SOURCE: Peapack-Gladstone Financial Corporation

July 28, 2014 09:20 ET

Peapack-Gladstone Financial Corporation Reports Another Solid Quarter of Growth and Accomplishment

BEDMINSTER, NJ--(Marketwired - Jul 28, 2014) -  Peapack-Gladstone Financial Corporation (NASDAQ: 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     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.

 
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.
     

Contact Information

  • Contact:

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