By 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 | |||||||||||||||||||
| Dec 31, | Sept 30, | June 30, | March 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: | |||||||||||||||||||
| (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, 2012 | December 31, 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, 2012 | December 31, 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
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