Peapack-Gladstone Financial Corporation Reports a Strong Fourth Quarter and Year and Declares Its Quarterly Cash Dividend

Company Release - 1/27/2017 4:30 PM ET

BEDMINSTER, NJ -- (Marketwired) -- 01/27/17 -- Peapack-Gladstone Financial Corporation (NASDAQ: PGC) (the "Company") recorded record net income of $26.48 million and diluted earnings per share of $1.60 for the year ended December 31, 2016, compared to $19.97 million and $1.29, respectively, for the year ended December 31, 2015, reflecting increases of $6.51 million or 33 percent, and $0.31 per share or 24 percent, respectively.

For the quarter ended December 31, 2016, the Company recorded net income of $7.31 million and diluted earnings per share of $0.43, compared to $4.34 million and $0.28 for the same quarterly period last year, reflecting increases of $2.97 million, or 68 percent, and $0.15 per share, or 54 percent, respectively.

During the fourth quarter of 2015 the Company recorded $2.5 million of charges related to the closure of two branch offices. These charges reduced pretax income by $2.5 million, net income by $1.6 million and diluted earnings per share by $0.10 per share, for both the 2015 year and 2015 fourth quarter.

The 2016 year and 2016 fourth quarter, when compared to the same periods in 2015, reflected improved net interest income, wealth management fee income, and other non-interest income. Expenses for 2016 included increased FDIC premiums, increased investment in risk management related analytics and practices, and increased salary and benefits associated with strategic hiring which was in line with the Company's Strategic Plan.

The following table summarizes specified financial measures for the year ended 2016 and 2015, respectively:

Year Year Increase/
(Dollars in millions, except EPS) 2016 2015(A) (Decrease)
Net interest income $ 96.44 $ 84.45 $ 11.99 14 %
Provision for loan losses $ 7.50 $ 7.10 $ 0.40 6 %
Pretax income $ 42.74 $ 32.14 $ 10.60 33 %
Net income $ 26.48 $ 19.97 $ 6.51 33 %
Diluted EPS $ 1.60 $ 1.29 $ 0.31 24 %
Total revenue $ 125.35 $ 108.17 $ 17.18 16 %
Return on average assets 0.72 % 0.64 % 0.08
Return on average equity 8.92 % 7.71 % 1.21
Efficiency ratio (B) 60.57 % 63.80 % (3.23)
Tang book value per share (B) $ 18.91 $ 17.40 $ 1.51
(A) The year ended December 31, 2015 included $2.5 million of charges related to the closure of two branch offices. These charges reduced pretax income by $2.5 million, net income by $1.6 million, diluted earnings per share by $0.10, ROAA by 0.05%, and ROAE by 0.60%, and increased the efficiency ratio by 2.09%.
(B) See Non-GAAP financial measures reconciliation table on page 26.

The following table summarizes specified financial measures for the fourth quarter of 2016 and 2015, respectively:

Q4 Q4 Increase/
(Dollars in millions, except EPS) 2016 2015(A) (Decrease)
Net interest income $ 24.58 $ 22.82 $ 1.76 8 %
Provision for loan losses $ 1.50 $ 1.95 $ (0.45) (23) %
Pretax income $ 11.79 $ 6.60 $ 5.19 79 %
Net income $ 7.31 $ 4.34 $ 2.97 68 %
Diluted EPS $ 0.43 $ 0.28 $ 0.15 54 %
Total revenue $ 32.25 $ 28.54 $ 3.71 13 %
Return on average assets 0.75 % 0.51 % 0.24
Return on average equity 9.27 % 6.37 % 2.90
Efficiency ratio (B) 59.45 % 70.05 % (10.60)
Tang book value per share (B) $ 18.91 $ 17.40 $ 1.51
(A) The quarter ended December 31, 2015 included $2.5 million of charges related to the closure of two branch offices. These charges reduced pretax income by $2.5 million, net income by $1.6 million, diluted earnings per share by $0.10, ROAA by 0.05%, ROAE by 0.60% and increased the efficiency ratio by 8.75%.
(B) See Non-GAAP financial measures reconciliation table on page 26.

