10-K 1 form10kpeapack50707.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended December 31, 2002 Commission File No. 000-23537 PEAPACK-GLADSTONE FINANCIAL CORPORATION (Exact name of registrant as specified in its charter) New Jersey 22-2491488 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 158 Route 206 Peapack-Gladstone, New Jersey 07934 (Address of principal executive offices) (Zip Code) Registrant's telephone number (908) 234-0700 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Exchange on which Registered Common Stock, No par value American Stock Exchange Securities registered pursuant to Section 12(g) of the Act: NONE Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_|. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment of this Form 10-K |X|. Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-d). Yes |X| No |_|. As of February 28, 2003, 6,704,984 shares of no par value Common Stock were outstanding and the aggregate market value of the shares held by unaffiliated stockholders was approximately $186,063,306. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Corporation's 2002 Annual Report (the "2002 Annual Report") and Definitive Proxy Statement for the Corporation's 2003 Annual Meeting of Shareholders (the "2003 Proxy Statement") are incorporated by reference into Parts II and III. FORM 10-K PEAPACK-GLADSTONE FINANCIAL CORPORATION For the Year Ended December 31, 2002 Table of Contents PART I Item 1. Description of Business ............................................................. 3 Item 2. Description of Property ............................................................. 6 Item 3. Legal Proceedings ................................................................... 6 Item 4. Submission of Matters to a Vote of Security Holders ................................. 6 Item 4A. Executive Officers of the Registrant ................................................ 7 PART II Item 5. Market for the Registrant's Common Stock and Related Shareholders Matters ........... 7 Item 6. Selected Financial Data ............................................................. 7 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Item 7A. Quantitative and Qualitative Disclosure About Market Risk ........................... 7 Item 8. Financial Statements and Supplementary Data ......................................... 8 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 8 PART III Item 10. Directors and Executive Officers of the Registrant .................................. 8 Item 11. Executive Compensation .............................................................. 8 Item 12. Security Ownership of Certain Beneficial Owners and Management ...................... 8 Item 13. Certain Relationships and Related Transactions ...................................... 9 PART IV Item 14. Controls and Procedures ............................................................. 9 Item 15. Exhibits, Financial Statements, and Reports on Form 8-K ............................. 9 Signatures .......................................................................... 11
2 This document contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Corporation. Such statements are not historical facts and include expressions about the Corporation's confidence, strategies and expectations about earnings, new and existing programs and products, relationships, opportunities, technology and market conditions. These statements may be identified by forward-looking terminology such as "expect," "believe," or "anticipate," or expressions of confidence like "strong," or "on-going," or similar statements or variations of such terms. Factors that may cause actual results to differ materially from those contemplated by such forward looking statements include, among others, the following possibilities: o Competitive pressure in the banking and financial services industry increases significantly. o Changes in the interest rate environment may reduce interest rate margins. o General economic conditions, either nationally or in the state of New Jersey, are less favorable than expected. The Corporation assumes no responsibility to update such forward-looking statements in the future. PART I Item 1. DESCRIPTION OF BUSINESS The Corporation The Peapack-Gladstone Financial Corporation (the "Corporation") is a bank holding company registered under the Bank Holding Company Act of 1956, as amended ("Holding Company Act"). The Corporation was organized under the laws of New Jersey in August, 1997, by the Board of Directors of Peapack-Gladstone Bank (the "Bank"), its principal subsidiary, to become a holding company for the Bank. The Bank is a state chartered commercial bank founded in 1921 under the laws of the State of New Jersey. Deposits of the Bank are insured for up to $100,000 per depositor by the Bank Insurance Fund administered by the FDIC. The Bank is a member of the Federal Reserve System. The Bank offers financial services through sixteen full-service banking offices, and one mini-branch. The Bank maintains eight (8) branches and one (1) auxiliary office in Somerset County, two (2) in Hunterdon County and six (6) in Morris County. The Bank is primarily dedicated to providing quality, personalized financial, trust and investment services to individuals and small businesses. Commercial loan customers of the Bank are business people, including merchants, architects, doctors, dentists, attorneys and building contractors as well