Peapack-Gladstone Financial Corporation Reports Another Quarter of Strong Results
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Up)BEDMINSTER, NJ -- (Marketwired) -- 10/28/15 -- Peapack-Gladstone Financial Corporation (NASDAQ: PGC) (the "Corporation" or the "Company") recorded net income of $15.63 million and diluted earnings per share of $1.02 for the nine months ended September 30, 2015, compared to $10.68 million and $0.90, respectively, for the same nine month period last year, reflecting growth of 46 percent and 13 percent, respectively. The Company's provision for loan losses for the nine months of 2015 of $5.15 million reflected an increase of $1.53 million from the $3.63 million for the same 2014 period.
For the quarter ended September 30, 2015, the Corporation recorded net income of $5.38 million and diluted earnings per share of $0.35, compared to $3.86 million and diluted earnings per share of $0.32 for the same three month period last year, reflecting in of 39 percent and 9 percent, respectively. The Company's provision for loan losses for the third quarter of 2015 of $1.60 million reflected an increase of $450 thousand from the $1.15 million for the third quarter of 2014.
The following table summarizes earnings for the quarters ended:
September September Increase/
(Dollars in millions, except EPS) 2015 2014 (Decrease)
--------------------------------- ---------- ---------- -----------------
Net interest income $ 21.71 $ 17.05 $ 4.66 27%
Provision for loan losses $ 1.60 $ 1.15 $ 0.45 39%
Pretax income $ 8.82 $ 6.26 $ 2.56 41%
Net income $ 5.38 $ 3.86 $ 1.52 39%
Diluted EPS $ 0.35 $ 0.32 $ 0.03 9%
Total revenue $ 27.32 $ 22.10 $ 5.22 24%
Return on average assets 0.66% 0.63% 0.03
Return on average equity 8.19% 8.35% (0.16)
Efficiency ratio (A) 61.14% 66.58% (5.44)
(A) See Non-GAAP financial measures reconciliation table on page 26.
Doug Kennedy, President and CEO, said, "We continue to generate strong results and drive operating efficiencies, as we continue to successfully execute on our Growth Strategy -- Expanding Our Reach."
Q3 2015 highlights follow:
- Earnings and performance ratios for the third quarter of 2015 reflected improvement when compared to the third quarter of 2014's results (as reflected just above). Year over year growth in EPS was 9 percent, despite 2.776 million common shares issued in the December 2014 capital raise.
- Loans at September 30, 2015 totaled $2.86 billion. This reflected growth of $814 million when compared to $2.04 billion at September 30, 2014. Year over year loan growth was 40 percent.
- Multifamily loan participations sold in the third quarter of 2015 totaled $40 million. Additionally, as of September 30, 2015, $27 million of multifamily loans were classified as loans held for sale representing a participation transaction that is anticipated to close during Q4 2015.
- Asset quality metrics continued to be strong at September 30, 2015. Nonperforming assets at September 30, 2015 were $7.9 million or 0.24 percent of total assets. Total loans past due 30 through 89 days and still accruing were $2.7 million at September 30, 2015.
- Commercial & Industrial (C&I) loans at September 30, 2015 totaled $457 million. This reflected growth of $231 million when compared to the $226 million at September 30, 2014. Year over year C&I loan growth was 102 percent. (Not included in totals above are $20 million of C&I loans which closed in early October.)
- Total "customer" deposit balances (defined as deposits excluding brokered CDs and brokered "overnight" interest-bearing demand deposits) grew to $2.55 billion at September 30, 2015 from $1.93 billion at September 30, 2014. Year over year customer deposit growth totaled 32 percent.
- The Company's net interest income for the third quarter of 2015 was $21.71 million. This reflected improvement when compared to $17.05 million for the third quarter of 2014. Year over year growth in net interest income was 27 percent.
- At September 30, 2015, the market value of assets under administration at the Private Wealth Management Division of Peapack-Gladstone Bank ("the Bank") was nearly $3.3 billion, including the acquisition of Wealth Management Consultants, which occurred in May 2015.
- Fee income from the Private Wealth Management Division totaled $4.17 million for the third quarter of 2015, growing from $3.66 million for the third quarter of 2014. Year over year growth in wealth management fee income was 14 percent.
- The Company continued to leverage the capital raised in the fourth quarter of 2014. The Company believes it has sufficient capital to support its continued growth and expansion for the immediate future.
- The book value per share at September 30, 2015 of $17.33 reflected improvement when compared to $15.80 at September 30, 2014. Year over year growth in book value per share totaled 10 percent.
Net Interest Income / Net Interest Margin
Net interest income was $21.71 million for the third quarter of 2015, compared to $17.05 million for the same quarter last year, reflecting growth of $4.66 million or 27 percent when compared to the prior year period. Net interest income for the third quarter of 2015 benefitted from significant loan growth during the fourth quarter of 2014, as well as during the first nine months of 2015.
While net interest income for the third quarter of 2015 improved compared to prior periods, the net interest margin, on a fully tax-equivalent basis, was 2.75 percent for the September 2015 quarter compared to 2.89 percent for the September 2014 quarter. Net interest margin continued to be impacted by the effect of low market yields, as well as competitive pressures in attracting new loans and deposits. The Company expects continued loan and deposit growth in this competitive environment.
Net interest margin is also affected by the maintenance of larger average interest earning deposit/cash balances, as well as larger balances of liquid investment securities. During 2014, the Company began maintaining greater liquidity on its balance sheet to support its expansive loan program. Mr. Kennedy said, "As I have said before, given our rapid growth, we had decided to maintain and will continue to maintain higher liquidity on our balance sheet than typically needed for operations." Mr. Kennedy went on to note, "In addition to liquidity from cash equivalents and investment securities on our balance sheet, we also have close to $900 million of net secured funding available from the Federal Home Loan Bank."
Loan Originations / Loans
Total loan originations were $1.05 billion for the nine months ended September 30, 2015 compared to $772 million for the same nine month period in 2014.
For the third quarter ended September 30, 2015 loan originations were $290 million, down from $417 million for the June 2015 quarter, but up from $221 million for the September 2014 quarter. At September 30, 2015, loans totaled $2.86 billion compared to $2.74 billion three months ago at June 30, 2015 and compared to $2.04 billion one year ago at September 30, 2014, representing net increases of $113 million or 4 percent sequentially and $814 million or 40 percent, year over year.
