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PGC - Peapack-Gladstone Financial News Story

$33.66 0.4  1.1%

Last Trade - 18/10/21

Sector
Financials
Size
Mid Cap
Market Cap £455.9m
Enterprise Value £608.5m
Revenue £145.2m
Position in Universe 3459th / 7243

Peapack-Gladstone Financial Corporation Reports Strong First Quarter Results, Driven By Noninterest Income Totaling 36% Of Total Revenue

Thu 29th April, 2021 2:00pm
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Bedminster, NJ, April 29, 2021 (GLOBE NEWSWIRE) -- via NewMediaWire
(https://www.globenewswire.com/Tracker?data=OxcxmvwP2Eq8uUTR13pKNSHWNha4GEdMucJDzA0ubeTBEUxUZ6moSolsjGaUVeoca0CnQ4HKs883RSpTkjYouDN67o9TS-DHknOqm9ASUrM=)
-- Peapack-Gladstone Financial Corporation (NASDAQ Global Select Market: PGC)
(the “Company”) announces its first quarter 2021 results.

This earnings release should be read in conjunction with the Company’s Q1
2021 Investor Update (and Supplemental Financial Information), a copy of which
is available on our website at www.pgbank.com and via a current report on Form
8-K on the website of the Securities and Exchange Commission at www.sec.gov. 

The Company recorded total revenue of $49.61 million, net income of $13.18
million and diluted earnings per share (“EPS”) of $0.67 for the quarter
ended March 31, 2021, compared to $46.27 million, $1.37 million and $0.07,
respectively, for the same three month period ended March 31, 2020.

The 2021 quarter included increased noninterest income, principally wealth
management income and income from capital markets activities (which includes
mortgage banking income, loan level back-to-back swap income, SBA loan income,
and corporate advisory fee income). The 2021 quarter also included a
significantly reduced provision for loan losses when compared to the same
quarter last year. The 2021 quarter included a $225,000 provision while the
2020 quarter included a $20.0 million provision, which was due to the
environment at that time created by the COVID-19 pandemic, which led to
increased qualitative loss factors when calculating the allowance for loan
losses.

The 2021 three-month period also included $1.5 million of severance expense
related to certain staff reorganizations within several areas of the Bank. 
The 2020 three-month period included a tax benefit of $3.2 million caused by
the changes in the treatment of tax net operating losses (“NOL”) under the
provisions of the Coronavirus Aid, Relief, and Economic Security (“CARES”)
Act.  

As previously disclosed, on January 28, 2021, the Company authorized the
repurchase of up to 948,735 shares, or approximately 5% of its outstanding
shares. During the first quarter of 2021 the Company purchased 158,033 shares
at an average price of $27.71 for a total cost of $4.4 million under this
program.

Douglas L. Kennedy, President and CEO, said, “Our capital is strong and we
believe that purchasing the Company’s stock is an opportunity for us to
effectively manage our excess capital, while taking advantage of the
Company’s discounted valuation relative to peers.”

Mr. Kennedy also said, “During the first quarter of 2021 the Company
participated in the 2021 round of the Paycheck Protection Program (“PPP”)
which created much needed funding to qualifying small businesses and
organizations.  We are proud to say that during the quarter we assisted with
over $142 million of PPP loans - $47 million processed, closed and funded by
the Bank, and another $95 million referred directly to a third party for
processing and funding.  The Company plans to sell the $46 million of loans
in the second quarter to the same third party, who is extremely proficient in
the servicing and forgiveness processes for PPP loans.”

EXECUTIVE SUMMARY:

The following tables summarize specified financial measures for the periods
shown.

March 2021 Quarter Compared to Prior Year Quarter

                                                   Three Months Ended             Three Months Ended                                           
                                                   March 31,                      March 31,                    Increase/                       
 (Dollars in millions, except per share data)      2021                           2020                         (Decrease)                      
 Net interest income                               $           31.79              $           31.75            $   0.04                0    %  
 Wealth management fee income (A)                              12.13                          9.96                 2.17                22      
 Capital markets activity (B)                                  3.57                           2.84                 0.73                26      
 Other income                                                  2.12                           1.72                 0.40                23      
 Total other income                                            17.82                          14.52                3.30                23      
 Operating expenses (C)                                        31.59                          28.24                3.35                12      
 Pretax income before provision for loan losses                18.02                          18.03                (0.01   )           (0   )  
 Provision for loan and lease losses (D)                       0.23                           20.00                (19.77  )           (99  )  
 Pretax income                                                 17.79                          (1.97       )        19.76           N/A         
 Income tax expense/(benefit) (E)                              4.61                           (3.34       )        7.95            N/A         
 Net income (C)                                    $           13.18              $           1.37             $   11.81               862  %  
 Diluted EPS                                       $           0.6747             $           0.0700           $   0.6047              864  %  
                                                                                                                                               
 Total Revenue (F)                                 $           49.61              $           46.27            $   3.34                7    %  
                                                                                                                                               
 Return on average assets annualized                           0.89        %                  0.11        %        0.78                        
 Return on average equity annualized                           10.03       %                  1.08        %        8.95                        
1. The March 2021 quarter included a full quarter of wealth management fee
income and expense related to the December lift outs of teams from Lucas
Capital Management (“Lucas”) and Noyes Capital Management (“Noyes”) -
approximately $600,000 of wealth management fee income and approximately
$400,000 of operating expenses were recorded in the 2021 quarter. 
2. Capital markets activity includes loan level back-to-back swap activities,
the SBA lending and sale program, corporate advisory activities and mortgage
banking activities. There were no fees related to loan level back-to-back swap
activities in the quarter ended March 31, 2021, compared to $1.4 million in
the March 2020 quarter.  
3. The quarter ended March 31, 2021 included $1.5 million of severance expense
related to certain staff reorganization within several areas of the Bank. This
expense reduced pretax income before provision for loan losses and pretax
income by $1.5 million each; and reduced net income by $1.1 million; diluted
EPS by $0.06; ROA by 0.08%; and ROE by 0.86%, respectively.   
4. The March 2020 quarter included a provision for loan and lease losses of
$20.0 million, primarily due to the environment at that time created by the
COVID-19 pandemic.
5. The March 2020 quarter included a $3.2 million tax benefit related to the
carryback of tax NOLs to prior years when the Federal tax rate was 14% higher.
6. Total revenue equals net interest income plus total other income.
March 2021 Quarter Compared to Linked Quarter

                                                   Three Months Ended           Three Months Ended                                            
                                                   March 31,                    December 31,                   Increase/                      
 (Dollars in millions, except per share data)      2021                         2020                           (Decrease)                     
 Net interest income                               $           31.79            $           31.74              $   0.05               0    %  
 Wealth management fee income (A)                              12.13                        10.79                  1.34               12      
 Capital markets activity (B)                                  3.57                         1.90                   1.67               88      
 Other income                                                  2.12                         1.71                   0.41               24      
 Total other income                                            17.82                        14.40                  3.42               24      
 Operating expenses (C)                                        31.59                        39.25                  (7.66  )           (20  )  
 Pretax income before provision for loan losses                18.02                        6.89                   11.13              162     
 Provision for loan and lease losses                           0.23                         2.35                   (2.12  )           (90  )  
 Pretax income                                                 17.79                        4.54                   13.25              292     
 Income tax expense                                            4.61                         1.51                   3.10               205     
 Net income (C)                                    $           13.18            $           3.03               $   10.15              335  %  
 Diluted EPS                                       $           0.67             $           0.16               $   0.51               319  %  
                                                                                                                                              
 Total Revenue (D)                                 $           49.61            $           46.14              $   3.47               8    %  
                                                                                                                                              
