0001564590-21-038498.txt : 20210728 0001564590-21-038498.hdr.sgml : 20210728 20210728100356 ACCESSION NUMBER: 0001564590-21-038498 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 20210728 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20210728 DATE AS OF CHANGE: 20210728 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEAPACK GLADSTONE FINANCIAL CORP CENTRAL INDEX KEY: 0001050743 STANDARD INDUSTRIAL CLASSIFICATION: COMMERCIAL BANKS, NEC [6029] IRS NUMBER: 223537895 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16197 FILM NUMBER: 211120102 BUSINESS ADDRESS: STREET 1: 500 HILLS DRIVE CITY: BEDMINSTER STATE: NJ ZIP: 07921 BUSINESS PHONE: 9082340700 MAIL ADDRESS: STREET 1: 500 HILLS DRIVE CITY: BEDMINSTER STATE: NJ ZIP: 07921 8-K 1 pgc-8k_20210728.htm 8-K pgc-8k_20210728.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported)

July 28, 2021

 

PEAPACK-GLADSTONE FINANCIAL CORPORATION

(Exact Name of Registrant as Specified in Charter)

 

New Jersey

001-16197

22-3537895

(State or Other Jurisdiction

(Commission

(I.R.S. Employer

  of Incorporation)

File Number)

Identification No.)

 

 

 

500 Hills Drive, Suite 300, Bedminster, New Jersey

07921

(Address of Principal Executive Offices)

(Zip Code)

 

Registrant’s telephone number, including area code

(908) 234-0700

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common

 

PGC

 

The NASDAQ Stock Market, LLC

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 


 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2 of this chapter).

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act.

 

 

 


 

 

INFORMATION TO BE INCLUDED IN THE REPORT

 

Item 2.02

Results of Operations and Financial Condition.

 

On July 28, 2021, Peapack-Gladstone Financial Corporation issued a press release reporting earnings and other financial results for three and six months ended June 30, 2021. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated by reference in its entirety.

 

The information disclosed under this Item 2.02, including Exhibit 99.1, shall be considered “furnished” but not “filed” for purposes of the Securities Exchange Act of 1934, as amended.

 

Item 9.01

Financial Statements and Exhibits.

 

(d)

Exhibits.

 

Exhibit No.

 

Title

 

 

 

99.1

 

Press Release dated July 28, 2021.

 

 

 

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

The press release disclosed in this Item 9.01 as Exhibit 99.1 shall be considered “furnished” but not “filed” for purposes of the Securities Exchange Act of 1934, as amended.

 

3


 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

PEAPACK-GLADSTONE FINANCIAL CORPORATION

 

 

 

Dated: July 28, 2021

By:

/s/ Jeffrey J. Carfora

 

Jeffrey J. Carfora

 

Senior Executive Vice President and Chief Financial Officer

 

4

EX-99.1 2 pgc-ex991_6.htm EX-99.1 pgc-ex991_6.htm

Exhibit 99.1

Contact:

Jeffrey J. Carfora, SEVP and CFO

Peapack-Gladstone Financial Corporation

T: 908-719-4308

PEAPACK-GLADSTONE FINANCIAL CORPORATION

REPORTS STRONG SECOND QUARTER RESULTS,

DRIVEN BY INCREASED WEALTH MANAGEMENT FEE INCOME,

STRONG LOAN GROWTH AND MARGIN EXPANSION

Bedminster, N.J. – July 28, 2021 – Peapack-Gladstone Financial Corporation (NASDAQ Global Select Market: PGC) (the “Company”) announces its second quarter 2021 results.

This earnings release should be read in conjunction with the Company’s Q2 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.  

For the six months ended June 30, 2021, the Company recorded total revenue of $101.14 million, net income of $27.60 million and diluted earnings per share (“EPS”) of $1.42 compared to $90.87 million, $9.62 million and $0.51, respectively, for the same six-month period ended June 30, 2020.

For the quarter ended June 30, 2021, the Company recorded total revenue of $51.52 million, net income of $14.42 million and diluted earnings per share (“EPS”) of $0.74, compared to $44.59 million, $8.24 million and $0.43, respectively, for the same three-month period ended June 30, 2020.

The quarter ended June 30, 2021 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) when compared to the same quarter in 2020. The 2021 quarter also included a significantly reduced provision for loan losses when compared to the same quarter last year. The decreased provision in the June 2021 quarter was due to the environment in 2020 created by the COVID-19 pandemic, which led to increased qualitative loss factors when calculating the allowance for loan losses.

The June 2021 quarter included a $1.13 million gain on the sale of Paycheck Protection Program (“PPP”) loans; fee income of $722,000 relating to PPP loan referrals to a third party; and $153,000 of additional BOLI income related to receipt of life insurance proceeds. These positives were substantially offset by a $842,000 cost (included as a negative to noninterest income) related to the termination of two interest rate swaps, and $648,000 of accelerated expense related to the prepayment of $50.0 million of subordinated notes.  Both actions will have a positive impact on earnings going forward.

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 second quarter of 2021 the Company purchased 234,722 shares at an average price of $32.40 for a total cost of $7.60 million under this program.  Since announced, the Company has purchased 392,755 shares at an average price of $30.51 for a total cost of $11.98 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 valuation relative to peers.”

1


Mr. Kennedy also said, “During 2021 the Company participated in the 2021 round of the PPP, which provided much needed funding to qualifying small businesses and organizations.  During the six months of 2021 we assisted with over $181 million of PPP loans - $57 million processed and funded by the Bank, and another $124 million referred directly to a third party for processing and funding.  During the second quarter, the Company sold the $57 million of loans to the same third party to create additional capacity to process our strong loan pipeline.

EXECUTIVE SUMMARY:

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

June 2021 Year Compared to Prior Year

 

 

 

Six Months Ended

 

 

Six Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

June 30,

 

 

 

Increase/

 

(Dollars in millions, except per share data)

 

2021

 

 

2020

 

 

 

(Decrease)

 

Net interest income

 

$

65.64

 

 

$

63.72

 

 

 

$

1.92

 

 

 

3

%

Wealth management fee income (A)

 

 

25.17

 

 

 

19.95

 

 

 

 

5.22

 

 

 

26

 

Capital markets activity (B)

 

 

5.03

 

 

 

3.85

 

 

 

 

1.18

 

 

 

31

 

Other income (C)

 

 

5.30

 

 

 

3.35

 

 

 

 

1.95

 

 

 

58

 

Total other income

 

 

35.50

 

 

 

27.15

 

 

 

 

8.35

 

 

 

31

 

Operating expenses (D)

 

 

62.28

 

 

 

57.25

 

 

 

 

5.03

 

 

 

9

 

Pretax income before provision for loan losses

 

 

38.86

 

 

 

33.62

 

 

 

 

5.24

 

 

 

16

 

Provision for loan and lease losses (E)

 

 

1.13

 

 

 

24.90

 

 

 

 

(23.77

)

 

 

(95

)

Pretax income

 

 

37.73

 

 

 

8.72

 

 

 

 

29.01

 

 

 

333

 

Income tax expense/(benefit) (F)

 

 

10.13

 

 

 

(0.90

)

 

 

 

11.03

 

 

N/A

 

Net income

 

$

27.60

 

 

$

9.62

 

 

 

$

17.98

 

 

 

187

%

Diluted EPS

 

$

1.42

 

 

$

0.51

 

 

 

$

0.91

 

 

 

178

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue (G)

 

$

101.14

 

 

$

90.87

 

 

 

$

10.27

 

 

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets annualized

 

 

0.93

%

 

 

0.35

%

 

 

 

0.58

 

 

 

 

 

Return on average equity annualized

 

 

10.45

%

 

 

3.80

%

 

 

 

6.65

 

 

 

 

 

 

 

(A)

The June 2021 six months included 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 $1.2 million of wealth management fee income and approximately $700,000 of operating expenses were recorded in 2021 from these teams.

 

(B)

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 six months ended June 30, 2021, compared to $1.6 million in the same 2020 period.  The three months ended March 31, 2021 included $1.1 million of corporate advisory fee income related to a large investment banking advisory event which closed in that quarter.

 

(C)

Included a cost of $842,000 related to the termination of interest rate swaps; $1.4 million gain on loans held at lower of cost or fair value; $722,000 of fee income related to the referral of PPP loans to a third party; and $455,000 of additional BOLI income related to receipt of life insurance proceeds.

 

(D)

The 2021 six months included $1.5 million of severance expense related to certain corporate restructuring within several areas of the Bank and $648,000 of expense related to the redemption of subordinated debt.  

 

(E)

The 2020 year included a provision for loan and lease losses of $24.9 million, primarily due to the environment at that time created by the COVID-19 pandemic.

 

(F)

The 2020 year 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.

 

(G)

Total revenue equals net interest income plus total other income.

 

2


 

June 2021 Quarter Compared to Prior Year Quarter

 

 

 

Three Months Ended

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

 

June 30,

 

 

Increase/

 

(Dollars in millions, except per share data)

 

2021

 

 

 

2020

 

 

(Decrease)

 

Net interest income

 

$

33.85

 

 

 

$

31.97

 

 

$

1.88

 

 

 

6

%

Wealth management fee income (A)

 

 

13.03

 

 

 

 

10.00

 

 

 

3.03

 

 

 

30

 

Capital markets activity (B)

 

 

1.46

 

 

 

 

1.08

 

 

 

0.38

 

 

 

35

 

Other income (C)

 

 

3.18

 

 

 

 

1.54

 

 

 

1.64

 

 

 

106

 

Total other income

 

 

17.67

 

 

 

 

12.62

 

 

 

5.05

 

 

 

40

 

Operating expenses (D)

 

 

30.68

 

 

 

 

29.01

 

 

 

1.67

 

 

 

6

 

Pretax income before provision for loan losses

 

 

20.84

 

 

 

 

15.58

 

 

 

5.26

 

 

 

34

 

Provision for loan and lease losses (E)

 

 

0.90

 

 

 

 

4.90

 

 

 

(4.00

)

 

 

(82

)

Pretax income

 

 

19.94

 

 

 

 

10.68

 

 

 

9.26

 

 

 

87

 

Income tax expense

 

 

5.52

 

 

 

 

2.44

 

 

 

3.08

 

 

 

126

 

Net income

 

$

14.42

 

 

 

$

8.24

 

 

$

6.18

 

 

 

75

%

Diluted EPS

 

$

0.74

 

 

 

$

0.43

 

 

$

0.31

 

 

 

72

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue (F)

 

$

51.52

 

 

 

$

44.59

 

 

$

6.93

 

 

 

16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets annualized

 

 

0.97

%

 

 

 

0.56

%

 

 

0.41

 

 

 

 

 

Return on average equity annualized

 

 

10.86

%

 

 

 

6.56

%

 

 

4.30

 

 

 

 

 

  

 

(A)

The June 2021 quarter included a full quarter of wealth management fee income and expense related to the December lift outs of teams from Lucas and Noyes - approximately $625,000 of wealth management fee income and approximately $350,000 of operating expenses were recorded in the 2021 quarter.

