pretax income     12.41       11.62         0.79       7  
Income tax expense     3.78       3.02         0.76       25  
Net income   $ 8.63     $ 8.60       $ 0.03       0 %
Diluted EPS   $ 0.48     $ 0.48       $ -       0 %
                           
Return on average assets annualized     0.54 %     0.53 %       0.01        
Return on average equity annualized     5.94 %     6.13 %       (0.19 )      


(a) Other income for the quarter ended March 31, 2024 included a negative fair value adjustment on a CRA equity security of $111,000 and $181,000 of income from life insurance proceeds. Other income for the three months ended December 31, 2023 included a positive fair value adjustment on a CRA equity security of $585,000.

SUPPLEMENTAL QUARTERLY DETAILS:

Wealth Management

AUM/AUA in the Bank’s Wealth Management Division were $11.5 billion at March 31, 2024 compared to $10.9 billion at December 31, 2023.  For the March 2024 quarter, the Wealth Management Team generated $14.4 million in fee income, compared to $13.8 million for the December 31, 2023 quarter and $13.8 million for the March 2023 quarter. The equity markets improved during Q1 2024, contributing to the increase in AUM/AUA along with gross new business inflows of $236 million.

John Babcock, President of the Bank's Wealth Management Division, noted, “2024 included total new accounts and client additions of $236 million ($138 million managed). As we look forward into 2024, our new business pipeline is healthy, and we remain focused on delivering excellent service and advice to our clients. Our highly skilled wealth management professionals, our fiduciary powers and expertise, our financial planning capabilities 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 $73.7 million, or 1%, to $5.36 billion at March 31, 2024 when compared to the previous linked quarter.  Total C&I loans and leases at March 31, 2024 were $2.24 billion or 42% of the total loan portfolio.

Mr. Kennedy noted, “As previously mentioned, we have tightened our underwriting guidelines due to economic uncertainty. Originations have also slowed due to the rate environment. As a result, our outstanding loan balances declined during Q1 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 $34.4 million and NIM of 2.20% for Q1 2024 decreased $2.3 million and 9 basis point from NII of $36.7 million and NIM of 2.29% for the linked quarter (Q4 2023), respectively, and decreased $9.6 million and 68 basis points from NII of $44.0 million and NIM of 2.88% for the prior year period (Q1 2023), respectively.  When comparing Q1 2024 to the prior periods, the Company has seen a sharp increase in interest expense mostly driven by higher deposit rates during 2023 and into 2024 and a greater proportion of the portfolio in higher-costing checking accounts and certificates of deposit. Cycle to date betas are approximately 52%.  Clients continue to migrate out of noninterest bearing checking products and into higher yielding alternatives, which leads to intense competition for deposit balances from other banks. Customers are also pursuing alternative investment opportunities due to the significant rise in interest rates.

Funding / Liquidity / Interest Rate Risk Management

Total deposits increased $202.6 million to $5.48 billion at March 31, 2024 from $5.27 billion at December 31, 2023.  The increase in deposits was used to lower the amount of overnight borrowings from $403.8 million at December 31, 2023 to $119.5 million at March 31, 2024.

At March 31, 2024, the Company’s balance sheet liquidity (investments available for sale, interest-earning deposits and cash) totaled $776.8 million, or 12% 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 $3.7 billion, which is 303% of the total uninsured/uncollateralized deposits on the Company balance sheet.

Income from Capital Markets Activities

Noninterest income from Capital Markets activities (detailed below) totaled $1.3 million for the March 2024 quarter compared to $296,000 for the December 2023 quarter and $966,000 for the March 2023 quarter. The March 2024 quarter included $818,000 of Corporate Advisory fee income.

    Three Months Ended     Three Months Ended     Three Months Ended  
    March 31,     December 31,     March 31,  
(Dollars in thousands, except per share data)   2024     2023     2023  
Gain on loans held for sale at fair value (Mortgage banking)   $ 56     $ 18     $ 21  
Gain on sale of SBA loans     400       239       865  
Corporate advisory fee income     818       39       80  
Total capital markets activity   $ 1,274     $ 296     $ 966  

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


Other noninterest income was $3.0 million for Q1 2024 compared to $3.5 million for Q4 2023 and $3.3 million for Q1 2023. Q1 2024 included $141,000 of income recorded by the Equipment Finance Division related to equipment transfers to lessees upon the termination of leases while Q4 2023 included $309,000 and Q1 2023 included $145,000 respectively. Additionally, Q1 2024 included $827,000 of unused line fees compared to $750,000 for Q4 2023 and $852,000 for Q1 2023.