as various service firms and other local retailers. Most forms of commercial lending are offered, including working capital lines of credit, term loans for fixed asset acquisitions, commercial mortgages and other forms of asset-based financing. In addition to commercial lending activities, the Bank offers a wide range of consumer banking services, including: checking and savings accounts, money market and interest-bearing checking accounts, certificates of deposit, and individual retirement accounts held in certificates of deposit. The Bank also offers residential and construction mortgages, home equity lines of credit and other second mortgage loans. For children, the Bank offers a special pony club savings account. New Jersey Consumer Checking Accounts are offered to low income customers. In addition, the Bank provides foreign and domestic travelers' checks, personal money orders, cashier's checks and wire transfers. Automated teller machines are available at sixteen (16) locations. Via the automatic teller machine access card issued by the Bank, customers may pay for commodities at point-of-sale merchant locations. Internet banking is available to customers including an on-line bill payment option. The Corporation has no foreign operations. The Bank's Trust and Investment Department, PGB Trust and Investments, is an important function of the Bank. PGB Trust and Investments offers personal investment management services, personal trust administration services, estate settlement, income tax services, custodial services and other financial planning services. Since its inception in 1972, trust assets (book value) have increased to more than $1 billion. 3 The Corporation does not make its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to such reports, available on its website at www.pgbank.com. Employees As of December 31, 2002, the Corporation employed 205 full-time equivalent persons. Management considers relations with employees to be satisfactory. Principal Market Areas The Bank's principal market for its deposit gathering activities includes Somerset, Morris and Hunterdon Counties. The area is composed of upper-income single family homes, moderate income properties, some low-income housing and several large corporate campuses. There are numerous small retail businesses in each of the towns as well as offices for various professionals, i.e. attorneys, architects, interior decorators, physicians, etc. A portion of the market area is bisected by Interstate Highways 287 and 78 where numerous corporate offices have relocated over the past 25 years. The Bank has expanded its service areas from one office in 1968 to the present sixteen (16) full-service banking locations and one (1) mini-branch location by steadily opening new branches. All of the communities that the Bank serves are demographically similar and contiguous to the main office. Competition The market for banking and bank-related services is highly competitive. The Corporation and its subsidiary compete with other providers of financial services such as other bank holding companies, commercial and savings banks, savings and loan associations, credit unions, money market and mutual funds, mortgage companies, and a growing list of other local, regional and national institutions which offer financial services. Mergers between financial institutions within New Jersey and in neighboring states have added competitive pressure. The Corporation and its subsidiary compete by offering quality products and convenient services at competitive prices. In order to maintain and enhance its competitive position, the Corporation regularly reviews its products, locations and new branching prospects. Governmental Policies and Legislation The banking industry is highly regulated. Statutory and regulatory controls increase a bank holding company's cost of doing business and limit the options of its management to deploy assets and maximize income. Proposals to change the laws and regulations governing the operations and taxation of banks, bank holding companies and other financial institutions are frequently made in Congress, in state legislatures and before various bank regulatory agencies. The likelihood of any major changes and the impact such changes might have on the Corporation or the Bank is impossible to predict. The following discussion is not intended to be a complete list of all the activities regulated by the banking laws or of the impact of such laws and regulations on the Bank. It is intended only to briefly summarize some material provisions. Capital Requirements The Federal Reserve Board has adopted risk-based capital guidelines for banks and bank holding companies. The minimum guideline for the ratio of total capital to risk-weighted assets is 8%. At least half of the total capital is to be comprised of common stock, retained earnings, minority interests in the equity accounts of consolidated subsidiaries, noncumulative perpetual preferred stock and a limited amount of qualifying cumulative perpetual preferred stock, less goodwill and certain other intangibles ("Tier 1 Capital"). The remainder may consist of other preferred stock, certain other instruments and a portion of the loan loss allowance. At December 31, 2002, the Corporation's Tier 1 Capital and Total Capital ratios were 19.51% and 20.81%, respectively. In addition, the Federal Reserve Board has established minimum leverage ratio guidelines for banks and bank holding companies. These