Mr. Kennedy said, "We had a very strong 2016, as we continued to successfully execute our Plan. We posted strong results, despite the additional FDIC Insurance and risk management expenses this past year."

Additional highlights follow:

  • Growth in diluted EPS for Q4 2016 when compared to Q4 2015 was $0.15 per share, or 54 percent, and for the full year of 2016 when compared to 2015 the growth was $0.31 per share, or 24 percent. At December 31, 2016, the market value of assets under administration (AUA) at the Private Wealth Management Division of Peapack-Gladstone Bank (the "Bank") increased to $3.67 billion from $3.32 billion at the end of 2015, reflecting growth of 11 percent.
  • Fee income from the Private Wealth Management Division totaled $4.6 million for the fourth quarter of 2016, compared to $4.3 million for the same quarter in 2015, and totaled $18.2 million for the year ended 2016, growing from $17.0 million for the year ended 2015. Wealth management fee income, comprising approximately 15 percent of the Company's total revenue for the year ended December 31, 2016, contributed significantly to the Company's diversified revenue sources.
  • Loans at December 31, 2016 totaled $3.31 billion. This reflected net growth of $50 million compared to the September 2016 quarter (2 percent compared to the prior quarter or 6 percent on an annualized basis), and $317 million (11 percent) when compared to the $3.00 billion at December 31, 2015.
  • Commercial & Industrial (C&I) loans at December 31, 2016 totaled $637 million. This reflected net growth of $39 million compared to the September 2016 quarter (7 percent compared to the prior quarter or 26 percent on an annualized basis), and net growth of $124 million (24 percent) when compared to $513 million in loans at December 31, 2015.
  • Multifamily whole loans sold totaled $53 million in the fourth quarter of 2016, which resulted in a net gain on sale of loans of $353 thousand. Multifamily whole loans sold in 2016 totaled $200 million, which resulted in a net gain on sale of loans of $1.2 million. Additionally, multifamily loan participations sold in 2016 totaled $34 million.
  • Total "customer" deposit balances (defined as deposits excluding brokered CDs and brokered "overnight" interest-bearing demand deposits) totaled $3.14 billion at December 31, 2016. This reflected net growth of $132 million compared to the September 2016 quarter (4 percent compared to the prior quarter or 18 percent on an annualized basis), and $496 million (19 percent) when compared to the $2.64 billion at December 31, 2015.
  • Asset quality metrics continued to be strong at December 31, 2016. Nonperforming assets at December 31, 2016 were just $11.8 million, or 0.30 percent of total assets. Total loans past due 30 through 89 days and still accruing were $1.4 million or 0.04 percent of total loans at December 31, 2016.
  • The Company's book value per share at December 31, 2016 of $19.10 reflected improvement when compared to $17.61 at December 31, 2015. Year over year growth in book value per share totaled 8 percent.

Mr. Kennedy noted, "We continue to be pleased with our progress since launching our Strategic Plan - Expanding our Reach - in early 2013, and we are particularly pleased with our progress in 2016. Despite the headwinds we noted going into 2016, we have delivered solid results for the year."

Net Interest Income / Net Interest Margin
Net interest income and net interest margin was $24.58 million and 2.63 percent for the fourth quarter of 2016, compared to $24.27 million and 2.74 percent for the third quarter of 2016, and compared to $22.82 million and 2.79 percent for the same quarter last year, reflecting growth in net interest income of $1.76 million or 8 percent when compared to the same prior year period. Net interest income for the fourth quarter of 2016 benefitted from loan growth during 2016. The December 2016 quarter included approximately $464 thousand of prepayment premiums received on the prepayment of certain multifamily loans, a slight decrease from $507 thousand for the September 2016 quarter, but a slight increase when compared to $326 thousand for the December 2015 quarter. Given the size of the Company's multifamily loan portfolio, prepayment premiums on such loans have become a part of recurring net interest income.

