•

AUM/AUA in our Peapack Private Wealth Management Division totaled $10.7 billion at March 31, 2022.

•

Gross new business inflows for Q1 2022 totaled $350 million.

•

Wealth Management fee income increased 22% to $14.8 million for Q1 2022 compared to $12.1 million for Q1 2021.

•

Finalizing the consolidation of three offices of previously acquired firms into existing private banking locations.

•

Total loans grew 6% (25% annualized) to $5.15 billion at March 31, 2022 compared to $4.84 billion at December 31, 2021; and grew 21% from $4.25 billion (excluding $187 million of PPP loans) at March 31, 2021.

•

Commercial & industrial lending (“C&I”) loan/lease balances comprise 40% of the total loan portfolio at March 31, 2022.    

•

U.S. Small Business Association (“SBA”) Income ($2.8 million) and corporate advisory fees ($1.6 million) totaled $4.4 million for the first quarter of 2022.

•

Core deposits (which includes noninterest-bearing demand and interest-bearing demand, savings and money market accounts) totaled 90% of total deposits at March 31, 2022, with an average cost of 0.15%.

•

The net interest margin (NIM) improved by 23 basis points in Q1 2022 compared to Q4 2021 and improved 41 basis points when compared to Q1 2021.

•

The Company executed a balance sheet repositioning resulting in an estimated four basis point improvement to future NIM, with no impact to balance sheet duration, tangible capital or tangible book value per share.

•

Repurchased approximately 300,000 shares of Company stock at an average price of $37.26 for a total cost of $11.2 million.

•

Regulatory Tier 1 Leverage Ratio stood at 10.3% for the Bank and 8.4% for the Company, at March 31, 2022. Regulatory Common Equity Tier 1 Ratio (to Risk-Weighted Assets) stood at 12.5% for the Bank and 10.2% for the Company.  These ratios are significantly above well capitalized standards.

Three Months Ended

Three Months Ended

March 31,

March 31,

Increase/

(Dollars in millions, except per share data)

2022

2021

(Decrease)

Net interest income

$

39.62

$

31.79

$

7.83

25

%

Wealth management fee income (A)

14.83

12.13

2.70

22

Capital markets activity (B)

4.65

3.57

1.08

30

Other income (C)

(4.77

)

2.12

(6.89

)

(325

)

Total other income

14.71

17.82

(3.11

)

(17

)

Operating expenses (A) (D)

34.17

31.59

2.58

8

Pretax income before provision for credit losses

20.16

18.02

2.14

12

Provision for credit losses

2.37

0.23

2.14

930

Pretax income

17.79

17.79

—

—

Income tax expense

4.35

4.61

(0.26

)

(6

)

Net income (E)

$

13.44

$

13.18

$

0.26

2

%

Diluted EPS (E)

$

0.71

$

0.67

$

0.04

6

%

Total Revenue (F)

$

54.33

$

49.61

$

4.72

10

%

Return on average assets annualized (E)

0.87

%

0.89

%

(0.02

)

Return on average equity annualized (E)

9.88

%

10.03

%

(0.15

)

(A)

The quarter ended March 31, 2022 included a full quarter of wealth management fee income and expense related to the July 2021 acquisition of Princeton Portfolio Strategies Group.

(B)

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.

(C)

Other income for the quarter ended March 31, 2022 included a $6.6 million loss on sale of securities associated with a balance sheet repositioning executed in the quarter.

(D)

The March 2022 and 2021 quarters each included $1.5 million of severance expense related to certain staff reorganizations within several areas of the Bank.

(E)

The March 31, 2022 quarter included a $6.6 million loss on sale of securities associated with a balance sheet repositioning executed in the quarter. The 2022 period also included $1.5 million of severance expense

associated with certain staff reorganizations within several areas of the Bank during the quarter. These two items reduced net income by $5.9 million, EPS by $0.31, ROA by 0.38%, and ROE by 4.31%, for the Q1 2022 period.

(F)

Total revenue equals the sum of net interest income plus total other income.