 

(B)

Capital markets activity includes loan level back-to-back swap activities, the SBA lending and sale program, corporate advisory activities, and mortgage banking activities.

 

(C)

The quarter ended June 30, 2021 included a cost of $842,000 related to the termination of certain interest rate swaps; a $1.1 million gain on the sale of PPP loans; $722,000 of fee income related to the referral of PPP loans to a third party; and $153,000 of additional BOLI income related to receipt of life insurance proceeds.

 

(D)

The June 2021 quarter includes $648,000 of expense related to the redemption of subordinated debt.  

 

(E)

The June 2020 quarter included a provision for loan and lease losses of $4.9 million, primarily due to the environment at that time created by the COVID-19 pandemic.

 

(F)

Total revenue equals net interest income plus total other income.

3


 

June 2021 Quarter Compared to Linked Quarter

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

March 31,

 

 

 

Increase/

 

(Dollars in millions, except per share data)

 

2021

 

 

2021

 

 

 

(Decrease)

 

Net interest income

 

$

33.85

 

 

$

31.79

 

 

 

$

2.06

 

 

 

6

%

Wealth management fee income

 

 

13.03

 

 

 

12.13

 

 

 

 

0.90

 

 

 

7

 

Capital markets activity (A)

 

 

1.46

 

 

 

3.57

 

 

 

 

(2.11

)

 

 

(59

)

Other income (B)

 

 

3.18

 

 

 

2.12

 

 

 

 

1.06

 

 

 

50

 

Total other income

 

 

17.67

 

 

 

17.82

 

 

 

 

(0.15

)

 

 

(1

)

Operating expenses (C)

 

 

30.68

 

 

 

31.59

 

 

 

 

(0.91

)

 

 

(3

)

Pretax income before provision for loan losses

 

 

20.84

 

 

 

18.02

 

 

 

 

2.82

 

 

 

16

 

Provision for loan and lease losses

 

 

0.90

 

 

 

0.23

 

 

 

 

0.67

 

 

 

291

 

Pretax income

 

 

19.94

 

 

 

17.79

 

 

 

 

2.15

 

 

 

12

 

Income tax expense

 

 

5.52

 

 

 

4.61

 

 

 

 

0.91

 

 

 

20

 

Net income

 

$

14.42

 

 

$

13.18

 

 

 

$

1.24

 

 

 

9

%

Diluted EPS

 

$

0.74

 

 

$

0.67

 

 

 

$

0.07

 

 

 

10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue (D)

 

$

51.52

 

 

$

49.61

 

 

 

$

1.91

 

 

 

4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets annualized

 

 

0.97

%

 

 

0.89

%

 

 

 

0.08

 

 

 

 

 

Return on average equity annualized

 

 

10.86

%

 

 

10.03

%

 

 

 

0.83

 

 

 

 

 

 

 

(A)

Capital markets activity includes loan level back-to-back swap activities, the SBA lending and sale program, corporate advisory and mortgage banking activities. The three months ended March 31, 2021 included $1.1 million of corporate advisory fee income related to a large investment banking advisory event which closed in that quarter.  

 

(B)

The quarter ended June 30, 2021 included a cost of $842,000 related to the termination of interest rate swaps; $1.1 million gain on the sale of PPP loans; and $722,000 of fee income related to the referral of PPP loans to a third party; and $153,000 of additional BOLI income related to receipt of life insurance proceeds.

 

(C)

The June 2021 quarter includes $648,000 of expense related to the redemption of subordinated debt. The quarter ended March 31, 2021 included $1.5 million of severance expense related to certain corporate restructuring within several areas of the Bank.

 

(D)

Total revenue equals net interest income plus total other income.

The Company’s near-term priorities include:

 

 

Grow and expand our three primary drivers of profitability: Wealth Management, Commercial Banking and Capital Markets businesses.

 

Maintain loan and deposit pricing discipline to protect and grow our Net Interest Margin.

 

Continue to execute on our stock repurchase program.

 

Generate 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%.

Highlights of the Company’s quarterly accomplishments follow:

 

Peapack Private Wealth Management:

 

 

AUM/AUA in our Peapack Private Wealth Management Division grew to $9.8 billion at June 30, 2021 (from $8.8 billion at December 31, 2020 and $7.5 billion at December 31, 2019).

 

Wealth Management Fee Income increased to $13 million for Q2 2021 (compared to $10 million for Q2 2020).

 

On July 1, 2021, closed on the acquisition of Princeton Portfolio Strategies Group (“PPSG”), a registered investment advisor headquartered in Princeton NJ with approximately $520 million of AUM/AUA.

 

4


 

 

Commercial Banking and Balance Sheet Management:

 

 

During Q2 2021, loans, excluding PPP loans, grew by $293 million (7% growth linked quarter: 28% annualized).  

 

Core deposits (which includes demand, savings and money market) totaled 88% of total deposits at June 30, 2021. The total cost of interest-bearing deposits improved to 0.34% for Q2 2021 compared to 0.40% for Q1 2021. Noninterest bearing DDA (included in core deposits) totaled 20% of total deposits.

 

Net interest margin improved by 10 basis points in Q2 2021 from Q1 2021.  

 

$50 million of 6% subordinated debt (set to reprice to 5% on July 1, 2021) was fully redeemed on June 30, 2021.   

 

$40 million of interest rate swaps with an all-in cost of approximately 1.50% were terminated.  

 

Sold $57 million of PPP loans recognizing a gain of $1.1 million.  

 

Received $722,000 of fee income in Q2 2021 for the referral of PPP loans to a third party for origination. (The sale and referral of PPP loans created additional capacity for the Company to process its strong loan pipeline).

 

Credit and Capital Management:

 

 

During Q2, non-performing assets declined $6 million; classified loans declined $15 million; and loans subject to special mention declined $17 million. NPAs stood at just 0.10% of assets at June 30, 2021.

 

Continued to execute on the previously approved stock repurchase program – during Q2 repurchased 234,722 shares at an average price of $32.40 for a total cost of $7.6 million. (Year-to-date through June 30, 2021, the Company has repurchased 392,755 shares).

 

Tangible book value per share increased to $26.30 at June 30, 2021, despite the stock repurchase activity at prices above tangible book value.

  

SUPPLEMENTAL QUARTERLY DETAILS:

 

Wealth Management Business

In the June 2021 quarter, the Bank’s wealth management business generated $13.03 million in fee income, compared to $10.00 million for the June 2020 quarter, and $12.13 million for the March 2021 quarter.

The market value of the Company’s AUM/AUA increased to $9.8 billion at June 30, 2021 from $8.8 billion at December 31, 2020, and $7.2 billion at June 30, 2020 due to new business as well as positive market action.

In the quarter ended June 30, 2021 the Company announced the acquisition of PPSG, a registered investment advisor headquartered in Princeton, New Jersey.  Upon joining the Company on July 1, 2021, PPSG had approximately $520 million of AUM/AUA.

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 2021 with gross inflows of over $240 million for Q2 2021.” Babcock went on to note, “We continue to look to grow our wealth business organically and through selective acquisitions. And, 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 $4.58 billion at June 30, 2021 (including PPP loans of $84 million) increased $144 million from $4.44 billion (including PPP loans of $233 million) at March 31, 2021. Excluding the decline in PPP loans during the June quarter, loans grew $293 million, or 7% on a linked quarter basis (28% annualized). During the quarter, multifamily loans grew $241 million and C&I loans grew $47 million.

Total C&I loans (including the PPP loans) at June 30, 2021 were $1.88 billion or 41% of the total loan portfolio. While C&I origination levels have been strong throughout 2021, paydown and payoff activity has also been

5


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 pipelines are strong going into the third quarter, standing at approximately $250 million with likelihood of closing during the third 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.  Notwithstanding the sale and forgiveness of PPP loans and significant payoff activity, we believe that we will achieve high single digit loan growth, which was the upper end of our guidance provided in the beginning of 2021.”

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 June 30, 2021 were $4.90 billion. While total deposits did not increase significantly over the last year, the mix changed favorably, as noninterest bearing demand deposits increased $48 million and interest-bearing demand increased $174 million, while brokered deposits declined $45 million, and higher costing CDs declined $187 million, when comparing June 30, 2021 to June 30, 2020.  

Mr. Kennedy noted, “88% of our deposits are demand, savings, or money market, and, our noninterest bearing deposits comprise 20% of our total deposits; both metrics reinforce the “core” nature of our deposit base.”

At June 30, 2021, the Company’s balance sheet liquidity (investments, interest-earning deposits and cash) totaled $1.1 billion (or 18% of assets). The Company has approximately $1.7 billion of secured funding available from the Federal Home Loan Bank and $1.0 billion of secured funding available from the Federal Reserve Discount Window.  The available funding from the Federal Home Loan Bank and the Federal Reserve is secured by the Company’s loan and investment portfolios.

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 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 68% of our loan portfolio reprices within 2 years - 44% would reprice within 90 days, another 12% within 3 to 12 months and another 12% repricing within year two.”

