Contact:
Arthur F. Birmingham
Peapack-Gladstone Financial Corporation
T: 908-719-4308
PEAPACK-GLADSTONE FINANCIAL CORPORATION
REACHES $1 BILLION IN ASSETS
REPORTS SECOND QUARTER RESULTS
Branch Opening in Oldwick expands market area
GLADSTONE, N.J.--(BUSINESS WIRE)--August 2, 2004 - Frank A. Kissel, Chairman and
CEO of Peapack-Gladstone Financial Corporation (AMEX:PGC) announced, "For the
first time in our history, Peapack-Gladstone Financial Corporation reached $1
billion in assets in the second quarter of 2004. Since last year at this time,
total loans have increased $56.5 million or 13.8 percent and we anticipate loan
growth to remain strong based on the current pipelines of commercial and
mortgage loans. Credit quality remains very good and loan delinquencies continue
at very low levels.
"We are pleased to report earnings of $3.21 million or $0.42 per diluted
share, for the second quarter of 2004, marginally lower than the $3.28 million
and $0.43 per diluted share reported for the second quarter last year. While
business remains strong, net income has been tempered by costs associated with
our investments in a new data center and two new branch locations."
Net income for the six months ended June 30, 2004 totaled $6.49
million, compared to the $6.54 million recorded in the same period last year.
This translates to diluted earnings per share of $0.85 and $0.86 for the six
months ended June 30, 2004 and 2003, respectively. These results produced a
return
on average assets of 1.33% and a return on average equity of 14.93% for
the six months ended June 30, 2004.
Mr. Kissel continued, "Peapack-Gladstone Financial Corporation was
ranked twenty-seventh out of the top 200 publicly traded Community Banks for
Return on Equity performance in U.S. Banker magazine's July 2004 issue. U.S.
Banker is a highly respected publication in the banking industry."
EARNINGS
Net Interest Income
In the second quarter of 2004, net interest income, on a tax-equivalent
basis, was $8.71 million, an increase of $798 thousand or 10.1 percent over the
same period last year and an increase of $151 thousand or 1.8 percent over the
first quarter of 2004. On a fully tax-equivalent basis, net interest margin for
the second quarter was 3.71 percent as compared to 3.68 percent for the same
quarter last year and 3.81 percent in the first quarter of 2004.
Average earning assets in the second quarter of 2004 increased 9.1 percent
to $938.7 million from $860.3 million in the same quarter of 2003. The yield on
interest earning assets declined 25 basis points to 4.67 percent in the second
quarter of 2004 from 4.92 percent in the second quarter of 2003.
Average loans increased $42.9 million or 10.7 percent while average
investment securities increased $35.4 million or 7.9 percent from the second
quarter of 2003 to the second quarter of 2004. For the second quarter of 2004,
total average deposits grew $72.4 million or 9.2 percent to $862.4 million from
$789.9 million for the second quarter of 2003. Total average borrowings
increased from $30.4 million in the second quarter of 2003 to $38.9 million in
the second quarter 2004. The cost of funds fell to 1.00 percent in the second
quarter of 2004 as compared to 1.30 percent in the second quarter of 2003.
On a year to date basis, net interest income on a tax-equivalent basis,
was $17.3 million, as compared to $16.0 million year to date 2003, an increase
of $1.3 million or 8.2 percent. The fully tax-equivalent net interest margin was
3.76 percent and 3.81 percent, year to date June 30, 2004 and 2003,
respectively.
Average investment securities grew $46.8 million or 11.0 percent, while
average loan balances grew $33.9 million or 8.5 percent from June 30, 2003 to
June 30, 2004. Average deposit balances increased $61.6 million or 7.9 percent
during this same time period. The yield on interest earning assets declined 37
basis points to 4.72 percent for the year to date ended June 30, 2004 from 5.09
percent in the same period of 2003, while the cost of funds declined 34 basis
points to 1.00 percent.
Other Income
Other income for the second quarter of 2004 was $2.92 million as compared
to $2.93 million in the same period a year ago. Income from PGB Trust and
Investments was $1.8 million, an increase of $170 thousand or 10.5 percent over
last year's second quarter. Securities gains were $406 thousand in the second
quarter of 2004, a decline of $148 thousand as compared to the same quarter of
2003.
