Peapack-Gladstone Financial Corporation Reports Strong Third Quarter Results, as Net Interest Margin Continues to Expand
Peapack-Gladstone Financial Corporation (PGC) reported Q3 2022 results with total revenue of $61.91 million, net income of $20.13 million, and diluted EPS of $1.09. Compared to Q3 2021, revenue increased by 17% and EPS by 48%. The growth was driven by improved net interest income, up 29%, while noninterest income declined due to market volatility. The company's lending portfolio rose by 7%, and it plans to expand into Life Insurance Premium Finance. The effective tax rate for the quarter was 27.47%.
- Revenue increased 17% YoY to $61.91 million.
- Net income rose 42% YoY to $20.13 million.
- EPS improved by 48% YoY to $1.09.
- Net interest income increased by 29% YoY.
- Total loans grew by 7% year-to-date.
- Return on average equity increased to 15.21%.
- Noninterest income decreased due to volatility in capital markets.
- Wealth management fee income dropped by 7% compared to Q2.
Bedminster, NJ, Oct. 27, 2022 (GLOBE NEWSWIRE) -- via NewMediaWire -- Peapack-Gladstone Financial Corporation (NASDAQ Global Select Market: PGC) (the “Company”) announces its third quarter 2022 results.
This earnings release should be read in conjunction with the Company’s Q3 2022 Investor Update, a copy of which is available on our website at www.pgbank.com and via a current report on Form 8-K on the website of the Securities and Exchange Commission at www.sec.gov.
The Company recorded total revenue of
The Company’s return on average assets, return on average equity, and return on average tangible equity totaled
The September 2022 quarter results were driven by continued improvement in net interest income and net interest margin, which improved
The September 2022 quarter included a
Douglas L. Kennedy, President and CEO said, “Our third quarter 2022 results continued to reflect the asset sensitivity of our loan portfolio, as loans continued to reprice upward in the rising rate environment.”
Mr. Kennedy also noted, "As previously announced, the Company has entered the Life Insurance Premium Finance business. Life insurance premium finance is a safe and profitable business, and we believe it is the next logical step in our growth plan. While Q4 of 2022 will include some level of loan originations, the business is expected to be fully operational at the beginning of 2023."
The following are select highlights:
Peapack Private Wealth Management:
- AUM/AUA in our Peapack Private Wealth Management Division totaled
$9.3 billion at September 30, 2022. - Gross new business inflows for Q3 2022 totaled
$219 million (and for the first nine months of 2022 totaled$775 million ). - Wealth Management fee income of
$12.9 million for Q3 2022 comprised21% of total revenue for the quarter. - Successfully opened our new Summit Wealth Management office, which has consolidated the teams of several previously acquired firms with legacy Peapack Private team members.
Commercial Banking and Balance Sheet Management:
- The net interest margin ("NIM") improved by 15 basis points in Q3 2022 compared to Q2 2022 and improved 56 basis points when compared to Q3 2021.
- During the third quarter of 2022, the Company successfully migrated
$287 million of interest-bearing checking into noninterest-bearing demand deposits. - Noninterest-bearing demand deposits comprised
25% of total deposits as of September 30, 2022. - Core deposits (which includes noninterest-bearing demand and interest-bearing demand, savings and money market accounts) totaled
91% of total deposits at September 30, 2022. - Commercial & industrial lending (“C&I”) loan/lease balances comprised
40% of the total loan portfolio at September 30, 2022. - Total loans grew
7% (9% annualized) to$5.19 billion at September 30, 2022 compared to$4.84 billion at December 31, 2021. - Fee income on unused commercial lines of credit totaled
$818,000 for Q3 2022.
Capital Management:
- Repurchased 290,399 shares of Company stock for a total cost of
$9.9 million during Q3 2022. (790,277 shares of Company stock for a total cost of$27.5 million were repurchased during the first nine months of 2022.) - At September 30, 2022, Regulatory Tier 1 Leverage Ratio stood at
10.8% for Peapack-Gladstone Bank (the "Bank") and8.7% for the Company; and Regulatory Common Equity Tier 1 Ratio (to Risk-Weighted Assets) stood at13.5% for the Bank and10.9% for the Company. These ratios have increased from June 30, 2022 levels (and from December 31, 2021 levels) and are significantly above well capitalized standards, as capital has benefitted from strong net income generation.
SUMMARY INCOME STATEMENT DETAILS:
The following tables summarize specified financial details for the periods shown.
September 2022 Year Compared to Prior Year
Nine Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | Increase/ | |||||||||||||||
(Dollars in millions, except per share data) | 2022 | 2021 | (Decrease) | ||||||||||||||
Net interest income | $ | 128.04 | $ | 100.85 | $ | 27.19 | 27 | % | |||||||||
Wealth management fee income (A) | 41.67 | 39.03 | 2.64 | 7 | |||||||||||||
Capital markets activity (B) | 8.30 | 7.10 | 1.20 | 17 | |||||||||||||
Other income (C) | (0.36 | ) | 7.15 | (7.51 | ) | (105 | ) | ||||||||||
Total other income | 49.61 | 53.28 | (3.67 | ) | (7 | ) | |||||||||||
Operating expenses (A) (D) | 100.39 | 94.46 | 5.93 | 6 | |||||||||||||
Pretax income before provision for credit losses | 77.26 | 59.67 | 17.59 | 29 | |||||||||||||
Provision for credit losses | 4.42 | 2.73 | 1.69 | 62 | |||||||||||||
Pretax income | 72.84 | 56.94 | 15.90 | 28 | |||||||||||||
Income tax expense/(benefit) | 19.17 | 15.17 | 4.00 | 26 | |||||||||||||
Net income | $ | 53.67 | $ | 41.77 | $ | 11.90 | 28 | % | |||||||||
Diluted EPS | $ | 2.88 | $ | 2.15 | $ | 0.73 | 34 | % | |||||||||
Total Revenue (E) | $ | 177.65 | $ | 154.13 | $ | 23.52 | 15 | % | |||||||||
Return on average assets annualized | 1.16 | % | 0.94 | % | 0.22 | ||||||||||||
Return on average equity annualized | 13.46 | % | 10.43 | % | 3.03 |
(A) The nine months ended September 30, 2022 included nine months of wealth management fee income and expense related to the July 2021 acquisition of Princeton Portfolio Strategies Group, while the nine months ended September 30, 2021 included three months.
(B) Capital markets activity includes fee income from loan level back-to-back swaps, the Small Business Association ("SBA") lending and sale program, corporate advisory and mortgage banking activities.
(C) Other income for the nine months ended September 30, 2022 included a
(D) The nine months ended September 2022 and 2021 each included
(E) Total revenue equals the sum of net interest income plus total other income.