At September 30, 2015, the multifamily loan portfolio loans totaled $1.44 billion compared to $1.37 billion three months ago at June 30, 2015 and compared to $928 million one year ago at September 30, 2014, representing net increases of $73 million or 5 percent sequentially and $516 million or 56 percent, year over year. The increases were net of participations sold, including $40 million of participations sold in the current September 2015 quarter, and $139 million for the nine months ended September 30, 2015. These participations were part of the Company's balance sheet management strategy and will likely continue in 2015 and beyond.
The commercial mortgage loan portfolio grew by $24 million from June 30, 2015 to September 30, 2015, reflecting linked quarter growth of 6 percent, and grew by $67 million from September 30, 2014 to September 30, 2015, reflecting year over year growth of 20 percent.
The net increases in both the multifamily and commercial mortgage portfolios were attributable to: the addition of seasoned banking professionals; continued attention to the client service aspect of the lending process; an expansion of New Jersey-based real estate marketing activities; and a focus on the Boroughs of New York City multifamily markets beginning in mid-2013. The increase was also due to demand from borrowers looking to refinance multifamily and other commercial mortgages held by other institutions.
Mr. Kennedy said, "As I explained last quarter, we anticipated multifamily loan growth would be less than past quarters, as we manage our balance sheet such that the C&I loan portfolio becomes a larger percentage of our overall loan portfolio. Our C&I pipeline remains robust and we believe we will continue to deliver strong growth."
For the quarter and nine months ended September 30, 2015 the Company closed $37 million and $215 million of commercial loans, respectively. Additionally, not included in these amounts are $20 million of C&I loans which closed in early October. When comparing September 30, 2015 to September 30, 2014, commercial loans grew $231 million or 102 percent, to $457 million at September 30, 2015 from $226 million one year ago at September 30, 2014. At September 30, 2015 the commercial loan portfolio comprised 16 percent of the overall loan portfolio, up from 11 percent one year ago at September 30, 2014.
Mr. Kennedy said, "As a result of our investment in and commitment to C&I banking, including the addition in 2014 and 2015 of highly regarded bankers with industry and capital markets expertise, and the addition of Eric H. Waser, Head of Commercial Banking in February 2015, we have seen, and believe will continue to see, our C&I client base and corresponding loan portfolio grow and consume a larger percentage of our overall loan portfolio. However, due to the nature of this business, this growth will likely not be linear each quarter, but rather will be apparent over longer periods of time."
Mr. Kennedy went on to say, "We believe 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."
Deposits / Funding / Balance Sheet Management
Net asset growth of $151 million and paydowns of overnight borrowings of $88 million and brokered (overnight) interest-bearing deposits of $50 million in the September 2015 quarter were principally funded by customer deposit growth of $274 million. Mr. Kennedy said, "As I noted in last quarter's release, we saw much of our June 30 deposit pipeline fund throughout July, eliminating our June 30th overnight borrowing position." Mr. Kennedy went on to say, "Customer deposit growth throughout the September quarter was very strong. A portion of this growth was due to a New York City based family office which opened a multiple account core deposit relationship."
Although brokered interest-bearing demand ("overnight") deposits decreased $50 million to $243 million at September 30, 2015, these deposits continue to be maintained as an additional source of liquidity. The interest rate paid on these deposits allows the Bank to fund at attractive rates and engage in interest rate swaps to hedge its asset-liability interest rate risk. The Company ensures ample available collateralized liquidity as a backup to these short term brokered deposits.
From a liquidity/funding perspective, such brokered deposits, at a direct cost of approximately 25 basis points (excluding costs of hedging), are generally a more cost effective alternative than borrowings which require pledged collateral when drawn, as secured wholesale borrowings do. From a balance sheet management perspective, the rate paid on these short term brokered deposits enables their use in swap transactions for an efficient hedging/interest rate risk management program. As of September 30, 2015, the Company had transacted pay fixed, receive floating interest rate swaps totaling $180 million notional amount.
Certificates of deposit have also been utilized more extensively in 2015 compared to prior periods. The majority of these deposits have been longer term and have generally been transacted as part of the Company's interest rate risk management. These certificates of deposit are also a more cost effective alternative than other borrowings of similar duration.
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 products will help support both core deposit growth and commercial lending opportunities."
Wealth Management Business
In the September 2015 quarter, Peapack-Gladstone Bank's wealth management business generated $4.17 million in fee income compared to $4.53 million for the June 2015 quarter. The June quarter included $399 thousand of fees related to tax return preparation which is seasonal to that quarter. John P. Babcock, President of Private Wealth Management, noted, "Excluding the effect of the tax return preparation fees, wealth management fees for the September 2015 quarter were generally flat to the fee income in the June 2015 quarter, notwithstanding an approximate 8 percent decline in the S&P index during the September 2015 quarter. The effect of the associated market value declines were positively offset by continued strong new business and new client acquisitions."
The September 2015 quarter's wealth management fees reflected an increase of $508 thousand or 14 percent when compared to fees for the same 2014 quarter. The growth in fee income was due to a combination of our acquisition of Wealth Management Consultants, LLC (WMC) which closed in May 2015, as well as new business.
The market value of the assets under administration (AUA) of the wealth management division was $3.25 billion at September 30, 2015, down approximately 6 percent from $3.45 billion at June 30, 2015 due to investment value depreciation due to market conditions, but up 14 percent from $2.86 billion at September 30, 2014 due to the WMC acquisition as well as new business.
Mr. Babcock said, "We continue to incorporate wealth into every conversation we have with all of the Company's clients, across all business lines. We have expanded our wealth management team and will continue to grow our team and expand the products, services, and advice we deliver to our clients. Despite the headwinds from Q3 market action going into the fourth quarter, we continue to remain optimistic and see continued strong growth in this business segment."
Other Noninterest Income
Service charges and fees for the September 2015 quarter were $832 thousand, compared to $829 thousand for the September 2014 quarter. Several categories reflected improvement in the quarter, including income from debit card usage as well as account analysis fees. These increases were offset by reduced overdraft/NSF fees.