Other income for the first half of 2004 was $5.54 million as compared to
$5.41 million for the first half of 2003. Trust income increased $410 thousand
or
13.4 percent to $3.47 million during this period. Securities gains
were $600 thousand for the six months ended June 30, 2004, a decline of $227
thousand when compared to the same period in 2003.
Other Expense
Other expenses for the second quarter of 2004 were $6.50 million compared
to $5.67 million for the second quarter of 2003, an increase of $838 thousand or
14.8 percent. Salaries and benefits expense grew $325 thousand or 9.7 percent
during the second quarter of 2004. Additions to our professional and clerical
ranks, required to service higher levels of business activity, along with the
related benefits costs account for the increase. Occupancy expenses increased
$330 thousand to $1.45 million for the second quarter of 2004 as compared to
$1.12 million for the same quarter of 2003. In the past year, occupancy expenses
have grown due to the investment in two new branches and a new data center. New
branches are our primary source of future growth and profitability. Our newest
branch, located in Oldwick, New Jersey opened in late June. Our new Morristown
Branch will open later in the year.
For the six months ended June 30, 2004, other expenses increased $1.5
million or 13.3 percent to $12.5 million. Salary and benefit expense and
occupancy costs were the primary reasons for the higher level of other expenses.
Salaries and benefits rose $623 thousand or 9.4 percent while occupancy costs
rose to $2.8 million, as compared to $2.2 million for the first half of 2003.
ASSET QUALITY
At June 30, 2004, non-performing loans totaled $918 thousand or 0.20
percent of total loans as compared to $168 thousand or 0.04 percent at June 30,
2003. This increase was primarily due to the addition to non-performing loans of
a commercial mortgage in the amount of $747 thousand. The underlying property is
currently under contract for sale for an amount in excess of the loan and
interest receivable balances.
The allowance for loan losses was $5.7 million or 1.23 percent of total
loans at June 30, 2004 as compared to $5.1 million or 1.25 percent of total
loans at June 30, 2003. Net chargeoffs of $6 thousand were recorded in the
second quarter of 2004 as compared to net chargeoffs of $8 thousand during the
second quarter of 2003. For the year to date ended June 30, 2004, net chargeoffs
were $61 thousand as compared to net recoveries of $27 thousand for the same
period in 2003.
CAPITAL
At June 30, 2004, shareholders' equity totaled $85.4 million as compared
with $83.2 million at June 30, 2003, an increase of $2.2 million or 2.7 percent.
The Corporation's leverage ratio, tier 1 and total risk based capital ratios at
June 30, 2004 were 8.72 percent, 20.17 percent and 21.52 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 18
branches in Somerset, Hunterdon and Morris Counties. Its Trust Division, PGB
Trust and Investments, with $1.56 billion in assets at market value under
management at June 30, 2004, operates at the Bank's main office located at 190
Main Street in Gladstone, New Jersey, and the Chatham Office located at 311 Main
Street, Chatham, 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. --------------
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 view of future
interest income and net loans, management's confidence and strategies and
management's expectations about new and existing programs and products,
relationships, opportunities 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, an unexpected decline in the
direction of the economy in New Jersey, an unexpected decline or no increase in
interest rates, continued unexpected loan prepayment volume, a decline in levels
of loan quality and origination volume and a decline in the volume of increase
in trust assets or deposits. Peapack-Gladstone assumes no obligation for
updating any such forward-looking statements at any time.
