BEDMINSTER, NJ -- (MARKET WIRE) -- 11/01/11 --
For the nine months and quarter ended September 30, 2011, Peapack-Gladstone Financial Corporation (NASDAQ: PGC) (the Corporation) recorded net income of $9.64 million (nine months) and $5.33 million (quarter), respectively, and diluted earnings per share, after considering the effects of preferred stock dividends and accretion, of $0.98 (nine months) and $0.58 (quarter), respectively.
Income taxes for the nine months and for the quarter included a one-time state tax benefit of $2.99 million, or $0.34 per diluted share, related to the reversal of a previously recorded valuation allowance against net state tax benefits related to security impairment charges recorded in the year ended December 31, 2008. Circumstances and projections now indicate that this deferred tax asset will be realized in future periods.
For comparative purposes, the Corporation believes that comparing earnings excluding the one-time state tax benefit provides a better analysis of earnings trends. The information discussed in the next two paragraphs is a non-GAAP measure.
Therefore, as detailed in the financial table on page 15, net income and diluted earnings per share for the nine months ended September 30, 2011, excluding the one-time state tax benefit, was $6.65 million and $0.64. This compared favorably to net income of $5.79 million and diluted earnings per share of $0.50 for the same nine month period last year.
Net income and diluted earnings per share for the quarter ended September 30, 2011, excluding the one-time state tax benefit, was $2.34 million and $0.24. This compared favorably to net income and diluted earnings per share of $2.17 million and $0.22 for the immediately preceding quarter ended June 30, 2011, and $1.91 million and $0.18 for the quarter ended September 30, 2010.
Frank A. Kissel, Chairman and CEO, stated, "We are pleased to continue to show growth in earnings this quarter and on a year-to-date basis. As I have noted many times in the past, building capital internally to redeem the Treasury's Capital Purchase Program ("CPP") investment over time continues to be an important business objective of the Corporation. As we reported previously, in the March 2010 and March 2011 quarters, we were successful in redeeming a combined $14.4 million, or 50 percent of the Treasury's original CPP investment."
The Corporation's provision for loan losses for the quarter ended September 30, 2011 was $1.5 million, below the $2.0 million provision recorded in the June 2011 quarter, and also below the $2.0 million provision recorded in the September 2010 quarter.
Although loans on nonaccrual status increased in the September 2011 quarter due primarily to two commercial real estate loans, those loans were previously classified and reserved for. Further, net charge-offs recorded in the quarter were at the lowest level in any of the past five quarters. After considering the nonaccrual levels and the reduced charge-off levels, among other things, and after applying the Allowance for Loan Loss methodology/calculations, it was estimated that a $1.5 million provision for loan losses was appropriate. Mr. Kissel noted that he has been pleased with the overall progress in resolving and valuing problem assets, and believes that progress will continue.
Net Interest Income and Margin
Net interest income, on a fully tax-equivalent basis, was $12.06 million for the third quarter of 2011, down from $12.34 million for the second quarter of 2011, and down from $12.53 million for the third quarter of 2010.
On a fully tax-equivalent basis, the net interest margin was 3.37 percent for the September 2011 quarter compared to 3.49 percent for the June 2011 quarter, and 3.64 percent for the September 2010 quarter. Due to the lower Treasury yields and flatter Treasury yield curve environment, asset yields compressed more than the cost of funds.
In comparing the September 2011 quarter to the same quarter last year, the growth of lower cost core deposits and the allowed run-off of higher cost certificates of deposit contributed to the reduced cost of funds. Growth in lower yielding, but shorter duration investment securities coupled with yields on new loans being less than the yields on loans that paid down, contributed to the reduced overall asset yield.
Loans
Average loans totaled $964.4 million for the third quarter of 2011 as compared to $949.3 million for the same 2010 quarter, reflecting an increase of $15.1 million.
The average residential mortgage loan portfolio was $434.4 million for the September 2011 quarter, reflecting an increase of $6.0 million when compared to $428.4 million in the same quarter of 2010. The increase is attributable to originations retained in the portfolio that have outpaced loan paydowns. During this period of lower interest rates, refinance activity has generally been robust. Many of these loans have been retained in portfolio. However, the Corporation does sell certain of its longer-term, fixed-rate loan production as a source of noninterest income and as part of its interest rate risk management strategy in the lower rate environment.
The average commercial mortgage and commercial loan portfolio increased to $444.3 million for the third quarter of 2011, reflecting an increase of $34.9 million from $409.5 million in the third quarter of 2010. Mr. Kissel commented, "We have seen increased commercial mortgage demand, principally from high quality borrowers looking to refinance multi-family property mortgages held by other institutions."