Net interest margin for the fourth quarter of 2016 was negatively impacted by 7 basis points when compared to the third quarter of 2016 and the fourth quarter of 2015 due to an increase in our interest earning cash balances during the 2016 quarter. This extra liquidity was generated by deposit growth, as well as continued multifamily loan sales, during the fourth quarter of 2016.

Net interest income and net interest margin for the fourth quarter of 2016 when compared to the fourth quarter of 2015 was also negatively impacted by the effect of the $50 million subordinated debt issue in June 2016.

Net interest income for the fourth quarter of 2016 improved compared to the same quarter in 2015, and net interest margin declined to 2.63 percent for the 2016 quarter compared to 2.79 percent for the 2015 quarter. Besides the 7 basis impact from higher liquidity in the 2016 quarter, the net interest margin also continued to be negatively impacted by the effect of the low interest rate environment throughout 2016, as well as competitive pressures in attracting new loans and deposits.

As noted above, the net interest margin is also affected by the maintenance of liquid assets on the Company's balance sheet. Mr. Kennedy said, "In addition to $468 million of cash, cash equivalents and investment securities on our balance sheet, we also have over $1.1 billion of secured funding available from the Federal Home Loan Bank, of which we only have $62 million drawn as of December 31, 2016."

The Company's interest rate sensitivity models indicate that the Company's net interest income and margin would improve in a rising interest rate environment.

Wealth Management Business
In the December 2016 quarter, Peapack-Gladstone Bank's wealth management business generated $4.61 million in fee income compared to $4.44 million for the September 2016 quarter, and $4.31 million for the December 2015 quarter.

Fee income for the December 2016 quarter increased by $303 thousand, or approximately 7 percent, from the December 2015 quarter. Growth in fee income was due to several factors including continued healthy new business results and a positive market environment, partially offset by normal levels of disbursements and outflows.

The market value of the AUA of the wealth management division was $3.67 billion at December 31, 2016, increasing by $178 million, or 5 percent (20 percent on an annualized basis), from September 30, 2016 and increasing $352 million, or11 percent from $3.32 billion at December 31, 2015.

John P. Babcock, President of PGB Private Wealth Management, said, "We continue to execute on our advice-led strategy, incorporating a wealth management conversation into every relationship we have with clients, across all business lines. We continue to add talented new professionals to our wealth management team and expand the products, services, and the advice we deliver to our clients. Our continued growth will be driven by organic new business, the expansion of existing relationships and potentially, strategic acquisitions of wealth management firms in the Tri-State area over the medium term." Mr. Babcock went on to note, "Quarter-over-quarter and year-over-year revenue gains and positive net AUA flows continue on an upward trajectory and we enter 2017 with a robust new business pipeline. While the post-election market lift also contributed to our positive quarter and year-end results, it is too soon to predict the near-term impact on the broader financial markets. Yet, we remain cautiously optimistic that much-discussed tax reform, infrastructure spending and anticipated pro-growth fiscal policies will provide the foundation for a healthy equity market in 2017. Notwithstanding potential market fluctuations, our business continues to grow and will be a significant driver of enhanced shareholder value as we move forward."

Loan Originations / Loans
At December 31, 2016, loans totaled $3.31 billion compared to $3.26 billion three months ago at September 30, 2016 and compared to $3.00 billion one year ago at December 31, 2015, representing net increases of $50 million compared to the prior quarter (2 percent compared to the prior quarter or 6 percent on an annualized basis), and $317 million (11 percent) compared to the prior year December 31 period. Mr. Kennedy noted, "We continue to believe we have a very high quality loan portfolio, as evidenced by very strong asset quality metrics."

For the quarter ended December 31, 2016, residential mortgage originations totaled $65 million. Residential mortgage loans grew $57 million, or 12 percent, to $527 million at December 31, 2016 from $471 million one year ago at December 31, 2015.

For the December 2016 quarter, commercial real estate originations (not including multifamily loans) totaled $57 million. Commercial real estate mortgage loans (not including multifamily loans) grew $138 million, or 33 percent, to $551 million at December 31, 2016 from $413 million one year ago at December 31, 2015.

