Peapack-Gladstone Financial Corporation (NASDAQ Global Select Market: PGC) (the Corporation) recorded net income of $1.8 million and diluted earnings per share of $0.16, for the quarter ended June 30, 2010. This compared to diluted earnings per share of $0.17 for the quarter ended June 30, 2009 and diluted earnings per share of $0.16 for the quarter ended March 31, 2010.

When compared to the quarter ended June 30, 2009, the June 2010 quarter included increased net interest income and increased income from the PGB Trust and Investment business, the effects of which were offset by reduced gains from securities sales and an increased provision for loan losses.

Frank A. Kissel, Chairman and CEO, stated, “We are pleased to continue to report positive earnings and growth in capital during these challenging times. Our internal capital generation enabled us to redeem 25 percent of our preferred shares issued previously under the U.S. Treasury’s Capital Purchase Program (the “CPP”).this past January. Building capital internally to redeem the Treasury’s CPP investment over time, while remaining well capitalized, continues to be an important business objective of the Corporation.”

The Corporation’s provision for loan losses for the quarter ended June 30, 2010 was $2.7 million. While this was lower than the highest recent quarterly level (which was in the fourth quarter of 2009), it was higher than the $2.0 million provision in the second quarter of 2009. Mr. Kissel noted, “The level of the June 2010 quarterly provision was due principally to one commercial customer relationship with three construction loans being placed on non-accrual status. We continue to be extremely diligent and proactive in managing our loan portfolio and placed this entire relationship on non-accrual status and charged-off $2.4 million related to this relationship during the quarter, leaving a balance after charge-off of $6.7 million.”

Mr. Kissel went on to say “We continue to be pleased with the progress we have made throughout 2009 and into 2010 in resolving certain problem assets.”

Net Interest Income and Margin

In the second quarter of 2010, net interest income, on a fully tax-equivalent basis, was $12.7 million, reflecting an increase from $12.4 million for the second quarter of 2009, due principally to growth in the investment portfolio funded by growth in lower costing core deposits.

On a fully tax-equivalent basis, the net interest margin was 3.64 percent for the June 2010 quarter compared to 3.71 percent for the June 2009 quarter. In comparing the June 2010 quarter to the same quarter last year, the effect of growth in lower yielding, but less risky and shorter duration cash deposits and investment securities coupled with declining loan balances, contributed to a reduction in margin. This effect was partially offset by the growth of lower cost core deposits and the intentional run-off of higher cost certificates of deposit.

Mr. Kissel stated, “Throughout 2009 and into 2010, we have built substantial liquidity into our balance sheet, so as to be better positioned in the future when we expect loan demand will increase and interest rates will rise.”

Loans

Average loans totaled $964.1 million for the second quarter of 2010 as compared to $1.03 billion for the same 2009 quarter, reflecting a decrease of $68.6 million or 6.6 percent. The average residential mortgage loan portfolio declined $53.2 million or 10.9 percent to $436.0 million in the second quarter of 2010 from the same quarter of 2009. The Corporation has opted to sell its longer-term, fixed-rate loan production as an interest rate risk management strategy in the lower rate environment, and loan pay-downs have outpaced the originations retained in portfolio. The average commercial portfolio declined $18.2 million or 3.8 percent from the second quarter of 2009 to $462.5 million for the same quarter in 2010, as loan demand and quality borrowers on the commercial front have remained scarce.

The average home equity line portfolio rose $6.5 million or 18.9 percent to $40.8 million for the second quarter of 2010 compared to the same quarter in 2009. The Corporation focused on the origination of these adjustable-rate loans. Loan originations outpaced principal paydowns over the year.

Deposits

Average total deposits (interest-bearing and noninterest-bearing) grew $46.9 million or 3.7 percent from $1.28 billion in the second quarter of 2009 to $1.33 billion in the second quarter of 2010. Average noninterest-bearing checking grew $16.6 million or 8.4 percent to $214.2 million in the second quarter of 2010 from the second quarter of 2009. Average interest-bearing checking balances totaled $254.0 million in the second quarter of 2010, rising $60.8 million or 31.4 percent from the same quarter in 2009. Checking growth is attributable to the Corporation’s focus on core deposit growth, particularly checking, coupled with growth in our Ultimate Checking product, which provides customers with a low-cost checking product and a higher yield for larger balances.