Operating Expenses

The Company’s total operating expenses were $40.0 million for the first quarter of 2024, compared to $37.6 million for the December 2023 quarter and $35.6 million for the March 2023 quarter. The March 2024 and December 2023 quarters included expenses associated with the Company’s expansion into New York City.

Mr. Kennedy noted, “We continue to make investments related to our strategic decision to expand into New York City as evidenced by the hiring of a senior leader and 10+ commercial private banking teams during the first quarter of 2024.  We will continue to manage expenses throughout the Company and continue to look for opportunities to create efficiencies while also investing in digital and other software tools to further enhance the client experience.”

Income Taxes

The effective tax rate for the three months ended March 31, 2024 was 30.4%, as compared to 26.0% for the December 2023 quarter and 26.4% for the quarter ended March 31, 2023. The higher tax rate for the March 2024 quarter was primarily due to the impact of vesting of restricted stock at prices lower than original grant prices.

Asset Quality / Provision for Credit Losses

Nonperforming assets (which does not include modified loans that are performing in accordance with their terms) were $69.8 million, or 1.09% of total assets at March 31, 2024, as compared to $61.3 million, or 0.95% of total assets at December 31, 2023. Loans past due 30 to 89 days and still accruing were $73.7 million, or 1.37% of total loans at March 31, 2024 compared to $34.6 million, or 0.64% of total loans at December 31, 2023. The Q1 2024 loans past due 30 to 89 days and still accruing included $25.2 million to federal and state governmental entities, $15.0 million to a single equipment finance customer and $28.9 million to two multifamily sponsors.

Criticized and classified loans totaled $177.3 million at March 31, 2024, reflecting an increase from December 31, 2023 and March 31, 2023 levels. The Company currently has no loans or leases on deferral and accruing.

For the quarter ended March 31, 2024, the Company’s provision for credit losses was $615,000 compared to $5.0 million for the December 2023 quarter and $1.5 million for the March 2023 quarter. The provision for credit losses in the first quarter of 2024 was positive despite a decline in loans and improved GDP forecasts, as the Company experienced an increase in past due and criticized and classified loans.

At March 31, 2024, the allowance for credit losses was $66.3 million (1.24% of total loans), compared to $65.9 million (1.21% of loans) at December 31, 2023, and $62.3 million (1.16% of loans) at March 31, 2023.

Capital

The Company’s capital position declined during the first quarter of 2024 due to the repurchase of 100,000 shares through the Company's stock repurchase program at a total cost of $2.4 million and payment of a quarterly dividend of $887,000.  Additionally, during the first quarter of 2024, the Company recorded deterioration in accumulated other comprehensive losses of $2.9 million, net of tax. This amount was driven by a $5.0 million decrease in the value of the available for sale securities portfolio partially offset by a $2.1 million gain on cash flow hedges. The total accumulated other comprehensive loss declined to $67.8 million as of March 31, 2024 ($74.8 million loss related to the available for sale securities portfolio partially offset by a $7.0 million gain on the cash flow hedges).  These changes were partially offset by net income of $8.6 million.

Tangible book value per share decreased during Q1 2024 to $30.21 at March 31, 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 March 31, 2024 remain strong, and reflect increases from December 31, 2023 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 December 31, 2023), under the severely adverse case, and no growth scenario, the Bank remains well capitalized over a two-year stress period.

On March 28, 2024, the Company declared a cash dividend of $0.05 per share payable on May 23, 2024 to shareholders of record on May 9, 2024.

ABOUT THE COMPANY

Peapack-Gladstone Financial Corporation is a New Jersey bank holding company with total assets of $6.4 billion and assets under management/administration of $11.5 billion as of March 31, 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  
    March 31,     Dec 31,     Sept 30,     June 30,     March 31,  
    2024     2023     2023     2023     2023  
Income Statement Data:                              
Interest income   $ 79,194     $ 80,178     $ 78,489     $ 74,852     $ 70,491  
Interest expense     44,819       43,503       41,974       35,931       26,513  
Net interest income     34,375       36,675       36,515       38,921       43,978  
Wealth management fee income     14,407       13,758       13,975       14,252       13,762  
Service charges and fees     1,322       1,255       1,319       1,320       1,258  
Bank owned life insurance     503       357       310       305       297  
Gain on loans held for sale at fair value
(Mortgage banking)
    56       18       37       15       21  
Gain on sale of SBA loans     400       239       491       838       865  
Corporate advisory fee income     818       39       85       15       80  
Other income (A)     1,306       1,339       3,541       2,039       1,567  
Fair value adjustment for CRA equity security     (111 )     585       (404 )     (209 )     209  
Total other income     18,701       17,590       19,354       18,575       18,059  
                               
