Contact:
Arthur F. Birmingham
Peapack-Gladstone Financial Corporation
T: 908-719-4308
PEAPACK-GLADSTONE FINANCIAL CORPORATION
REPORTS RECORD ANNUAL AND FOURTH QUARTER EARNINGS
GLADSTONE, N.J.--(BUSINESS WIRE)--February 1, 2005 - Peapack-Gladstone Financial
Corporation (AMEX:PGC) reported fourth quarter 2004 net income of $3.1 million,
as compared to $2.9 million for the fourth quarter 2003, an increase of $210
thousand or 7.3 percent. Net income per diluted share was $0.37 for the fourth
quarter of 2004 compared to $0.34 for the fourth quarter of 2003, an increase of
8.8 percent. The annualized return on average assets ("ROA") was 1.17 percent
and the annualized return on average equity ("ROE") was 13.12 percent for the
fourth quarter of 2004. All per share data reflects the effect of a 10 percent
stock dividend declared September 9, 2004.
Net income was $13.1 million for the twelve months ended December 31, 2004,
an increase of $809 thousand or 6.6 percent over the $12.3 million for the
twelve months ended December 31, 2003. The per diluted share earnings were $1.56
for the year ended December 31, 2004, as compared to $1.47 for the year ended
December 31, 2003, an increase of 6.1 percent. The annualized return on average
assets was 1.30 percent and the annualized return on average equity was 14.72
percent for 2004.
Net income in the fourth quarter and year of 2004 included the previously
announced non-cash charge of $336 thousand after tax, or $0.04 per diluted
share, related to an other-than-temporary impairment charge for Fannie Mae
("FNMA") and Freddie Mac ("FHLMC") preferred stock. Excluding this charge,
diluted earnings per share for the fourth quarter of 2004 increased 20.6 percent
as compared to the fourth quarter of 2003 and for the year 2004, 8.8 percent as
compared to 2003.
Frank A. Kissel, Chairman and CEO, stated, "We are very pleased with our
financial performance in 2004, particularly in the current competitive banking
environment. Earnings per share are at the highest levels in our history, our
two new branches in Oldwick and Morristown have had very successful openings and
our loan portfolios and deposits grew for the year 34.0 percent and 10.6
percent, respectively.
We remain committed to maintaining credit quality and low levels of loan
delinquencies reflect that commitment. Maintaining these low levels is most
encouraging during this period of strong growth in our loan portfolios. The
market value of trust assets under management by PGB Trust and Investments grew
to $1.7 billion, almost a 20 percent increase over the levels of December 31,
2003.
Our 19th branch, in Morristown, New Jersey, opened in November 2004 and we
are very pleased with the results attained in the first months of business.
Officers from PGB Trust and Investments and from the Commercial and Consumer
Loan Departments are available to provide investment and lending services to
Morristown area individuals and businesses. We expect to continue opening
branches in communities that are contiguous to our current market area."
EARNINGS
Net Interest Income
For the fourth quarter of 2004, net interest income, on a tax-equivalent
basis, was $9.4 million, an increase of $1.1 million or 13.0 percent over the
same period last year and an increase of $143 thousand or 1.5 percent over the
third quarter of 2004. On a fully tax-equivalent basis, net interest margin for
the fourth quarter was 3.78 percent as compared to 3.73 percent for the same
quarter last year and 3.78 percent for the third quarter of 2004.
Average-earning assets increased $102.8 million or 11.5 percent to $995.3
million in the fourth quarter of 2004, from $892.5 million in the same quarter
of 2003. In the fourth quarter of 2004, the yield on interest earning assets
increased 20 basis points to 4.96 percent from 4.76 percent in the fourth
quarter of 2003.
Average loans increased $143.2 million, or 34.4 percent, to $559.7
million in the fourth quarter of 2004 from the same quarter of 2003. The growth
occurred in all categories of loans with the majority in the adjustable-rate
residential mortgage portfolio. The growth in our portfolios is primarily the
result of new business initiatives and our entry into new market areas. Average
investment securities declined $38.4 million or 8.2 percent from the fourth
quarter of 2003 to the fourth quarter of 2004. Total average deposits grew $90.8
million or 11.2 percent to $899.4 million in the fourth quarter of 2004 from
$808.6 million for the same quarter of 2003. Total average borrowings were $57.6
million in the fourth quarter of 2004, an increase of $9.2 million or 19.0
percent from $48.4 million in the same quarter of 2003. This increase is in
short-term Federal Home
Loan Bank borrowings and reflects the additional funding required to grow the
loan portfolios. The cost of funds increased to 1.22 percent in the fourth
quarter of 2004 as compared to 1.08 percent in the fourth quarter of 2003 as the
Federal Reserve increased the Federal Funds rate five times during the year.