 Return on average assets annualized                           0.89        %                0.21        %          0.68                       
 Return on average equity annualized                           10.03       %                2.32        %          7.71                       
1. The March 2021 quarter included a full quarter of wealth management fee
income and expense related to the lift outs of teams from Lucas and Noyes -
approximately $600,000 of wealth management fee income and approximately
$400,000 of operating expenses were recorded in the 2021 quarter. 
2. Capital markets activity includes loan level back-to-back swap activities,
the SBA lending and sale program, corporate advisory and mortgage banking
activities.  
3. The quarter ended March 31, 2021 included $1.5 million of severance expense
related to certain staff reorganization within several areas of the Bank. This
expense reduced pretax income before provision for loan losses and pretax
income by $1.5 million each; and reduced net income by $1.1 million; diluted
EPS by $0.06; ROA by 0.08%; and ROE by 0.86%, respectively.   The December
31, 2020 quarter included $4.8 million for the prepayment of FHLB advances,
$4.4 million for the valuation allowance for a loan held for sale and $210,000
for the consolidation of two private banking locations.
4. Total revenue equals net interest income plus total other income.
The Company’s near-term priorities include:
* Actively deploy/manage capital and liquidity by expanding our lending
activities and executing on our recently announced stock repurchase program.
* Continue to grow and expand our core Wealth Management, Commercial Banking
and Capital Markets businesses through core operations, strategic hires,
lift-outs, and acquisition of wealth management firms.
* Expand our Net Interest Margin.
* Investment in digital enhancements. 
* Continue to target fee income at 35% - 45% of total bank revenue.
* Drive ROA to greater than 1% and return on average tangible common equity to
greater than 14%.
Other select highlights for the quarter included:
* Total noninterest income totaled $17.8 million for the March 2021 quarter,
accounting for 36% of total revenue (within our target of 35% to 45% of total
revenue). 
* Wealth management fee income, which comprised approximately 24% of the
Company’s total revenue for the three-months ended March 31, 2021, continues
to contribute significantly to the Company’s diversified revenue sources. 
* The Company completed its first major corporate advisory/investment banking
deal.  
* As of March 31, 2021, total C&I loans (including PPP loans held in portfolio
and held for sale) comprised 45% of the total loan portfolio.  
* Deposits totaled $4.94 billion at March 31, 2021.  This reflected net
growth of $504 million or 11% compared to $4.44 billion at March 31, 2020,
despite managed reductions in higher cost CDs of $184 million.  
* The Company’s net interest margin improved in the quarter when compared to
the December 2020 quarter (see subsequent discussion of Net Interest Income /
Net Interest Margin).
* In addition to $1.4 billion (23% of total assets) of balance sheet liquidity
(investments, interest-earning deposits and cash) as of March 31, 2021, the
Company also has access to approximately $2.8 billion of available secured
funding at the Federal Home Loan Bank and the Federal Reserve. 
* Nonperforming assets at March 31, 2021 were $11.8 million, or 0.20% of total
assets. Loans past due 30 to 89 days totaled $1.6 million at March 31, 2021.
Loans on deferral status as of March 31, 2021 were $43 million (less than 1%
of total loans).
* As previously announced, the Company opened a retail location in
Boonton/Mountain Lakes, New Jersey. 
  

SUPPLEMENTAL QUARTERLY DETAILS:

Wealth Management Business

In the March 2021 quarter, the Bank’s wealth management business generated
$12.13 million in fee income, compared to $9.96 million for the March 2020
quarter, and $10.79 million for the December 2020 quarter.

The market value of the Company’s AUM/AUA increased from $8.8 billion at
December 31, 2020 to $9.4 billion at March 31, 2021.

In the quarter ended March 31, 2021 the Company successfully integrated the
previously announced teams from Lucas and Noyes which combined added
approximately $400 million in AUM/AUA during the fourth quarter of 2020.

John P. Babcock, President of the Peapack Private Wealth Management division,
said, “2021 showed continued strong new business, new client acquisition and
client retention. We ended 2020 with a very strong Q4 and this continued into
Q1 2021 with gross inflows of over $250 million.” Babcock went on to note,
“We continue to look to grow our wealth business organically and through
selective acquisition.  At year-end 2020, we combined two of our acquired
RIAs – Lassus Wherley Associates and Point View Wealth Management into the
Peapack Private bank entity as well as on-boarded two lift outs in Morristown
and Red Bank NJ.  We continue to make significant progress on our
infrastructure consolidation including launching our new trading platform and
a new CRM system, as well as adding more resources to our financial planning
team.”

Loans / Commercial Banking

Total loans of $4.44 billion at March 31, 2021 (including PPP loans of $233
million, of which $46 million are held for sale) increased $36 million from
$4.40 billion at December 31, 2020. Excluding net PPP loan growth during the
March 2021 quarter, loan balances were relatively flat to year-end. Loan
origination levels for the March 2021 quarter were approximately $330 million
(excluding PPP loans), but paydown and payoff activity remains robust.

Total C&I loans (including the PPP loans) at March 31, 2021 were $1.98 billion
or 45% of the total loan portfolio. While C&I origination levels have been
strong, as noted just above, paydown and payoff activity has also been robust,
including paydowns of several large lines of credit, as well as the
Company’s workout and asset recovery efforts, including the workout and
recovery of several nonaccrual and/or classified credits in 2021.

Mr. Kennedy noted, “Our commercial loan (C&I, Equipment Finance and
CRE/Multifamily) pipelines are strong going into the second quarter, standing
at approximately $350 million with likelihood of closing during the second
quarter of 2021.”

Mr. Kennedy also noted, “As I have mentioned in the past, our Corporate
Advisory business, which gives us the capability to engage in high level
strategic debt, capital and valuation analysis, enables us to provide a unique
boutique level of service, giving us a competitive advantage over many of our
peers. Our Corporate Advisory pipelines are also strong.”

The Company maintains a well-diversified loan portfolio, as noted in the Q1
2021 Investor Update (and Supplemental Financial Information).

Funding / Liquidity / Interest Rate Risk Management

The Company actively manages its deposit base to reduce reliance on wholesale
sourced deposits, volatility, and/or operational risk.  Total deposits at
March 31, 2021 were $4.94 billion reflecting an increase of $504 million when
compared to $4.44 billion at March 31, 2020 and an increase of $126 million
from $4.82 billion at December 31, 2020. Compared to the quarter ended March
31, 2020, noninterest bearing demand deposits increased $328 million and
interest-bearing demand increased $307 million, while brokered deposits
declined $70 million, and higher costing CDs declined $184 million.  Mr.
Kennedy noted, “Our noninterest bearing deposits comprise 19% of our
customer deposits, and only 17% of our total deposits are not covered by FDIC
insurance; both statistics reinforce the ‘core’ nature of our deposit
base.”

For the quarter ended March 31, 2021, the Company’s balance sheet liquidity
(investments, interest-earning deposits and cash) totaled $1.4 billion (or 23%
of assets).  In addition to the $1.4 billion of balance sheet liquidity, the
Company also had approximately $1.8 billion of secured funding available from
the Federal Home Loan Bank. Additionally, the Company had $990 million of
secured funding available from the Federal Reserve Discount Window.

Mr. Kennedy noted, “As a commercial bank, a large portion of our loans
reprice when the Fed changes rates. The 150-basis point reduction in target
Fed Funds near the end of the first quarter of 2020 reduced the Company’s
yield earned on assets. However, we were able to and we continue to
strategically reprice our deposits over time to offset much of that decline.
Further, when interest rates rise, we expect that our net interest income will
improve. Our current modeling indicates that net interest income would improve
6.3% with an immediate 100 basis points rise in rates.”