Average money market accounts also rose, from $414.1 million in the second quarter of 2009 to $510.6 million for the same quarter of 2010, an increase of $96.5 million or 23.3 percent. The Corporation’s focus on core deposit growth, as well as certain customers tending to “park” funds in money market accounts in lower interest rate environments accounted for this growth.

Average certificates of deposit declined from $406.5 million in the June 2009 quarter to $274.2 million in the June 2010 quarter, a decline of $132.3 million or 32.5 percent. The Corporation allowed higher costing certificates of deposit to run-off and replaced those funds with lower costing, more stable core deposits.

Mr. Kissel commented, “Our reduced reliance on certificates of deposit and our core deposit growth continues to strengthen customer relationships, reduce the overall cost of funds, contribute to profitability and enhance franchise value.”

PGB Trust and Investments

PGB Trust and Investments generated $2.7 million in fee income in the second quarter of 2010, compared to $2.5 million in the second quarter of 2009, reflecting an increase of 5.3 percent. The market value of the assets under administration of the Trust Division increased from $1.70 billion at June 30, 2009 to $1.83 billion at June 30, 2010.

Craig C. Spengeman, President of PGB Trust & Investments commented, “We have a seen a nice increase in our managed asset business and related recurring fee income. Further, we are pleased with the recovery and performance of our assets under administration throughout 2009 and into 2010. The financial markets continue to experience extreme volatility as we continue to manage through the most challenging period since the Great Depression. The recovery of the value of assets under administration and our performance reflect the sound financial management of our trust and investment professionals. Further, we continue to book new business as prospective clients continue to seek our professional advice during these challenging times.”

Other Income

Other income, excluding trust fee income and net security gains, totaled $1.1 million in each of the quarters ended June 30, 2010 and 2009. Fee income earned on the sale of mortgage loans at origination decreased, as there were less mortgage originations in 2010. This effect was partially offset by a greater targeted sale price for originations in 2010. The 2010 June quarter included increased income from overdraft and NSF charges, when compared to the 2009 June quarter.

Operating Expenses

The Corporation’s total operating expenses were $11.0 million in the June 2010 quarter compared to $11.2 million in the June 2009 quarter. The decrease for 2010, when compared to the year ago quarter, was principally due to decreased FDIC insurance expense, due to an industry wide special FDIC insurance premium assessed in the June 2009 quarter. This decrease in FDIC insurance expense in the 2010 quarter was partially offset by expenses associated with a new Trust office opened in June 2009, a new branch office opened in September 2009, a new corporate headquarters occupied in June 2010, and increased expenses related to problem loans and REO.

ASSET QUALITY

At June 30, 2010, nonperforming assets increased to $21.3 million or 1.44 percent of total assets as compared to $12.9 million or 0.87 percent of total assets at March 31, 2010. As noted earlier, one commercial customer consisting of three construction loans, was placed on non-accrual status in the quarter. That relationship totaled approximately $6.7 million, after charge-offs of $2.4 million in the quarter.

Mr. Kissel continued, “We have the capital and liquidity to lend to well-qualified individuals and businesses. However, we do remain committed to our conservative underwriting standards that have served us well.”

The allowance for loan losses was $13.9 million or 1.44 percent of total loans at June 30, 2010 as compared to $13.2 million or 1.34 percent of total loans at December 31, 2009.

CAPITAL

At June 30, 2010, the Corporation’s leverage ratio, tier 1 and total risk based capital ratios were 7.85 percent, 12.28 percent and 13.53 percent, respectively. All ratios include the $7.2 million reduction in regulatory capital due to the partial redemption in January 2010 of the preferred shares previously issued under the CPP. All are above the levels necessary to be considered well capitalized under applicable regulatory guidelines. Additionally, the Corporation’s common equity ratio (common equity to total assets) at June 30, 2010 is 6.45 percent compared to 6.09 percent at December 31, 2009.

As previously announced, on July 15, 2010 the Board of Directors declared a regular cash dividend of $0.05 per share payable on August 12, 2010 to shareholders of record on July 29, 2010.

ABOUT THE CORPORATION

Peapack-Gladstone Financial Corporation is a bank holding company with total assets of $1.48 billion as of June 30, 2010. Peapack-Gladstone Bank, its wholly owned community bank, was established in 1921, and has 23 branches in Somerset, Hunterdon, Morris, Middlesex and Union Counties. Its Trust Division, PGB Trust and Investments, operates at the Bank’s new corporate offices located at 500 Hills Drive in Bedminster and at four other locations in Clinton, Morristown and Summit, New Jersey and Bethlehem, Pennsylvania. To learn more about Peapack-Gladstone Financial Corporation and its services please visit our web site at www.pgbank.com or call 908-234-0700.

