Contact:
Arthur F. Birmingham
Peapack-Gladstone Financial Corporation
T: 908-719-4308
PEAPACK-GLADSTONE FINANCIAL CORPORATION
REPORTS SECOND QUARTER RESULTS
GLADSTONE, N.J.--(BUSINESS WIRE)--August 1, 2003 - Peapack-Gladstone Financial
Corporation (AMEX:PGC) today reported net income of $3.3 million for the quarter
ended June 30, 2003, an increase of $130 thousand or 4.1 percent over the $3.2
million reported for the same quarter of 2002. Net income per diluted share was
$0.47 for the second quarter of 2003 compared to $0.46 for the second quarter of
2002, an increase of 2.2 percent. Annualized return on average assets ("ROA")
was 1.44 percent and annualized return on average equity ("ROE") was 16.24
percent for the second quarter of 2003.
For the six months ended June 30, 2003, net earnings were $6.5 million, an
increase of 7.0 percent over the $6.1 million reported for the six months ended
June 30, 2002. Net income per diluted share was $0.95, an increase of 5.6
percent over the $0.90 reported for the year ago period. Annualized return on
average assets was 1.48 percent and annualized return on average equity was
16.43 percent for the first six months of 2003.
Frank A. Kissel, Chairman and CEO, stated, "In spite of the historically
low interest rate environment, we posted strong earnings in the second quarter
of 2003. We have been careful to attempt to limit our interest rate risk by not
extending long-term fixed rate assets during this low interest rate cycle.
Average deposits continued to grow this quarter, rising 15.2 percent over last
year and the
market value of trust assets under management by PGB Trust and Investments
reached $1.3 billion, an increase of 8.7 percent over June 30, 2002 levels.
These growth patterns reflect our continuing commitment to meet and exceed our
customers' needs and expectations".
EARNINGS
Net Interest Income
Net interest income for the second quarter of 2003 was $7.8 million, with a
net interest margin of 3.67 percent. That compares with net interest income of
$8.2 million for the second quarter of 2002 with a net interest margin of 4.53
percent. The decline in net interest income during the second quarter of 2003
was primarily a result of declining interest rates on loans and investments due
to refinancing and reinvestment activity. Deposit and borrowing rates also
declined, but at a slower pace than the rates on loans and investments.
Earning assets increased to $860.3 million on average, or 19.2 percent,
from the second quarter of 2002 while the yield on interest earnings assets
declined 131 basis points from 6.28 percent to 4.97 percent in the second
quarter of 2003 from the second quarter of 2002.
The growth in earnings assets during the second quarter of 2003 was
primarily in the investment securities portfolio, as average investment
securities rose $159.3 million or 56.4 percent, offset in part by lower average
loans, which declined $27.6 million on average. This decline was primarily due
to residential
mortgage pay-offs, which resulted from the historically low interest rate
environment.
Total average deposits for the second quarter of 2003 grew to $789.9
million from $685.8 million, an increase of $104.1 million or 15.2 percent, and
total average borrowings increased to $30.4 million from $5.5 million in the
year ago period. The Corporation has begun to position some of its borrowings to
try to take advantage of the low long-term interest rate environment that
presently exists. This strategy of extending the maturities of borrowings and
matching with lower yielding fixed rate loans is intended to reduce interest
rate risk if interest rates begin to rise. The cost of funds fell to 1.30
percent in the second quarter of 2003 as compared to 1.75 percent in the second
quarter of 2002.
Other Income
Other income before gains on securities sales and trust fee income rose 2.5
percent to $836 thousand for the second quarter of 2003 from $816 thousand for
the second quarter of 2002. This increase was primarily due to additions to cash
surrender value of Bank Owned Life Insurance. Net securities gains for the
second quarter 2003 were $554 thousand as compared to $8 thousand for the second
quarter of 2002.
Trust fee income generated by PGB Trust and Investments rose $362 thousand
or 28.8 percent to $1.6 million for the quarter ended June 30, 2003 as compared
to $1.3 million for the same period in 2002.
Other Expense
For the second quarter of 2003, other expenses totaled $5.7 million, an
increase of $413 thousand or 7.7 percent over the $5.3 million reported for the
second quarter of 2002. Higher salary and benefit costs and premises and
equipment expense relating to new branch locations and business expansion along
with costs related to the installation of a new primary software program were
the main reasons for the increase in other expenses. The efficiency ratio was
56.25 percent for the quarter ended June 30, 2003 as compared to 52.17 percent
for the same period in 2002.
ASSET QUALITY
Non-performing loans totaled $168 thousand or 0.04 percent of total loans
at June 30, 2003 as compared to $394 thousand or 0.09 percent at June 30, 2002.