(Tables to Follow)
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
UNAUDITED
(Dollars in Thousands, Except Per Share Amounts)
At or For The Three Months At or For The Six Months
Ended Ended
June 30, June 30,
2004 2003 2004 2003
---- ---- ---- ----
Income Statement Data:
Interest Income $ 10,740 $ 10,428 $ 21,261 $ 21,032
Interest Expense 2,246 2,666 4,405 5,350
---------- ---------- ---------- ----------
Net Interest Income 8,494 7,762 16,856 15,682
Provision For Loan Losses 150 150 300 300
---------- ---------- ---------- ----------
Net Interest Income After
Provision For Loan Losses 8,344 7,612 16,556 15,382
Other Income 722 753 1,466 1,518
Securities Gains 406 554 600 827
Trust Fees 1,791 1,621 3,474 3,064
Other Expenses 6,503 5,665 12,542 11,073
---------- ---------- ---------- ----------
Income Before Income Taxes 4,760 4,875 9,554 9,718
Income Tax Expense 1,551 1,592 3,064 3,175
---------- ---------- ---------- ----------
Net Income $ 3,209 $ 3,283 $ 6,490 $ 6,543
========== ========== ========== ==========
Balance Sheet Data:
Total Assets $1,013,463 $ 957,294
Federal Funds Sold 2,666 3,621
Short-Term Investments 847 523
Securities Held To Maturity 96,760 146,355
Securities Available For Sale 387,567 344,968
Loans 465,761 409,249
Allowance For Loan Losses 5,706 5,125
Deposits 875,623 800,545
Borrowings 48,219 64,428
Shareholders' Equity 85,447 83,202
Trust Department Assets
(Book Value, Not
Included Above) $1,123,437 $1,050,565
Average Balance Sheet Data:
Total Assets $ 994,246 $ 909,687 $ 972,922 $ 887,125
Earning Assets 938,748 860,275 918,861 837,437
Loans, net 438,280 395,976 429,589 396,282
Interest-Bearing Deposits 698,535 650,607 685,346 648,153
Demand Deposits 163,822 139,315 156,352 131,979
Borrowings 38,856 30,377 37,676 19,433
Shareholders' Equity 87,230 80,883 89,967 79,631
Performance Ratios:
Return on Average Assets 1.29% 1.44% 1.33% 1.48%
Return on Average Equity 14.72 16.24 14.93 16.43
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
UNAUDITED
(Dollars in Thousands, Except Per Share Amounts)
At or For The Three Months At or For The Six Months
Ended Ended
June 30, June 30,
2004 2003 2004 2003
---- ---- ---- ----
Net Interest Margin
(Taxable Equivalent Basis) 3.71% 3.68% 3.76% 3.81%
Asset Quality:
Loans past due over 90 days
And Still Accruing $ 817 $ 1
Non-Accrual Loans 101 167
Net (Charge-Offs)/Recoveries (6) (8) (61) 27
Allowance For Loan Losses
To Total Loans 1.23% 1.25%
Per Share Data:
Earnings Per Share (Basic) $ 0.43 $ 0.44 $ 0.87 $ 0.88
Earnings Per Share (Diluted) 0.42 0.43 0.85 0.86
Book Value Per Share 11.47 11.27
Dividends Per Share 0.20 0.18
Capital Adequacy:
Tier I Leverage 8.72% 8.71%
Tier I Capital to Risk-
Weighted Assets 20.17 19.87
Tier I & II Capital to
Risk-Weighted Assets 21.52 21.19
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
QUARTERS ENDED
(Tax-Equivalent Basis, Dollars in Thousands)
June 30, 2004 June 30, 2003
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
------- ------- ----- ------- ------- -----
ASSETS:
Interest-Earning Assets:
Investments:
Taxable $ 442,672 $ 4,114 3.72% $ 423,801 $ 3,817 3.60%
Tax-Exempt (1) 42,095 536 5.09% 25,524 368 5.76%
Loans (1) (2) 443,905 6,283 5.66% 401,030 6,364 6.35%
Federal Funds Sold 9,302 22 0.95% 9,277 28 1.19%
Interest-Earning Deposits 774 2 0.88% 643 2 1.12%
--------- ------------------------- --------- -----------------------
Total Interest-Earning
Assets 938,748 $ 10,957 4.67% 860,275 $ 10,579 4.92%
--------- ------------------------- --------- -----------------------
Noninterest-Earning Assets:
Cash and Due from Banks 19,629 18,545
Allowance for Loan
Losses (5,625) (5,054)
Premises and Equipment 17,540 14,575
Other Assets 23,954 21,346
--------- ---------
Total Noninterest-Earning
Assets 55,498 49,412
--------- ---------