Net Interest Income (NII)/Net Interest Margin (NIM)

                                                     Three Months Ended                        Three Months Ended                        Three Months Ended                      
                                                     March 31, 2021                            December 31, 2020                         March 31, 2020                          
                                                     NII                       NIM             NII                       NIM             NII                       NIM           
                                                                                                                                                                                 
 NII/NIM excluding the below                         $     30,565              2.49%           $     30,897              2.51%           $     31,279              2.60%         
 Prepayment premiums received on loan paydowns             704                 0.05%                 413                 0.02%                 525                 0.05%         
 Effect of maintaining excess interest earning cash        (195    )           -0.21%                (206    )           -0.24%                (57     )           -0.08%        
 Effect of PPP loans                                       719                 -0.05%                631                 -0.04%                —                   0.00%         
 NII/NIM as reported                                 $     31,793              2.28%           $     31,735              2.25%           $     31,747              2.57%         

 

As shown above, the Company’s reported NIM increased 3 basis points compared
to the linked quarter. The Bank strategically lowered its cost of deposits by
8 basis points and generated an additional $291,000 of prepayment premiums
compared to the linked quarter. These positives were partially offset by a
reduced yield on loans (decline of 4 basis points) and the full 90-day impact
from the mid-December 2020 $100 million, 3.5% subordinated debt issuance. 

Future net interest income and net interest margin should benefit from the
following:
* $415 million of CDs at an average rate of 0.76% mature within one year. 
* $67 million of term money market accounts at an average rate of 0.50% are
set to reprice on July 1, 2021. 
* $50 million of subordinated debt at a coupon of 6% becomes callable on June
30, 2021.
Income from Capital Markets Activities

Noninterest income from Capital Markets activities (the SBA lending and sale
program, mortgage banking activity, corporate advisory activity and loan level
back-to-back swap activities) totaled $3.57 million for the March 2021 quarter
compared to $1.90 million for the December 2020 quarter and $2.84 million for
the March 2020 quarter.  The March 2021 quarter results were driven by a
$1.45 million gain on sale of SBA loans, which was benefitted by certain
changes to SBA lending requirements. The March 2021 and December 2020 quarters
reflected increased mortgage banking activity due to greater refinance
activity in the low rate environment. During March 2021, the Company also
recorded $1.1 million of corporate advisory fee income.  This included the
Company’s first major corporate advisory/investment banking event. These
transactions tend to be larger and take longer to complete. As noted
previously, the pipeline of such business is fairly robust.  The March 2021
quarter included no income from loan level, back-to-back swap activities, as
there has been, and will continue to be, minimal activity for such in the
current environment. The March 2020 quarter included $1.4 million of such
income.

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

The March 2021 quarter included approximately $300,000 of additional Bank
Owned life Insurance income, compared to prior quarters, due to receipt of
life insurance proceeds. Such proceeds were nontaxable. The 2021 quarter also
included a $282,000 gain on sale of $8 million of loans that had some past
payment issues and were classified as held for sale as of December 31, 2020.
Partially offsetting these positives, the Company recorded a $265,000
securities loss related to the valuation of certain community investment
equity securities. 

Operating Expenses

The Company’s total operating expenses were $31.59 million for the quarter
ended March 31, 2021, compared to $39.25 million for the December 2020 quarter
and $28.24 million for the March 2020 quarter. The March 2021 quarter included
$1.5 million of severance expense related to certain staff reorganization
within several areas of the Bank, as well as a full quarter’s worth of
expense related to Lucas and Noyes (approximately $400,000). The December 2020
quarter included the prepayment of FHLB advances ($4.8 million), a valuation
allowance on a loan held for sale ($4.4 million) and consolidation of two
private banking offices ($210,000). 

Mr. Kennedy noted, “While we continue to manage expenses closely and
prudently, we will invest in digital enhancements to improve the client
experience and grow and expand our core wealth management and commercial
banking businesses, including lift-outs, strategic hires, and wealth M&A.”

Income Taxes

The effective tax rate for the three months ended March 31, 2021 was 25.94%,
as compared to 33.29% for the December 2020 quarter and a tax benefit in the
quarter ended March 31, 2020. The March 31, 2021 benefitted from life
insurance proceeds that were not taxable and from the vesting of restricted
stock at prices higher than grant prices. A tax return to book adjustment
recorded in the December 2020 quarter, coupled with reduced pretax income in
the that quarter, increased the December 2020 effective tax rate by
approximately 5%.    

During the first quarter of 2020, the Company recorded a $3.34 million tax
benefit, principally due to a $3.2 million Federal income tax benefit that
resulted from a tax NOL carryback. The Company had a $23 million operating
loss for tax purposes in 2018 (when the Federal tax rate was 21%) resulting
from accelerated tax depreciation. Under the CARES Act, the Company was
allowed to carry this NOL back to a period when the Federal tax rate was 35%,
generating a permanent tax benefit. 

Asset Quality / Provision for Loan and Lease Losses

For further details, see the Q1 2021 Investor Update (and Supplemental
Financial Information).

Nonperforming assets at March 31, 2021 (which does not include troubled debt
restructured loans that are performing in accordance with their terms) were
$11.8 million, or 0.20% of total assets, up slightly from $11.5 million, or
0.19% of total assets, at December 31, 2020 and down significantly from $29.4
million, or 0.50% of total assets, at March 31, 2020.  Total loans past due
30 through 89 days and still accruing declined to $1.6 million at March 31,
2021, from $5.1 million at December 31, 2020 and $8.3 million at March 31,
2020.  During the latter half of 2020 and first quarter of 2021, the
Company’s asset recovery and workout efforts reduced nonperforming and
classified assets.   

For the quarter ended March 31, 2021, the Company’s provision for loan and
lease losses was $225,000 compared to $2.35 million for the December 2020
quarter and $20.00 million for the March 2020 quarter. The decreased provision
for loan and lease losses in the 2021 quarter when compared to the 2020
quarters reflect the reduced qualitative loss factors when calculating the
allowance for loan losses as loan deferrals entered into during the COVID-19
pandemic have come down significantly from prior year (declined from $914
million at June 30, 2020 to $43 million at March 31, 2021). The Company’s
provision for loan and lease losses (and its allowance for loan and lease
losses) also reflect, among other things, the Company’s assessment of asset
quality metrics, net charge-offs/recoveries, and the composition of the loan
portfolio.

At March 31, 2021, the allowance for loan and lease losses was $67.54 million
(1.52% of total loans), compared to $67.31 million at December 31, 2020 (1.53%
of total loans), and $63.78 million at March 31, 2020 (1.44% of total
loans).  The Company has elected to take additional time to adopt CECL and
will implement effective January 1, 2022.

Capital

The Company’s capital position during the March 2021 quarter was benefitted
by net income of $13.18 million which was offset by the purchase of shares
through the Company’s stock repurchase program.  The Company purchased
158,033 shares at an average price of $27.71 for a total cost of $4.4
million.  Capital was also impacted by an increase in the unrealized loss on
our securities of $13.4 million during the March 2021 quarter, as medium-term
market interest rates rose during the quarter impacting the market value of
securities.

The Company’s and Bank’s capital ratios at March 31, 2021 all remain
strong.  Such ratios remain well above regulatory well capitalized standards.

As previously announced, in the fourth quarter of 2020 the Company
successfully completed a private placement of $100 million in fixed-to
floating rate subordinated notes due 2030 at a rate of 3.5%. Such funds
benefitted the Company’s Regulatory Tier 2 Capital. The proceeds raised will
be used for general corporate purposes, which will include stock repurchases
and could potentially include redemption of the Company’s existing 6%
subordinated debt and acquisitions of wealth management firms.

