Peapack-Gladstone Financial Corporation Reports Improved Results For The Second Quarter Of 2011

Peapack-Gladstone Financial Corporation ( NASDAQ Global Select Market:PGC) (the Corporation) recorded net income of $2.2 million and diluted earnings per share of $0.22 for the quarter ended June 30, 2011. This compared favorably to net income and diluted earnings per share of $2.1 million and $0.18 for the immediately preceding quarter ended March 31, 2011, and $1.8 million and $0.16 for the quarter ended June 30, 2010.

For the six months ended June 30, 2011 the Corporation recorded net income of $4.3 million and diluted earnings per share of $0.40. This compared favorably to net income of $3.9 million and diluted earnings per share of $0.32 for the same six month period last year.

Frank A. Kissel, Chairman and CEO, stated, “We are pleased to have shown growth in earnings this quarter and on a year-to-date basis. As I have noted many times in the past, building capital internally to redeem the Treasury’s Capital Purchase Program (“CPP”) investment over time continues to be an important business objective of the Corporation. As we reported previously, in the March 2011 quarter, we were successful in redeeming an additional 25 percent of the CPP investment. Together with the January 2010 redemption, we have now redeemed $14.4 million or 50 percent of the Treasury’s original CPP investment.”

The Corporation’s provision for loan losses for the quarter ended June 30, 2011, was $2.0 million, flat compared to the $2.0 million provision recorded in the March 2011 quarter, and below the $2.8 million provision recorded in the June 2010 quarter which is consistent with the trend in problem loans.

Mr. Kissel noted that progress continues in resolving problem assets. During the June 2011 quarter, $4.6 million of problem loans were paid off or sold. Further, a contract for the sale of a $3.0 million property included in Other Real Estate Owned (OREO) was executed. During the March 2011 quarter, $5.4 million of problem loans were paid off or sold and a $1.0 million property included in OREO was sold.

Net Interest Income and Margin

Net interest income, on a fully tax-equivalent basis, was $12.3 million for the second quarter of 2011, approximately equal to the first quarter of 2011, and down slightly from $12.7 million for the same quarter in 2010.

On a fully tax-equivalent basis, the net interest margin was 3.49 percent for the June 2011 quarter compared to 3.54 percent for the March 2011 quarter, and 3.64 percent for the June 2010 quarter. The overall asset yield declined more than the decline in the cost of funds.

In comparing the June 2011 quarter to the same quarter last year, the growth of lower cost core deposits and the allowed run-off of higher cost certificates of deposit contributed to the reduced cost of funds. Growth in lower yielding, but shorter duration investment securities coupled with yields on new loans being less than the yields on loans that paid down, contributed to the reduced overall asset yield.

Loans

Average loans totaled $968.2 million for the second quarter of 2011 as compared to $964.1 million for the same 2010 quarter, reflecting a slight increase of $4.1 million.

The average residential mortgage loan portfolio was $438.8 million for the June 2011 quarter, reflecting an increase of $2.8 million when compared to $436.0 million in the same quarter of 2010. The increase is attributable to originations retained in the portfolio that have outpaced loan paydowns. The Corporation sells the majority of its longer-term, fixed-rate loan production as a source of noninterest income and as part of its interest rate risk management strategy in the lower rate environment. Over the past six months, originations of adjustable-rate and shorter-term, fixed-rate loans have been more in favor with customers than in previous periods. We have generally retained these loans in our portfolio.

The average commercial mortgage and commercial loan portfolio increased to $444.0 million for the second quarter of 2011, reflecting an increase of $30.1 million from $413.9 million the second quarter of 2010. Mr. Kissel commented, “Loan demand from higher quality borrowers on the commercial mortgage/commercial loan front was generally scarce through the first nine months of 2010. However, over the last few months of 2010 and into 2011, we have seen increased commercial mortgage demand, principally relating to multi-family properties, from high quality borrowers. The commercial mortgage and commercial loan pipeline stands at $30 million at June 30, 2011.”

