Contact:
Arthur F. Birmingham
Peapack-Gladstone Financial Corporation
T: 908-719-4308
PEAPACK-GLADSTONE FINANCIAL CORPORATION
REPORTS FOURTH QUARTER AND ANNUAL EARNINGS
GLADSTONE, N.J.--(BUSINESS WIRE)--February 1, 2008 - Peapack-Gladstone Financial
Corporation (AMEX:PGC) today announced fourth quarter and annual financial
results for 2007. Net income for the fourth quarter was $3.71 million, an
increase of $814 thousand or 28.1 percent, compared to the same period last
year. Diluted earnings per share for the fourth quarter were $0.44, as compared
to $0.34 reported in the fourth quarter of 2006. The annualized return on
average assets was 1.11 percent and the annualized return on average equity was
13.67 percent for the fourth quarter of 2007.
Net income for the year ended December 31, 2007 was $11.86 million
compared to $10.23 million in 2006, an increase of $1.63 million or 16.0 percent
compared to 2006. Diluted earnings per share were $1.42 and $1.22 for the twelve
months ended December 31, 2007 and 2006, respectively. For the year ended
December 31, 2007, the annualized return on average assets was 0.90 percent and
the annualized return on average equity was 11.12 percent. The annual results
for 2006 include a balance sheet restructuring charge of $1.1 million, or $0.13
per diluted share.
Frank A. Kissel, Chairman and CEO, stated, "We are very pleased with
the results we produced in the fourth quarter and full year 2007, which
demonstrates the merits of our long-term business plan. Our strategy to shift
our loan mix away from residential mortgages to commercial credits has started
to produce higher margins. We believe that our balance sheet is uniquely
structured to benefit from lower interest rates and a careful and deliberate
shift in assets." The Corporation experienced several positive developments
during 2007, including:
o Total loans increased $111.0 million or 12.8 percent from
December 31, 2006, as commercial loans increased $109.9
million or 34.6 percent.
o Net interest margin was 3.21 percent in the fourth quarter of
2007, an increase of 42 basis points as compared to the fourth
quarter of 2006 and an increase of 29 basis points as compared
to the third quarter of 2007.
o Total deposits increased $35.5 million or 3.1 percent from
December 31, 2006.
o We opened our 22nd branch, a full-service facility in Summit.
o PGB Trust and Investment assets surpassed $2 billion for the
first time.
o Revenues from trust income increased 14.3 percent from 2006
levels.
EARNINGS
Net Interest Income
Net interest income, on a fully tax-equivalent basis, was $10.2 million
in the fourth quarter of 2007, an increase of $1.75 million or 20.6 percent from
the same quarter last year and an increase of $1.12 million or 12.3 percent over
the third quarter of 2007. The net interest margin, on a fully tax-equivalent
basis, was 3.21 percent for the fourth quarter of 2007 as compared to 2.79
percent for the same period last year and 2.92 percent for the third quarter of
2007.
The yield on earning assets was 6.01 percent for the fourth quarter of
2007 and 5.81 percent for the same quarter of 2006, an increase of 20 basis
points, while the cost of interest-bearing liabilities declined 24 basis points
from 3.70 percent in the fourth quarter of 2006 to 3.46 percent in the fourth
quarter of 2007.
Average loans continued to grow at a strong pace, averaging $961.4
million in the fourth quarter of 2007, an increase of $89.8 million or 10.3
percent over the fourth quarter of 2006. During this period, the average
commercial loan portfolio grew $85.9 million or 27.0 percent, reflecting the
Corporation's commitment to changing the total loan mix toward higher yielding
commercial and construction loans. Yields on loans improved by 14 basis points
to 6.24 percent for the fourth quarter of 2007 when compared to the same period
of 2006.
Average investments for the fourth quarter of 2007 declined $31.9
million when compared to the fourth quarter of 2006 and yields on investments
increased 24 basis points to 5.31 percent over the same period. In 2007, the
Corporation followed a strategy of investing the proceeds of maturing and sold
securities into higher yielding loans.