Three Months Ended

Three Months Ended

March 31,

December 31,

Increase/

(Dollars in millions, except per share data)

2022

2021

(Decrease)

Net interest income

$

39.62

$

37.21

$

2.41

6

%

Wealth management fee income

14.83

13.96

0.87

6

Capital markets activity (A)

4.65

3.52

1.13

32

Other income (B)

(4.77

)

1.48

(6.25

)

(422

)

Total other income

14.71

18.96

(4.25

)

(22

)

Operating expenses (C)

34.17

31.70

2.47

8

Pretax income before provision for credit losses

20.16

24.47

(4.31

)

(18

)

Provision for credit losses

2.37

3.75

(1.38

)

(37

)

Pretax income

17.79

20.72

(2.93

)

(14

)

Income tax expense

4.35

5.86

(1.51

)

(26

)

Net income (D)

$

13.44

$

14.86

$

(1.42

)

(10

)%

Diluted EPS (D)

$

0.71

$

0.78

$

(0.07

)

(9

)%

Total Revenue (E)

$

54.33

$

56.17

$

(1.84

)

(3

)%

Return on average assets annualized (D)

0.87

%

0.96

%

(0.09

)

Return on average equity annualized (D)

9.88

%

10.94

%

(1.06

)

(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 quarter ended March 31, 2022 included a $6.6 million loss on the sale of securities associated with a balance sheet repositioning executed in the quarter. The December 2021 quarter included a $265,000 loss on the sale of loans.

(C)

The March 2022 quarter included $1.5 million of severance expense related to certain staff reorganization within several areas of the Bank.

(D)

The March 31, 2022 quarter included a $6.6 million loss on sale of securities associated with a balance sheet repositioning executed in the quarter. The 2022 period also included $1.5 million of severance expense associated with certain staff reorganizations within several areas of the Bank during the quarter. These two items reduced net income by $5.9 million, EPS by $0.31, ROA by 0.38%, and ROE by 4.31%, for the Q1 2022 period.

(E)

Total revenue equals the sum of net interest income plus total other income.

Three Months Ended

Three Months Ended

Three Months Ended

March 31, 2022

December 31, 2021

March 31, 2021

NII

NIM

NII

NIM

NII

NIM

NII/NIM excluding the below

$

39,274

2.68%

$

36,564

2.60%

$

30,565

2.49%

Prepayment premiums received on loan paydowns

351

0.02%

555

0.04%

704

0.05%

Effect of maintaining excess interest earning cash

(3

)

-0.01%

(68

)

-0.18%

(195

)

-0.21%

Effect of PPP loans

0

0.00%

161

0.00%

719

-0.05%

NII/NIM as reported

$

39,622

2.69%

$

37,212

2.46%

$

31,793

2.28%

Three Months Ended

Three Months Ended

Three Months Ended

March 31,

December 31,

March 31,

(Dollars in thousands, except per share data)

2022

2021

2021

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

$

247

$

352

$

1,025

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

—

—

—

Gain on sale of SBA loans

2,844

989

1,449

Corporate advisory fee income

1,561

2,180

1,098

Total capital markets activity

$

4,652

$

3,521

$

3,572

•

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;

•

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.

•

demand for our products and services may decline, making it difficult to grow assets and income;

•

if the economy worsens, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income;

•

collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase;

•

our allowance for credit losses may increase if borrowers experience financial difficulties, which will adversely affect our net income;

•

the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us;

•

a material decrease in net income or a net loss over several quarters could result in an elimination or a decrease in the rate of our quarterly cash dividend;

•

our wealth management revenues may decline with continuing market turmoil;

•

a worsening of business and economic conditions or in the financial markets could result in an impairment of certain intangible assets, such as goodwill;

•

the unanticipated loss or unavailability of key employees due to the outbreak, which could harm our ability to operate our business or execute our business strategy, especially as we may not be successful in finding and integrating suitable successors;

•

our cyber security risks are increased as the result of an increase in the number of employees working remotely; and

•

FDIC premiums may increase if the agency experience additional resolution costs.