guidelines provide for a minimum ratio of Tier 1 Capital to average total assets of 3% for banks that 4 meet certain specified criteria, including having the highest regulatory rating. All other banks and bank holding companies generally are required to maintain a leverage ratio of at least 3% plus an additional cushion of 100 to 200 basis points. The Corporation's leverage ratio at December 31, 2002 was 9.19%. FDICIA Pursuant to the Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"), each federal banking agency has promulgated regulations, specifying the levels at which a financial institution would be considered "well capitalized," "adequately capitalized," "undercapitalized," "significantly undercapitalized," and "critically undercapitalized," and to take certain mandatory and discretionary supervisory actions based on the capital level of the institution. The regulations implementing these provisions of FDICIA provide that a bank is defined to be "well capitalized" if it maintains a leverage ratio of at least 5%, a risk-adjusted Tier 1 capital ratio of at least 6% and a risk-adjusted total capital ratio of at least 10% and is not otherwise in a "troubled condition" as specified by its appropriate federal regulatory agency. A bank is defined to be "adequately capitalized" if it meets other minimum capital requirements. In addition, a depository institution will be considered "undercapitalized" if it fails to meet any minimum required measure, "significantly undercapitalized" if it is significantly below such measure and "critically undercapitalized" if it fails to maintain a level of tangible equity equal to not less than 2% of total assets. A depository institution may be deemed to be in a capitalization category that is lower than is indicated by its actual capital position if it receives an unsatisfactory examination rating. Insurance Funds Legislation The Corporation's wholly-owned subsidiary, the Peapack-Gladstone Bank, is a member of the Bank Insurance Fund ("BIF") of the FDIC. The FDIC also maintains another insurance fund, the Savings Association Insurance Fund ("SAIF"), which primarily covers savings and loan association deposits but also covers deposits that are acquired by a BIF-insured institution from a savings and loan association. Restrictions on the Payment of Dividends The holders of the Corporation's common stock are entitled to receive dividends, when, as and if declared by the Board of Directors of the Corporation out of funds legally available. The only statutory limitation is that such dividends may not be paid when the Corporation is insolvent. Since the principal source of income for the Corporation will be dividends on Bank common stock paid to the Corporation by the Bank, the Corporation's ability to pay dividends to its shareholders will depend on whether the Bank pays dividends to it. As a practical matter, restrictions on the ability of the Bank to pay dividends act as restrictions on the amount of funds available for the payment of dividends by the Corporation. As a New Jersey chartered commercial bank, the Bank is subject to the restrictions on the payment of dividends contained in the New Jersey Banking Act of 1948, as amended (the "Banking Act"). Under the Banking Act, the Bank may pay dividends only out of retained earnings, and out of surplus to the extent that surplus exceeds 50% of stated capital. Under the Financial Institutions Supervisory Act, the FDIC has the authority to prohibit a state-chartered bank from engaging in conduct that, in the FDIC's opinion, constitutes an unsafe or unsound banking practice. Under certain circumstances, the FDIC could claim that the payment of a dividend or other distribution by the Bank to the Corporation constitutes an unsafe or unsound practice. The Corporation is also subject to FRB policies, which may, in certain circumstances, limit its ability to pay dividends. The FRB policies require, among other things, that a bank holding company maintain a minimum capital base. The FRB would most likely seek to prohibit any dividend payment that would reduce a holding company's capital below these minimum amounts. Holding Company Supervision The Corporation is a bank holding company within the meaning of the Holding Company Act. As a bank holding company, the Corporation is supervised by the FRB and is required to file reports with the FRB and provide such additional information as the FRB may require. 5 The Holding Company Act prohibits the Corporation, with certain exceptions, from acquiring direct or indirect ownership or control of more than five percent of the voting shares of any company which is not a bank and from engaging in any business other than that of banking, managing and controlling banks or furnishing services to subsidiary banks, except that it may, upon application, engage in, and may own shares of companies engaged in, certain businesses found by the FRB to be so closely related to banking "as to be a proper incident thereto." The Holding Company Act requires prior approval by the FRB of the acquisition by the Corporation of more than five percent of the voting stock of any additional bank. Satisfactory capital ratios, Community Reinvestment Act ratings and anti-money laundering policies are generally prerequisites to obtaining federal regulatory approval to make acquisitions. The policy of the FRB provides that a bank holding company is expected to act as a source of financial strength to its subsidiary