Exhibit 99.1
Contact:
Arthur F. Birmingham
Peapack-Gladstone Financial Corporation
T: 908-719-4308
PEAPACK-GLADSTONE FINANCIAL CORPORATION
REPORTS FIRST QUARTER EARNINGS
GLADSTONE, N.J.--(BUSINESS WIRE)--April 24, 2007 - Peapack-Gladstone Financial
Corporation (AMEX:PGC) reported net income of $2.7 million for the first quarter
of 2007, a decline of $554 thousand or 17.1 percent from the $3.2 million
reported for the first quarter of 2006. Diluted earnings per share were $0.32
for the first quarter of 2007 and $0.39 for the first quarter of 2006. The
annualized return on average assets was 0.84 percent and the annualized return
on average equity was 10.28 percent for the first quarter of 2007.
EARNINGS
Net Interest Income
Net interest income, on a fully tax-equivalent basis, was $8.5 million
in the first quarter of 2007, a decline of $338 thousand or 3.8 percent from the
same quarter last year and an increase of $60 thousand or 0.7 percent over the
fourth quarter of 2006. On a fully tax-equivalent basis, the net interest margin
for the first quarter of 2007 was 2.81 percent as compared to 2.94 percent for
the same period last year and 2.79 percent in the fourth quarter of 2006. In the
past year, funding costs increased at a faster pace than yields on new loan
originations. However, costs of interest-bearing liabilities declined by 7 basis
points from the fourth quarter of 2006, due in part to the 25 basis point
decrease in the rate on the high yield money market account. In addition, the
The yield on earning assets increased over the first quarter of 2006 by
43 basis points, while cost of interest-bearing funds increased 71 basis points.
The continued increase in funding costs was due to the Federal Reserve policy of
increasing the target federal funds rate through most of 2006 and a change in
funding mix into higher cost products.
Average loans for the first quarter of 2007 increased $95.9 million or
12.4 percent to $870.9 million from $775.0 million for the first quarter of
2006. The average mortgage loan portfolio grew by $55.4 million or 9.0 percent,
during this period, while the average commercial loan portfolio grew $31.8
million or 27.6 percent. Our long-term plan calls for a substantial shift in our
asset mix, with less emphasis on residential mortgages and more emphasis on
higher yielding commercial loans and commercial mortgages. We believe this
material shift in our asset mix will deliver substantially superior earnings
performance over the coming years.
For the first quarter of 2007, average deposits grew $125.3 million, or
12.4 percent to $1.14 billion from $1.01 billion for the first quarter of 2006.
Money markets and certificates of deposit remain the Corporation's fastest
growing categories of deposits, and also pay the highest rates, averaging 4.06
percent and 4.80 percent, respectively. Average short-term borrowings declined
$114.3 million from $118.6 million in the first quarter of 2006 to $4.3 million
for the first quarter of 2007, a result of the strategic decision to reduce
exposure to high-cost, short-term borrowings and reduce interest rate risk.
Average demand deposits increased $3.8 million or 2.2 percent in the first
quarter of 2007 from the year ago period. Other Income
Other income remained constant at $3.2 million for each of the first
quarters of 2007 and 2006. Fee income generated by PGB Trust and Investments was
$2.1 million, a decrease of $103 thousand or 4.6 percent over the same quarter a
year ago, due in part to a decline in trust termination fees and executor fees.
These fees, which are non-recurring, totaled $304 thousand in 2006 as compared
to $48 thousand in 2007. The market value of trust assets under administration
was in excess of $1.94 billion at March 31, 2007 an increase of $173.7 million
or 9.8 percent over the market value at March 31, 2006. Net securities gains of
$162 thousand were recorded in the first quarter of 2007, as compared to net
securities gains of $51 thousand in the year ago quarter. Other Expenses
<page>
Other expenses totaled $7.6 million for the first quarter of 2007 as
compared to $7.1 million for the first quarter of 2006, an increase of $440
thousand or 6.2 percent. For the first quarter of 2007, salaries and benefits
expense was $4.3 million, increasing $395 thousand or 10.2 percent. Normal
salary increases, additions to the professional lending staff and higher group
health insurance accounted for the increase. Premises and equipment expenses
were $1.9 million and $1.7 million for the first quarter of 2007 and 2006,
respectively, an increase of $129 thousand, or 7.5 percent, reflecting
investments in a new branch and equipment. All other expense categories declined
$84 thousand or 5.5 percent for the first quarter 2007 as compared to 2006 due
in part to decreases in advertising expense, trust department expense and
stationery and supplies expense offset in part by increases in fees paid for
professional services. The Corporation opened its newest branch in Summit in
March.
ASSET QUALITY
At March 31, 2007, non-performing loans totaled $6.0 million or 0.68
percent of total loans as compared to $106 thousand or 0.01 percent at March 31,
2006. The increase in non-performing assets is primarily the result of two
commercial loans totaling $5.3 million being designated as non-performing in the
first quarter of 2007. These loans are both well collateralized by properties
with appraised values in excess of the loan amounts. No loss of principal or
interest is anticipated. Peapack-Gladstone Bank has no sub-prime loans,
higher-interest rate loans to consumers with impaired or non-existent credit
histories, in its mortgage loan portfolio.