The September 2015 quarter included $102 thousand of income from the sale of newly originated residential mortgage loans (mortgage banking), up from $87 thousand in the same 2014 quarter. The volume of residential loans originated for sale was slightly greater in the 2015 period compared to the 2014 period.
Securities gains were $83 thousand for the September 2015 quarter compared to $39 thousand for the September 2014 quarter. Sales of securities have been generally employed to benefit interest rate risk, prepayment risk, and/or liquidity risk. Given the duration of our investment portfolio and the interest rate environment, as well as the future outlook, we anticipate such sales will continue to be a very small component of the Company's operations.
Other income of $164 thousand for the September 2015 quarter was generally flat to the September 2014 quarter, but down $381 thousand from the June 2015 quarter. The June 2015 quarter included $373 thousand of fee income related to the Company's loan level / back-to-back swap program, while the September quarter did not include any fee income from this program. The program utilizes mirror interest rate swaps, one directly with the loan customer and one directly with a well-established counterparty. This enables a loan customer to benefit from a fixed rate loan, while the Company records a floating rate loan. The program provides enhanced interest rate risk management, as well as the potential for fee income for the Company. While the Company cannot predict the amount of fee income that may be recognized each period, this program is a part of ongoing operations.
Operating Expenses
The Company's total operating expenses were $16.90 million for the quarter ended September 30, 2015 compared to $14.69 million in the same 2014 quarter, reflecting a net increase of $2.21 million. The increase in total operating expenses is in line with our Strategic Plan.
Salary and benefits expense increased in the September 2015 quarter when compared to the same quarter last year due to strategic hiring in line with the Company's Plan. Also contributing to the increase was the acquisition of WMC. Additionally, normal salary increases and increased bonus/incentive accruals associated with the Company's growth contributed to the increase.
Premises and equipment expense and FDIC insurance expense for the quarter ended September 30, 2015 increased when compared to the same quarter last year. The increases were consistent with the Company's continued growth.
Other expenses for the September 2015 quarter increased when compared to the September 2014 quarter. The current 2015 period included: a $250 thousand provision for losses on REO, increased wealth management division expenses due to growth in the business as well as the WMC acquisition, and increased professional fee expenses associated with the Company's growth, as well as various project work.
Mr. Kennedy noted, "Expense increases continue to track to our Plan. We expect that the trend of higher operating expenses will continue, as we continue to bring on high caliber revenue producers and invest in our infrastructure, in line with our Plan. Further, we generally expect revenue and profitability related to new revenue producers to lag those expenses by several quarters. It is important to note, however, that our plan has delivered positive operating leverage as evidenced by revenue growth outpacing expense growth, which has caused our Efficiency Ratio to improve. Our Efficiency Ratio was 61 percent for the September 2015 quarter, reflecting an improvement from 67 percent for the September 2014 quarter. Additionally, total expenses as a percentage of average assets has improved to 2.07 percent for the September 2015 quarter from 2.39 percent for the September 2014."
Mr. Kennedy also said, "After completing a comprehensive analysis of our branch locations, we have decided to close two of our branch offices. Our analysis included review of transaction volume; deposit source, mix and balances; deposit growth opportunities; market share; and profitability. Our branches located at 1038 Stelton Road in Piscataway ("Piscataway") and at 54 Morris and Essex Turnpike on the Short Hills/Summit border ("Short Hills") will be closed in December 2015. However, we plan on repositioning our Short Hills office as a non-branch financial services office. Due to the nature of the deposits in both locations, as well as the close proximity of our other Summit branch to the Short Hills location, we anticipate that we will retain the majority of deposits. While we anticipate an approximate $2.4 million to $3.0 million pretax charge (approximately $1.5 million to $1.8 million after tax) in Q4 2015 related to these closures, we expect expense saves that will recoup that charge in three years or less."
Provision for Loan Losses / Asset Quality
For the quarter ended September 30, 2015, the Company's provision for loan losses was $1.60 million, compared to $1.15 million for the September 2014 quarter. Charge-offs, net of recoveries, for the third quarter of 2015 year were only $195 thousand. The larger provision in 2015 was due to loan growth, as well as greater qualitative factor allocations of the allowance to C&I and Commercial Real Estate loans.
At September 30, 2015 the allowance for loan losses was $24.37 million, 320 percent of nonperforming loans and 0.85 percent of total loans, compared to $18.30 million, 208 percent of nonperforming loans and 0.90 percent of total loans one year prior, at September 30, 2014.
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 September 30, 2015 were just $7.9 million or 0.24 percent of total assets. Total loans past due 30 through 89 days and still accruing were only $2.7 million at September 30, 2015.
Capital / Dividends
The Company's capital position in the September 2015 quarter was benefitted by net income of $5.4 million and also by $4.3 million of voluntary share purchases in the Dividend Reinvestment Plan, which continue to be a source of capital for the company.
At September 30, 2015, the Company's leverage, common equity tier 1, tier 1 and total risk based capital ratios were 8.10 percent, 12.44 percent, 12.44 percent and 13.59 percent, respectively. The Company's ratios are all above the respective 5 percent, 6.5 percent, 8 percent, and 10 percent levels required to be considered well capitalized under regulatory guidelines applicable to banks.
As previously announced on October 22, 2015, the Board of Directors declared a regular cash dividend of $0.05 per share payable on November 20, 2015 to shareholders of record on November 5, 2015.
