BEDMINSTER, NJ -- (Marketwire) -- 01/31/13 --
For the year and fourth quarter ended December 31, 2012, Peapack-Gladstone Financial Corporation (NASDAQ: PGC) (the Corporation) recorded net income of $9.70 million (year) and $1.06 million (quarter), respectively, and diluted earnings per share of $1.05 (year) and $0.12 (quarter), respectively.
Doug Kennedy, CEO, said, "We took several strategic steps during the quarter that have positioned us well for the future. These strategic initiatives have strengthened our core operating base as we embark on a plan to grow our core lending, retail, and wealth advisory businesses, while maintaining and enhancing our high levels of customer service."
The 2012 fourth quarter included the following strategic initiatives:
a) Approximately $19 million of classified loans were transferred to loans held for sale and are being marketed for sale. The transfer of these loans to held for sale resulted in an additional provision for loan losses of $4.0 million and charge-offs of $5.4 million.
b) The Company's Pooled Trust Preferred Securities portfolio was sold, resulting in a $2.87 million gain. This transaction also resulted in a significant reduction in risk-weighted assets for regulatory capital purposes and the realization of the majority of the Company's deferred tax assets, with the monetization of much of that to occur in 2013. As part of this, $260 thousand of additional tax expense needed to be recorded, which was related to the realization of the deferred tax assets to be carried-back to the prior two years at a slightly lower tax rate compared to the tax rate as recorded.
c) All of the Company's remaining Held to Maturity securities were transferred to Available for Sale, affording greater flexibility in the management of liquidity and interest rate risk.
d) The organization and set-up of PGB Trust & Investments of Delaware was completed just prior to year end, resulting in legal fees of $74 thousand.
e) Staffing and organizational restructuring coupled with various resignations, retirements, and position eliminations, Resulted in the recording of a $965 thousand severance accrual.
f) The position of Chairman and CEO was split when Mr. Kennedy joined the Company as CEO in early October 2012. Frank Kissel remained as Chairman of the Board. Professional, legal, and other costs totaling $336 thousand were recorded in connection with the CEO search.
Additionally, the fourth quarter of 2012 included $175 thousand of costs and fee waivers as a result of Hurricane Sandy.
The 2011 year included a state income tax benefit of $2.99 million related to the reversal of a valuation allowance previously recorded in 2008. Circumstances and projections indicated that the deferred tax asset would be realized in future periods and it was, in fact, realized upon the sale of the Pooled Trust Preferred Securities portfolio in the fourth quarter of 2012, as noted above.
For comparative purposes, the Corporation believes that comparing earnings excluding unusual items provides a better analysis of earnings trends. The information discussed in the next two paragraphs are non-GAAP measures.
As detailed in the financial tables on pages 16, 17 and 18, net income and diluted earnings per share for the year ended December 31, 2012, excluding the unusual items, were $11.89 million and $1.30, respectively. This compared favorably to net income of $9.18 million and diluted earnings per share of $0.91 for the 2011 full-year period, after excluding the unusual items.
Net income and diluted earnings per share for the quarter ended December 31, 2012 were $2.97 million and $0.34, respectively, after adjustments. This compared favorably to net income and diluted earnings per share of $2.53 million and $0.26, respectively, for the quarter ended December 31, 2011.
Net Interest Income and Margin
Net interest income, on a fully tax-equivalent basis, was $12.91 million for the fourth quarter of 2012, up from $12.79 million for the same quarter last year.
On a fully tax-equivalent basis, the net interest margin was 3.42 percent for the December 2012 quarter compared to 3.46 percent for the December 2011 quarter.
Net interest income reflected an increase for the December 2012 quarter when compared to the December 2011 quarter, as the positive effect of increased loans, funded by reduced lower yielding investment securities and increased lower cost core deposits, was partially offset by the effect of lower market yields, which compressed asset yields more than deposit costs.
The net interest margin for the current quarter reflected a decline of four basis points from the same quarter last year, due to the effect of the lower market yields discussed above.
Loans
Average loans totaled $1.13 billion for the fourth quarter of 2012 as compared to $993 million for the same 2011 quarter, which was an increase of $133 million, or just over 13 percent.
The average residential mortgage loan portfolio for the fourth quarter of 2012 increased $51 million, or 11 percent, when compared to the same quarter of 2011. The increase was attributable to originations retained in the portfolio outpacing loan paydowns. During this period of historically low interest rates, refinance activity has generally been robust. All of the shorter-duration loan production and select longer-duration loan production have been retained in portfolio. However, the Company does sell much of its longer-duration, fixed-rate loan production as a source of noninterest income and as part of its interest rate risk management strategy in the current low rate environment.
