PGC Peapack Gladstone Financial Corporation

via NewMediaWire -- Peapack-Gladstone Financial Corporation (NASDAQ Global Select Market: PGC) (the “Company”) announces its second quarter 2024 financial results.

This earnings release should be read in conjunction with the Company’s Q2 2024 Investor Update, a copy of which is available on our website at www.pgbank.com and via a current report on Form 8-K on the website of the Securities and Exchange Commission at www.sec.gov.

During the second quarter of 2024, core relationship deposits grew $354 million to $4.6 billion which represents an annualized rate of 33%.  During the first six months of the year core relationship deposits have grown by $524 million. Strong growth in core relationship deposit balances have enabled the Company to repay $119.5 million of all outstanding short-term borrowings as of June 30, 2024.

The improvement in the Company’s liquidity profile also resulted in an increase in the net interest margin compared to the previous quarter. The net interest margin increased to 2.25% for the quarter ended June 30, 2024, compared to 2.20% for the quarter ended March 31, 2024.

The Company recorded total revenue of $56.6 million, net income of $7.5 million and diluted earnings per share (“EPS”) of $0.42 for the quarter ended June 30, 2024, compared to revenue of $57.5 million, net income of $13.1 million and diluted EPS of $0.73 for the quarter ended June 30, 2023. Return on average assets was 0.47%, return on average equity was 5.22%, and return on average tangible equity was 5.67% for the quarter ended June 30, 2024.

Douglas L. Kennedy, President and CEO said, “One year ago we announced our strategic decision to expand our footprint into New York City with the addition of a team of experienced banking professionals and a new office on Park Avenue. During the second quarter of this year, we have taken another step to enhance our expansion effort with the addition of thirteen (13) commercial private banking teams that bring with them decades of experience and deep client relationships in the metro New York market. Our second quarter results demonstrate the progress and momentum we are building toward a successful destination. Growth in customer deposits in an extremely competitive environment, improvement in our net interest margin, along with an enhanced liquidity profile are evidence of the positive results we are striving to achieve."

Mr. Kennedy also noted, “We continue to expand our unique private banking model that offers a ‘Single Point of Contact’ to deliver a white glove experience for all of our product offerings. We are being extremely well received by all those that we have had the opportunity to interact with and are very pleased with the results to date. While we are aware of the potential headwinds in front of us related to credit quality concerns and a challenging interest rate environment, we remain focused executing our strategy which we believe will deliver a successful outcome."

The following are select highlights for the period ended June 30, 2024:

Wealth Management:

• Gross new business inflows for Q2 2024 totaled $171 million ($139 million managed).
• AUM/AUA in our Wealth Management Division totaled $11.5 billion at June 30, 2024 compared to $10.9 billion at December 31, 2023.
• Wealth Management fee income was $16.4 million in Q2 2024, which amounted to 29% of total revenue for the quarter.

Commercial Banking and Balance Sheet Management:

• Total deposits grew by $382 million, to $5.7 billion at June 30, 2024 compared to $5.3 billion at December 31, 2023. The Company intentionally allowed $142 million in high cost, non-core relationship deposits to roll off during the first six months of the year. Excluding this deposit run-off, core relationship deposits have grown by $524 million during 2024.
• The Company has repaid all short-term borrowings as of June 30, 2024 compared to $404 million outstanding at December 31, 2023.
• Total loans declined $167 million to $5.3 billion at June 30, 2024 from $5.4 billion at December 31, 2023.
• Commercial and industrial lending (“C&I”) loan/lease balances represent 42% of the total loan portfolio at June 30, 2024.
• Fee income on unused commercial lines of credit totaled $786,000 for Q2 2024.
• The net interest margin ("NIM") was 2.25% in Q2 2024, an increase of 5 basis points compared to 2.20% at Q1 2024.
• Noninterest-bearing demand deposits increased by $35 million during the second quarter of 2024 and represented 17% of total deposits as of June 30, 2024.

Capital Management:

• Tangible book value per share increased slightly to $30.73 per share at June 30, 2024 compared to $30.31 at December 31, 2023.
• During the second quarter, the Company repurchased 100,000 shares of common stock at a cost of $2.2 million. During the first six months of 2024, the Company repurchased 200,000 shares of common stock at a cost of $4.6 million. For the full year 2023, the Company repurchased 455,341 shares at a cost of $12.5 million.
• At June 30, 2024, the Tier 1 Leverage Ratio stood at 11.14% for Peapack-Gladstone Bank (the "Bank") and 9.45% for the Company. The Common Equity Tier 1 Ratio (to Risk-Weighted Assets) was 14.05% for the Bank and 11.92% for the Company at June 30, 2024. These ratios remain significantly above well capitalized standards, as capital continues to benefit from net income generation.

SUMMARY INCOME STATEMENT DETAILS:

The following tables summarize specified financial details for the periods shown.

June 2024 Year Compared to Prior Year

		Six Months Ended				Six Months Ended
		June 30,				June 30,					Increase/
(Dollars in millions, except per share data)		2024				2023					(Decrease)
Net interest income		$	69.42			$	82.90				$	(13.48	)			(16	)%
Wealth management fee income			30.83				28.01					2.82				10
Capital markets activity			1.86				1.83					0.03				2
Other income			7.57				6.80					0.77				11
Total other income			40.26				36.64					3.62				10
Total Revenue			109.68				119.54					(9.86	)			(8	)%
Operating expenses			83.17				73.27					9.90				14
Pretax income before provision for credit losses			26.51				46.27					(19.76	)			(43	)
Provision for credit losses			4.54				3.21					1.33				41
Pretax income			21.97				43.06					(21.09	)			(49	)
Income tax expense			5.81				11.56					(5.75	)			(50	)
Net income		$	16.16			$	31.50				$	(15.34	)			(49	)%
Diluted EPS		$	0.91			$	1.74				$	(0.83	)			(48	)%
Return on average assets			0.51	%			0.99	%				(0.48	)
Return on average equity			5.58	%			11.44	%				(5.86	)

June 2024 Quarter Compared to Prior Year Quarter

		Three Months Ended					Three Months Ended
		June 30,					June 30,				Increase/
(Dollars in millions, except per share data)		2024					2023				(Decrease)
Net interest income		$	35.04				$	38.92			$	(3.88	)			(10	)%
Wealth management fee income			16.42					14.25				2.17				15
Capital markets activity			0.59					0.87				(0.28	)			(32	)
Other income			4.55					3.46				1.09				32
Total other income			21.56					18.58				2.98				16
Total Revenue			56.60					57.50				(0.90	)			(2	)%
Operating expenses			43.13					37.69				5.44				14
Pretax income before provision for credit losses			13.47					19.81				(6.34	)			(32	)
Provision for credit losses			3.91					1.70				2.21				130
Pretax income			9.56					18.11				(8.55	)			(47	)
Income tax expense			2.03					4.96				(2.93	)			(59	)
Net income		$	7.53				$	13.15			$	(5.62	)			(43	)%
Diluted EPS		$	0.42				$	0.73			$	(0.31	)			(42	)%
Return on average assets annualized			0.47	%				0.82	%			(0.35	)
Return on average equity annualized			5.22	%				9.43	%			(4.21	)

June 2024 Quarter Compared to Linked Quarter

		Three Months Ended				Three Months Ended
		June 30,				March 31,					Increase/
(Dollars in millions, except per share data)		2024				2024					(Decrease)
Net interest income		$	35.04			$	34.38				$	0.66				2	%
Wealth management fee income			16.42				14.41					2.01				14
Capital markets activity			0.59				1.27					(0.68	)			(54	)
Other income			4.55				3.02					1.53				51
Total other income			21.56				18.70					2.86				15
Total Revenue			56.60				53.08					3.52				7	%
Operating expenses			43.13				40.04					3.09				8
Pretax income before provision for credit losses			13.47				13.04					0.43				3
Provision for credit losses			3.91				0.63					3.28				521
Pretax income			9.56				12.41					(2.85	)			(23	)
Income tax expense			2.03				3.78					(1.75	)			(46	)
Net income		$	7.53			$	8.63				$	(1.10	)			(13	)%
Diluted EPS		$	0.42			$	0.48				$	(0.06	)			(13	)%
Return on average assets annualized			0.47	%			0.54	%				(0.07	)
Return on average equity annualized			5.22	%			5.94	%				(0.72	)

SUPPLEMENTAL QUARTERLY DETAILS:

Wealth Management

AUM/AUA in the Bank’s Wealth Management Division were $11.5 billion at June 30, 2024 compared to $10.9 billion at December 31, 2023.  For the June 2024 quarter, the Wealth Management Team generated $16.4 million in fee income, compared to $14.4 million for the March 31, 2024 quarter and $14.3 million for the June 2023 quarter. The equity markets improved during the first half of 2024, contributing to the increase in AUM/AUA along with gross new business inflows of $171 million.

John Babcock, President of the Bank's Wealth Management Division, noted, “Q2 2024 continued strong client inflows totaling new accounts and client additions of $171 million ($139 million managed). Our 2024 new business pipeline is healthy, and we continue to remain focused on delivering excellent service and advice to our clients. Our highly skilled wealth management professionals, our fiduciary powers and expertise, our financial planning capabilities combined with our high-touch client service model distinguishes us in our market and continues to drive our growth and success.”

Loans / Commercial Banking

Total loans declined $167 million, or 3%, to $5.3 billion at June 30, 2024 when compared to December 31, 2023, primarily driven by repayments, maturities and tighter lending standards. Nearly half of the decline in outstanding loans was related to reductions in multifamily and commercial real estate balances. Total C&I loans and leases at June 30, 2024 were $2.2 billion or 42% of the total loan portfolio.