6


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

 

Six Months Ended

 

 

Six Months Ended

 

 

 

 

 

 

 

 

 

 

June 30, 2021

 

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

NII

 

 

NIM

 

 

NII

 

 

NIM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NII/NIM excluding the below

$

63,001

 

 

2.51%

 

 

$

61,403

 

 

2.54%

 

 

 

 

 

 

 

 

 

Prepayment premiums received on loan paydowns

 

1,205

 

 

0.05%

 

 

 

901

 

 

0.04%

 

 

 

 

 

 

 

 

 

Effect of maintaining excess interest earning cash

 

(300

)

 

-0.18%

 

 

 

(563

)

 

-0.15%

 

 

 

 

 

 

 

 

 

Effect of PPP loans

 

1,732

 

 

-0.06%

 

 

 

1,977

 

 

-0.02%

 

 

 

 

 

 

 

 

 

NII/NIM as reported

$

65,638

 

 

2.32%

 

 

$

63,718

 

 

2.41%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Three Months Ended

 

 

June 30, 2021

 

 

March 31, 2021

 

 

June 30, 2020

 

 

NII

 

 

NIM

 

 

NII

 

 

NIM

 

 

NII

 

 

NIM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NII/NIM excluding the below

$

32,446

 

 

2.56%

 

 

$

30,565

 

 

2.49%

 

 

$

29,881

 

 

2.45%

 

Prepayment premiums received on loan paydowns

 

501

 

 

0.04%

 

 

 

704

 

 

0.05%

 

 

 

376

 

 

0.03%

 

Effect of maintaining excess interest earning cash

 

(115

)

 

-0.15%

 

 

 

(195

)

 

-0.21%

 

 

 

(263

)

 

-0.19%

 

Effect of PPP loans

 

1,013

 

 

-0.07%

 

 

 

719

 

 

-0.05%

 

 

 

1,977

 

 

-0.02%

 

NII/NIM as reported

$

33,845

 

 

2.38%

 

 

$

31,793

 

 

2.28%

 

 

$

31,971

 

 

2.27%

 

As shown above, the Company’s reported NIM increased 10 basis points compared to the linked quarter. The Bank strategically lowered its cost of deposits and used much of its excess liquidity to grow loans, both of which benefitted NIM.

 

Future net interest income and net interest margin should benefit from the following:

 

Full realization of the second quarter loan growth, as well as robust loan pipelines.

 

Continued downward repricing of maturing CDs.

 

Redemption of $50 million of subordinated debt during the June quarter.

 

Termination of $40 million notional interest rate swaps during the June quarter.

 

Income from Capital Markets Activities

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

June 30,

 

 

March 31,

 

 

June 30,

 

(Dollars in thousands, except per share data)

 

2021

 

 

2021

 

 

2020

 

Gain on loans held for sale at fair value (Mortgage banking)

 

$

409

 

 

$

1,025

 

 

$

550

 

Fee income related to loan level, back-to-back swaps

 

 

 

 

 

 

 

 

202

 

Gain on sale of SBA loans

 

 

932

 

 

 

1,449

 

 

 

258

 

Corporate advisory fee income

 

 

121

 

 

 

1,098

 

 

 

65

 

Total capital markets activity

 

$

1,462

 

 

$

3,572

 

 

$

1,075

 

Noninterest income from Capital Markets activities (SBA lending and sale program, mortgage banking activity, corporate advisory activity and loan level back-to-back swap activities) totaled $1.46 million for the June 2021 quarter compared to $3.57 million for the March 2021 quarter and $1.08 million for the June 2020 quarter.  The June 2021 and March 2021 quarter results were driven by $932,000 and $1.45 million gain on sale of SBA loans, respectively. The March 2021 quarter reflected increased mortgage banking activity due to greater refinance activity in the low rate environment. During the March 2021 quarter, the Company recorded $1.1 million of corporate advisory fee income related to a large investment banking advisory event which closed in that quarter.  These transactions tend to be larger and take longer to complete. As noted previously, the pipeline of such business is fairly robust. The June 2021 and March 2021 quarters included no income from loan level, back-to-back swap activities, as there has been,

7


and will continue to be, minimal activity for such in the current environment. The June 2020 quarter included $202,000 of such income.

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

The June 2021 quarter included approximately $153,000 and the March 2021 quarter included approximately $302,000 of Bank Owned life Insurance income due to receipt of life insurance proceeds. Such proceeds were nontaxable. The June 2021 quarter included $1.13 million gain on the sale of PPP loans, while the March 2021 quarter included a $282,000 gain on sale of $8 million of loans that had payment issues and were classified as held for sale as of December 31, 2020. The Company also received $722,000 of fee income related to referral of PPP loans to a third party.  Partially offsetting the above items in the June 2021 quarter, the Company recorded a one-time $842,000 cost on the termination of $40 million notional interest rate swaps with an all-in cost of 1.50%.

Operating Expenses

The Company’s total operating expenses were $30.68 million for the quarter ended June 30, 2021, compared to $31.59 million for the March 2021 quarter and $29.01 million for the June 2020 quarter. The June 2021 quarter included $648,000 of expense related to the redemption of subordinated debt. The March 2021 quarter included $1.5 million of severance expense related to certain corporate restructuring within several areas of the Bank. The June and March 2021 quarter included a full quarter’s worth of expense related to Lucas and Noyes (approximately $350,000 in each quarter).

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 June 30, 2021 was 27.69%, as compared to 25.94% for the March 2021 quarter and 22.85% for the quarter ended June 30, 2020. The March 31, 2021 quarter benefitted from life insurance proceeds that were not taxable and from the vesting of restricted stock at prices higher than grant prices. The effective tax rate for the June 2020 quarter was impacted by reduced taxable income due to the environment created by the Pandemic.

 

The effective tax rate for the six months of 2021 was 26.87% compared to a net tax benefit recorded for the first six months of 2020. 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 Q2 2021 Investor Update (and Supplemental Financial Information).

Nonperforming assets at June 30, 2021 (which does not include troubled debt restructured loans that are performing in accordance with their terms) were $6.0 million, or 0.10% of total assets, down from $11.8 million, or 0.20% of total assets, at March 31, 2021 and down significantly from $26.7 million, or 0.43% of total assets, at June 30, 2020.  

For the quarter ended June 30, 2021, the Company’s provision for loan and lease losses was $900,000 compared to $225,000 for the March 2021 quarter and $4.90 million for the June 2020 quarter. The decreased provision for loan and lease losses in the 2021 quarters when compared to the 2020 quarters reflect the reduced qualitative loss factors related to the unemployment rate and amount of loan deferrals and other economic qualitative factors due to the COVID-19 pandemic when calculating the allowance for loan losses. Loan deferrals entered into during the COVID-19 pandemic have come down significantly from the prior year (declined from $914 million at June 30, 2020 to $37 million at June 30, 2021). The Company’s provision for loan and lease losses (and its allowance

8


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 June 30, 2021, the allowance for loan and lease losses was $63.51 million (1.39% of total loans), compared to $67.31 million at December 31, 2020 (1.53% of total loans), and $66.07 million at June 30, 2020 (1.35% 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 June 2021 quarter was benefitted by net income of $14.42 million which was offset by the purchase of shares through the Company’s stock repurchase program.  During the second quarter of 2021, the Company purchased 234,722 shares at an average price of $32.40 for a total cost of $7.6 million.  GAAP Capital at June 30, 2021 was also benefitted by a decrease in the unrealized loss on securities from March 31, 2021 to June 30, 2021, due to market value appreciation of the AFS investment securities portfolio.

The Company’s and Bank’s capital ratios at June 30, 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. At the time, the Company noted the proceeds raised would be used for general corporate purposes, which could include stock repurchases, the redemption of the Company’s existing 6% subordinated debt and acquisitions of wealth management firms. Throughout the first half of 2021, the Company repurchased $12 million of stock.  On June 30, 2021 the Company redeemed its 6% subordinated debt. On July 1, 2021 the Company closed on the acquisition of Princeton Portfolio Strategies Group.

The Company employs quarterly capital stress testing run under multiple scenarios, including a no growth, severely adverse case. In such case as of March 31, 2021, 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 Q2 2021 Investor Update (and Supplemental Financial Information).

On July 27, 2021, the Company declared a cash dividend of $0.05 per share payable on August 24, 2021 to shareholders of record on August 10, 2021.

ABOUT THE COMPANY

Peapack-Gladstone Financial Corporation is a New Jersey bank holding company with total assets of $5.8 billion and assets under management/administration of $9.8 billion as of June 30, 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;

9


 

 

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;

 

a 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 higher 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 increase 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 an elimination or 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.

10


 

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)

11


PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in Thousands, except share data)

(Unaudited)

 

 

For the Three Months Ended

 

 

 

June 30,

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

 

June 30,

 

 

 

2021

 

 

2021

 

 

2020

 

 

2020

 

 

2020

 

Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

39,686

 

 

$

38,239

 

 

$

38,532

 

 

$

40,174

 

 

$

41,649

 

Interest expense

 

 

5,841

 

 

 

6,446

 

 

 

6,797

 

 

 

8,025

 

 

 

9,678

 

Net interest income

 

 

33,845

 

 

 

31,793

 

 

 

31,735

 

 

 

32,149

 

 

 

31,971

 

Wealth management fee income

 

 

13,034

 

 

 

12,131

 

 

 

10,791

 

 

 

10,119

 

 

 

9,996

 

Service charges and fees

 

 

896

 

 

 

846

 

 

 

859

 

 

 

785

 

 

 

695

 

Bank owned life insurance

 

 

466

 

 

 

611

 

 

 

313

 

 

 

314

 

 

 

318

 

Gain on loans held for sale at fair value

   (Mortgage banking) (A)

 

 

409

 

 

 

1,025

 

 

 

1,470

 

 

 

954

 

 

 

550

 

Gain/(loss) on loans held for sale at lower of cost or

   fair value(B)

 

 

1,125

 

 

 

282

 

 

 

 

 

 

7,429

 

 

 

 

Fee income related to loan level, back-to-back

   swaps (A)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

202

 

Gain on sale of SBA loans (A)

 

 

932

 

 

 

1,449

 

 

 

375

 

 

 

79

 

 

 

258

 

Corporate advisory fee income (A)

 

 

121

 

 

 

1,098

 

 

 

50

 

 

 

75

 

 

 

65

 

Loss on swap termination

 

 

(842

)

 

 

 

 

 

 

 

 

 

 

 

 

Other income (C)

 

 

1,495

 

 

 

643

 

 

 

590

 

 

 

456

 

 

 

417

 

Securities gains/(losses), net

 

 

42

 

 

 

(265

)

 

 

(42

)

 

 

 

 

 

125

 

Total other income

 

 

17,678

 

 

 

17,820

 

 

 

14,406

 

 

 

20,211

 

 

 

12,626

 

Salaries and employee benefits (D)

 

 

19,910

 

 

 

21,990

 

 

 

19,902

 

 

 

19,202

 

 

 

19,186

 

Premises and equipment

 

 

4,074

 

 

 

4,113

 

 

 

4,189

 

 

 

4,109

 

 

 

4,036

 

FDIC insurance expense

 

 

529

 

 

 

585

 

 

 

665

 

 

 

605

 

 

 

455

 

FHLB prepayment penalty

 

 

 

 

 

 

 

 

4,784

 

 

 

 

 

 

 

Valuation allowance loans held for sale (E)

 

 

 

 