The foregoing contains 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
  • a continued or unexpected decline in the economy, in particular in our New Jersey market area;
  • declines in value in our investment portfolio;
  • higher than expected increases in our allowance for loan losses;
  • higher than expected increases in loan losses or in the level of nonperforming loans;
  • unexpected changes in interest rates;
  • we may be unable to successfully grow our business;
  • we may be unable to manage our growth;
  • a continued or unexpected decline in real estate values within our market areas;
  • legislative and regulatory actions (including the impact of the Dodd-Frank Wall Street and Consumer Protection Act and the Electronic Fund transfer Act and related regulations) subject us to additional regulatory oversight which may result in increased compliance costs;
  • higher than expected FDIC insurance premiums;
  • lack of liquidity to fund our various cash obligations;
  • repurchase of our preferred shares issued under the Treasury’s Capital Purchase Program which will impact net income available to our common shareholders and our earnings per share;
  • further offerings of our equity securities may result in dilution of our common stock;
  • reduction in our lower-cost funding sources;
  • changes in accounting policies or accounting standards;
  • we may be unable to adapt to technological changes;
  • our internal controls and procedures may not be adequate to prevent losses;
  • claims and litigation pertaining to fiduciary responsibility, environmental laws and other matters; 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, 2009. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Corporation’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.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in thousands)

(Unaudited)

 

 

As of
June 30,  

March 31,
 

December 31,
 

September 30,
  June 30,
2010 2010 2009 2009 2009
 
ASSETS
Cash and due from banks $ 10,735 $ 8,999 $ 7,864 $ 9,343 $ 50,921
Federal funds sold 201 201 201 200 200
Interest-earning deposits 59,356 33,915 71,907 46,876 513
Total cash and cash equivalents 70,292 43,115 79,972 56,419 51,634
 
Securities held to maturity 101,603 105,258 89,459 86,703 77,216
Securities available for sale 252,646 278,052 272,484 252,786 227,414
FHLB and FRB Stock, at cost 4,807 5,305 5,315 5,329 5,343
 
Residential mortgage 430,021 443,085 452,641 466,601 483,330
Commercial mortgage 280,513 281,323 279,595 279,336 275,915
Commercial loans 133,881 133,288 120,554 129,671 133,659
Construction loans 46,286 48,044 64,816 65,760 67,075
Consumer loans 23,811 24,936 25,638 26,571 27,302
Home equity lines of credit 41,956 39,487 38,728 38,450 35,357
Other loans 2,788 902 1,565 1,592 1,079
Total loans 959,256 971,065 983,537 1,007,981 1,023,717
Less: Allowance for loan losses 13,856 13,720 13,192 12,947 11,054
Net loans 945,400 957,345 970,345 995,034 1,012,663
 
Premises and equipment 34,626 27,942 27,911 28,011 27,189
Other real estate owned 210 40 360 680 700
Accrued interest receivable 4,533 5,112 4,444 5,359 4,652
Bank owned life insurance 26,672 26,473 26,292 26,087 25,865
Deferred tax assets, net 23,438 23,999 23,522 22,154 23,653
Other assets 13,036 10,670 12,249 9,117 2,550
TOTAL ASSETS $ 1,477,263 $ 1,483,311 $ 1,512,353 $ 1,487,679 $ 1,458,879
 
LIABILITIES
Deposits:

Noninterest bearing demand deposits
$ 216,314 $ 223,184 $ 216,127 $ 199,804 $ 194,888
Interest-bearing deposits
Checking 249,472 241,887 255,058 212,687 203,378
Savings 76,937 77,064 73,866 73,308 71,464
Money market accounts 503,829 502,548 458,303 470,123 418,208
CD’s $100,000 and over 101,034 109,347 147,138 159,942 187,516
CD’s less than $100,000 163,769 173,219 199,177 209,994 220,779
Total deposits 1,311,355 1,327,249 1,349,669 1,325,858 1,296,233
Borrowings 28,342 36,140 36,499 36,815 37,128
Capital lease obligation 6,148 - - - -
Other liabilities 15,435 5,998 6,676 5,862 9,844
TOTAL LIABILITIES 1,361,280 1,369,387 1,392,844 1,368,535 1,343,205
Shareholders’ Equity 115,983 113,924 119,509 119,144 115,674