The Company employs quarterly capital stress testing run under multiple
scenarios, including a no growth, severely adverse case. In such case as of
December 31, 2020, the Bank remains well capitalized over a two-year stress
period. With a Pandemic stress overlay on this case, the Bank still remains
well capitalized over the two-year stress period. For further details, see the
Q1 2021 Investor Update (and Supplemental Financial Information).

As previously announced, on April 27, 2021, the Company declared a cash
dividend of $0.05 per share payable on May 25, 2021 to shareholders of record
on May 11, 2021.

ABOUT THE COMPANY

Peapack-Gladstone Financial Corporation is a New Jersey bank holding company
with total assets of $6.0 billion and assets under management/administration
of $9.4 billion as of March 31, 2021.  Founded in 1921, Peapack-Gladstone
Bank is a commercial bank that provides innovative wealth management,
commercial and retail solutions, including residential lending and online
platforms, to businesses and consumers.  Peapack Private, the bank’s wealth
management division, offers comprehensive financial, tax, fiduciary and
investment advice and solutions, to individuals, families, privately-held
businesses, family offices and not-for-profit organizations, which help them
to establish, maintain and expand their legacy.  Together, Peapack-Gladstone
Bank and Peapack Private offer an unparalleled commitment to client service. 
Visit www.pgbank.com and www.peapackprivate.com for more information.

The foregoing may contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995.  Such statements are not
historical facts and include expressions about management’s confidence and
strategies and management’s expectations about new and existing programs and
products, investments, relationships, opportunities and market conditions. 
These statements may be identified by such forward-looking terminology as
“expect,” “look,” “believe,” “anticipate,” “may” or
similar statements or variations of such terms.  Actual results may differ
materially from such forward-looking statements.  Factors that may cause
results to differ materially from such forward-looking statements include, but
are not limited to:
* our 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;
* the impact of anticipated higher operating expenses in 2021 and beyond;
* our inability to successfully integrate wealth management firm acquisitions;
* our inability to manage our growth;
* our inability to successfully integrate our expanded employee base;
* an 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 interest rate environment
and/or our highly competitive market;
* declines in value in our investment portfolio;
* impact on our business from a pandemic event on our business, operations,
customers, allowance for loan losses and capital levels;
* higher than expected increases in our allowance for loan and lease losses;
* higher than expected increases in loan and lease losses or in the level of
nonperforming loans;
* changes in interest rates;
* decline in real estate values within our market areas;
* legislative and regulatory actions (including the impact of the Dodd-Frank
Wall Street Reform and Consumer Protection Act, Basel III and related
regulations) that may result in increased compliance costs;
* successful cyberattacks against our IT infrastructure and that of our IT and
third-party providers;
* higher than expected FDIC insurance premiums;
* adverse weather conditions;
* our inability to successfully generate new business in new geographic
markets;
* our inability to execute upon new business initiatives;
* our 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;
* our inability to retain key employees;
* demands for loans and deposits in our market areas;
* adverse changes in securities markets;
* changes in accounting policies and practices; and
* other unexpected material adverse changes in our operations or earnings.
Further, given its ongoing and dynamic nature, it is difficult to predict the
full impact of the COVID-19 outbreak on our business. The extent of such
impact will depend on future developments, which are highly uncertain,
including when the coronavirus can be controlled and abated and when and
whether the gradual reopening of businesses will result in a meaningful
increase in economic activity.  As the result of the COVID-19 pandemic and
the related adverse local and national economic consequences, we could be
subject to any of the following risks, any of which could have a material,
adverse effect on our business, financial condition, liquidity, and results of
operations:
* demand for our products and services may decline, making it difficult to
grow assets and income; 
* if the economy is unable to substantially reopen, and high levels of
unemployment continue for an extended period of time, loan delinquencies,
problem assets, and foreclosures may increase, resulting in increased charges
and reduced income; 
* collateral for loans, especially real estate, may decline in value, which
could cause loan losses to increase; 
* our allowance for loan losses may have to be increased if borrowers
experience financial difficulties, which will adversely affect our net income;

* the net worth and liquidity of loan guarantors may decline, impairing their
ability to honor commitments to us; 
* a material decrease in net income or a net loss over several quarters could
result in a decrease in the rate of our quarterly cash dividend; 
* our wealth management revenues may decline with continuing market turmoil; 
* a worsening of business and economic conditions or in the financial markets
could result in an impairment of certain intangible assets, such as goodwill;
* the unanticipated loss or unavailability of key employees due to the
outbreak, which could harm our ability to operate our business or execute our
business strategy, especially as we may not be successful in finding and
integrating suitable successors;
* we may face litigation, regulatory enforcement and reputation risk as a
result of our participation in the PPP and the risk that the SBA may not fund
some or all PPP loan guaranties;
* our cyber security risks are increased as the result of an increase in the
number of employees working remotely; and 
* FDIC premiums may increase if the agency experience additional resolution
costs.
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, 2020.  We undertake no duty to update any
forward-looking statement to conform the statement to actual results or
changes in the Company’s expectations.

Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements.

 (Tables to follow)

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



                                                                         For the Three Months Ended                                                                                                       
                                                                         March 31,                  Dec 31,                   Sept 30,                   June 30,                   March 31,             
                                                                         2021                       2020                      2020                       2020                       2020                  
 Income Statement Data:                                                                                                                                                                                   
 Interest income                                                         $      38,239              $     38,532              $      40,174              $      41,649              $      45,395         
 Interest expense                                                               6,446                     6,797                      8,025                      9,678                      13,648         
 Net interest income                                                            31,793                    31,735                     32,149                     31,971                     31,747         
 Wealth management fee income                                                   12,131                    10,791                     10,119                     9,996                      9,955          
 Service charges and fees                                                       846                       859                        785                        695                        816            
 Bank owned life insurance                                                      611                       313                        314                        318                        328            
 Gain on loans held for sale at fair value (Mortgage banking) (A)               1,025                     1,470                      954                        550                        292            
 Gain/(loss) on loans held for sale at lower of cost or fair value(B)           282                       —                          7,429                      —                          (3          )  
 Fee income related to loan level, back-to-back swaps (A)                       —                         —                          —                          202                        1,418          
 Gain on sale of SBA loans (A)                                                  1,449                     375                        79                         258                        1,054          
 Corporate advisory fee income (A)                                              1,098                     50                         75                         65                         75             
 Other income                                                                   643                       590                        456                        417                        384            
 Securities (losses)/gains, net                                                 (265        )             (42         )              —                          125                        198            
 Total other income                                                             17,820                    14,406                     20,211                     12,626                     14,517         
 Salaries and employee benefits (C)                                             21,990                    19,902                     19,202                     19,186                     19,226         
 Premises and equipment                                                         4,113                     4,189                      4,109                      4,036                      4,043          
 FDIC insurance expense                                                         585                       665                        605                        455                        250            
 FHLB prepayment penalty                                                        —                         4,784                      —                          —                          —              
 Valuation allowance loans held for sale (D)                                    —                         4,425                      —                          —                          —              
 Other expenses                                                                 4,906                     5,284                      4,545                      5,337                      4,716          
 Total operating expenses                                                       31,594                    39,249                     28,461                     29,014                     28,235         
 Pretax income before provision for loan losses                                 18,019                    6,892                      23,899                     15,583                     18,029         
 Provision for loan and lease losses (E)                                        225                       2,350                      5,150                      4,900                      20,000         
 Income/(loss) before income taxes                                              17,794                    4,542                      18,749                     10,683                     (1,971      )  
 Income tax expense/(benefit) (F)                                               4,616                     1,512                      5,202                      2,441                      (3,344      )  
 Net income                                                              $      13,178              $     3,030               $      13,547              $      8,242               $      1,373          
                                                                                                                                                                                                          