 

 

 

 

4,425

 

 

 

 

 

 

 

Other expenses

 

 

6,171

 

 

 

4,906

 

 

 

5,284

 

 

 

4,545

 

 

 

5,337

 

Total operating expenses

 

 

30,684

 

 

 

31,594

 

 

 

39,249

 

 

 

28,461

 

 

 

29,014

 

Pretax income before provision for loan losses

 

 

20,839

 

 

 

18,019

 

 

 

6,892

 

 

 

23,899

 

 

 

15,583

 

Provision for loan and lease losses (F)

 

 

900

 

 

 

225

 

 

 

2,350

 

 

 

5,150

 

 

 

4,900

 

Income/(loss) before income taxes

 

 

19,939

 

 

 

17,794

 

 

 

4,542

 

 

 

18,749

 

 

 

10,683

 

Income tax expense

 

 

5,521

 

 

 

4,616

 

 

 

1,512

 

 

 

5,202

 

 

 

2,441

 

Net income

 

$

14,418

 

 

$

13,178

 

 

$

3,030

 

 

$

13,547

 

 

$

8,242

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue (G)

 

$

51,523

 

 

$

49,613

 

 

$

46,141

 

 

$

52,360

 

 

$

44,597

 

Per Common Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (basic)

 

$

0.76

 

 

$

0.70

 

 

$

0.16

 

 

$

0.72

 

 

$

0.44

 

Earnings per share (diluted)

 

 

0.74

 

 

 

0.67

 

 

 

0.16

 

 

 

0.71

 

 

 

0.43

 

Weighted average number of common

   shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

18,963,237

 

 

 

18,950,305

 

 

 

18,947,864

 

 

 

18,908,337

 

 

 

18,872,070

 

Diluted

 

 

19,439,439

 

 

 

19,531,689

 

 

 

19,334,569

 

 

 

19,132,650

 

 

 

19,059,822

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets annualized (ROAA)

 

 

0.97

%

 

 

0.89

%

 

 

0.21

%

 

 

0.89

%

 

 

0.56

%

Return on average equity annualized (ROAE)

 

 

10.86

%

 

 

10.03

%

 

 

2.32

%

 

 

10.53

%

 

 

6.56

%

Return on average tangible common equity (ROATCE) (H)

 

 

11.83

%

 

 

10.94

%

 

 

2.51

%

 

 

11.41

%

 

 

7.13

%

Net interest margin (tax-equivalent basis)

 

 

2.38

%

 

 

2.28

%

 

 

2.25

%

 

 

2.20

%

 

 

2.27

%

GAAP efficiency ratio (I)

 

 

59.55

%

 

 

63.68

%

 

 

85.06

%

 

 

54.36

%

 

 

65.06

%

Operating expenses / average assets annualized

 

 

2.06

%

 

 

2.14

%

 

 

2.66

%

 

 

1.86

%

 

 

1.97

%

12


 

 

(A)

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.

 

(B)

Includes gain on sale $355 million and $57 million of PPP loans completed in the September 2020 and June 2021 quarters, respectively.

 

(C)

Includes income of $722,000 from the referral of PPP loans to a third-party firm during the June 2021 quarter.

 

(D)

The March 2021 quarter included $1.5 million of severance expense related to corporate restructuring.

 

(E)

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.

 

(F)

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.

 

(G)

Total revenue equals net interest income plus total other income.

 

(H)

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.

 

(I)

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.

 

13


 

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in Thousands, except share data)

(Unaudited)

 

 

 

For the Six Months Ended

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

Change

 

 

 

2021

 

 

2020

 

 

$

 

 

%

 

Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

77,925

 

 

$

87,044

 

 

$

(9,119

)

 

 

-10

%

Interest expense

 

 

12,287

 

 

 

23,326

 

 

 

(11,039

)

 

 

-47

%

Net interest income

 

 

65,638

 

 

 

63,718

 

 

 

1,920

 

 

 

3

%

Wealth management fee income

 

 

25,165

 

 

 

19,951

 

 

 

5,214

 

 

 

26

%

Service charges and fees

 

 

1,742

 

 

 

1,511

 

 

 

231

 

 

 

15

%

Bank owned life insurance

 

 

1,077

 

 

 

646

 

 

 

431

 

 

 

67

%

Gain on loans held for sale at fair value (Mortgage banking) (A)

 

 

1,434

 

 

 

842

 

 

 

592

 

 

 

70

%

Gain on loans held for sale at lower of cost or fair value (B)

 

 

1,407

 

 

 

(3

)

 

 

1,410

 

 

 

-47000

%

Fee income related to loan level, back-to-back swaps (A)

 

 

 

 

 

1,620

 

 

 

(1,620

)

 

 

-100

%

Gain on sale of SBA loans (A)

 

 

2,381

 

 

 

1,312

 

 

 

1,069

 

 

 

81

%

Corporate advisory fee income (A)

 

 

1,219

 

 

 

75

 

 

 

1,144

 

 

 

1525

%

Loss on swap termination

 

 

(842

)

 

 

 

 

 

(842

)

 

N/A

 

Other income (C)

 

 

2,138

 

 

 

866

 

 

 

1,272

 

 

 

147

%

Securities gains/(losses), net

 

 

(223

)

 

 

323

 

 

 

(546

)

 

 

-169

%

Total other income

 

 

35,498

 

 

 

27,143

 

 

 

8,355

 

 

 

31

%

Salaries and employee benefits (D)

 

 

41,900

 

 

 

38,412

 

 

 

3,488

 

 

 

9

%

Premises and equipment

 

 

8,187

 

 

 

8,079

 

 

 

108

 

 

 

1

%

FDIC insurance expense

 

 

1,114

 

 

 

705

 

 

 

409

 

 

 

58

%

Other expenses

 

 

11,077

 

 

 

10,053

 

 

 

1,024

 

 

 

10

%

Total operating expenses

 

 

62,278

 

 

 

57,249

 

 

 

5,029

 

 

 

9

%

Pretax income before provision for loan losses

 

 

38,858

 

 

 

33,612

 

 

 

5,246

 

 

 

16

%

Provision for loan and lease losses (E)

 

 

1,125

 

 

 

24,900

 

 

 

(23,775

)

 

 

-95

%

Income before income taxes

 

 

37,733

 

 

 

8,712

 

 

 

29,021

 

 

 

333

%

Income tax expense/(benefit) (F)

 

 

10,137

 

 

 

(903

)

 

 

11,040

 

 

 

-1223

%

Net income

 

$

27,596

 

 

$

9,615

 

 

$

17,981

 

 

 

187

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue (G)

 

$

101,136

 

 

$

90,861

 

 

$

10,275

 

 

 

11

%

Per Common Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (basic)

 

$

1.46

 

 

$

0.51

 

 

$

0.95

 

 

 

186

%

Earnings per share (diluted)

 

 

1.42

 

 

 

0.51

 

 

 

0.91

 

 

 

178

%

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

18,956,807

 

 

 

18,865,206

 

 

 

91,601

 

 

 

0

%

Diluted

 

 

19,473,150

 

 

 

18,991,056

 

 

 

482,094

 

 

 

3

%

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets annualized (ROAA)

 

 

0.93

%

 

 

0.35

%

 

 

0.58

%

 

 

166

%

Return on average equity annualized (ROAE)

 

 

10.45

%

 

 

3.80

%

 

 

6.65

%

 

 

175

%

Return on average tangible common equity (ROATCE) (H)

 

 

11.39

%

 

 

4.13

%

 

 

7.25

%

 

 

175

%

Net interest margin (tax-equivalent basis)

 

 

2.32

%

 

 

2.41

%

 

 

(0.09

)%

 

 

-4

%

GAAP efficiency ratio (I)

 

 

61.58

%

 

 

63.01

%

 

 

(1.43

)%

 

 

-2

%

Operating expenses / average assets annualized

 

 

2.10

%

 

 

2.07

%

 

 

0.03

%

 

 

2

%

14


 

 

(A)

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.

 

(B)

Includes gain on sale of PPP loans of $57 million completed in the six months ended June 30, 2021.

 

(C)

Includes income of $722,000 from the referral of PPP loans to a third-party firm during 2021.

 

(D)

The six months ended June 30, 2021 included $1.5 million of severance expense related to corporate restructuring.

 

(E)

The six months ended June 30, 2020 included a higher provision for loan and lease losses primarily due to the environment created by the COVID-19 pandemic.

 

(F)

2020 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.

 

(G)

Total revenue equals net interest income plus total other income.

 

(H)

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.

 

(I)

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.

15


PEAPACK-GLADSTONE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in Thousands)

(Unaudited)

 

 

As of

 

 

 

June 30,

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

 

June 30,

 

 

 

2021

 

 

2021

 

 

2020

 

 

2020

 

 

2020

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

12,684

 

 

$

8,159

 

 

$

10,629

 

 

$

8,400

 

 

$

5,608

 

Federal funds sold

 

 

 

 

 

102

 

 

 

102

 

 

 

102

 

 

 

102

 

Interest-earning deposits

 

 

190,778

 

 

 

468,276

 

 

 

642,591

 

 

 

670,863

 

 

 

617,117

 

Total cash and cash equivalents

 

 

203,462

 

 

 

476,537

 

 

 

653,322

 

 

 

679,365

 

 

 

622,827

 

Securities available for sale

 

 

823,820

 

 

 

875,301

 

 

 

622,689

 

 

 

596,929

 

 

 

539,742

 

Equity security

 

 

14,894

 

 

 

14,852

 

 

 

15,117

 

 

 

15,159

 

 

 

15,159

 

FHLB and FRB stock, at cost

 

 

12,901

 

 

 

13,699

 

 

 

13,709

 

 

 

18,433

 

 

 

18,598

 

Residential mortgage

 

 

504,181

 

 

 

498,884

 

 

 

520,188

 

 

 

532,120

 

 

 

536,015

 

Multifamily mortgage

 

 

1,420,043

 

 

 

1,178,940

 

 

 

1,127,198

 

 

 

1,168,796

 

 

 

1,178,494

 

Commercial mortgage

 

 

702,777

 

 

 

697,599

 

 

 

694,034

 

 

 

722,678

 

 

 

761,910

 

Commercial loans (A)

 

 

1,880,830

 

 

 

1,982,570

 

 

 

1,975,337

 

 

 

1,930,984

 

 

 

2,316,125

 

Consumer loans

 

 

31,889

 

 

 

36,519

 

 

 

37,016

 

 

 

51,859

 

 

 

53,111

 