Total revenue     53,076       54,265       55,869       57,496       62,037  
                               
Salaries and employee benefits (B)     28,476       24,320       25,264       26,354       24,586  
Premises and equipment     5,081       5,416       5,214       4,729       4,374  
FDIC insurance expense     945       765       741       729       711  
Other expenses     5,539       7,115       6,194       5,880       5,903  
Total operating expenses     40,041       37,616       37,413       37,692       35,574  
Pretax income before provision for credit losses     13,035       16,649       18,456       19,804       26,463  
Provision for credit losses     627       5,026       5,856       1,696       1,513  
Income before income taxes     12,408       11,623       12,600       18,108       24,950  
Income tax expense     3,777       3,024       3,845       4,963       6,595  
Net income   $ 8,631     $ 8,599     $ 8,755     $ 13,145     $ 18,355  
                               
Per Common Share Data:                              
Earnings per share (basic)   $ 0.49     $ 0.48     $ 0.49     $ 0.73     $ 1.03  
Earnings per share (diluted)     0.48       0.48       0.49       0.73       1.01  
Weighted average number of common
shares outstanding:
                             
Basic     17,711,639       17,770,158       17,856,961       17,930,611       17,841,203  
Diluted     17,805,347       17,961,400       18,010,127       18,078,848       18,263,310  
Performance Ratios:                              
Return on average assets annualized (ROAA)     0.54 %     0.53 %     0.54 %     0.82 %     1.16 %
Return on average equity annualized (ROAE)     5.94 %     6.13 %     6.20 %     9.43 %     13.50 %
Return on average tangible equity annualized (ROATCE) (C)     6.45 %     6.68 %     6.75 %     10.30 %     14.78 %
Net interest margin (tax-equivalent basis)     2.20 %     2.29 %     2.28 %     2.49 %     2.88 %
GAAP efficiency ratio (D)     75.44 %     69.32 %     66.97 %     65.56 %     57.34 %
Operating expenses / average assets annualized     2.51 %     2.33 %     2.31 %     2.36 %     2.26 %


(A) The September 2023 quarter included $2.3 million of fee income from equipment finance activity.
(B) The June 2023 quarter included $1.7 million of expense associated with the retirement of certain employees.
(C) 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.
(D) Calculated as total operating expenses as a percentage of total revenue. For Non-GAAP efficiency ratio, see the Non-GAAP financial measures reconciliation included in these tables.

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

    As of  
    March 31,     Dec 31,     Sept 30,     June 30,     March 31,  
    2024     2023     2023     2023     2023  
ASSETS                              
Cash and due from banks   $ 5,769     $ 5,887     $ 7,400     $ 4,859     $ 6,514  
Federal funds sold                              
Interest-earning deposits     189,069       181,784       180,469       166,769       244,779  
Total cash and cash equivalents     194,838       187,671       187,869       171,628       251,293  
Securities available for sale     550,870       550,617       521,005       540,519       556,266  
Securities held to maturity     106,498       107,755       108,940       110,438       111,609  
CRA equity security, at fair value     13,055       13,166       12,581       12,985       13,194  
FHLB and FRB stock, at cost (A)     18,079       31,044       34,158       35,402       30,338  
                               
Residential mortgage     581,426       578,427       585,295       575,238       544,655  
Multifamily mortgage     1,827,165       1,836,390       1,871,853       1,884,369       1,871,387  
Commercial mortgage     615,964       637,625       622,469       624,710       613,911  
Commercial and industrial loans     2,235,342       2,284,940       2,321,917       2,278,133       2,266,837  
Consumer loans     66,827       62,036       57,227       52,098       49,002  
Home equity lines of credit     35,542       36,464       34,411       34,397       33,294  
Other loans     184       238       265       269       443  
Total loans     5,362,450       5,436,120       5,493,437       5,449,214       5,379,529  
Less: Allowance for credit losses     66,251       65,888       68,592       62,704       62,250  
Net loans     5,296,199       5,370,232       5,424,845       5,386,510       5,317,279  
                               