The average commercial construction loan portfolio declined $31.9 million from the second quarter of 2010 to the second quarter of 2011, as the Bank has significantly decreased its exposure to construction lending.

The average home equity line portfolio rose $7.2 million to $48.0 million for the second quarter of 2011 compared to the same quarter in 2010. The Corporation focuses on the origination of these adjustable-rate loans and loan originations outpaced principal paydowns over the year.

From December 31, 2010 to June 30, 2011, the total loan portfolio grew $33.3 million to $965.8 million. Mr. Kissel stated, “We were particularly pleased to have seen quality growth opportunities in our loan portfolio over the course of 2011. Loan originations increased to $152.6 million for the first six months of 2011 from $77.3 million for the same six month period of 2010. Included in the total were commercial mortgage/commercial loan originations of $63.7 million for the six months of 2011, up from $14.2 million for the first six months of 2010.” Mr. Kissel went on to say, “We anticipate that we will benefit in the future from utilizing cash flows from our lower-yielding investment portfolio to fund our higher-yielding loan production. In doing so, however, we will remain committed to our conservative underwriting standards.”

Deposits

Average total deposits (interest-bearing and noninterest-bearing) increased $29.4 million to $1.36 billion for the June 2011 quarter from $1.33 billion for the same quarter last year.

Average noninterest-bearing checking balances grew $23.5 million to $237.7 million for the second quarter of 2011 from $214.2 million for the second quarter of 2010. Average interest-bearing checking balances totaled $309.3 million for the quarter ended June 30, 2011, rising $55.3 million from the same quarter in 2010. Overall checking growth is attributable to the Corporation’s relationship orientation, its continual focus on business and personal core deposit generation, particularly checking, and a successful focus on establishing municipal relationships within its market territory.

Average money market accounts also rose, from $510.6 million for the second quarter of 2010 to $516.7 million for the second quarter of 2011, reflecting an increase of $6.1 million. The Corporation’s reduction in certificate of deposit balances and its 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 (CDs) declined from $274.2 million for the June 2010 quarter to $208.7 million for the June 2011 quarter, reflecting a decline of $65.5 million. The Corporation allowed higher cost CDs to run-off, and replaced those funds with lower cost, more stable core deposits.

From December 31, 2010 to June 30, 2011, total deposits increased $10.2 million. The Corporation’s checking and savings balances increased $48.5 million, while higher costing CD balances declined by $21.1 million and money market balances declined by $17.3 million.

Mr. Kissel commented, “Our reduced reliance on higher cost certificates of deposit coupled with our continued growth in core deposits, has reduced our cost of funds, and enhanced our franchise value.”

PGB Trust and Investments

PGB Trust and Investments generated $2.8 million in fee income in the second quarter of 2011, compared to $2.7 million in the same quarter of 2010. The market value of the assets under administration of the Trust Division increased from $1.83 billion at June 30, 2010 to just over $2.00 billion at June 30, 2011.

Craig C. Spengeman, President of PGB Trust & Investments commented, “We continue to see increases in both our fiduciary and asset management businesses resulting in higher recurring fee income. We also continue to add new clients, as individuals and their families seek out our professional advice. In addition, we are pleased with the growth of our assets under administration - our growth reflects the sound financial management of our wealth advisors.”

Other Non-Interest Income

Other non-interest income, exclusive of Trust fees, totaled $1.5 million in the June 2011 quarter compared to $1.1 million in the same quarter a year ago. The 2011 quarter reflected: increased service charges and fees, principally due to increased core deposit accounts and activity from such account holders, increased income from Bank Owned Life Insurance, due to improved crediting rates, and increased securities gains.