The December 2016 quarter included $26 million of multifamily loan originations, down significantly from the previous quarters. At December 31, 2016, the multifamily loan portfolio, including multifamily loans held for sale, totaled $1.46 billion (or 44.1 percent of total loans) compared to $1.54 billion (or 47.1 percent of total loans) three months ago at September 30, 2016 and compared to $1.50 billion (or 50 percent of total loans) at December 31, 2015. The reductions included whole loans sold and participations sold, including $53 million of whole loans sold in the December 2016 quarter, bringing the total whole loans sold and participations sold for 2016 to $235 million. These loan sales and participations were part of the Company's balance sheet management strategy and will likely continue in 2017.

Mr. Kennedy said, "As I explained previously, we anticipated multifamily loan originations and growth would be less than prior years, as we manage our balance sheet such that multifamily loans decline as a percentage of the overall loan portfolio and C&I loans become a larger percentage of the overall loan portfolio. We made progress on this front late in 2015, and we are pleased this has continued into 2016." Mr. Kennedy further noted that, "This balance sheet management will likely not be linear each quarter, but will rather be apparent over periods of time."

For the quarter ended December 31, 2016 the Company closed $78 million of commercial loans. Commercial loans grew $124 million, or 24 percent, to $637 million at December 31, 2016 from $513 million one year ago at December 31, 2015. At December 31, 2016 the commercial loan portfolio comprised 19.2 percent of the overall loan portfolio up from the 18.3 percent at September 30, 2016, and up from 17.1 percent one year ago at December 31, 2015.

Mr. Kennedy said, "As a result of our continued investment in and commitment to C&I banking, we have seen, and believe we will continue to see, our C&I client base and corresponding loan portfolio grow."

Mr. Kennedy went on to say, "Our private banking business model of addressing the sophisticated needs and expectations of successful business owners and entrepreneurs is being well received. The ability to engage in high level strategic debt, capital and valuation analysis coupled with succession, estate and wealth planning strategies, enables us to provide a unique boutique level of service to business owners and middle market clients."

Eric H. Waser, Head of Commercial Banking noted, "We are extremely pleased with how our "Advice Led" approach is capturing the attention of the business community."

Deposits / Funding / Balance Sheet Management
As noted previously, in June 2016, the Company issued $50 million of subordinated debt ($48.7 million net of underwriting fees and expenses) bearing interest at an annual rate of 6 percent for the first five years, and thereafter at an adjustable rate until maturity in June 2026 or earlier redemption.

During the December 2016 quarter, customer deposit growth of $132 million (principally interest-bearing checking and money market) and increased capital of $15 million, primarily funded a $10 million maturity of FHLB Advances, an increase in loans of $50 million, and an increase in investment securities of $56 million.

Brokered interest-bearing demand ("overnight") deposits declined $20 million to $180 million at December 31, 2016 compared to $200 million at December 31, 2015. The interest rate paid on these deposits allowed the Bank to fund at attractive rates and engage in interest rate swaps as part of its asset-liability interest rate risk management. As of December 31, 2016, the Company had transacted pay fixed, receive floating interest rate swaps totaling $180 million notional amount. The Company ensures ample available collateralized liquidity as a backup to these short term brokered deposits.

Mr. Kennedy noted, "The Company will continue to place an intense focus on providing high touch client service and growing its core deposit base. Our full array of treasury management solutions will help support both core deposit growth and commercial lending opportunities."

Other Noninterest Income
The Company's total noninterest income for the December 2016 quarter totaled $7.67 million or nearly 24 percent of total revenue.

The December 2016 quarter included $197 thousand of income from the sale of newly originated residential mortgage loans (mortgage banking), compared to $383 thousand for the September 2016 quarter, and $117 thousand for the December 2015 quarter. Originations of residential mortgage loans for sale were higher in the September 2016 quarter, compared to the other noted periods.

Gain on sale of multifamily loans held for sale at the lower of cost or fair value was $353 thousand for the December 2016 quarter, compared to $256 thousand for the September 2016 quarter. There were no such gains in the December 2015 quarter. During the first quarter of 2016 the Company began selling whole multifamily loans, in addition to participations. The Company anticipates that it will continue to employ both of these strategies into 2017, and beyond.