Premises and equipment     24,494       24,166       23,969       23,814       23,782  
Other real estate owned                             116  
Accrued interest receivable     32,672       30,676       22,889       20,865       19,143  
Bank owned life insurance     47,580       47,581       47,509       47,382       47,261  
Goodwill and other intangible assets     45,742       46,014       46,286       46,624       46,979  
Finance lease right-of-use assets     1,900       2,087       2,274       2,461       2,648  
Operating lease right-of-use assets     16,035       12,096       12,800       13,500       12,262  
Other assets     60,591       53,752       76,456       67,572       47,848  
TOTAL ASSETS   $ 6,408,553     $ 6,476,857     $ 6,521,581     $ 6,479,700     $ 6,480,018  
                               
LIABILITIES                              
Deposits:                              
Noninterest-bearing demand deposits   $ 914,893     $ 957,687     $ 947,405     $ 1,024,105     $ 1,096,549  
Interest-bearing demand deposits     3,029,119       2,882,193       2,871,359       2,816,913       2,797,493  
Savings     108,305       111,573       117,905       120,082       132,523  
Money market accounts     775,132       740,559       761,833       763,026       873,329  
Certificates of deposit – Retail     486,079       443,791       422,291       384,106       357,131  
Certificates of deposit – Listing Service     7,704       7,804       9,103       10,822       15,922  
Subtotal “customer” deposits     5,321,232       5,143,607       5,129,896       5,119,054       5,272,947  
IB Demand – Brokered     10,000       10,000       10,000       10,000       10,000  
Certificates of deposit – Brokered     145,480       120,507       119,463       69,443       25,895  
Total deposits     5,476,712       5,274,114       5,259,359       5,198,497       5,308,842  
Short-term borrowings     119,490       403,814       470,576       485,360       378,800  
Finance lease liability     3,104       3,430       3,752       4,071       4,385  
Operating lease liability     17,630       12,876       13,595       14,308       13,082  
Subordinated debt, net     133,346       133,274       133,203       133,131       133,059  
Due to brokers                             8,308  
Other liabilities     75,892       65,668       82,140       79,264       78,584  
TOTAL LIABILITIES     5,826,174       5,893,176       5,962,625       5,914,631       5,925,060  
Shareholders’ equity     582,379       583,681       558,956       565,069       554,958  
TOTAL LIABILITIES AND                              
SHAREHOLDERS’ EQUITY   $ 6,408,553     $ 6,476,857     $ 6,521,581     $ 6,479,700     $ 6,480,018  
Assets under management and / or administration at
Peapack-Gladstone Bank’s Private Wealth Management
Division (market value, not included above-dollars in billions)
  $ 11.5     $ 10.9     $ 10.4     $ 10.7     $ 10.4  


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

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

    As of  
    March 31,     Dec 31,     Sept 30,     June 30,     March 31,  
    2024     2023     2023     2023     2023  
Asset Quality:                              
Loans past due over 90 days and still accruing   $ 35     $     $     $     $  
Nonaccrual loans (A)     69,811       61,324       70,809       34,505       28,659  
Other real estate owned                             116  
Total nonperforming assets   $ 69,846     $ 61,324     $ 70,809     $ 34,505     $ 28,775  
                               
Nonperforming loans to total loans     1.30 %     1.13 %     1.29 %     0.63 %     0.53 %
Nonperforming assets to total assets     1.09 %     0.95 %     1.09 %     0.53 %     0.44 %
                               
Performing modifications (B)(C)   $ 12,311     $ 248     $ 248     $ 248     $ 248  
                               
Loans past due 30 through 89 days and still accruing (D)   $ 73,699     $ 34,589     $ 9,780     $ 14,524     $ 2,762  
                               
Loans subject to special mention   $ 59,450     $ 71,397     $ 53,328     $ 53,606     $ 46,566  
                               
Classified loans   $ 117,869     $ 84,372     $ 94,866     $ 58,655     $ 58,010  
                               
Individually evaluated loans   $ 69,530     $ 60,710     $ 70,184     $ 33,867     $ 27,736  
                               
Allowance for credit losses ("ACL"):                              
Beginning of quarter   $ 65,888     $ 68,592     $ 62,704     $ 62,250     $ 60,829  
Provision for credit losses (E)     615       5,082       5,944       1,666       1,464  
(Charge-offs)/recoveries, net (F)     (252 )     (7,786 )     (56 )     (1,212 )     (43 )
End of quarter   $ 66,251     $ 65,888     $ 68,592     $ 62,704     $ 62,250  
                               
ACL to nonperforming loans     94.85 %     107.44 %     96.87 %     181.72 %     217.21 %
ACL to total loans     1.24 %     1.21 %     1.25 %     1.15 %     1.16 %
Collectively evaluated ACL to total loans (G)     1.15 %     1.13 %     1.10 %     1.11 %     1.11 %