The average commercial mortgage and commercial loan portfolio for the fourth quarter of 2012 increased $85 million, or in excess of 19 percent, from the fourth quarter of 2011. The increase was attributable to demand from high quality borrowers looking to refinance multifamily and other commercial mortgages held by other institutions.
From December 31, 2011 to December 31, 2012, total loans grew $94 million or nearly 9 percent. Total loan originations were $397 million for 2012, up from $321 million for 2011. Included in the total were commercial mortgage/commercial loan originations of $150 million for 2012, up from $103 million for 2011.
Mr. Kennedy said, "I was pleased with our success in generating solid lending growth this past quarter and year. I look forward to continuing to grow our multi-family and other commercial real estate loan book, as well as introduce a comprehensive Commercial & Industrial (C&I) lending program."
Deposits
Average total deposits (interest-bearing and noninterest-bearing) increased $38 million for the December 2012 quarter when compared to the same quarter last year.
Over that same period, the Company saw growth in average noninterest-bearing checking balances, growth in average interest-bearing checking, and growth in savings. Average money market account balances remained relatively flat.
The Company has successfully focused on:
- Business and personal core deposit generation, particularly checking;
- Municipal relationships within its market territory; and
- Growth in deposits associated with its commercial mortgage/commercial loan growth.
Average certificates of deposit (CDs) declined $19 million for the December 2012 quarter from the December 2011 quarter. These higher-cost CDs were replaced with lower-cost, more stable core deposits.
From December 31, 2011 to December 31, 2012, total deposits increased $73 million, or 5 percent.
Mr. Kennedy commented, "This continues to be a strong and valuable deposit franchise, as evidenced by our high level of lower-cost, more stable core deposits. I see a lot of opportunity for growth in our core markets. Over the course of 2013, we plan to further grow our core deposit base, while maintaining and enhancing our high level of customer service."
PGB Trust & Investments
PGB Trust & Investments generated $2.93 million in fee income in the fourth quarter of 2012 compared to $2.58 million for the fourth quarter of 2011, reflecting growth in excess of 13 percent. The market value of the assets under administration of the wealth management division stood at $2.30 billion at December 31, 2012, up from $1.96 billion reported at December 31, 2011. The growth was due to new business, as well as market action coupled with solid investment advisory and management.
Mr. Kennedy noted, "The wealth management business adds significant value to the Company. I look forward to growing this business further through our new Delaware Trust subsidiary; in and around our market areas; through our existing wealth, loan and depository client base; and through discussions with all potential loan and depository clients. We will continue to provide the personalized, high touch service our valued clients have come to expect."
Other Noninterest Income
Other noninterest income, exclusive of Trust fees, totaled $4.42 million in the December 2012 quarter compared to $1.67 million in the same quarter a year ago. The December 2012 quarter included $370 thousand of fee income from the sale of longer-term, fixed-rate residential mortgage loans, compared to $139 thousand in the same 2011 quarter. The $230 thousand increase was due to higher residential mortgage loan origination levels, as well as a decision to retain less fixed rate loans in the portfolio. The December 2012 quarter also included a $2.87 million gain from one of the strategic initiatives noted earlier, which is the sale of the Company's Pooled Trust Preferred Securities portfolio. These positives were slightly offset by reduced service charges, some due to waivers resulting from an across the board Hurricane Sandy program and some due to customers being more diligent in managing their accounts.
Operating Expenses
The Company's total operating expenses were $13.55 million in the December 2012 quarter compared to $11.55 million in the December 2011 quarter. The 2012 expense levels included: costs associated with several of the strategic initiatives discussed earlier, specifically, a $965 thousand severance accrual associated with staffing and organizational restructuring; $74 thousand of legal expenses associated with the organization and set-up of PGB Trust & Investments of Delaware; $336 thousand of professional, legal, and other fees associated with the CEO search; and various expenses associated with Hurricane Sandy. The December 2012 quarter also included costs for the Company to keep up with the increased regulatory burden on financial institutions; costs associated with key additions to staff in PGB Trust & Investments to enhance their ability to grow and service their client base; increased commissions related to increased loan originations; normal salary increases; and increased bonus and profit sharing accruals. The net effect of the additional costs in the fourth quarter of 2012 was partially offset by various operational efficiencies.