September 2022 Quarter Compared to Prior Year Quarter
Three Months Ended | Three Months Ended | ||||||||||||||||
September 30, | September 30, | Increase/ | |||||||||||||||
(Dollars in millions, except per share data) | 2022 | 2021 | (Decrease) | ||||||||||||||
Net interest income | $ | 45.53 | $ | 35.21 | $ | 10.32 | 29 | % | |||||||||
Wealth management fee income | 12.94 | 13.86 | (0.92 | ) | (7 | ) | |||||||||||
Capital markets activity (A) | 0.78 | 2.06 | (1.28 | ) | (62 | ) | |||||||||||
Other income (B) | 2.66 | 1.86 | 0.80 | 43 | |||||||||||||
Total other income | 16.38 | 17.78 | (1.40 | ) | (8 | ) | |||||||||||
Operating expenses (C) | 33.56 | 32.18 | 1.38 | 4 | |||||||||||||
Pretax income before provision for credit losses | 28.35 | 20.81 | 7.54 | 36 | |||||||||||||
Provision for credit losses | 0.60 | 1.60 | (1.00 | ) | (63 | ) | |||||||||||
Pretax income | 27.75 | 19.21 | 8.54 | 44 | |||||||||||||
Income tax expense | 7.62 | 5.04 | 2.58 | 51 | |||||||||||||
Net income | $ | 20.13 | $ | 14.17 | $ | 5.96 | 42 | % | |||||||||
Diluted EPS | $ | 1.09 | $ | 0.74 | $ | 0.35 | 48 | % | |||||||||
Total Revenue (D) | $ | 61.91 | $ | 52.99 | $ | 8.92 | 17 | % | |||||||||
Return on average assets annualized | 1.30 | % | 0.95 | % | 0.35 | ||||||||||||
Return on average equity annualized | 15.21 | % | 10.40 | % | 4.81 |
(A) Capital markets activity includes fee income from loan level back-to-back swaps, the SBA lending and sale program, corporate advisory and mortgage banking activities.
(B) Other income for the September 2022 and 2021 quarters included a fair value adjustment on a CRA equity security of
(C) The September 2021 quarter included
(D) Total revenue equals the sum of net interest income plus total other income.
September 2022 Quarter Compared to Linked Quarter
Three Months Ended | Three Months Ended | ||||||||||||||||
September 30, | June 30, | Increase/ | |||||||||||||||
(Dollars in millions, except per share data) | 2022 | 2022 | (Decrease) | ||||||||||||||
Net interest income | $ | 45.53 | $ | 42.89 | $ | 2.64 | 6 | % | |||||||||
Wealth management fee income | 12.94 | 13.89 | (0.95 | ) | (7 | ) | |||||||||||
Capital markets activity (A) | 0.78 | 2.86 | (2.08 | ) | (73 | ) | |||||||||||
Other income (B) | 2.66 | 1.76 | 0.90 | 51 | |||||||||||||
Total other income | 16.38 | 18.51 | (2.13 | ) | (12 | ) | |||||||||||
Operating expenses | 33.56 | 32.66 | 0.90 | 3 | |||||||||||||
Pretax income before provision for credit losses | 28.35 | 28.74 | (0.39 | ) | (1 | ) | |||||||||||
Provision for credit losses | 0.60 | 1.45 | (0.85 | ) | (59 | ) | |||||||||||
Pretax income | 27.75 | 27.29 | 0.46 | 2 | |||||||||||||
Income tax expense | 7.62 | 7.19 | 0.43 | 6 | |||||||||||||
Net income | $ | 20.13 | $ | 20.10 | $ | 0.03 | 0 | % | |||||||||
Diluted EPS | $ | 1.09 | $ | 1.08 | $ | 0.01 | 1 | % | |||||||||
Total Revenue (C) | $ | 61.91 | $ | 61.40 | $ | 0.51 | 1 | % | |||||||||
Return on average assets annualized | 1.30 | % | 1.30 | % | 0.00 | ||||||||||||
Return on average equity annualized | 15.21 | % | 15.43 | % | (0.22 | ) |
(A) Capital markets activity includes fee income from loan level back-to-back swaps, the SBA lending and sale program, corporate advisory and mortgage banking activities.
(B) Other income for the September 2022 and June 2022 quarters included a fair value adjustment on a CRA equity security of
(C) Total revenue equals the sum of net interest income plus total other income.
SUPPLEMENTAL QUARTERLY DETAILS:
Peapack Private Wealth Management
In the September 2022 quarter, the Bank’s wealth management business, Peapack Private Wealth Management ("PPWM"), generated
John Babcock, President of Peapack Private Wealth Management, noted, “Notwithstanding broad market forces that have negatively impacted both the equities and bond markets, and with economic challenges ahead, our business is sound and continues to attract new clients as well as additional funds from existing relationships. In Q3 2022, total new accounts and client additions totaled
Loans / Commercial Banking
Total loans grew
Total C&I loans and leases at September 30, 2022 were
Mr. Kennedy noted, “Our loan growth has historically been strong however, given economic uncertainty and rising interest rates, we believe loan demand will subside somewhat. Further, we have tightened our initial underwriting in anticipation of a potential economic downturn and higher rate environment. Given that, we believe we will achieve modest growth for the remainder of 2022, resulting in mid to high single digit growth for all of 2022.”
Mr. Kennedy also noted, “We are proud to have built a leading middle market commercial banking franchise, as evidenced by our C&I Portfolio, Treasury Management services, and Corporate Advisory and SBA businesses. Additionally, we are encouraged by the expansion into the Life Insurance Premium Finance business and believe it will prove to be a safe and profitable business line that aligns with the Company's strategy.”
Net Interest Income (NII)/Net Interest Margin (NIM)
Nine Months Ended | Nine Months Ended | ||||||||||||||||
September 30, 2022 | September 30, 2021 | ||||||||||||||||
NII | NIM | NII | NIM | ||||||||||||||
NII/NIM excluding the below | $ | 126,643 | | $ | 97,655 | | |||||||||||
Prepayment premiums received on loan paydowns | 912 | | 1,530 | | |||||||||||||
Effect of maintaining excess interest earning cash | 485 | - | (365 | ) | - | ||||||||||||
Effect of PPP loans | — | | 2,029 | - | |||||||||||||
NII/NIM as reported | $ | 128,040 | | $ | 100,849 | | |||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | |||||||||||||||
September 30, 2022 | June 30, 2022 | September 30, 2021 | |||||||||||||||
NII | NIM | NII | NIM | NII | NIM | ||||||||||||
NII/NIM excluding the below | $ | 44,728 | | $ | 42,526 | | $ | 34,635 | | ||||||||
Prepayment premiums received on loan paydowns | 305 | | 255 | | 325 | | |||||||||||
Effect of maintaining excess interest earning cash | 492 | - | 112 | - | (46 | ) | - | ||||||||||
Effect of PPP loans | — | | — | | 297 | - | |||||||||||
NII/NIM as reported | $ | 45,525 | | $ | 42,893 | | $ | 35,211 | |
The Company’s reported NII and NIM for Q3 2022 increased
Mr. Kennedy stated, “As noted above, we benefitted from the increases in LIBOR and Prime during 2022 and our loan portfolio is positioned to continue to benefit from a rise in interest rates.