On a fully-tax equivalent basis, net interest income for the year ended
December 31, 2004 was $35.9 million, as compared to $31.8 million for the year
ended December 31, 2003, an increase of $4.1 million or 13.0 percent. For the
years ended December 31, 2004 and 2003, the fully tax-equivalent net interest
margin was 3.78 percent and 3.69 percent, respectively.
Average loan balances grew $76.1 million or 18.7 percent from year to year,
while average investment securities grew $13.4 million or 3.0 percent. Average
deposit balances increased $69.2 million or 8.7 percent during the year. The
yield on interest earning assets was 4.81 percent for the year ended December
31, 2004, a decline of 7 basis points from 4.88 percent for the year ended
December 31, 2003. The cost of funds declined 16 basis points to 1.08 percent.
Other Income
Other income for the fourth quarter of 2004 was $1.9 million as compared to
$2.1 million in the fourth quarter of 2003, a decline of $237 thousand or 11.0
percent. Income from PGB Trust and Investments was $1.6 million, an increase of
$242 thousand or 18.1 percent over the same quarter last year. Securities losses
were $462 thousand in the fourth quarter of 2004, including a $560 thousand
other-than-temporary non-cash impairment charge on adjustable rate
investment-grade preferred stock, as compared to gains of $57 thousand in the
year ago quarter.
For the year ended December 31, 2004, other income was $9.9 million as
compared to $10.1 million for the year ended December 31, 2003. Trust income
grew to $6.7 million from $5.8 million, an increase of $961 thousand or 16.7
percent. The market value of trust assets under management was $1.7 billion at
December 31, 2004, an increase of $277 million, or 19.6% over the previous year.
Securities gains were $150 thousand for the twelve months ended December 31,
2004, as compared to $1.3 million for the twelve months ended December 31, 2003.
The decline in securities gains for 2004 was attributable in part to the
other-than temporary non-cash impairment charge on adjustable rate
investment-grade preferred stock recorded in the fourth quarter of 2004.
Other Expenses
For the fourth quarter of 2004, other expenses were $6.5 million compared
to $6.0 million for the same quarter of 2003, an increase of $552 thousand or
9.3 percent. During the fourth quarter of 2004, salaries and benefits expense
grew $202 thousand, or 6.3 percent, due to normal salary increases as well as
additions to the professional staff and branch expansion. Occupancy expenses
increased to $1.5 million for the fourth quarter of 2004, an increase of $61
thousand or 4.3 percent as compared to $1.4 million for the same quarter of
2003. Accounting and consulting fees related to the implementation of Section
404 of the Sarbanes-Oxley Act contributed to higher other expenses in the fourth
quarter of 2004.
For the year ended December 31, 2004, other expenses were $25.2 million, an
increase of $2.6 million or 11.7 percent as compared to $22.5 million for the
previous year. Salaries and benefits increased by $1.3 million or 10.0 percent
to $13.9 million in 2004, from $12.6 million for the year ended December 31,
2003. For the twelve months ended December 31, 2004, occupancy costs rose $832
thousand, or 17.2 percent to $5.7 million, as compared to $4.8 million for the
same period 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 Morristown Branch opened
in November of 2004. Costs rose this year as the Corporation invested in its
technological capacity for future growth and the expectation of increased levels
of business activity.
ASSET QUALITY
At December 31, 2004, non-performing loans totaled $351 thousand or 0.06
percent of total loans as compared to $215 thousand or 0.05 percent at December
31, 2003.
The allowance for loan losses was $6.0 million or 1.05 percent of total
loans at December 31, 2004 as compared to $5.5 million or 1.28 percent of total
loans at December 31, 2003. Net recoveries of $2 thousand were recorded in the
fourth quarter of 2004 as compared to net recoveries of $41 thousand during the
same quarter of 2003. For the year to date December 31, 2004, net chargeoffs
were $63 thousand as compared to net recoveries of $69 thousand for the same
period in 2003.
CAPITAL
At December 31, 2004, shareholders' equity totaled $94.7 million as
compared with $85.1 million at December 31, 2003, an increase of $9.6 million or
11.3 percent. The Corporation's leverage ratio, tier 1 and total risk based
capital ratios at December 31, 2004 were 9.18 percent, 19.02 percent and 20.19
percent, respectively.