Mr. Kennedy noted, “As previously mentioned, we have tightened our underwriting guidelines due to economic uncertainty, successfully excited some problem credits, and originations have also slowed due to the rate environment. As a result, our outstanding loan balances have declined during 2024. Recently, we have been building a pipeline of C&I loans and believe that we will make up the decline in loans experienced during the first half of 2024. We are proud to have built a leading middle market commercial banking franchise, as evidenced by our C&I Portfolio, Treasury Management services, Corporate Advisory and SBA businesses. We believe these business lines fit perfectly with our private banking business model and will generate solid production going forward.”

Net Interest Income (NII)/Net Interest Margin (NIM)

The Company’s NII of $35.0 million and NIM of 2.25% for Q2 2024 increased $667,000 and 5 basis points from NII of $34.4 million and NIM of 2.20% for the linked quarter (Q1 2024), and decreased $3.9 million and 24 basis points from NII of $38.9 million and NIM of 2.49% compared to the prior year period (Q2 2023).  During Q2 2024, the Company has seen NIM expansion partially due the paydown of overnight borrowings which were replaced by lower cost deposit balances.  Prior to Q2 2024, the Company had seen a sharp increase in interest expense mostly driven by higher deposit rates during 2023. Noninterest-bearing checking deposits increased by $35 million during the second quarter of 2024, which also benefited NIM. Cycle to date betas are approximately 53%.

Funding / Liquidity / Interest Rate Risk Management

Total deposits increased $382 million to $5.7 billion at June 30, 2024 from $5.3 billion at December 31, 2023.  The change in deposit balances included a decline in brokered deposits of $95 million.  The overall growth in deposits was used to pay down all overnight borrowings as of June 30, 2024, as well as providing additional balance sheet liquidity. Outstanding overnight borrowings were $404 million at December 31, 2023.

At June 30, 2024, the Company’s balance sheet liquidity (investments available for sale, interest-earning deposits and cash) totaled $933 million, or 14% of assets. The Company maintains additional liquidity resources of approximately $2.9 billion through secured available funding with the Federal Home Loan Bank and the Federal Reserve Discount Window.  The available funding from the Federal Home Loan Bank and the Federal Reserve are secured by the Company’s loan and investment portfolios.

The Company's total on and off-balance sheet liquidity totaled $3.9 billion, which amounts to 304% of the total uninsured/uncollateralized deposits currently on the Company’s balance sheet.

Income from Capital Markets Activities

Noninterest income from Capital Markets activities (detailed below) totaled $586,000 for the June 2024 quarter compared to $1.3 million for the March 2024 quarter and $868,000 for the June 2023 quarter. The March 2024 quarter included $818,000 of corporate advisory fee income.

		Three Months Ended				Three Months Ended				Three Months Ended
		June 30,				March 31,				June 30,
(Dollars in thousands, except per share data)		2024				2024				2023
Gain on loans held for sale at fair value (Mortgage banking)		$	34			$	56			$	15
Gain on sale of SBA loans			449				400				838
Corporate advisory fee income			103				818				15
Total capital markets activity		$	586			$	1,274			$	868

Other Noninterest Income (other than Wealth Management Fee Income and Income from Capital Markets Activities)        

Other noninterest income was $4.6 million for Q2 2024 compared to $3.0 million for Q1 2024 and $3.5 million for Q2 2023. Q2 2024 included $1.6 million of income recorded by the Equipment Finance Division related to equipment transfers to lessees upon the termination of leases, while Q1 2024 included $141,000 and Q2 2023 included $221,000 respectively. Additionally, Q2 2024 included $786,000 of unused line fees compared to $827,000 for Q1 2024 and $809,000 for Q2 2023.

Operating Expenses

The Company’s total operating expenses were $43.1 million for the second quarter of 2024, compared to $40.0 million for the first quarter of 2024 and $37.7 million for the quarter ended June 2023. Both 2024 quarters included expenses associated with the Company’s expansion into New York City. The June 2024 quarter also included normal annual merit increases.

Mr. Kennedy noted, “We continue to make investments related to our strategic decision to expand into New York City and are confident that these expenses will position us for future growth, which will ultimately translate to shareholder value. We continue to look for opportunities to create efficiencies and manage expenses throughout the Company while investing in enhancements to the client experience."

Income Taxes

The effective tax rate for the three months ended June 30, 2024 was 21.2%, as compared to 30.4% for the March 2024 quarter and 27.4% for the quarter ended June 30, 2023.  The June 2024 quarter included a benefit related to the Company’s deferred tax assets associated with a surtax imposed by the State of New Jersey in June 2024. Excluding such benefit, the effective tax rate for the June 2024 quarter would have been approximately 29.0%. The higher tax rate for the March 2024 quarter was primarily due to the impact of vesting of the restricted stock at prices lower than original grant prices.