Funding / Liquidity / Interest Rate Risk Management
The Company actively manages its deposit base to reduce reliance on wholesale funding, volatility, and/or operational risk. Total deposits increased
Mr. Kennedy noted, “
At September 30, 2022, the Company’s balance sheet liquidity (investments available for sale, interest-earning deposits and cash) totaled
The Company maintains backup liquidity of approximately
Income from Capital Markets Activities
Noninterest income from Capital Markets activities (detailed below) totaled
Nine Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
(Dollars in thousands, except per share data) | 2022 | 2021 | ||||||||||
Gain on loans held for sale at fair value (Mortgage banking) | $ | 458 | $ | 1,842 | ||||||||
Fee income related to loan level, back-to-back swaps | — | — | ||||||||||
Gain on sale of SBA loans | 6,141 | 3,950 | ||||||||||
Corporate advisory fee income | 1,696 | 1,303 | ||||||||||
Total capital markets activity | $ | 8,295 | $ | 7,095 | ||||||||
Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||
September 30, | June 30, | September 30, | ||||||||||
(Dollars in thousands, except per share data) | 2022 | 2022 | 2021 | |||||||||
Gain on loans held for sale at fair value (Mortgage banking) | $ | 60 | $ | 151 | $ | 408 | ||||||
Fee income related to loan level, back-to-back swaps | — | — | — | |||||||||
Gain on sale of SBA loans | 622 | 2,675 | 1,569 | |||||||||
Corporate advisory fee income | 102 | 33 | 84 | |||||||||
Total capital markets activity | $ | 784 | $ | 2,859 | $ | 2,061 |
Other Noninterest Income (other than Wealth Management fee income and Income from Capital Markets Activities)
Other noninterest income was
Operating Expenses
The Company’s total operating expenses were
Mr. Kennedy noted, “While we continue to manage expenses closely and prudently, we have and will continue to invest in our existing people as the market demands in order to retain the talent we have acquired. We will also grow and expand our core wealth management and commercial banking businesses, including strategic hires and lift-outs, and invest in digital enhancements to further enhance the client experience.”
Income Taxes
The effective tax rate for the three months ended September 30, 2022 was
Asset Quality / Provision for Credit Losses
Nonperforming assets (which does not include troubled debt restructured loans that are performing in accordance with their terms) were
Criticized and classified loans totaled
The Company currently has no loans or leases on deferral and accruing. (During the COVID-19 pandemic,
On January 1, 2022, the Company implemented Current Expected Credit Losses (“CECL”) methodology for calculating the Company’s Allowance for Credit Losses (“ACL”). The day one CECL adjustment totaled
For the quarter ended September 30, 2022, the Company’s provision for credit losses was
At September 30, 2022, the ACL was
Capital
The Company’s capital position during the September 2022 quarter was benefitted by net income of
Mr. Kennedy noted, “Despite capital spent on stock repurchases, and capital being affected by the increased unrealized loss on AFS securities, our tangible book value per share improved slightly during Q3 2022 to
The Company’s and Bank’s regulatory capital ratios as of September 30, 2022 remain strong, and reflect increases from June 30, 2022 and December 31, 2021 levels. Where applicable, such ratios remain well above regulatory well capitalized standards.
The Company employs quarterly capital stress testing – adverse case and severely adverse case. In the most recent completed stress test (as of June 30, 2022), under the severely adverse case, and no growth scenario, the Bank remains well capitalized over a two-year stress period. With an additional stress overlay (impacting the industries most affected by the Pandemic more severely), the Bank still remains well capitalized over the two-year stress period.
On October 27, 2022, the Company declared a cash dividend of
ABOUT THE COMPANY
Peapack-Gladstone Financial Corporation is a New Jersey bank holding company with total assets of
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 ability to successfully grow our business and implement our strategic plan, including our ability to generate revenues to offset the increased personnel and other costs related to the strategic plan;
- the impact of anticipated higher operating expenses in 2022 and beyond;
- our ability to successfully integrate wealth management firm acquisitions;
- our ability to manage our growth;
- our ability 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 the value in our investment portfolio;
- impact from a pandemic event on our business, operations, customers, allowance for credit losses and capital levels;
- the continuing impact of the COVID-19 pandemic on our business and results of operation;
- higher than expected increases in our allowance for credit losses;
- higher than expected increases in loan and lease losses or in the level of delinquent, nonperforming, classified and criticized loans;
- inflation and changes in interest rates, which may adversely impact or margins and yields, reduce the fair value of our financial instruments, reduce our loan originations and lead to higher operating costs;
- 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;
- the current or anticipated impact of military conflict, terrorism or other geopolitical events;
- 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.
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, 2021. 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.
Contact:
Jeffrey J. Carfora, SEVP and CFO
Peapack-Gladstone Financial Corporation
T: 908-719-4308
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands, except share data)
(Unaudited)
For the Three Months Ended | ||||||||||
Sept 30, | June 30, | March 31, | Dec 31, | Sept 30, | ||||||
2022 | 2022 | 2022 | 2021 | 2021 | ||||||
Income Statement Data: | ||||||||||
Interest income | | | | | | |||||
Interest expense | 9,488 | 5,627 | 4,518 | 4,863 | 4,856 | |||||
Net interest income | 45,525 | 42,893 | 39,622 | 37,212 | 35,211 | |||||
Wealth management fee income | 12,943 | 13,891 | 14,834 | 13,962 | 13,860 | |||||
Service charges and fees | 1,060 | 1,063 | 952 | 996 | 959 | |||||
Bank owned life insurance | 299 | 310 | 313 | 308 | 311 | |||||
Gain on loans held for sale at fair value (Mortgage banking) (A) | 60 | 151 | 247 | 352 | 408 | |||||
Gain/(loss) on loans held for sale at lower of cost or fair value | — | — | — | (265) | — | |||||
Fee income related to loan level, back-to-back swaps (A) | — | — | — | — | — | |||||
Gain on sale of SBA loans (A) | 622 | 2,675 | 2,844 | 989 | 1,569 | |||||
Corporate advisory fee income (A) | 102 | 33 | 1,561 | 2,180 | 84 | |||||
Other income | 1,868 | 860 | 1,254 | 581 | 660 | |||||
Loss on securities sale, net (B) | — | — | (6,609) | — | — | |||||
Fair value adjustment for CRA equity security | (571) | (475) | (682) | (139) | (70) | |||||
Total other income | 16,383 | 18,508 | 14,714 | 18,964 | 17,781 | |||||
Salaries and employee benefits (C) | 22,656 | 21,882 | 22,449 | 20,105 | 19,859 | |||||
Premises and equipment | 4,534 | 4,640 | 4,647 | 4,519 | 4,459 | |||||
FDIC insurance expense | 510 | 503 | 471 | 402 | 555 | |||||
Swap valuation allowance | — | — | 673 | 893 | 1,350 | |||||
Other expenses | 5,860 | 5,634 | 5,929 | 5,785 | 5,962 | |||||
Total operating expenses | 33,560 | 32,659 | 34,169 | 31,704 | 32,185 | |||||
Pretax income before provision for credit losses | 28,348 | 28,742 | 20,167 | 24,472 | 20,807 | |||||
Provision for credit losses (D) | 599 | 1,449 | 2,375 | 3,750 | 1,600 | |||||
Income before income taxes | 27,749 | 27,293 | 17,792 | 20,722 | 19,207 | |||||
Income tax expense | 7,623 | 7,193 | 4,351 | 5,867 | 5,036 | |||||
Net income | | | | | | |||||
Total revenue (E) | | | | | | |||||
Per Common Share Data: | ||||||||||
Earnings per share (basic) | | | | | | |||||
Earnings per share (diluted) | 1.09 | 1.08 | 0.71 | 0.78 | 0.74 | |||||
Weighted average number of common shares outstanding: | ||||||||||
Basic | 18,072,385 | 18,325,605 | 18,339,013 | 18,483,268 | 18,763,316 | |||||
Diluted | 18,420,661 | 18,637,340 | 18,946,683 | 19,070,594 | 19,273,831 | |||||
Performance Ratios: | ||||||||||
Return on average assets annualized (ROAA) | ||||||||||
Return on average equity annualized (ROAE) | ||||||||||
Return on average tangible common equity (ROATCE) (F) | ||||||||||
Net interest margin (tax-equivalent basis) | ||||||||||
GAAP efficiency ratio (G) | ||||||||||
Operating expenses / average assets annualized |
(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) Loss on sale of securities was a result of a balance sheet repositioning employed in the March 2022 quarter.
