Press Release Upon Merger

         Gladstone,   NJ,   January  7,  2000  -   Peapack-Gladstone   Financial
Corporation  (NASDAQ;PGFC) holding company of Peapack-Gladstone  Bank, announced
today that it closed its acquisition of Chatham Savings, FSB.

         Peapack-Gladstone Financial Corporation exchanged 305,730 of its shares
for all the  outstanding  shares of Chatham  Savings.  As of December  31, 1999,
Chatham Savings had  approximately  $80,000,000 in assets and  Peapack-Gladstone
Bank had approximately  $419,000,000 in assets.  Frank A. Kissel,  President and
CEO of  Peapack-Gladstone  Financial  Corporation  and  Peapack-Gladstone  Bank,
reported  that both  Chatham  Savings  offices,  one of which is located on Main
Street in Chatham  and the other on  Shunpike  Road in Chatham  Township,  would
become part of the Peapack-Gladstone  Bank branch network.  Prior to the merger,
Peapack-Gladstone  Bank had eleven  branches in Somerset,  Hunterdon  and Morris
Counties.

         The  transaction  was  accounted  for using the  pooling  of  interests
accounting treatment. "We are very excited about this combination", Kissel said.
"We believe that the Chatham markets give us a terrific opportunity to bring our
style of high service  banking to many new customers and many new  opportunities
for our Trust and Investment  Department to continue its  extraordinary  growth.
Our Trust and  Investment  Department  has  almost $1  billion  in assets  under
management  and  operates  at the  Bank's  Main  Office  at 190 Main  Street  in
Gladstone.  We also anticipate  having a full time Trust and Investment  Officer
located at the Main Street Branch in Chatham."

         "We bring strong capital,  up to date technology and a determination to
do a great job for our customers",  Kissel said. "Our work ethic will be a great
compliment to the energy in the Chatham area."

         T.   Leonard   Hill,   Chairman   of    Peapack-Gladstone    Bank   and
Peapack-Gladstone  Financial  Corporation reported that Anthony J. Consi, former
Chairman of Chatham Savings,  FSB will be joining the Board of Directors of both
Peapack-Gladstone  Financial  Corporation  and  Peapack-Gladstone  Bank. "We are
delighted  to have Mr.  Consi on the Board and welcome his help in building  our
organization" said Mr. Hill.


This press release contains  certain  forward-looking  statements  regarding the
financial  condition,  results of operations  and business of  Peapack-Gladstone
Financial  Corporation  and  Peapack-Gladstone  Bank.  These  statements are not
historical fact and include  expressions about  Peapack-Gladstone's  confidence,
new and existing programs and products,  opportunities,  and market  conditions.
You may identify these  statements by looking for forward  looking  terminology,
like   "believe"  or   "anticipate,"   or   expressions   of   confidence   like
"extraordinary"  or  "terrific"  or similar  statements  or  variations of those
terms. These forward-looking statements involve certain risks and uncertainties.
Actual  results  may differ  materially  from the  results  the  forward-looking
statements contemplate,  because of, among others, the following  possibilities:
competitive  pressure in the banking and financial  services industry  increases
significantly;  Peapack-Gladstone  does not  realize  expected  cost  savings or
revenue enhancements from the merger as anticipated; deposit attrition, customer
loss or revenue  loss is greater than  expected;  a downturn in the stock market
occurs; general economic conditions,  either nationally,  or in the state of New
Jersey, are less favorable than expected.  Neither  Peapack-Gladstone  Financial
Corporation nor  Peapack-Gladstone  Bank assumes any obligation for updating its
forward-looking statements at any time.