bank and to commit resources to support the subsidiary bank in circumstances in which it might not do so absent that policy. Acquisitions through the Bank require the approval of the FDIC and the New Jersey Department of Banking and Insurance ("NJDOBI"). Recent Legislation The Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley Act"), which became law on July 30, 2002, added new legal requirements for public companies affecting corporate governance, accounting and corporate reporting. The Sarbanes-Oxley Act provides for, among other things: o a prohibition on personal loans made or arranged by the issuer to its directors and executive officers (except for loans made by a bank subject to Regulation O); o independence requirements for audit committee members; o independence requirements for company auditors; o certification of financial statements and Forms 10-K and 10-Q reports by the chief executive officer and the chief financial officer; o the forfeiture of bonuses or other incentive-based compensation and profits from the sale of an issuer's securities by directors and senior officers in the twelve month period following initial publication of any financial statements that later require restatement due to corporate misconduct; o disclosure of off-balance sheet transactions; o two-business day filing requirements for insiders filing Form 4s; o disclosure of a code of ethics for financial officers and filing a Form 8-K for a change or waiver of such code; o "real time" filing of periodic reports; o posting of certain SEC filings and other information on the company website; o the reporting of securities violations "up the ladder" by both in-house and outside attorneys; o restrictions on the use of non-GAAP financial measures; o the formation of a public accounting oversight board; and o various increased criminal penalties for violations of securities laws. The Sarbanes-Oxley Act contains provisions, which became effective upon enactment on July 30, 2002 and provisions, which will become effective from within 30 days to one year from enactment. The SEC has been delegated the task of enacting rules to implement various provisions. In addition, each of the national stock exchanges has proposed new corporate governance rules, including rules strengthening director independence requirements for boards, the adoption of corporate governance codes and charters for the nominating, corporate governance and audit committees. Item 2. DESCRIPTION OF PROPERTY The Corporation owns six branches and leases 11 branches. The Corporation also owns two properties adjacent to the Main Office in Peapack-Gladstone, a future branch site in Tewksbury Township, and leases an administrative and operations office building in Peapack-Gladstone. Item 3. LEGAL PROCEEDINGS 6 There is no currently pending litigation against the Corporation or its subsidiaries, which assert claims that if adversely decided, would have a material adverse effect on the Corporation. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. 7 Item 4A. EXECUTIVE OFFICERS OF THE REGISTRANT WHO ARE NOT DIRECTORS
Name Age Executive Officer Since Office --------------------------------------------------------------------------------------------------------------------------------- Arthur F. Birmingham 51 1996 Executive Vice President and Chief Financial Officer Garrett P. Bromley 58 1997 Executive Vice President and Chief Credit Officer
PART II Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The Common Stock of Peapack-Gladstone Financial Corporation is traded on the American Stock Exchange under the symbol of PGC since November 1, 2000. The following table sets forth, for the periods indicated, the reported high and low sale prices on known trades and cash dividends declared per share by the Corporation. DIVIDEND 2002 HIGH LOW PER SHARE ---- ---- --- --------- 1st QUARTER $25.00 $18.13 $0.075 2nd QUARTER 31.50 24.75 0.075 3rd QUARTER 32.50 28.83 0.090 4th QUARTER 37.46 29.75 0.090 DIVIDEND 2001 HIGH LOW PER SHARE ---- ---- --- --------- 1st QUARTER $21.14 $17.73 $0.070 2nd QUARTER 18.18 16.14 0.070 3rd QUARTER 19.30 16.84 0.075 4th QUARTER 19.63 18.25 0.075 Future dividends payable by the Corporation will be determined by the Board of Directors after consideration of earnings and financial condition of the Corporation, need for capital and such other matters as the Board of Directors deems appropriate. The payment of dividends is subject to certain restrictions, see Part I, Item 1, "Description of Business - Restrictions on the Payment of Dividends." On December 31, 2002, the last reported sale price of the Common Stock was $34.25. Also, on February 28, 2003, there were approximately 797 shareholders of record. Item 6. SELECTED CONSOLIDATED FINANCIAL DATA The information set forth in the 2002 Annual Report under the heading "Selected Consolidated Financial Data" is incorporated herein by reference. Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information set forth in the 2002 Annual Report under the heading "Management's Discussion and Analysis" is incorporated herein by reference. Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK 8 The information set forth in the 2002 Annual Report under the heading "Market Risk Sensitive Instruments" is incorporated herein by reference. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Consolidated Financial Statements set forth in the 2002 Annual Report, together with the report thereon by KPMG LLP and the Notes to the Consolidated Financial Statements, are incorporated herein by reference. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The information which will be set forth under the captions "Director Information" and "Section 16(a) Beneficial Ownership Reporting Compliance" in the 2003 Proxy Statement is incorporated herein by reference. Certain information on Executive Officers of the registrant is included in Part I, Item 4A of this report, which is also incorporated herein by reference. Item 11. EXECUTIVE COMPENSATION Information with respect to executive compensation contained in the 2003 Proxy Statement set forth under the caption "Executive Compensation" is incorporated herein by reference. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table shows information for all equity compensation plans:
NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE NUMBER OF SECURITIES UNDER EQUITY TO BE ISSUED UPON WEIGHTED-AVERAGE COMPENSATION PLANS EXERCISE OF EXERCISE PRICE OF (EXCLUDING SECURITIES PLAN CATEGORY OUTSTANDING OPTIONS OUTSTANDING OPTIONS REFLECTED IN COLUMN (A) ------------------------------------------------------------------------------------------------------------------------------- EQUITY COMPENSATION PLANS APPROVED BY SECURITY HOLDERS 462,319 $15.68 339,144 -------------------------------------------------------------------------------------------------- EQUITY COMPENSATION PLANS NOT APPROVED BY SECURITY HOLDERS N/A N/A N/A -------------------------------------------------------------------------------------------------- TOTAL 462,319 $15.68 339,144 ==================================================================================================
Information with respect to beneficial ownership of persons known to the Corporation to own beneficially more than five percent of the outstanding common stock contained in the 2003 Proxy Statement set forth under the caption "Beneficial Ownership of Common Stock" is incorporated herein by reference. 9 Information with respect to the security ownership of management contained in the 2003 Proxy Statement set forth under the caption "Beneficial Ownership of Common Stock" is incorporated herein by reference. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Information with respect to certain relationships and related transactions contained in the 2003 Proxy Statement set forth under the caption "Certain Relationships and Related Transactions" is incorporated herein by reference. PART IV Item 14. CONTROLS AND PROCEDURES Within the 90 days prior to the date of this report, the Corporation carried out an evaluation, under the supervision and with the participation of the Corporation's management, including the Corporation's Chairman and Chief Executive Officer and the Corporation's Chief Financial Officer, of the effectiveness of the design and operation of the Corporation's disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon the evaluation, they concluded that the Corporation's disclosure controls and procedures are effective in timely alerting them to material information relating to the Corporation (including its consolidated subsidiaries) required to be included in this report. There have been no significant changes in the Corporation's internal controls or in other factors that could significantly affect internal controls subsequent to the date of the evaluation. The Corporation's management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, provides reasonable, not absolute, assurance that the objectives of the control system are met. The design of a control system reflects resource constraints; the benefits of controls must be considered relative to their costs. Because there are inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Corporation have been or will be detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns occur because of simple error or mistake. Controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events. There can be no assurance that any design will succeed in achieving its stated goals under all future conditions; over time, control may become inadequate because of changes in conditions or deterioration in the degree of compliance with the policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Item 15. EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS ON FORM 8-K (a) Financial Statements and Schedules: Those portions of the 2002 Annual Report attached hereto as Exhibit 13 contain the financial statements incorporated herein by reference. All financial statement schedules are omitted because they are either inapplicable or not required, or because the required information is included in the Consolidated Financial Statements or notes thereto contained in the 2002 Annual Report. (10) Exhibits (3) Articles of Incorporation and By-Laws: A. Certificate of Incorporation dated August 14, 1997 is incorporated by reference to the Registrant's Form 10- K Annual Report for the year ended December 31, 1997. 10 B. By-Laws of the Registrant adopted as of August 14, 1997 are incorporated by reference to the Registrant's Form 10-K Annual Report for the year ended December 31, 1997. 