(C) The March 2022 quarter included
(D) Commencing on January 1, 2022, the allowance calculation is based on the CECL methodology. Prior to January 1, 2022, the calculation was based on the incurred loss methodology.
(E) Total revenue equals the sum of net interest income plus total other income.
(F) 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.
(G) Calculated as total operating expenses as a percentage of total revenue. For Non-GAAP efficiency ratio, see the Non-GAAP financial measures reconciliation included in these tables.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands, except share data)
(Unaudited)
For the Nine Months Ended | ||||||||
Sept 30, | Change | |||||||
2022 | 2021 | $ | % | |||||
Income Statement Data: | ||||||||
Interest income | | | | |||||
Interest expense | 19,633 | 17,143 | 2,490 | |||||
Net interest income | 128,040 | 100,849 | 27,191 | |||||
Wealth management fee income | 41,668 | 39,025 | 2,643 | |||||
Service charges and fees | 3,075 | 2,701 | 374 | |||||
Bank owned life insurance | 922 | 1,388 | (466) | - | ||||
Gain on loans held for sale at fair value (Mortgage banking) (A) | 458 | 1,842 | (1,384) | - | ||||
Gain on loans held for sale at lower of cost or fair value (B) | — | 1,407 | (1,407) | - | ||||
Fee income related to loan level, back-to-back swaps (A) | — | — | — | N/A | ||||
Gain on sale of SBA loans (A) | 6,141 | 3,950 | 2,191 | |||||
Corporate advisory fee income (A) | 1,696 | 1,303 | 393 | |||||
Loss on swap termination | — | (842) | 842 | - | ||||
Other income (C) | 3,982 | 2,798 | 1,184 | |||||
Loss on securities sale, net (D) | (6,609) | — | (6,609) | N/A | ||||
Fair value adjustment for CRA equity security | (1,728) | (293) | (1,435) | |||||
Total other income | 49,605 | 53,279 | (3,674) | - | ||||
Salaries and employee benefits (E) | 66,987 | 61,759 | 5,228 | |||||
Premises and equipment | 13,821 | 12,646 | 1,175 | |||||
FDIC insurance expense | 1,484 | 1,669 | (185) | - | ||||
Swap valuation allowance | 673 | 1,350 | (677) | - | ||||
Other expenses | 17,423 | 17,039 | 384 | |||||
Total operating expenses | 100,388 | 94,463 | 5,925 | |||||
Pretax income before provision for credit losses | 77,257 | 59,665 | 17,592 | |||||
Provision for credit losses (F) | 4,423 | 2,725 | 1,698 | |||||
Income before income taxes | 72,834 | 56,940 | 15,894 | |||||
Income tax expense | 19,167 | 15,173 | 3,994 | |||||
Net income | | | | |||||
Total revenue (G) | | | | |||||
Per Common Share Data: | ||||||||
Earnings per share (basic) | | | | |||||
Earnings per share (diluted) | 2.88 | 2.15 | 0.73 | |||||
Weighted average number of common shares outstanding: | ||||||||
Basic | 18,244,691 | 18,891,601 | (646,910) | - | ||||
Diluted | 18,652,042 | 19,390,522 | (738,480) | - | ||||
Performance Ratios: | ||||||||
Return on average assets annualized (ROAA) | ||||||||
Return on average equity annualized (ROAE) | ||||||||
Return on average tangible common equity (ROATCE) (H) | ||||||||
Net interest margin (tax-equivalent basis) | ||||||||
GAAP efficiency ratio (I) | (4.78)% | - | ||||||
Operating expenses / average assets annualized | ||||||||
(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
(C) Includes income of
(D) Loss on sale of securities was a result of a balance sheet repositioning employed in the March 2022 quarter.
(E) The September 2022 and 2021 nine months ended each included
(F) Commencing on January 1, 2022, the allowance calculation is based on the CECL methodology. Prior to January 1, 2022, the calculation was based on the incurred loss methodology.
(G) Total revenue equals the sum of 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 the Non-GAAP financial measures reconciliation included in these tables.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in Thousands)
(Unaudited)
As of | ||||||||||
Sept 30, | June 30, | March 31, | Dec 31, | Sept 30, | ||||||
2022 | 2022 | 2022 | 2021 | 2021 | ||||||
ASSETS | ||||||||||
Cash and due from banks | | | | | | |||||
Federal funds sold | — | — | — | — | — | |||||
Interest-earning deposits | 103,214 | 147,222 | 105,111 | 140,875 | 606,913 | |||||
Total cash and cash equivalents | 108,280 | 153,425 | 113,960 | 146,804 | 616,212 | |||||
Securities available for sale | 497,880 | 556,791 | 601,163 | 796,753 | 843,779 | |||||
Securities held to maturity | 103,551 | 105,048 | 106,816 | 108,680 | — | |||||
CRA equity security, at fair value | 12,957 | 13,528 | 14,003 | 14,685 | 14,824 | |||||
FHLB and FRB stock, at cost (A) | 14,986 | 13,710 | 18,570 | 12,950 | 12,950 | |||||
Residential mortgage | 519,088 | 512,341 | 513,289 | 501,340 | 510,878 | |||||
Multifamily mortgage | 1,856,675 | 1,876,783 | 1,850,097 | 1,595,866 | 1,497,683 | |||||
Commercial mortgage | 638,903 | 657,812 | 669,899 | 662,626 | 680,107 | |||||
Commercial and industrial loans | 2,099,917 | 2,048,474 | 2,041,720 | 2,009,252 | 1,833,532 | |||||
Consumer loans | 37,412 | 37,675 | 35,322 | 33,687 | 30,689 | |||||
Home equity lines of credit | 36,375 | 36,023 | 38,604 | 40,803 | 42,512 | |||||
Other loans | 259 | 236 | 226 | 238 | 245 | |||||
Total loans | 5,188,629 | 5,169,344 | 5,149,157 | 4,843,812 | 4,595,646 | |||||
Less: Allowances for credit losses (B) | 59,683 | 59,022 | 58,386 | 61,697 | 65,133 | |||||
Net loans | 5,128,946 | 5,110,322 | 5,090,771 | 4,782,115 | 4,530,513 | |||||
Premises and equipment | 23,781 | 22,804 | 22,960 | 23,044 | 23,123 | |||||
Other real estate owned | 116 | 116 | — | — | — | |||||
Accrued interest receivable | 17,816 | 23,468 | 22,890 | 21,589 | 22,790 | |||||
Bank owned life insurance | 47,072 | 46,944 | 46,805 | 46,663 | 46,510 | |||||
Goodwill and other intangible assets | 47,698 | 48,082 | 48,471 | 48,902 | 49,333 | |||||
Finance lease right-of-use assets | 3,021 | 3,209 | 3,395 | 3,582 | 3,769 | |||||
Operating lease right-of-use assets | 13,404 | 14,192 | 14,725 | 9,775 | 10,307 | |||||
Due from brokers (C) | — | — | 120,245 | — | — | |||||