Operating Expenses

The Corporation’s total operating expenses were $11.0 million in the June 2011 quarter flat compared to the $11.0 million in the June 2010 quarter. The 2011 expense levels include costs for the Corporation to keep up with the increased regulatory burden on financial institutions, a new corporate headquarters occupied in June 2010 and a major system upgrade in our Trust Division in May 2010. The 2010 expense levels include certain accelerated depreciation charges recorded in the 2010 quarter. The net effect of the new/additional costs were principally offset by various operational efficiencies and reduced FDIC insurance expense due to a regulatory change in the calculation of FDIC assessments. Mr. Kissel commented, “Our investments in a new corporate headquarters and a new, significantly enhanced system in our Trust area have added convenience and efficiencies for our customers and our company.”

Asset Quality

At June 30, 2011, nonperforming assets totaled $18.4 million or 1.21 percent of total assets, reflecting improvement from $22.5 million or 1.48 percent of total assets at March 31, 2011, $22.8 million or 1.51% of assets at December 31, 2010, and $21.3 million or 1.44% at June 30, 2010. As noted earlier, problem loans/assets continue to be paid off or sold.

Total net charge-offs against the allowance for loan losses were $2.3 million for the quarter ended June 30, 2011. The allowance for loan losses at June 30, 2011 was $14.1 million or 1.46 percent of total loans, as compared to $14.4 million or 1.51 percent of total loans at March 31, 2011, $14.3 million or 1.53 percent of loans at December 31, 2010, and $13.9 million or 1.44 percent of total loans at June 30, 2010.

Capital / Dividends

At June 30, 2011, the Corporation’s leverage ratio, tier 1 and total risk based capital ratios were 7.63 percent, 12.67 percent and 13.92 percent, respectively. The Corporation’s ratios are all 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, 2011 was 6.71 percent.

The Company’s preferred dividend and accretion for the June 2011 quarter was $219 thousand, down from $570 thousand in the March 2011 quarter and $324 thousand in June 2010 quarter. The reduction reflects the March 2011 $7.2 million partial redemption of the preferred shares previously issued under the Treasury’s Capital Purchase Program.

As previously announced, on July 21, 2011 the Board of Directors declared a regular cash dividend of $0.05 per share payable on August 18, 2011 to shareholders of record on August 4, 2011.

ABOUT THE CORPORATION

Peapack-Gladstone Financial Corporation is a bank holding company with total assets of $1.51 billion as of June 30, 2011. Peapack-Gladstone Bank, its wholly owned community bank, was established in 1921, and has 23 branches in Somerset, Hunterdon, Morris, Middlesex and Union Counties. The Bank’s 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 website 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;
  • inability to successfully grow our business;
  • inability 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 Reform and Consumer Protection 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;
  • 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; 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, 2010 and our subsequent Quarterly Reports on Form 10-Q. 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,
2011 2011 2010 2010 2010
 
ASSETS
Cash and due from banks $ 8,678 $ 7,348 $ 6,490 $ 9,935 $ 10,735
Federal funds sold 100 100 100 100 201
Interest-earning deposits 51,606 42,234 56,097 84,566 59,356
Total cash and cash equivalents 60,384 49,682 62,687 94,601 70,292
 
Securities held to maturity 140,572 151,993 140,277 102,032 101,603
Securities available for sale 249,837 271,687 275,076 246,334 252,646
FHLB and FRB Stock, at cost 4,704 4,619 4,624 4,623 4,807
 
Loans held for sale, at fair value 1,813 1,168 - - -
 
Residential mortgage 432,735 432,413 419,653 425,315 430,021
Commercial mortgage 316,197 300,659 288,183 280,486 280,513
Commercial loans 128,839 133,614 131,408 128,220 133,881
Construction loans 15,385 17,693 25,367 39,989 46,286
Consumer loans 20,184 19,278 20,622 22,410 23,811
Home equity lines of credit 48,805 45,512 45,775 45,345 41,956
Other loans 3,612 1,130 1,489 2,626 2,788
Total loans 965,757 950,299 932,497 944,391 959,256
Less: Allowance for loan losses 14,056 14,386 14,282 14,025 13,856
Net loans 951,701 935,913 918,215 930,366 945,400
 