Peapack-Gladstone Financial Corporation is a bank holding company with
total assets of $1.07 billion as of December 31, 2004. Peapack-Gladstone Bank,
its wholly owned community bank was established in 1921, and has 19 branches in
Somerset, Hunterdon and Morris Counties. Its Trust Division, PGB Trust and
Investments, operates at the Bank's main office located at 190 Main Street in
Gladstone and at its Morristown office located at 233 South Street. 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, unexpected changes 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 Twelve Months
Ended Ended
December 31, December 31,
2004 2003 2004 2003
---- ---- ---- ----
Income Statement Data:
Interest Income $ 12,108 $ 10,447 $ 44,917 $ 41,426
Interest Expense 2,930 2,314 9,860 10,262
----------- ----------- ----------- -----------
Net Interest Income 9,178 8,133 35,057 31,164
Provision For Loan Losses 150 150 600 600
----------- ----------- ----------- -----------
Net Interest Income After
Provision For Loan Losses 9,028 7,983 34,457 30,564
Other Income 794 754 3,057 3,029
Securities (Losses)/Gains (462) 57 150 1,284
Trust Fees 1,579 1,337 6,720 5,759
Other Expenses 6,506 5,954 25,191 22,549
----------- ----------- ----------- -----------
Income Before Income Taxes 4,433 4,177 19,193 18,087
Income Tax Expense 1,350 1,304 6,084 5,787
----------- ----------- ----------- -----------
Net Income $ 3,083 $ 2,873 $ 13,109 $ 12,300
=========== =========== =========== ===========
Balance Sheet Data:
Total Assets $ 1,067,395 $ 968,126
Federal Funds Sold 101 5,461
Short-Term Investments 786 30,949
Securities Held To Maturity 87,128 97,701
Securities Available For Sale 354,186 355,998
Loans 572,164 427,001
Allowance For Loan Losses 6,004 5,467
Deposits 935,666 845,771
Borrowings 33,394 30,032
Shareholders' Equity 94,669 85,054
Trust Department Assets
(Book Value, Not
Included Above) $ 1,191,186 $ 1,089,447
s
Average Balance Sheet Data:
Total Assets $ 1,057,401 $ 947,634 $ 1,009,834 $ 918,961
Earning Assets 995,303 892,490 951,610 862,342
Loans, net 553,742 411,053 477,687 402,136
Interest-Bearing Deposits 737,097 660,301 705,943 655,433
Demand Deposits 162,351 148,324 158,151 139,476
Borrowings 57,563 48,356 50,416 35,248
Shareholders' Equity 93,979 83,636 89,081 81,226
Performance Ratios:
Return on Average Assets 1.17% 1.21% 1.30% 1.34%
Return on Average Equity 13.12 13.74 14.72 15.14
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 Twelve Months
Ended Ended
December 31, December 31,
2004 2003 2004 2003
---- ---- ---- ----
Net Interest Margin
(Taxable Equivalent Basis) 3.78% 3.73% 3.78% 3.69%
Asset Quality:
Loans past due over 90 days
And Still Accruing $ 0 $ 56
Non-Accrual Loans 351 159
Net (Charge-Offs)/Recoveries 2 41 (63) 69
Allowance For Loan Losses
To Total Loans 1.05% 1.28%
Per Share Data: (1)
Earnings Per Share (Basic) $ 0.37 $ 0.35 $ 1.60 $ 1.51
Earnings Per Share (Diluted) 0.37 0.34 1.56 1.47
Book Value Per Share 11.48 10.43
Dividends Per Share 0.42 0.38
Capital Adequacy:
Tier I Leverage 9.18% 8.91%
Tier I Capital to Risk-
Weighted Assets 19.02 20.38
Tier I & II Capital to
Risk-Weighted Assets 20.19 21.74
(1) Restated for the effect of 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)
December 31, 2004 December 31, 2003
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
------- ------- ----- ------- ------- -----
ASSETS:
Interest-Earning Assets:
Investments:
Taxable (1) $ 386,050 $ 3,758 3.89% $ 435,118 $ 4,014 3.69%
Tax-Exempt (1) (2) 45,762 550 4.81% 35,085 455 5.18%
Loans (2) (3) 559,659 8,004 5.72% 416,416 6,149 5.91%
Federal Funds Sold 2,982 15 2.01% 4,304 10 0.94%
Interest-Earning Deposits 850 4 1.88% 1,567 3 0.72%
----------- -------------------------- ----------- ------------------------
Total Interest-Earning
Assets 995,303 $ 12,331 4.96% 892,490 $ 10,631 4.76%
----------- -------------------------- ----------- ------------------------