Mr. Kennedy noted, "Given our plans to grow our core businesses, we expect higher operating expenses in 2013 as compared to prior periods. We expect revenue and related profitability associated with these plans to lag expenses by several quarters."
Provision for Loan Losses / Asset Quality
The Company's provision for loan losses for the quarter ended December 31, 2012 was $4.53 million compared to $750 thousand recorded in the immediately preceding September 2012 quarter and the $1.75 million provision recorded in the December 2011 quarter. Charge-offs, net of recoveries, for the fourth quarter of 2012 were $5.68 million compared to $543 thousand for the immediately preceding September 2012 quarter and $2.37 million for the December 2011 quarter.
The higher provisioning and net charge-off levels in the December 2012 quarter were due to one of the strategic initiatives discussed earlier - moving approximately $19 million of classified loans to loans held for sale, which resulted in an additional provision for loan losses of $4.0 million and charge-offs of $5.4 million.
At December 31, 2012, nonperforming assets totaled $15.2 million or just 0.91 percent of total assets compared to $26.3 million or 1.65 percent of assets at December 31, 2011.
Capital / Dividends
As noted in prior quarters, the preferred stock issued in January 2009 under Treasury's Capital Purchase Program (CPP) was fully redeemed early in the first quarter of 2012. At December 31, 2012, including the effect from this redemption, the Company's leverage ratio, tier 1 and total risk based capital ratios were 7.27 percent, 11.83 percent and 13.08 percent, respectively. The Company's ratios are all above the levels necessary to be considered well-capitalized under regulatory guidelines applicable to banks. Additionally, the Company's common equity ratio (common equity to total assets) at December 31, 2012 was 7.32 percent of total assets, reflecting growth from 6.81 percent of total assets at December 31, 2011.
As previously announced, on January 17, 2013, the Board of Directors declared a regular cash dividend of $0.05 per share payable on February 15, 2013 to shareholders of record on February 1, 2013.
In accordance with its By-Laws, the Company's Annual Meeting will be held on the fourth Tuesday of April (April 23, 2013) at 2:00 p.m. on the first floor of our headquarters building at 500 Hills Drive, Bedminster, New Jersey. Earnings for the first quarter of 2013 will also be announced that day.
ABOUT THE COMPANY
Peapack-Gladstone Financial Corporation is a bank holding company with total assets of $1.67 billion as of December 31, 2012. Peapack-Gladstone Bank, its wholly owned community bank, was established in 1921, and has 23 branches in Somerset, Hunterdon, Middlesex, Morris and Union Counties. The Bank's wealth management division, PGB Trust & Investments, operates at the Bank's corporate offices located at 500 Hills Drive in Bedminster and at five other locations in Clinton, Morristown and Summit, New Jersey, Bethlehem, Pennsylvania and Greenville, Delaware. To learn more about Peapack-Gladstone Financial Corporation and Peapack-Gladstone Bank's products and 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;
- successful cyber attacks against our IT infrastructure and that of our IT providers;
- higher than expected FDIC insurance premiums;
- lack of liquidity to fund our various cash obligations;
- 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, 2011 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.
(Tables to Follow)
PEAPACK-GLADSTONE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in Thousands)
(Unaudited)
As of
------------------------------------------------------
Dec 31, Sept 30, June 30, March 31, Dec 31,
2012 2012 2012 2012 2011
---------- --------- --------- --------- ---------
ASSETS
Cash and due from
banks $ 6,733 $ 5,466 $ 5,639 $ 5,146 $ 7,097
Federal funds sold 100 100 100 100 100
Interest-earning
deposits 112,395 49,354 29,024 28,144 35,856
---------- ---------- ---------- ---------- ----------
Total cash and cash
equivalents 119,228 54,920 34,763 33,390 43,053
Securities held to
maturity - 76,698 84,779 88,667 100,719
Securities available
for sale 304,479 253,489 257,318 281,770 319,520
FHLB and FRB Stock, at
cost 4,639 4,639 4,818 5,594 4,569
Loans held for sale 20,210 8,443 2,259 3,214 2,841
Residential mortgage 515,014 504,407 526,726 518,111 498,482
Commercial mortgage 420,086 391,976 384,289 358,822 330,559
Commercial loans 115,372 115,602 116,493 119,351 123,845
Construction loans 9,328 9,639 6,804 12,517 13,713
Consumer loans 21,188 21,542 20,885 19,769 19,439
Home equity lines of
credit 49,635 51,440 49,057 47,831 50,291
Other loans 1,961 1,876 2,128 1,504 2,016
---------- ---------- ---------- ---------- ----------
Total loans 1,132,584 1,096,482 1,106,382 1,077,905 1,038,345
Less: Allowance for
loan losses 12,735 13,893 13,686 13,496 13,223
---------- ---------- ---------- ---------- ----------
Net loans 1,119,849 1,082,589 1,092,696 1,064,409 1,025,122
Premises and equipment 30,030 30,472 30,979 31,482 31,941
Other real estate
owned 3,496 3,392 3,073 3,391 7,137
Accrued interest
receivable 3,864 4,040 3,447 3,842 4,078
Bank owned life
insurance 31,088 30,887 30,688 30,490 27,296
Deferred tax assets,
net 9,478 25,861 26,430 26,767 26,731
Other assets 21,475 8,060 7,355 6,524 7,328
---------- ---------- ---------- ---------- ----------
TOTAL ASSETS $1,667,836 $1,583,490 $1,578,605 $1,579,540 $1,600,335
========== ========== ========== ========== ==========
LIABILITIES
Deposits:
Noninterest-bearing
demand deposits $ 298,095 $ 306,711 $ 304,651 $ 288,130 $ 297,459
Interest-bearing
deposits
Checking 346,877 332,786 323,813 318,239 341,180
Savings 109,686 103,572 104,631 98,743 92,322
Money market
accounts 583,197 504,863 495,929 512,464 516,920
CD's $100,000 and
over 68,741 72,168 78,268 73,927 71,783
CD's less than
$100,000 109,831 112,586 115,793 120,140 124,228
---------- ---------- ---------- ---------- ----------
Total deposits 1,516,427 1,432,686 1,423,085 1,411,643 1,443,892
Overnight borrowings - - - 22,900 -
Federal home loan bank
advances 12,218 12,335 16,451 17,566 17,680
Capital lease
obligation 8,971 9,024 9,076 9,127 9,178
Other Liabilities 8,163 11,967 15,758 7,170 6,614
---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES 1,545,779 1,466,012 1,464,370 1,468,406 1,477,364
Shareholders' equity 122,057 117,478 114,235 111,134 122,971
---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES
AND SHAREHOLDERS'
EQUITY $1,667,836 $1,583,490 $1,578,605 $1,579,540 $1,600,335
========== ========== ========== ========== ==========
Trust division assets
under administration
(market value, not
included above) $2,303,612 $2,146,920 $2,062,798 $2,063,729 $1,957,146
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED BALANCE SHEET DATA
(Dollars in Thousands)
(Unaudited)
As of
------------------------------------------------
Sept June March
Dec 31, 30, 30, 31, Dec 31,
2012 2012 2012 2012 2011
-------- -------- -------- -------- --------
Asset Quality:
Loans past due over 90
days and still accruing $ - $ - $ - $ - $ 345
Nonaccrual loans 11,732 (C) 16,958 19,011 18,598 18,865
Other real estate owned 3,496 3,392 3,073 3,391 7,137
-------- -------- -------- -------- --------
Total nonperforming
assets $ 15,228 (C) $ 20,350 $ 22,084 $ 21,989 $ 26,347
======== ======== ======== ======== ========
Nonperforming loans to
total loans 1.04% (C) 1.55% 1.72% 1.73% 1.85%
Nonperforming assets to
total assets 0.91% (C) 1.29% 1.40% 1.39% 1.65%
Accruing TDR's (A) $ 6,415 (C) $ 7,626 $ 7,647 $ 7,842 $ 7,281
Loans past due 30 through
89 days and still
accruing $ 3,786 $ 2,244 $ 2,836 $ 7,619 $ 11,632
Classified loans (B) $ 32,014 (C) $ 47,017 $ 47,102 $ 48,546 $ 49,101
Impaired loans (B) $ 18,147 (C) $ 24,584 $ 26,658 $ 26,568 $ 26,212
Allowance for loan losses:
Beginning of period $ 13,893 $ 13,686 $ 13,496 $ 13,223 $ 13,843
Provision for loan
losses 4,525 750 1,500 1,500 1,750
Charge-offs, net (5,683) (543) (1,310) (1,227) (2,370)
-------- -------- -------- -------- --------
End of period $ 12,735 $ 13,893 $ 13,686 $ 13,496 $ 13,223
======== ======== ======== ======== ========
ALLL to nonperforming
loans 108.55% (C) 81.93% 71.99% 72.57% 68.83%
ALLL to total loans 1.12% (C) 1.27% 1.24% 1.25% 1.27%
Capital Adequacy:
Tier I leverage 7.27% 7.31% 7.15% 7.00% 7.73%
Tier I capital to risk-
weighted assets 11.83% 11.51% 11.27% 11.21% 12.51%
Tier I & II capital to
risk-weighted assets 13.08% 12.76% 12.52% 12.46% 13.76%
Common equity to total
assets 7.32% 7.42% 7.24% 7.04% 6.81%
Book value per common
share $ 13.87 $ 13.38 $ 13.02 $ 12.70 $ 12.47
(A) Does not include $2.9 million at December 31, 2012, $5.7 million at
September 30, 2012, $6.1 million at June 30, 2012, $6.0 million at March
31, 2012 and $3.8 million at December 31, 2011 of TDR's included in
nonaccrual loans.
(B) Classified loans include all impaired loans. Impaired loans include all
nonaccrual loans and all TDRs.
(C) Does not include classified Loans Held for Sale, as these loans have
been written down to market value and are currently being marketed for
sale.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except share data)
(Unaudited)
----------------------------------------------------
Dec 31, Sept 30, June 30, March 31, Dec 31,
2012 2012 2012 2012 2011
--------- ---------- ---------- ---------- ---------
Income Statement Data:
Interest income $ 13,792 $ 13,982 $ 14,102 $ 14,214 $ 14,101
Interest expense 1,033 1,132 1,199 1,323 1,485
--------- ---------- ---------- ---------- ---------
Net interest income 12,759 12,850 12,903 12,891 12,616
Provision for loan
losses 4,525 750 1,500 1,500 1,750
--------- ---------- ---------- ---------- ---------
Net interest income
after provision for
loan losses 8,234 12,100 11,403 11,391 10,866
Trust fees 2,929 2,918 3,259 3,176 2,584
Other income 1,343 1,406 1,305 1,157 1,350
Securities
gains/(losses), net 3,078 235 107 390 316
--------- ---------- ---------- ---------- ---------
Total other income 7,350 4,559 4,671 4,723 4,250
--------- ---------- ---------- ---------- ---------
Salaries and employee
benefits 8,045 7,029 6,408 6,113 5,651
Premises and equipment 2,433 2,290 2,413 2,331 2,313
FDIC insurance expense 267 299 290 352 278
Other expenses 2,808 2,375 2,593 2,284 3,306
--------- ---------- ---------- ---------- ---------
Total operating
expenses 13,553 11,993 11,704 11,080 11,548
--------- ---------- ---------- ---------- ---------
Income before income
taxes 2,031 4,666 4,370 5,034 3,568
Income tax
expense/(benefit) 973 1,834 1,647 1,951 1,041
--------- ---------- ---------- ---------- ---------
Net income 1,058 2,832 2,723 3,083 2,527
Dividends and accretion
on preferred stock - - - 474 220
Net income available to
common shareholders $ 1,058 $ 2,832 $ 2,723 $ 2,609 $ 2,307
========= ========== ========== ========== =========
Per Common Share Data:
Earnings per share
(basic) $ 0.12 $ 0.32 $ 0.31 $ 0.30 $ 0.26
Earnings per share
(diluted) 0.12 0.32 0.31 0.30 0.26
Performance Ratios:
Return on average
assets 0.26% 0.72% 0.69% 0.78% 0.64%
Return on average
common equity 3.52% 9.77% 9.65% 9.47% 8.61%
Net interest margin
(Taxable equivalent
basis) 3.42% 3.50% 3.52% 3.54% 3.46%
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except share data)
(Unaudited)
For the
Twelve Months Ended
December 31,
2012 2011
---------- ----------
Income Statement Data:
Interest income $ 56,090 $ 56,051
Interest expense 4,687 7,136
---------- ----------
Net interest income 51,403 48,915
Provision for loan losses 8,275 7,250
---------- ----------
Net interest income after provision for loan
losses 43,128 41,665
Trust fees 12,282 10,686
Other income 5,211 4,993
Securities gains/(losses), net 3,810 1,037
---------- ----------
Total other income 21,303 16,716
---------- ----------
Salaries and employee benefits 27,595 23,230
Premises and equipment 9,467 9,371
FDIC insurance expense 1,208 1,532
Other expenses 10,060 10,266
---------- ----------
Total operating expenses 48,330 44,399
---------- ----------
Income before income taxes 16,101 13,982
Income tax expense 6,405 1,814 (A)
---------- ----------
Net income 9,696 12,168 (B)
Dividends and accretion on preferred stock 474 1,228
Net income available to common shareholders $ 9,222 $ 10,940 (B)
========== ==========
Per Common Share Data:
Earnings per share (basic) $ 1.05 $ 1.25 (C)
Earnings per share (diluted) 1.05 1.25 (C)
Performance Ratios:
Return on average assets 0.61% 0.79% (D)
Return on average common equity 8.03% 10.74% (E)
Net interest margin (Tax equivalent basis) 3.50% 3.47%
(A) Income taxes for the twelve months ended 12/31/11 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 indicated 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 $9.180 million
and $7.952 million, respectively for the twelve months ended 12/31/11.