Other assets (D) | 67,753 | 39,528 | 30,890 | 62,451 | 66,175 | |||||
TOTAL ASSETS | | | | | | |||||
LIABILITIES | ||||||||||
Deposits: | ||||||||||
Noninterest-bearing demand deposits | | | | | | |||||
Interest-bearing demand deposits | 2,149,629 | 2,456,988 | 2,362,987 | 2,287,894 | 2,355,892 | |||||
Savings | 166,821 | 168,441 | 162,116 | 154,914 | 168,831 | |||||
Money market accounts | 1,178,112 | 1,217,516 | 1,304,017 | 1,307,051 | 1,287,686 | |||||
Certificates of deposit – Retail | 345,047 | 375,387 | 384,909 | 409,608 | 426,981 | |||||
Certificates of deposit – Listing Service | 30,647 | 31,348 | 31,348 | 31,382 | 31,382 | |||||
Subtotal “customer” deposits | 5,188,210 | 5,292,905 | 5,268,585 | 5,147,331 | 5,257,537 | |||||
IB Demand – Brokered | 85,000 | 85,000 | 85,000 | 85,000 | 85,000 | |||||
Certificates of deposit – Brokered | 25,974 | 25,963 | 33,831 | 33,818 | 33,804 | |||||
Total deposits | 5,299,184 | 5,403,868 | 5,387,416 | 5,266,149 | 5,376,341 | |||||
Short-term borrowings | 32,369 | — | 122,085 | — | — | |||||
Paycheck Protection Program Liquidity Facility (E) | — | — | — | — | 48,496 | |||||
Finance lease liability | 5,003 | 5,305 | 5,573 | 5,820 | 6,063 | |||||
Operating lease liability | 14,101 | 14,756 | 15,155 | 10,111 | 10,644 | |||||
Subordinated debt, net | 132,916 | 132,844 | 132,772 | 132,701 | 132,629 | |||||
Other liabilities (D) | 88,174 | 74,070 | 69,237 | 116,824 | 123,098 | |||||
TOTAL LIABILITIES | 5,571,747 | 5,630,843 | 5,732,238 | 5,531,605 | 5,697,271 | |||||
Shareholders’ equity | 515,514 | 520,324 | 523,426 | 546,388 | 543,014 | |||||
TOTAL LIABILITIES AND | ||||||||||
SHAREHOLDERS’ EQUITY | | | | | | |||||
Assets under management and / or administration at Peapack-Gladstone Bank’s Private Wealth Management Division (market value, not included above-dollars in billions) | | | | | | |||||
(A) FHLB means "Federal Home Loan Bank" and FRB means "Federal Reserve Bank."
(B) Commencing on January 1, 2022, the allowance calculation is based on the CECL methodology. Prior to January 1, 2022, the calculation was based on the incurred loss methodology.
(C) Includes
(D) 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.
(E) Represents funding provided by the Federal Reserve for pledged PPP loans.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED BALANCE SHEET DATA
(Dollars in Thousands)
(Unaudited)
As of | ||||||||||
Sept 30, | June 30, | March 31, | Dec 31, | Sept 30, | ||||||
2022 | 2022 | 2022 | 2021 | 2021 | ||||||
Asset Quality: | ||||||||||
Loans past due over 90 days and still accruing | $— | $— | $— | $— | $— | |||||
Nonaccrual loans | 15,724 | 15,078 | 15,884 | 15,573 | 25,925 | |||||
Other real estate owned | 116 | 116 | — | — | — | |||||
Total nonperforming assets | | | | | | |||||
Nonperforming loans to total loans | ||||||||||
Nonperforming assets to total assets | ||||||||||
Performing TDRs (A)(B) | | | | | | |||||
Loans past due 30 through 89 days and still accruing (C) | | | | | | |||||
Loans subject to special mention | | | | | | |||||
Classified loans | | | | | | |||||
Impaired loans | | | | | | |||||
Allowance for credit losses ("ACL"): | ||||||||||
Beginning of quarter | | | | | | |||||
Day one CECL adjustment | — | — | (5,536) | — | — | |||||
Provision for credit losses (D) | 665 | 646 | 2,489 | 3,750 | 1,600 | |||||
(Charge-offs)/recoveries, net | (4) | (10) | (264) | (7,186) | 28 | |||||
End of quarter | | | | | | |||||
ACL to nonperforming loans | ||||||||||
ACL to total loans | ||||||||||
General ACL to total loans (E) |
(A) Amounts reflect troubled debt restructurings (“TDRs”) that are paying according to restructured terms.
(B) Excludes TDRs included in nonaccrual loans in the following amounts:
(C) Includes
(D) Commencing on January 1, 2022, the allowance calculation is based on the CECL methodology. Prior to January 1, 2022, the calculation was based on the incurred loss methodology. Provision to roll forward the ACL excludes a credit of
(E) Total ACL less specific reserves equals general ACL.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED BALANCE SHEET DATA
(Dollars in Thousands)
(Unaudited)
September 30, | December 31, | September 30, | |||||||
2022 | 2021 | 2021 | |||||||
Capital Adequacy | |||||||||
Equity to total assets (A) | |||||||||
Tangible equity to tangible assets (B) | |||||||||
Book value per share (C) | | | | ||||||
Tangible book value per share (D) | | | | ||||||
Tangible equity to tangible assets excluding other comprehensive loss* | |||||||||
Tangible book value per share excluding other comprehensive loss* | | | |
*Excludes other comprehensive loss of
As of | ||||||||||||
September 30, | December 31, | September 30, | ||||||||||
2022 | 2021 | 2021 | ||||||||||
Regulatory Capital – Holding Company | ||||||||||||
Tier I leverage | | | | |||||||||
Tier I capital to risk-weighted assets | 540,464 | 10.86 | 508,231 | 10.62 | 501,188 | 10.97 | ||||||
Common equity tier I capital ratio to risk-weighted assets | 540,440 | 10.86 | 508,207 | 10.62 | 501,159 | 10.97 | ||||||
Tier I & II capital to risk-weighted assets | 733,988 | 14.74 | 700,790 | 14.64 | 691,044 | 15.12 | ||||||
Regulatory Capital – Bank | ||||||||||||
Tier I leverage (E) | | | | |||||||||
Tier I capital to risk-weighted assets (F) | 670,717 | 13.48 | 612,762 | 12.80 | 594,610 | 13.01 | ||||||
Common equity tier I capital ratio to risk-weighted assets (G) | 670,693 | 13.48 | 612,738 | 12.80 | 594,581 | 13.01 | ||||||
Tier I & II capital to risk-weighted assets (H) | 731,325 | 14.69 | 672,614 | 14.05 | 651,841 | 14.26 |
(A) Equity to total assets is calculated as total shareholders’ equity as a percentage of total assets at quarter 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 quarter end is calculated by dividing tangible equity by tangible assets at quarter end. See Non-GAAP financial measures reconciliation included in these tables.