ABOUT THE COMPANY
Peapack-Gladstone Financial Corporation is a New Jersey bank holding company with total assets of $3.27 billion as of September 30, 2015. 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;
- 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, 2014. 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
------------------------------------------------------
Sept 30, June 30, March 31, Dec 31, Sept 30,
2015 2015 2015 2014 2014
---------- ---------- ---------- ---------- ----------
ASSETS
Cash and due from
banks $ 10,695 $ 6,205 $ 7,439 $ 6,621 $ 6,596
Federal funds sold 101 101 101 101 101
Interest-earning
deposits 65,402 32,382 65,283 24,485 114,124
---------- ---------- ---------- ---------- ----------
Total cash and cash
equivalents 76,198 38,688 72,823 31,207 120,821
Securities available
for sale 220,930 245,897 276,119 332,652 269,550
FHLB and FRB stock, at
cost 11,737 15,590 10,598 11,593 9,121
Loans held for sale 27,524 745 4,245 839 351
Residential mortgage 469,865 470,863 466,333 466,760 470,030
Multifamily mortgage 1,444,334 1,371,139 1,214,714 1,080,256 928,054
Commercial mortgage 399,592 375,440 339,037 308,491 332,507
Commercial loans 456,611 438,461 336,079 308,743 225,814
Construction loans 1,409 1,417 5,777 5,998 6,025
Consumer loans 32,563 29,996 28,206 28,040 27,597
Home equity lines of
credit 50,370 51,675 50,399 50,141 48,200
Other loans 483 2,947 1,755 1,838 2,560
---------- ---------- ---------- ---------- ----------
Total loans 2,855,227 2,741,938 2,442,300 2,250,267 2,040,787
Less: Allowances for
loan losses 24,374 22,969 20,816 19,480 18,299
---------- ---------- ---------- ---------- ----------
Net loans 2,830,853 2,718,969 2,421,484 2,230,787 2,022,488
Premises and equipment 31,310 31,637 32,068 32,258 30,825
Other real estate
owned 330 956 1,103 1,324 949
Accrued interest
receivable 6,839 6,451 5,943 5,371 5,126
Bank owned life
insurance 32,727 32,565 32,404 32,634 32,448
Deferred tax assets,
net 14,613 12,673 10,458 10,491 11,661
Other assets 15,902 13,999 12,212 13,241 11,181
---------- ---------- ---------- ---------- ----------
TOTAL ASSETS $3,268,963 $3,118,170 $2,879,457 $2,702,397 $2,514,521
========== ========== ========== ========== ==========
LIABILITIES
Deposits:
Noninterest-bearing
demand deposits $ 399,200 $ 386,588 $ 377,399 $ 366,371 $ 383,268
Interest-bearing
demand deposits 829,970 667,847 634,580 600,889 558,537
Savings 117,665 120,606 115,515 112,878 111,897
Money market
accounts 792,685 717,246 714,466 700,069 713,383
Certificates of
deposit - Retail 411,335 384,235 310,678 198,819 165,834
---------- ---------- ---------- ---------- ----------
Subtotal "customer"
deposits 2,550,855 2,276,522 2,152,638 1,979,026 1,932,919
IB Demand - Brokered 243,000 293,000 263,000 188,000 138,000
Certificates of
deposit - Brokered 93,690 94,224 106,694 131,667 132,500
---------- ---------- ---------- ---------- ----------
Total deposits 2,887,545 2,663,746 2,522,332 2,298,693 2,203,419
Overnight borrowings - 87,500 - 54,600 -
Federal home loan bank
advances 83,692 83,692 83,692 83,692 83,692
Capital lease
obligation 10,350 10,475 10,594 10,712 9,734
Other liabilities 19,448 14,881 13,486 12,433 12,646
Due to brokers,
securities
settlements 1,528 - - - 16,960
---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES 3,002,563 2,860,294 2,630,104 2,460,130 2,326,451
Shareholders' equity 266,400 257,876 249,353 242,267 188,070
---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES
AND SHAREHOLDERS'
EQUITY $3,268,963 $3,118,170 $2,879,457 $2,702,397 $2,514,521
========== ========== ========== ========== ==========
Assets under
administration at
Peapack-Gladstone
Bank's Wealth
Management Division
(market value, not
included above) $3,250,835 $3,445,939 $3,053,110 $2,986,623 $2,857,727
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED BALANCE SHEET DATA
(Dollars in Thousands)
(Unaudited)
As of
-----------------------------------------------------
Sept 30, June 30, March 31, Dec 31, Sept 30,
2015 2015 2015 2014 2014
--------- --------- --------- --------- ---------
Asset Quality:
Loans past due over 90
days and still
accruing $ - $ - $ - $ - $ -
Nonaccrual loans 7,615 7,111 6,335 6,850 8,790
Other real estate
owned 330 956 1,103 1,324 949
--------- --------- --------- --------- ---------
Total nonperforming
assets $ 7,945 $ 8,067 $ 7,438 $ 8,174 $ 9,739
========= ========= ========= ========= =========
Nonperforming loans to
total loans 0.27% 0.26% 0.26% 0.30% 0.43%
Nonperforming assets
to total assets 0.24% 0.26% 0.26% 0.30% 0.39%
Accruing TDR's (A) $ 14,609 $ 13,695 $ 13,561 $ 13,601 $ 13,045
Loans past due 30
through 89 days and
still accruing $ 2,748 $ 1,744 $ 2,481 $ 1,755 $ 2,278
Classified loans $ 41,985 $ 38,676 $ 38,450 $ 35,809 $ 34,752
Impaired loans $ 22,224 $ 20,806 $ 19,896 $ 20,451 $ 21,834
Allowance for loan
losses:
Beginning of period $ 22,969 $ 20,816 $ 19,480 $ 18,299 $ 17,204
Provision for loan
losses 1,600 2,200 1,350 1,250 1,150
Charge-offs, net (195) (47) (14) (69) (55)
--------- --------- --------- --------- ---------
End of period $ 24,374 $ 22,969 $ 20,816 $ 19,480 $ 18,299
========= ========= ========= ========= =========
ALLL to nonperforming
loans 320.08% 323.01% 328.59% 284.38% 208.18%
ALLL to total loans 0.85% 0.84% 0.85% 0.87% 0.90%
Capital Adequacy
Tier I leverage 8.10% 8.48% 8.80% 9.11% 7.57%
Tier I capital to risk
weighted assets 12.44% 12.46% 13.57% 14.38% 12.16%
Common equity tier I
capital ratio to
risk-weighted assets
(B) 12.44% 12.46% 13.57% N/A N/A
Tier I & II capital to
risk-weighted assets 13.59% 13.58% 14.71% 15.55% 13.36%
Equity to total assets
(end of period) 8.15% 8.27% 8.66% 8.96% 7.48%
Book value per share
(C) (D) $ 17.33 $ 17.02 $ 16.61 $ 16.36 $ 15.80
(A) Does not include $2.8 million at September 30, 2015, $2.2 million at
June 30, 2015, $1.4 million at March 31, 2015, $1.4 million at
December 31, 2014, and $2.4 million at September 30, 2014 of TDR's
included in nonaccrual loans.
(B) New capital ratio required under Basel III effective March 31, 2015.
(C) Shares included in the book value per share calculation are shares
outstanding at period end less the restricted shares that have not
yet vested.
(D) Tangible book value per share was $17.12 at September 30, 2015,
$16.80 at June 30, 2015, $16.57 at March 31, 2015, $16.32 at December
31, 2014, and $15.75 at September 30, 2014. Tangible book value per
share is different than book value per share because it excludes
intangible assets. See Non-GAAP financial measures reconciliation
included in these tables.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
LOANS CLOSED
(Dollars in Thousands)
(Unaudited)
For the Quarters Ended
-------------------------------------------------
Sept 30, June 30, March 31, Dec 31, Sept 30,
2015 2015 2015 2014 2014
--------- --------- --------- --------- ---------
Residential loans retained $ 20,623 $ 23,117 $ 16,986 $ 10,661 $ 20,540
Residential loans sold 6,078 10,978 8,938 8,230 5,561
--------- --------- --------- --------- ---------
Total residential loans 26,701 34,095 25,924 18,891 26,101
CRE (includes Community
banking) 47,450 29,561 57,787 14,953 3,208
Multifamily (includes
Community banking) 149,763 206,803 209,034 172,021 105,584
Commercial loans (includes
Community banking) 37,361 136,483 40,696 89,905 74,029
Wealth lines of credit 24,000 6,150 10,260 - -
--------- --------- --------- --------- ---------
Total commercial loans 258,574 378,997 317,777 276,879 182,821
Installment loans 933 1,128 344 2,015 9,410
Home equity lines of credit 3,775 3,225 3,377 4,140 2,550
--------- --------- --------- --------- ---------
Total loans closed $ 289,983 $ 417,445 $ 347,422 $ 301,925 $ 220,882
========= ========= ========= ========= =========
For the Nine Months
Ended
-----------------------
Sept 30, Sept 30,
2015 2014
----------- -----------
Residential loans retained $ 60,726 $ 49,438
Residential loans sold 25,994 19,916
----------- -----------
Total residential loans 86,720 69,354
CRE (includes Community banking) 134,798 39,224
Multifamily (includes Community banking) 565,600 480,664
Commercial loans (includes Community banking) 214,540 152,654
Wealth lines of credit 40,410 -
----------- -----------
Total commercial loans 955,348 672,542
Installment loans 2,405 16,471
Home equity lines of credit 10,377 13,927
----------- -----------
Total loans closed $ 1,054,850 $ 772,294
=========== ===========
Includes loans and lines of credit that closed in the period, but not necessarily funded.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands, except share data)
(Unaudited)
For the Three Months Ended
---------------------------------------------------------------
Sept 30, June 30, March 31, Dec 31, Sept 30,
2015 2015 2015 2014 2014
----------- ----------- ----------- ----------- -----------
Income
Statement
Data:
Interest
income $ 25,806 $ 23,852 $ 22,361 $ 20,786 $ 19,210
Interest
expense 4,100 3,508 2,778 2,434 2,162
----------- ----------- ----------- ----------- -----------
Net
interest
income 21,706 20,344 19,583 18,352 17,048
Provision
for loan
losses 1,600 2,200 1,350 1,250 1,150
----------- ----------- ----------- ----------- -----------
Net
interest
income
after
provision
for loan
losses 20,106 18,144 18,233 17,102 15,898
Wealth
management
fee income 4,169 4,532 4,031 3,822 3,661
Service
charges and
fees 832 837 805 880 829
Bank owned
life
insurance 260 248 537 274 276
Gain on
loans held
for sale at
fair value
(Mortgage
banking) 102 161 148 128 87
(Loss)/gain
on loans
held for
sale at
lower of
cost or
fair value - - - (3) (7)
Other income 164 545 93 142 167
Securities
gains, net 83 176 268 44 39
----------- ----------- ----------- ----------- -----------
Total
other
income 5,610 6,499 5,882 5,287 5,052
----------- ----------- ----------- ----------- -----------
Salaries and
employee
benefits 10,322 9,872 9,425 9,188 9,116
Premises and
equipment 2,785 2,778 2,616 2,627 2,564
FDIC
insurance
expense 416 431 482 453 350
Other
expenses 3,376 3,185 3,245 3,310 2,663
----------- ----------- ----------- ----------- -----------
Total
operating
expenses 16,899 16,266 15,768 15,578 14,693
----------- ----------- ----------- ----------- -----------
Income
before
income
taxes 8,817 8,377 8,347 6,811 6,257
Income tax
expense 3,434 3,139 3,339 2,599 2,393
----------- ----------- ----------- ----------- -----------
Net income $ 5,383 $ 5,238 $ 5,008 $ 4,212 $ 3,864
=========== =========== =========== =========== ===========
Total
revenue $ 27,316 $ 26,843 $ 25,465 $ 23,639 $ 22,100
=========== =========== =========== =========== ===========
Per Common
Share Data:
Earnings per
share
(basic) $ 0.35 $ 0.34 $ 0.34 $ 0.32 $ 0.33
Earnings per
share
(diluted) 0.35 0.34 0.33 0.32 0.32
Weighted
average
number of
common shares
outstanding:
Basic 15,253,009 15,082,516 14,909,722 13,037,947 11,841,777
Diluted 15,435,939 15,233,151 15,070,352 13,163,877 11,956,356
Performance
Ratios:
Return on
average
assets
annualized 0.66% 0.70% 0.71% 0.64% 0.63%
Return on
average
common
equity
annualized 8.19% 8.24% 8.13% 8.01% 8.35%
Net interest
margin
(taxable
equivalent
basis) 2.75% 2.80% 2.88% 2.89% 2.89%
Efficiency
ratio (A) 61.14% 61.00% 62.58% 66.01% 66.58%
Operating
expenses /
average
assets
annualized 2.07% 2.16% 2.24% 2.36% 2.39%
(A) 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 loss or 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
Nine Months Ended
September 30, Change
------------------------ ---------------------
Income Statement Data: 2015 2014 $ %
----------- ----------- ---------- ---------
Interest income $ 72,019 $ 54,789 $ 17,230 31%
Interest expense 10,386 5,247 5,139 98%
----------- ----------- ---------- ---------
Net interest income 61,633 49,542 12,091 24%
Provision for loan losses 5,150 3,625 1,525 42%
----------- ----------- ---------- ---------
Net interest income after