For the fourth quarter of 2007, average deposits totaled $1.18 billion,
an increase of $62.4 million or 5.6 percent over the average for the fourth
quarter of 2006, while average rates paid on interest-bearing deposits were 3.43
percent as compared to 3.66 percent for the same quarter of 2006, a decline of
23 basis. While the Federal Reserve Board reduced the fed funds target rate 100
basis points in the later months of 2007, deposit gathering remained highly
competitive and deposit interest rates experienced only a modest decline. The
Federal Reserve has already reduced rates in January 2008 and further interest
rate reductions are possible. We expect that these rate cuts will further lower
the cost of funds. Money markets and certificates of deposit continued to be the
deposit products experiencing the fastest growth, with yields averaging 3.42
percent and 4.81 percent, respectively, for the fourth quarter of 2007.
Average borrowings decreased by $9.2 million from $48.6 million in the
fourth quarter of 2006 to $39.4 million for the same quarter of 2007. Average
non-interest bearing demand deposits increased $10.0 million or 5.6 percent in
the fourth quarter of 2007 from the year ago period.
Other Income
For the fourth quarter of 2007, other income totaled $1.4 million, as
compared to $1.0 million for the same quarter of 2006, an increase of $418
thousand, or 41.7 percent. Net losses on sales of investment securities were
$128 thousand in the fourth quarter of 2007. No securities gains or losses were
recognized in the fourth quarter of 2006. This increase was partially due to a
pre-tax gain of $486 thousand recorded in the fourth quarter of 2007 as the
result of the sale of non-banking related property.
PGB Trust and Investments
PGB Trust and Investments generated $2.7 million in fee income in the
fourth quarter of 2007, an increase of $538 thousand or 24.8 percent over the
same quarter of 2006. The market value of trust assets under management was in
excess of $2.02 billion at December 31, 2007, an increase of $103.3 million or
5.4 percent over the market value at December 31, 2006.
Other Expenses
Other expense for the fourth quarter of 2007 was $8.4 million compared
to $7.2 million reported for the fourth quarter of 2006. Salary and benefit
expense increased by $497 thousand to $4.5 million, primarily due to additions
to professional staff, new branch personnel and higher group health insurance.
For the fourth quarter of 2007, premises and equipment expense was $2.2 million,
increasing $480 thousand or 28.3 percent for the year ago period, primarily due
to the addition of the Summit Branch. During the fourth quarter of 2007, other
expenses increased $265 thousand, or 18.0 percent to 1.7 million, when compared
to the same period in 2006.
ASSET QUALITY
At December 31, 2007, non-performing loans totaled $2.1 million or 0.22
percent of total loans as compared to $2.1 million or 0.24 percent of total
loans at December 31, 2006 and $5.6 million at September 30, 2007. The decline
in non-performing assets in the fourth quarter as compared to the third quarter
was the result of a payoff of all principal and interest on a $3.5 million
commercial loan.
Peapack-Gladstone Bank has no sub-prime loans or other high-interest
rate loans to consumers with impaired or non-existent credit histories in it
loan portfolios.
The allowance for loan losses was $7.5 million or 0.76 percent of total
loans at December 31, 2007 as compared to $6.8 million or 0.78 percent of total
loans at December 31, 2006. There were net charge-offs of $11 thousand in both
fourth quarters of 2007 and 2006.
CAPITAL
At December 31, 2007, shareholders' equity totaled $107.4 million as
compared with $103.8 million at December 31, 2006, an increase of $3.7 million,
or 3.5 percent. The Corporation's leverage ratio, tier 1 and total risk based
capital ratios at December 31, 2007 were 8.59 percent, 14.92 percent and 15.91
percent, respectively.
The Corporation repurchased 9,500 shares during the fourth quarter of
2007 under its stock buy back program. A total of 82,400 shares have been
repurchased since the program was originally announced in April 2005 and 67,600
shares are eligible to be repurchased under the program in the future.
Peapack-Gladstone Financial Corporation is a bank holding company with
total assets of $1.35 billion as of December 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.
--------------
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, the ability of management to effectively
execute its balance sheet restructuring initiative, unanticipated costs in
connection with new branch openings, 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, development of new tax
strategies or the disallowance of prior tax strategies 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,
2007 2006 2007 2006
---- ---- ---- ----
Income Statement Data:
Interest Income $ 18,907 $ 17,368 $ 72,352 $ 67,267
Interest Expense 8,919 9,152 36,483 34,444
----------- ----------- ----------- -----------
Net Interest Income 9,988 8,216 35,869 32,823
Provision For Loan Losses 400 150 750 414
----------- ----------- ----------- -----------
Net Interest Income After
Provision For Loan Losses 9,588 8,066 35,119 32,409
Trust Fees 2,710 2,172 9,563 8,367
Other Income 1,549 1,003 4,226 3,681
Securities (Losses)/Gains (128) 0 254 (1,781)
Other Expenses 8,412 7,230 32,087 28,945
----------- ----------- ----------- -----------
Income Before Income Taxes 5,307 4,011 17,075 13,731
Income Tax Expense 1,599 1,117 5,213 3,505
----------- ----------- ----------- -----------
Net Income $ 3,708 $ 2,894 $ 11,862 $ 10,226
=========== =========== =========== ===========
Balance Sheet Data:
Total Assets $ 1,346,976 $ 1,288,376
Federal Funds Sold and
Short-Term Investments 2,744 7,068
Securities Held To Maturity 45,139 55,165
Securities Available For Sale 241,237 286,186
Loans 981,180 870,153
Allowance For Loan Losses 7,500 6,768
Deposits 1,180,267 1,144,736
Borrowings 44,819 23,964
Shareholders' Equity 107,429 103,763
Trust Division Assets under
Management (Market
Value, Not Included
Above) $ 2,028,232 $ 1,924,954
Performance Ratios:
Return on Average Assets 1.11% 0.90% 0.90% 0.79%
Return on Average Equity 13.67 11.05 11.12 10.10
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,
2007 2006 2007 2006
---- ---- ---- ----
Net Interest Margin
(Taxable Equivalent Basis) 3.21% 2.79% 2.95% 2.76%
Asset Quality:
Loans past due over 90 days
And Still Accruing $ 0 $ 197
Non-Accrual Loans 2,131 1,880
Net (Charge-Offs) $ (11) $ (11) (18) (24)
Asset Quality Ratios:
Allowance to Total Loans 0.76% 0.78%
Non-Performing Loans to
Total Loans 0.22 0.24
Allowance to Non-Performing
Loans 3.5X 3.3X
Per Share Data:
Earnings Per Share (Basic) $ 0.45 $ 0.35 $ 1.43 $ 1.24
Earnings Per Share (Diluted) 0.44 0.34 1.42 1.22
Book Value Per Share 12.94 12.55
Dividends Per Share 0.62 0.58
Capital Adequacy:
Tier I Leverage 8.59% 8.20%
Tier I Capital to Risk-
Weighted Assets 14.92 15.33
Tier I & II Capital to
Risk-Weighted Assets 15.91 16.31
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
QUARTERS ENDED
(Tax-Equivalent Basis, Dollars in Thousands)
December 31, 2007 December 31, 2006
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
------- ------- ----- ------- ------- -----