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$ 1,477,263 $ 1,483,311 $ 1,512,353 $ 1,487,679 $ 1,458,879
 

Trust division assets under management (market value, not included above)
$ 1,830,944 $ 1,894,971 $ 1,856,229 $ 1,803,862 $ 1,702,782

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED BALANCE SHEET DATA

(Dollars in thousands)

(Unaudited)

 
 

As of

June 30,
 

March 31,
 

December 31,
 

September 30,
 

June 30,
2010 2010 2009 2009 2009
 
Asset Quality:

Loans past due over 90 days and still accruing
$ 736 $ 638 $ 496 $ 1,118 $ 104
Nonaccrual loans 20,361 12,200 11,256 13,082 12,998
Other real estate owned 210 40 360 680 700
Total nonperforming assets $ 21,307 $ 12,878 $ 12,112 $ 14,880 $ 13,802
 
 

Nonperforming loans to total loans
2.20% 1.32% 1.19% 1.41% 1.28%

Nonperforming assets to total assets
1.44% 0.87% 0.80% 1.00% 0.95%
 
Troubled debt restructured loans $ 10,613 $ 11,817 $ 11,123 $ 18,671 $ 7,766
 

Loans past due 30 through 89 days and still accruing
$ 9,444 $ 10,056 $ 6,015 $ 7,362 $ 5,524
 
Allowance for loan losses:
Beginning of period $ 13,720 $ 13,192 $ 12,947 $ 11,054 $ 9,762
Provision for loan losses 2,750 2,400 2,950 2,750 2,000
Charge-offs, net (2,614) (1,872) (2,705) (857) (708)
End of period $ 13,856 $ 13,720 $ 13,192 $ 12,947 $ 11,054
 
ALLL to nonperforming loans 65.68% 106.87% 112.25% 91.18% 84.37%
ALLL to total loans 1.44% 1.41% 1.34% 1.28% 1.08%
 
Capital Adequacy:
Tier I leverage

(5% minimum to be considered well capitalized)
7.85% 7.80% 7.93% 8.17% 8.25%

Tier I capital to risk-weighted assets

(6% minimum to be considered well capitalized)
12.28% 12.01% 12.45% 12.23% 12.30%

Tier I & II capital to risk-weighted assets

(10% minimum to be considered well capitalized)
13.53% 13.27% 13.71% 13.48% 13.44%
 

Common equity to Total assets
6.45% 6.29% 6.09% 6.17% 6.06%
 

Book value per Common share
$ 10.85 $ 10.70 $ 10.57 $ 10.54 $ 10.15

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in thousands, except share data)

(Unaudited)

 
 

For The Three Months Ended

June 30,
 

March 31,
 

December 31,
 

September 30,
 

June 30,
2010 2010 2009 2009 2009
Income Statement Data:
Interest income $ 15,450 $ 15,791 $ 16,123 $ 16,379 $ 16,709
Interest expense 2,963 3,243 4,000 4,129 4,543
Net interest income 12,487 12,548 12,123 12,250 12,166
Provision for loan losses 2,750 2,400 2,950 2,750 2,000

Net interest income after provision for loan losses
9,737 10,148 9,173 9,500 10,166
Trust fees 2,686 2,364 2,346 2,200 2,550
Other income 1,098 1,108 1,067 1,137 1,114
Securities gains, net 2 - (42) (2) 108
Salaries and employee benefits 5,704 5,709 5,291 5,622 5,430
Premises and equipment 2,588 2,372 2,358 2,185 2,171
FDIC insurance expense 552 586 834 724 1,378
Other expenses 2,161 1,863 2,124 2,409 2,216
Income before income taxes 2,518 3,090 1,937 1,895 2,743
Income tax expense 762 965 536 583 813
Net income 1,756 2,125 1,401 1,312 1,930

Dividends and accretion on preferred stock
324 710 430 430 428

Net income available to Common shareholders
$ 1,432 $ 1,415 $ 971 $ 882 $ 1,502
 
Per Common Share Data:
Earnings per share (basic) $ 0.16 $ 0.16 $ 0.11 $ 0.10 $ 0.17

Earnings per share (diluted)
0.16 0.16 0.11 0.10 0.17
 
Performance Ratios:
Return on Average Assets 0.47% 0.58% 0.37% 0.36% 0.54%
Return on Average Common
Equity 6.06% 6.10% 4.18% 3.89% 6.75%
 