Premises and equipment 33,098 33,386 33,820 33,901 34,626
Other real estate owned 3,000 3,000 4,000 1,000 210
Accrued interest receivable 4,391 4,587 4,231 4,594 4,533
Bank owned life insurance 27,537 27,301 27,074 26,877 26,672
Deferred tax assets, net 24,689 26,039 26,083 23,903 23,438
Other assets 9,014 11,343 9,338 12,030 13,036
TOTAL ASSETS $ 1,510,740 $ 1,520,718 $ 1,505,425 $ 1,480,261 $ 1,477,263
 
LIABILITIES
Deposits:
Noninterest bearing
demand deposits $ 238,788 $ 235,977 $ 228,764 $ 219,700 $ 216,314
Interest-bearing deposits
Checking 322,801 302,589 290,322 255,665 249,472
Savings 86,828 85,741 80,799 78,819 76,937
Money market accounts 507,159 526,355 524,449 525,264 503,829
CD’s $100,000 and over 73,186 73,966 79,311 85,703 101,034
CD’s less than $100,000 132,949 139,022 147,901 155,268 163,769
Total deposits 1,361,711 1,363,650 1,351,546 1,320,419 1,311,355
Borrowings 20,905 24,016 24,126 24,234 28,342
Capital lease obligation 6,426 6,383 6,304 6,226 6,148
Other liabilities 6,489 14,585 5,733 11,903 15,435
TOTAL LIABILITIES 1,395,531 1,408,634 1,387,709 1,362,782 1,361,280
Shareholders’ Equity 115,209 112,084 117,716 117,479 115,983
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY $ 1,510,740 $ 1,520,718 $ 1,505,425 $ 1,480,261 $ 1,477,263
 
Trust division assets under
administration (market value,
not included above) $ 2,005,859 $ 1,997,214 $ 1,940,404 $ 1,929,565 $ 1,830,944

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED BALANCE SHEET DATA

(Dollars in thousands)

(Unaudited)
 

                                        As of
June 30,     March 31,     December 31,     September 30,     June 30,
2011 2011 2010 2010 2010
Asset Quality:
Loans past due over 90 days
and still accruing $ 412 $ 323 $ 666 $ 442 $ 736
Nonaccrual loans (A) 14,943 19,173 18,114 17,535 20,361
Other real estate owned 3,000 3,000 4,000 1,000 210
Total nonperforming assets $ 18,355 $ 22,496 $ 22,780 $ 18,977 $ 21,307
 
Nonperforming loans to
total loans 1.59% 2.05% 2.01% 1.90% 2.20%
Nonperforming assets to
total assets 1.21% 1.48% 1.51% 1.28% 1.44%
 
Restructured loans (A) $ 9,603 $ 5,639 $ 7,157 $ 10,639 $ 10,613
 
Loans past due 30 through 89
days and still accruing $ 8,200 $ 5,419 $ 5,475 $ 9,487 $ 9,444
 
Classified Loans (B) $ 51,586 $ 51,186 $ 41,979 $ 36,521 $ 48,722
 
Impaired Loans (B) $ 23,115 $ 26,056 $ 28,397 $ 36,521 $ 48,722
 
Allowance for loan losses:
Beginning of period $ 14,386 $ 14,282 $ 14,025 $ 13,856 $ 13,720
Provision for loan losses 2,000 2,000 2,850 2,000 2,750
Charge-offs, net (2,330) (1,896) (2,593) (1,831) (2,614)
End of period $ 14,056 $ 14,386 $ 14,282 $ 14,025 $ 13,856
 
ALLL to nonperforming loans 91.54% 73.79% 76.05% 78.02% 65.68%
ALLL to total loans 1.46% 1.51% 1.53% 1.49% 1.44%
 