Home equity lines of credit

 

 

44,062

 

 

 

45,624

 

 

 

50,547

 

 

 

52,194

 

 

 

54,006

 

Other loans

 

 

204

 

 

 

199

 

 

 

225

 

 

 

260

 

 

 

272

 

Total loans

 

 

4,583,986

 

 

 

4,440,335

 

 

 

4,404,545

 

 

 

4,458,891

 

 

 

4,899,933

 

Less: Allowances for loan and lease losses

 

 

63,505

 

 

 

67,536

 

 

 

67,309

 

 

 

66,145

 

 

 

66,065

 

Net loans

 

 

4,520,481

 

 

 

4,372,799

 

 

 

4,337,236

 

 

 

4,392,746

 

 

 

4,833,868

 

Premises and equipment

 

 

23,261

 

 

 

23,260

 

 

 

21,609

 

 

 

21,668

 

 

 

21,449

 

Other real estate owned

 

 

 

 

 

50

 

 

 

50

 

 

 

50

 

 

 

50

 

Accrued interest receivable

 

 

23,117

 

 

 

23,916

 

 

 

22,495

 

 

 

22,192

 

 

 

15,956

 

Bank owned life insurance

 

 

46,605

 

 

 

46,448

 

 

 

46,809

 

 

 

46,645

 

 

 

46,479

 

Goodwill and other intangible assets

 

 

43,156

 

 

 

43,524

 

 

 

43,891

 

 

 

39,622

 

 

 

39,943

 

Finance lease right-of-use assets

 

 

3,956

 

 

 

4,143

 

 

 

4,330

 

 

 

4,517

 

 

 

4,704

 

Operating lease right-of-use assets

 

 

9,569

 

 

 

10,186

 

 

 

9,421

 

 

 

10,011

 

 

 

10,810

 

Other assets (B)

 

 

66,466

 

 

 

64,912

 

 

 

99,764

 

 

 

110,770

 

 

 

111,630

 

TOTAL ASSETS

 

$

5,791,688

 

 

$

5,969,627

 

 

$

5,890,442

 

 

$

5,958,107

 

 

$

6,281,215

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

 

$

959,494

 

 

$

908,922

 

 

$

833,500

 

 

$

838,307

 

 

$

911,989

 

Interest-bearing demand deposits

 

 

1,978,497

 

 

 

1,987,567

 

 

 

1,849,254

 

 

 

1,858,529

 

 

 

1,804,102

 

Savings

 

 

147,227

 

 

 

141,743

 

 

 

130,731

 

 

 

127,737

 

 

 

123,140

 

Money market accounts

 

 

1,213,992

 

 

 

1,256,605

 

 

 

1,298,885

 

 

 

1,251,349

 

 

 

1,183,603

 

Certificates of deposit – Retail

 

 

446,143

 

 

 

474,668

 

 

 

530,222

 

 

 

586,801

 

 

 

629,941

 

Certificates of deposit – Listing Service

 

 

31,631

 

 

 

31,631

 

 

 

32,128

 

 

 

32,677

 

 

 

35,327

 

Subtotal “customer” deposits

 

 

4,776,984

 

 

 

4,801,136

 

 

 

4,674,720

 

 

 

4,695,400

 

 

 

4,688,102

 

IB Demand – Brokered

 

 

85,000

 

 

 

110,000

 

 

 

110,000

 

 

 

130,000

 

 

 

130,000

 

Certificates of deposit – Brokered

 

 

33,791

 

 

 

33,777

 

 

 

33,764

 

 

 

33,750

 

 

 

33,736

 

Total deposits

 

 

4,895,775

 

 

 

4,944,913

 

 

 

4,818,484

 

 

 

4,859,150

 

 

 

4,851,838

 

Short-term borrowings

 

 

 

 

 

15,000

 

 

 

15,000

 

 

 

15,000

 

 

 

15,000

 

FHLB advances (C)

 

 

 

 

 

 

 

 

 

 

 

105,000

 

 

 

105,000

 

Paycheck Protection Program Liquidity Facility (D)

 

 

83,586

 

 

 

168,180

 

 

 

177,086

 

 

 

183,790

 

 

 

535,837.00

 

Finance lease liability

 

 

6,299

 

 

 

6,528

 

 

 

6,753

 

 

 

6,976

 

 

 

7,196

 

Operating lease liability

 

 

9,902

 

 

 

10,509

 

 

 

9,737

 

 

 

10,318

 

 

 

11,116

 

Subordinated debt, net (E)

 

 

132,557

 

 

 

181,837

 

 

 

181,794

 

 

 

83,585

 

 

 

83,529

 

Other liabilities (B)

 

 

125,110

 

 

 

120,219

 

 

 

154,466

 

 

 

156,472

 

 

 

163,719

 

Due to brokers

 

 

 

 

 

 

 

 

 

 

 

15,088

 

 

 

 

TOTAL LIABILITIES

 

 

5,253,229

 

 

 

5,447,186

 

 

 

5,363,320

 

 

 

5,435,379

 

 

 

5,773,235

 

Shareholders’ equity

 

 

538,459

 

 

 

522,441

 

 

 

527,122

 

 

 

522,728

 

 

 

507,980

 

TOTAL LIABILITIES AND

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY

 

$

5,791,688

 

 

$

5,969,627

 

 

$

5,890,442

 

 

$

5,958,107

 

 

$

6,281,215

 

Assets under management and / or administration at

   Peapack-Gladstone Bank’s Private Wealth Management

   Division (market value, not included above-dollars in billions)

 

$

9.8

 

 

$

9.4

 

 

$

8.8

 

 

$

7.6

 

 

$

7.2

 

 

 

(A)

Includes PPP loans of $84 million at June 30, 2021, $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.

16


 

(B)

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.

 

(C)

The Company prepaid $105 million of FHLB advances with a weighted-average rate of 3.20% during the December 2020 quarter.

 

(D)

Represents funding provided by the Federal Reserve for pledged PPP loans.

 

(E)

The increase was due to the completion of a $100 million subordinated debt offering in December 22, 2020.  The Company redeemed $50 million of subordinated debt on June 30, 2021.

 


17


 

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED BALANCE SHEET DATA

(Dollars in Thousands)

(Unaudited)

 

 

As of

 

 

 

June 30,

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

 

June 30,

 

 

 

2021

 

 

2021

 

 

2020

 

 

2020

 

 

2020

 

Asset Quality:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans past due over 90 days and still accruing

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

Nonaccrual loans (A)

 

 

5,962

 

 

 

11,767

 

 

 

11,410

 

 

 

8,611

 

 

 

26,697

 

Other real estate owned

 

 

 

 

 

50

 

 

 

50

 

 

 

50

 

 

 

50

 

Total nonperforming assets

 

$

5,962

 

 

$

11,817

 

 

$

11,460

 

 

$

8,661

 

 

$

26,747

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans to total loans

 

 

0.13

%

 

 

0.27

%

 

 

0.26

%

 

 

0.19

%

 

 

0.54

%

Nonperforming assets to total assets

 

 

0.10

%

 

 

0.20

%

 

 

0.19

%

 

 

0.15

%

 

 

0.43

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing TDRs (B)(C)

 

$

190

 

 

$

197

 

 

$

201

 

 

$

2,278

 

 

$

2,376

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans past due 30 through 89 days and still accruing (D)(E)

 

$

1,678

 

 

$

1,622

 

 

$

5,053

 

 

$

6,609

 

 

$

3,785

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans subject to special mention

 

$

148,601

 

 

$

166,013

 

 

$

162,103

 

 

$

129,700

 

 

$

27,922

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Classified loans

 

$

11,178

 

 

$

25,714

 

 

$

37,771

 

 

$

41,263

 

 

$

63,562

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impaired loans

 

$

6,498

 

 

$

11,964

 

 

$

16,204

 

 

$

15,514

 

 

$

33,708

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan and lease losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning of period

 

$

67,536

 

 

$

67,309

 

 

$

66,145

 

 

$

66,065

 

 

$

63,783

 

Provision for loan and lease losses

 

 

900

 

 

 

225

 

 

 

2,350

 

 

 

5,150

 

 

 

4,900

 

(Charge-offs)/recoveries, net

 

 

(4,931

)

 

 

2

 

 

 

(1,186

)

 

 

(5,070

)

 

 

(2,618

)

End of period

 

$

63,505

 

 

$

67,536

 

 

$

67,309

 

 

$

66,145

 

 

$

66,065

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ALLL to nonperforming loans

 

 

1065.16

%

 

 

573.94

%

 

 

589.91

%

 

 

768.15

%

 

 

247.46

%

ALLL to total loans

 

 

1.39

%

 

 

1.52

%

 

 

1.53

%

 

 

1.48

%

 

 

1.35

%

General ALLL to total loans (F)

 

 

1.38

%

 

 

1.45

%

 

 

1.47

%

 

 

1.48

%

 

 

1.26

%

 

(A)

Excludes one commercial loan held for sale of $5.6 million at both June 30, 2021 and 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.

 

(B)

Amounts reflect TDRs that are paying according to restructured terms.

 

(C)

Amount excludes $3.9 million at June 30, 2021, $3.9 million at March 31, 2021, $4.0 million at December 31, 2020, $5.2 million at September 30, 2020 and $23.2 million at June 30, 2020 of TDRs included in nonaccrual loans.

 

(D)

Excludes a residential loan held for sale of $93,000 at December 31, 2020.

 

(E)

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.

 

(F)

Total ALLL less specific reserves equals general ALLL.