The average commercial construction loan portfolio declined $29.8 million from the third quarter of 2010 to the third quarter of 2011, as many of the Bank's problem loans were in this category and the Bank has resolved those loans, while not originating any new commercial construction loans. In doing this, the Bank believes it has significantly decreased its exposure to construction lending.
The average home equity line portfolio rose $7.6 million to $49.8 million for the third quarter of 2011 compared to the same quarter in 2010. The Corporation focuses on the origination of these adjustable-rate loans and loan originations outpaced principal paydowns over the year.
From December 31, 2010 to September 30, 2011, the total loan portfolio grew $40.7 million to $973.2 million. Mr. Kissel stated, "We were particularly pleased to have seen quality growth opportunities in our loan portfolio over the course of 2011. Loan originations increased to $205.7 million for the first nine months of 2011 from $136.8 million for the same nine month period of 2010. Included in the total were commercial mortgage/commercial loan originations of $75.8 million for the first nine months of 2011, up from $24.5 million for the first nine months of 2010." Mr. Kissel went on to say, "We anticipate that we will benefit in the future from utilizing cash flows from our lower-yielding investment portfolio to fund our higher-yielding loan production. In doing so, however, we will continue to remain committed to our conservative underwriting standards." As of September 30, 2011, the residential first mortgage loan pipeline stood at $76 million and the commercial mortgage/commercial loan pipeline stood at $26 million, with many other lending opportunities in the discussion stage.
Deposits
Average total deposits (interest-bearing and noninterest-bearing) increased $62.9 million to $1.38 billion for the September 2011 quarter from $1.32 billion for the same quarter last year.
Average noninterest-bearing checking balances grew $35.3 million to $246.7 million for the third quarter of 2011 from $211.4 million for the third quarter of 2010. Average interest-bearing checking balances totaled $321.4 million for the quarter ended September 30, 2011, rising $61.6 million from the same quarter in 2010. Overall checking growth is attributable to the Corporation's relationship orientation, its continual focus on business and personal core deposit generation, particularly checking, and a successful focus on establishing municipal relationships within its market territory.
Average savings accounts rose slightly, from $78.1 million for the third quarter of 2010 to $87.9 million for the third quarter of 2011, reflecting an increase of $9.8 million. Average money market accounts rose slightly, from $515.7 million for the third quarter of 2010 to $519.9 million for the third quarter of 2011, reflecting an increase of $4.2 million. The Corporation's reduction in certificate of deposit balances, its focus on core deposit growth and certain customers tending to "park" funds in money market and savings accounts in lower interest rate environments accounted for this growth.
Average certificates of deposit (CDs) declined from $251.5 million for the September 2010 quarter to $203.6 million for the September 2011 quarter, reflecting a decline of $47.9 million. The Corporation allowed higher cost CDs to run-off, and replaced those funds with lower cost, more stable core deposits.
From December 31, 2010 to September 30, 2011, total deposits increased $45.5 million. The Corporation's checking and savings balances increased $82.2 million, while higher costing CD balances declined by $23.3 million and money market balances declined by $13.4 million.
Mr. Kissel commented, "Our reduced reliance on higher cost certificates of deposit coupled with our continued growth in core deposits, has significantly increased our franchise value and has reduced our cost of funds."
PGB Trust and Investments
PGB Trust and Investments generated $2.56 million in fee income in the second quarter of 2011, compared to $2.25 million in the same quarter of 2010, despite the decline in market value of assets under administration due to the uncertain and volatile markets. The market value of the assets under administration of the Trust Division stood at $1.86 billion at September 30, 2011.
Craig C. Spengeman, President of PGB Trust & Investments, commented, "We continue to see increases in both our fiduciary and asset management businesses resulting in higher recurring fee income. We also continue to add new clients, as individuals and their families seek out our professional advice. Our growth reflects sound financial management by our wealth advisors."
Other Non-Interest Income
Other non-interest income, exclusive of Trust fees, totaled $1.42 million in the September 2011 quarter compared to $969 thousand in the same quarter a year ago. The 2011 quarter reflected: increased service charges and fees, principally due to increased core deposit accounts and activity from such account holders; increased income from Bank Owned Life Insurance, due to improved crediting rates; increased securities gains; and reduced broker fee income/gain on sale of loans, as more new loan originations were retained in portfolio in 2011 rather than sold. The 2010 quarter included a $360 thousand other-than-temporary-impairment charge on securities.