The fourth quarter of 2016 included $121 thousand of income related to the Company's SBA lending and sale program, compared to $243 thousand generated in the September 2016 quarter, and $7 thousand in the December 2015 quarter. The SBA program was fully implemented in the March 2016 quarter, and it is part of the Company's normal ongoing operations.

The December 2016 quarter included $874 thousand of loan level, back-to-back swap income compared to $670 thousand in the September 2016 quarter. There was no such income in the December 2015 quarter. This program is also a part of the Company's normal ongoing operations.

Other income for the December 2016 quarter totaled $322 thousand, compared to $395 thousand for the September 2016 quarter and to $191 thousand for the December 2015 quarter. The September 2016 quarter included somewhat higher loan fees than the December 2016 quarter. The December 2016 quarter, when compared to the same quarter in 2015, includes increased loan servicing fees and increased unused line of credit fees.

Operating Expenses
The Company's total operating expenses were $18.97 million for the quarter ended December 31, 2016, compared to $18.17 million for the September 2016 quarter and $19.99 million for the same quarter in 2015.

While the fourth quarter 2016 FDIC premium was relatively flat to the third quarter of 2016, and the fourth quarter of 2015, it was down significantly from the first and second quarters of 2016. Beginning July 1, 2016 the FDIC assessment system was revised. Revisions for "small institutions" (under $10 billion in assets) resulted in, among other things, the elimination of risk categories and utilization of a financial ratios method to determine assessment rates. The changes reduced the Company's assessment rate by nearly 50% in the third and fourth quarters of 2016, when compared to the first and second quarters 2016 assessment rate.

Salary and benefits expenses for the December 2016 quarter were $11.48 million compared to $11.52 million for the September 2016 quarter, and $10.66 million for the December 2015 quarter. Strategic hiring that was in line with the Company's Plan, normal salary increases and increased bonus/incentive accruals associated with the Company's growth, all contributed to the increase from the December 2015 quarter to the December 2016 quarter.

Premises and equipment expenses for the December 2016 quarter were $2.90 million compared to $2.74 million for the September 2016 quarter, and $3.39 million for the December 2015 quarter. The December 2015 quarter included approximately $700 thousand of premises and equipment expenses related to the closure of two branch offices in that quarter.

Other expenses for the December 2016 quarter were $3.78 million compared to $3.10 million for the September 2016 quarter, and $5.12 million for the December 2015 quarter. The December 2016 quarter included increased marketing expenses associated with a targeted marketing campaign run throughout the quarter. The December 2015 quarter included approximately $1.75 million of other expenses related to the closure of two branch offices in that quarter.

Mr. Kennedy noted, "Total expenses for 2016 came in under budget, as we worked to manage our expenses closely."

Provision for Loan Losses / Asset Quality
For the quarter ended December 31, 2016, the Company's provision for loan losses was $1.50 million, which was slightly lower than the September 2016 provision of $2.10 million and the December 2015 provision of $1.95 million. The Company had $92 thousand of net recoveries in the December 2016 quarter, compared to $703 thousand and $468 thousand of net charge-offs in the September 2016 and December 2015 quarters, respectively.

At December 31, 2016 the allowance for loan losses was $32.21 million, which was 286 percent of nonperforming loans and 0.97 percent of total loans, compared to $30.62 million, which was 282 percent of nonperforming loans and 0.95 percent of total loans at September 30, 2016, and $25.86 million, which was 383 percent of nonperforming loans and 0.89 percent of total loans one year prior, at December 31, 2015.

The Company's provision for loan losses and its allowance for loan losses continue to track consistently with the Company's net loan growth and asset quality metrics.

Nonperforming assets at December 31, 2016 (which does not include troubled debt restructured loans that are performing in accordance with their terms) were just $11.8 million or 0.30 percent of total assets, compared to $11.4 million or 0.30 percent of total assets at September 30, 2016 and $7.3 million or 0.22 percent of total assets at December 31, 2015. Total loans past due 30 through 89 days and still accruing were $1.4 million at December 31, 2016, compared to $8.2 million at September 30, 2016 and $2.1 million at December 31, 2015. There were no multifamily loans past due at December 31, 2016.