provision for loan losses 56,483 45,917 10,566 23%
Wealth management fee income 12,732 11,420 1,312 11%
Service charges and fees 2,474 2,231 243 11%
Bank owned life insurance 1,045 818 227 28%
Gain on loans held for sale
at fair
Value (Mortgage banking) 411 310 101 33%
(Loss)/gain on loans held
for sale at lower of cost
or fair value - 169 (169) -100%
Other income 802 356 446 125%
Securities gains, net 527 216 311 144%
----------- ----------- ---------- ---------
Total other income 17,991 15,520 2,471 16%
----------- ----------- ---------- ---------
Salaries and employee
benefits 29,619 27,053 2,566 9%
Premises and equipment 8,179 7,336 843 11%
FDIC insurance expense 1,329 928 401 43%
Other expenses 9,806 8,645 1,161 13%
----------- ----------- ---------- ---------
Total operating expenses 48,933 43,962 4,971 11%
----------- ----------- ---------- ---------
Income before income taxes 25,541 17,475 8,066 46%
Income tax expense 9,912 6,797 3,115 46%
----------- ----------- ---------- ---------
Net income $ 15,629 $ 10,678 4,951 46%
=========== =========== ========== =========
Total revenue (See footnote
(A) below) $ 79,624 $ 65,062 14,562 22%
=========== =========== ========== =========
Per Common Share Data:
Earnings per share (basic) $ 1.04 $ 0.91 $ 0.13 14%
Earnings per share (diluted) 1.02 0.90 0.12 13%
Weighted average number of
common shares outstanding:
Basic 15,083,006 11,723,873 3,359,133 29%
Diluted 15,293,747 11,833,507 3,460,240 29%
Performance Ratios:
Return on average assets
annualized 0.69% 0.63% 0.06% 10%
Return on average common
equity annualized 8.19% 7.95% 0.24% 3%
Net interest margin (taxable
equivalent basis) 2.81% 3.06% -0.25 -8%
Efficiency ratio (B) 61.55% 67.35% -5.80 -9%
Operating expenses / average
assets annualized 2.15% 2.60% -0.45 -17%
(A) Total revenue includes a $169 thousand gain (for 2014) from sale of
loans held for sale at lower of cost or fair value. Excluding this
gain, total revenue was $64,893 (for 2014).
(B) 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 loss or 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
AVERAGE BALANCE SHEET
UNAUDITED
THREE MONTHS ENDED
(Tax-Equivalent Basis, Dollars in Thousands)
September 30, 2015 September 30, 2014
----------------------------- -----------------------------
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
---------- ---------- ------ ---------- ---------- ------
ASSETS:
Interest-
earning
assets:
Investments:
Taxable (1) $ 214,967 $ 959 1.78% $ 192,207 $ 960 2.00%
Tax-exempt
(1) (2) 30,682 211 2.76 47,701 268 2.25
Loans held for
sale 1,075 10 3.76 1,026 10 3.90
Loans (2) (3):
Mortgages 465,603 3,796 3.26 464,227 3,879 3.34
Commercial
mortgages 1,839,312 16,119 3.51 1,231,798 11,790 3.83
Commercial 454,239 4,132 3.64 166,092 1,597 3.85
Commercial
construction 1,742 18 4.13 6,029 65 4.31
Installment 31,361 268 3.42 24,965 249 3.99
Home equity 51,012 415 3.25 48,371 394 3.26
Other 510 12 9.41 563 13 9.24
---------- ---------- ------ ---------- ---------- ------
Total loans 2,843,779 24,760 3.48 1,942,045 17,987 3.70
---------- ---------- ------ ---------- ---------- ------
Federal funds
sold 101 - 0.10 101 - 0.10
Interest-
earning
deposits 96,308 46 0.19 197,705 109 0.22
---------- ---------- ------ ---------- ---------- ------
Total interest-
earning assets 3,186,912 25,986 3.26% 2,380,785 19,334 3.25%
---------- ---------- ------ ---------- ---------- ------
Noninterest-
Earning
Assets:
Cash and due
from banks 7,434 6,262
Allowance for
loan losses (23,726) (17,720)
Premises and
equipment 31,574 30,985
Other assets 68,067 60,717
---------- ----------
Total
noninterest-
earning assets 83,349 80,244
---------- ----------
Total assets $3,270,261 $2,461,029
========== ==========
LIABILITIES:
Interest-
bearing
deposits:
Checking $ 810,106 $ 356 0.18% $ 541,920 $ 232 0.17%
Money markets 757,135 546 0.29 689,721 430 0.25
Savings 118,329 17 0.06 113,802 15 0.05
Certificates
of deposit -
retail 403,593 1,296 1.28 158,472 357 0.90
---------- ---------- ------ ---------- ---------- ------
Subtotal
interest-
bearing
deposits 2,089,163 2,215 0.42 1,503,915 1,034 0.28
Interest-
bearing
demand -
brokered 292,456 857 1.17 138,000 84 0.24
Certificates
of deposit -
brokered 93,907 504 2.15 144,872 550 1.52
---------- ---------- ------ ---------- ---------- ------
Total
interest-
bearing
deposits 2,475,526 3,576 0.58 1,786,787 1,668 0.37
---------- ---------- ------ ---------- ---------- ------
Borrowings 107,770 399 1.48 83,692 377 1.80
Capital lease
obligation 10,394 125 4.81 9,770 117 4.79
---------- ---------- ------ ---------- ---------- ------
Total
interest-
bearing
liabilities 2,593,690 4,100 0.63 1,880,249 2,162 0.46
---------- ---------- ------ ---------- ---------- ------
Noninterest-
bearing
liabilities:
Demand
deposits 398,181 383,423
Accrued
expenses and
other
liabilities 15,619 12,165
---------- ----------
Total
noninterest-
bearing
liabilities 413,800 395,588
Shareholders'
equity 262,771 185,192
---------- ----------
Total
liabilities
and
shareholders'
equity $3,270,261 $2,461,029
========== ==========
Net interest
income $ 21,886 $ 17,172
========== ==========
Net interest
spread 2.63% 2.79%
====== ======
Net interest
margin (4) 2.75% 2.89%
====== ======
(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.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
THREE MONTHS ENDED
(Tax-Equivalent Basis, Dollars in Thousands)
September 30, 2015 June 30, 2015
---------------------------- ----------------------------
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
---------- ---------- ------ ---------- ---------- ------
ASSETS:
Interest-earning
assets:
Investments:
Taxable (1) $ 214,967 $ 959 1.78% $ 244,087 $ 1,037 1.70%
Tax-exempt (1)
(2) 30,682 211 2.76 30,941 210 2.71
Loans held for
sale 1,075 10 3.76 2,049 24 4.64
Loans (2) (3):
Mortgages 465,603 3,796 3.26 466,033 3,800 3.26