11 (10) Material Contracts: A. "Change in Control Agreements" dated as of January 1, 1998 by and among the Corporation, the Bank and Frank A. Kissel, Robert M. Rogers, Craig C. Spengeman and Arthur F. Birmingham are incorporated by reference to Registrant's Form 10-K Annual Report for the year ended December 31, 1997. B. Peapack-Gladstone Financial Corporation 1998 Stock Option Plan and 1998 Stock Option Plan for Outside Directors are incorporated by reference to Registrant's Registration Statement on Form S-8 dated May 19, 1998. C. "Change in Control Agreement" dated April 3, 1998 by and among the Corporation, the Bank and Garrett P. Bromley is incorporated by reference to Registrant's Form 10-K Annual Report for the year ended December 31, 1998. D. Agreement and Plan of Merger dated August 26, 1999 between Peapack-Gladstone and Chatham Savings, FSB is incorporated herein by reference to Peapack-Gladstone's Report on Form 8-K filed with the Commission on September 7, 1999. E. Peapack-Gladstone Financial Corporation 2002 Long-Term Stock Incentive Plan and 2002 Stock Option Plan for Outside Directors are incorporated by reference to Registrant's Registration Statement on Form S-8 dated April 25, 2002. F. "Employment Agreements" dated as of May 13, 2002 by and among the Corporation, the Bank and Frank A. Kissel, Craig C. Spengeman, Robert M. Rogers and Arthur F. Birmingham are incorporated by reference to Registrant's Form 10-Q Quarterly Report for the quarter ended June 30, 2002. (13) Annual Report to Shareholders (21) List of Subsidiaries: (a) Subsidiaries of the Corporation:
Percentage of Voting Jurisdiction Securities Owned by the Name of Incorporation Parent --------------------------------------------------------------------------------------- Peapack-Gladstone Bank New Jersey 100% (b) Subsidiaries of the Bank: Name ----------------------------------- Peapack-Gladstone Investment Company, Inc. New Jersey 100% Peapack-Gladstone Financial Services, Inc. (Inactive) New Jersey 100% (c) Subsidiaries of Peapack-Gladstone Investment Company, Inc.: Name ----------------------------------- Peapack-Gladstone Mortgage Group, Inc. New Jersey 100%
(23) Consents of Experts and Counsel: 12 Consent of KPMG LLP SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PEAPACK-GLADSTONE FINANCIAL CORPORATION (Registrant) By FRANK A. KISSEL ----------------------------------------------- Frank A. Kissel, Chairman of the Board Dated March 13, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Date T. LEONARD HILL March 13, 2003 --------------------------------------------------------- T. Leonard Hill, Director FRANK A. KISSEL March 13, 2003 --------------------------------------------------------- Frank A. Kissel, Chairman of the Board ARTHUR F. BIRMINGHAM March 13, 2003 --------------------------------------------------------- Arthur F. Birmingham, Executive Vice President and CFO (Principal Financial and Accounting Officer) ANTHONY J. CONSI II March 13, 2003 --------------------------------------------------------- Anthony J. Consi II, Director PAMELA HILL March 13, 2003 --------------------------------------------------------- Pamela Hill, Director JOHN D. KISSEL March 13, 2003 --------------------------------------------------------- John D. Kissel, Director JAMES R. LAMB March 13, 2003 --------------------------------------------------------- James R. Lamb, Director GEORGE R. LAYTON March 13, 2003 --------------------------------------------------------- George R. Layton, Director EDWARD A. MERTON March 13, 2003 --------------------------------------------------------- Edward A. Merton, Director 13 F. DUFFIELD MEYERCORD March 13, 2003 --------------------------------------------------------- F. Duffield Meyercord, Director JOHN R. MULCAHY March 13, 2003 --------------------------------------------------------- John R. Mulcahy, Director ROBERT M. ROGERS March 13, 2003 --------------------------------------------------------- Robert M. Rogers, President and COO PHILIP W. SMITH III March 13, 2003 --------------------------------------------------------- Philip W. Smith III, Director CRAIG C. SPENGEMAN March 13, 2003 --------------------------------------------------------- Craig C. Spengeman, President, PGB Trust and Investments JACK D. STINE March 13, 2003 --------------------------------------------------------- Jack D. Stine, Director 14 INDEPENDENT ACCOUNTANTS' CONSENT The Board of Directors Peapack-Gladstone Financial Corporation: We consent to incorporation by reference in the Registration Statements No. 333-51187 and No. 333-53001 on Form S-8 of Peapack-Gladstone Financial Corporation of our report dated January 22, 2003, relating to the consolidated statements of condition of Peapack-Gladstone Financial Corporation and subsidiary as of December 31, 2002 and 2001, and the related consolidated statements of income, changes in stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2002, which report is incorporated by reference in the December 31, 2002 Annual Report on Form 10-K of Peapack-Gladstone Financial Corporation. KPMG LLP Short Hills, New Jersey March 26, 2003 15 CERTIFICATIONS I, Frank A. Kissel, certify that: 1. I have reviewed this annual report on Form 10-K of Peapack-Gladstone Financial Corporation; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: March 13, 2003 ------------------------------------------------- Frank A. Kissel Chairman of the Board and Chief Executive Officer 16 I, Arthur F. Birmingham, certify that: 1. I have reviewed this annual report on Form 10-K of Peapack-Gladstone Financial Corporation; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: March 13, 2003 ---------------------------------------------------- Arthur F. Birmingham Executive Vice President and Chief Financial Officer 17