Noninterest-Earning Assets:
Cash and Due from Banks 20,874 18,699
Allowance for Loan
Losses (5,917) (5,363)
Premises and Equipment 19,362 15,053
Other Assets 27,779 26,755
----------- -----------
Total Noninterest-Earning
Assets 62,098 55,144
----------- -----------
Total Assets $ 1,057,401 $ 947,634
=========== ===========
LIABILITIES:
Interest-Bearing Deposits
Checking $ 176,190 $ 364 0.83% $ 129,429 $ 123 0.35%
Money Markets 76,492 259 1.35% 59,242 99 0.67%
Tiered Money Markets 153,705 436 1.13% 141,419 355 1.00%
Savings 106,893 170 0.64% 101,981 163 0.64%
Certificates of Deposit 223,817 1,304 2.33% 228,230 1,269 2.22%
----------- -------------------------- ----------- ------------------------
Total Interest-Bearing
Deposits 737,097 2,533 1.37% 660,301 2,009 1.22%
Borrowings 57,563 397 2.76% 48,356 305 2.53%
----------- -------------------------- ----------- ------------------------
Total Interest-Bearing
Liabilities 794,660 2,930 1.47% 708,657 2,314 1.31%
----------- -------------------------- ----------- ------------------------
Noninterest Bearing
Liabilities
Demand Deposits 162,351 148,324
Accrued Expenses and
Other Liabilities 6,411 7,017
----------- -----------
Total Noninterest-Bearing
Liabilities 168,762 155,341
Shareholders' Equity 93,979 83,636
----------- -----------
Total Liabilities and
Shareholders' Equity $ 1,057,401 $ 947,634
=========== ===========
Net Interest Income $ 9,401 $ 8,317
=========== ===========
Net Interest Spread 3.49% 3.45%
==== ====
Net Interest Margin (4) 3.78% 3.73%
==== ====
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
YEAR-TO-DATE
(Tax-Equivalent Basis, Dollars in Thousands)
December 31, 2004 December 31, 2003
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
------- ------- ----- ------- ------- -----
ASSETS:
Interest-Earning Assets:
Investments:
Taxable (1) $ 418,492 $ 15,992 3.82% $ 419,464 $ 15,261 3.64%
Tax-Exempt (1) (2) 42,959 2,155 5.02% 28,572 1,571 5.50%
Loans (2) (3) 483,397 27,566 5.70% 407,261 25,155 6.18%
Federal Funds Sold 5,122 58 1.13% 6,128 70 1.14%
Interest-Earning Deposits 1,640 19 1.16% 917 8 0.87%
----------- -------------------------- ----------- ------------------------
Total Interest-Earning
Assets 951,610 $ 45,790 4.81% 862,342 $ 42,065 4.88%
----------- -------------------------- ----------- ------------------------
Noninterest-Earning Assets:
Cash and Due from Banks 19,832 18,849
Allowance for Loan
Losses (5,710) (5,125)
Premises and Equipment 17,785 14,788
Other Assets 26,317 28,107
----------- -----------
Total Noninterest-Earning
Assets 58,224 56,619
----------- -----------
Total Assets $ 1,009,834 $ 918,961
LIABILITIES:
Interest-Bearing Deposits
Checking $ 159,043 $ 991 0.62% $ 129,203 $ 616 0.48%
Money Markets 68,582 572 0.83% 62,607 552 0.88%
Tiered Money Markets 149,559 1,450 0.97% 129,485 1,444 1.12%
Savings 106,518 664 0.62% 100,451 767 0.76%
Certificates of Deposit 222,241 4,834 2.18% 233,687 5,997 2.57%
----------- -------------------------- ----------- ------------------------
Total Interest-Bearing
Deposits 705,943 8,511 1.21% 655,433 9,376 1.43%
Borrowings 50,416 1,349 2.68% 35,248 886 2.51%
----------- -------------------------- ----------- ------------------------
Total Interest-Bearing
Liabilities 756,359 9,860 1.30% 690,681 10,262 1.49%
----------- -------------------------- ----------- ------------------------
Noninterest Bearing
Liabilities
Demand Deposits 158,151 139,476
Accrued Expenses and
Other Liabilities 6,243 7,578
----------- -----------
Total Noninterest-Bearing
Liabilities 164,394 147,054
Shareholders' Equity 89,081 81,226
----------- -----------
Total Liabilities and
Shareholders' Equity $ 1,009,834 $ 918,961
=========== ===========
Net Interest Income $ 35,930 $ 31,803
=========== ===========
Net Interest Spread 3.51% 3.39%
==== ====
Net Interest Margin (4) 3.78% 3.69%
==== ====
(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.