Asset Quality / Provision for Credit Losses

Nonperforming assets were $82.1 million, or 1.26% of total assets at June 30, 2024, as compared to $69.8 million, or 1.09% of total assets at March 31, 2024. Loans past due 30 to 89 days and still accruing were $34.7 million, or 0.66% of total loans at June 30, 2024 compared to $73.7 million, or 1.37% of total loans at March 31, 2024.

Criticized and classified loans totaled $269.1 million at June 30, 2024, reflecting an increase from the March 31, 2024 and June 30, 2023 levels. The Company currently has no loans or leases on deferral and still accruing.   

For the quarter ended June 30, 2024, the Company’s provision for credit losses was $3.9 million compared to $615,000 for the March 2024 quarter and $1.7 million for the June 2023 quarter. The provision for credit losses in the second quarter of 2024 was primarily driven by charge-offs related to the sale of two problem loans, which were approaching foreclosure and transfer to other real estate owned.

At June 30, 2024, the allowance for credit losses was $68.0 million (1.29% of total loans), compared to $66.3 million (1.24% of total loans) at March 31, 2024, and $62.7 million (1.15% of total loans) at June 30, 2023.

Mr. Kennedy noted, “As evidenced by our asset quality metrics, we have seen some credit issues surface, but we believe these are presently isolated to a small number of specific multifamily sponsors and will work through each credit one at a time.  All of the multifamily loans that matured or repriced in 2024 have continued to make their scheduled payments despite the higher rate environment."

Capital

The Company’s capital position increased during the second quarter of 2024 due to net income of $7.5 million, which was partially offset by the repurchase of 100,000 shares through the Company's repurchase program at a total cost of $2.2 million and the quarterly dividend of $887,000. Additionally, during the second quarter of 2024, the Company recorded a deterioration in accumulated other comprehensive losses of $582,000, net of tax. The total accumulated other comprehensive loss declined to $68.3 million as of June 30, 2024 ($75.1 million loss related to the available for sale securities portfolio partially offset by a $6.8 million gain on the cash flow hedges). 

Tangible book value per share increased during the second quarter to $30.73 at June 30, 2024 from $30.31 at December 31, 2023. Tangible book value per share is a non-GAAP financial measure. See the reconciliation tables included in this release for further detail. The Company’s and Bank’s regulatory capital ratios as of June 30, 2024 remain strong and reflect increases from March 31, 2024 levels. Where applicable, such ratios remain well above regulatory well capitalized standards.

The Company employs quarterly capital stress testing modeling of an adverse case and severely adverse case. In the most recently completed stress test (as of March 31, 2024), under the severely adverse case, and no growth scenario, the Bank remains well capitalized over a two-year stress period.

On June 27, 2024, the Company declared a cash dividend of $0.05 per share payable on August 22, 2024 to shareholders of record on August 8, 2024.

ABOUT THE COMPANY

Peapack-Gladstone Financial Corporation is a New Jersey bank holding company with total assets of $6.5 billion and assets under management/administration of $11.5 billion as of June 30, 2024. Founded in 1921, Peapack-Gladstone Bank is a commercial bank that provides Private Banking customized solutions through its wealth management, commercial and retail solutions, including residential lending and online platforms, to businesses and consumers. Peapack Private, the bank’s wealth management division, offers comprehensive financial, tax, fiduciary and investment advice and solutions to individuals, families, privately-held businesses, family offices and not-for-profit organizations, which help them to establish, maintain and expand their legacy. Together, Peapack-Gladstone Bank and Peapack Private offer an unparalleled commitment to client service. Visit www.pgbank.com and www.peapackprivate.com for more information.

FORWARD-LOOKING STATEMENTS

The foregoing may contain 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:

• our ability to successfully grow our business and implement our strategic plan, including our ability to generate revenues to offset the increased personnel and other costs related to the strategic plan;
• the impact of anticipated higher operating expenses in 2024 and beyond;
• our ability to successfully integrate wealth management firm and team acquisitions;
• our ability to successfully integrate our expanded employee base;
• an unexpected decline in the economy, in particular in our New Jersey and New York market areas, including potential recessionary conditions;
• declines in our net interest margin caused by the interest rate environment and/or our highly competitive market;
• declines in the value in our investment portfolio;
• impact from a pandemic event on our business, operations, customers, allowance for credit losses and capital levels;
• the continuing impact of the COVID-19 pandemic on our business and results of operation;
• higher than expected increases in our allowance for credit losses;
• higher than expected increases in credit losses or in the level of delinquent, nonperforming, classified and criticized loans or charge-offs;
• inflation and changes in interest rates, which may adversely impact our margins and yields, reduce the fair value of our financial instruments, reduce our loan originations and lead to higher operating costs;
• 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) that may result in increased compliance costs;
• successful cyberattacks against our IT infrastructure and that of our IT and third-party providers;
• higher than expected FDIC insurance premiums;
• adverse weather conditions;
• the current or anticipated impact of military conflict, terrorism or other geopolitical events;
• our inability to successfully generate new business in new geographic markets, including our expansion into New York City;
• a reduction in our lower-cost funding sources;
• changes in liquidity, including the size and composition of our deposit portfolio, including the percentage of uninsured deposits in the portfolio;
• our inability to adapt to technological changes;
• claims and litigation pertaining to fiduciary responsibility, environmental laws and other matters;
• our inability to retain key employees;
• demands for loans and deposits in our market areas;
• adverse changes in securities markets;
• changes in New York City rent regulation law;
• changes in governmental regulation, including, but not limited to, any increase in FDIC insurance premiums and changes in the monetary policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System;
• changes in accounting policies and practices; and/or
• 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, 2023. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Contact:Frank A. Cavallaro, SEVP and CFOPeapack-Gladstone Financial CorporationT: 908-306-8933