Capital Adequacy:
Tier I leverage
(5% minimum to be considered
well capitalized) 7.63% 7.59% 7.96% 8.00% 7.85%
Tier I capital to risk-weighted assets
(6% minimum to be considered
well capitalized) 12.67% 12.25% 12.91% 12.62% 12.28%
Tier I & II capital to
risk-weighted assets
(10% minimum to be considered
well capitalized) 13.92% 13.51% 14.16% 13.88% 13.53%
 
Common equity to
Total assets 6.71% 6.46% 6.44% 6.54% 6.45%
 
Book value per
Common share $ 11.48 $ 11.13 $ 11.03 $ 11.01 $ 10.85
(A) At June 30, 2011, restructured loans include $1.4 million of residential mortgage loans and $8.2 million of commercial and commercial mortgage loans. The $8.2 million are classified substandard and considered impaired. Any restructured loans that are on nonaccrual status are only reported in nonaccrual loans and not also in restructured loans.
(B) At June 30, 2011, $23.1 million; at March 31, 2011, $26.1 million; and at December 31, 2010, $28.4 million of the classified loans were also considered impaired. In periods prior to December 31, 2010, all classified loans were also considered impaired.

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,
2011 2011 2010 2010 2010
Income Statement Data:
Interest income $ 14,099 $ 14,257 $ 14,707 $ 14,974 $ 15,450
Interest expense 1,916 2,036 2,214 2,612 2,963
Net interest income 12,183 12,221 12,493 12,362 12,487
Provision for loan losses 2,000 2,000 2,850 2,000 2,750
Net interest income after
provision for loan losses 10,183 10,221 9,643 10,362 9,737
Trust fees 2,829 2,718 2,598 2,254 2,686
Other income 1,218 1,255 1,621 1,203 1,098
Securities gains/(losses), net 277 196 (4) 126 2
Other-than-temporary impairment
Charge, securities - - (581) (360) -
Salaries and employee benefits 5,817 5,973 5,469 5,647 5,704
Premises and equipment 2,386 2,322 2,248 2,416 2,588
FDIC insurance expense 397 604 598 586 552
Other expenses 2,435 2,344 2,374 2,237 2,161
Income before income taxes 3,472 3,147 2,588 2,699 2,518
Income tax expense 1,304 1,006 711 793 762
Net income 2,168 2,141 1,877 1,906 1,756
Dividends and accretion
on preferred stock 219 570 326 326 324
Net income available to          
Common shareholders $ 1,949 $ 1,571 $ 1,551 $ 1,580 $ 1,432
 
Per Common Share Data:
Earnings per share (basic) $ 0.22 $ 0.18 $ 0.18 $ 0.18 $ 0.16
Earnings per share (diluted) 0.22 0.18 0.18 0.18 0.16
 
 
Performance Ratios:
Return on Average Assets 0.57% 0.57% 0.50% 0.52% 0.47%
Return on Average Common
Equity 7.82% 6.44% 6.34% 6.55% 6.06%
 
Net Interest Margin
(Taxable Equivalent Basis) 3.49% 3.54% 3.62% 3.64% 3.64%

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in thousands, except share data)

(Unaudited)
 
For TheSix Months EndedJune 30,
      2011     2010
Income Statement Data:
Interest income $ 28,357 $ 31,240
Interest expense 3,953 6,206
Net interest income 24,404 25,034
Provision for loan losses 4,000 5,150
Net interest income after
provision for loan losses 20,404 19,884
Trust fees 5,547 5,050
Other income 2,472 2,207
Securities gains, net 473 2
Salaries and employee benefits 11,790 11,413
Premises and equipment 4,736 4,960
FDIC insurance expense 1,001 1,138
Other expenses 4,750 4,024
Income before income taxes 6,619 5,608
Income tax expense 2,310 1,727
Net income 4,309 3,881
Dividends and accretion
on preferred stock 789 1,034
Net income available to    
Common shareholders $ 3,520 $ 2,847
 