Capital / Dividends
The Company's capital position in the December 2016 quarter was benefitted by net income of $7.3 million and $6.9 million of voluntary share purchases under the Dividend Reinvestment Plan, which continues to be a source of capital for the Company.

At December 31, 2016, the Company's GAAP capital as a percent of total assets was 8.36 percent. The Company's regulatory leverage, common equity tier 1, tier 1 and total risk based capital ratios were 8.35 percent, 10.60 percent, 10.60 percent and 13.25 percent, respectively. The Bank's regulatory leverage, common equity tier 1, tier 1 and total risk based capital ratios were 9.31 percent, 11.82 percent, 11.82 percent and 12.87 percent, respectively. The Bank's regulatory capital ratios are all above the ratios to be considered well capitalized under regulatory guidance.

On January 26, 2017, the Company's Board of Directors declared a regular cash dividend of $0.05 per share payable on February 23, 2017 to shareholders of record on February 9, 2017.

Mr. Kennedy said, "We continue to believe we have sufficient common equity to support our planned growth and expansion for the immediate future."

ABOUT THE COMPANY
Peapack-Gladstone Financial Corporation is a New Jersey bank holding company with total assets of $3.88 billion as of December 31, 2016. Founded in 1921, Peapack-Gladstone Bank is a commercial bank that provides innovative private banking services to businesses, non-profits and consumers, which help them to establish, maintain and expand their legacy. Through its private banking locations in Bedminster, Morristown, Princeton and Teaneck, its wealth management division, and its branch network and online platforms, Peapack-Gladstone Bank offers an unparalleled commitment to client service.