For the Three Months Ended

March 31,

Dec 31,

Sept 30,

June 30,

March 31,

2022

2021

2021

2021

2021

Income Statement Data:

Interest income

$

44,140

$

42,075

$

40,067

$

39,686

$

38,239

Interest expense

4,518

4,863

4,856

5,841

6,446

Net interest income

39,622

37,212

35,211

33,845

31,793

Wealth management fee income

14,834

13,962

13,860

13,034

12,131

Service charges and fees

952

996

959

896

846

Bank owned life insurance

313

308

311

466

611

Gain on loans held for sale at fair value

   (Mortgage banking) (A)

247

352

408

409

1,025

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

   fair value (B)

—

(265

)

—

1,125

282

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

   swaps (A)

—

—

—

—

—

Gain on sale of SBA loans (A)

2,844

989

1,569

932

1,449

Corporate advisory fee income (A)

1,561

2,180

84

121

1,098

Loss on swap termination

—

—

—

(842

)

—

Other income (C)

1,254

581

660

1,495

643

Loss on securities sale, net (D)

(6,609

)

—

—

—

—

Fair value adjustment for CRA equity security

(682

)

(139

)

(70

)

42

(265

)

Total other income

14,714

18,964

17,781

17,678

17,820

Salaries and employee benefits (E)

22,449

20,105

19,859

19,910

21,990

Premises and equipment

4,647

4,519

4,459

4,074

4,113

FDIC insurance expense

471

402

555

529

585

Swap valuation allowance

673

893

1,350

—

—

Other expenses

5,929

5,785

5,962

6,171

4,906

Total operating expenses

34,169

31,704

32,185

30,684

31,594

Pretax income before provision for credit losses

20,167

24,472

20,807

20,839

18,019

Provision for credit losses (F)

2,375

3,750

1,600

900

225

Income before income taxes

17,792

20,722

19,207

19,939

17,794

Income tax expense

4,351

5,867

5,036

5,521

4,616

Net income

$

13,441

$

14,855

$

14,171

$

14,418

$

13,178

Total revenue (G)

$

54,336

$

56,176

$

52,992

$

51,523

$

49,613

Per Common Share Data:

Earnings per share (basic)

$

0.73

$

0.80

$

0.76

$

0.76

$

0.70

Earnings per share (diluted)

0.71

0.78

0.74

0.74

0.67

Weighted average number of common

   shares outstanding:

Basic

18,339,013

18,483,268

18,763,316

18,963,237

18,950,305

Diluted

18,946,683

19,070,594

19,273,831

19,439,439

19,531,689

Performance Ratios:

Return on average assets annualized (ROAA)

0.87

%

0.96

%

0.95

%

0.97

%

0.89

%

Return on average equity annualized (ROAE)

9.88

%

10.94

%

10.40

%

10.86

%

10.03

%

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

10.85

%

12.03

%

11.43

%

11.83

%

10.94

%

Net interest margin (tax-equivalent basis)

2.69

%

2.46

%

2.42

%

2.38

%

2.28

%

GAAP efficiency ratio (I)

62.88

%

56.44

%

60.74

%

59.55

%

63.68

%

Operating expenses / average assets annualized

2.22

%

2.05

%

2.16

%

2.06

%

2.14

%

(A)

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

(B)

Includes a $1.1 million gain on sale of $57 million of PPP loans completed in the June 2021 quarter.

(C)

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

(D)

Loss on sale of securities was a result of a balance sheet repositioning employed in the March  2022 quarter.

(E)

The March 2022 and 2021 quarters each included $1.5 million of severance expense related to corporate restructuring.

(F)

Commencing on January 1, 2022, the allowance calculation is based on the current expected credit loss 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.

As of

March 31,

Dec 31,

Sept 30,

June 30,

March 31,

2022

2021

2021

2021

2021

ASSETS

Cash and due from banks

$

8,849

$

5,929

$

9,299

$

12,684

$

8,159

Federal funds sold

—

—

—

—

102

Interest-earning deposits

105,111

140,875

606,913

190,778

468,276

Total cash and cash equivalents

113,960

146,804

616,212

203,462

476,537

Securities available for sale

601,163

796,753

843,779

823,820

875,301

Securities held to maturity

106,816

108,680

—

—

—

CRA equity security, at fair value

14,003

14,685

14,824

14,894

14,852

FHLB and FRB stock, at cost

18,570

12,950

12,950

12,901

13,699

Residential mortgage

513,289

501,340

510,878

504,181

498,884

Multifamily mortgage

1,850,097

1,595,866

1,497,683

1,420,043

1,178,940

Commercial mortgage

669,899

662,626

680,107

702,777

697,599

Commercial loans (A)