Operating Expenses
The Corporation's total operating expenses were $10.6 million in the September 2011 quarter compared to $10.9 million in the September 2010 quarter. The 2011 expense levels include costs for the Corporation to keep up with the increased regulatory burden on financial institutions. The net effect of the new/additional costs were principally offset by various operational efficiencies and reduced FDIC insurance expense due to a regulatory change in the calculation of FDIC assessments. Both periods include costs associated with a new corporate headquarters occupied in June 2010 and a major system upgrade in our Trust Division in May 2010. Mr. Kissel commented, "Our investments in a new corporate headquarters and a new, significantly enhanced system in our Trust area have added convenience and efficiencies for our customers and our company."
Asset Quality
At September 30, 2011, nonperforming assets totaled $26.2 million or 1.66 percent of total assets, compared to $18.4 million or 1.21 percent of assets at June 30, 2011 and $22.8 million or 1.51 percent of assets at December 31, 2010. During the September 2011 quarter, two larger loans, previously classified and reserved for, were moved into nonaccrual status.
Total net charge-offs against the allowance for loan losses were $1.7 million for the quarter ended September 30, 2011. As noted previously, this is the lowest level in any of the past five quarters. The allowance for loan losses at September 30, 2011 was $13.8 million, or 1.42 percent of total loans.
Capital / Dividends
At September 30, 2011, the Corporation's leverage ratio, tier 1 and total risk based capital ratios were 7.86 percent, 12.73 percent and 13.98 percent, respectively. The Corporation's ratios are all above the levels necessary to be considered well capitalized under applicable regulatory guidelines. Additionally, the Corporation's common equity ratio (common equity to total assets) at September 30, 2011 was 6.78 percent.
The Company's preferred dividend and accretion for the September 2011 quarter was $219 thousand, flat to the June 2011 quarter, but down from $326 thousand in the September 2010 quarter. The reduction reflects the March 2011$7.2 million partial redemption of the preferred shares previously issued under the Treasury's Capital Purchase Program.
As previously announced, on October 20, 2011 the Board of Directors declared a regular cash dividend of $0.05 per share payable on November 18, 2011 to shareholders of record on November 3, 2011.
ABOUT THE CORPORATION
Peapack-Gladstone Financial Corporation is a bank holding company with total assets of $1.58 billion as of September 30, 2011. Peapack-Gladstone Bank, its wholly owned community bank, was established in 1921, and has 23 branches in Somerset, Hunterdon, Morris, Middlesex and Union Counties. The Bank's Trust Division, PGB Trust and Investments, operates at the Bank's new corporate offices located at 500 Hills Drive in Bedminster 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 website 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
- a continued or unexpected decline in the economy, in particular in our New Jersey market area;
- declines in value in our investment portfolio;
- higher than expected increases in our allowance for loan losses;
- higher than expected increases in loan losses or in the level of nonperforming loans;
- unexpected changes in interest rates;
- inability to successfully grow our business;
- inability to manage our growth;
- a continued or unexpected decline in real estate values within our market areas;
- legislative and regulatory actions (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulations) subject us to additional regulatory oversight which may result in increased compliance costs;
- higher than expected FDIC insurance premiums;
- lack of liquidity to fund our various cash obligations;
- repurchase of our preferred shares issued under the Treasury's Capital Purchase Program which will impact net income available to our common shareholders and our earnings per share;
- reduction in our lower-cost funding sources;
- our inability to adapt to technological changes;
- claims and litigation pertaining to fiduciary responsibility, environmental laws and other matters; and
- other unexpected material adverse changes in our operations or earnings.