The allowance for loan losses was $5.1 million or 1.25 percent of total loans at
June 30, 2003 as compared to $4.4 million or 1.02 percent of total loans at June
30, 2002. Net charge-offs of $8 thousand were recorded in the second quarter of
2003 as compared to $20 thousand of net recoveries in the second quarter of
2002.
CAPITAL
Shareholders' equity totaled $83.2 million at June 30, 2003, an increase of
$12.9 million or 18.3 percent over the $70.4 million reported at June 30, 2002.
The Corporation's leverage ratio, tier 1 and total risk based capital ratios at
June 30, 2003 were 8.71 percent, 19.87 percent and 21.19 percent, respectively.
Peapack-Gladstone Financial Corporation, headquartered in
Peapack-Gladstone, New Jersey, and listed on the American Stock Exchange under
the symbol "PGC", is the holding company for the Peapack-Gladstone Bank.
Peapack-Gladstone Bank, a community bank, was established in 1921, and has 17
branches in Somerset, Hunterdon and Morris Counties. Its Trust Division, PGB
Trust and Investments, with $1.3 billion in assets at market value under
management at June 30, 2003, operates at the Bank's main office located at 190
Main Street in Gladstone, New Jersey. 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.
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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, relationships, opportunities, taxation, technology and market
conditions. These statements may be identified by such forward-looking
terminology as "expect", "look", "believe", "anticipate", "may", "will", 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, changes in the direction of the economy in New Jersey, the direction
of interest rates, effective income tax rates, loan prepayment assumptions,
continued levels of loan quality and origination volume, continued relationships
with major customers including sources for loans, as well as the effects of
general economic
conditions and legal and regulatory barriers and structure. Peapack-Gladstone
assumes no obligation for updating any such forward-looking statements at any
time.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
UNAUDITED
(Dollars in Thousands, Except Per Share Amounts)
At or For The Three Months Ended At or For The Six Months Ended
June 30, June 30,
2003 2002 2003 2002
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Income Statement Data:
Interest income $ 10,428 $ 11,174 $ 21,032 $ 21,865
Interest expense 2,666 3,022 5,350 6,005
Net interest income 7,762 8,152 15,682 15,860
Provision for loan losses 150 201 300 400
Net interest income after
provision for loan losses 7,612 7,951 15,382 15,460
Other income 836 816 1,676 1,620
Securities Gains 554 8 827 26
Trust Fees 1,621 1,259 3,064 2,405
Other expense 5,748 5,335 11,231 10,465
Income before income taxes 4,875 4,699 9,718 9,046
Income tax expense 1,592 1,546 3,175 2,931
Net income $ 3,283 $ 3,153 $ 6,543 $ 6,115
Balance Sheet Data:
Total assets $ 957,294 $ 797,657
Federal funds sold 3,621 2,081
Short-term investments 523 526
Securities held to maturity 146,355 102,517
Securities available for sale 344,968 204,799
Loans 409,249 435,180
Allowance for Loan Losses 5,125 4,421
Deposits 800,545 710,832
Borrowings 64,428 8,000
Shareholders' equity 83,202 70,352
Trust Department Assets (book value, not included above) 1,050,565 $ 973,174
Average Balance Sheet Data:
Total Assets $ 909,687 $ 765,632 $ 887,125 $ 743,513
Earning Assets 860,275 721,809 837,437 699,166
Loans, net 395,976 424,005 396,282 419,561
Interest-Bearing Deposits 650,607 571,543 648,153 551,077
Demand Deposits 139,315 114,290 131,979 113,012
Borrowings 30,377 5,544 19,433 6,782
Shareholders' equity 80,883 66,707 79,631 65,678
Performance Ratios:
Return on average assets 1.44% 1.65% 1.48% 1.64%
Return on average equity 16.24 18.91 16.43 18.62
Efficiency Ratio 56.25% 52.17% 54.99% 52.63%
Net Interest Margin
(Taxable Equivalent Basis) 3.67% 4.53% 3.83% 4.58%
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
UNAUDITED
(Dollars in Thousands, Except Per Share Amounts)
At or For The Three Months Ended At or For The Six Months Ended
June 30, June 30,
2003 2002 2003 2002
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Asset Quality:
Loans past due over 90 days and still accruing $ 1 $ 308
Non-accrual loans 167 86
Net recoveries/(charge-offs) (8) 20 27 (2)
Allowance for loan losses
to total loans 1.25% 1.02%
Per Share Data: (1)
Earnings per share (Basic) $ 0.49 $ 0.47 $ 0.98 $ 0.91
Earnings per share (Diluted) 0.47 0.46 0.95 0.90
Book Value per share 12.40 10.52
Capital Adequacy:
Tier I Leverage 8.71% 9.02%
Tier I Capital to Risk-Weighted Assets 19.87 19.04
Tier I & Tier II Capital to Risk-Weighted Assets 21.19 20.30
(1) Restated for the 2 for 1 stock split declared September 12, 2002.