News Details

Peapack-Gladstone Financial Corporation Reports Second Quarter Results of Operations

August 3, 2009

GLADSTONE, N.J.--(BUSINESS WIRE)-- Peapack-Gladstone Financial Corporation (NASDAQ Global Select Market:PGC) (the Corporation) recorded net income for the second quarter of 2009 of $1.9 million, a decline of $1.6 million from the second quarter of 2008. For the second quarter of 2009, diluted earnings per share after effect of the preferred stock dividend were $0.17 as compared to diluted earnings per common share of $0.41 for the same quarter of 2008. The decrease in 2009 earnings per share was primarily due to an increase in the provision for loan losses, an increase in the industry-wide FDIC assessment and the dividends on preferred stock.

The Corporation recorded a provision for loan losses of $2.0 million in the second quarter of 2009 compared to $590 thousand for the same period in 2008. Due to a substantial increase in the FDIC assessment rates, as well as a one-time special assessment of all institutions in the second quarter, which totaled $657 thousand for the Corporation, total FDIC Assessment expense of $1.4 million was recorded for the second quarter of 2009 as compared to $130 thousand for the same period in 2008, respectively. Dividends and accretion on preferred stock totaled $428 thousand for the quarter ended June 30, 2009. There was no such charge last year as the preferred stock was issued in January 2009 as a result of the Corporation's participation in the U.S. Treasury's Capital Purchase Program.

Frank A. Kissel, Chairman and CEO, stated, "Given the extent of the current recession and its impact on financial institutions, we are pleased to report positive earnings for the second quarter. While our loan portfolios continue to perform as expected, given the weak housing market and economic environment, it makes sense to increase reserves and, accordingly, a provision for loan losses of $2.0 million was recorded this quarter."

Mr. Kissel continued, "Also this quarter, a 5% stock dividend was declared and the Dividend Reinvestment Plan was enhanced to give shareholders a 3% discount on shares purchased with the cash dividend or with optional cash payments up to $50,000 per quarter. The shares purchased will be issued from the Corporation's authorized but unissued shares or from Treasury, which will build capital for the Corporation. The enhanced plan has been well received by shareholders."

EARNINGS

Net Interest Income

In the second quarter of 2009, net interest income, on a fully tax-equivalent basis, was $12.4 million, an increase of $690 thousand or 5.9 percent from the same quarter last year. On a fully tax-equivalent basis, the net interest margin was 3.71 percent and 3.63 percent for the second quarters of 2009 and 2008, respectively.

For the second quarter of 2009, the yield on earning assets was 5.07 percent as compared to 5.55 percent for the same quarter of 2008, a decline of 48 basis points. The cost of interest-bearing liabilities for the 2009 quarter was 1.62 percent compared to 2.38 percent for the 2008 quarter, reflecting a decrease of 76 basis points. In the declining rate environment over the year, the cost of the Corporation's interest-bearing liabilities repriced downward faster than the yield on interest-earning assets, resulting in improved net interest margin and net interest income.

Loans

Loans averaged $1.03 billion for the second quarter of 2009 as compared to $992.0 million for the same 2008 quarter, reflecting an increase of $40.6 million or 4.1 percent. The average commercial mortgage portfolio grew $23.5 million or 9.3 percent to $275.4 million and the average commercial construction loan portfolio was $70.3 million, an increase of $18.7 million or 36.3 percent. The average home equity loan portfolio rose $13.1 million or 62.0 percent to $34.3 million. The Corporation focused on the origination of these higher-yielding, shorter-maturity loans and loan originations outpaced principal pay downs over the year. Since December 31, 2008, however, the loan portfolio has declined slightly, principally the residential mortgage loan portfolio, as the Corporation opted to sell its longer-term, fixed-rate production as an interest rate risk management strategy in the lower rate environment.

Deposits

Average deposits grew 7.5 percent from $1.19 billion in the second quarter of 2008 to $1.28 billion in the second quarter of 2009. Average interest-bearing checking balances totaled $193.2 million in the second quarter of 2009, rising $56.6 million or 41.4 percent from the same quarter in 2008 due to the Corporation's focus on core deposit growth coupled with the introduction of the Ultimate Checking product, which provides customers with a low-cost checking product and a higher yield for greater balances. Average money market accounts also rose from the second quarter of 2008 to $414.1 million for the same quarter of 2009, an increase of $19.8 million or 5.0 percent as certain customers tend to "park" funds in money market accounts in the lower interest rate environment. Since December 31, 2008, lower costing interest-bearing checking accounts and money market accounts have continued to increase, but higher costing certificates of deposit have declined. The Corporation has opted not to pay higher rates on maturing certificates of deposit, as the Corporation has ample liquidity from other core deposits and principal pay downs on loans.