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

  • inability to successfully grow our business and implement our strategic plan, including an inability to generate revenues to offset the increased personnel and other costs related to the strategic plan;
  • the impact of anticipated higher operating expenses in 2017 and beyond;
  • inability to manage our growth;
  • inability to successfully integrate our expanded employee base;
  • a continued or unexpected decline in the economy, in particular in our New Jersey and New York market areas;
  • declines in our net interest margin caused by the low interest rate environment and highly competitive market;
  • 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;
  • 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, Basel III and related regulations) subject us to additional regulatory oversight which may result in increased compliance costs;
  • successful cyberattacks against our IT infrastructure and that of our IT providers;
  • higher than expected FDIC insurance premiums;
  • adverse weather conditions;
  • inability to successfully generate new business in new geographic markets;
  • inability to execute upon new business initiatives;
  • 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, 2015. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company'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
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands, except share data)
(Unaudited)
For the Three Months Ended
Dec 31, Sept 30, June 30, March 31, Dec 31,
2016 2016 (A) 2016 2016 2015 (B)
Income Statement Data:
Interest income $ 30,271 $ 29,844 $ 29,035 $ 27,898 $ 27,123
Interest Expense 5,691 5,575 4,859 4,488 4,304
Net interest income 24,580 24,269 24,176 23,410 22,819
Provision for loan losses 1,500 2,100 2,200 1,700 1,950
Net interest income after provision for loan losses 23,080 22,169 21,976 21,710 20,869
Wealth management fee income 4,610 4,436 4,899 4,295 4,307
Service charges and fees 815 812 818 807 849
Bank owned life insurance 380 340 345 342 252
Gain on loans held for sale at fair value (Mortgage banking) 197 383 309 121 117
Gain on loans held for sale at lower of cost or fair value 353 256 500 124 -
Fee income related to loan level, back-to-back swaps 874 670 - 94 -
Gain on sale of SBA loans 121 243 212 47 7
Other income 322 395 347 332 191
Securities gains, net - - 18 101 -
Total other income 7,672 7,535 7,448 6,263 5,723
Compensation and employee benefits 11,480 11,515 11,100 10,908 10,659
Premises and equipment 2,903 2,736 2,742 2,864 3,390
FDIC insurance expense 804 814 1,581 1,559 825
Other expenses 3,778 3,101 3,352 3,875 5,119
Total operating expenses 18,965 18,166 18,775 19,206 19,993
Income before income taxes 11,787 11,538 10,649 8,767 6,599
Income tax expense 4,479 4,422 4,085 3,278 2,256
Net income $ 7,308 $ 7,116 $ 6,564 $ 5,489 $ 4,343
Total revenue $ 32,252 $ 31,804 $ 31,624 $ 29,673 $ 28,542
Per Common Share Data:
Earnings per share (basic) $ 0.44 $ 0.43 $ 0.41 $ 0.35 $ 0.28
Earnings per share (diluted) 0.43 0.43 0.40 0.34 0.28
Weighted average number of common shares outstanding:
Basic 16,770,725 16,467,654 16,172,223 15,858,278 15,498,119
Diluted 17,070,473 16,673,596 16,341,975 16,016,972 15,721,876
Performance Ratios:
Return on average assets annualized (ROAA) 0.75% 0.77% 0.73% 0.64% 0.51%
Return on average equity annualized (ROAE) 9.27% 9.44% 9.06% 7.83% 6.37%
Net interest margin (taxable equivalent basis) 2.63% 2.74% 2.79% 2.82% 2.79%
Efficiency ratio (D) 59.45% 57.58% 60.36% 65.22% 70.05%
Operating expenses / average assets annualized 1.96% 1.98% 2.08% 2.22% 2.36%
(A) The quarter ended December 31, 2016 and September 30, 2016 included a reduction in FDIC premium. The reduction was a result of an amendment to small institution pricing for deposit insurance by the FDIC effective the quarter after the FDIC reserve ratio reaches 1.15%. The reserve ratio reached 1.15% effective as of the quarter ended June 30, 2016.
(B) The quarter ended December 31, 2015 included $2.5 million of charges related to the closure of two branch offices. These charges reduced pretax income by $2.5 million, net income by $1.6 million, diluted earnings per share by $0.10, ROAA by 0.05%and ROAE by 0.60%, and increased the efficiency ratio by 8.75%.
(C) Total revenue includes gain from sale of loans held for sale at lower of cost or fair value.
(D) Calculated as (total operating expenses, excluding provision for losses on REO) as a percentage of (net interest income plus noninterest income less gain on securities and gain on loans held for sale at lower of cost or fair value). See Non-GAAP financial measures reconciliation included in these tables.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands, except share data)
(Unaudited)
For the
Twelve Months Ended
December 31, Change
Income Statement Data: 2016 2015 (A) $ %
Interest income $ 117,048 $ 99,142 $ 17,906 18%
Interest expense 20,613 14,690 5,923 40%
Net interest income 96,435 84,452 11,983 14%
Provision for loan losses 7,500 7,100 400 6%
Net interest income after provision for loan losses 88,935 77,352 11,583 15%
Wealth management fee income 18,240 17,039 1,201 7%
Service charges and fees 3,252 3,323 (71) -2%
Bank owned life insurance 1,407 1,297 110 8%
Gain on loans held for sale at fair value (Mortgage banking) 1,010 528 482 91%
Gains on loans held for sale at lower of cost or fair value 1,233 - 1,233 N/A
Fee income related to loan level, back-to-back swaps 1,638 373 1,265 339%
Gain on sale of SBA loans 623 7 616 8,800%
Other income 1,396 620 776 125%
Securities gains, net 119 527 (408) -77%
Total other income 28,918 23,714 5,204 22%
Compensation and employee benefits 45,003 40,278 4,725 12%
Premises and equipment 11,245 11,569 (324) -3%
FDIC insurance expense 4,758 2,154 2,604 121%
Other expenses 14,106 14,925 (819) -5%
Total operating expenses 75,112 68,926 6,186 9%
Income before income taxes 42,741 32,140 10,601 33%
Income tax expense 16,264 12,168 4,096 34%
Net income $ 26,477 $ 19,972 $ 6,505 33%
Total revenue $ 125,353 $ 108,166 $ 17,187 16%
Per Common Share Data: