Contact:
Arthur F. Birmingham
Peapack-Gladstone Financial Corporation
T: 908-719-4308
PEAPACK-GLADSTONE FINANCIAL CORPORATION
REPORTS A RECORD $3.5 MILLION IN THIRD QUARTER NET INCOME
Loan growth fuels earnings
GLADSTONE, N.J.--(BUSINESS WIRE)--November 1, 2004 - Peapack-Gladstone Financial
Corporation (AMEX:PGC) reported net income of $3.5 million for the quarter ended
September 30, 2004, as compared to $2.9 million for the quarter ended September
30, 2003, an increase of $651 thousand or 22.6 percent. Net income per diluted
share was $0.42 for the third quarter of 2004 compared to $0.34 for the third
quarter of 2003, an increase of 23.5 percent. All per share data have been
restated for the 10 percent stock dividend declared September 9, 2004. The
annualized return on average assets ("ROA") was 1.37 percent and the annualized
return on average equity ("ROE") was 16.00 percent for the third quarter of
2004.
Net income was $10.0 million for the nine months ended September 30, 2004,
an increase of 6.3 percent over the $9.4 million for the nine months ended
September 30, 2003. The per diluted share earnings were $1.19 for the nine
months ended September 30, 2004, as compared to $1.12 for the year to date
September 30, 2003, an increase of 6.3 percent. The annualized return on average
assets was 1.34 percent and the annualized return on average equity was 15.29
percent for the first nine months of 2004.
Frank A. Kissel, Chairman and CEO, stated, "We are pleased to report that
earnings for the third quarter of 2004 are the highest quarterly earnings ever
attained in our organization's history. These results were fueled by strong loan
originations and higher Trust and Investment fee income.
Loans grew by $81 million or 70 percent annualized on a linked quarter
basis. Our strategy of providing superior customer service and business
development initiatives translated into higher loan growth and a strong pipeline
for future loan originations. Credit quality remains very good and loan
delinquencies continue at very low levels. The market value of trust assets
under management by PGB Trust and Investments grew to $1.56 billion, an increase
of 15.9 percent over the levels of September 30, 2003.
Our 19th branch, in Morristown, New Jersey, is expected to open in the
fourth quarter of 2004 and we look forward to building strong customer
relationships with individuals and businesses in the area."
EARNINGS
Net Interest Income
Net interest income, on a tax-equivalent basis, was $9.3 million for the
third quarter of 2004, an increase of $1.7 million or 23.1 percent over the same
period last year and an increase of $549 thousand or 6.3 percent over the second
quarter of 2004. On a fully tax-equivalent basis, net interest margin for the
third quarter was 3.78 percent as compared to 3.35 percent for the same quarter
last year and 3.71 percent in the second quarter of 2004.
In the third quarter of 2004, average-earning assets increased $83.0
million or 9.3 percent to $979.4 million from $896.4 million in the same quarter
of
2003. The yield on interest earning assets increased 29 basis points to 4.81
percent in the third quarter of 2004 from 4.52 percent in the third quarter of
2003.
Average loans increased to $502.6 million in the third quarter of 2004, an
increase of $92.6 million or 22.6 percent from the same quarter of 2003. The
growth occurred in all categories of loans with the majority in the
adjustable-rate residential mortgage portfolio. Average investment securities
declined $9.1 million or 1.9 percent from the third quarter of 2003 to the third
quarter of 2004. For the third quarter of 2004, total average deposits grew
$62.8 million or 7.7 percent to $873.0 million from $810.3 million for the third
quarter of 2003. Total average borrowings increased from $53.3 million in the
third quarter of 2003 to $68.5 million in the same quarter of 2004, an increase
of $15.2 million or 28.6 percent. This increase reflects the additional funding
required to grow the loan portfolios. The cost of funds fell to 1.07 percent in
the third quarter of 2004 as compared to 1.20 percent in the third quarter of
2003.
On a tax-equivalent basis, net interest income for the nine months ended
September 30, 2004 was $26.5 million, as compared to $23.5 million for the same
period of 2003, an increase of $3.0 million or 13.0 percent. For the year to
date September 30, 2004 and 2003, the fully tax-equivalent net interest margin
was 3.78 percent and 3.67 percent, respectively.
Average loan balances grew $53.6 million or 13.3 percent from September 30,
2003 to September 30, 2004, while average investment securities grew $30.8
million or 7.0 percent. Average deposit balances increased $61.9 million or 7.8
percent during this same time period. The yield on interest earning assets
declined 16 basis points to 4.76 percent for the year to date ended September
30, 2004 from 4.92 percent in the same period of 2003, while the cost of funds
declined 26 basis points to 1.03 percent. Other Income
For the third quarter of 2004, other income was $2.48 million as compared
to $2.51 million in the same period a year ago. Income from PGB Trust and
Investments was $1.7 million, an increase of $308 thousand or 22.7 percent over
the same quarter last year. Securities gains were $12 thousand in the third
quarter of 2004, a decline of $388 thousand when compared to the same quarter of
2003.
Other income for the first nine months of 2004 was $8.0 million as compared
to $7.9 million for the same period of 2003. Trust income increased $719
thousand or 16.3 percent to $5.1 million during this period. The market value of
trust assets under management was $1.56 billion at September 30, 2004, an
increase of $214 million, or 15.9% over the previous year. Securities gains were
$612 thousand for the nine months ended September 30, 2004, as compared to $1.2
million for the same period a year ago.
Other Expenses
Other expenses for the third quarter of 2004 were $6.1 million compared to
$5.5 million for the third quarter of 2003, an increase of $621 thousand or 11.2
percent. Salaries and benefits expense grew $332 thousand or 10.0 percent during
the third quarter of 2004 due to normal salary increases as well as additions to
staff due to branch expansion. Occupancy expenses increased $207 thousand to
$1.4 million for the third quarter of 2004 as compared to $1.2 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 new
Morristown Branch is anticipated to open during the fourth quarter of 2004.
Other expenses increased $2.1 million or 12.6 percent to $18.7 million for
the nine months ended September 30, 2004. Salaries and benefits rose $956
thousand or 9.7 percent to $10.9 million, while occupancy costs rose $770
thousand, or 22.5 percent to $4.2 million, as compared to $3.4 million for the
first nine months of 2003. Costs have risen as the level of business has grown
and as the Corporation invests in its technological capacity for future growth.
ASSET QUALITY
At September 30, 2004, non-performing loans totaled $289 thousand or 0.05
percent of total loans as compared to $228 thousand or 0.06 percent at September
30, 2003. The allowance for loan losses was $5.9 million or 1.07 percent of
total loans at September 30, 2004 as compared to $5.3 million or 1.30 percent of
total loans at September 30, 2003. Net chargeoffs of $4 thousand were recorded
in the third quarter of 2004 as compared to net recoveries of $2 thousand during
the same quarter of 2003. For the year to date ended September 30, 2004, net
chargeoffs were $65 thousand as compared to net recoveries of $29 thousand for
the same period in 2003.
CAPITAL
At September 30, 2004, shareholders' equity totaled $92.7 million as
compared with $82.7 million at September 30, 2003, an increase of $10.0 million
or 12.1 percent. The Corporation's leverage ratio, tier 1 and total risk based
capital ratios at September 30, 2004 were 9.08 percent, 19.59 percent and 20.86
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 September 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", 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,
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 Nine Months
Ended Ended
September 30, September 30,
2004 2003 2004 2003
---- ---- ---- ----
Income Statement Data:
Interest Income $ 11,547 $ 9,947 $ 32,809 $ 30,979
Interest Expense 2,525 2,598 6,930 7,948
---------- ---------- ---------- ----------
Net Interest Income 9,022 7,349 25,879 23,031
Provision For Loan Losses 150 150 450 450
---------- ---------- ---------- ----------
Net Interest Income After
Provision For Loan Losses 8,872 7,199 25,429 22,581
Other Income 797 756 2,262 2,274
Securities Gains 12 400 612 1,227
Trust Fees 1,666 1,358 5,141 4,422
Other Expenses 6,142 5,521 18,685 16,594
---------- ---------- ---------- ----------
Income Before Income Taxes 5,205 4,192 14,759 13,910
Income Tax Expense 1,670 1,308 4,734 4,483
---------- ---------- ---------- ----------
Net Income $ 3,535 $ 2,884 $ 10,025 $ 9,427
========== ========== ========== ==========
Balance Sheet Data:
Total Assets $1,055,575 $ 953,936
Federal Funds Sold 1,897 1,951
Short-Term Investments 656 503
Securities Held To Maturity 91,946 106,972
Securities Available For Sale 351,578 381,756
Loans 546,742 406,424
Allowance For Loan Losses 5,852 5,277
Deposits 879,872 815,430
Borrowings 75,308 47,394
Shareholders' Equity 92,686 82,691
Trust Department Assets
(Book Value, Not
Included Above) $1,137,219 $1,081,159
Average Balance Sheet Data:
Total Assets $1,035,289 $ 952,922 $ 993,863 $ 909,298
Earning Assets 979,440 896,425 936,940 852,180
Loans, net 496,783 404,735 452,151 399,131
Interest-Bearing Deposits 715,535 664,889 695,482 653,794
Demand Deposits 157,508 145,377 156,740 136,494
Borrowings 68,474 53,255 48,017 30,831
Shareholders' Equity 88,363 81,955 87,436 80,414
Performance Ratios:
Return on Average Assets 1.37% 1.21% 1.34% 1.38%
Return on Average Equity 16.00 14.08 15.29 15.63
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 Nine Months
Ended Ended
September 30, September 30,
2004 2003 2004 2003
---- ---- ---- ----
Net Interest Margin
(Taxable Equivalent Basis) 3.78% 3.35% 3.78% 3.67%
Asset Quality:
Loans past due over 90 days
And Still Accruing $ 188 $ 65
Non-Accrual Loans 101 163
Net (Charge-Offs)/Recoveries (4) 2 (65) 29
Allowance For Loan Losses
To Total Loans 1.07% 1.30%
Per Share Data: (1)
Earnings Per Share (Basic) $ 0.43 $ 0.36 $ 1.22 $ 1.16
Earnings Per Share (Diluted) 0.42 0.34 1.19 1.12
Book Value Per Share 11.28 10.18
Dividends Per Share 0.31 0.28
Capital Adequacy:
Tier I Leverage 9.08% 8.74%
Tier I Capital to Risk-
Weighted Assets 19.59 20.62
Tier I & II Capital to
Risk-Weighted Assets 20.86 21.99
(1) Restated for the 10 percent stock dividend declared September 9, 2004.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
QUARTERS ENDED
(Tax-Equivalent Basis, Dollars in Thousands)
September 30, 2004 September 30, 2003
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
------- ------- ----- ------- ------- -----
ASSETS:
Interest-Earning Assets:
Investments:
Taxable (1) $ 427,945 $ 4,061 3.80% $ 451,987 $ 3,595 3.18%
Tax-Exempt (1) (2) 46,753 582 4.98% 31,840 418 5.26%
Loans (2) (3) 502,552 7,133 5.68% 409,935 6,098 5.95%
Federal Funds Sold 1,475 5 1.36% 1,784 4 0.90%
Interest-Earning Deposits 715 2 1.12% 879 2 0.91%
----------- -------------------------- ----------- ------------------------
Total Interest-Earning
Assets 979,440 $ 11,783 4.81% 896,425 $ 10,117 4.52%
----------- -------------------------- ----------- ------------------------
Noninterest-Earning Assets:
Cash and Due from Banks 19,969 19,147
Allowance for Loan
Losses (5,769) (5,200)
Premises and Equipment 18,242 14,890
Other Assets 23,407 27,660
----------- -----------
Total Noninterest-Earning
Assets 55,849 56,497
----------- -----------
Total Assets $ 1,035,289 $ 952,922
=========== ===========
LIABILITIES:
Interest-Bearing Deposits
Checking $ 165,293 $ 279 0.68% $ 133,189 $ 154 0.46%
Money Markets 66,220 117 0.71% 59,153 123 0.83%
Tiered Money Markets 155,854 367 0.94% 136,284 353 1.04%
Savings 109,557 169 0.62% 102,738 164 0.64%
Certificates of Deposit 218,611 1,183 2.16% 233,525 1,482 2.54%
----------- -------------------------- ----------- ------------------------
Total Interest-Bearing
Deposits 715,535 2,115 1.18% 664,889 2,276 1.37%
Borrowings 68,474 410 2.40% 53,255 322 2.42%
----------- -------------------------- ----------- ------------------------
Total Interest-Bearing
Liabilities 784,009 2,525 1.29% 718,144 2,598 1.45%
----------- -------------------------- ----------- ------------------------
Noninterest Bearing
Liabilities
Demand Deposits 157,508 145,377
Accrued Expenses and
Other Liabilities 5,409 7,446
----------- -----------
Total Noninterest-Bearing
Liabilities 162,917 152,823
Shareholders' Equity 88,363 81,955
----------- -----------
Total Liabilities and
Shareholders' Equity $ 1,035,289 $ 952,922
=========== ===========
Net Interest Income $ 9,258 $ 7,519
=========== ===========
Net Interest Spread 3.52% 3.07%
==== ====
Net Interest Margin (4) 3.78% 3.35%
==== ====
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
YEAR-TO-DATE
(Tax-Equivalent Basis, Dollars in Thousands)
September 30, 2004 September 30, 2003
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
------- ------- ----- ------- ------- -----
ASSETS:
Interest-Earning Assets:
Investments:
Taxable (1) $ 429,385 $ 12,234 3.80% $ 414,189 $ 11,248 3.62%
Tax-Exempt (1) (2) 42,018 1,606 5.09% 26,376 1,116 5.64%
Loans (2) (3) 457,791 19,561 5.70% 404,175 19,005 6.27%
Federal Funds Sold 5,841 43 0.98% 6,742 60 1.19%
Interest-Earning Deposits 1,905 15 1.05% 698 5 0.99%
--------- ------------------------ --------- ----------------------
Total Interest-Earning
Assets 936,940 $ 33,459 4.76% 852,180 $ 31,434 4.92%
--------- ------------------------ --------- ----------------------
Noninterest-Earning Assets:
Cash and Due from Banks 19,483 18,900
Allowance for Loan
Losses (5,640) (5,044)
Premises and Equipment 17,255 14,698
Other Assets 25,825 28,564
--------- ---------
Total Noninterest-Earning
Assets 56,923 57,118
--------- ---------
Total Assets $ 993,863 $ 909,298
========= =========
LIABILITIES:
Interest-Bearing Deposits
Checking $ 153,285 $ 629 0.55% $ 129,128 $ 493 0.51%
Money Markets 65,926 311 0.63% 63,742 453 0.95%
Tiered Money Markets 148,167 1,013 0.91% 125,463 1,089 1.16%
Savings 106,393 493 0.62% 99,935 604 0.81%
Certificates of Deposit 221,711 3,531 2.12% 235,526 4,729 2.68%
--------- ------------------------ --------- ----------------------
Total Interest-Bearing
Deposits 695,482 5,977 1.15% 653,794 7,368 1.50%
Borrowings 48,017 953 2.64% 30,831 580 2.51%
--------- ------------------------ --------- ----------------------
Total Interest-Bearing
Liabilities 743,499 6,930 1.24% 684,625 7,948 1.55%
--------- ------------------------ --------- ----------------------
Noninterest Bearing
Liabilities
Demand Deposits 156,740 136,494
Accrued Expenses and
Other Liabilities 6,188 7,765
--------- ---------
Total Noninterest-Bearing
Liabilities 162,928 144,259
Shareholders' Equity 87,436 80,414
--------- ---------
Total Liabilities and
Shareholders' Equity $ 993,863 $ 909,298
========= =========
Net Interest Income $ 26,529 $ 23,486
========= =========
Net Interest Spread 3.52% 3.37%
==== ====
Net Interest Margin (4) 3.78% 3.67%
==== ====
(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 non-accrual loans.
(4) Net interest income on a tax-equivalent basis as a percentage of total
average interest-earning assets.