ASSETS:
Interest-Earning Assets:
Investments:
Taxable (1) $ 251,018 $ 3,332 5.31% $ 290,532 $ 3,634 5.00%
Tax-Exempt (1) (2) 55,263 733 5.31 47,617 653 5.49
Loans (2) (3) 961,424 15,008 6.24 871,664 13,291 6.10
Federal Funds Sold 6,102 71 4.63 3,282 43 5.29
Interest-Earning Deposits 897 9 4.03 1,548 18 4.70
----------- ----------- ----------- ----------- ----------- -----------
Total Interest-Earning
Assets 1,274,704 $ 19,153 6.01% 1,214,643 $ 17,639 5.81%
----------- ----------- ----------- ----------- ----------- -----------
Noninterest-Earning Assets:
Cash and Due from Banks 22,203 23,068
Allowance for Loan
Losses (7,114) (6,632)
Premises and Equipment 26,145 23,649
Other Assets 26,574 25,465
----------- -----------
Total Noninterest-Earning
Assets 67,803 65,550
----------- -----------
Total Assets $ 1,342,512 $ 1,280,193
=========== ===========
LIABILITIES:
Interest-Bearing Deposits
Checking $ 132,446 $ 238 0.72% $ 132,834 301 0.91%
Money Markets 399,177 3,417 3.42 357,379 3,705 4.15
Savings 65,470 101 0.62 75,773 132 0.70
Certificates of Deposit 395,784 4,757 4.81 374,529 4,476 4.78
----------- ----------- ----------- ----------- ----------- -----------
Total Interest-Bearing
Deposits 992,877 8,513 3.43 940,515 8,614 3.66
Borrowings 39,369 406 4.13 48,638 538 4.42
----------- ----------- ----------- ----------- ----------- -----------
Total Interest-Bearing
Liabilities 1,032,246 8,919 3.46 989,153 9,152 3.70
----------- ----------- ----------- ----------- ----------- -----------
Noninterest Bearing
Liabilities
Demand Deposits 189,384 179,338
Accrued Expenses and
Other Liabilities 12,357 6,962
----------- -----------
Total Noninterest-Bearing
Liabilities 201,736 186,300
Shareholders' Equity 108,525 104,740
----------- -----------
Total Liabilities and
Shareholders' Equity $ 1,342,512 $ 1,280,193
=========== ===========
Net Interest Income $ 10,234 8,487
=========== ===========
Net Interest Spread 2.55% 2.11%
=========== ===========
Net Interest Margin (4) 3.21% 2.79%
=========== ===========
PEAPACK-GLADSTONE FINANCIAL CO RPORATION
AVERAGE BALANCE SHEET
UNAUDITED
QUARTERS ENDED
(Tax-Equivalent Basis, Dollars in Thousands)
December 31 , 2007 September 30, 2007
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
------- ------- ----- ------- ------- -----
ASSETS:
Interest-Earning Assets:
Investments:
Taxable (1) $ 251,018 $ 3,332 5.31% $ 263,636 $ 3,431 5.21%
Tax-Exempt (1) (2) 55,263 733 5.31 55,041 717 5.21
Loans (2) (3) 961,424 15,008 6.24 917,599 14,179 6.18
Federal Funds Sold 6,102 71 4.63 11,116 149 5.36
Interest-Earning Deposits 897 9 4.03 706 9 4.99
----------- ----------- ----------- ----------- ----------- -----------
Total Interest-Earning
Assets 1,274,704 $ 19,153 6.01% 1,248,098 $ 18,485 5.92%
----------- ----------- ----------- ----------- ----------- -----------
Noninterest-Earning Assets:
Cash and Due from Banks 22,203 20,510
Allowance for Loan
Losses (7,114) (6,996)
Premises and Equipment 26,145 25,591
Other Assets 26,574 26,015
----------- -----------
Total Noninterest-Earning
Assets 67,803 65,120
----------- -----------
Total Assets $ 1,342,512 $ 1,313,218
=========== ===========
LIABILITIES:
Interest-Bearing Deposits
Checking $ 132,446 $ 238 0.72% $ 126,506 $ 254 0.80%
Money Markets 399,177 3,417 3.42 384,013 3,778 3.94
Savings 65,470 101 0.62 68,796 118 0.69