(C) EPS excluding the one-time state tax benefit of $2.988 million is $0.91
for the twelve months ended 12/31/11. See page 14, for more information
on this non-GAAP measure.
(D) ROA excluding the one-time state tax benefit of $2.988 million is 0.60%
for the twelve months ended 12/31/11. See page 14, for more information
on this non-GAAP measure.
(E) ROE excluding the one-time state tax benefit of $2.988 million is 7.81%
for the twelve months ended 12/31/11. See page 14, for more information
on this non-GAAP measure.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
NON-GAAP RECONCILIATION
(Dollars in thousands, except share data)
This press release contains certain supplemental financial information, described below, which has been determined by methods other that 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 it consolidated financial statements in their entirety and not to rely on any single financial measure.
For the Twelve
Months Ended
December 31, 2011
-------------------
Net Income:
As reported $ 12,168
Less: Valuation allowance reversal 2,988
-------------------
Net income, excluding valuation allowance reversal 9,180
===================
Net Income Available to Common Shareholders:
As reported $ 10,940
Less: Valuation allowance reversal 2,988
-------------------
Net income, excluding valuation allowance reversal 7,952
===================
Per Common Share Data:
Earnings per share (basic):
As reported $ 1.25
Less: Valuation allowance reversal 0.34
-------------------
Earnings per share (basic), excluding valuation
allowance reversal 0.91
===================
Earnings per share (diluted):
As reported $ 1.25
Less: Valuation allowance reversal 0.34
-------------------
Earnings per share (diluted), excluding valuation
allowance reversal 0.91
===================
Performance Ratios:
Return on average assets:
As reported 0.79%
Return on average assets, excluding valuation allowance
reversal 0.60%
Return on average common equity:
As reported 10.74%
Return on average common equity,excluding valuation
allowance reversal 7.81%
PEAPACK-GLADSTONE FINANCIAL CORPORATION
NON-GAAP RECONCILIATION
(Dollars in thousands, except share data)
This press release contains certain supplemental financial information, described below, which has been determined by methods other that 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 it consolidated financial statements in their entirety and not to rely on any single financial measure.
For the Three For the Twelve
Months Ended Months Ended
December 31, December 31,
2012 2012
-------------- --------------
Net Income:
As reported $ 1,058 $ 9,696
Additional provision for loan loss -
transfer to loans held for sale 4,000 4,000
Gain on sale of pooled trust preferred
securities (2,870) (2,870)
Severance accrual 965 965
CEO search expenses 336 336
Hurricane Sandy - costs and fee waivers 175 175
Delaware Trust Subsidiary - organization and
legal expenses 74 74
Valuation of directors retirement plan N/A 473
Tax effect (A) (773) (955)
-------------- --------------
Net income, excluding unusual items 2,965 11,894
============== ==============
Net Income Available to Common Shareholders:
As reported $ 1,058 $ 9,222
Additional provision for loan loss -
transfer to loans Held for sale 4,000 4,000
Gain on sale of pooled trust preferred
securities (2,870) (2,870)
Severance accrual 965 965
CEO search 336 336
Hurricane Sandy - costs and fee waivers 175 175
Delaware Trust Subsidiary - organization and
legal expenses 74 74
Valuation of directors retirement plan N/A 473
Tax effect (A) (773) (955)
-------------- --------------
Net income, excluding unusual items 2,965 11,420
============== ==============
(A) Taxes were calculated at an annual effective rate of 38.54%, net of the
tax adjustment of $260 thousand for the realization of the carryback of
deferred tax assets due to the pooled trust preferred securities sale.