 Total revenue (G)                                                       $      49,613              $     46,141              $      52,360              $      44,597              $      46,264         
 Per Common Share Data:                                                                                                                                                                                   
 Earnings per share (basic)                                              $      0.70                $     0.16                $      0.72                $      0.44                $      0.07           
 Earnings per share (diluted)                                                   0.67                      0.16                       0.71                       0.43                       0.07           
 Weighted average number of common shares outstanding:                                                                                                                                                    
 Basic                                                                          18,950,305                18,947,864                 18,908,337                 18,872,070                 18,858,343     
 Diluted                                                                        19,531,689                19,334,569                 19,132,650                 19,059,822                 19,079,575     
 Performance Ratios:                                                                                                                                                                                      
 Return on average assets annualized (ROAA)                                     0.89        %             0.21        %              0.89        %              0.56        %              0.11        %  
 Return on average equity annualized (ROAE)                                     10.03       %             2.32        %              10.53       %              6.56        %              1.08        %  
 Return on average tangible common equity (ROATCE) (H)                          10.94       %             2.51        %              11.41       %              7.13        %              1.17        %  
 Net interest margin (tax-equivalent basis)                                     2.28        %             2.25        %              2.20        %              2.27        %              2.57        %  
 GAAP efficiency ratio (I)                                                      63.68       %             85.06       %              54.36       %              65.06       %              61.03       %  
 Operating expenses / average assets annualized                                 2.14        %             2.66        %              1.86        %              1.97        %              2.18        %  
1. Gain on loans held for sale at fair value (mortgage banking), fee income
related to loan level, back-to-back swaps, gain on sale of SBA loans and
corporate advisory fee income are all included in “capital markets
activity” as referred to within the earnings release.
2. Includes gain on sale of PPP loans of $355 million completed in the
September quarter.
3. The March 2021 quarter included $1.5 million of severance expense related
to corporate restructuring.
4. The December 2020 quarter reflects a $4.4 million write-down of a
commercial real estate held for sale loan associated with an assisted living
facility.
5. The March 2020, June 2020 and September 2020 quarters included a higher
provision for loan and lease losses primarily due to the environment created
by the COVID-19 pandemic.
6. The March 2020 quarter included a $3.2 million tax benefit related to the
carryback of tax NOLs to prior years when the Federal tax rate was 14% higher.
7. Total revenue equals net interest income plus total other income.
8. Return on average tangible common equity is calculated by dividing tangible
common equity by annualized net income.  See Non-GAAP financial measures
reconciliation included in these tables.
9. Calculated as total operating expenses as a percentage of total revenue. 
For Non-GAAP efficiency ratio, see Non-GAAP financial measures reconciliation
included in these tables.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
 CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in Thousands)
(Unaudited)

                                                                                                                                                                              As of                                                                                                              
                                                                                                                                                                              March 31,               Dec 31,                Sept 30,                June 30,                March 31,           
                                                                                                                                                                              2021                    2020                   2020                    2020                    2020                
 ASSETS                                                                                                                                                                                                                                                                                          
 Cash and due from banks                                                                                                                                                      $      8,159            $     10,629           $      8,400            $      5,608            $      6,171        
 Federal funds sold                                                                                                                                                                  102                    102                     102                     102                     102          
 Interest-earning deposits                                                                                                                                                           468,276                642,591                 670,863                 617,117                 767,730      
 Total cash and cash equivalents                                                                                                                                                     476,537                653,322                 679,365                 622,827                 774,003      
 Securities available for sale                                                                                                                                                       875,301                622,689                 596,929                 539,742                 400,558      
 Equity security                                                                                                                                                                     14,852                 15,117                  15,159                  15,159                  14,034       
 FHLB and FRB stock, at cost                                                                                                                                                         13,699                 13,709                  18,433                  18,598                  40,871       
 Residential mortgage                                                                                                                                                                498,884                520,188                 532,120                 536,015                 532,063      
 Multifamily mortgage                                                                                                                                                                1,178,940              1,127,198               1,168,796               1,178,494               1,203,487    
 Commercial mortgage                                                                                                                                                                 697,599                694,034                 722,678                 761,910                 760,648      
 Commercial loans (A)                                                                                                                                                                1,982,570              1,975,337               1,930,984               2,316,125               1,810,214    
 Consumer loans                                                                                                                                                                      36,519                 37,016                  51,859                  53,111                  53,365       
 Home equity lines of credit                                                                                                                                                         45,624                 50,547                  52,194                  54,006                  55,856       
 Other loans                                                                                                                                                                         199                    225                     260                     272                     347          
 Total loans                                                                                                                                                                         4,440,335              4,404,545               4,458,891               4,899,933               4,415,980    
 Less: Allowances for loan and lease losses                                                                                                                                          67,536                 67,309                  66,145                  66,065                  63,783       
 Net loans                                                                                                                                                                           4,372,799              4,337,236               4,392,746               4,833,868               4,352,197    
 Premises and equipment                                                                                                                                                              23,260                 21,609                  21,668                  21,449                  21,243       
 Other real estate owned                                                                                                                                                             50                     50                      50                      50                      50           
 Accrued interest receivable                                                                                                                                                         23,916                 22,495                  22,192                  15,956                  11,816       
 Bank owned life insurance                                                                                                                                                           46,448                 46,809                  46,645                  46,479                  46,309       
 Goodwill and other intangible assets                                                                                                                                                43,524                 43,891                  39,622                  39,943                  40,265       
 Finance lease right-of-use assets                                                                                                                                                   4,143                  4,330                   4,517                   4,704                   4,891        
 Operating lease right-of-use assets                                                                                                                                                 10,186                 9,421                   10,011                  10,810                  11,553       
 Other assets (B)                                                                                                                                                                    64,912                 99,764                  110,770                 111,630                 113,668      
 TOTAL ASSETS                                                                                                                                                                 $      5,969,627        $     5,890,442        $      5,958,107        $      6,281,215        $      5,831,458    
                                                                                                                                                                                                                                                                                                 
