Exhibit 99.1

Contact:

Jeffrey J. Carfora, SEVP and CFO

Peapack-Gladstone Financial Corporation

T: 908-719-4308

PEAPACK-GLADSTONE FINANCIAL CORPORATION

REPORTS RECORD FOURTH QUARTER AND FULL YEAR RESULTS,

DRIVEN BY SOLID WEALTH MANAGEMENT AND COMMERCIAL BANKING ACTIVITIES

Bedminster, N.J.– January 29, 2020 – Peapack-Gladstone Financial Corporation (NASDAQ Global Select Market: PGC) (the “Company”) announces its fourth quarter and full year 2019 results, a quarterly dividend, and the status of the stock repurchase program.  

For the quarter ended December 31, 2019, the Company recorded revenue of $46.44 million, pretax income of $17.79 million, net income of $12.23 million and diluted earnings per share (“EPS”) of $0.64, compared to $40.64 million, $13.62 million, $10.73 million and $0.55, respectively, for the same three-month period last year. The 2019 quarter included increased net interest income and non-interest income, partially offset by an increased provision for loan and lease losses (due to loan growth) and increased operating expenses (due in part to the wealth management firm acquired in September 2019). In comparing the fourth quarter of 2019 to the fourth quarter of 2018, revenue increased 14% and pretax income increased 31%, reflecting favorable operating leverage during the period. For the same periods net income increased 14% and EPS increased 16%.  The lower growth in net income and EPS relative to pre-tax income was due to a higher effective tax rate in 2019 caused by changes in NJ State tax law in 2018.       

For the twelve months ended December 31, 2019, the Company recorded total revenue of $174.97 million, pretax income of $66.12 million, net income of $47.43 million and diluted earnings per share of $2.44, compared to $159.36 million, $57.72 million, $44.17 million and $2.31, respectively, for the twelve months ended December 31, 2018, reflecting increases of 10% in revenue and 15% in pretax income, reflecting favorable operating leverage. Net income and EPS increased 7% and 6%, respectively, less than the increase in pretax income due to the increase in the effective tax rate in 2019. The effective tax rate was 28.26% for twelve months of 2019 compared to 23.48% for the twelve months of 2018. The increase was caused by changes in NJ State tax law in 2018.    

As previously announced, on July 25, 2019, the Company authorized the repurchase of up to 960,000 shares, or approximately 5% of its outstanding shares, through June 30, 2020.  During the fourth quarter of 2019, under this program, the Company purchased 143,925 shares, at an average price of $29.78, for a total cost of $4.3 million. To date, under this program, the Company purchased 739,778 shares, at an average price of $28.39, for a total cost of $21.0 million. 220,222 shares remain to be purchased under the authorization.

Douglas L. Kennedy, President and CEO, said, “We were very pleased with our earnings this past quarter, as we continued to drive operating leverage. We acknowledge the challenges the Bank and the industry face given the recent Fed rate decreases and the shape of the yield curve.  We were pleased our reported net interest margin (“NIM”) did not decrease and our NIM, adjusted for prepayment premiums and excess liquidity (see page 6), only decreased marginally in the fourth quarter, after the three rate decreases during the second half of 2019.  Further, we believe our strategy (which results in a higher incidence of fee income - 33% of total revenue for the fourth quarter of 2019) will enable us to deliver higher quality earnings and increased shareholder value over time.”

EXECUTIVE SUMMARY:

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

1

December 2019 Quarter Compared to Prior Year Quarter

	Three Months Ended			Three Months Ended
	December 31,			December 31,			Increase/
(Dollars in millions, except per share data)	2019 (A)			2018 (B)			(Decrease)
Net interest income	$	30.91		$	29.39		$	1.52		5	%
Provision for loan and lease losses		1.95			1.50			0.45		30
Net interest income after provision		28.96			27.89			1.07		4
Wealth management fee income		10.12			8.55			1.57		18
Capital markets activity		3.73			2.19			1.54		70
Other income		1.68			0.51			1.17		229
Total other income		15.53			11.25			2.74		24
Operating expenses		26.70			25.52			1.18		5
Pretax income		17.79			13.62			2.63		19
Income tax expense		5.56			2.89			2.67		92
Net income	$	12.23		$	10.73		$	(0.04	)	(0	)%
Diluted EPS	$	0.64		$	0.55		$	0.09		16	%
Total Revenue	$	46.44		$	40.64		$	5.80		14	%
Effective tax rate		31.25	%		21.22	%		10.03
Return on average assets annualized		0.98	%		0.96	%		0.02
Return on average equity annualized		9.81	%		9.32	%		0.49

(A) The December 2019 quarter included a full quarter of wealth management fee income and expense related to Point View Wealth Management, (“Point View”), which was acquired effective September 1, 2019.  The December 2019 quarter included a higher effective tax rate than the prior year quarter due to changes in NJ state tax law.

(B) The December 2018 quarter included $4.39 million loss on the sale of multifamily loans; $3.00 million of life insurance proceeds related to the December 31, 2018 passing of the founder and managing principal of MCM; and a $405,000 write-down of intangible assets related to MCM.

December 2019 Quarter Compared to Linked Quarter

	Three Months Ended			Three Months Ended
	December 31,			September 30,			Increase/
(Dollars in millions, except per share data)	2019 (A)			2019			(Decrease)
Net interest income	$	30.91		$	30.09		$	0.82		3	%
Provision for loan and lease losses		1.95			0.80			1.15		144
Net interest income after provision		28.96			29.29			(0.33	)	(1	)
Wealth management fee income		10.12			9.50			0.62		7
Capital markets activity		3.73			2.77			0.96		35
Other income		1.68			2.15			(0.47	)	(22	)
Total other income		15.53			14.42			1.11		8
Operating expenses		26.70			26.26			0.44		2
Pretax income		17.79			17.45			0.34		2
Income tax expense		5.56			5.22			0.34		7
Net income	$	12.23		$	12.23		$	0.00		0	%
Diluted EPS	$	0.64		$	0.63		$	0.01		2	%
Total Revenue	$	46.44		$	44.51		$	1.93		4	%
Effective tax rate		31.25	%		29.91	%		1.34
Return on average assets annualized		0.98	%		1.00	%		(0.02	)
Return on average equity annualized		9.81	%		9.87	%		(0.06	)

2

(A) The quarter ended December 31, 2019 included a full quarter of wealth management fee income and expense related to Point View, which was acquired effective September 1, 2019 compared to one month in the quarter ended September 30, 2019.