For the Three For the Twelve
Months Ended Months Ended
December 31, December 31,
2012 2012
-------------- --------------
Per Common Share Data:
Earnings per share (basic):
As reported $ 0.12 $ 1.05
Less: Adjustments 0.22 0.25
-------------- --------------
Earnings per share (basic), excluding
unusual items 0.34 1.30
============== ==============
Earnings per share (diluted):
As reported $ 0.12 $ 1.05
Less: Adjustments 0.22 0.25
-------------- --------------
Earnings per share (diluted), excluding
unusual items 0.34 1.30
============== ==============
Performance Ratios:
Return on average assets:
As reported 0.26% 0.61%
Return on average assets, excluding unusual
items 0.74% 0.75%
Return on average common equity:
As reported 3.52% 8.03%
Return on average common equity, excluding
unusual items 9.87% 9.95%
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
THREE MONTHS ENDED
(Tax-Equivalent Basis, Dollars in Thousands)
December 31, 2012 December 31, 2011
------------------------- -------------------------
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
---------- -------- ----- ---------- -------- -----
ASSETS:
Interest-Earning
Assets:
Investments:
Taxable (1) $ 267,890 $ 1,423 2.12% $ 369,741 $ 2,111 2.28%
Tax-exempt (1) (2) 47,262 327 2.77 47,564 386 3.25
Loans held for sale 4,355 48 4.40 1,661 23 5.53
Loans (2) (3) 1,125,490 12,107 4.30 992,617 11,706 4.72
Federal funds sold 100 - 0.10 100 - 0.15
Interest-earning
deposits 66,942 41 0.24 66,318 53 0.32
---------- -------- ----- ---------- -------- -----
Total interest-
earning assets 1,512,039 $ 13,946 3.69% 1,478,001 $ 14,279 3.86%
---------- -------- ----- ---------- -------- -----
Noninterest-Earning
Assets:
Cash and due from
banks 6,885 8,466
Allowance for loan
losses (14,020) (13,648)
Premises and
equipment 30,350 32,170
Other assets 76,251 77,099
---------- ----------
Total noninterest-
earning assets 99,466 104,087
---------- ----------
Total assets $1,611,505 $1,582,088
========== ==========
LIABILITIES:
Interest-Bearing
Deposits:
Checking $ 346,373 $ 87 0.10% $ 344,560 $ 181 0.21%
Money markets 517,470 202 0.16 519,705 371 0.29
Savings 105,228 14 0.05 90,983 46 0.20
Certificates of
deposit 180,941 528 1.17 200,158 643 1.28
---------- -------- ----- ---------- -------- -----
Total interest-
bearing deposits 1,150,012 831 0.29 1,155,406 1,241 0.43
Borrowings 12,258 95 3.10 18,860 164 3.48
Capital lease
obligation 8,990 107 4.76 6,436 80 4.97
---------- -------- ----- ---------- -------- -----
Total interest-
bearing liabilities 1,171,260 1,033 0.35 1,180,702 1,485 0.50
---------- -------- ----- ---------- -------- -----
Noninterest-Bearing
Liabilities:
Demand deposits 311,920 268,135
Accrued expenses and
other liabilities 8,144 12,113
---------- ----------
Total noninterest-
bearing liabilities 320,064 280,248
Shareholders' equity 120,181 121,138
---------- ----------
Total liabilities
and shareholders'
equity $1,611,505 $1,582,088
========== ==========
Net interest income $ 12,913 $ 12,794
======== ========
Net interest spread 3.34% 3.36%
===== =====
Net interest margin
(4) 3.42% 3.46%
===== =====
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
THREE MONTHS ENDED
(Tax-Equivalent Basis, Dollars in Thousands)
December 31, 2012 September 30, 2012
------------------------- -------------------------
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
---------- -------- ----- ---------- -------- -----
ASSETS:
Interest-Earning
Assets:
Investments:
Taxable (1) $ 267,890 $ 1,423 2.12% $ 284,440 $ 1,787 2.51%
Tax-exempt (1) (2) 47,262 327 2.77 44,481 322 2.90
Loans held for sale 4,355 48 4.40 2,829 34 4.77
Loans (2) (3) 1,125,490 12,107 4.30 1,098,857 11,965 4.36
Federal funds sold 100 - 0.10 100 - 0.10
Interest-earning
deposits 66,942 41 0.24 53,560 27 0.20
---------- -------- ----- ---------- -------- -----
Total interest-
earning assets 1,512,039 $ 13,946 3.69% 1,484,267 $ 14,135 3.81%