 LIABILITIES                                                                                                                                                                                                                                                                                     
 Deposits:                                                                                                                                                                                                                                                                                       
 Noninterest-bearing demand deposits                                                                                                                                          $      908,922          $     833,500          $      838,307          $      911,989          $      581,085      
 Interest-bearing demand deposits                                                                                                                                                    1,987,567              1,849,254               1,858,529               1,804,102               1,680,452    
 Savings                                                                                                                                                                             141,743                130,731                 127,737                 123,140                 112,668      
 Money market accounts                                                                                                                                                               1,256,605              1,298,885               1,251,349               1,183,603               1,163,410    
 Certificates of deposit – Retail                                                                                                                                                    474,668                530,222                 586,801                 629,941                 651,000      
 Certificates of deposit – Listing Service                                                                                                                                           31,631                 32,128                  32,677                  35,327                  38,895       
 Subtotal “customer” deposits                                                                                                                                                        4,801,136              4,674,720               4,695,400               4,688,102               4,227,510    
 IB Demand – Brokered                                                                                                                                                                110,000                110,000                 130,000                 130,000                 180,000      
 Certificates of deposit – Brokered                                                                                                                                                  33,777                 33,764                  33,750                  33,736                  33,723       
 Total deposits                                                                                                                                                                      4,944,913              4,818,484               4,859,150               4,851,838               4,441,233    
 Short-term borrowings                                                                                                                                                               15,000                 15,000                  15,000                  15,000                  515,000      
 FHLB advances (C)                                                                                                                                                                   —                      —                       105,000                 105,000                 105,000      
 Paycheck Protection Program Liquidity Facility (D)                                                                                                                                  168,180                177,086                 183,790                 535,837                 —            
 Finance lease liability                                                                                                                                                             6,528                  6,753                   6,976                   7,196                   7,402        
 Operating lease liability                                                                                                                                                           10,509                 9,737                   10,318                  11,116                  11,852       
 Subordinated debt, net (E)                                                                                                                                                          181,837                181,794                 83,585                  83,529                  83,473       
 Other liabilities (B)                                                                                                                                                               120,219                154,466                 156,472                 163,719                 160,173      
 Due to brokers                                                                                                                                                                      —                      —                       15,088                  —                       10,885       
 TOTAL LIABILITIES                                                                                                                                                                   5,447,186              5,363,320               5,435,379               5,773,235               5,335,018    
 Shareholders’ equity                                                                                                                                                                522,441                527,122                 522,728                 507,980                 496,440      
 TOTAL LIABILITIES AND                                                                                                                                                                                                                                                                           
 SHAREHOLDERS’ EQUITY                                                                                                                                                         $      5,969,627        $     5,890,442        $      5,958,107        $      6,281,215        $      5,831,458    
 Assets under management and / or administration at Peapack-Gladstone Bank ’ s Private Wealth Management Division (market value, not included above-dollars in billions)      $      9.4              $     8.8              $      7.6              $      7.2              $      6.4          
1. Includes PPP loans of $233 million at March 31, 2021, $196 million at
December 31, 2020, $202 million at September 30, 2020 and $547 million at June
30, 2020.
2. The change in other assets and other liabilities was primarily due to the
change in the fair value of our back-to-back swap program.
3. The Company prepaid $105 million of FHLB advances with a weighted-average
rate of 3.20% during the December 2020 quarter.
4. Represents funding provided by the Federal Reserve for pledged PPP loans.
5. The increase was due to the completion of a $100 million subordinated debt
offering in December 22, 2020.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED BALANCE SHEET DATA
(Dollars in Thousands)
(Unaudited)

                                                                As of                                                                                                   
                                                                March 31,             Dec 31,              Sept 30,              June 30,             March 31,         
                                                                2021                  2020                 2020                  2020                 2020              
 Asset Quality:                                                                                                                                                         
 Loans past due over 90 days and still accruing                 $      —              $     —              $      —              $      —             $      —          
 Nonaccrual loans (A)                                                  11,767               11,410                8,611                 26,697               29,324     
 Other real estate owned                                               50                   50                    50                    50                   50         
 Total nonperforming assets                                     $      11,817         $     11,460         $      8,661          $      26,747        $      29,374     
                                                                                                                                                                        
 Nonperforming loans to total loans                                    0.27     %           0.26     %            0.19     %            0.54    %            0.66    %  
 Nonperforming assets to total assets                                  0.20     %           0.19     %            0.15     %            0.43    %            0.50    %  
                                                                                                                                                                        
 Performing TDRs (B)(C)                                         $      197            $     201            $      2,278          $      2,376         $      2,389      
                                                                                                                                                                        
 Loans past due 30 through 89 days and still accruing (D)(E)    $      1,622          $     5,053          $      6,609          $      3,785         $      8,261      
                                                                                                                                                                        
 Loans subject to special mention                               $      166,013        $     162,103        $      129,700        $      27,922        $      13,222     
                                                                                                                                                                        
 Classified loans                                               $      25,714         $     37,771         $      41,263         $      63,562        $      58,938     
                                                                                                                                                                        
 Impaired loans                                                 $      11,964         $     16,204         $      15,514         $      33,708        $      36,369     
                                                                                                                                                                        
 Allowance for loan and lease losses:                                                                                                                                   
 Beginning of period                                            $      67,309         $     66,145         $      66,065         $      63,783        $      43,676     
 Provision for loan and lease losses                                   225                  2,350                 5,150                 4,900                20,000     
 (Charge-offs)/recoveries, net                                         2                    (1,186   )            (5,070   )            (2,618  )            107        
 End of period                                                  $      67,536         $     67,309         $      66,145         $      66,065        $      63,783     
                                                                                                                                                                        
 ALLL to nonperforming loans                                           573.94   %           589.91   %            768.15   %            247.46  %            217.51  %  
 ALLL to total loans                                                   1.52     %           1.53     %            1.48     %            1.35    %            1.44    %  
 General ALLL to total loans (F)                                       1.45     %           1.47     %            1.48     %            1.26    %            1.30    %  
1. Excludes one commercial loan held for sale of $5.6 million at March 31,
2021. Excludes residential and commercial loans held for sale of $8.5 million
at December 31, 2020.  Excludes one commercial loan held for sale of $10.0
million at September 30, 2020.
2. Amounts reflect TDRs that are paying according to restructured terms.
3. Amount does not include $3.9 million at March 31, 2021, $4.0 million at
December 31, 2020, $5.2 million at September 30, 2020, $23.2 million at June
30, 2020 and $25.9 million at March 31, 2020 of TDRs included in nonaccrual
loans.
4. Excludes a residential loan held for sale of $93,000 at December 31, 2020.
5. December 31, 2020 includes $1.3 million of residential loans that are
classified as delinquent due to an escrow payment shortage due to a recent
change in escrow payment requirement.
6. Total ALLL less specific reserves equals general ALLL.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED BALANCE SHEET DATA
(Dollars in Thousands)
(Unaudited)

                                                               March 31,                  December 31,                  March 31,                
                                                               2021                       2020                          2020                     
 Capital Adequacy                                                                                                                                
 Equity to total assets (A)(J)                                                8.75   %                      8.95   %                   8.51   %  
 Tangible Equity to tangible assets (B)                                       8.08   %                      8.27   %                   7.88   %  
 Tangible Equity to tangible assets excluding PPP loans (C)                   8.41   %                      8.55   %                   7.88   %  
 Book value per share (D)                                                $    27.45                   $     27.78                 $    26.33     
 Tangible Book Value per share (E)                                       $    25.16                   $     25.47                 $    24.20     



                                                                   March 31,                            December 31,                          March 31,                         
                                                                   2021                                 2020                                  2020                              
 Regulatory Capital – Holding Company                                                                                                                                           
 Tier I leverage                                                   $   491,384          8.66%           $    483,535            8.53%         $   458,640          8.93%        
 Tier I capital to risk-weighted assets                                491,384               12.00           483,535            11.93             458,640          10.71        
 Common equity tier I capital ratio to risk-weighted assets            491,355               12.00           483,500            11.93             458,639          10.71        
 Tier I & II capital to risk-weighted assets                           724,599               17.70           716,210            17.67             595,770          13.91        
                                                                                                                                                                                
 Regulatory Capital – Bank                                                                                                                                                      
 Tier I leverage (F)                                               $   564,533          9.95%           $    549,575            9.71%         $   527,433          10.28%       
 Tier I capital to risk-weighted assets (G)                            564,533          13.79                549,575            13.55             527,433                12.33  
 Common equity tier I capital ratio to risk-weighted assets (H)        564,504          13.78                549,540            13.55             527,432                12.33  
 Tier I & II capital to risk-weighted assets (I)                       615,925          15.04                600,478            14.81             581,025          13.58        
1. Equity to total assets is calculated as total shareholders’ equity as a
percentage of total assets at period end.
2. Tangible equity and tangible assets are calculated by excluding the balance
of intangible assets from shareholders’ equity and total assets,
respectively. Tangible equity as a percentage of tangible assets at period end
is calculated by dividing tangible equity by tangible assets at period end. 
See Non-GAAP financial measures reconciliation included in these tables.
3. Tangible equity and tangible assets excluding PPP loans are calculated by
excluding the balance of intangible assets from shareholders’ equity and
excluding the balance of intangible assets and PPP loans from total assets.
Tangible equity as a percentage of tangible assets excluding PPP loans at
period end is calculated by dividing tangible equity by tangible assets
excluding PPP loans at period end.  See Non-GAAP financial measures
reconciliation included in these tables.
4. Book value per common share is calculated by dividing shareholders’
equity by period end common shares outstanding
5. Tangible book value per excludes intangible assets.  Tangible book value
per share is calculated by dividing tangible equity by period end common
shares outstanding.  See Non-GAAP financial measures reconciliation tables.
6. Regulatory well capitalized standard = 5.00% ($284 million)
7. Regulatory well capitalized standard = 8.00% ($328 million)
8. Regulatory well capitalized standard = 6.50% ($266 million)
9. Regulatory well capitalized standard = 10.00% ($410 million)
10. PPP loans with a balance of $233 million and $196 million increased total
assets at March 31, 2021 and December 31, 2020, respectively.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
LOANS CLOSED
(Dollars in Thousands)
(Unaudited)