Year over Year Comparison

	Year Ended			Year Ended
	December 31,			December 31,			Increase/
(Dollars in millions, except per share data)	2019 (A)			2018 (B)			(Decrease)
Net interest income	$	120.27		$	115.16		$	5.11		4	%
Provision for loan and lease losses		4.00			3.55			0.45		13
Net interest income after provision		116.27			111.61			4.66		4
Wealth management fee income		38.36			33.25			5.11		15
Capital markets activity		8.67			5.81			2.86		49
Other income		7.67			5.14			2.53		49
Total other income		54.70			44.20			10.50		24
Operating expenses		104.85			98.09			6.76		7
Pretax income		66.12			57.72			8.40		15
Income tax expense		18.69			13.55			5.14		38
Net income	$	47.43		$	44.17		$	3.26		7	%
Diluted EPS	$	2.44		$	2.31		$	0.13		6	%
Total Revenue	$	174.97		$	159.36		$	15.61		10	%
Effective tax rate		28.26	%		23.48	%		4.78
Return on average assets annualized		0.99	%		1.02	%		(0.03	)
Return on average equity annualized		9.70	%		10.13	%		(0.43	)

(A) The year ended December 31, 2019 included a full year of wealth management fee income and expense related to Lassus Wherley, which was acquired effective September 1, 2018, and includes four months of wealth management fee income and expense related to Point View, which was acquired effective September 1, 2019.  The 2019 twelve months included a higher effective tax rate than the prior year due to changes in NJ state tax law.

(B) The 2018 year includes $4.39 million loss on the sale of multifamily loans; $3.00 million of life insurance proceeds related to the December 31, 2018 passing of the founder and managing principal of MCM; and a $405,000 write-down of intangible assets related to MCM.  

Other highlights for the quarter included:

• Wealth Management remains integral to our strategy and provides a diversified, predictable, and stable source of revenue over time:

o As previously announced, effective September 1, 2019 the Company completed its acquisition of Point View, a registered investment advisor headquartered in Summit, NJ, which added nearly $350 million of assets under management and/or administration (“AUM/AUA”).

o At December 31, 2019, the market value of AUM/AUA at the Peapack Private Wealth Management Division of Peapack-Gladstone Bank (the “Bank”) was $7.5 billion reflecting an increase of $1.7 billion from $5.8 billion at December 31, 2018, reflecting growth of 29% from the end of the prior year.

o Wealth management fee income totaled $10.12 million and $38.36 million for the quarter and year ended December 31, 2019, reflecting an increase of $1.6 million, or 18%, from the December 2018 quarter and $5.1 million or 15% from the 2018 year.  

o Wealth management fee income, which comprised approximately 22% of the Company’s total revenue for the quarter ended December 31, 2019, continues to contribute significantly to the Company’s diversified revenue sources.

3

• Growth in Commercial Banking also continues to be integral to our strategy:

o Total commercial and industrial (“C&I”) loans (including equipment finance leases and loans of $659 million) at December 31, 2019 were $1.78 billion.  This reflected net growth of $378 million (27%) when compared to $1.40 billion at December 31, 2018 and reflected net growth of $201 million when compared to the September 30, 2019 balance (13% growth linked quarter; 51% annualized).  

o C&I momentum has continued to build and pipelines remain strong.

o As of December 31, 2019, total C&I loans comprised 40% of the total loan portfolio, as compared to 36% at December 31, 2018.  As of December 31, 2019, total multifamily loans comprised 27% of the total loan portfolio compared to 29% at December 31, 2018.

o The Bank’s concentration in commercial real estate loans was 404% of risk-based capital at December 31, 2019 compared to 394% at December 31, 2018. The slight increase was due to management’s plan to generate volumes ahead of and at yields in excess of expected significant maturities/payoffs in 2020.  

• Deposits, funding, and interest rate risk continue to be actively managed:

o Deposits totaled $4.24 billion at December 31, 2019.  This reflected net growth of $348 million (9%) when compared to $3.90 billion at December 31, 2018 and increased $182 million (4% growth linked quarter; 18% annualized) when compared to the September 30, 2019 balance.    

o The Company’s loan-to-deposit ratio was 104.0% at December 31, 2019, up slightly from September 30, 2019 and December 31, 2018 levels.

o The Company continues to have access to approximately $1.3 billion of available secured funding at the Federal Home Loan Bank.

o With the transformation to a commercial bank balance sheet and business model, the Company’s interest rate sensitivity models indicate the Company is asset sensitive as of December 31, 2019, and that net interest income would improve in a rising rate environment but decline in a falling rate environment. Over the past six months, the Company has been managing its balance sheet and deposit costs to mitigate the effects of a falling rate environment.  

• Capital and asset quality continue to be strong.

o The Company’s and Bank’s capital ratios at December 31, 2019 remain strong, despite $21.0  million of share repurchases made during the third and fourth quarters as part of the Company’s stock repurchase program. At December 31, 2019 the Company’s tangible capital ratio stood at 9.01%. The Company believes its existing capital and capital generation from earnings will be more than adequate to support planned balance sheet growth, wealth acquisitions, and potential purchases under its stock repurchase program.

o The Company authorized a 5% (960,000 shares) stock repurchase program on July 25, 2019 under which the Company has purchased 739,778 shares through the end of the fourth quarter.

o The Company’s tangible book value per share at December 31, 2019 was $24.47 reflecting an increase of 8% from $22.58 at December 31, 2018.

o Asset quality metrics continued to be strong as of December 31, 2019. Nonperforming assets at December 31, 2019 were $28.9 million, or 0.56% of total assets as compared to $25.7 million and 0.56% of total assets at December 31, 2018.  

SUPPLEMENTAL QUARTERLY DETAILS:

Wealth Management Business

In the December 2019 quarter, the Bank’s wealth management business generated $10.12 million in fee income, reflecting an increase of $1.57 million (18% growth) compared to $8.55 million for the December 2018 quarter, and reflecting an increase of $619,000 from the September 2019 quarter (7% growth linked quarter, 26%

4

annualized). The December 2019 quarter included three months of fee income related to Point View compared to one month in the September 2019 quarter, which was acquired effective September 1, 2019, as well as increased fees from net organic growth in assets under management.  

John P. Babcock, President of the “Peapack Private Wealth Management” division said, “I am pleased with our results; we had approximately $750 million of new business inflows in 2019 and have a strong pipeline as we finished the year strong.  We are making significant forward progress on integrating the systems, processes and people from our 2017, 2018, and 2019 acquisitions and continue to selectively look for additional acquisitions that can add talent and expertise to our wealth management organization.”

Loans / Commercial Banking

Net loans increased to $4.37 billion at December 31, 2019 from $3.89 billion at December 31, 2018, reflecting 12% annual growth. Loan/line origination levels were robust as was paydown activity. Mr. Kennedy noted, “We were pleased to have strong net loan growth, despite increased paydown activity. And, we have entered the new year with strong loan pipelines.”  

Total C&I loans (including equipment finance leases and loans of $659 million) at December 31, 2019 were $1.78 billion.  This reflected net growth of $378 million (27%) when compared to $1.40 billion at December 31, 2018 and reflected net growth of $201 million when compared to the September 30, 2019 balance (13% growth linked quarter; 51% annualized).

Mr. Kennedy said, “The loan market continues to be extremely competitive from a structure/credit and a pricing perspective. As I have noted before, we will continue to be disciplined and not compromise our credit standards, but we will compete on price, as long as returns remain reasonable as measured by our proprietary loan pricing model.”

Mr. Kennedy also said, “Our newly expanded Corporate Advisory and Structured Finance businesses give us the capability to engage in high level strategic debt, capital and valuation analysis coupled with succession, estate and wealth planning strategies, enabling us to provide a unique boutique level of service, giving us a competitive advantage over much of our peers.”

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.

For the quarter ended December 31, 2019, the Company utilized its excess balance sheet liquidity (basically interest-earning deposits), increased client deposits and short-term borrowings to fund its loan growth.

Mr. Kennedy noted, “As a commercial bank with an asset sensitive balance sheet, as the Fed reduces rates, our loans reprice faster than our deposits. Thus, we have been and will remain keenly focused on our comprehensive deposit rate reduction program with an eye toward relationship profitability.”  

As of December 31, 2019, in addition to approximately $610 million of cash, cash equivalents and investment securities on its balance sheet, the Company also had approximately $1.55 billion of secured funding available from the Federal Home Loan Bank, of which only $233 million was drawn as of December 31, 2019.

Mr. Kennedy noted, “Depending on market conditions, we may utilize lower cost fixed rate wholesale borrowings and/or interest rate swaps, as opposed to retail deposits, to fund fixed rate loan production.”

Kennedy went on to note, “The northeast market continues to be extremely competitive for deposits. The Company is focused on providing high touch client service, a key element in growing its personal and commercial core deposit base.  The Company is focused on multiple retail channels, as well as commercial channels, including its enhanced Treasury Management and Escrow offerings. Further, all of our Private Bankers remain keenly focused on deposit gathering.”

5

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

	Twelve Months Ended					Twelve Months Ended
	December 31, 2019					December 31, 2018
	NII			NIM		NII			NIM
NII/NIM excluding the below	$	119,032		2.67%		$	112,840		2.69%
Prepayment premiums received on loan paydowns		1,328		0.03%			2,002		0.05%
Effect of maintaining excess interest earning cash during 2019		(86	)	-0.07%			—			—
Material fees recognized on full paydowns of C&I loans		—			—		321		0.01%
NII/NIM as reported	$	120,274		2.63%		$	115,163		2.75%
	Three Months Ended					Three Months Ended					Three Months Ended
	December 31, 2019					September 30, 2019					December 31, 2018
	NII			NIM		NII			NIM		NII			NIM
NII/NIM excluding the below	$	30,385		2.61%		$	29,896		2.67%		$	28,899		2.70%
Prepayment premiums received on loan paydowns		414		0.03%			236		0.02%			495		0.04%
Effect of maintaining excess interest earning cash during 2019		115		-0.04%			(47	)	-0.09%			(9	)	-0.02%
Material fees recognized on full paydowns of C&I loans		—			—		—			—		—			—
NII/NIM as reported	$	30,914		2.60%		$	30,085		2.60%		$	29,385		2.72%

Net interest income and net interest margin comparisons are shown above.

Mr. Kennedy noted, “Given the yield curve as well as the recent Fed rate decreases, our reported NIM remained flat, but our core NIM declined slightly this quarter, as was expected. While our models indicate additional slight compression in Q1 2020, assuming no further Fed rate decreases, we believe our margin will gradually begin to improve after that. In addition to managing our balance sheet, asset yields and cost of deposits very closely, we will continue to focus even more on fee based activities.”    

Other Noninterest Income (other than Wealth Management fee income)

Noninterest income from Capital Markets activities (loan level back-to-back swap activities, SBA lending and sale program, and mortgage banking income) totaled $3.73 million for the December 2019 quarter compared to $2.77 million for the September 2019 quarter and $2.19 million for the December 2018 quarter.  Income from these programs are not linear each quarter, as some quarters will be higher than others.

Other income totaled $504,000 for the fourth quarter of 2019, compared to $902,000 for the third quarter of 2019, and $3.6 million for the fourth quarter of 2018. The December 2018 quarter included $3.00 million of life insurance proceeds related to the December 31, 2018 passing of the founder and managing principal of Murphy Capital Management.

The December 2018 quarter included a $4.39 million loss on the sale of $131 million of fixed rate multifamily loans, sold as part of the Company’s balance sheet management strategy.    

Operating Expenses

6

The Company’s total operating expenses were $26.70 million for the quarter ended December 31, 2019, compared to $26.26 million for the September 2019 quarter and $25.52 million for the December 2018 quarter.  The December 2019 quarter included three months of expenses related to Point View’s operations compared to one month in the September 2019 quarter.  Strategic hiring and normal salary increases also contributed to the increase for the December 2019 quarter. There was no FDIC insurance expense for the December 2019 quarter or the September 2019 quarter as the Bank utilized its small bank assessment credit from the FDIC. Mr. Kennedy said, “As we reported last quarter, the Company launched a company-wide expense review, with a goal of slowing expense growth, while continuing our investment in digital and in client acquisition initiatives.  Both activities continue to be important given the current yield curve environment.”

Income Taxes

The effective tax rate for the December 2019 quarter was 31.2%, compared to 29.9% for the September 2019 quarter, and 21.2% for the December 2018 quarter. The effective tax rate for the year ended December 31, 2019 was 28.3% compared to 23.5% for the year ended December 31, 2018. The 2019 periods included higher NJ State Income Tax due to the change in NJ Tax law.

Asset Quality / Provision for Loan and Lease Losses

Nonperforming assets at December 31, 2019 (which does not include troubled debt restructured loans that are performing in accordance with their terms) were $28.9 million, or 0.56% of total assets, compared to $29.7 million, or 0.60% of total assets, at September 30, 2019 and $25.7 million, or 0.56% of total assets, at December 31, 2018.  Total loans past due 30 through 89 days and still accruing were $1.9 million at December 31, 2019, compared to $6.3 million at September 30, 2019 and $3.5 million at December 31, 2018.    

For the quarter ended December 31, 2019, the Company’s provision for loan and lease losses was $2.0 million compared to $800,000 for the September 2019 quarter and $1.5 million for the December 2018 quarter. The Company’s provision for loan and lease losses (and its allowance for loan and lease losses) reflect, among other things, the Company’s asset quality metrics, net loan growth, net charge-offs/recoveries, and the composition of the loan portfolio.

At December 31, 2019, the allowance for loan and lease losses was $43.68 million (151% of nonperforming loans and 0.99% of total loans), compared to $41.58 million at September 30, 2019 (142% of nonperforming loans and 1.00% of total loans), and $38.50 million (150% of nonperforming loans and 0.98% of total loans) at December 31, 2018.  

Capital / Dividend / Stock Repurchase Program

The Company’s capital position during the December 2019 quarter was benefitted by net income partially offset by the purchase of shares through the Company’s stock repurchase program. During the quarter, the Company purchased 143,925 shares, at an average price of $29.78, for a total cost of $4.3 million.

The Company’s and Bank’s capital ratios at December 31, 2019 all remain strong.  Such ratios remain well above regulatory well capitalized standards.

On January 28, 2020, the Company declared a cash dividend of $0.05 per share payable on February 26, 2020 to shareholders of record on February 11, 2020.

ABOUT THE COMPANY

Peapack-Gladstone Financial Corporation is a New Jersey bank holding company with total assets of $5.2 billion and AUM/AUA of $7.5 billion as of December 31, 2019.  Founded in 1921, Peapack-Gladstone Bank is a commercial bank that provides innovative private banking services to businesses, non-profits and consumers, which help them to establish, maintain and expand their legacy.  Through its private banking locations in Bedminster, Morristown, Princeton and Teaneck, its Private Wealth Management Division, and its branch network and online platforms, Peapack-Gladstone Bank offers an unparalleled commitment to client service.

7

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 2019 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;

• 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;

• effects related to a prolonged shutdown of the federal government which could impact SBA and other government lending programs; and

• other unexpected material adverse changes in our operations or earnings.

A discussion of these and other factors that could affect our results is included in our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2018.  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)

8

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in Thousands, except share data)

(Unaudited)

	For the Three Months Ended
	Dec 31,			Sept 30,			June 30,			March 31,			Dec 31,
	2019			2019			2019			2019			2018
Income Statement Data:
Interest income	$	45,556		$	45,948		$	44,603		$	44,563		$	42,781
Interest expense		14,642			15,863			15,335			14,556			13,396
Net interest income		30,914			30,085			29,268			30,007			29,385
Provision for loan and lease losses		1,950			800			1,150			100			1,500
Net interest income after provision for loan and    lease losses		28,964			29,285			28,118			29,907			27,885
Wealth management fee income		10,120			9,501			9,568			9,174			8,552
Service charges and fees		893			882			897			816			938
Bank owned life insurance		325			332			326			338			351
Gain on loans held for sale at fair value    (Mortgage banking) (A)		344			198			132			47			74
Loss on loans held for sale at lower of cost or    fair value		(4	)		(6	)		—			—			(4,392	)
Fee income related to loan level, back-to-back    swaps (A)		2,459			2,349			721			270			1,838
Gain on sale of SBA loans (A)		929			224			573			419			277
Other income (B)		504			902			740			606			3,571
Securities gains/(losses), net		(45	)		34			69			59			46
Total other income		15,525			14,416			13,026			11,729			11,255
Salaries and employee benefits		17,954			17,476			17,543			17,156			16,372
Premises and equipment		3,898			3,849			3,600			3,388			3,422
FDIC insurance expense		—			(277	)		277			277			645
Other expenses		4,849			5,211			4,753			4,894			5,085
Total operating expenses		26,701			26,259			26,173			25,715			25,524
Income before income taxes		17,788			17,442			14,971			15,921			13,616
Income tax expense		5,555			5,216			3,421			4,496			2,887
Net income	$	12,233		$	12,226		$	11,550		$	11,425		$	10,729
Total revenue (C)	$	46,439		$	44,501		$	42,294		$	41,736		$	40,640
Per Common Share Data:
Earnings per share (basic)	$	0.64		$	0.63		$	0.59		$	0.59		$	0.56
Earnings per share (diluted)		0.64			0.63			0.59			0.58			0.55
Weighted average number of common    shares outstanding:
Basic		18,966,917			19,314,666			19,447,155			19,350,452			19,260,033
Diluted		19,207,738			19,484,905			19,568,371			19,658,006			19,424,906
Performance Ratios:
Return on average assets annualized (ROAA)		0.98	%		1.00	%		0.99	%		0.98	%		0.96	%
Return on average equity annualized (ROAE)		9.81	%		9.87	%		9.49	%		9.65	%		9.32	%
Net interest margin (tax- equivalent basis)		2.60	%		2.60	%		2.64	%		2.70	%		2.72	%
GAAP efficiency ratio (D)		57.50	%		59.01	%		61.88	%		61.61	%		62.81	%
Operating expenses / average assets annualized		2.13	%		2.16	%		2.25	%		2.21	%		2.28	%

(A) Gain on loans held for sale at fair value (mortgage banking), fee income related to loan level, back-to-back swaps and gain on sale of SBA loans are all included in “capital markets activity” as referred to within the earnings release.

(B) The December 31, 2018 quarter includes death benefit from life insurance policy of $3.0 million related to the December 31, 2018 passing of the founder and managing principal of MCM.

(C) Total revenue includes net interest income plus total other income.

(D) 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.