---------- -------- ----- ---------- -------- -----
Noninterest-Earning
Assets:
Cash and due from
banks 6,885 5,611
Allowance for loan
losses (14,020) (14,005)
Premises and
equipment 30,350 30,820
Other assets 76,251 77,232
---------- ----------
Total noninterest-
earning assets 99,466 99,658
---------- ----------
Total assets $1,611,505 $1,583,925
========== ==========
LIABILITIES:
Interest-Bearing
Deposits:
Checking $ 346,373 $ 87 0.10% $ 334,982 $ 89 0.11%
Money markets 517,470 202 0.16 503,180 259 0.21
Savings 105,228 14 0.05 104,273 14 0.05
Certificates of
deposit 180,941 528 1.17 188,568 550 1.17
---------- -------- ----- ---------- -------- -----
Total interest-
bearing deposits 1,150,012 831 0.29 1,131,003 912 0.32
Borrowings 12,258 95 3.10 15,281 113 2.96
Capital lease
obligation 8,990 107 4.76 9,043 107 4.73
---------- -------- ----- ---------- -------- -----
Total interest-
bearing liabilities 1,171,260 1,033 0.35 1,155,327 1,132 0.39
---------- -------- ----- ---------- -------- -----
Noninterest-Bearing
Liabilities:
Demand deposits 311,920 305,192
Accrued expenses and
other liabilities 8,144 7,434
---------- ----------
Total noninterest-
bearing liabilities 320,064 312,626
Shareholders' equity 120,181 115,972
---------- ----------
Total liabilities
and shareholders'
equity $1,611,505 $1,583,925
========== ==========
Net interest income $ 12,913 $ 13,003
======== ========
Net interest spread 3.34% 3.42%
===== =====
Net interest margin
(4) 3.42% 3.50%
===== =====
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
TWELVE MONTHS ENDED
(Tax-Equivalent Basis, Dollars in Thousands)
December 31, 2012 December 31, 2011
------------------------- -------------------------
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
---------- -------- ----- ---------- -------- -----
ASSETS:
Interest-Earning
Assets:
Investments:
Taxable (1) $ 303,599 $ 7,033 2.32% $ 369,905 $ 8,351 2.26%
Tax-exempt (1) (2) 46,780 1,363 2.91 39,338 1,439 3.66
Loans held for sale 2,487 123 4.94 880 56 6.41
Loans (2) (3) 1,094,696 48,112 4.40 965,716 46,716 4.84
Federal funds sold 100 - 0.10 100 - 0.23
Interest-earning
deposits 41,303 98 0.24 54,664 144 0.26
---------- -------- ----- ---------- -------- -----
Total interest-
earning assets 1,488,965 $ 56,729 3.81% 1,430,603 $ 56,706 3.96%
---------- -------- ----- ---------- -------- -----
Noninterest-Earning
Assets:
Cash and due from
banks 6,506 8,260
Allowance for loan
losses (13,942) (14,561)
Premises and
equipment 31,049 33,015
Other assets 77,048 73,263
---------- ----------
Total noninterest-
earning assets 100,661 99,977
---------- ----------
Total assets $1,589,626 $1,530,580
========== ==========
LIABILITIES:
Interest-Bearing
Deposits:
Checking $ 336,228 $ 379 0.11% $ 318,446 $ 1,045 0.33%
Money markets 510,633 1,022 0.20 519,702 2,010 0.39
Savings 101,068 70 0.07 86,818 205 0.24
Certificates of
deposit 188,918 2,237 1.18 207,892 2,815 1.35
---------- -------- ----- ---------- -------- -----
Total interest-
bearing deposits 1,136,847 3,708 0.33 1,132,858 6,075 0.54
Borrowings 25,277 548 2.17 22,622 742 3.28
Capital lease
obligation 9,067 431 4.75 6,397 319 4.99
---------- -------- ----- ---------- -------- -----
Total interest-
bearing liabilities 1,171,191 4,687 0.40 1,161,877 7,136 0.61
---------- -------- ----- ---------- -------- -----
Noninterest-Bearing
Liabilities:
Demand deposits 296,250 243,850
Accrued expenses and
other liabilities 6,977 7,954
---------- ----------
Total noninterest-
bearing liabilities 303,227 251,804
Shareholders' equity 115,208 116,899
---------- ----------
Total liabilities
and shareholders'
equity $1,589,626 $1,530,580
========== ==========
Net interest income $ 52,042 $ 49,570
======== ========
Net interest spread 3.41% 3.35%
===== =====
Net interest margin
(4) 3.50% 3.47%
===== =====
(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