(A) Includes one freight credit totaling $22.2 million at March 31, 2024, one freight credit totaling $23.5 million at December 31, 2023 and two freight credits totaling $33.4 million at September 30, 2023. Excludes $1.6 million in held for sale at September 30, 2023.
(B) Amounts reflect modifications that are paying according to modified terms.
(C) Excludes modifications included in nonaccrual loans of $3.2 million at March 31, 2024, $3.0 million at December 31, 2023, $3.1 million at September 30, 2023 and $777,000 at June 30, 2023.
(D) Includes $25.2 million to U.S. and state governmental entities, $15.0 million for one equipment finance deal and $28.9 million to two multifamily sponsors at March 31, 2024, $16.5 million outstanding to U.S. governmental entities at December 31, 2023 and $8.2 million of outstanding multifamily loans to one sponsor.
(E) Excludes a provision of $12,000 at March 31, 2024, a credit of $55,000 at December 31, 2023, a credit of $88,000 at September 30, 2023, a provision of $30,000 at June 30, 2023 and a provision of $49,000 at March 31, 2023 related to off-balance sheet commitments.
(F) Net charge-offs for the quarter ended December 31, 2023 included charge-offs of $2.2 million of a previously established reserve to loans individually evaluated on one multifamily loan and $5.6 million on one equipment finance relationship. Net charge-offs for the quarter ended June 30, 2023 included a charge-off of $1.2 million of a previously established reserve to loans individually evaluated on one commercial real estate loan.
(G) Total ACL less reserves to loans individually evaluated equals collectively evaluated ACL.

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

    As of  
    March 31,     December 31,     March 31,  
    2024     2023     2023  
Capital Adequacy                              
Equity to total assets (A)         9.09 %         9.01 %         8.56 %
Tangible equity to tangible assets (B)         8.43 %         8.36 %         7.90 %
Book value per share (C)       $ 32.79         $ 32.90         $ 30.81  
Tangible book value per share (D)       $ 30.21         $ 30.31         $ 28.20  
                               
Tangible equity to tangible assets excluding other comprehensive loss*         9.40 %         9.28 %         8.85 %
Tangible book value per share excluding other comprehensive loss*       $ 34.03         $ 33.97         $ 31.94  


*Excludes other comprehensive loss of $67.8 million for the quarter ended March 31, 2024, $64.9 million for the quarter ended December 31, 2023, and $67.4 million for the quarter ended March 31, 2023. See Non-GAAP financial measures reconciliation included in these tables.

(A) Equity to total assets is calculated as total shareholders’ equity as a percentage of total assets at quarter end.
(B) Tangible equity and tangible assets are calculated by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. Tangible equity as a percentage of tangible assets at quarter end is calculated by dividing tangible equity by tangible assets at quarter end. See Non-GAAP financial measures reconciliation included in these tables.
(C) Book value per common share is calculated by dividing shareholders’ equity by quarter end common shares outstanding.
(D) Tangible book value per share excludes intangible assets. Tangible book value per share is calculated by dividing tangible equity by quarter end common shares outstanding. See Non-GAAP financial measures reconciliation tables.

    As of
    March 31,   December 31,   March 31,
    2024     2023     2023  
Regulatory Capital – Holding Company                              
Tier I leverage   $ 602,493     9.36 %   $ 600,444     9.19 %   $ 573,154     9.02 %
Tier I capital to risk-weighted assets     602,493     11.76       600,444     11.43       573,154     11.39  
Common equity tier I capital ratio
to risk-weighted assets
    602,481     11.76       600,432     11.43       573,136     11.39  
Tier I & II capital to risk-weighted assets     785,909     15.34       785,413     14.95       762,095     15.15  
                               
Regulatory Capital – Bank                              
Tier I leverage (E)   $ 709,744     11.02 %   $ 707,446     10.83 %   $ 700,858     11.03 %
Tier I capital to risk-weighted assets (F)     709,744     13.86       707,446     13.48       700,858     13.93  
Common equity tier I capital ratio
to risk-weighted assets (G)
    709,732     13.86       707,434     13.47       700,840     13.93  
Tier I & II capital to risk-weighted assets (H)     773,781     15.11       773,083     14.73       763,732     15.18  


(E) Regulatory well capitalized standard (including capital conservation buffer) = 4.00% ($258 million)
(F) Regulatory well capitalized standard (including capital conservation buffer) = 8.50% ($435 million)
(G) Regulatory well capitalized standard (including capital conservation buffer) = 7.00% ($358 million)
(H) Regulatory well capitalized standard (including capital conservation buffer) = 10.50% ($538 million)