2,041,720

2,009,252

1,833,532

1,880,830

1,982,570

Consumer loans

35,322

33,687

30,689

31,889

36,519

Home equity lines of credit

38,604

40,803

42,512

44,062

45,624

Other loans

226

238

245

204

199

Total loans

5,149,157

4,843,812

4,595,646

4,583,986

4,440,335

Less: Allowances for credit losses (B)

58,386

61,697

65,133

63,505

67,536

Net loans

5,090,771

4,782,115

4,530,513

4,520,481

4,372,799

Premises and equipment

22,960

23,044

23,123

23,261

23,260

Other real estate owned

—

—

—

—

50

Accrued interest receivable

22,890

21,589

22,790

23,117

23,916

Bank owned life insurance

46,805

46,663

46,510

46,605

46,448

Goodwill and other intangible assets

48,471

48,902

49,333

43,156

43,524

Finance lease right-of-use assets

3,395

3,582

3,769

3,956

4,143

Operating lease right-of-use assets

14,725

9,775

10,307

9,569

10,186

Due from brokers (C)

120,245

—

—

—

—

Other assets (D)

30,890

62,451

66,175

66,466

64,912

TOTAL ASSETS

$

6,255,664

$

6,077,993

$

6,240,285

$

5,791,688

$

5,969,627

LIABILITIES

Deposits:

Noninterest-bearing demand deposits

$

1,023,208

$

956,482

$

986,765

$

959,494

$

908,922

Interest-bearing demand deposits

2,362,987

2,287,894

2,355,892

1,978,497

1,987,567

Savings

162,116

154,914

168,831

147,227

141,743

Money market accounts

1,304,017

1,307,051

1,287,686

1,213,992

1,256,605

Certificates of deposit – Retail

384,909

409,608

426,981

446,143

474,668

Certificates of deposit – Listing Service

31,348

31,382

31,382

31,631

31,631

Subtotal “customer” deposits

5,268,585

5,147,331

5,257,537

4,776,984

4,801,136

IB Demand – Brokered

85,000

85,000

85,000

85,000

110,000

Certificates of deposit – Brokered

33,831

33,818

33,804

33,791

33,777

Total deposits

5,387,416

5,266,149

5,376,341

4,895,775

4,944,913

Short-term borrowings

122,085

—

—

—

15,000

Paycheck Protection Program Liquidity Facility (E)

—

—

48,496

83,586

168,180

Finance lease liability

5,573

5,820

6,063

6,299

6,528

Operating lease liability

15,155

10,111

10,644

9,902

10,509

Subordinated debt, net (F)

132,772

132,701

132,629

132,557

181,837

Other liabilities (D)

69,237

116,824

123,098

125,110

120,219

TOTAL LIABILITIES

5,732,238

5,531,605

5,697,271

5,253,229

5,447,186

Shareholders’ equity

523,426

546,388

543,014

538,459

522,441

TOTAL LIABILITIES AND

SHAREHOLDERS’ EQUITY

$

6,255,664

$

6,077,993

$

6,240,285

$

5,791,688

$

5,969,627

Assets under management and / or administration at

   Peapack-Gladstone Bank’s Private Wealth Management

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

$

10.7

$

11.1

$

10.3

$

9.8

$

9.4

(A)

Includes PPP loans of $10 million at March 31, 2022; $14 million at December 31, 2021; $49 million at September 30, 2021; $84 million at June 30, 2021; and $187 million at March 31, 2021.

(B)

Commencing on January 1, 2022, the allowance calculation is based on the current expected credit loss methodology.  Prior to January 1, 2022, the calculation was based on the incurred loss methodology.

(C)

Includes $120 million due from FHLB related to securities sales at March 31, 2022.  The $120 million received on April 1, 2022, was used to reduce short term borrowings.

(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.

(F)

The decrease was due to the redemption of a $50 million subordinated debt on June 30, 2021.  

As of

March 31,

Dec 31,

Sept 30,

June 30,

March 31,

2022

2021

2021

2021

2021

Asset Quality:

Loans past due over 90 days and still accruing

$

—

$

—

$

—

$

—

$

—

Nonaccrual loans (A)

15,884

15,573

25,925

5,962

11,767

Other real estate owned

—

—

—

—

50

Total nonperforming assets

$

15,884

$

15,573

$

25,925