18


 

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED BALANCE SHEET DATA

(Dollars in Thousands)

(Unaudited)

 

 

June 30,

 

 

December 31,

 

 

June 30,

 

 

 

2021

 

 

2020

 

 

2020

 

Capital Adequacy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity to total assets (A)(J)

 

 

 

 

9.30

%

 

 

 

 

8.95

%

 

 

 

 

8.09

%

Tangible Equity to tangible assets (B)

 

 

 

 

8.62

%

 

 

 

 

8.27

%

 

 

 

 

7.50

%

Tangible Equity to tangible assets excluding

   PPP loans (C)

 

 

 

 

8.74

%

 

 

 

 

8.55

%

 

 

 

 

8.22

%

Book value per share (D)

 

 

 

$

28.60

 

 

 

 

$

27.78

 

 

 

 

$

26.87

 

Tangible Book Value per share (E)

 

 

 

$

26.30

 

 

 

 

$

25.47

 

 

 

 

$

24.76

 

 

 

 

 

June 30,

 

 

December 31,

 

 

June 30,

 

 

 

2021

 

 

2020

 

 

2020

 

Regulatory Capital – Holding Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier I leverage

 

$

499,344

 

 

8.67%

 

 

$

483,535

 

 

8.53%

 

 

$

468,898

 

 

8.57%

 

Tier I capital to risk-weighted assets

 

 

499,344

 

 

 

11.45

 

 

 

483,535

 

 

11.93

 

 

 

468,898

 

 

11.35

 

Common equity tier I capital ratio

   to risk-weighted assets

 

 

499,315

 

 

 

11.45

 

 

 

483,500

 

 

11.93

 

 

 

468,863

 

 

11.35

 

Tier I & II capital to risk-weighted assets

 

 

686,543

 

 

 

15.74

 

 

 

716,210

 

 

17.67

 

 

 

604,258

 

 

14.62

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory Capital – Bank

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier I leverage (F)

 

$

583,208

 

 

10.13%

 

 

$

549,575

 

 

9.71%

 

 

$

534,794

 

 

9.79%

 

Tier I capital to risk-weighted assets (G)

 

 

583,208

 

 

13.37

 

 

 

549,575

 

 

13.55

 

 

 

534,794

 

 

 

12.96

 

Common equity tier I capital ratio

   to risk-weighted assets (H)

 

 

583,179

 

 

13.37

 

 

 

549,540

 

 

13.55

 

 

 

534,759

 

 

 

12.95

 

Tier I & II capital to risk-weighted assets (I)

 

 

637,858

 

 

14.62

 

 

 

600,478

 

 

14.81

 

 

 

586,574

 

 

14.21

 

 

(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)

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.

 

(D)

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

 

(E)

Tangible book value per share 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.

 

(F)

Regulatory well capitalized standard = 5.00% ($288 million)

 

(G)

Regulatory well capitalized standard = 8.00% ($349 million)

 

(H)

Regulatory well capitalized standard = 6.50% ($284 million)

 

(I)

Regulatory well capitalized standard = 10.00% ($436 million)

 

(J)

PPP loans with a balance of $84 million at June 30, 2021, $196 million at December 31, 2020 and $547 million at June 30, 2020 increased total assets.

 

 

19


 

PEAPACK-GLADSTONE FINANCIAL CORPORATION

LOANS CLOSED

(Dollars in Thousands)

(Unaudited)

 

 

For the Quarters Ended

 

 

 

June 30,

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

 

June 30,

 

 

 

2021

 

 

2021

 

 

2020

 

 

2020

 

 

2020

 

Residential loans retained

 

$

37,083

 

 

$

15,814

 

 

$

22,316

 

 

$

32,599

 

 

$

18,627

 

Residential loans sold

 

 

25,432

 

 

 

45,873

 

 

 

64,630

 

 

 

54,521

 

 

 

37,061

 

Total residential loans

 

 

62,515

 

 

 

61,687

 

 

 

86,946

 

 

 

87,120

 

 

 

55,688

 

Commercial real estate

 

 

12,243

 

 

 

38,363

 

 

 

 

 

 

1,613

 

 

 

748

 

Multifamily

 

 

255,820

 

 

 

85,009

 

 

 

1,184

 

 

 

1,500

 

 

 

11,960

 

Commercial (C&I) loans (A) (B)

 

 

141,285

 

 

 

129,141

 

 

 

218,235

 

 

 

118,048

 

 

 

99,294

 

SBA (C)

 

 

15,976

 

 

 

58,730

 

 

 

8,355

 

 

 

4,962

 

 

 

595,651

 

Wealth lines of credit (A)

 

 

3,200

 

 

 

2,475

 

 

 

3,925

 

 

 

2,000

 

 

 

500

 

Total commercial loans

 

 

428,524

 

 

 

313,718

 

 

 

231,699

 

 

 

128,123

 

 

 

708,153

 

Installment loans

 

 

25

 

 

 

63

 

 

 

690

 

 

 

253

 

 

 

950

 

Home equity lines of credit (A)

 

 

4,140

 

 

 

1,899

 

 

 

2,330

 

 

 

4,759

 

 

 

4,280

 

Total loans closed

 

$

495,204

 

 

$

377,367

 

 

$

321,665

 

 

$

220,255

 

 

$

769,071

 

 

 

 

For the Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2021

 

 

2020

 

Residential loans retained

 

$

52,897

 

 

$

33,458

 

Residential loans sold

 

 

71,305

 

 

 

56,452

 

Total residential loans

 

 

124,202

 

 

 

89,910

 

Commercial real estate

 

 

50,606

 

 

 

9,606

 

Multifamily

 

 

340,829

 

 

 

73,958

 

Commercial (C&I) loans (A) (B)

 

 

270,426

 

 

 

142,202

 

SBA (C)

 

 

74,706

 

 

 

609,481

 

Wealth lines of credit (A)

 

 

5,675

 

 

 

3,750

 

Total commercial loans

 

 

742,242

 

 

 

838,997

 

Installment loans

 

 

88

 

 

 

1,206

 

Home equity lines of credit (A)

 

 

6,039

 

 

 

7,912

 

Total loans closed

 

$

872,571

 

 

$

938,025

 

 

 

(A)

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

 

(B)

Includes equipment finance.

 

(C)

Includes PPP loans of $9.2 million for the quarter ended June 30, 2021, $47 million for the quarter ended March 31, 2021 and $596 million for the quarter ended June 30, 2020.

20


PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

THREE MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)

 

 

June 30, 2021

 

 

June 30, 2020

 

 

 

Average

 

 

Income/

 

 

 

 

 

 

Average

 

 

Income/

 

 

 

 

 

 

 

Balance

 

 

Expense

 

 

Yield

 

 

Balance

 

 

Expense

 

 

Yield

 

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable (A)

 

$

884,374

 

 

$

3,020

 

 

 

1.37

%

 

$

437,288

 

 

$

2,108

 

 

 

1.93

%

Tax-exempt (A) (B)

 

 

6,891

 

 

 

81

 

 

 

4.70

 

 

 

10,137

 

 

 

129

 

 

 

5.09

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (B) (C):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgages

 

 

498,594

 

 

 

3,826

 

 

 

3.07

 

 

 

530,087

 

 

 

4,497

 

 

 

3.39

 

Commercial mortgages

 

 

1,941,330

 

 

 

15,056

 

 

 

3.10

 

 

 

2,083,310

 

 

 

16,147

 

 

 

3.10

 

Commercial

 

 

1,942,802

 

 

 

16,984

 

 

 

3.50

 

 

 

2,038,530

 

 

 

18,204

 

 

 

3.57

 

Commercial construction

 

 

20,952

 

 

 

180

 

 

 

3.44

 

 

 

3,296

 

 

 

44

 

 

 

5.34

 

Installment

 

 

34,319

 

 

 

255

 

 

 

2.97

 

 

 

52,859

 

 

 

371

 

 

 

2.81

 

Home equity

 

 

45,042

 

 

 

377

 

 

 

3.35

 

 

 

54,869

 

 

 

453

 

 

 

3.30

 

Other

 

 

219

 

 

 

5

 

 

 

9.13

 

 

 

318

 

 

 

7

 

 

 

8.81

 

Total loans

 

 

4,483,258

 

 

 

36,683

 

 

 

3.27

 

 

 

4,763,269

 

 

 

39,723

 

 

 

3.34

 

Federal funds sold

 

 

91

 

 

 

 

 

 

0.06

 

 

 

102

 

 

 

 

 

 

0.25

 

Interest-earning deposits

 

 

428,464

 

 

 

97

 

 

 

0.09

 

 

 

497,764

 

 

 

109

 

 

 

0.09

 

Total interest-earning assets

 

 

5,803,078

 

 

 

39,881

 

 

 

2.75

%

 

 

5,708,560

 

 

 

42,069

 

 

 

2.95

%

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

10,360

 

 

 

 

 

 

 

 

 

 

 

5,437

 

 

 

 

 

 

 

 

 

Allowance for loan and lease losses

 

 

(67,593

)

 

 

 

 

 

 

 

 

 

 

(64,109

)

 

 

 

 

 

 

 

 

Premises and equipment

 

 

23,307

 

 

 

 

 

 

 

 

 

 

 

21,462

 

 

 

 

 

 

 

 

 

Other assets

 

 

182,421

 

 

 

 

 

 

 

 

 

 

 

234,357

 

 

 

 

 

 

 

 

 

Total noninterest-earning assets

 

 

148,495

 

 

 

 

 

 

 

 

 

 

 

197,147

 

 

 

 

 

 

 

 

 

Total assets

 

$

5,951,573

 

 

 

 

 

 

 

 

 

 

$

5,905,707

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

$

1,980,688

 

 

$

944

 

 

 

0.19

%

 

$

1,748,753

 

 

$

1,642

 

 

 

0.38

%

Money markets

 

 

1,235,464

 

 

 

727

 

 

 

0.24

 

 

 

1,207,816

 

 

 

1,473

 

 

 

0.49

 

Savings

 

 

144,044

 

 

 

18

 

 

 

0.05

 

 

 

118,878

 

 

 

16

 

 

 

0.05

 

Certificates of deposit – retail

 

 

488,148

 

 

 

1,027

 

 

 

0.84

 

 

 

676,498

 

 

 

3,147

 

 

 

1.86

 

Subtotal interest-bearing deposits

 

 

3,848,344

 

 

 

2,716

 

 

 

0.28

 

 

 

3,751,945

 

 

 

6,278

 

 

 

0.67

 

Interest-bearing demand – brokered

 

 

105,604

 

 

 

456

 

 

 

1.73

 

 

 

150,330

 

 

 

700

 

 

 

1.86

 

Certificates of deposit – brokered

 

 

33,783

 

 

 

264

 

 

 

3.13

 

 

 

33,729

 

 

 

264

 

 

 

3.13

 

Total interest-bearing deposits

 

 

3,987,731

 

 

 

3,436

 

 

 

0.34

 

 

 

3,936,004

 

 

 

7,242

 

 

 

0.74

 

Borrowings

 

 

166,343

 

 

 

182

 

 

 

0.44

 

 

 

330,514

 

 

 

1,127

 

 

 

1.36

 

Capital lease obligation

 

 

6,380

 

 

 

76

 

 

 

4.76

 

 

 

7,270

 

 

 

87

 

 

 

4.79

 

Subordinated debt

 

 

181,317

 

 

 

2,147

 

 

 

4.74

 

 

 

83,496

 

 

 

1,222

 

 

 

5.85

 

Total interest-bearing liabilities

 

 

4,341,771

 

 

 

5,841

 

 

 

0.54

%

 

 

4,357,284

 

 

 

9,678

 

 

 

0.89

%

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

948,851

 

 

 

 

 

 

 

 

 

 

 

873,926

 

 

 

 

 

 

 

 

 

Accrued expenses and other liabilities

 

 

129,980

 

 

 

 

 

 

 

 

 

 

 

171,814

 

 

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

1,078,831

 

 

 

 

 

 

 

 

 

 

 

1,045,740

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

530,971

 

 

 

 

 

 

 

 

 

 

 

502,683

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

5,951,573

 

 

 

 

 

 

 

 

 

 

$

5,905,707

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

 

$

34,040

 

 

 

 

 

 

 

 

 

 

$

32,391

 

 

 

 

 

Net interest spread

 

 

 

 

 

 

 

 

 

 

2.21

%

 

 

 

 

 

 

 

 

 

 

2.06

%

Net interest margin (D)

 

 

 

 

 

 

 

 

 

 

2.38

%

 

 

 

 

 

 

 

 

 

 

2.27

%

 

(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.