A discussion of these and other factors that could affect our results is included in our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2010 and our subsequent Quarterly Reports on Form 10-Q. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Corporation's expectations.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)
As of
----------------------------------------------------------
September December September
30, June 30, March 31, 31, 30,
2011 2011 2011 2010 2010
---------- ---------- ---------- ---------- ----------
ASSETS
Cash and due
from banks $ 8,135 $ 8,678 $ 7,348 $ 6,490 $ 9,935
Federal funds
sold 100 100 100 100 100
Interest-earning
deposits 66,424 51,606 42,234 56,097 84,566
---------- ---------- ---------- ---------- ----------
Total cash and
cash
equivalents 74,659 60,384 49,682 62,687 94,601
Securities held
to maturity 121,241 140,572 151,993 140,277 102,032
Securities
available for
sale 311,927 249,837 271,687 275,076 246,334
FHLB and FRB
Stock, at cost 4,699 4,704 4,619 4,624 4,623
Loans held for
sale, at fair
value 722 1,813 1,168 - -
Residential
mortgage 438,828 432,735 432,413 419,653 425,315
Commercial
mortgage 317,066 316,197 300,659 288,183 280,486
Commercial loans 129,039 128,839 133,614 131,408 128,220
Construction
loans 14,893 15,385 17,693 25,367 39,989
Consumer loans 20,345 20,184 19,278 20,622 22,410
Home equity
lines of credit 51,458 48,805 45,512 45,775 45,345
Other loans 1,564 3,612 1,130 1,489 2,626
---------- ---------- ---------- ---------- ----------
Total loans 973,193 965,757 950,299 932,497 944,391
Less:
Allowance for
loan losses 13,843 14,056 14,386 14,282 14,025
---------- ---------- ---------- ---------- ----------
Net loans 959,350 951,701 935,913 918,215 930,366
Premises and
equipment 32,497 33,098 33,386 33,820 33,901
Other real
estate owned 3,264 3,000 3,000 4,000 1,000
Accrued interest
receivable 3,788 4,391 4,587 4,231 4,594
Bank owned life
insurance 27,767 27,537 27,301 27,074 26,877
Deferred tax
assets, net 27,543 24,689 26,039 26,083 23,903
Other assets 7,831 9,014 11,343 9,338 12,030
---------- ---------- ---------- ---------- ----------
TOTAL ASSETS $ 1,575,288 $ 1,510,740 $ 1,520,718 $ 1,505,425 $ 1,480,261
========== ========== ========== ========== ==========
LIABILITIES
Deposits:
Noninterest
bearing
demand
deposits $ 254,646 $ 238,788 $ 235,977 $ 228,764 $ 219,700
Interest-
bearing
deposits
Checking 337,900 322,801 302,589 290,322 255,665
Savings 89,527 86,828 85,741 80,799 78,819
Money market
accounts 511,059 507,159 526,355 524,449 525,264
CD's
$100,000
and over 76,100 73,186 73,966 79,311 85,703
CD's less
than
$100,000 127,778 132,949 139,022 147,901 155,268
---------- ---------- ---------- ---------- ----------
Total deposits 1,397,010 1,361,711 1,363,650 1,351,546 1,320,419
Borrowings 20,793 20,905 24,016 24,126 24,234
Capital lease
obligation 6,396 6,426 6,383 6,304 6,226
Other
liabilities 30,406 6,489 14,585 5,733 11,903
---------- ---------- ---------- ---------- ----------
TOTAL
LIABILITIES 1,454,605 1,395,531 1,408,634 1,387,709 1,362,782
Shareholders'
Equity 120,683 115,209 112,084 117,716 117,479
---------- ---------- ---------- ---------- ----------
TOTAL
LIABILITIES
AND
SHAREHOLDERS'
EQUITY $ 1,575,288 $ 1,510,740 $ 1,520,718 $ 1,505,425 $ 1,480,261
========== ========== ========== ========== ==========
Trust division
assets under
administration
(market value,
not included
above) $ 1,857,527 $ 2,005,859 $ 1,997,214 $ 1,940,404 $ 1,929,565
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED BALANCE SHEET DATA
(Dollars in thousands)
(Unaudited)
As of
----------------------------------------------------------
September December September
30, June 30, March 31, 31, 30,
2011 2011 2011 2010 2010
---------- ---------- ---------- ---------- ----------
Asset Quality:
Loans past due
over 90 days
and still
accruing $ 836 $ 412 $ 323 $ 666 $ 442
Nonaccrual loans
(B) 22,103 14,943 19,173 18,114 17,535
Other real
estate owned 3,264 3,000 3,000 4,000 1,000
---------- ---------- ---------- ---------- ----------
Total
nonperforming
assets $ 26,203 $ 18,355 $ 22,496 $ 22,780 $ 18,977
========== ========== ========== ========== ==========
Nonperforming
loans to
total loans 2.36% 1.59% 2.05% 2.01% 1.90%
Nonperforming
assets to
total assets 1.66% 1.21% 1.48% 1.51% 1.28%
Accruing TDR's
(A) $ 5,519 $ 8,171 $ 3,787 $ 5,680 $ 7,468
Loans past due
30 through 89
days and still
accruing $ 9,706 $ 8,200 $ 5,419 $ 5,475 $ 9,487
Classified Loans
(B) $ 52,031 $ 51,586 $ 51,186 $ 41,979 $ 36,521
Impaired Loans
(B) $ 27,529 $ 23,115 $ 26,056 $ 28,397 $ 36,521
Allowance for
loan losses:
Beginning of
period $ 14,056 $ 14,386 $ 14,282 $ 14,025 $ 13,856
Provision
for loan
losses 1,500 2,000 2,000 2,850 2,000
Charge-offs,
net (1,713) (2,330) (1,896) (2,593) (1,831)
---------- ---------- ---------- ---------- ----------
End of
period $ 13,843 $ 14,056 $ 14,386 $ 14,282 $ 14,025
========== ========== ========== ========== ==========
ALLL to
nonperforming
loans 60.35% 91.54% 73.79% 76.05% 78.02%
ALLL to total
loans 1.42% 1.46% 1.51% 1.53% 1.49%
Capital
Adequacy:
Tier I leverage
(5% minimum to
be considered
well
capitalized) 7.86% 7.63% 7.59% 7.96% 8.00%
Tier I capital
to risk-
weighted assets
(6% minimum to
be considered
well
capitalized) 12.73% 12.67% 12.25% 12.91% 12.62%
Tier I & II
capital to
risk-weighted
assets
(10% minimum
to be
considered
well
capitalized) 13.98% 13.92% 13.51% 14.16% 13.88%
Common equity to
Total assets 6.78% 6.71% 6.46% 6.44% 6.54%
Book value per
Common share $ 12.09 $ 11.48 $ 11.13 $ 11.03 $ 11.01
(A) Does not include $3.9 million at September 30, 2011, $1.3 million at
June 30, 2011, $1.1 million at March 31, 2011, $379 thousand at December 31,
2010 and $387 thousand at September 30, 2010 of TDR's included in nonaccrual
loans.