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

    For the Quarters Ended  
    March 31,     Dec 31,     Sept 30,     June 30,     March 31,  
    2024     2023     2023     2023     2023  
Residential loans retained   $ 11,661     $ 5,895     $ 21,310     $ 39,358     $ 30,303  
Residential loans sold     4,025       1,449       2,503       1,072       1,477  
Total residential loans     15,686       7,344       23,813       40,430       31,780  
Commercial real estate     11,500       21,375       3,900       43,235       18,990  
Multifamily     1,900       5,725       3,000       26,662       30,150  
Commercial (C&I) loans (A) (B)     145,803       145,397       176,845       158,972       207,814  
SBA     2,790       7,326       300       13,713       9,950  
Wealth lines of credit (A)     3,850       350       6,875       3,950       23,225  
Total commercial loans     165,843       180,173       190,920       246,532       290,129  
Installment loans     6,868       2,946       6,999       4,587       12,086  
Home equity lines of credit (A)     2,103       4,174       6,275       6,107       2,921  
Total loans closed   $ 190,500     $ 194,637     $ 228,007     $ 297,656     $ 336,916  


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

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

    For the Three Months Ended  
    March 31, 2024     December 31, 2023  
    Average     Income/     Annualized     Average     Income/     Annualized  
    Balance     Expense     Yield     Balance     Expense     Yield  
ASSETS:                                    
Interest-earning assets:                                    
Investments:                                    
Taxable (A)   $ 793,675     $ 5,136       2.59 %   $ 798,661     $ 5,202       2.61 %
Tax-exempt (A) (B)                       106              
                                     
Loans (B) (C):                                    
Mortgages     577,648       5,420       3.75       581,088       5,300       3.65  
Commercial mortgages     2,460,403       27,541       4.48       2,492,204       28,318       4.55  
Commercial     2,240,161       37,559       6.71       2,274,841       37,958       6.67  
Commercial construction     18,927       428       9.05       16,680       382       9.16  
Installment     65,287       1,113       6.82       59,988       1,037       6.91  
Home equity     36,406       737       8.10       35,570       721       8.11  
Other     214       7       13.08       246       8       13.01  
Total loans     5,399,046       72,805       5.39       5,460,617       73,724       5.40  
Federal funds sold                                    
Interest-earning deposits     140,097       1,522       4.35       146,699       1,623       4.43  
Total interest-earning assets     6,332,818       79,463       5.02 %     6,406,083       80,549       5.03 %
Noninterest-earning assets:                                    
Cash and due from banks     10,105                   10,709              
Allowance for credit losses     (67,105 )                 (68,289 )            
Premises and equipment     24,393                   24,387              
Other assets     87,129                   85,720              
Total noninterest-earning assets     54,522                   52,527              
Total assets   $ 6,387,340                 $ 6,458,610              
                                     
LIABILITIES:                                    
Interest-bearing deposits:                                    
Checking   $ 2,954,698     $ 27,433       3.71 %   $ 2,890,964     $ 25,811       3.57 %
Money markets     757,753       5,525       2.92       771,051       5,247       2.72  
Savings     108,503       89       0.33       112,969       81       0.29  
Certificates of deposit – retail     477,793       4,855       4.06       440,712       4,086       3.71  
Subtotal interest-bearing deposits     4,298,747       37,902       3.53       4,215,696       35,225       3.34  
Interest-bearing demand – brokered     10,000       126       5.04       10,000       142       5.68  
Certificates of deposit – brokered     128,341       1,602       4.99       115,722       1,454       5.03  
Total interest-bearing deposits     4,437,088       39,630       3.57       4,341,418       36,821       3.39  
Borrowings     235,384       3,467       5.89       357,384       4,955       5.55  
Capital lease obligation     3,215       38       4.73       3,539       42       4.75  
Subordinated debt     133,303       1,684       5.05       133,234       1,685       5.06  
Total interest-bearing liabilities     4,808,990       44,819       3.73 %     4,835,575       43,503       3.60 %
Noninterest-bearing liabilities:                                    
Demand deposits     916,848                   963,968              
Accrued expenses and other liabilities     80,499                   98,012              
Total noninterest-bearing liabilities     997,347                   1,061,980              
Shareholders’ equity     581,003                   561,055              
Total liabilities and shareholders’ equity   $ 6,387,340                 $ 6,458,610              
Net interest income         $ 34,644                 $ 37,046        
Net interest spread                 1.29 %                 1.43 %
Net interest margin (D)                 2.20 %                 2.29 %