(C) Book value per common share is calculated by dividing shareholders’ equity by quarter end common shares outstanding.
(D) Tangible book value per share excludes intangible assets. Tangible book value per share is calculated by dividing tangible equity by quarter end common shares outstanding. See Non-GAAP financial measures reconciliation tables.
(E) Regulatory well capitalized standard =
(F) Regulatory well capitalized standard =
(G) Regulatory well capitalized standard =
(H) Regulatory well capitalized standard =
PEAPACK-GLADSTONE FINANCIAL CORPORATION
LOANS CLOSED
(Dollars in Thousands)
(Unaudited)
For the Quarters Ended | ||||||||||
Sept 30, | June 30, | March 31, | Dec 31, | Sept 30, | ||||||
2022 | 2022 | 2022 | 2021 | 2021 | ||||||
Residential loans retained | | | | | | |||||
Residential loans sold | 4,898 | 9,886 | 15,669 | 20,694 | 24,041 | |||||
Total residential loans | 22,783 | 45,058 | 57,216 | 43,647 | 60,886 | |||||
Commercial real estate | 7,320 | 13,960 | 25,575 | 16,134 | 14,944 | |||||
Multifamily | 4,000 | 74,564 | 265,650 | 162,740 | 120,716 | |||||
Commercial (C&I) loans/leases (A) (B) | 251,249 | 332,801 | 143,029 | 341,886 | 143,121 | |||||
SBA | 5,682 | 10,534 | 26,093 | 27,630 | 11,570 | |||||
Wealth lines of credit (A) | 4,450 | 12,575 | 9,400 | 7,500 | 10,020 | |||||
Total commercial loans | 272,701 | 444,434 | 469,747 | 555,890 | 300,371 | |||||
Installment loans | 1,253 | 100 | 131 | 94 | 178 | |||||
Home equity lines of credit (A) | 5,614 | 3,897 | 1,341 | 5,359 | 2,535 | |||||
Total loans closed | | | | | | |||||
For the Nine Months Ended | ||||
Sept 30, | Sept 30, | |||
2022 | 2021 | |||
Residential loans retained | | | ||
Residential loans sold | 30,453 | 95,346 | ||
Total residential loans | 125,057 | 185,088 | ||
Commercial real estate | 46,855 | 65,550 | ||
Multifamily | 344,214 | 461,545 | ||
Commercial (C&I) loans (A) (B) | 727,079 | 413,547 | ||
SBA (C) | 42,309 | 86,276 | ||
Wealth lines of credit (A) | 26,425 | 15,695 | ||
Total commercial loans | 1,186,882 | 1,042,613 | ||
Installment loans | 1,484 | 266 | ||
Home equity lines of credit (A) | 10,852 | 8,574 | ||
Total loans closed | | | ||
(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
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
(Tax-Equivalent Basis, Dollars in Thousands)
(Unaudited)
For the Three Months Ended | ||||||||||||
September 30, 2022 | September 30, 2021 | |||||||||||
Average | Income/ | Average | Income/ | |||||||||
Balance | Expense | Yield | Balance | Expense | Yield | |||||||
ASSETS: | ||||||||||||
Interest-earning assets: | ||||||||||||
Investments: | ||||||||||||
Taxable (A) | | | | | ||||||||
Tax-exempt (A) (B) | 3,226 | 30 | 3.72 | 6,035 | 64 | 4.24 | ||||||
Loans (B) (C): | ||||||||||||
Mortgages | 513,864 | 3,861 | 3.01 | 503,621 | 3,779 | 3.00 | ||||||
Commercial mortgages | 2,510,616 | 23,121 | 3.68 | 2,133,259 | 16,114 | 3.02 | ||||||
Commercial | 2,016,590 | 23,362 | 4.63 | 1,826,368 | 16,553 | 3.63 | ||||||
Commercial construction | 12,073 | 143 | 4.74 | 24,596 | 198 | 3.22 | ||||||
Installment | 38,338 | 399 | 4.16 | 32,219 | 245 | 3.04 | ||||||
Home equity | 36,706 | 451 | 4.91 | 43,182 | 357 | 3.31 | ||||||
Other | 263 | 7 | 10.65 | 252 | 5 | 7.94 | ||||||
Total loans | 5,128,450 | 51,344 | 4.00 | 4,563,497 | 37,251 | 3.27 | ||||||
Federal funds sold | — | — | — | — | — | — | ||||||
Interest-earning deposits | 232,158 | 1,162 | 2.00 | 413,623 | 142 | 0.14 | ||||||
Total interest-earning assets | 6,118,014 | 55,389 | 5,803,729 | 40,281 | ||||||||
Noninterest-earning assets: | ||||||||||||
Cash and due from banks | 8,296 | 8,592 | ||||||||||
Allowance for credit losses | (59,464) | (64,100) | ||||||||||
Premises and equipment | 23,580 | 23,311 | ||||||||||
Other assets | 97,583 | 201,287 | ||||||||||
Total noninterest-earning assets | 69,995 | 169,090 | ||||||||||
Total assets | | | ||||||||||
LIABILITIES: | ||||||||||||
Interest-bearing deposits: | ||||||||||||
Checking | | | | | ||||||||
Money markets | 1,237,975 | 1,557 | 0.50 | 1,257,760 | 683 | 0.22 | ||||||
Savings | 168,281 | 5 | 0.01 | 152,759 | 20 | 0.05 | ||||||
Certificates of deposit – retail | 391,340 | 791 | 0.81 | 461,917 | 836 | 0.72 | ||||||
Subtotal interest-bearing deposits | 4,205,802 | 7,480 | 0.71 | 3,971,263 | 2,716 | 0.27 | ||||||
Interest-bearing demand – brokered | 85,000 | 345 | 1.62 | 85,000 | 385 | 1.81 | ||||||
Certificates of deposit – brokered | 25,968 | 210 | 3.23 | 33,796 | 266 | 3.15 | ||||||
Total interest-bearing deposits | 4,316,770 | 8,035 | 0.74 | 4,090,059 | 3,367 | 0.33 | ||||||
Borrowings | 3,810 | 29 | 3.04 | 64,332 | 57 | 0.35 | ||||||
Capital lease obligation | 5,106 | 61 | 4.78 | 6,147 | 74 | 4.82 | ||||||
Subordinated debt | 132,874 | 1,363 | 4.10 | 132,588 | 1,358 | 4.10 | ||||||
Total interest-bearing liabilities | 4,458,560 | 9,488 | 4,293,126 | 4,856 | ||||||||
Noninterest-bearing liabilities: | ||||||||||||
Demand deposits | 1,116,843 | 997,450 | ||||||||||
Accrued expenses and other liabilities | 83,446 | 137,387 | ||||||||||
Total noninterest-bearing liabilities | 1,200,289 | 1,134,837 | ||||||||||
Shareholders’ equity | 529,160 | 544,856 | ||||||||||
Total liabilities and shareholders’ equity | | | ||||||||||
Net interest income | | | ||||||||||
Net interest spread | ||||||||||||
Net interest margin (D) | ||||||||||||
(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
(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.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
(Tax-Equivalent Basis, Dollars in Thousands)
(Unaudited)
For the Three Months Ended | ||||||||||||
September 30, 2022 | June 30, 2022 | |||||||||||
Average | Income/ | Average | Income/ | |||||||||
Balance | Expense | Yield | Balance | Expense | Yield | |||||||
ASSETS: | ||||||||||||
Interest-earning assets: | ||||||||||||
Investments: | ||||||||||||
Taxable (A) | | | | | ||||||||
Tax-exempt (A) (B) | 3,226 | 30 | 3.72 | 4,193 | 40 | 3.82 | ||||||
Loans (B) (C): | ||||||||||||