9

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in Thousands, except share data)

(Unaudited)

	For the Twelve Months Ended
	Dec 31,						Change
	2019			2018			$			%
Income Statement Data:
Interest income	$	180,670		$	159,686		$	20,984			13	%
Interest expense		60,396			44,523			15,873			36	%
Net interest income		120,274			115,163			5,111			4	%
Provision for loan and lease losses		4,000			3,550			450			13	%
Net interest income after provision for loan and    lease losses		116,274			111,613			4,661			4	%
Wealth management fee income		38,363			33,245			5,118			15	%
Service charges and fees		3,488			3,502			(14	)		0	%
Bank owned life insurance		1,321			1,381			(60	)		-4	%
Gain on loans held for sale at fair value (Mortgage banking) (A)		721			334			387			116	%
Loss on loans held for sale at lower of cost or fair value		(10	)		(4,392	)		4,382			-100	%
Fee income related to loan level, back-to-back swaps (A)		5,799			3,844			1,955			51	%
Gain on sale of SBA loans (A)		2,145			1,636			509			31	%
Other income (B)		2,752			5,036			(2,284	)		-45	%
Securities gains/(losses), net		117			(393	)		510			-130	%
Total other income		54,696			44,193			10,503			24	%
Salaries and employee benefits		70,129			62,802			7,327			12	%
Premises and equipment		14,735			13,497			1,238			9	%
FDIC insurance expense		277			2,443			(2,166	)		-89	%
Other expenses		19,707			19,344			363			2	%
Total operating expenses		104,848			98,086			6,762			7	%
Income before income taxes		66,122			57,720			8,402			15	%
Income tax expense		18,688			13,550			5,138			38	%
Net income	$	47,434		$	44,170		$	3,264			7	%
Total revenue (C)	$	174,970		$	159,356		$	15,614			10	%
Per Common Share Data:
Earnings per share (basic)	$	2.46		$	2.33		$	0.13			6	%
Earnings per share (diluted)		2.44			2.31			0.13			6	%
Weighted average number of common shares outstanding:
Basic		19,268,870			18,965,305			303,565			2	%
Diluted		19,411,448			19,148,645			262,803			1	%
Performance Ratios:
Return on average assets annualized (ROAA)		0.99	%		1.02	%		(0.03	)%
Return on average equity annualized (ROAE)		9.70	%		10.13	%		(0.43	)%
Net interest margin (tax- equivalent basis)		2.63	%		2.75	%		(0.12	)%
GAAP efficiency ratio (D)		59.92	%		61.55	%		(1.63	)%
Operating expenses / average assets annualized		2.19	%		2.25	%		(0.06	)%

(A) Gain on loans held for sale at fair value (mortgage banking), fee income related to loan level, back-to-back swaps and gain on sale of SBA loans are all included in “capital markets activity” as referred to within the earnings release.

(B) The December 31, 2018 quarter includes death benefit from life insurance policy of $3.0 million related to the December 31, 2018 passing of the founder and managing principal of MCM.

(C) Total revenue includes net interest income plus total other income.

(D) 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.

.

10

PEAPACK-GLADSTONE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in Thousands)

(Unaudited)

	As of
	Dec 31,		Sept 30,		June 30,		March 31,		Dec 31,
	2019 (A)		2019		2019		2019		2018
ASSETS
Cash and due from banks	$	6,591	$	5,770	$	5,351	$	4,726	$	5,914
Federal funds sold		102		101		101		101		101
Interest-earning deposits		201,492		221,242		298,575		235,487		154,758
Total cash and cash equivalents		208,185		227,113		304,027		240,314		160,773
Securities available for sale		390,755		349,989		378,839		384,400		377,936
Equity security		10,836		7,881		4,847		4,778		4,719
FHLB and FRB stock, at cost		24,068		21,403		18,338		18,460		18,533
Residential mortgage		552,019		561,543		572,926		569,304		573,146
Multifamily mortgage		1,210,003		1,197,093		1,129,476		1,104,406		1,138,190
Commercial mortgage		761,244		721,261		694,674		705,221		702,165
Commercial loans		1,776,450		1,575,076		1,518,591		1,410,146		1,398,214
Consumer loans		54,372		53,829		53,995		54,276		58,678
Home equity lines of credit		57,248		58,423		62,522		57,639		62,191
Other loans		349		380		424		355		465
Total loans		4,411,685		4,167,605		4,032,608		3,901,347		3,933,049
Less: Allowances for loan and lease losses		43,676		41,580		39,791		38,653		38,504
Net loans		4,368,009		4,126,025		3,992,817		3,862,694		3,894,545
Premises and equipment		20,913		20,898		20,987		21,201		27,408
Other real estate owned		50		336		—		—		—
Accrued interest receivable		10,494		11,759		11,594		11,688		10,814
Bank owned life insurance		46,128		45,940		45,744		45,554		45,353
Goodwill and other intangible assets (A)		40,588		41,111		31,941		32,170		32,399
Finance lease right-of-use assets (B)		5,078		5,265		5,452		5,639		—
Operating lease right-of-use assets (B)		12,132		10,328		11,017		7,541		—
Other assets		45,643		57,361		45,631		27,867		45,378
TOTAL ASSETS	$	5,182,879	$	4,925,409	$	4,871,234	$	4,662,306	$	4,617,858
LIABILITIES
Deposits:
Noninterest-bearing demand deposits	$	529,281	$	544,464	$	544,431	$	476,013	$	463,926
Interest-bearing demand deposits		1,510,363		1,352,471		1,388,821		1,268,823		1,247,305
Savings		112,652		115,448		112,438		114,865		114,674
Money market accounts		1,196,313		1,196,188		1,207,358		1,209,835		1,243,369
Certificates of deposit – Retail		633,763		583,425		570,384		545,450		510,724
Certificates of deposit – Listing Service		47,430		55,664		58,541		68,055		79,195
Subtotal “customer” deposits		4,029,802		3,847,660		3,881,973		3,683,041		3,659,193
IB Demand – Brokered		180,000		180,000		180,000		180,000		180,000
Certificates of deposit – Brokered		33,709		33,696		33,682		56,165		56,147
Total deposits		4,243,511		4,061,356		4,095,655		3,919,206		3,895,340
Short-term borrowings		128,100		67,000		—		—		—
FHLB advances		105,000		105,000		105,000		105,000		108,000
Finance lease liability		7,598		7,793		7,985		8,175		8,362
Operating lease liability (B)		12,423		10,619		11,269		7,683		—
Subordinated debt, net		83,417		83,361		83,305		83,249		83,193
Other liabilities		91,227		94,930		74,132		57,521		53,950
Due to brokers, securities settlements		7,951		—		—		—		—
TOTAL LIABILITIES		4,679,227		4,430,059		4,377,346		4,180,834		4,148,845
Shareholders’ equity		503,652		495,350		493,888		481,472		469,013
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY	$	5,182,879	$	4,925,409	$	4,871,234	$	4,662,306	$	4,617,858
Assets under management and / or administration at    Peapack-Gladstone Bank’s Private Wealth Management    Division (market value, not included above-dollars in billions)	$	7.5	$	7.0	$	6.6	$	6.3	$	5.8

(A) Includes goodwill and intangibles from the Murphy Capital Management, Quadrant Capital Management, Lassus Wherley and Associates and Point View Wealth Management acquisitions completed in August 2017, November 2017, September 2018 and September 2019, respectively.

(B) Resulted from the January 1, 2019 adoption of ASU No. 2016-02, “Leases (Topic 842)”.