(A) Average balances for available for sale securities are based on amortized cost.
(B) Interest income is presented on a tax-equivalent basis using a 21% federal tax rate.
(C) Loans are stated net of unearned income and include nonaccrual loans.
(D) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

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

    For the Three Months Ended  
    March 31, 2024     March 31, 2023  
    Average     Income/     Annualized     Average     Income/     Annualized  
    Balance     Expense     Yield     Balance     Expense     Yield  
ASSETS:                                    
Interest-earning assets:                                    
Investments:                                    
Taxable (A)   $ 793,675     $ 5,136       2.59 %   $ 791,125     $ 4,471       2.26 %
Tax-exempt (A) (B)                       1,864       19       4.08  
                                     
Loans (B) (C):                                    
Mortgages     577,648       5,420       3.75       529,570       4,283       3.24  
Commercial mortgages     2,460,403       27,541       4.48       2,478,645       25,917       4.18  
Commercial     2,240,161       37,559       6.71       2,201,801       33,369       6.06  
Commercial construction     18,927       428       9.05       4,296       88       8.19  
Installment     65,287       1,113       6.82       39,945       609       6.10  
Home equity     36,406       737       8.10       33,839       591       6.99  
Other     214       7       13.08       276       7       10.14  
Total loans     5,399,046       72,805       5.39       5,288,372       64,864       4.91  
Federal funds sold                                    
Interest-earning deposits     140,097       1,522       4.35       163,225       1,538       3.77  
Total interest-earning assets     6,332,818       79,463       5.02 %     6,244,586       70,892       4.54 %
Noninterest-earning assets:                                    
Cash and due from banks     10,105                   10,449              
Allowance for credit losses     (67,105 )                 (61,567 )            
Premises and equipment     24,393                   23,927              
Other assets     87,129                   84,800              
Total noninterest-earning assets     54,522                   57,609              
Total assets   $ 6,387,340                 $ 6,302,195              
                                     
LIABILITIES:                                    
Interest-bearing deposits:                                    
Checking   $ 2,954,698     $ 27,433       3.71 %   $ 2,567,426     $ 16,481       2.57 %
Money markets     757,753       5,525       2.92       1,124,047       4,874       1.73  
Savings     108,503       89       0.33       141,285       28       0.08  
Certificates of deposit – retail     477,793       4,855       4.06       357,953       1,729       1.93  
Subtotal interest-bearing deposits     4,298,747       37,902       3.53       4,190,711       23,112       2.21  
Interest-bearing demand – brokered     10,000       126       5.04       26,111       208       3.19  
Certificates of deposit – brokered     128,341       1,602       4.99       25,961       205       3.16  
Total interest-bearing deposits     4,437,088       39,630       3.57       4,242,783       23,525       2.22  
Borrowings     235,384       3,467       5.89       104,915       1,296       4.94  
Capital lease obligation     3,215       38       4.73       4,493       53       4.72  
Subordinated debt     133,303       1,684       5.05       133,017       1,639       4.93  
Total interest-bearing liabilities     4,808,990       44,819       3.73 %     4,485,208       26,513       2.36 %
Noninterest-bearing liabilities:                                    
Demand deposits     916,848                   1,176,495              
Accrued expenses and other liabilities     80,499                   96,631              
Total noninterest-bearing liabilities     997,347                   1,273,126              
Shareholders’ equity     581,003                   543,861              
Total liabilities and shareholders’ equity   $ 6,387,340                 $ 6,302,195              
Net interest income         $ 34,644                 $ 44,379        
Net interest spread                 1.29 %                 2.18 %
Net interest margin (D)                 2.20 %                 2.88 %


(A) Average balances for available for sale securities are based on amortized cost.
(B) Interest income is presented on a tax-equivalent basis using a 21% federal tax rate.
(C) Loans are stated net of unearned income and include nonaccrual loans.
(D) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

PEAPACK-GLADSTONE FINANCIAL CORPORATION
NON-GAAP FINANCIAL MEASURES RECONCILIATION

Tangible book value per share and tangible equity as a percentage of tangible assets at period end are non-GAAP financial measures derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. We calculate tangible book value per share by dividing tangible equity by common shares outstanding, as compared to book value per common share, which we calculate by dividing shareholders’ equity by common shares outstanding at period end. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios.