(B) At September 30, 2011, $27.5 million, at June 30, 2011, $23.1 million;
at March 31, 2011, $26.1 million; and at December 31, 2010, $28.4 million of
the classified loans were also considered impaired. In periods prior to
December 31, 2010, all classified loans were also considered impaired.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except share data)
(Unaudited)
For The Three Months Ended
------------------------------------------------------
September December September
30, June 30, March 31, 31, 30,
2011 2011 2011 2010 2010
---------- -------- --------- ---------- ----------
Income Statement
Data:
Interest income $ 13,594 $ 14,099 $ 14,257 $ 14,707 $ 14,974
Interest expense 1,699 1,916 2,036 2,214 2,612
---------- -------- --------- ---------- ----------
Net interest income 11,895 12,183 12,221 12,493 12,362
Provision for loan
losses 1,500 2,000 2,000 2,850 2,000
---------- -------- --------- ---------- ----------
Net interest income
after
provision for loan
losses 10,395 10,183 10,221 9,643 10,362
Trust fees 2,555 2,829 2,718 2,598 2,254
Other income 1,170 1,218 1,255 1,621 1,203
Securities
gains/(losses), net 248 277 196 (4) 126
Other-than-temporary
impairment
Charge, securities - - - (581) (360)
Total other income 3,973 4,324 4,169 3,634 3,223
---------- -------- --------- ---------- ----------
Salaries and employee
benefits 5,789 5,817 5,973 5,469 5,647
Premises and
equipment 2,322 2,386 2,322 2,248 2,416
FDIC insurance
expense 253 397 604 598 586
Other expenses 2,209 2,435 2,344 2,374 2,237
---------- -------- --------- ---------- ----------
Total operating
expenses 10,573 11,035 11,243 10,689 10,886
---------- -------- --------- ---------- ----------
Income before income
taxes 3,795 3,472 3,147 2,588 2,699
Income tax
(benefit)/expense (1,537)(A) 1,304 1,006 711 793
---------- -------- --------- ---------- ----------
Net income 5,332 (B) 2,168 2,141 1,877 1,906
Dividends and
accretion
on preferred stock 219 219 570 326 326
---------- -------- --------- ---------- ----------
Net income available
to
Common shareholders $ 5,113 (B)$ 1,949 $ 1,571 $ 1,551 $ 1,580
========== ======== ========= ========== ==========
Per Common Share
Data:
Earnings per share
(basic) $ 0.58 (C)$ 0.22 $ 0.18 $ 0.18 $ 0.18
Earnings per share
(diluted) 0.58 (C) 0.22 0.18 0.18 0.18
Performance Ratios:
Return on Average
Assets 1.39%(D) 0.57% 0.57% 0.50% 0.52%
Return on Average
Common
Equity 19.87%(E) 7.82% 6.44% 6.34% 6.55%
Net Interest Margin
(Taxable Equivalent
Basis) 3.37% 3.49% 3.54% 3.62% 3.64%
(A) Income taxes for the quarter includes a one-time state tax benefit of
$2.988 million related to the reversal of a previously recorded valuation
allowance against net state tax benefits related to security impairment
charges recorded in the year ended December 31, 2008. Circumstances and
projections now indicate that this deferred tax asset can be utilized when
it is realized in future periods.