11

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED BALANCE SHEET DATA

(Dollars in Thousands)

(Unaudited)

	As of
	Dec 31,			Sept 30,			June 30,			March 31,			Dec 31,
	2019			2019			2019			2019			2018
Asset Quality:
Loans past due over 90 days and still accruing	$	—		$	—		$	—		$	—		$	—
Nonaccrual loans (A)		28,881			29,383			31,150			24,892			25,715
Other real estate owned		50			336			—			—			—
Total nonperforming assets	$	28,931		$	29,719		$	31,150		$	24,892		$	25,715
Nonperforming loans to total loans		0.65	%		0.71	%		0.77	%		0.64	%		0.65	%
Nonperforming assets to total assets		0.56	%		0.60	%		0.64	%		0.53	%		0.56	%
Performing TDRs (B)(C)	$	2,357		$	2,527		$	3,772		$	4,274		$	4,303
Loans past due 30 through 89 days and still accruing (D)	$	1,910		$	6,333		$	432		$	2,492		$	3,484
Classified loans	$	58,908		$	53,882		$	56,135		$	51,306		$	58,265
Impaired loans	$	35,924		$	36,627		$	34,941		$	29,185		$	31,300
Allowance for loan and lease losses:
Beginning of period	$	41,580		$	39,791		$	38,653		$	38,504		$	37,293
Provision for loan and lease losses		1,950			800			1,150			100			1,500
Recoveries (charge-offs), net		146			989			(12	)		49			(289	)
End of period	$	43,676		$	41,580		$	39,791		$	38,653		$	38,504
ALLL to nonperforming loans		151.23	%		141.51	%		127.74	%		155.28	%		149.73	%
ALLL to total loans		0.990	%		0.998	%		0.987	%		0.991	%		0.979	%
General ALLL to total loans (E)		0.927	%		0.932	%		0.956	%		0.984	%		0.972	%

(A) Amount includes one healthcare real estate secured loan with a loan balance of $14.5 million at December 31, 2019, that went on nonaccrual at December 31, 2018.  In addition, one casual dining commercial banking relationship, with a balance of $5.9 million at December 31, 2019, that went on nonaccrual at June 30, 2019.

(B) Amounts reflect TDRs that are paying according to restructured terms.

(C) Amount does not include $25.8 million at December 31, 2019, $19.7 million at September 30, 2019, $19.8 million at June 30, 2019, $20.0 million at March 31, 2019 and $20.5 million at December 31, 2018, of TDRs included in nonaccrual loans.

(D) The $6.3 million at September 30, 2019 included one $4.3 million commercial real estate loan that was in process of a rate modification (not a TDR modification).  The loan was brought fully current in early October 2019.

(E) Total ALLL less specific reserves equals general ALLL.

12

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED BALANCE SHEET DATA

(Dollars in Thousands)

(Unaudited)

	December 31,				September 30,				December 31,
	2019				2019				2018
Capital Adequacy
Equity to total assets (A)			9.72	%			10.06	%			10.16	%
Tangible Equity to tangible assets (B)			9.01	%			9.30	%			9.52	%
Book value per share (C)		$	26.61			$	26.07			$	24.25
Tangible Book Value per share (D)		$	24.47			$	23.91			$	22.58

	December 31,			September 30,			December 31,
	2019			2019			2018
Regulatory Capital – Holding Company
Tier I leverage	$	463,521	9.33%	$	455,179	9.43%	$	438,240	9.82%
Tier I capital to risk-weighted assets		463,521	11.14		455,179	11.23		438,240	11.76
Common equity tier I capital ratio    to risk-weighted assets		463,520	11.14		455,177	11.23		438,238	11.76
Tier I & II capital to risk-weighted assets		590,614	14.20		580,120	14.31		559,937	15.03
Regulatory Capital – Bank
Tier I leverage (E)	$	527,833	10.63%	$	534,351	11.08%	$	504,504	11.32%
Tier I capital to risk-weighted assets (F)		527,833	12.70		534,351	13.20		504,504	13.56
Common equity tier I capital ratio    to risk-weighted assets (G)		527,832	12.70		534,349	13.20		504,502	13.56
Tier I & II capital to risk-weighted assets (H)		571,509	13.76		575,931	14.23		543,008	14.59

(A)  Equity to total assets is calculated as total shareholders’ equity as a percentage of total assets at period end.

(B) Tangible equity and tangible assets are calculated by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. Tangible equity as a percentage of tangible assets at period end is calculated by dividing tangible equity by tangible assets at period end.  See Non-GAAP financial measures reconciliation included in these tables.

(C) Book value per common share is calculated by dividing shareholders’ equity by period end common shares outstanding.

(D) 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.

(E) Regulatory well capitalized standard = 5.00%

(F) Regulatory well capitalized standard = 6.50%

(G) Regulatory well capitalized standard = 8.00%

(H) Regulatory well capitalized standard = 10.00%

13

PEAPACK-GLADSTONE FINANCIAL CORPORATION

LOANS CLOSED

(Dollars in Thousands)

(Unaudited)

	For the Quarters Ended
	Dec 31,		Sept 30,		June 30,		March 31,		Dec 31,
	2019		2019		2019		2019		2018
Residential loans retained	$	17,115	$	19,073	$	21,998	$	10,839	$	24,937
Residential loans sold		21,255		15,846		9,785		3,090		4,686
Total residential loans		38,370		34,919		31,783		13,929		29,623
Commercial real estate		52,630		43,414		34,204		21,025		63,486
Multifamily		63,627		77,138		58,604		21,122		58,175
Commercial (C&I) loans (A) (B)		174,946		228,903		143,944		141,128		285,950
SBA		19,195		3,510		3,740		9,050		5,695
Wealth lines of credit (A)		42,575		6,980		6,725		7,380		5,850
Total commercial loans		352,973		359,945		247,217		199,705		419,156
Installment loans		984		362		1,497		558		649
Home equity lines of credit (A)		2,414		5,631		3,626		1,607		3,625
Total loans closed	$	394,741	$	400,857	$	284,123	$	215,799	$	453,053

	For the Twelve Months Ended
	Dec 31,		Dec 31,
	2019		2018
Residential loans retained	$	69,025	$	73,208
Residential loans sold		49,976		25,563
Total residential loans		119,001		98,771
Commercial real estate		151,273		142,601
Multifamily		220,491		96,246
Commercial (C&I) loans (A) (B)		688,921		676,153
SBA		35,495		25,505
Wealth lines of credit (A)		63,660		42,748
Total commercial loans		1,159,840		983,253
Installment loans		3,401		4,669
Home equity lines of credit (A)		13,278		21,486
Total loans closed	$	1,295,520	$	1,108,179

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

(B) Includes equipment finance.