Mortgages | 513,864 | 3,861 | 3.01 | 513,666 | 3,630 | 2.83 | ||||||
Commercial mortgages | 2,510,616 | 23,121 | 3.68 | 2,552,128 | 21,185 | 3.32 | ||||||
Commercial | 2,016,590 | 23,362 | 4.63 | 2,024,457 | 19,348 | 3.82 | ||||||
Commercial construction | 12,073 | 143 | 4.74 | 16,186 | 162 | 4.00 | ||||||
Installment | 38,338 | 399 | 4.16 | 37,235 | 297 | 3.19 | ||||||
Home equity | 36,706 | 451 | 4.91 | 38,061 | 331 | 3.48 | ||||||
Other | 263 | 7 | 10.65 | 258 | 6 | 9.30 | ||||||
Total loans | 5,128,450 | 51,344 | 4.00 | 5,181,991 | 44,959 | 3.47 | ||||||
Federal funds sold | — | — | — | — | — | — | ||||||
Interest-earning deposits | 232,158 | 1,162 | 2.00 | 164,066 | 314 | 0.77 | ||||||
Total interest-earning assets | 6,118,014 | 55,389 | 6,124,395 | 48,848 | ||||||||
Noninterest-earning assets: | ||||||||||||
Cash and due from banks | 8,296 | 9,715 | ||||||||||
Allowance for credit losses | (59,464) | (59,629) | ||||||||||
Premises and equipment | 23,580 | 22,952 | ||||||||||
Other assets | 97,583 | 96,232 | ||||||||||
Total noninterest-earning assets | 69,995 | 69,270 | ||||||||||
Total assets | | | ||||||||||
LIABILITIES: | ||||||||||||
Interest-bearing deposits: | ||||||||||||
Checking | | | | | ||||||||
Money markets | 1,237,975 | 1,557 | 0.50 | 1,234,564 | 579 | 0.19 | ||||||
Savings | 168,281 | 5 | 0.01 | 163,062 | 5 | 0.01 | ||||||
Certificates of deposit – retail | 391,340 | 791 | 0.81 | 411,202 | 651 | 0.63 | ||||||
Subtotal interest-bearing deposits | 4,205,802 | 7,480 | 0.71 | 4,302,496 | 3,565 | 0.33 | ||||||
Interest-bearing demand – brokered | 85,000 | 345 | 1.62 | 85,000 | 364 | 1.71 | ||||||
Certificates of deposit – brokered | 25,968 | 210 | 3.23 | 33,470 | 261 | 3.12 | ||||||
Total interest-bearing deposits | 4,316,770 | 8,035 | 0.74 | 4,420,966 | 4,190 | 0.38 | ||||||
Borrowings | 3,810 | 29 | 3.04 | 3,873 | 10 | 1.03 | ||||||
Capital lease obligation | 5,106 | 61 | 4.78 | 5,406 | 64 | 4.74 | ||||||
Subordinated debt | 132,874 | 1,363 | 4.10 | 132,803 | 1,363 | 4.11 | ||||||
Total interest-bearing liabilities | 4,458,560 | 9,488 | 4,563,048 | 5,627 | ||||||||
Noninterest-bearing liabilities: | ||||||||||||
Demand deposits | 1,116,843 | 1,029,538 | ||||||||||
Accrued expenses and other liabilities | 83,446 | 79,882 | ||||||||||
Total noninterest-bearing liabilities | 1,200,289 | 1,109,420 | ||||||||||
Shareholders’ equity | 529,160 | 521,197 | ||||||||||
Total liabilities and shareholders’ equity | | | ||||||||||
Net interest income | | | ||||||||||
Net interest spread | ||||||||||||
Net interest margin (D) | ||||||||||||
(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
(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.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
(Tax-Equivalent Basis, Dollars in Thousands)
(Unaudited)
For the Nine Months Ended | ||||||||||||
September 30, 2022 | September 30, 2021 | |||||||||||
Average | Income/ | Average | Income/ | |||||||||
Balance | Expense | Yield | Balance | Expense | Yield | |||||||
ASSETS: | ||||||||||||
Interest-earning assets: | ||||||||||||
Investments: | ||||||||||||
Taxable (A) | | | | | ||||||||
Tax-exempt (A) (B) | 4,035 | 117 | 3.87 | 6,961 | 243 | 4.65 | ||||||
Loans (B) (C): | ||||||||||||
Mortgages | 511,999 | 11,148 | 2.90 | 501,276 | 11,559 | 3.07 | ||||||
Commercial mortgages | 2,472,503 | 62,481 | 3.37 | 1,972,723 | 45,590 | 3.08 | ||||||
Commercial | 2,016,533 | 60,911 | 4.03 | 1,900,231 | 49,992 | 3.51 | ||||||
Commercial construction | 15,427 | 465 | 4.02 | 20,418 | 516 | 3.37 | ||||||
Installment | 36,697 | 951 | 3.46 | 34,724 | 777 | 2.98 | ||||||
Home equity | 38,324 | 1,106 | 3.85 | 45,672 | 1,133 | 3.31 | ||||||
Other | 268 | 18 | 8.96 | 239 | 15 | 8.37 | ||||||
Total loans | 5,091,751 | 137,080 | 3.59 | 4,475,283 | 109,582 | 3.26 | ||||||
Federal funds sold | — | — | — | 64 | — | 0.13 | ||||||
Interest-earning deposits | 174,833 | 1,505 | 1.15 | 465,287 | 367 | 0.11 | ||||||
Total interest-earning assets | 6,089,030 | 148,697 | 5,769,857 | 118,665 | ||||||||
Noninterest-earning assets: | ||||||||||||
Cash and due from banks | 8,491 | 10,018 | ||||||||||
Allowance for credit losses | (60,026) | (67,592) | ||||||||||
Premises and equipment | 23,187 | 23,087 | ||||||||||
Other assets | 119,908 | 203,344 | ||||||||||
Total noninterest-earning assets | 91,560 | 168,857 | ||||||||||
Total assets | | | ||||||||||
LIABILITIES: | ||||||||||||
Interest-bearing deposits: | ||||||||||||
Checking | | | | | ||||||||
Money markets | 1,255,341 | 2,675 | 0.28 | 1,250,933 | 2,204 | 0.23 | ||||||
Savings | 162,675 | 15 | 0.01 | 140,066 | 55 | 0.05 | ||||||
Certificates of deposit – retail | 409,442 | 2,048 | 0.67 | 494,255 | 3,333 | 0.90 | ||||||
Subtotal interest-bearing deposits | 4,238,481 | 13,433 | 0.42 | 3,881,917 | 8,691 | 0.30 | ||||||
Interest-bearing demand – brokered | 85,000 | 1,082 | 1.70 | 100,110 | 1,334 | 1.78 | ||||||
Certificates of deposit – brokered | 31,058 | 732 | 3.14 | 33,783 | 791 | 3.12 | ||||||
Total interest-bearing deposits | 4,354,539 | 15,247 | 0.47 | 4,015,810 | 10,816 | 0.36 | ||||||
Borrowings | 20,876 | 103 | 0.66 | 138,448 | 448 | 0.43 | ||||||
Capital lease obligation | 5,389 | 193 | 4.78 | 6,376 | 229 | 4.79 | ||||||
Subordinated debt | 132,803 | 4,090 | 4.11 | 165,053 | 5,650 | 4.56 | ||||||
Total interest-bearing liabilities | 4,513,607 | 19,633 | 4,325,687 | 17,143 | ||||||||
Noninterest-bearing liabilities: | ||||||||||||
Demand deposits | 1,042,064 | 932,088 | ||||||||||
Accrued expenses and other liabilities | 93,462 | 143,045 | ||||||||||
Total noninterest-bearing liabilities | 1,135,526 | 1,075,133 | ||||||||||
Shareholders’ equity | 531,457 | 533,894 | ||||||||||
Total liabilities and shareholders’ equity | | | ||||||||||
Net interest income | | | ||||||||||
Net interest spread | ||||||||||||
Net interest margin (D) | ||||||||||||
(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
(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.