                                    For the Quarters Ended                                                                                         
                                    March 31,               Dec 31,                Sept 30,                June 30,                March 31,       
                                    2021                    2020                   2020                    2020                    2020            
 Residential loans retained         $      15,814           $     22,316           $      32,599           $      18,627           $      14,831   
 Residential loans sold                    45,873                 64,630                  54,521                  37,061                  19,391   
 Total residential loans                   61,687                 86,946                  87,120                  55,688                  34,222   
 Commercial real estate                    38,363                 —                       1,613                   748                     8,858    
 Multifamily                               85,009                 1,184                   1,500                   11,960                  61,998   
 Commercial (C&I) loans (A) (B)            129,141                218,235                 118,048                 99,294                  42,908   
 SBA (C)                                   58,730                 8,355                   4,962                   595,651                 13,830   
 Wealth lines of credit (A)                2,475                  3,925                   2,000                   500                     3,250    
 Total commercial loans                    313,718                231,699                 128,123                 708,153                 130,844  
 Installment loans                         63                     690                     253                     950                     256      
 Home equity lines of credit (A)           1,899                  2,330                   4,759                   4,280                   3,632    
 Total loans closed                 $      377,367          $     321,665          $      220,255          $      769,071          $      168,954  
1. Includes loans and lines of credit that closed in the period but not
necessarily funded.
2. Includes equipment finance.
3. Includes PPP loans of $47 million for the quarter ended March 31, 2021 and
$596 million for the three months ended June 30, 2020.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
THREE MONTHS ENDED
(Tax-Equivalent Basis, Dollars in Thousands)

                                                 March 31, 2021                                                 March 31, 2020                                               
                                                 Average                  Income/                               Average                  Income/                             
                                                 Balance                  Expense               Yield           Balance                  Expense               Yield         
 ASSETS:                                                                                                                                                                     
 Interest-earning assets:                                                                                                                                                    
 Investments:                                                                                                                                                                
 Taxable (A)                                     $     761,187            $     2,629                1.38  %    $     411,806            $     2,459                2.39  %  
 Tax-exempt (A) (B)                                    7,980                    98                   4.91             10,534                   131                  4.97     
                                                                                                                                                                             
 Loans (B) (C):                                                                                                                                                              
 Mortgages                                             501,590                  3,954                3.15             535,114                  4,576                3.42     
 Commercial mortgages                                  1,840,363                14,420               3.13             1,955,808                18,483               3.78     
 Commercial                                            1,932,692                16,455               3.41             1,758,137                18,593               4.23     
 Commercial construction                               15,606                   139                  3.56             5,629                    88                   6.25     
 Installment                                           37,695                   276                  2.93             53,983                   464                  3.44     
 Home equity                                           48,853                   399                  3.27             55,654                   614                  4.41     
 Other                                                 246                      5                    8.13             364                      9                    9.89     
 Total loans                                           4,377,045                35,648               3.26             4,364,689                42,827               3.92     
 Federal funds sold                                    102                      —                    0.25             102                      —                    0.25     
 Interest-earning deposits                             555,331                  128                  0.09             251,566                  552                  0.88     
 Total interest-earning assets                         5,701,645                38,503               2.70  %          5,038,697                45,969               3.65  %  
 Noninterest-earning assets:                                                                                                                                                 
 Cash and due from banks                               11,129                                                         5,517                                                  
 Allowance for loan and lease losses                   (71,160    )                                                   (44,368    )                                           
 Premises and equipment                                22,634                                                         21,145                                                 
 Other assets                                          228,134                                                        161,452                                                
 Total noninterest-earning assets                      190,737                                                        143,746                                                
 Total assets                                    $     5,892,382                                                $     5,182,443                                              
                                                                                                                                                                             
 LIABILITIES:                                                                                                                                                                
 Interest-bearing deposits:                                                                                                                                                  
 Checking                                        $     1,908,380          $     978                  0.20  %    $     1,540,798          $     3,447                0.89  %  
 Money markets                                         1,259,597                794                  0.25             1,192,049                2,981                1.00     
 Savings                                               135,202                  17                   0.05             110,905                  15                   0.05     
 Certificates of deposit – retail                      533,488                  1,470                1.10             698,019                  3,694                2.12     
 Subtotal interest-bearing deposits                    3,836,667                3,259                0.34             3,541,771                10,137               1.14     
 Interest-bearing demand – brokered                    110,000                  493                  1.79             180,000                  923                  2.05     
 Certificates of deposit – brokered                    33,769                   261                  3.09             33,715                   263                  3.12     
 Total interest-bearing deposits                       3,980,436                4,013                0.40             3,755,486                11,323               1.21     
 Borrowings                                            186,006                  209                  0.45             183,398                  1,012                2.21     
 Capital lease obligation                              6,608                    79                   4.78             7,475                    90                   4.82     
 Subordinated debt                                     181,795                  2,145                4.72             83,439                   1,223                5.86     
 Total interest-bearing liabilities                    4,354,845                6,446                0.59  %          4,029,798                13,648               1.35  %  
 Noninterest-bearing liabilities:                                                                                                                                            
 Demand deposits                                       848,325                                                        542,557                                                
 Accrued expenses and other liabilities                163,569                                                        101,662                                                
 Total noninterest-bearing liabilities                 1,011,894                                                      644,219                                                
 Shareholders’ equity                                  525,643                                                        508,426                                                
 Total liabilities and shareholders’ equity      $     5,892,382                                                $     5,182,443                                              
 Net interest income                                                      $     32,057                                                   $     32,321                        
 Net interest spread                                                                                 2.11  %                                                        2.30  %  
 Net interest margin (D)                                                                             2.28  %                                                        2.57  %  
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 21% 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)

                                                 March 31, 2021                                                 December 31, 2020                                            
                                                 Average                  Income/                               Average                  Income/                             
                                                 Balance                  Expense               Yield           Balance                  Expense               Yield         
 ASSETS:                                                                                                                                                                     
 Interest-earning assets:                                                                                                                                                    
 Investments:                                                                                                                                                                
 Taxable (A)                                     $     761,187            $     2,629                1.38  %    $     636,417            $     2,033                1.28  %  
 Tax-exempt (A) (B)                                    7,980                    98                   4.91             8,137                    101                  4.96     
                                                                                                                                                                             