Total Assets $ 994,246 $ 909,687
========= =========
LIABILITIES:
Interest-Bearing Deposits
Checking $ 162,593 $ 237 0.58% $ 127,259 $ 156 0.49%
Money Markets 66,143 93 0.56% 64,370 155 0.96%
Tiered Money Markets 139,102 303 0.87% 121,030 352 1.16%
Savings 107,310 165 0.61% 101,446 210 0.83%
Certificates of Deposit 223,387 1,174 2.10% 236,502 1,591 2.69%
--------- ------------------------- --------- -----------------------
Total Interest-Bearing
Deposits 698,535 1,972 1.13% 650,607 2,464 1.51%
Borrowings 38,856 274 2.82% 30,377 202 2.66%
--------- ------------------------- --------- -----------------------
Total Interest-Bearing
Liabilities 737,391 2,246 1.22% 680,984 2,666 1.57%
--------- ------------------------- --------- -----------------------
Noninterest Bearing
Liabilities
Demand Deposits 163,822 139,315
Accrued Expenses and
Other Liabilities 5,803 8,505
--------- ---------
Total Noninterest-Bearing
Liabilities 169,625 147,820
Shareholders' Equity 87,230 80,883
---------
Total Liabilities and
Shareholders' Equity $ 994,246 $ 909,687
========= =========
Net Interest Income $ 8,711 $ 7,913
========= =========
Net Interest Spread 3.45% 3.35%
========= ========
Net Interest Margin (3) 3.71% 3.68%
========= ========
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
YEAR-TO-DATE
(Tax-Equivalent Basis, Dollars in Thousands)
June 30, 2004 June 30, 2003
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
------- ------- ----- ------- ------- -----
ASSETS:
Interest-Earning Assets:
Investments:
Taxable $ 433,517 $ 8,173 3.77% $ 402,722 $ 7,653 3.80%
Tax-Exempt (1) 39,625 1,024 5.17% 23,600 697 5.91%
Loans (1) (2) 435,164 12,428 5.71% 401,247 12,907 6.43%
Federal Funds Sold 8,048 38 0.95% 9,263 56 1.21%
Interest-Earning Deposits 2,507 13 1.04% 605 3 1.07%
--------- ------------------------- --------- -----------------------
Total Interest-Earning
Assets 918,861 $ 21,676 4.72% 837,437 $ 21,316 5.09%
--------- ------------------------- --------- -----------------------
Noninterest-Earning Assets:
Cash and Due from Banks 19,237 18,774
Allowance for Loan
Losses (5,575) (4,965)
Premises and Equipment 16,756 14,601
Other Assets 23,643 21,278
--------- ---------
Total Noninterest-Earning
Assets 54,061 49,688
--------- ---------
Total Assets $ 972,922 $ 887,125
========= =========
LIABILITIES:
Interest-Bearing Deposits
Checking $ 147,216 $ 349 0.47% $ 127,062 $ 339 0.53%
Money Markets 65,777 194 0.59% 66,073 330 1.00%
Tiered Money Markets 144,281 648 0.90% 119,964 737 1.23%
Savings 104,793 325 0.62% 98,511 440 0.89%
Certificates of Deposit 223,279 2,347 2.10% 236,543 3,246 2.74%
--------- ------------------------- --------- -----------------------
Total Interest-Bearing
Deposits 685,346 3,863 1.13% 648,153 5,092 1.57%
Borrowings 37,676 542 2.88% 19,433 258 2.66%
--------- ------------------------- --------- -----------------------
Total Interest-Bearing
Liabilities 723,022 4,405 1.22% 667,586 5,350 1.60%
--------- ------------------------- --------- -----------------------
Noninterest Bearing
Liabilities
Demand Deposits 156,352 131,979
Accrued Expenses and
Other Liabilities 6,581 7,929
--------- ---------
Total Noninterest-Bearing
Liabilities 162,933 139,908
Shareholders' Equity 86,967 79,631
--------- ---------
Total Liabilities and
Shareholders' Equity $ 972,922 $ 887,125
========= =========
Net Interest Income $ 17,271 $ 15,966
========= ========
Net Interest Spread 3.50% 3.49%
========= ========
Net Interest Margin (3) 3.76% 3.81%
========= ========
(1) Interest income is presented on a tax-equivalent basis using a 35 percent
federal tax rate.
(2) Loans are stated net of unearned income and include non-accrual loans.
(3) Net interest income on a tax-equivalent basis as a percentage of total
average interest-earning assets.