Net Interest Margin
(Taxable Equivalent Basis) 3.64% 3.67% 3.44% 3.61% 3.71%
 

Note: Per share amounts have been restated for a 5% stock dividend declared on June 18, 2009, and payable on August 3, 2009 to shareholders of record on July 9, 2009.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in thousands, except share data)

(Unaudited)
  For The
Six Months Ended

 
June 30,
2010   2009
Income Statement Data:
Interest income $ 31,240 $ 33,504
Interest expense 6,206 9,530
Net interest income 25,034 23,974
Provision for loan losses 5,150 4,000

Net interest income after provision for loan losses
19,884 19,974
Trust fees 5,050 4,882
Other income 2,207 2,097
Securities gains, net 2 113
Salaries and employee benefits 11,413 10,964
Premises and equipment 4,960 4,260
FDIC insurance expense 1,138 1,750
Other expenses 4,024 3,745
Income before income taxes 5,608 6,347
Income tax expense 1,727 1,935
Net income 3,881 4,412

Dividends and accretion on preferred stock
1,034 633

Net income available to Common shareholders
$ 2,847 $ 3,779
 
Per Common Share Data:
Earnings per share (basic) $ 0.32 $ 0.43
Earnings per share (diluted) 0.32 0.43
 
Performance Ratios:
Return on Average Assets 0.52% 0.62%
Return on Average Common
Equity 6.09% 8.58%
 
Net Interest Margin
(Taxable Equivalent Basis) 3.66% 3.70%
 

Note: Per share amounts have been restated for a 5% stock dividend declared on June 18, 2009, and payable on August 3, 2009 to shareholders of record on July 9, 2009.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

THREE MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)
   

 

June 30, 2010
  June 30, 2009
Average   Income/   Average   Income/  
Balance Expense Yield Balance Expense Yield
ASSETS:
Interest-Earning Assets:
Investments:
Taxable (1) $ 321,887 $ 2,404 2.99% $ 229,392 $ 2,287 3.99%
Tax-Exempt (1) (2) 35,111 420 4.78 49,031 618 5.05
Loans (2) (3) 964,070 12,774 5.30 1,032,665 14,046 5.44
Federal Funds Sold 201 - 0.22 200 - 0.20
Interest-Earning Deposits 69,245 28   0.16 27,574 9   0.13
Total Interest-Earning
Assets 1,390,514 $ 15,626   4.50% 1,338,862 $ 16,960   5.07%
Noninterest-Earning Assets:
Cash and Due from Banks 8,478 31,381

Allowance for Loan Losses
(14,075) (9,853)
Premises and Equipment 30,675 26,890
Other Assets 68,786 55,486
Total Noninterest-Earning
Assets 93,964 103,904
Total Assets $ 1,484,378 $ 1,442,766
 
LIABILITIES:
Interest-Bearing Deposits
Checking $ 254,018 $ 420 0.66% $ 193,245 $ 349 0.72%
Money Markets 510,589 1,019 0.80 414,082 1,127 1.09
Savings 76,092 79 0.42 70,802 81 0.46
Certificates of Deposit 274,240 1,103   1.61 406,518 2,638   2.60

Total Interest-Bearing Deposits
1,114,939 2,621 0.94 1,084,647 4,195 1.55
Borrowings 32,403 291 3.59 38,925 348 3.58
Capital Lease Obligation 2,019 51   10.09 - -   -

Total Interest-Bearing Liabilities
1,149,361 2,963   1.03 1,123,572 4,543   1.62

Noninterest Bearing Liabilities
Demand Deposits 214,198 197,565

Accrued Expenses and Other Liabilities
5,667 5,438

Total Noninterest-Bearing Liabilities
219,865 203,003
Shareholders’ Equity 115,152 116,191

Total Liabilities and Shareholders’ Equity
$ 1,484,378 $ 1,442,766
Net Interest Income $ 12,663 $ 12,417
Net Interest Spread 3.47% 3.45%
Net Interest Margin (4) 3.64% 3.71%

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

THREE MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)
   

 

June 30, 2010
  March 31, 2010
Average   Income/   Average   Income/  
Balance Expense Yield Balance Expense Yield
ASSETS:
Interest-Earning Assets:
Investments:
Taxable (1) $ 321,887 $ 2,404 2.99% $ 325,379 $ 2,511 3.09%
Tax-Exempt (1) (2) 35,111 420 4.78 37,800 450 4.76
Loans (2) (3) 964,070 12,774 5.30 978,470 12,994 5.31
Federal Funds Sold 201 - 0.22 201 - 0.20
Interest-Earning Deposits 69,245 28   0.16 44,591 24   0.21