Per Common Share Data:
Earnings per share (basic) $ 0.40 $ 0.32
Earnings per share (diluted) 0.40 0.32
 
 
Performance Ratios:
Return on Average Assets 0.57% 0.52%
Return on Average Common
Equity 7.14% 6.09%
 
Net Interest Margin 3.51% 3.66%
(Taxable Equivalent Basis)

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

THREE MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)
 

               June 30, 2011
June 30, 2010
Average   Income/   Average   Income/  
Balance Expense Yield Balance Expense Yield
ASSETS:
Interest-Earning Assets:
Investments:
Taxable (1) $ 375,216 $ 2,209 2.35% $ 321,887 $ 2,404 2.99%
Tax-Exempt (1) (2) 36,855 340 3.69 35,111 420 4.78
Loans Held for Sale 510 5 3.78 N/A N/A N/A
Loans (2) (3) 968,179 11,675 4.82 964,070 12,774 5.30
Federal Funds Sold 100 - 0.25 201 - 0.22
Interest-Earning Deposits 32,598 20 0.24 69,245 28 0.16
Total Interest-Earning
Assets 1,413,458 $ 14,249 4.03% 1,390,514 $ 15,626 4.50%
Noninterest-Earning Assets:
Cash and Due from Banks 8,231 8,478
Allowance for Loan
Losses (15,086) (14,075)
Premises and Equipment 33,393 30,675
Other Assets 71,868 68,786
Total Noninterest-Earning
Assets 98,406 93,864
Total Assets $ 1,511,864 $ 1,484,378
 
LIABILITIES:
Interest-Bearing Deposits
Checking $ 309,310 $ 292 0.38% $ 254,018 $ 420 0.66%
Money Markets 516,739 577 0.45 510,589 1,019 0.80
Savings 86,150 56 0.26 76,092 79 0.42
Certificates of Deposit 208,698 713 1.37 274,240 1,103 1.61
Total Interest-Bearing
Deposits 1,120,897 1,638 0.58 1,114,939 2,621 0.94
Borrowings 26,242 199 3.03 32,403 291 3.59
Capital Lease Obligation 6,410 80 4.98 2,019 51 10.09
Total Interest-Bearing
Liabilities 1,153,549 1,917 0.66 1,149,361 2,963 1.03
Noninterest Bearing
Liabilities
Demand Deposits 237,651 214,198
Accrued Expenses and
Other Liabilities 7,104 5,667
Total Noninterest-Bearing
Liabilities 244,755 219,865
Shareholders’ Equity 113,561 115,152
Total Liabilities and
Shareholders’ Equity $ 1,511,865 $ 1,484,378
Net Interest Income $ 12,332 $ 12,663
Net Interest Spread 3.37% 3.47%
Net Interest Margin (4) 3.49% 3.64%

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

THREE MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)
 

               June 30, 2011
March 31, 2011
Average   Income/   Average   Income/  
Balance Expense Yield Balance Expense Yield
ASSETS:
Interest-Earning Assets:
Investments:
Taxable (1) $ 375,216 $ 2,209 2.35% $ 384,083 $ 2,269 2.36%
Tax-Exempt (1) (2) 36,855 340 3.69 35,587 345 3.88
Loans Held for Sale 510 5 3.78 733 16 8.65
Loans (2) (3) 968,179 11,675 4.82 937,073 11,747 5.01
Federal Funds Sold 100 - 0.25 100 - 0.28
Interest-Earning Deposits 32,598 20 0.24 41,927 28 0.27
Total Interest-Earning
Assets 1,413,458 $ 14,249 4.03% 1,399,503 $ 14,405 4.12%
Noninterest-Earning Assets:
Cash and Due from Banks 8,231 7,877
Allowance for Loan
Losses (15,086) (14,934)
Premises and Equipment 33,393 33,640
Other Assets 71,868 71,404
Total Noninterest-Earning
Assets 98,406 97,987
Total Assets $ 1,511,864 $ 1,497,490
 