(Tables to follow)

PEAPACK-GLADSTONE FINANCIAL CORPORATIONSELECTED CONSOLIDATED FINANCIAL DATA(Dollars in Thousands, except per share data) (Unaudited)

		For the Three Months Ended
		June 30,				March 31,				Dec 31,				Sept 30,				June 30,
		2024				2024				2023				2023				2023
Income Statement Data:
Interest income		$	79,238			$	79,194			$	80,178			$	78,489			$	74,852
Interest expense			44,196				44,819				43,503				41,974				35,931
Net interest income			35,042				34,375				36,675				36,515				38,921
Wealth management fee income			16,419				14,407				13,758				13,975				14,252
Service charges and fees			1,345				1,322				1,255				1,319				1,320
Bank owned life insurance			328				503				357				310				305
Gain on loans held for sale at fair value (Mortgage banking)			34				56				18				37				15
Gain on loans held for sale at lower of cost or fair value			23				—				—				—				—
Gain on sale of SBA loans			449				400				239				491				838
Corporate advisory fee income			103				818				39				85				15
Other income (A)			2,938				1,306				1,339				3,541				2,039
Fair value adjustment for CRA equity security			(84	)			(111	)			585				(404	)			(209	)
Total other income			21,555				18,701				17,590				19,354				18,575
Total revenue			56,597				53,076				54,265				55,869				57,496
Salaries and employee benefits			29,884				28,476				24,320				25,264				26,354
Premises and equipment			5,776				5,081				5,416				5,214				4,729
FDIC insurance expense			870				945				765				741				729
Other expenses			6,596				5,539				7,115				6,194				5,880
Total operating expenses			43,126				40,041				37,616				37,413				37,692
Pretax income before provision for credit losses			13,471				13,035				16,649				18,456				19,804
Provision for credit losses			3,911				627				5,026				5,856				1,696
Income before income taxes			9,560				12,408				11,623				12,600				18,108
Income tax expense			2,030				3,777				3,024				3,845				4,963
Net income		$	7,530			$	8,631			$	8,599			$	8,755			$	13,145
Per Common Share Data:
Earnings per share (basic)		$	0.42			$	0.49			$	0.48			$	0.49			$	0.73
Earnings per share (diluted)			0.42				0.48				0.48				0.49				0.73
Weighted average number of common shares outstanding:
Basic			17,747,070				17,711,639				17,770,158				17,856,961				17,930,611
Diluted			17,792,296				17,805,347				17,961,400				18,010,127				18,078,848
Performance Ratios:
Return on average assets annualized (ROAA)			0.47	%			0.54	%			0.53	%			0.54	%			0.82	%
Return on average equity annualized (ROAE)			5.22	%			5.94	%			6.13	%			6.20	%			9.43	%
Return on average tangible equity annualized (ROATCE) (B)			5.67	%			6.45	%			6.68	%			6.75	%			10.30	%
Net interest margin (tax-equivalent basis)			2.25	%			2.20	%			2.29	%			2.28	%			2.49	%
GAAP efficiency ratio (C)			76.20	%			75.44	%			69.32	%			66.97	%			65.56	%
Operating expenses / average assets annualized			2.70	%			2.51	%			2.33	%			2.31	%			2.36	%

(A) The September 2023 quarter included $2.3 million of fee income from equipment finance activity.(B) Return on average tangible equity is calculated by dividing tangible equity by annualized net income. See Non-GAAP financial measures reconciliation included in these tables.(C) Calculated as total operating expenses as a percentage of total revenue. For Non-GAAP efficiency ratio, see the Non-GAAP financial measures reconciliation included in these tables.