Commercial
mortgages 1,839,312 16,119 3.51 1,663,150 14,767 3.55
Commercial 454,239 4,132 3.64 360,517 3,347 3.71
Commercial
construction 1,742 18 4.13 5,713 61 4.27
Installment 31,361 268 3.42 29,169 256 3.51
Home equity 51,012 415 3.25 51,710 417 3.23
Other 510 12 9.41 527 12 9.11
---------- ---------- ------ ---------- ---------- ------
Total loans 2,843,779 24,760 3.48 2,576,819 22,660 3.52
---------- ---------- ------ ---------- ---------- ------
Federal funds sold 101 - 0.10 101 - 0.10
Interest-earning
deposits 96,308 46 0.19 69,780 39 0.22
---------- ---------- ------ ---------- ---------- ------
Total interest-
earning assets 3,186,912 25,986 3.26% 2,923,777 23,970 3.28%
---------- ---------- ------ ---------- ---------- ------
Noninterest-Earning
Assets:
Cash and due from
banks 7,434 6,385
Allowance for loan
losses (23,726) (21,493)
Premises and
equipment 31,574 31,983
Other assets 68,067 66,131
---------- ----------
Total
noninterest-
earning assets 83,349 83,006
---------- ----------
Total assets $3,270,261 $3,006,783
========== ==========
LIABILITIES:
Interest-bearing
deposits:
Checking $ 810,106 $ 356 0.18% $ 670,473 $ 359 0.21%
Money markets 757,135 546 0.29 703,236 461 0.26
Savings 118,329 17 0.06 117,411 16 0.05
Certificates of
deposit - retail 403,593 1,296 1.28 343,781 1,051 1.22
---------- ---------- ------ ---------- ---------- ------
Subtotal
interest-bearing
deposits 2,089,163 2,215 0.42 1,834,901 1,887 0.41
Interest-bearing
demand - brokered 292,456 857 1.17 265,802 563 0.85
Certificates of
deposit -
brokered 93,907 504 2.15 98,191 504 2.05
---------- ---------- ------ ---------- ---------- ------
Total interest-
bearing deposits 2,475,526 3,576 0.58 2,198,894 2,954 0.54
---------- ---------- ------ ---------- ---------- ------
Borrowings 107,770 399 1.48 146,441 428 1.17
Capital lease
obligation 10,394 125 4.81 10,515 126 4.79
---------- ---------- ------ ---------- ---------- ------
Total interest-
bearing
liabilities 2,593,690 4,100 0.63 2,355,850 3,508 0.60
---------- ---------- ------ ---------- ---------- ------
Noninterest-bearing
liabilities:
Demand deposits 398,181 384,604
Accrued expenses
and other
liabilities 15,619 12,133
---------- ----------
Total noninterest-
bearing
liabilities 413,800 396,737
Shareholders'
equity 262,771 254,196
---------- ----------
Total liabilities
and shareholders'
equity $3,270,261 $3,006,783
========== ==========
Net interest
income $ 21,886 $ 20,462
========== ==========
Net interest
spread 2.63% 2.68%
====== ======
Net interest
margin (4) 2.75% 2.80%
====== ======
(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.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
NINE MONTHS ENDED
(Tax-Equivalent Basis, Dollars in Thousands)
September 30, 2015 September 30, 2014
---------------------------- ----------------------------
Average Income/ Average Income/
Balance Expense Yield Balance Expense Yield
---------- --------- ------ ---------- --------- ------
ASSETS:
Interest-earning
assets:
Investments:
Taxable (1) $ 244,117 $ 3,178 1.74% $ 196,313 $ 2,998 2.04%
Tax-exempt (1)
(2) 33,059 652 2.63 55,209 917 2.21
Loans held for
sale 1,301 44 4.49 1,124 35 4.17
Loans (2) (3):
Mortgages 465,785 11,380 3.26 497,692 12,635 3.38
Commercial
mortgages 1,655,501 44,475 3.58 1,108,732 31,943 3.84
Commercial 377,461 10,376 3.67 147,666 4,442 4.01
Commercial
construction 4,446 141 4.23 5,989 197 4.39
Installment 29,454 776 3.51 22,906 710 4.13
Home equity 51,129 1,237 3.23 47,569 1,149 3.22
Other 522 37 9.45 562 39 9.25
---------- --------- ------ ---------- --------- ------
Total loans 2,584,298 68,422 3.53 1,831,116 51,115 3.72
---------- --------- ------ ---------- --------- ------
Federal funds
sold 101 - 0.10 101 - 0.10
Interest-earning
deposits 85,932 128 0.20 94,120 142 0.20
---------- --------- ------ ---------- --------- ------
Total
interest-
earning
assets 2,948,808 72,424 3.27% 2,177,983 55,207 3.38%
---------- --------- ------ ---------- --------- ------
Noninterest-
Earning Assets:
Cash and due
from banks 6,877 6,548
Allowance for
loan losses (21,772) (17,012)
Premises and
equipment 31,935 30,966
Other assets 66,038 60,216
---------- ----------
Total
noninterest-
earning assets 83,078 80,718
---------- ----------
Total assets $3,031,886 $2,258,701
========== ==========
LIABILITIES:
Interest-bearing
deposits:
Checking $ 704,558 $ 1,028 0.19% $ 458,811 $ 438 0.13%
Money markets 723,824 1,470 0.27 666,986 1,137 0.23
Savings 116,410 48 0.05 115,746 45 0.05
Certificates of
deposit -
retail 332,315 3,010 1.21 154,091 1,081 0.94
---------- --------- ------ ---------- --------- ------
Subtotal
interest-
bearing
deposits 1,877,107 5,556 0.39 1,395,634 2,701 0.26
Interest-bearing
demand -
brokered 266,443 1,700 0.85 117,348 198 0.22
Certificates of
deposit -
brokered 106,048 1,532 1.93 86,986 845 1.30
---------- --------- ------ ---------- --------- ------
Total interest-
bearing
deposits 2,249,598 8,788 0.52 1,599,968 3,744 0.31
---------- --------- ------ ---------- --------- ------
Borrowings 121,277 1,219 1.34 97,359 1,149 1.57
Capital lease
obligation 10,514 379 4.81 9,861 354 4.79
---------- --------- ------ ---------- --------- ------
Total interest-
bearing
liabilities 2,381,389 10,386 0.58 1,707,188 5,247 0.41
---------- --------- ------ ---------- --------- ------
Noninterest-
bearing
liabilities:
Demand deposits 383,161 361,726
Accrued expenses
and other
liabilities 12,852 10,597
---------- ----------
Total
noninterest-
bearing
liabilities 396,013 372,323
Shareholders'
equity 254,484 179,190
---------- ----------
Total
liabilities and
shareholders'
equity $3,031,886 $2,258,701
========== ==========
Net interest
income $ 62,038 $ 49,960
========= =========
Net interest
spread 2.69% 2.97%
====== ======
Net interest
margin (4) 2.81% 3.06%
====== ======
(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.