14

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

THREE MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)

	December 31, 2019								December 31, 2018
	Average			Income/					Average			Income/
	Balance			Expense		Yield			Balance			Expense		Yield
ASSETS:
Interest-earning assets:
Investments:
Taxable (A)	$	393,549		$	2,428		2.47	%	$	383,455		$	2,521		2.63	%
Tax-exempt (A) (B)		12,037			147		4.88			17,887			173		3.87
Loans (B) (C):
Mortgages		557,132			4,780		3.43			562,284			4,732		3.37
Commercial mortgages		1,959,902			18,588		3.79			1,947,674			18,825		3.87
Commercial		1,662,026			18,413		4.43			1,221,111			14,915		4.89
Commercial construction		4,842			81		6.69			—			—		—
Installment		54,562			524		3.84			60,855			624		4.10
Home equity		58,082			662		4.56			61,423			759		4.94
Other		379			10		10.55			461			11		9.54
Total loans		4,296,925			43,058		4.01			3,853,808			39,866		4.14
Federal funds sold		102			—		0.25			101			—		0.25
Interest-earning deposits		159,759			560		1.40			122,813			636		2.07
Total interest-earning assets		4,862,372			46,193		3.80	%		4,378,064			43,196		3.95	%
Noninterest-earning assets:
Cash and due from banks		5,600								6,876
Allowance for loan and lease losses		(42,374	)							(37,774	)
Premises and equipment		20,946								27,749
Other assets		166,868								112,348
Total noninterest-earning assets		151,040								109,199
Total assets	$	5,013,412							$	4,487,263
LIABILITIES:
Interest-bearing deposits:
Checking	$	1,407,151		$	3,489		0.99	%	$	1,208,604		$	3,174		1.05	%
Money markets		1,169,413			3,456		1.18			1,124,780			3,684		1.31
Savings		112,597			16		0.06			115,316			16		0.06
Certificates of deposit – retail and listing service		660,159			3,734		2.26			569,151			2,914		2.05
Subtotal interest-bearing deposits		3,349,320			10,695		1.28			3,017,851			9,788		1.30
Interest-bearing demand – brokered		180,000			981		2.18			180,000			855		1.90
Certificates of deposit – brokered		33,702			267		3.17			59,061			386		2.61
Total interest-bearing deposits		3,563,022			11,943		1.34			3,256,912			11,029		1.35
Borrowings		221,462			1,383		2.50			143,348			1,043		2.91
Capital lease obligation		7,669			92		4.80			8,428			102		4.84
Subordinated debt		83,385			1,224		5.87			83,157			1,222		5.88
Total interest-bearing liabilities		3,875,538			14,642		1.51	%		3,491,845			13,396		1.53	%
Noninterest-bearing liabilities:
Demand deposits		539,501								496,238
Accrued expenses and other liabilities		99,702								38,498
Total noninterest-bearing liabilities		639,203								534,736
Shareholders’ equity		498,671								460,682
Total liabilities and shareholders’ equity	$	5,013,412							$	4,487,263
Net interest income				$	31,551							$	29,800
Net interest spread							2.29	%							2.42	%
Net interest margin (D)							2.60	%							2.72	%

(A)  Average balances for available for sale securities are based on amortized cost.

(B) Interest income is presented on a tax-equivalent basis using a 21% federal tax rate.

(C) Loans are stated net of unearned income and include nonaccrual loans.

(D) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

15

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

THREE MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)

	December 31, 2019								September 30, 2019
	Average			Income/					Average			Income/
	Balance			Expense		Yield			Balance			Expense		Yield
ASSETS:
Interest-earning assets:
Investments:
Taxable (A)	$	393,549		$	2,428		2.47	%	$	393,386		$	2,477		2.52	%
Tax-exempt (A) (B)		12,037			147		4.88			13,497			165		4.89
Loans (B) (C):
Mortgages		557,132			4,780		3.43			567,097			4,811		3.39
Commercial mortgages		1,959,902			18,588		3.79			1,856,216			17,870		3.85
Commercial		1,662,026			18,413		4.43			1,530,131			18,605		4.86
Commercial construction		4,842			81		6.69			2,619			51		7.79
Installment		54,562			524		3.84			53,891			560		4.16
Home equity		58,082			662		4.56			58,573			736		5.03
Other		379			10		10.55			396			11		11.11
Total loans		4,296,925			43,058		4.01			4,068,923			42,644		4.19
Federal funds sold		102			—		0.25			101			—		0.25
Interest-earning deposits		159,759			560		1.40			256,865			1,362		2.12
Total interest-earning assets		4,862,372			46,193		3.80	%		4,732,772			46,648		3.94	%
Noninterest-earning assets:
Cash and due from banks		5,600								5,628
Allowance for loan and lease losses		(42,374	)							(40,806	)
Premises and equipment		20,946								21,121
Other assets		166,868								151,265
Total noninterest-earning assets		151,040								137,208
Total assets	$	5,013,412							$	4,869,980
LIABILITIES:
Interest-bearing deposits:
Checking	$	1,407,151		$	3,489		0.99	%	$	1,410,837		$	4,467		1.27	%
Money markets		1,169,413			3,456		1.18			1,184,589			4,227		1.43
Savings		112,597			16		0.06			113,961			16		0.06
Certificates of deposit – retail and listing service		660,159			3,734		2.26			649,393			3,781		2.33
Subtotal interest-bearing deposits		3,349,320			10,695		1.28			3,358,780			12,491		1.49
Interest-bearing demand – brokered		180,000			981		2.18			180,000			901		2.00
Certificates of deposit – brokered		33,702			267		3.17			33,688			267		3.17
Total interest-bearing deposits		3,563,022			11,943		1.34			3,572,468			13,659		1.53
Borrowings		221,462			1,383		2.50			114,584			886		3.09
Capital lease obligation		7,669			92		4.80			7,866			94		4.78
Subordinated debt		83,385			1,224		5.87			83,329			1,224		5.88
Total interest-bearing liabilities		3,875,538			14,642		1.51	%		3,778,247			15,863		1.68	%
Noninterest-bearing liabilities:
Demand deposits		539,501								512,497
Accrued expenses and other liabilities		99,702								83,554
Total noninterest-bearing liabilities		639,203								596,051
Shareholders’ equity		498,671								495,682
Total liabilities and shareholders’ equity	$	5,013,412							$	4,869,980
Net interest income				$	31,551							$	30,785
Net interest spread							2.29	%							2.26	%
Net interest margin (D)							2.60	%							2.60	%

(A)  Average balances for available for sale securities are based on amortized cost.