PEAPACK-GLADSTONE FINANCIAL CORPORATIONSELECTED CONSOLIDATED FINANCIAL DATA(Dollars in Thousands, except per share data) (Unaudited)

		For the Six Months Ended
		June 30,								Change
		2024				2023				$				%
Income Statement Data:
Interest income		$	158,432			$	145,343			$	13,089				9	%
Interest expense			89,015				62,444				26,571				43	%
Net interest income			69,417				82,899				(13,482	)			-16	%
Wealth management fee income			30,826				28,014				2,812				10	%
Service charges and fees			2,667				2,578				89				3	%
Bank owned life insurance			831				602				229				38	%
Gain on loans held for sale at fair value (Mortgage banking)			90				36				54				150	%
Gain on loans held for sale at lower of cost or fair value			23				—				23			N/A
Gain on sale of SBA loans			849				1,703				(854	)			-50	%
Corporate advisory fee income			921				95				826				869	%
Other income			4,244				3,606				638				18	%
Fair value adjustment for CRA equity security			(195	)			—				(195	)		N/A
Total other income			40,256				36,634				3,622				10	%
Total revenue			109,673				119,533				(9,860	)			-8	%
Salaries and employee benefits			58,360				50,940				7,420				15	%
Premises and equipment			10,857				9,103				1,754				19	%
FDIC insurance expense			1,815				1,440				375				26	%
Other expenses			12,135				11,783				352				3	%
Total operating expenses			83,167				73,266				9,901				14	%
Pretax income before provision for credit losses			26,506				46,267				(19,761	)			-43	%
Provision for credit losses			4,538				3,209				1,329				41	%
Income before income taxes			21,968				43,058				(21,090	)			-49	%
Income tax expense			5,807				11,558				(5,751	)			-50	%
Net income		$	16,161			$	31,500			$	(15,339	)			-49	%
Per Common Share Data:
Earnings per share (basic)		$	0.91			$	1.76			$	(0.85	)			-48	%
Earnings per share (diluted)			0.91				1.74				(0.83	)			-48	%
Weighted average number of common shares outstanding:
Basic			17,729,355				17,886,154				(156,799	)			-1	%
Diluted			17,811,895				18,153,267				(341,372	)			-2	%
Performance Ratios:
Return on average assets (ROAA)			0.51	%			0.99	%			(0.48	)%			-49	%
Return on average equity (ROAE)			5.58	%			11.44	%			(5.86	)%			-51	%
Return on average tangible equity (ROATCE) (A)			6.06	%			12.51	%			(6.45	)%			-52	%
Net interest margin (tax-equivalent basis)			2.22	%			2.68	%			(0.46	)%			-17	%
GAAP efficiency ratio (B)			75.83	%			61.29	%			14.54	%			24	%
Operating expenses / average assets			2.60	%			2.31	%			0.29	%			13	%

(A) Return on average tangible equity is calculated by dividing tangible equity by annualized net income. See Non-GAAP financial measures reconciliation included in these tables.(B) Calculated as total operating expenses as a percentage of total revenue.  For Non-GAAP efficiency ratio, see the Non-GAAP financial measures reconciliation included in these tables.

PEAPACK-GLADSTONE FINANCIAL CORPORATIONCONSOLIDATED STATEMENTS OF CONDITION(Dollars in Thousands)(Unaudited)