(B) Net income and net income available to common shareholders, excluding
the one-time state tax benefit of $2.988 million would be $2.344 million and
$2.125 million, respectively for the quarter.
(C) EPS excluding the one-time state tax benefit of $2.988 million is $0.24
for the quarter. See page 15, for more information on this non-GAAP measure.
(D) ROA excluding the one-time state tax benefit of $2.988 million is 0.61%
for the quarter. See page 15, for more information on this non-GAAP measure.
(E) ROE excluding the one-time state tax benefit of $2.988 million is 8.26%
for the quarter. See page 15, for more information on this non-GAAP measure.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except share data)
(Unaudited)
For The
Nine Months Ended
September 30,
2011 2010
----------- -----------
Income Statement Data:
Interest income $ 41,950 $ 46,215
Interest expense 5,651 8,818
----------- -----------
Net interest income 36,299 37,397
Provision for loan losses 5,500 7,150
----------- -----------
Net interest income after
provision for loan losses 30,799 30,247
Trust fees 8,102 7,303
Other income 3,643 3,410
Securities gains, net 721 128
Other-than-temporary impairment
charge, equity securities - (360)
Total other income 12,466 10,481
----------- -----------
Salaries and employee benefits 17,579 17,060
Premises and equipment 7,058 7,376
FDIC insurance expense 1,254 1,724
Other expenses 6,960 6,261
----------- -----------
Total operating expenses 32,851 32,421
----------- -----------
Income before income taxes 10,414 8,307
Income tax expense 773 (A) 2,520
----------- -----------
Net income 9,641 (B) 5,787
Dividends and accretion
on preferred stock 1,008 1,360
----------- -----------
Net income available to
Common shareholders $ 8,633 (B) $ 4,427
=========== ===========
Per Common Share Data:
Earnings per share (basic) $ 0.98 (C) $ 0.50
Earnings per share (diluted) 0.98 (C) 0.50
Performance Ratios:
Return on Average Assets 0.85%(D) 0.52%
Return on Average Common
Equity 11.50%(E) 6.24%
Net Interest Margin
(Taxable Equivalent Basis) 3.46% 3.65%
(A) Income taxes for the nine months ended 9/30/11 includes a one-time state
tax benefit of $2.988 million related to the reversal of a previously
recorded valuation allowance against net state tax benefits related to
security impairment charges recorded in the year ended December 31, 2008.
Circumstances and projections now indicate that this deferred tax asset can
be utilized when it is realized in future periods.
(B) Net income and net income available to common shareholders, excluding
the one-time state tax benefit of $2.988 million would be $6.653 million and
$5.645 million, respectively for the nine months ended 9/30/11.
(C) EPS excluding the one-time state tax benefit of $2.988 million is $0.64
for the nine months ended 9/30/11. See page 15, for more information on this
non-GAAP measure.
(D) ROA excluding the one-time state tax benefit of $2.988 million is 0.59%
for the nine months ended 9/30/11. See page 15, for more information on this
non-GAAP measure.
(E) ROE excluding the one-time state tax benefit of $2.988 million is 7.52%
for the nine months ended 9/30/11. See page 15, for more information on this
non-GAAP measure.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except share data)
(Unaudited)
This press release contains certain supplemental financial information, described below, which has been determined by methods other than U.S. Generally Accepted Accounting Principles ("GAAP") that management uses in its analysis of the Corporation's performance. Management believes these non-GAAP financial measures provide information useful to investors in understanding the Corporation's financial results. Management believes that the Corporation's presentation and discussion, together with the accompanying reconciliation, provides a complete understanding of factors and trends affecting the Corporation's business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and the Corporation strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure.