PGB Trust and Investments

PGB Trust and Investments generated $2.6 million in fee income in the second quarter of 2009, a decrease of $115 thousand or 4.3 percent over the same quarter of 2008. The decrease reflects the lower market values on assets under management, due to the current recession, on which the investment management fees are based.

Other Income

For the second quarter of 2009, other income totaled $1.2 million as compared to $996 thousand for the same quarter of 2008, rising $226 thousand, or 22.7 percent. Income earned on the sale of mortgage loans at origination totaled $240 thousand in the second quarter of 2009. More customers are interested in longer-term, fixed-rate mortgages in the current low rate environment. These mortgages are sold rather than retained in portfolio for interest rate risk management purposes.

Income from Bank-Owned Life Insurance, due to the increase in cash surrender value, declined $90 thousand or 29.6 percent to $214 thousand for the second quarter of 2009 as compared to 2008 due primarily to the lower interest rate environment.

Other Expenses

The Corporation's other expense of $11.2 million in the second quarter of 2009 compared to $9.1 million for the same quarter of 2008, an increase of $2.1 million or 22.6 percent. The majority of this increase was due to an increase in the industry-wide FDIC assessment. Due to a substantial increase in the FDIC assessment rates, as well as a one-time special assessment of all institutions in the second quarter, which totaled $657 thousand for the Corporation, total FDIC assessment expense of $1.4 million was recorded for the second quarter of 2009 as compared to $130 thousand for the same period in 2008. The FDIC has indicated that an additional special assessment in 2009 is possible. Salary and benefit expense in the second quarters of 2009 and 2008 was $5.4 million and $4.8 million, respectively, increasing by $597 thousand or 12.4 percent. In addition to salary increases, the Corporation added staff for two new branches opened in 2008 and a new trust office opened in Bethlehem, Pennsylvania in 2009. In addition, during the second quarter of 2009, the Corporation recorded $265 thousand in additional write-down on an OREO property whose value has declined.

ASSET QUALITY

At June 30, 2009, non-performing assets totaled $13.8 million or 0.95 percent of total assets as compared to $6.6 million or 0.48 percent of total assets at December 31, 2008 and $5.2 million or 0.38 percent of total assets at June 30, 2008. Non-performing loans have increased during the first half of 2009 primarily due to two construction loans to one borrower totaling $6.0 million and one large residential loan totaling $2.5 million. Both borrowers were affected by the current economic downturn. Although both borrowers continue to make interest payments on these loans, they are on non-accrual status and $494 thousand in charge-offs have been recorded in 2009 related to these loans. Mr. Kissel commented, "We are proactively managing our loan portfolios in this economic environment in an effort to identify and stay ahead of potential problems. We are well capitalized and we are ready to lend to well-qualified individuals and businesses. However, we remain committed to our conservative underwriting standards that have served us well and will continue to serve us well in the future."

The allowance for loan losses was $11.1 million or 1.08 percent of total loans at June 30, 2009 as compared to $9.8 million or 0.94 percent of total loans at December 31, 2008 and $8.3 million or 0.82 percent of total loans at June 30, 2008.

The provision for loan losses for the second quarter of 2009 was $2.0 million as compared to $590 thousand for the same quarter of 2008. Management has determined that a higher provision is warranted because of the increase in non-performing loans and the continued weakness in the housing markets and the overall economy.

CAPITAL

At June 30, 2009, the Corporation's leverage ratio, tier 1 and total risk based capital ratios were 8.25 percent, 12.30 percent and 13.44 percent, respectively. These capital ratios are well above the minimum levels to be considered well capitalized under applicable regulatory guidelines.

In the second quarter, the Board of Directors declared a 5% stock dividend and reduced the regular cash dividend to $0.05 per share, payable after effect of the stock dividend. The reduction in the cash dividend will increase the Corporation's capital by $3.6 million per year, and together with ongoing profitability will better enable the Corporation to redeem, at the appropriate time, the preferred shares issued to the U.S. Treasury in January 2009. Mr. Kissel stated, "The decision to reduce the cash dividend was difficult but after considerable deliberation, the Board determined that repaying the Treasury investment and building capital were sound business objectives."