Total Interest-Earning Assets
1,390,514 $ 15,626   4.50% 1,386,441 $ 15,979   4.61%
Noninterest-Earning Assets:
Cash and Due from Banks 8,478 8,334

Allowance for Loan Losses
(14,075) (13,773)
Premises and Equipment 30,675 27,992
Other Assets 68,786 68,845

Total Noninterest-Earning Assets
93,964 91,398
Total Assets $ 1,484,378 $ 1,477,839
 
LIABILITIES:
Interest-Bearing Deposits
Checking $ 254,018 $ 420 0.66% $ 238,285 $ 407 0.68%
Money Markets 510,589 1,019 0.80 494,670 1,118 0.90
Savings 76,092 79 0.42 75,186 77 0.41
Certificates of Deposit 274,240 1,103   1.61 305,654 1,317   1.72

Total Interest-Bearing Deposits
1,114,939 2,621 0.94 1,113,795 2,919 1.05
Borrowings 32,403 291 3.59 36,290 324 3.57
Capital Lease Obligation 2,019 51   10.09 - -   -

Total Interest-Bearing Liabilities
1,149,361 2,963   1.03 1,150,085 3,243   1.13

Noninterest Bearing Liabilities
Demand Deposits 214,198 208,044

Accrued Expenses and Other Liabilities
5,667 6,087

Total Noninterest-Bearing Liabilities
219,865 214,131
Shareholders’ Equity 115,152 113,623

Total Liabilities and Shareholders’ Equity
$ 1,484,378 $ 1,477,839
Net Interest Income $ 12,663 $ 12,736
Net Interest Spread 3.47% 3.48%
Net Interest Margin (4) 3.64% 3.67%

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

SIX MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)
   

 

June 30, 2010
  June 30, 2009
Average   Income/   Average   Income/  
Balance Expense Yield Balance Expense Yield
ASSETS:
Interest-Earning Assets:
Investments:
Taxable (1) $ 323,623 $ 4,914 3.04% $ 204,487 $ 4,426 4.33%
Tax-Exempt (1) (2) 36,448 869 4.77 49,501 1,272 5.14
Loans (2) (3) 971,231 25,768 5.31 1,040,246 28,304 5.44
Federal Funds Sold 201 - 0.21 200 - 0.20
Interest-Earning Deposits 56,986 52   0.18 27,813 18   0.13

Total Interest-Earning Assets
1,388,489 $ 31,603   4.55% 1,322,247 $ 34,020   5.15%
Noninterest-Earning Assets:
Cash and Due from Banks 8,406 25,571

Allowance for Loan Losses
(13,925) (9,733)
Premises and Equipment 29,341 26,872
Other Assets 68,817 54,945

Total Noninterest-Earning Assets
92,639 97,655
Total Assets $ 1,481,128 $ 1,419,902
 
LIABILITIES:
Interest-Bearing Deposits
Checking $ 246,195 $ 826 0.67% $ 180,712 $ 646 0.71%
Money Markets 502,673 2,138 0.85 397,898 2,298 1.16
Savings 75,642 156 0.41 69,452 159 0.46
Certificates of Deposit 289,860 2,420   1.67 416,708 5,728   2.75

Total Interest-Bearing Deposits
1,114,370 5,540 0.99 1,064,770 8,831 1.66
Borrowings 34,336 615 3.58 40,278 699 3.47
Capital Lease Obligation 1,015 51   10.03 - -   -

Total Interest-Bearing Liabilities
1,149,721 6,206   1.08 1,105,048 9,530   1.72

Noninterest Bearing Liabilities
Demand Deposits 211,138 194,880

Accrued Expenses and Other Liabilities
5,877 5,954

Total Noninterest-Bearing Liabilities
217,015 200,834
Shareholders’ Equity 114,392 114,020

Total Liabilities and Shareholders’ Equity
$ 1,481,128 $ 1,419,902
Net Interest Income $ 25,397 $ 24,490
Net Interest Spread 3.47% 3.43%
Net Interest Margin (4) 3.66% 3.70%
(1)   Average balances for available-for sale securities are based on amortized cost.
(2) Interest income is presented on a tax-equivalent basis using a 35 percent federal tax rate.
(3) Loans are stated net of unearned income and include nonaccrual loans.
(4) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

Copyright Business Wire 2010