(B) Interest income is presented on a tax-equivalent basis using a 21% federal tax rate.

(C) Loans are stated net of unearned income and include nonaccrual loans.

(D) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

16

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

TWELVE MONTHS ENDED

Tax-Equivalent Basis, Dollars in Thousands

	December 31, 2019								December 31, 2018
	Average			Income/					Average			Income/
	Balance			Expense		Yield			Balance			Expense		Yield
ASSETS:
Interest-earning assets:
Investments:
Taxable (A)	$	391,666		$	10,228		2.61	%	$	363,259		$	8,903		2.45	%
Tax-exempt (A) (B)		14,930			728		4.88			20,489			731		3.57
Loans (B) (C):
Mortgages		565,935			19,321		3.41			565,513			18,842		3.33
Commercial mortgages		1,857,014			72,061		3.88			1,976,712			74,693		3.78
Commercial		1,498,077			71,071		4.74			1,087,600			50,854		4.68
Commercial construction		1,881			132		7.02			—			—		—
Installment		54,555			2,246		4.12			71,643			2,603		3.63
Home equity		60,036			2,981		4.97			61,828			2,786		4.51
Other		391			42		10.74			451			45		9.98
Total loans		4,037,889			167,854		4.16			3,763,747			149,823		3.98
Federal funds sold		102			—		0.25			101			—		0.25
Interest-earning deposits		223,629			4,457		1.99			103,059			1,806		1.75
Total interest-earning assets		4,668,216			183,267		3.93	%		4,250,655			161,263		3.79	%
Noninterest-earning assets:
Cash and due from banks		5,477								5,346
Allowance for loan and lease losses		(40,328	)							(37,904	)
Premises and equipment		21,176								28,477
Other assets		142,156								103,761
Total noninterest-earning assets		128,481								99,680
Total assets	$	4,796,697							$	4,350,335
LIABILITIES:
Interest-bearing deposits:
Checking	$	1,342,901		$	15,789		1.18	%	$	1,143,640		$	9,543		0.83	%
Money markets		1,189,880			16,434		1.38			1,056,368			11,322		1.07
Savings		113,312			63		0.06			119,699			66		0.06
Certificates of deposit – retail and listing service		631,999			14,210		2.25			554,903			9,938		1.79
Subtotal interest-bearing deposits		3,278,092			46,496		1.42			2,874,610			30,869		1.07
Interest-bearing demand – brokered		180,000			3,457		1.92			180,000			3,135		1.74
Certificates of deposit – brokered		42,460			1,225		2.89			64,009			1,608		2.51
Total interest-bearing deposits		3,500,552			51,178		1.46			3,118,619			35,612		1.14
Borrowings		136,992			3,941		2.88			154,765			3,606		2.33
Capital lease obligation		7,956			382		4.80			8,698			418		4.81
Subordinated debt		83,300			4,895		5.88			83,104			4,887		5.88
Total interest-bearing liabilities		3,728,800			60,396		1.62	%		3,365,186			44,523		1.32	%
Noninterest-bearing liabilities:
Demand deposits		505,486								516,718
Accrued expenses and other liabilities		73,601								32,541
Total noninterest-bearing liabilities		579,087								549,259
Shareholders’ equity		488,810								435,890
Total liabilities and shareholders’ equity	$	4,796,697							$	4,350,335
Net interest income				$	122,871							$	116,740
Net interest spread							2.31	%							2.47	%
Net interest margin (D)							2.63	%							2.75	%

(A)  Average balances for available for sale securities are based on amortized cost.

(B) Interest income is presented on a tax-equivalent basis using a 21% federal tax rate.

(C) Loans are stated net of unearned income and include nonaccrual loans.

(D) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

17

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
	Dec 31,			Sept 30,			June 30,			March 31,			Dec 31,
Tangible Book Value Per Share	2019			2019			2019			2019			2018
Shareholders’ equity	$	503,652		$	495,350		$	493,888		$	481,472		$	469,013
Less:  Intangible assets, net		40,588			41,111			31,941			32,170			32,399
Tangible equity		463,064			454,239			461,947			449,302			436,614
Period end shares outstanding		18,926,810			18,999,241			19,456,312			19,445,363			19,337,662
Tangible book value per share	$	24.47		$	23.91		$	23.74		$	23.11		$	22.58
Book value per share		26.61			26.07			25.38			24.76			24.25
Tangible Equity to Tangible Assets
Total assets	$	5,182,879		$	4,925,409		$	4,871,234		$	4,662,306		$	4,617,858
Less: Intangible assets, net		40,588			41,111			31,941			32,170			32,399
Tangible assets		5,142,291			4,884,298			4,839,293			4,630,136			4,585,459
Tangible equity to tangible assets		9.01	%		9.30	%		9.55	%		9.70	%		9.52	%
Equity to assets		9.72	%		10.06	%		10.14	%		10.33	%		10.16	%

18

	Three Months Ended
	Dec 31,			Sept 30,			June 30,			March 31,			Dec 31,
Efficiency Ratio	2019			2019			2019			2019			2018
Net interest income	$	30,914		$	30,085		$	29,268		$	30,007		$	29,385
Total other income		15,525			14,416			13,026			11,729			11,255
Less:  Loss/(gain) on loans held for sale
at lower of cost or fair value		4			6			—			—			4,392
Less:  Income from life insurance proceeds		—			—			—			—			(3,000	)
Add:  Securities (gains)/losses, net		45			(34	)		(69	)		(59	)		(46	)
Total recurring revenue		46,488			44,473			42,225			41,677			41,986
Operating expenses		26,701			26,259			26,173			25,715			25,524
Less: ORE provision		—			—			—			—			—
Total operating expense		26,701			26,259			26,173			25,715			25,524
Efficiency ratio		57.44	%		59.04	%		61.98	%		61.70	%		60.79	%

	For the Twelve Months Ended
	Dec 31,			Dec 31,
Efficiency Ratio	2019			2018
Net interest income	$	120,274		$	115,163
Total other income		54,696			44,193
Add:  Securities (gains)/losses, net		(117	)		393
Less:  Loss/(gain) on loans held for sale
at lower of cost or fair value		10			4,392
Less:  Income from life insurance proceeds		—			(3,000	)
Total recurring revenue		174,863			161,141
Operating expenses		104,848			98,086
Less: ORE provision		—			232
Total operating expense		104,848			97,854
Efficiency ratio		59.96	%		60.73	%

19