The allowance for loan losses was $6.9 million or 0.78 percent of total
loans at March 31, 2007 as compared to $6.4 million or 0.81 percent of total
loans at March 31, 2006. Net recoveries of $1 thousand were recorded in the
quarter ended March 31, 2007, while $3 thousand of net charge-offs were recorded
in the first quarter of 2006.
CAPITAL
At March 31, 2007, shareholders' equity totaled $105.6 million as
compared with $99.1 million at March 31, 2006, an increase of $6.5 million or
6.6 percent. The Corporation's leverage ratio, tier 1 and total risk based
capital ratios at March 31, 2007 were 8.37 percent, 15.51 percent and 16.51
percent, respectively.
In the first quarter of 2007, the Corporation did not purchase any
shares under its stock buy back program. A total of 60,900 shares have been
repurchased since the program was originally announced in April 2005 and 89,100
shares are eligible to be repurchased under the program in the future. The
Corporation extended its stock buy back program for another year as announced on
April 19, 2007.
Peapack-Gladstone Financial Corporation is a bank holding company with
total assets of $1.31 billion as of March 31, 2007. Peapack-Gladstone Bank, its
wholly owned community bank was established in 1921, and has 22 branches in
Somerset, Hunterdon, Morris and Union 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.
<page>
The foregoing contains certain 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 actual results to differ materially from those contemplated by such
forward-looking statements include, among others, the following possibilities:
o The success of the Corporation's balance sheet restructuring initiative.
o Unexpected decline in the direction of the economy in New Jersey.
o Unexpected changes in interest rates.
o Failure to grow business.
o Inability to manage growth.
o Unexpected loan prepayment volume.
o Exposure to credit risks.
o Insufficient allowance for loan losses.
o Competition from other financial institutions.
o Adverse effects of government regulation.
o Decline in the levels of loan quality and origination volume.
o 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)
<page>
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
UNAUDITED
(Dollars in Thousands, Except Per Share Amounts)
At or For The Three Months
Ended
March 31,
2007 2006
---- ----
Income Statement Data:
Interest Income $ 17,279 $ 15,794
Interest Expense 8,970 7,218
---------- ----------
Net Interest Income 8,309 8,576
Provision For Loan Losses 125 39
---------- ----------
Net Interest Income After
Provision For Loan Losses 8,184 8,537
Trust Fees 2,142 2,245
Other Income 899 890
Securities Gains 162 51
Other Expenses 7,558 7,118
---------- ----------
Income Before Income Taxes 3,829 4,605
Income Tax Expense 1,137 1,359
---------- ----------
Net Income $ 2,692 $ 3,246
========== ==========
Balance Sheet Data:
Total Assets $1,307,082 $1,287,441
Federal Funds Sold 26,365 1,437
Short-Term Investments 1,092 1,583
Securities Held To Maturity 52,987 71,771
Securities Available For Sale 276,195 351,742
Loans 882,574 789,487
Allowance For Loan Losses 6,894 6,414
Deposits 1,166,027 1,046,199
Borrowings 23,520 134,275
Shareholders' Equity 105,567 99,072
Trust Division Assets under
Administration (Market
Value, Not Included
Above) $1,944,274 $1,770,545
Performance Ratios:
Return on Average Assets 0.84% 1.02%
Return on Average Equity 10.28 13.04
<page>
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
UNAUDITED
(Dollars in Thousands, Except Per Share Amounts)
At or For The Three Months
Ended
March 31,
2007 2006
---- ----
Net Interest Margin
(Taxable Equivalent Basis) 2.81% 2.94%
Asset Quality:
Loans past due over 90 days
And Still Accruing $ 393 $ 38
Non-Accrual Loans 5,651 68
Net Recoveries/(Charge-Offs) 1 (3)
Allowance For Loan Losses
To Total Loans 0.78% 0.81%
Per Share Data:
Earnings Per Share (Basic) $ 0.33 $ 0.39
Earnings Per Share (Diluted) 0.32 0.39
Book Value Per Share 12.75 11.98
Dividends Per Share 0.15 0.14
Capital Adequacy:
Tier I Leverage 8.37% 8.13%
Tier I Capital to Risk-
Weighted Assets 15.51 16.17
Tier I & II Capital to
Risk-Weighted Assets 16.51 17.18
<page>
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
YEAR-TO-DATE
(Tax-Equivalent Basis, Dollars in Thousands)
<table>
<caption>
March 31, 2007 March 31, 2006
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
------- ------- ----- ------- ------- -----