Certificates of Deposit 395,784 4,757 4.81 396,529 4,855 4.90
----------- ----------- ----------- ----------- ----------- -----------
Total Interest-Bearing
Deposits 992,877 8,513 3.43 975,844 9,005 3.69
Borrowings 39,369 406 4.13 35,578 364 4.09
----------- ----------- ----------- ----------- ----------- -----------
Total Interest-Bearing
Liabilities 1,032,246 8,919 3.46 1,011,422 9,369 3.71
----------- ----------- ----------- ----------- ----------- -----------
Noninterest Bearing
Liabilities
Demand Deposits 189,384 183,500
Accrued Expenses and
Other Liabilities 12,357 11,365
----------- -----------
Total Noninterest-Bearing
Liabilities 201,736 194,865
Shareholders' Equity 108,525 106,931
----------- -----------
Total Liabilities and
Shareholders' Equity $ 1,342,512 $ 1,313,218
=========== ===========
Net Interest Income $ 10,234 $ 9,116
=========== ===========
Net Interest Spread 2.55% 2.21%
=========== ===========
Net Interest Margin (4) 3.21% 2.92%
=========== ===========
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
YEAR-TO-DATE
(Tax-Equivalent Basis, Dollars in Thousands)
December 31, 2007 December 31, 2006
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
------- ------- ----- ------- ------- -----
ASSETS:
Interest-Earning Assets:
Investments:
Taxable (1) $ 266,977 $ 13,707 5.13% $ 345,190 $ 15,857 4.59%
Tax-Exempt (1) (2) 55,845 2,930 5.25 52,040 2,793 5.37
Loans (2) (3) 910,485 55,970 6.15 828,337 49,555 5.98
Federal Funds Sold 12,506 656 5.24 2,939 146 4.96
Interest-Earning Deposits 804 39 4.91 1,284 61 4.72
----------- ----------- ----------- ----------- ----------- -----------
Total Interest-Earning
Assets 1,246,617 $ 73,302 5.88% 1,229,790 $ 68,412 5.56%
----------- ----------- ----------- ----------- ----------- -----------
Noninterest-Earning Assets:
Cash and Due from Banks 22,135 22,475
Allowance for Loan
Losses (6,945) (6,516)
Premises and Equipment 25,321 23,038
Other Assets 26,519 22,564
----------- -----------
Total Noninterest-Earning
Assets 67,029 61,561
----------- -----------
Total Assets $ 1,313,647 $ 1,291,351
=========== ===========
LIABILITIES:
Interest-Bearing Deposits
Checking $ 133,574 $ 1,076 0.81% $ 138,045 $ 1,044 0.76%
Money Markets 383,279 14,700 3.84 317,524 11,955 3.77
Savings 69,247 466 0.67 82,016 567 0.69
Certificates of Deposit 391,922 19,004 4.85 352,114 15,505 4.40
----------- ----------- ----------- ----------- ----------- -----------
Total Interest-Bearing
Deposits 978,022 35,246 3.60 889,699 29,071 3.27
Borrowings 31,568 1,237 3.92 115,181 5,373 4.66
----------- ----------- ----------- ----------- ----------- -----------
Total Interest-Bearing
Liabilities 1,009,590 36,483 3.61 1,004,880 34,444 3.43
----------- ----------- ----------- ----------- ----------- -----------
Noninterest Bearing
Liabilities
Demand Deposits 185,909 179,597
Accrued Expenses and
Other Liabilities 11,485 5,659
----------- -----------
Total Noninterest-Bearing
Liabilities 197,393 185,256
Shareholders' Equity 106,663 101,215
----------- -----------
Total Liabilities and
Shareholders' Equity $ 1,313,647 $ 1,291,351
=========== ===========
Net Interest Income $ 36,819 33,968
=========== ===========
Net Interest Spread 2.27% 2.13%
=========== ===========
Net Interest Margin (4) 2.95% 2.76%
=========== ===========
(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.