21


 

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

THREE MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)

 

 

June 30, 2021

 

 

March 31, 2021

 

 

 

Average

 

 

Income/

 

 

 

 

 

 

Average

 

 

Income/

 

 

 

 

 

 

 

Balance

 

 

Expense

 

 

Yield

 

 

Balance

 

 

Expense

 

 

Yield

 

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable (A)

 

$

884,374

 

 

$

3,020

 

 

 

1.37

%

 

$

761,187

 

 

$

2,629

 

 

 

1.38

%

Tax-exempt (A) (B)

 

 

6,891

 

 

 

81

 

 

 

4.70

 

 

 

7,980

 

 

 

98

 

 

 

4.91

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (B) (C):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgages

 

 

498,594

 

 

 

3,826

 

 

 

3.07

 

 

 

501,590

 

 

 

3,954

 

 

 

3.15

 

Commercial mortgages

 

 

1,941,330

 

 

 

15,056

 

 

 

3.10

 

 

 

1,840,363

 

 

 

14,420

 

 

 

3.13

 

Commercial

 

 

1,942,802

 

 

 

16,984

 

 

 

3.50

 

 

 

1,932,692

 

 

 

16,455

 

 

 

3.41

 

Commercial construction

 

 

20,952

 

 

 

180

 

 

 

3.44

 

 

 

15,606

 

 

 

139

 

 

 

3.56

 

Installment

 

 

34,319

 

 

 

255

 

 

 

2.97

 

 

 

37,695

 

 

 

276

 

 

 

2.93

 

Home equity

 

 

45,042

 

 

 

377

 

 

 

3.35

 

 

 

48,853

 

 

 

399

 

 

 

3.27

 

Other

 

 

219

 

 

 

5

 

 

 

9.13

 

 

 

246

 

 

 

5

 

 

 

8.13

 

Total loans

 

 

4,483,258

 

 

 

36,683

 

 

 

3.27

 

 

 

4,377,045

 

 

 

35,648

 

 

 

3.26

 

Federal funds sold

 

 

91

 

 

 

 

 

 

0.06

 

 

 

102

 

 

 

 

 

 

0.25

 

Interest-earning deposits

 

 

428,464

 

 

 

97

 

 

 

0.09

 

 

 

555,331

 

 

 

128

 

 

 

0.09

 

Total interest-earning assets

 

 

5,803,078

 

 

 

39,881

 

 

 

2.75

%

 

 

5,701,645

 

 

 

38,503

 

 

 

2.70

%

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

10,360

 

 

 

 

 

 

 

 

 

 

 

11,129

 

 

 

 

 

 

 

 

 

Allowance for loan and lease losses

 

 

(67,593

)

 

 

 

 

 

 

 

 

 

 

(71,160

)

 

 

 

 

 

 

 

 

Premises and equipment

 

 

23,307

 

 

 

 

 

 

 

 

 

 

 

22,634

 

 

 

 

 

 

 

 

 

Other assets

 

 

182,421

 

 

 

 

 

 

 

 

 

 

 

228,134

 

 

 

 

 

 

 

 

 

Total noninterest-earning assets

 

 

148,495

 

 

 

 

 

 

 

 

 

 

 

190,737

 

 

 

 

 

 

 

 

 

Total assets

 

$

5,951,573

 

 

 

 

 

 

 

 

 

 

$

5,892,382

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

$

1,980,688

 

 

$

944

 

 

 

0.19

%

 

$

1,908,380

 

 

$

978

 

 

 

0.20

%

Money markets

 

 

1,235,464

 

 

 

727

 

 

 

0.24

 

 

 

1,259,597

 

 

 

794

 

 

 

0.25

 

Savings

 

 

144,044

 

 

 

18

 

 

 

0.05

 

 

 

135,202

 

 

 

17

 

 

 

0.05

 

Certificates of deposit – retail

 

 

488,148

 

 

 

1,027

 

 

 

0.84

 

 

 

533,488

 

 

 

1,470

 

 

 

1.10

 

Subtotal interest-bearing deposits

 

 

3,848,344

 

 

 

2,716

 

 

 

0.28

 

 

 

3,836,667

 

 

 

3,259

 

 

 

0.34

 

Interest-bearing demand – brokered

 

 

105,604

 

 

 

456

 

 

 

1.73

 

 

 

110,000

 

 

 

493

 

 

 

1.79

 

Certificates of deposit – brokered

 

 

33,783

 

 

 

264

 

 

 

3.13

 

 

 

33,769

 

 

 

261

 

 

 

3.09

 

Total interest-bearing deposits

 

 

3,987,731

 

 

 

3,436

 

 

 

0.34

 

 

 

3,980,436

 

 

 

4,013

 

 

 

0.40

 

Borrowings

 

 

166,343

 

 

 

182

 

 

 

0.44

 

 

 

186,006

 

 

 

209

 

 

 

0.45

 

Capital lease obligation

 

 

6,380

 

 

 

76

 

 

 

4.76

 

 

 

6,608

 

 

 

79

 

 

 

4.78

 

Subordinated debt

 

 

181,317

 

 

 

2,147

 

 

 

4.74

 

 

 

181,795

 

 

 

2,145

 

 

 

4.72

 

Total interest-bearing liabilities

 

 

4,341,771

 

 

 

5,841

 

 

 

0.54

%

 

 

4,354,845

 

 

 

6,446

 

 

 

0.59

%

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

948,851

 

 

 

 

 

 

 

 

 

 

 

848,325

 

 

 

 

 

 

 

 

 

Accrued expenses and other liabilities

 

 

129,980

 

 

 

 

 

 

 

 

 

 

 

163,569

 

 

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

1,078,831

 

 

 

 

 

 

 

 

 

 

 

1,011,894

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

530,971

 

 

 

 

 

 

 

 

 

 

 

525,643

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

5,951,573

 

 

 

 

 

 

 

 

 

 

$

5,892,382

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

 

$

34,040

 

 

 

 

 

 

 

 

 

 

$

32,057

 

 

 

 

 

Net interest spread

 

 

 

 

 

 

 

 

 

 

2.21

%

 

 

 

 

 

 

 

 

 

 

2.11

%

Net interest margin (D)

 

 

 

 

 

 

 

 

 

 

2.38

%

 

 

 

 

 

 

 

 

 

 

2.28

%

 

(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.

 

22


 

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

SIX MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)

 

 

 

June 30, 2021

 

 

June 30, 2020

 

 

 

Average

 

 

Income/

 

 

 

 

 

 

Average

 

 

Income/

 

 

 

 

 

 

 

Balance

 

 

Expense

 

 

Yield

 

 

Balance

 

 

Expense

 

 

Yield

 

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable (A)

 

$

823,120

 

 

$

5,649

 

 

 

1.37

%

 

$

424,547

 

 

$

4,567

 

 

 

2.15

%

Tax-exempt (A) (B)

 

 

7,433

 

 

 

179

 

 

 

4.82

 

 

 

10,335

 

 

 

260

 

 

 

5.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (B) (C):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgages

 

 

500,084

 

 

 

7,780

 

 

 

3.11

 

 

 

532,601

 

 

 

9,073

 

 

 

3.41

 

Commercial mortgages

 

 

1,891,125

 

 

 

29,476

 

 

 

3.12

 

 

 

2,019,559

 

 

 

34,629

 

 

 

3.43

 

Commercial

 

 

1,937,776

 

 

 

33,439

 

 

 

3.45

 

 

 

1,898,334

 

 

 

36,798

 

 

 

3.88

 

Commercial construction

 

 

18,294

 

 

 

319

 

 

 

3.49

 

 

 

4,462

 

 

 

132

 

 

 

6

 

Installment

 

 

35,997

 

 

 

531

 

 

 

2.95

 

 

 

53,421

 

 

 

835

 

 

 

3.13

 

Home equity

 

 

46,937

 

 

 

776

 

 

 

3.31

 

 

 

55,261

 

 

 

1,067

 

 

 

3.86

 

Other

 

 

233

 

 

 

10

 

 

 

8.58

 

 

 

341

 

 

 

16

 

 

 

9.38

 

Total loans

 

 

4,430,446

 

 

 

72,331

 

 

 

3.27

 

 

 

4,563,979

 

 

 

82,550

 

 

 

3.62

 

Federal funds sold

 

 

96

 

 

 

 

 

 

0.11

 

 

 

102

 

 

 

 

 

 

0.25

 

Interest-earning deposits

 

 

491,547

 

 

 

225

 

 

 

0.09

 

 

 

374,665

 

 

 

661

 

 

 

0.35

 

Total interest-earning assets

 

 

5,752,642

 

 

 

78,384

 

 

 

2.73

%

 

 

5,373,628

 

 

 

88,038

 

 

 

3.28

%

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

10,743

 

 

 

 

 

 

 

 

 

 

 

5,477

 

 

 

 

 

 

 

 

 

Allowance for loan and lease losses

 

 

(69,367

)

 

 

 

 

 

 

 

 

 

 

(54,238

)

 

 

 

 

 

 

 

 

Premises and equipment

 

 

22,972

 

 

 

 

 

 

 

 

 

 

 

21,304

 

 

 

 

 

 

 

 

 

Other assets

 

 

204,390

 

 

 

 

 

 

 

 

 

 

 

197,904

 

 

 

 

 

 

 

 

 

Total noninterest-earning assets

 

 

168,738

 

 

