SYS-CON MEDIA Authors: Doug Masi, Mat Mathews, PR.com Newswire, David Smith, Tim Crawford

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

BEDMINSTER, NJ -- (Marketwired) -- 07/28/14 -- 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:

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

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