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
2011 2011
---------------- ----------------
Net Income:
As reported $ 5,332 $ 9,641
Less: Valuation allowance reversal 2,988 2,988
---------------- ----------------
Net income, excluding valuation
allowance reversal 2,344 6,653
================ ================
Net income available to common
shareholders:
As reported $ 5,113 $ 8,633
Less: Valuation Allowance Reversal 2,988 2,988
---------------- ----------------
Net income, excluding valuation
allowance reversal 2,125 5,645
================ ================
Per Common Share Data:
Earnings per share (basic):
As reported $ 0.58 $ 0.98
Less: Valuation allowance reversal 0.34 0.34
---------------- ----------------
Earnings per share (basic),
excluding valuation allowance reversal $0.24 0.64
================ ================
Earnings per share (diluted):
As reported $ 0.58 $ 0.98
Less: Valuation allowance reversal 0.34 0.34
---------------- ----------------
Earnings per share (diluted),
excluding valuation allowance reversal $0.24 0.64
================ ================
Performance Ratios:
Return on Average Assets:
As reported 1.39% 0.85%
Return on Average Assets,
excluding valuation allowance reversal 0.61% 0.59%
Return on Average Common Equity:
As reported 19.87% 11.50%
Return on Average Common Equity,
excluding valuation allowance reversal 8.26% 7.52%
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
THREE MONTHS ENDED
(Tax-Equivalent Basis, Dollars in Thousands)
September 30, 2011 September 30, 2010
-------------------------- --------------------------
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
---------- -------- ----- ---------- -------- -----
ASSETS:
Interest-Earning
Assets:
Investments:
Taxable (1) $ 350,946 $ 1,762 2.01% $ 314,213 $ 2,230 2.84%
Tax-Exempt (1)
(2) 37,238 353 3.79 32,545 384 4.72
Loans Held for
Sale 610 12 8.37 N/A N/A N/A
Loans (2) (3) 964,400 11,589 4.81 949,301 12,473 5.26
Federal Funds Sold 100 - 0.25 193 - 0.22
Interest-Earning
Deposits 77,295 43 0.22 78,501 50 0.26
---------- -------- ----- ---------- -------- -----
Total Interest-
Earning Assets 1,430,589 $ 13,759 3.85% 1,374,753 15,137 4.40%
---------- -------- ----- ---------- -------- -----
Noninterest-Earning
Assets:
Cash and Due from
Banks 8,458 8,314
Allowance for Loan
Losses (14,592) (14,180)
Premises and
Equipment 32,876 34,589
Other Assets 72,428 70,056
---------- ----------
Total Noninterest-
Earning Assets 99,170 98,779
---------- ----------
Total Assets $1,529,759 $1,473,532
========== ==========
LIABILITIES:
Interest-Bearing
Deposits
Checking $ 321,368 $ 269 0.33% $ 259,816 409 0.63%
Money Markets 519,918 438 0.34 515,734 839 0.65
Savings 87,863 51 0.23 78,058 78 0.40
Certificates of
Deposit 203,612 684 1.34 251,511 986 1.57
---------- -------- ----- ---------- -------- -----
Total Interest-
Bearing
Deposits 1,132,761 1,442 0.51 1,105,119 2,312 0.84
Borrowings 20,831 177 3.40 25,532 223 3.49
Capital Lease
Obligation 6,406 80 4.99 6,177 77 4.98
---------- -------- ----- ---------- -------- -----
Total Interest-
Bearing
Liabilities 1,159,998 1,699 0.59 1,136,828 2,612 0.92
---------- -------- ----- ---------- -------- -----
Noninterest Bearing
Liabilities
Demand Deposits 246,665 211,390
Accrued Expenses
and Other
Liabilities 6,287 8,216
---------- ----------
Total Noninterest-
Bearing
Liabilities 252,952 219,606
Shareholders' Equity 116,809 117,098
---------- ----------
Total Liabilities
and Shareholders'
Equity $1,529,759 $1,473,532
========== ==========
Net Interest
Income $ 12,060 12,525
======== ========
Net Interest
Spread 3.26% 3.48%
===== =====
Net Interest
Margin (4) 3.37% 3.64%
===== =====
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
THREE MONTHS ENDED
(Tax-Equivalent Basis, Dollars in Thousands)
September 30, 2011 June 30, 2011
-------------------------- --------------------------
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
---------- -------- ----- ---------- -------- -----
ASSETS:
Interest-Earning
Assets:
Investments:
Taxable (1) $ 350,946 $ 1,762 2.01% $ 375,216 $ 2,209 2.35%
Tax-Exempt (1)
(2) 37,238 353 3.79 36,855 347 3.77
Loans Held for
Sale 610 12 8.37 510 5 3.78
Loans (2) (3) 964,400 11,589 4.81 968,179 11,674 4.82
Federal Funds Sold 100 - 0.25 100 - 0.25
Interest-Earning