<s> <c> <c> <c> <c> <c> <c>
ASSETS:
Interest-Earning Assets:
Investments:
Taxable (1) $ 282,137 $ 3,509 4.97% $ 374,043 $ 4,065 4.35%
Tax-Exempt (1) (2) 56,502 740 5.24 57,635 752 5.22
Loans (2) (3) 870,905 13,178 6.05 775,015 11,261 5.81
Federal Funds Sold 5,884 79 5.38 1,479 16 4.33
Interest-Earning Deposits 898 11 5.02 904 9 4.03
----------- ----------- ----------- ----------- ----------- -----------
Total Interest-Earning
Assets 1,216,326 $ 17,517 5.76% 1,209,076 $ 16,103 5.33%
----------- ----------- ----------- ----------- ----------- -----------
Noninterest-Earning Assets:
Cash and Due from Banks 23,127 21,893
Allowance for Loan
Losses (6,770) (6,501)
Premises and Equipment 24,406 21,716
Other Assets 26,642 23,113
----------- -----------
Total Noninterest-Earning
Assets 67,405 60,221
----------- -----------
Total Assets $ 1,283,731 $ 1,269,297
=========== ===========
LIABILITIES:
Interest-Bearing Deposits
Checking $ 136,941 $ 282 0.82% $ 144,319 $ 196 0.54%
Money Markets 378,082 3,837 4.06 283,022 2,146 3.03
Savings 72,574 124 0.68 88,395 150 0.68
Certificates of Deposit 372,280 4,464 4.80 322,649 3,098 3.84
----------- ----------- ----------- ----------- ----------- -----------
Total Interest-Bearing
Deposits 959,877 8,707 3.63 838,385 5,590 2.67
Borrowings 27,930 263 3.77 150,054 1,628 4.34
----------- ----------- ----------- ----------- ----------- -----------
Total Interest-Bearing
Liabilities 987,807 8,970 3.63 988,439 7,218 2.92
----------- ----------- ----------- ----------- ----------- -----------
Noninterest Bearing
Liabilities
Demand Deposits 180,247 176,398
Accrued Expenses and
Other Liabilities 10,967 4,893
----------- -----------
Total Noninterest-Bearing
Liabilities 191,214 181,291
Shareholders' Equity 104,710 99,567
----------- -----------
Total Liabilities and
Shareholders' Equity $ 1,283,731 $ 1,269,297
=========== ===========
Net Interest Income $ 8,547 $ 8,885
=========== ===========
Net Interest Spread 2.13% 2.41%
=========== ===========
Net Interest Margin (4) 2.81% 2.94%
=========== ===========
</table>
<page>
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
QUARTER-TO-DATE
(Tax-Equivalent Basis, Dollars in Thousands)
<table>
<caption>
March 31, 2007 December 31, 2006
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
------- ------- ----- ------- ------- -----
<s> <c> <c> <c> <c> <c> <c>
ASSETS:
Interest-Earning Assets:
Investments:
Taxable (1) $ 282,137 $ 3,509 4.97% $ 290,532 $ 3,634 5.00%
Tax-Exempt (1) (2) 56,502 740 5.24 47,617 653 5.49
Loans (2) (3) 870,905 13,178 6.05 871,664 13,291 6.10
Federal Funds Sold 5,884 79 5.38 3,282 43 5.29
Interest-Earning Deposits 898 11 5.02 1,548 18 4.70
----------- ----------- ----------- ----------- ----------- -----------
Total Interest-Earning
Assets 1,216,326 $ 17,517 5.76% 1,214,643 $ 17,639 5.81%
----------- ----------- ----------- ----------- ----------- -----------
Noninterest-Earning Assets:
Cash and Due from Banks 23,127 23,068
Allowance for Loan
Losses (6,770) (6,632)
Premises and Equipment 24,406 23,649
Other Assets 26,642 25,465
----------- -----------
Total Noninterest-Earning
Assets 67,405 65,550
----------- -----------
Total Assets $ 1,283,731 $ 1,280,193
=========== ===========
LIABILITIES:
Interest-Bearing Deposits
Checking $ 136,941 $ 282 0.82% $ 132,834 $ 301 0.91%
Money Markets 378,082 3,837 4.06 357,379 3,705 4.15
Savings 72,574 124 0.68 75,773 132 0.70
Certificates of Deposit 372,280 4,464 4.80 374,529 4,476 4.78
----------- ----------- ----------- ----------- ----------- -----------
Total Interest-Bearing
Deposits 959,877 8,707 3.63 940,515 8,614 3.66
Borrowings 27,930 263 3.77 48,638 538 4.42
----------- ----------- ----------- ----------- ----------- -----------
Total Interest-Bearing
Liabilities 987,807 8,970 3.63 989,153 9,152 3.70
----------- ----------- ----------- ----------- ----------- -----------
Noninterest Bearing
Liabilities
Demand Deposits 180,247 179,338
Accrued Expenses and
Other Liabilities 10,967 6,962
----------- -----------
Total Noninterest-Bearing
Liabilities 191,214 186,300
Shareholders' Equity 104,710 104,740
----------- -----------
Total Liabilities and
Shareholders' Equity $ 1,283,731 $ 1,280,193
=========== ===========
Net Interest Income $ 8,547 8,487
=========== ===========
Net Interest Spread 2.13% 2.11%
=========== ===========
Net Interest Margin (4) 2.81% 2.79%
=========== ===========
</table>
(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.