ABOUT THE CORPORATION

Peapack-Gladstone Financial Corporation is a bank holding company with total assets of $1.46 billion as of June 30, 2009. Peapack-Gladstone Bank, its wholly owned community bank, was established in 1921, and has 23 branches in Somerset, Hunterdon, Morris, Middlesex 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 four other locations in Clinton, Morristown and Summit, New Jersey and Bethlehem, Pennsylvania. 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 confidence and strategies and management's expectations about new and existing programs and products, investments, 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, those risk factors set forth in the "Risk Factor" section of our Annual Report on Form 10-K for the year ended December 31, 2008. Peapack-Gladstone assumes no obligation for updating any such forward-looking statements at any time.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in thousands)

(Unaudited)

                    As of

                      June 30,     March 31,    December     September    June 30,
                                                31,          30,

                      2009         2009         2008         2008         2008

ASSETS

Cash and due        $ 50,921     $ 20,525     $ 25,686     $ 28,108     $ 25,433
from banks

Federal funds         200          201          200          125          637
sold

Interest-earning      513          59,063       1,003        3,265        1,709
deposits

Total cash and        51,634       79,789       26,889       31,498       27,779
cash equivalents

Securities held       77,216       48,379       51,731       86,327       40,277
to maturity

Securities
available for         227,414      178,676      173,543      146,125      213,057
sale

FHLB and FRB          5,343        4,202        4,902        6,705        5,363
Stock, at cost

Residential           483,330      494,208      505,150      507,440      499,131
mortgage

Commercial            275,915      275,675      274,640      267,002      252,911
mortgage

Commercial loans      133,659      137,304      143,188      145,545      147,033

Construction          67,075       69,474       66,785       57,122       52,747
loans

Consumer loans        27,302       27,959       29,789       31,092       31,528

Home equity           35,357       32,648       31,054       27,165       23,378
loans

Other loans           1,079        1,958        2,376        1,013        1,117

Total loans           1,023,717    1,039,226    1,052,982    1,036,379    1,007,845

Less: Allowance       11,054       9,762        9,688        9,088        8,295
for loan losses

Net loans             1,012,663    1,029,464    1,043,294    1,027,291    999,550

Premises and          27,189       26,740       26,936       26,439       26,321
equipment

Other real            700          965          1,211        1,211        1,564
estate owned

Accrued interest      4,652        4,635        4,117        4,884        4,857
receivable

Cash surrender
value

of life               25,865       25,672       25,480       25,249       24,993
insurance

Deferred tax          23,653       22,927       23,143       10,975       12,022
assets, net

Other assets          2,550        2,858        4,179        2,194        1,876

TOTAL ASSETS        $ 1,458,879  $ 1,424,307  $ 1,385,425  $ 1,368,898  $ 1,357,659

LIABILITIES

Deposits:

Noninterest
bearing

demand deposits     $ 194,888    $ 195,175    $ 210,030    $ 200,976    $ 190,713

Interest-bearing
deposits

Checking              203,378      178,430      167,727      148,868      140,290

Savings               71,464       70,426       67,453       67,611       67,247

Money market          418,208      400,692      364,628      379,719      392,289
accounts

CD's $100,000         187,516      192,708      195,826      156,272      176,862
and over

CD's less than        220,779      225,608      232,224      207,539      211,283
$100,000

Total deposits        1,296,233    1,263,039    1,237,888    1,160,985    1,178,684

Borrowings            37,128       39,439       54,998       95,054       65,357

Other                 9,844        7,654        8,645        7,007        11,209
liabilities

TOTAL                 1,343,205    1,310,132    1,301,531    1,263,046    1,255,250
LIABILITIES

Shareholders'         115,674      114,175      83,894       105,852      102,409
Equity

TOTAL
LIABILITIES AND

SHAREHOLDERS'       $ 1,458,879  $ 1,424,307  $ 1,385,425  $ 1,368,898  $ 1,357,659
EQUITY

Trust division
assets under

management
(market value,

not included        $ 1,702,782  $ 1,602,752  $ 1,804,629  $ 1,861,763  $ 1,913,014
above)



PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED BALANCE SHEET DATA

(Dollars in thousands)