 Loans (B) (C):                                                                                                                                                              
 Mortgages                                             501,590                  3,954                3.15             520,123                  4,372                3.36     
 Commercial mortgages                                  1,840,363                14,420               3.13             1,865,953                14,796               3.17     
 Commercial                                            1,932,692                16,455               3.41             1,943,855                16,587               3.41     
 Commercial construction                               15,606                   139                  3.56             10,376                   108                  4.16     
 Installment                                           37,695                   276                  2.93             44,581                   320                  2.87     
 Home equity                                           48,853                   399                  3.27             51,545                   429                  3.33     
 Other                                                 246                      5                    8.13             281                      6                    8.54     
 Total loans                                           4,377,045                35,648               3.26             4,436,714                36,618               3.30     
 Federal funds sold                                    102                      —                    0.25             102                      —                    0.25     
 Interest-earning deposits                             555,331                  128                  0.09             614,024                  148                  0.10     
 Total interest-earning assets                         5,701,645                38,503               2.70  %          5,695,394                38,900               2.73  %  
 Noninterest-earning assets:                                                                                                                                                 
 Cash and due from banks                               11,129                                                         9,632                                                  
 Allowance for loan and lease losses                   (71,160    )                                                   (68,862    )                                           
 Premises and equipment                                22,634                                                         21,698                                                 
 Other assets                                          228,134                                                        238,856                                                
 Total noninterest-earning assets                      190,737                                                        201,324                                                
 Total assets                                    $     5,892,382                                                $     5,896,718                                              
                                                                                                                                                                             
 LIABILITIES:                                                                                                                                                                
 Interest-bearing deposits:                                                                                                                                                  
 Checking                                        $     1,908,380          $     978                  0.20  %    $     1,850,917          $     1,059                0.23  %  
 Money markets                                         1,259,597                794                  0.25             1,273,681                811                  0.25     
 Savings                                               135,202                  17                   0.05             128,195                  17                   0.05     
 Certificates of deposit – retail                      533,488                  1,470                1.10             602,068                  2,106                1.40     
 Subtotal interest-bearing deposits                    3,836,667                3,259                0.34             3,854,861                3,993                0.41     
 Interest-bearing demand – brokered                    110,000                  493                  1.79             113,696                  514                  1.81     
 Certificates of deposit – brokered                    33,769                   261                  3.09             33,756                   267                  3.16     
 Total interest-bearing deposits                       3,980,436                4,013                0.40             4,002,313                4,774                0.48     
 Borrowings                                            186,006                  209                  0.45             244,753                  616                  1.01     
 Capital lease obligation                              6,608                    79                   4.78             6,832                    82                   4.80     
 Subordinated debt                                     181,795                  2,145                4.72             94,437                   1,325                5.61     
 Total interest-bearing liabilities                    4,354,845                6,446                0.59  %          4,348,335                6,797                0.63  %  
 Noninterest-bearing liabilities:                                                                                                                                            
 Demand deposits                                       848,325                                                        858,004                                                
 Accrued expenses and other liabilities                163,569                                                        166,933                                                
 Total noninterest-bearing liabilities                 1,011,894                                                      1,024,937                                              
 Shareholders’ equity                                  525,643                                                        523,446                                                
 Total liabilities and shareholders’ equity      $     5,892,382                                                $     5,896,718                                              
 Net interest income                                                      $     32,057                                                   $     32,103                        
 Net interest spread                                                                                 2.11  %                                                        2.10  %  
 Net interest margin (D)                                                                             2.28  %                                                        2.25  %  
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 21% 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
NON-GAAP FINANCIAL MEASURES RECONCILIATION

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

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

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

Non-GAAP Financial Reconciliation

(Dollars in thousands, except share data)



                                                           Three Months Ended                                                                                                               
                                                           March 31,                  Dec 31,                   Sept 30,                   June 30,                   March 31,             
 Tangible Book Value Per Share                             2021                       2020                      2020                       2020                       2020                  
 Shareholders’ equity                                      $      522,441             $     527,122             $      522,728             $      507,980             $      496,440        
 Less: Intangible assets, net                                     43,524                    43,891                     39,622                     39,943                     40,265         
 Tangible equity                                                  478,917                   483,231                    483,106                    468,037                    456,175        
                                                                                                                                                                                            
 Period end shares outstanding                                    19,034,870                18,974,703                 18,924,953                 18,905,135                 18,852,523     
 Tangible book value per share                             $      25.16               $     25.47               $      25.53               $      24.76               $      24.20          
 Book value per share                                             27.45                     27.78                      27.62                      26.87                      26.33          
                                                                                                                                                                                            
 Tangible Equity to Tangible Assets                                                                                                                                                         
 Total assets                                              $      5,969,627           $     5,890,442           $      5,958,107           $      6,281,215           $      5,831,458      
 Less: Intangible assets, net                                     43,524                    43,891                     39,622                     39,943                     40,265         
 Tangible assets                                                  5,926,103                 5,846,551                  5,918,485                  6,241,272                  5,791,193      
 Less: PPP Loans                                                  232,721                   195,574                    201,991                    547,004                    —              
 Tangible Assets excluding PPP Loans                              5,693,382                 5,650,977                  5,716,494                  5,694,268                  5,791,193      
 Tangible equity to tangible assets                               8.08        %             8.27        %              8.16        %              7.50        %              7.88        %  
 Tangible equity to tangible assets excluding PPP loans           8.41        %             8.55        %              8.45        %              8.22        %              7.88        %  
 Equity to assets (A)                                             8.75        %             8.95        %              8.77        %              8.09        %              8.51        %  
1. Equity to total assets would be 9.11% if PPP loans of $233 million were
excluded from total assets of March 31, 2021. Equity to total assets would be
9.26% if PPP loans of $196 million were excluded from total assets as of
December 31, 2020. Equity to total assets would be 9.08% if PPP loans of $202
million were excluded from total assets as of September 30, 2020. Equity to
total assets would be 8.86% if PPP loans of $547 million were excluded from
total assets as of June 30, 2020.


                                             Three Months Ended                                                                                                
                                             March 31,               Dec 31,                Sept 30,                June 30,                March 31,          
 Return on Average Tangible Equity           2021                    2020                   2020                    2020                    2020               
 Net income                                  $      13,178           $     3,030            $      13,547           $      8,242            $      1,373       
                                                                                                                                                               
 Average shareholders’ equity                $      525,643          $     523,446          $      514,736          $      502,683          $      508,426     
 Less: Average intangible assets, net               43,742                 40,336                  39,811                  40,139                  40,459      
 Average tangible equity                            481,901                483,110                 474,925                 462,544                 467,967     
                                                                                                                                                               
 Return on average tangible common equity           10.94    %             2.51     %              11.41    %              7.13     %              1.17     %  



                                              Three Months Ended                                                                                           
                                              March 31,              Dec 31,               Sept 30,               June 30,               March 31,         
 Efficiency Ratio                             2021                   2020                  2020                   2020                   2020              
 Net interest income                          $      31,793          $     31,735          $      32,149          $      31,971          $      31,747     
 Total other income                                  17,820                14,406                 20,211                 12,626                 14,517     
 Less: Loss/(gain) on loans held for sale                                                                                                                  
 at lower of cost or fair value                      (282    )             —                      (7,429  )              —                      3          
 Less: Income from life insurance proceeds           (302    )             —                      —                      —                      —          
 Add: Securities (gains)/losses, net                 265                   42                     —                      (125    )              (198    )  
 Total recurring revenue                             49,294                46,183                 44,931                 44,472                 46,069     
                                                                                                                                                           
 Operating expenses                                  31,594                39,249                 28,461                 29,014                 28,235     
 Less:                                                                                                                                                     
 FHLB prepayment penalty                             —                     4,784                  —                      —                      —          
 Valuation allowance loans held for sale             —                     4,425                  —                      —                      —          
 Severance expense                                   1,532                 —                      —                      —                      —          
 Total operating expense                             30,062                30,040                 28,461                 29,014                 28,235     
                                                                                                                                                           
 Efficiency ratio                                    60.99   %             65.05   %              63.34   %              65.24   %              61.29   %  

Contact:

Jeffrey J. Carfora, SEVP and CFO

Peapack-Gladstone Financial Corporation

T: 908-719-4308
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