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 these non-GAAP financial measures provide information that is important to investors and useful in understanding our financial position, results and ratios because 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.
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 these non-GAAP financial measures provide information that is important to investors and useful in understanding our financial position, results and ratios because 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 | ||||||||||
Sept 30, | June 30, | March 31, | Dec 31, | Sept 30, | ||||||
Tangible Book Value Per Share | 2022 | 2022 | 2022 | 2021 | 2021 | |||||
Shareholders’ equity | | | | | | |||||
Less: Intangible assets, net | 47,698 | 48,082 | 48,471 | 48,902 | 49,333 | |||||
Tangible equity | | | | | | |||||
Less: other comprehensive loss | (74,983) | (58,727) | (40,938) | (12,374) | (9,035) | |||||
Tangible equity excluding other comprehensive loss | | | | | | |||||
Period end shares outstanding | 17,920,571 | 18,190,009 | 18,370,312 | 18,393,888 | 18,627,910 | |||||
Tangible book value per share | | | | | | |||||
Tangible book value per share excluding other comprehensive loss | | | | | | |||||
Book value per share | 28.77 | 28.60 | 28.49 | 29.70 | 29.15 | |||||
Tangible Equity to Tangible Assets | ||||||||||
Total assets | | | | | | |||||
Less: Intangible assets, net | 47,698 | 48,082 | 48,471 | 48,902 | 49,333 | |||||
Tangible assets | | | | | | |||||
Less: other comprehensive loss | (74,983) | (58,727) | (40,938) | (12,374) | (9,035) | |||||
Tangible assets excluding other comprehensive loss | | | | | | |||||
Tangible equity to tangible assets | ||||||||||
Tangible equity to tangible assets excluding other comprehensive loss | ||||||||||
Equity to assets | ||||||||||
Three Months Ended | ||||||||||
Sept 30, | June 30, | March 31, | Dec 31, | Sept 30, | ||||||
Return on Average Tangible Equity | 2022 | 2022 | 2022 | 2021 | 2021 | |||||
Net income | | | | | | |||||
Average shareholders’ equity | | | | | | |||||
Less: Average intangible assets, net | 47,922 | 48,291 | 48,717 | 49,151 | 48,757 | |||||
Average tangible equity | | | | | | |||||
Return on average tangible common equity | ||||||||||
For the Nine Months Ended | ||||
Sept 30, | Sept 30, | |||
Return on Average Tangible Equity | 2022 | 2021 | ||
Net income | | | ||
Average shareholders’ equity | | | ||
Less: Average intangible assets, net | 48,307 | 45,306 | ||
Average tangible equity | 483,150 | 488,588 | ||
Return on average tangible common equity | ||||
Three Months Ended | ||||||||||
Sept 30, | June 30, | March 31, | Dec 31, | Sept 30, | ||||||
Efficiency Ratio | 2022 | 2022 | 2022 | 2021 | 2021 | |||||
Net interest income | | | | | | |||||
Total other income | 16,383 | 18,508 | 14,714 | 18,964 | 17,781 | |||||
Add: | ||||||||||
Fair value adjustment for CRA equity security | 571 | 475 | 682 | 139 | 70 | |||||
Less: | ||||||||||
Loss/(gain) on loans held for sale | ||||||||||
at lower of cost or fair value | — | — | — | 265 | — | |||||
Loss on securities sale, net | — | — | 6,609 | — | — | |||||
Total recurring revenue | 62,479 | 61,876 | 61,627 | 56,580 | 53,062 | |||||
Operating expenses | 33,560 | 32,659 | 34,169 | 31,704 | 32,185 | |||||
Less: | ||||||||||
Swap valuation allowance | — | — | 673 | 893 | 1,350 | |||||
Severance expense | — | — | 1,476 | — | — | |||||
Total operating expense | 33,560 | 32,659 | 32,020 | 30,811 | 30,835 | |||||
Efficiency ratio | ||||||||||
For the Nine Months Ended | ||||
Sept 30, | Sept 30, | |||
Efficiency Ratio | 2022 | 2021 | ||
Net interest income | | | ||
Total other income | 49,605 | 53,279 | ||
Add: | ||||
Fair value adjustment for CRA equity security | 1,728 | 293 | ||
Less: | ||||
Loss on swap termination | — | 842 | ||
Income from life insurance proceeds | — | (455) | ||
Loss/(gain) on loans held for sale | ||||
at lower of cost or fair value | — | (1,407) | ||
Loss on securities sale, net | 6,609 | — | ||
Total recurring revenue | 185,982 | 153,401 | ||
Operating expenses | 100,388 | 94,463 | ||
Less: | ||||
Write-off of subordinated debt costs | — | 648 | ||
Swap valuation allowance | 673 | 1,350 | ||
Severance expense | 1,476 | 1,532 | ||
Total operating expense | 98,239 | 90,933 | ||
Efficiency ratio | ||||
FAQ
What were the earnings results for Peapack-Gladstone Financial Corporation in Q3 2022?
How did Peapack-Gladstone's revenue change compared to Q3 2021?
What is the future outlook for Peapack-Gladstone Financial Corporation?
What was the net income for Peapack-Gladstone in Q3 2022?