The efficiency ratio is a non-GAAP measure of expense control relative to recurring revenue. We calculate the efficiency ratio by dividing total noninterest expenses, excluding other real estate owned provision, as determined under GAAP, by net interest income and total noninterest income as determined under GAAP, but excluding net gains/(losses) on loans held for sale at lower of cost or fair value and excluding net gains on securities from this calculation, which we refer to below as recurring revenue. We believe that this provides a reasonable measure of core expenses relative to core revenue.

We believe these non-GAAP financial measures provide information that is important to investors and useful in understanding our financial position, results and ratios because our management internally assesses our performance based, in part, on these measures. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titles measures reported by other companies. A reconciliation of the non-GAAP measures of tangible common equity, tangible book value per share and efficiency ratio to the underlying GAAP numbers is set forth below.

(Dollars in thousands, except per share data)

    Three Months Ended  
    March 31,     Dec 31,     Sept 30,     June 30,     March 31,  
Tangible Book Value Per Share   2024     2023     2023     2023     2023  
Shareholders’ equity   $ 582,379     $ 583,681     $ 558,956     $ 565,069     $ 554,958  
Less: Intangible assets, net     45,742       46,014       46,286       46,624       46,979  
Tangible equity   $ 536,637     $ 537,667     $ 512,670     $ 518,445     $ 507,979  
Less: other comprehensive loss     (67,760 )     (64,878 )     (81,653 )     (67,997 )     (67,445 )
Tangible equity excluding other comprehensive loss   $ 604,397     $ 602,545     $ 594,323     $ 586,442     $ 575,424  
                               
Period end shares outstanding     17,761,538       17,739,677       17,816,922       17,887,895       18,014,757  
Tangible book value per share   $ 30.21     $ 30.31     $ 28.77     $ 28.98     $ 28.20  
Tangible book value per share excluding other comprehensive loss   $ 34.03     $ 33.97     $ 33.36     $ 32.78     $ 31.94  
Book value per share     32.79       32.90       31.37       31.59       30.81  
                               
Tangible Equity to Tangible Assets                              
Total assets   $ 6,408,553     $ 6,476,857     $ 6,521,581     $ 6,479,700     $ 6,480,018  
Less: Intangible assets, net     45,742       46,014       46,286       46,624       46,979  
Tangible assets   $ 6,362,811     $ 6,430,843     $ 6,475,295     $ 6,433,076     $ 6,433,039  
Less: other comprehensive loss     (67,760 )     (64,878 )     (81,653 )     (67,997 )     (67,445 )
Tangible assets excluding other comprehensive loss   $ 6,430,571     $ 6,495,721     $ 6,556,948     $ 6,501,073     $ 6,500,484  
                               
Tangible equity to tangible assets     8.43 %     8.36 %     7.92 %     8.06 %     7.90 %
Tangible equity to tangible assets excluding other comprehensive loss     9.40 %     9.28 %     9.06 %     9.02 %     8.85 %
Equity to assets     9.09 %     9.01 %     8.57 %     8.72 %     8.56 %


(Dollars in thousands, except per share data)

    Three Months Ended  
    March 31,     Dec 31,     Sept 30,     June 30,     March 31,  
Return on Average Tangible Equity   2024     2023     2023     2023     2023  
Net income   $ 8,631     $ 8,599     $ 8,755     $ 13,145     $ 18,355  
                               
Average shareholders’ equity   $ 581,003     $ 561,055     $ 565,153     $ 557,428     $ 543,861  
Less: Average intangible assets, net     45,903       46,167       46,468       46,828       47,189  
Average tangible equity   $ 535,100     $ 514,888     $ 518,685     $ 510,600     $ 496,672  
                               
Return on average tangible common equity     6.45 %     6.68 %     6.75 %     10.30 %     14.78 %


(Dollars in thousands, except per share data)

    Three Months Ended  
    March 31,     Dec 31,     Sept 30,     June 30,     March 31,  
Efficiency Ratio   2024     2023     2023     2023     2023  
Net interest income   $ 34,375     $ 36,675     $ 36,515     $ 38,921     $ 43,978  
Total other income     18,701       17,590       19,354       18,575       18,059  
Add:                              
Fair value adjustment for CRA equity security     111       (585 )     404       209       (209 )
Less:                              
Income from life insurance proceeds     (181 )                        
Total recurring revenue     53,006       53,680       56,273       57,705       61,828  
                               
Operating expenses     40,041       37,616       37,413       37,692       35,574  
Less:                              
Accelerated Expense for Retirement                       1,665       300  
Branch Closure Expense                             175  
Total operating expense     40,041       37,616       37,413       36,027       35,099  
                               
Efficiency ratio     75.54 %     70.07 %     66.48 %     62.43 %     56.77 %