(Unaudited)

                  As of

                    June 30,    March 31,    December    September    June 30,
                                             31,         30,

                    2009        2009         2008        2008         2008

Asset Quality:

Loans past due
over 90 days

and still         $ 104       $ -          $ -         $ -          $ -
accruing

Non-accrual         12,998      11,139       5,393       3,804        3,611
loans

Other real          700         965          1,211       1,211        1,564
estate owned

Total
non-performing    $ 13,802    $ 12,104     $ 6,604     $ 5,015      $ 5,175
assets

Non-performing
loans to

total loans         1.28   %    1.07   %     0.51   %    0.37   %     0.36   %

Non-performing
assets to

total assets        0.95   %    0.85   %     0.48   %    0.37   %     0.38   %

Allowance for
loan losses:

Beginning of      $ 9,762     $ 9,688      $ 9,088     $ 8,295      $ 7,777
period

Provision for       2,000       2,000        600         780          590
loan losses

Charge-offs,        (708   )    (1,926 )     -           13           (72    )
net

End of period     $ 11,054    $ 9,762      $ 9,688     $ 9,088      $ 8,295

ALLL to
non-performing      84.37  %    87.64  %     179.64 %    238.91 %     229.71 %
loans

ALLL to total       1.08   %    0.94   %     0.92   %    0.88   %     0.82   %
loans

Capital
Adequacy:

Tier I
leverage

(5% minimum to
be

considered
well

capitalized)        8.25   %    8.21   %     6.15   %    8.76   %     8.59   %

Tier I capital
to risk-

weighted
assets

(6% minimum to
be

considered
well

capitalized)        12.30  %    11.73  %     9.11   %    12.41  %     12.18  %

Tier I & II
capital to

risk-weighted
assets

(10% minimum
to be

considered
well

capitalized)        13.44  %    12.73  %     10.05  %    13.36  %     13.05  %

Tangible
common equity
to

Tangible            6.03   %    6.07   %     6.02   %    7.69   %     7.50   %
assets

Book value per

Common share      $ 10.15     $ 9.99       $ 9.64      $ 12.16      $ 11.75

Tangible book
value per

Common share      $ 10.09     $ 9.92       $ 9.57      $ 12.10      $ 11.69



PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in thousands, except share data)

(Unaudited)

                For The Three Months Ended

                  June 30,    March 31,    December 31,    September    June 30,
                                                           30,

                  2009        2009         2008            2008         2008

Income
Statement
Data:

Interest        $ 16,709    $ 16,795     $ 18,048        $ 17,912     $ 17,612
income

Interest          4,543       4,987        5,812           5,759        6,195
expense

Net interest      12,166      11,808       12,236          12,153       11,417
income

Provision
for loan          2,000       2,000        600             780          590
losses

Net interest
income after

provision
for loan          10,166      9,808        11,636          11,373       10,827
losses

Trust fees        2,550       2,332        2,899           2,489        2,665

Other income      1,114       983          1,019           964          927

Securities        108         5            -               104          69
gains, net

Impairment        -           -            (56,146 )       -            -
charges

Other             11,195      9,524        9,956           9,591        9,129
expenses

Income
before            2,743       3,604        (50,548 )       5,339        5,359
income taxes

Income tax        813         1,122        (17,929 )       1,822        1,780
expense

Net income        1,930       2,482        (32,619 )       3,517        3,579

Dividends
and
accretion

on preferred      428         205          -               -            -
stock

Net income
available to

Common          $ 1,502     $ 2,277      $ (32,619 )     $ 3,517      $ 3,579
shareholders

Per Common
Share Data:

Earnings per
share           $ 0.17      $ 0.26       $ (3.75   )     $ 0.40       $ 0.41
(basic)

Earnings per
share             0.17        0.26         (3.70   )       0.40         0.41
(diluted)

Performance
Ratios:

Return on
Average           0.54   %    0.71   %     (9.45   )%      1.04   %     1.05   %
Assets

Return on
Average
Common

Equity            6.75   %    10.45  %     (121.92 )%      13.46  %     13.52  %

Net Interest
Margin

(Taxable
Equivalent        3.71   %    3.70   %     3.84    %       3.92   %     3.63   %
Basis)



Note: Per share amounts have been restated for a 5% stock dividend declared on June 18, 2009, and payable on August 3, 2009 to shareholders of record on July 9, 2009.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in thousands, except share data)

(Unaudited)

                                    For The

                                    Six Months Ended

                                    June 30,

                                    2009        2008

Income Statement Data:

Interest income                   $ 33,504    $ 35,957

Interest expense                    9,530       14,026

Net interest income                 23,974      21,931

Provision for loan losses           4,000       1,020

Net interest income after

provision for loan losses           19,974      20,911

Trust fees                          4,882       5,150

Other income                        2,097       1,861

Securities gains, net               113         379

Other expenses                      20,719      17,738

Income before income taxes          6,347       10,563

Income tax expense                  1,935       3,521

Net income                          4,412       7,042

Dividends and accretion

on preferred stock                  633         -

Net income available to

Common shareholders               $ 3,779     $ 7,042

Per Common Share Data:

Earnings per share (basic)        $ 0.43      $ 0.81

Earnings per share (diluted)        0.43        0.80

Performance Ratios:

Return on Average Assets            0.62   %    1.04   %

Return on Average Common

Equity                              8.58   %    13.16  %

Net Interest Margin

(Taxable Equivalent Basis)          3.70   %    3.48   %



Note: Per share amounts have been restated for a 5% stock dividend declared on June 18, 2009, and payable on August 3, 2009 to shareholders of record on July 9, 2009.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

THREE MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)

                       June 30, 2009                  June 30, 2008

                         Average      Income/           Average      Income/

                         Balance      Expense  Yield    Balance      Expense  Yield

ASSETS:

Interest-Earning
Assets:

Investments:

Taxable (1)            $ 229,392    $ 2,287    3.99%  $ 226,594    $ 2,703    4.77%

Tax-Exempt (1) (2)       49,031       618      5.05     58,617       828      5.65

Loans (2) (3)            1,032,665    14,046   5.44     992,032      14,309   5.77

Federal Funds Sold       200          -        0.20     849          5        2.15

Interest-Earning         27,574       9        0.13     14,406       76       2.10
Deposits

Total
Interest-Earning

Assets                   1,338,862  $ 16,960   5.07%    1,292,498  $ 17,921   5.55%

Noninterest-Earning
Assets:

Cash and Due from        31,381                         20,731
Banks

Allowance for Loan

Losses                   (9,853)                        (7,771)

Premises and             26,890                         26,484
Equipment

Other Assets             55,486                         25.984

Total
Noninterest-Earning

Assets                   103,904                        65,428

Total Assets           $ 1,442,766                    $ 1,357,926

LIABILITIES:

Interest-Bearing
Deposits

Checking               $ 193,245    $ 349      0.72%  $ 136,649      214      0.63%

Money Markets            414,082      1,127    1.09     394,267      1,848    1.87

Savings                  70,802       81       0.46     65,993       100      0.61

Certificates of          406,518      2,638    2.60     396,969      3,642    3.67
Deposit

Total
Interest-Bearing

Deposits                 1,084,647    4,195    1.55     993,878      5,804    2.34

Borrowings               38,925       348      3.58     45,975       391      3.40

Total
Interest-Bearing

Liabilities              1,123,572    4,543    1.62     1,039,853    6,195    2.38

Noninterest Bearing

Liabilities

Demand Deposits          197,565                        198,924

Accrued Expenses
and

Other Liabilities        5,438                          13,227

Total
Noninterest-Bearing

Liabilities              203,003                        212,151

Shareholders'            116,191                        105,922
Equity

Total Liabilities
and

Shareholders'          $ 1,442,766                    $ 1,357,926
Equity

Net Interest Income                 $ 12,417                         11,726

Net Interest Spread                            3.45%                          3.17%

Net Interest Margin                            3.71%                          3.63%
(4)



PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

THREE MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)

                       June 30, 2009                  March 31, 2009

                         Average      Income/           Average      Income/

                         Balance      Expense  Yield    Balance      Expense  Yield

ASSETS:

Interest-Earning
Assets:

Investments:

Taxable (1)            $ 229,392    $ 2,287    3.99%  $ 179,304    $ 2,139    4.77%

Tax-Exempt (1) (2)       49,031       618      5.05     49,976       653      5.24

Loans (2) (3)            1,032,665    14,046   5.44     1,047,911    14,258   5.44

Federal Funds Sold       200          -        0.20     200          -        0.20

Interest-Earning         27,574       9        0.13     28,054       9        0.13
Deposits

Total
Interest-Earning

Assets                   1,338,862  $ 16,960   5.07%    1,305,445  $ 17,059   5.23%

Noninterest-Earning
Assets:

Cash and Due from        31,381                         19,697
Banks

Allowance for Loan

Losses                   (9,853)                        (9,612)

Premises and             26,890                         26,854
Equipment

Other Assets             55,486                         54,654

Total
Noninterest-Earning

Assets                   103,904                        91,593

Total Assets           $ 1,442,766                    $ 1,397,038

LIABILITIES:

Interest-Bearing
Deposits

Checking               $ 193,245    $ 349      0.72%  $ 168,041    $ 297      0.71%

Money Markets            414,082      1,127    1.09     381,532      1,171    1.23

Savings                  70,802       81       0.46     68,087       78       0.46

Certificates of          406,518      2,638    2.60     427,011      3,090    2.89
Deposit

Total
Interest-Bearing

Deposits                 1,084,647    4,195    1.55     1,044,671    4,636    1.78

Borrowings               38,925       348      3.58     41,646       351      3.37

Total
Interest-Bearing

Liabilities              1,123,572    4,543    1.62     1,086,317    4,987    1.84

Noninterest Bearing

Liabilities

Demand Deposits          197,565                        192,166

Accrued Expenses
and

Other Liabilities        5,438                          6,729

Total
Noninterest-Bearing

Liabilities              203,003                        198,895

Shareholders'            116,191                        111,826
Equity

Total Liabilities
and

Shareholders'          $ 1,442,766                    $ 1,397,038
Equity

Net Interest Income                 $ 12,417                       $ 12,072

Net Interest Spread                            3.45%                          3.39%

Net Interest Margin                            3.71%                          3.70%
(4)



PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

SIX MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)

                       June 30, 2009                  June 30, 2008

                         Average      Income/           Average      Income/

                         Balance      Expense  Yield    Balance      Expense  Yield

ASSETS:

Interest-Earning
Assets:

Investments:

Taxable (1)            $ 204,487    $ 4,426    4.33%  $ 229,155    $ 5,686    4.96%

Tax-Exempt (1) (2)       49,501       1,272    5.14     57,719       1,603    5.56

Loans (2) (3)            1,040,246    28,304   5.44     987,328      29,014   5.88

Federal Funds Sold       200          -        0.20     7,001        112      3.19

Interest-Earning         27,813       18       0.13     11,113       124      2.22
Deposits

Total
Interest-Earning

Assets                   1,322,247  $ 34,020   5.15%    1,292,316  $ 36,539   5.65%

Noninterest-Earning
Assets:

Cash and Due from        25,571                         20,770
Banks

Allowance for Loan

Losses                   (9,733)                        (7,617)

Premises and             26,872                         26,478
Equipment

Other Assets             54,945                         27,210

Total
Noninterest-Earning

Assets                   97,655                         66,841

Total Assets           $ 1,419,902                    $ 1,359,157

LIABILITIES:

Interest-Bearing
Deposits

Checking               $ 180,712    $ 646      0.71%  $ 136,544    $ 424      0.62%

Money Markets            397,898      2,298    1.16     400,168      4,497    2.25

Savings                  69,452       159      0.46     65,373       199      0.61

Certificates of          416,708      5,728    2.75     400,441      8,145    4.07
Deposit

Total
Interest-Bearing

Deposits                 1,064,770    8,831    1.66     1,002,526    13,265   2.65

Borrowings               40,278       699      3.47     43,495       761      3.50

Total
Interest-Bearing

Liabilities              1,105,048    9,530    1.72     1,046,021    14,026   2.68

Noninterest Bearing

Liabilities

Demand Deposits          194,880                        192,371

Accrued Expenses
and

Other Liabilities        5,954                          13,747

Total
Noninterest-Bearing

Liabilities              200,834                        206,118

Shareholders'            114,020                        107,018
Equity

Total Liabilities
and

Shareholders'          $ 1,419,902                    $ 1,359,157
Equity

Net Interest Income                 $ 24,490                       $ 22,513

Net Interest Spread                            3.43%                          2.97%

Net Interest Margin                            3.70%                          3.48%
(4)



(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.



    Source: Peapack-Gladstone Financial Corporation
Contact: Peapack-Gladstone Financial Corporation Jeffrey J. Carfora, 908-719-4308