		As of
		June 30,				March 31,				Dec 31,				Sept 30,				June 30,
		2024				2024				2023				2023				2023
ASSETS
Cash and due from banks		$	5,586			$	5,769			$	5,887			$	7,400			$	4,859
Federal funds sold			—				—				—				—				—
Interest-earning deposits			310,143				189,069				181,784				180,469				166,769
Total cash and cash equivalents			315,729				194,838				187,671				187,869				171,628
Securities available for sale			591,884				550,870				550,617				521,005				540,519
Securities held to maturity			105,013				106,498				107,755				108,940				110,438
CRA equity security, at fair value			12,971				13,055				13,166				12,581				12,985
FHLB and FRB stock, at cost (A)			12,478				18,079				31,044				34,158				35,402
Residential mortgage			579,057				581,426				578,427				585,295				575,238
Multifamily mortgage			1,796,687				1,827,165				1,836,390				1,871,853				1,884,369
Commercial mortgage			600,859				615,964				637,625				622,469				624,710
Commercial and industrial loans			2,185,827				2,235,342				2,284,940				2,321,917				2,278,133
Consumer loans			69,579				66,827				62,036				57,227				52,098
Home equity lines of credit			37,117				35,542				36,464				34,411				34,397
Other loans			172				184				238				265				269
Total loans			5,269,298				5,362,450				5,436,120				5,493,437				5,449,214
Less: Allowance for credit losses			67,984				66,251				65,888				68,592				62,704
Net loans			5,201,314				5,296,199				5,370,232				5,424,845				5,386,510
Premises and equipment			24,932				24,494				24,166				23,969				23,814
Accrued interest receivable			33,534				32,672				30,676				22,889				20,865
Bank owned life insurance			47,716				47,580				47,581				47,509				47,382
Goodwill and other intangible assets			45,470				45,742				46,014				46,286				46,624
Finance lease right-of-use assets			1,055				1,900				2,087				2,274				2,461
Operating lease right-of-use assets			38,683				16,035				12,096				12,800				13,500
Due from brokers			3,184				—				—				—				—
Other assets			71,387				60,591				53,752				76,456				67,572
TOTAL ASSETS		$	6,505,350			$	6,408,553			$	6,476,857			$	6,521,581			$	6,479,700
LIABILITIES
Deposits:
Noninterest-bearing demand deposits		$	950,368			$	914,893			$	957,687			$	947,405			$	1,024,105
Interest-bearing demand deposits			3,229,814				3,029,119				2,882,193				2,871,359				2,816,913
Savings			105,602				108,305				111,573				117,905				120,082
Money market accounts			824,158				775,132				740,559				761,833				763,026
Certificates of deposit – Retail			502,810				486,079				443,791				422,291				384,106
Certificates of deposit – Listing Service			7,454				7,704				7,804				9,103				10,822
Subtotal “customer” deposits			5,620,206				5,321,232				5,143,607				5,129,896				5,119,054
IB Demand – Brokered			10,000				10,000				10,000				10,000				10,000
Certificates of deposit – Brokered			26,000				145,480				120,507				119,463				69,443
Total deposits			5,656,206				5,476,712				5,274,114				5,259,359				5,198,497
Short-term borrowings			—				119,490				403,814				470,576				485,360
Finance lease liability			1,427				3,104				3,430				3,752				4,071
Operating lease liability			41,347				17,630				12,876				13,595				14,308
Subordinated debt, net			133,417				133,346				133,274				133,203				133,131
Due to brokers			9,981				—				—				—				—
Other liabilities			74,650				75,892				65,668				82,140				79,264
TOTAL LIABILITIES			5,917,028				5,826,174				5,893,176				5,962,625				5,914,631
Shareholders’ equity			588,322				582,379				583,681				558,956				565,069
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY		$	6,505,350			$	6,408,553			$	6,476,857			$	6,521,581			$	6,479,700
Assets under management and / or administration at Peapack-Gladstone Bank’s Private Wealth Management Division (market value, not included above-dollars in billions)		$	11.5			$	11.5			$	10.9			$	10.4			$	10.7

(A) FHLB means "Federal Home Loan Bank" and FRB means "Federal Reserve Bank.".

PEAPACK-GLADSTONE FINANCIAL CORPORATIONSELECTED BALANCE SHEET DATA(Dollars in Thousands)(Unaudited)

		As of
		June 30,				March 31,				Dec 31,				Sept 30,				June 30,
		2024				2024				2023				2023				2023
Asset Quality:
Loans past due over 90 days and still accruing		$	—			$	35			$	—			$	—			$	—
Nonaccrual loans			82,075				69,811				61,324				70,809				34,505
Other real estate owned			—				—				—				—				—
Total nonperforming assets		$	82,075			$	69,846			$	61,324			$	70,809			$	34,505
Nonperforming loans to total loans			1.56	%			1.30	%			1.13	%			1.29	%			0.63	%
Nonperforming assets to total assets			1.26	%			1.09	%			0.95	%			1.09	%			0.53	%
Performing modifications (A)(B)		$	26,788			$	12,311			$	248			$	248			$	248
Loans past due 30 through 89 days and still accruing		$	34,714			$	73,699			$	34,589			$	9,780			$	14,524
Loans subject to special mention		$	140,791			$	59,450			$	71,397			$	53,328			$	53,606
Classified loans		$	128,311			$	117,869			$	84,372			$	94,866			$	58,655
Individually evaluated loans		$	81,802			$	69,530			$	60,710			$	70,184			$	33,867
Allowance for credit losses ("ACL"):
Beginning of quarter		$	66,251			$	65,888			$	68,592			$	62,704			$	62,250
Provision for credit losses (C)			3,901				615				5,082				5,944				1,666
(Charge-offs)/recoveries, net (D)			(2,168	)			(252	)			(7,786	)			(56	)			(1,212	)
End of quarter		$	67,984			$	66,251			$	65,888			$	68,592			$	62,704
ACL to nonperforming loans			82.83	%			94.85	%			107.44	%			96.87	%			181.72	%
ACL to total loans			1.29	%			1.24	%			1.21	%			1.25	%			1.15	%
Collectively evaluated ACL to total loans (E)			1.14	%			1.15	%			1.13	%			1.10	%			1.11	%

(A) Amounts reflect modifications that are paying according to modified terms.(B) Excludes modifications included in nonaccrual loans of $3.2 million at June 30, 2024, $3.2 million at March 31, 2024, $3.0 million at December 31, 2023, $3.1 million at September 30, 2023 and $777,000 at June 30, 2023.(C) Excludes a provision of $10,000 at June 30, 2024, a provision of $12,000 at March 31, 2024, a credit of $55,000 at December 31, 2023, a credit of $88,000 at September 30, 2023 and a provision of $30,000 at June 30, 2023 related to off-balance sheet commitments.(D) Net charge-offs for the quarter ended December 31, 2023 included charge-offs of $2.2 million of a previously established reserve to loans individually evaluated on one multifamily loan and $5.6 million on one equipment finance relationship. Net charge-offs for the quarter ended June 30, 2023 included a charge-off of $1.2 million of a previously established reserve to loans individually evaluated on one commercial real estate loan.(E) Total ACL less reserves to loans individually evaluated equals collectively evaluated ACL.