Deposits 77,295 43 0.22 32,598 20 0.24
---------- -------- ----- ---------- -------- -----
Total Interest-
Earning Assets 1,430,589 $ 13,759 3.85% 1,413,458 $ 14,255 4.03%
---------- -------- ----- ---------- -------- -----
Noninterest-Earning
Assets:
Cash and Due from
Banks 8,458 8,231
Allowance for Loan
Losses (14,592) (15,086)
Premises and
Equipment 32,876 33,393
Other Assets 72,428 71,868
---------- ----------
Total Noninterest-
Earning Assets 99,170 98,406
---------- ----------
Total Assets $1,529,759 $1,511,864
========== ==========
LIABILITIES:
Interest-Bearing
Deposits
Checking $ 321,368 $ 269 0.33% $ 309,310 $ 292 0.38%
Money Markets 519,918 438 0.34 516,739 577 0.45
Savings 87,863 51 0.23 86,150 56 0.26
Certificates of
Deposit 203,612 684 1.34 208,697 713 1.37
---------- -------- ----- ---------- -------- -----
Total Interest-
Bearing
Deposits 1,132,761 1,442 0.51 1,120,896 1,638 0.58
Borrowings 20,831 177 3.40 26,242 198 3.02
Capital Lease
Obligation 6,406 80 4.99 6,410 80 4.98
---------- -------- ----- ---------- -------- -----
Total Interest-
Bearing
Liabilities 1,159,998 1,699 0.59 1,153,548 1,916 0.66
---------- -------- ----- ---------- -------- -----
Noninterest Bearing
Liabilities
Demand Deposits 246,665 237,651
Accrued Expenses
and Other
Liabilities 6,287 7,104
---------- ----------
Total Noninterest-
Bearing
Liabilities 252,952 244,755
Shareholders' Equity 116,809 113,561
---------- ----------
Total Liabilities
and Shareholders'
Equity $1,529,759 $1,511,864
========== ==========
Net Interest
Income $ 12,060 $ 12,339
======== ========
Net Interest
Spread 3.26% 3.37%
===== =====
Net Interest
Margin (4) 3.37% 3.49%
===== =====
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
NINE MONTHS ENDED
(Tax-Equivalent Basis, Dollars in Thousands)
September 30, 2011 September 30, 2010
------------------------- -------------------------
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
---------- ------- ----- ---------- ------- -----
ASSETS:
Interest-Earning
Assets:
Investments:
Taxable (1) $ 369,960 $ 6,240 2.25% $ 320,452 $ 7,145 2.97%
Tax-Exempt (1) (2) 36,566 1,053 3.84 35,133 1,253 4.76
Loans Held for Sale 617 33 7.22 N/A N/A N/A
Loans (2) (3) 956,651 35,011 4.88 963,840 38,242 5.29
Federal Funds Sold 100 - 0.26 198 - 0.21
Interest-Earning
Deposits 50,736 91 0.24 64,237 102 0.21
---------- ------- ----- ---------- ------- -----
Total Interest-
Earning Assets 1,414,630 $42,428 4.00% 1,383,860 $46,742 4.50%
---------- ------- ----- ---------- ------- -----
Noninterest-Earning
Assets:
Cash and Due from
Banks 8,191 8,375
Allowance for Loan
Losses (14,869) (14,011)
Premises and
Equipment 33,300 31,110
Other Assets 71,970 69,234
---------- ----------
Total Noninterest-
Earning Assets 98,592 94,708
---------- ----------
Total Assets $1,513,222 $1,478,568
========== ==========
LIABILITIES:
Interest-Bearing
Deposits
Checking $ 309,646 $ 865 0.37% $ 250,785 $ 1,234 0.66%
Money Markets 519,700 1,638 0.42 507,075 2,977 0.78
Savings 85,415 159 0.25 76,456 235 0.41
Certificates of
Deposit 210,498 2,172 1.38 276,937 3,406 1.64
---------- ------- ----- ---------- ------- -----
Total Interest-
Bearing Deposits 1,125,259 4,834 0.57 1,111,253 7,852 0.94
Borrowings 23,890 578 3.23 31,369 838 3.56
Capital Lease
Obligation 6,384 239 4.99 2,754 128 6.18
---------- ------- ----- ---------- ------- -----
Total Interest-
Bearing Liabilities 1,155,533 5,651 0.65 1,145,376 8,818 1.03
---------- ------- ----- ---------- ------- -----
Noninterest Bearing
Liabilities
Demand Deposits 235,666 211,223
Accrued Expenses and
Other Liabilities 6,552 6,665
---------- ----------
Total Noninterest-
Bearing Liabilities 242,218 217,888
Shareholders' Equity 115,471 115,304
---------- ----------
Total Liabilities
and Shareholders'
Equity $1,513,222 $1,478,568
========== ==========
Net Interest Income $36,777 $37,924
======= =======
Net Interest
Spread 3.35% 3.47%
===== =====
Net Interest
Margin (4) 3.46% 3.65%
===== =====
(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 nonaccrual loans.
(4) Net interest income on a tax-equivalent basis as a percentage of total
average interest-earning assets.
Contact:
Jeffrey J. Carfora
EVP and CFO
Peapack-Gladstone Financial Corporation
T: 908-719-4308
Source: Peapack-Gladstone Financial Corporation