LIABILITIES:
Interest-Bearing Deposits
Checking $ 309,310 $ 292 0.38% $ 298,003 $ 303 0.41%
Money Markets 516,739 577 0.45 522,473 623 0.48
Savings 86,150 56 0.26 82,168 53 0.26
Certificates of Deposit 208,698 713 1.37 219,359 775 1.41
Total Interest-Bearing
Deposits 1,120,897 1,638 0.58 1,122,003 1,754 0.63
Borrowings 26,242 199 3.03 24,639 203 3.30
Capital Lease Obligation 6,410 80 4.98 6,334 79 4.98
Total Interest-Bearing
Liabilities 1,153,549 1,917 0.66 1,152,976 2,036 0.71
Noninterest Bearing
Liabilities
Demand Deposits 237,651 222,415
Accrued Expenses and
Other Liabilities 7,104 6,065
Total Noninterest-Bearing
Liabilities 244,755 228,480
Shareholders’ Equity 113,561 116,034
Total Liabilities and
Shareholders’ Equity $ 1,511,865 $ 1,497,490
Net Interest Income $ 12,332 $ 12,369
Net Interest Spread 3.37% 3.41%
Net Interest Margin (4) 3.49% 3.54%

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

SIX MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)
 

               June 30, 2011
June 30, 2010
Average   Income/   Average   Income/  
Balance Expense Yield Balance Expense Yield
ASSETS:
Interest-Earning Assets:
Investments:
Taxable (1) $ 379,625 $ 4,478 2.36% $ 323,623 $ 4,914 3.04%
Tax-Exempt (1) (2) 36,224 685 3.78 36,448 869 4.77
Loans Held for Sale 621 21 6.66 N/A N/A N/A
Loans (2) (3) 952,712 23,421 4.92 971,231 25,768 5.31
Federal Funds Sold 100 - 0.26 201 - 0.21
Interest-Earning Deposits 37,237 48 0.26 56,986 52 0.18
Total Interest-Earning
Assets 1,406,519 $ 28,653 4.07% 1,388,489 $ 31,603 4.55%
Noninterest-Earning Assets:
Cash and Due from Banks 8,055 8,406
Allowance for Loan
Losses (15,010) (13,925)
Premises and Equipment 33,516 29,341
Other Assets 71,457 68,817
Total Noninterest-Earning
Assets 98,018 92,639
Total Assets $ 1,504,537 $ 1,481,128
 
LIABILITIES:
Interest-Bearing Deposits
Checking $ 303,688 $ 594 0.39% $ 246,195 $ 826 0.67%
Money Markets 519,590 1,201 0.46 502,673 2,138 0.85
Savings 84,170 109 0.26 75,642 156 0.41
Certificates of Deposit 213,998 1,488 1.39 289,860 2,420 1.67
Total Interest-Bearing
Deposits 1,121,446 3,392 0.60 1,114,370 5,540 0.99
Borrowings 25,445 401 3.15 34,336 615 3.58
Capital Lease Obligation 6,372 159 4.97 1,015 51 10.03
Total Interest-Bearing
Liabilities 1,153,263 3,952 0.69 1,149,721 6,206 1.08
Noninterest Bearing
Liabilities
Demand Deposits 230,075 211,138
Accrued Expenses and
Other Liabilities 6,408 5,877
Total Noninterest-Bearing
Liabilities 236,483 217,015
Shareholders’ Equity 114,791 114,392
Total Liabilities and
Shareholders’ Equity $ 1,504,537 $ 1,481,128
Net Interest Income $ 24,701 $ 25,397
Net Interest Spread 3.38% 3.47%
Net Interest Margin (4) 3.51% 3.66%
 
(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

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