PEAPACK-GLADSTONE FINANCIAL CORPORATION NON-GAAP FINANCIAL MEASURES RECONCILIATION
Tangible book value per share and tangible equity as a percentage of tangible assets at period end are non-GAAP financial measures derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from shareholders' equity and total assets, respectively. We calculate tangible book value per share by dividing tangible equity by period end common shares outstanding less restricted shares not yet vested, as compared to book value per common share, which we calculate by dividing shareholders' equity by period end common shares outstanding less restricted shares not yet vested. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios.
The efficiency ratio is a non-GAAP measure of expense control relative to recurring revenue. We calculate the efficiency ratio by dividing total noninterest expenses, excluding ORE provision, as determined under GAAP, by net interest income and total noninterest income as determined under GAAP, but excluding net gains/(losses) on loans held for sale at lower of cost or fair value and excluding net gains on securities from this calculation, which we refer to below as recurring revenue. We believe that this provides one reasonable measure of core expenses relative to core revenue.
We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial position, results and ratios. Our management internally assesses our performance based, in part, on these measures. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titles measures reported by other companies. A reconciliation of the non-GAAP measures of tangible common equity, tangible book value per share and efficiency ratio to the underlying GAAP numbers is set forth below.
Non-GAAP Financial Reconciliation
(Dollars in thousands, except share data)
Three Months Ended
Sept 30, June 30, March 31, Dec 31, Sept 30,
Tangible Book
Value Per Share 2015 2015 2015 2014 2014
----------- ----------- ----------- ----------- -----------
Shareholders'
equity $ 266,400 $ 257,876 $ 249,353 $ 242,267 $ 188,070
Less: Intangible
assets 3,311 3,342 563 563 563
----------- ----------- ----------- ----------- -----------
Tangible equity 263,089 254,534 248,790 241,704 187,507
Period end shares
outstanding 15,805,815 15,592,168 15,440,430 15,155,717 12,286,821
Less: Restricted
shares not yet
vested 435,312 436,908 429,642 345,095 382,252
----------- ----------- ----------- ----------- -----------
Total outstanding
shares 15,370,503 15,155,260 15,010,788 14,810,622 11,904,569
Tangible book
value per share 17.12 16.80 16.57 16.32 15.75
Book value per
share 17.33 17.02 16.61 16.36 15.80
Tangible Equity
to Tangible
Assets
Total Assets 3,268,963 3,118,170 2,879,457 2,702,397 2,514,521
Less: Intangible
assets 3,311 3,342 563 563 563
----------- ----------- ----------- ----------- -----------
Tangible assets 3,265,652 3,114,828 2,878,894 2,701,834 2,513,958
Tangible equity
to tangible
assets 8.06% 8.17% 8.64% 8.95% 7.46%
Equity to assets 8.15% 8.27% 8.66% 8.96% 7.48%
Three Months Ended
Sept 30, June 30, March 31, Dec 31, Sept 30,
Efficiency Ratio 2015 2015 2015 2014 2014
---------- ---------- ---------- ---------- ----------
Net interest income $ 21,706 $ 20,344 $ 19,583 $ 18,352 $ 17,048
Total other income 5,610 6,499 5,882 5,287 5,052
Less: (Loss)/gain on
loans held for sale
at lower of cost or
fair value - - - (3) (7)
Less: Securities
gains, net 83 176 268 44 39
---------- ---------- ---------- ---------- ----------
Total recurring
revenue 27,233 26,667 25,197 23,598 22,068
---------- ---------- ---------- ---------- ----------
Operating expenses 16,899 16,266 15,768 15,578 14,693
Less: ORE provision 250 - - - -
---------- ---------- ---------- ---------- ----------
Total operating
expenses 16,649 16,266 15,768 15,578 14,693
---------- ---------- ---------- ---------- ----------
Efficiency ratio 61.14% 61.00% 62.58% 66.01% 66.58%
Nine Months Ended
Sept 30, Sept 30,
Efficiency Ratio 2015 2014
---------- ----------
Net interest income $ 61,633 $ 49,542
Total other income 17,991 15,520
Less: Gain on loans held for sale at lower of
cost or fair value - 169
Less: Securities gains, net 527 216
---------- ----------
Total recurring revenue 79,097 64,677
---------- ----------
Operating expenses 48,933 43,962
Less: ORE provision 250 400
---------- ----------
Total operating expenses 48,683 43,562
---------- ----------
Efficiency ratio 61.55% 67.35%
Contact: Jeffrey J. Carfora SEVP and CFO Peapack-Gladstone Financial Corporation T: 908-719-4308
Source: Peapack-Gladstone Financial Corp
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