 

 

 

 

 

 

 

 

 

170,447

 

 

 

 

 

 

 

 

 

Total assets

 

$

5,921,380

 

 

 

 

 

 

 

 

 

 

$

5,544,075

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

$

1,944,734

 

 

$

1,922

 

 

 

0.20

%

 

$

1,644,776

 

 

$

5,089

 

 

 

0.62

%

Money markets

 

 

1,247,464

 

 

 

1,521

 

 

 

0.24

 

 

 

1,199,932

 

 

 

4,454

 

 

 

0.74

 

Savings

 

 

139,648

 

 

 

35

 

 

 

0.05

 

 

 

114,892

 

 

 

31

 

 

 

0.05

 

Certificates of deposit – retail

 

 

510,693

 

 

 

2,497

 

 

 

0.98

 

 

 

687,258

 

 

 

6,841

 

 

 

1.99

 

Subtotal interest-bearing deposits

 

 

3,842,539

 

 

 

5,975

 

 

 

0.31

 

 

 

3,646,858

 

 

 

16,415

 

 

 

0.90

 

Interest-bearing demand – brokered

 

 

107,790

 

 

 

949

 

 

 

1.76

 

 

 

165,165

 

 

 

1,623

 

 

 

1.97

 

Certificates of deposit – brokered

 

 

33,776

 

 

 

525

 

 

 

3.11

 

 

 

33,722

 

 

 

527

 

 

 

3.13

 

Total interest-bearing deposits

 

 

3,984,105

 

 

 

7,449

 

 

 

0.37

 

 

 

3,845,745

 

 

 

18,565

 

 

 

0.97

 

Borrowings

 

 

176,120

 

 

 

391

 

 

 

0.44

 

 

 

256,956

 

 

 

2,139

 

 

 

1.66

 

Capital lease obligation

 

 

6,493

 

 

 

155

 

 

 

4.77

 

 

 

7,373

 

 

 

177

 

 

 

4.80

 

Subordinated debt

 

 

181,555

 

 

 

4,292

 

 

 

4.73

 

 

 

83,467

 

 

 

2,445

 

 

 

5.86

 

Total interest-bearing liabilities

 

 

4,348,273

 

 

 

12,287

 

 

 

0.57

%

 

 

4,193,541

 

 

 

23,326

 

 

 

1.11

%

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

898,866

 

 

 

 

 

 

 

 

 

 

 

708,242

 

 

 

 

 

 

 

 

 

Accrued expenses and other liabilities

 

 

145,920

 

 

 

 

 

 

 

 

 

 

 

136,738

 

 

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

1,044,786

 

 

 

 

 

 

 

 

 

 

 

844,980

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

528,322

 

 

 

 

 

 

 

 

 

 

 

505,554

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

5,921,381

 

 

 

 

 

 

 

 

 

 

$

5,544,075

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

 

$

66,097

 

 

 

 

 

 

 

 

 

 

$

64,712

 

 

 

 

 

Net interest spread

 

 

 

 

 

 

 

 

 

 

2.16

%

 

 

 

 

 

 

 

 

 

 

2.17

%

Net interest margin (D)

 

 

 

 

 

 

 

 

 

 

2.32

%

 

 

 

 

 

 

 

 

 

 

2.41

%

 

(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.

 

 

23


 

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

We believe 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.

(Dollars in thousands, except share data)

 

 

Three Months Ended

 

 

 

June 30,

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

 

June 30,

 

Tangible Book Value Per Share

 

2021

 

 

2021

 

 

2020

 

 

2020

 

 

2020

 

Shareholders’ equity

 

$

538,459

 

 

$

522,441

 

 

$

527,122

 

 

$

522,728

 

 

$

507,980

 

Less:  Intangible assets, net

 

 

43,156

 

 

 

43,524

 

 

 

43,891

 

 

 

39,622

 

 

 

39,943

 

Tangible equity

 

 

495,303

 

 

 

478,917

 

 

 

483,231

 

 

 

483,106

 

 

 

468,037

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period end shares outstanding

 

 

18,829,877

 

 

 

19,034,870

 

 

 

18,974,703

 

 

 

18,924,953

 

 

 

18,905,135

 

Tangible book value per share

 

$

26.30

 

 

$

25.16

 

 

$

25.47

 

 

$

25.53

 

 

$

24.76

 

Book value per share

 

 

28.60

 

 

 

27.45

 

 

 

27.78

 

 

 

27.62

 

 

 

26.87

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Equity to Tangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

5,791,688

 

 

$

5,969,627

 

 

$

5,890,442

 

 

$

5,958,107

 

 

$

6,281,215

 

Less: Intangible assets, net

 

 

43,156

 

 

 

43,524

 

 

 

43,891

 

 

 

39,622

 

 

 

39,943

 

Tangible assets

 

 

5,748,532

 

 

 

5,926,103

 

 

 

5,846,551

 

 

 

5,918,485

 

 

 

6,241,272

 

Less: PPP Loans

 

 

83,766

 

 

 

232,721

 

 

 

195,574

 

 

 

201,991

 

 

 

547,004

 

Tangible Assets excluding PPP Loans

 

 

5,664,766

 

 

 

5,693,382

 

 

 

5,650,977

 

 

 

5,716,494

 

 

 

5,694,268

 

Tangible equity to tangible assets

 

 

8.62

%

 

 

8.08

%

 

 

8.27

%

 

 

8.16

%

 

 

7.50

%

Tangible equity to tangible assets excluding PPP loans

 

 

8.74

%

 

 

8.41

%

 

 

8.55

%

 

 

8.45

%

 

 

8.22

%

Equity to assets (A)

 

 

9.30

%

 

 

8.75

%

 

 

8.95

%

 

 

8.77

%

 

 

8.09

%

 

(A)

Equity to total assets would be 9.43% if PPP loans of $84 million were excluded from total assets as of June 30, 2021. 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.

 

24


 

 

 

Three Months Ended

 

 

 

June 30,

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

 

June 30,

 

Return on Average Tangible Equity

 

2021

 

 

2021

 

 

2020

 

 

2020

 

 

2020

 

Net income

 

$

14,418

 

 

$

13,178

 

 

$

3,030

 

 

$

13,547

 

 

$

8,242

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average shareholders’ equity

 

$

530,971

 

 

$

525,643

 

 

$

523,446

 

 

$

514,736

 

 

$

502,683

 

Less:  Average intangible assets, net

 

 

43,366

 

 

 

43,742

 

 

 

40,336

 

 

 

39,811

 

 

 

40,139

 

Average tangible equity

 

 

487,605

 

 

 

481,901

 

 

 

483,110

 

 

 

474,925

 

 

 

462,544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average tangible common equity

 

 

11.83

%

 

 

10.94

%

 

 

2.51

%

 

 

11.41

%

 

 

7.13

%

 

 

 

For the Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

Return on Average Tangible Equity

 

2021

 

 

2020

 

Net income

 

$

27,596

 

 

$

9,615

 

 

 

 

 

 

 

 

 

 

Average shareholders’ equity

 

$

528,322

 

 

$

505,554

 

Less:  Average intangible assets, net

 

 

43,553

 

 

 

40,299

 

Average tangible equity

 

 

484,769

 

 

 

465,255

 

 

 

 

 

 

 

 

 

 

Return on average tangible common equity

 

 

11.39

%

 

 

4.13

%

 

 

 

Three Months Ended

 

 

 

June 30,

 

 

March 31,

 

 

Dec 31,

 

 

Sept 30,

 

 

June 30,

 

Efficiency Ratio

 

2021

 

 

2021

 

 

2020

 

 

2020

 

 

2020

 

Net interest income

 

$

33,845

 

 

$

31,793

 

 

$

31,735

 

 

$

32,149

 

 

$

31,971

 

Total other income

 

 

17,678

 

 

 

17,820

 

 

 

14,406

 

 

 

20,211

 

 

 

12,626

 

Less:  Loss/(gain) on loans held for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

at lower of cost or fair value

 

 

(1,125

)

 

 

(282

)

 

 

 

 

 

(7,429

)

 

 

 

Less:  Income from life insurance proceeds

 

 

(153

)

 

 

(302

)

 

 

 

 

 

 

 

 

 

Less: Loss/(gain) on swap termination

 

 

842

 

 

 

 

 

 

 

 

 

 

 

 

 

Add:  Securities (gains)/losses, net

 

 

(42

)

 

 

265

 

 

 

42

 

 

 

 

 

 

(125

)

Total recurring revenue

 

 

51,045

 

 

 

49,294

 

 

 

46,183

 

 

 

44,931

 

 

 

44,472

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

30,684

 

 

 

31,594

 

 

 

39,249

 

 

 

28,461

 

 

 

29,014

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   FHLB prepayment penalty

 

 

 

 

 

 

 

 

4,784

 

 

 

 

 

 

 

   Valuation allowance loans held for sale

 

 

 

 

 

 

 

 

4,425

 

 

 

 

 

 

 

   Write-off of subordinated debt costs

 

 

648

 

 

 

 

 

 

 

 

 

 

 

 

 

   Severance expense

 

 

 

 

 

1,532

 

 

 

 

 

 

 

 

 

 

Total operating expense

 

 

30,036

 

 

 

30,062

 

 

 

30,040

 

 

 

28,461

 

 

 

29,014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio

 

 

58.84

%

 

 

60.99

%

 

 

65.05

%

 

 

63.34

%

 

 

65.24

%

 

25


 

 

 

For the Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

Efficiency Ratio

 

2021

 

 

2020

 

Net interest income

 

$

65,638

 

 

$

63,718

 

Total other income

 

 

35,498

 

 

 

27,143

 

Add:  Securities (gains)/losses, net

 

 

223

 

 

 

(323

)

Less: Loss/(gain) on swap termination

 

 

842

 

 

 

 

Less:  Income from life insurance proceeds

 

 

(455

)

 

 

 

Less:  Loss/(gain) on loans held for sale

 

 

 

 

 

 

 

 

at lower of cost or fair value

 

 

(1,407

)

 

 

3

 

Total recurring revenue

 

 

100,339

 

 

 

90,541

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

62,278

 

 

 

57,249

 

Less:

 

 

 

 

 

 

 

 

   Write-off of subordinated debt costs

 

 

648

 

 

 

 

   Severance expense

 

 

1,532

 

 

 

 

Total operating expense

 

 

60,098

 

 

 

57,249

 

 

 

 

 

 

 

 

 

 

Efficiency ratio

 

 

59.89

%

 

 

63.23

%

 

 

26

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