PEAPACK-GLADSTONE FINANCIAL CORPORATIONSELECTED BALANCE SHEET DATA(Dollars in Thousands)(Unaudited)

		As of
		June 30,						December 31,						June 30,
		2024						2023						2023
Capital Adequacy
Equity to total assets (A)					9.04	%					9.01	%					8.72	%
Tangible equity to tangible assets (B)					8.40	%					8.36	%					8.06	%
Book value per share (C)				$	33.30					$	32.90					$	31.59
Tangible book value per share (D)				$	30.73					$	30.31					$	28.98
Tangible equity to tangible assets excluding other comprehensive loss*					9.36	%					9.28	%					9.02	%
Tangible book value per share excluding other comprehensive loss*				$	34.60					$	33.97					$	32.78

*Excludes other comprehensive loss of $68.3 million for the quarter ended June 30, 2024, $64.9 million for the quarter ended December 31, 2023, and $68.0 million for the quarter ended June 30, 2023. See Non-GAAP financial measures reconciliation included in these tables.

(A) Equity to total assets is calculated as total shareholders’ equity as a percentage of total assets at quarter end.(B) Tangible equity and tangible assets are calculated by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. Tangible equity as a percentage of tangible assets at quarter end is calculated by dividing tangible equity by tangible assets at quarter end. See Non-GAAP financial measures reconciliation included in these tables.(C) Book value per common share is calculated by dividing shareholders’ equity by quarter end common shares outstanding.(D) Tangible book value per share excludes intangible assets. Tangible book value per share is calculated by dividing tangible equity by quarter end common shares outstanding. See Non-GAAP financial measures reconciliation tables.

		As of
		June 30,							December 31,							June 30,
		2024							2023							2023
Regulatory Capital – Holding Company
Tier I leverage		$	609,299			9.45	%		$	600,444			9.19	%		$	584,140			9.06	%
Tier I capital to risk-weighted assets			609,299			11.92				600,444			11.43				584,140			11.47
Common equity tier I capital ratio to risk-weighted assets			609,287			11.92				600,432			11.43				584,122			11.47
Tier I & II capital to risk-weighted assets			792,684			15.50				785,413			14.95				773,808			15.20
Regulatory Capital – Bank
Tier I leverage (E)		$	717,557			11.14	%		$	707,446			10.83	%		$	696,399			10.80	%
Tier I capital to risk-weighted assets (F)			717,557			14.05				707,446			13.48				696,399			13.69
Common equity tier I capital ratio to risk-weighted assets (G)			717,545			14.05				707,434			13.47				696,381			13.68
Tier I & II capital to risk-weighted assets (H)			781,448			15.30				773,083			14.73				759,935			14.93

(E) Regulatory well capitalized standard (including capital conservation buffer) = 4.00% ($258 million)(F) Regulatory well capitalized standard (including capital conservation buffer) = 8.50% ($434 million)(G) Regulatory well capitalized standard (including capital conservation buffer) = 7.00% ($357 million)(H) Regulatory well capitalized standard (including capital conservation buffer) = 10.50% ($536 million)

PEAPACK-GLADSTONE FINANCIAL CORPORATIONLOANS CLOSED(Dollars in Thousands)(Unaudited)

		For the Quarters Ended
		June 30,				March 31,				Dec 31,				Sept 30,				June 30,
		2024				2024				2023				2023				2023
Residential loans retained		$	16,087			$	11,661			$	5,895			$	21,310			$	39,358
Residential loans sold			2,361				4,025				1,449				2,503				1,072
Total residential loans			18,448				15,686				7,344				23,813				40,430
Commercial real estate			2,600				11,500				21,375				3,900				43,235
Multifamily			4,330				1,900				5,725				3,000				26,662
Commercial (C&I) loans (A) (B)			103,065				145,803				145,397				176,845				158,972
SBA			8,200				2,790				7,326				300				13,713
Wealth lines of credit (A)			10,950				3,850				350				6,875				3,950
Total commercial loans			129,145				165,843				180,173				190,920				246,532
Installment loans			1,664				6,868				2,946				6,999				4,587
Home equity lines of credit (A)			4,787				2,103				4,174				6,275				6,107
Total loans closed		$	154,044			$	190,500			$	194,637			$	228,007			$	297,656

		For the Six Months Ended
		June 30,				June 30,
		2024				2023
Residential loans retained		$	27,748			$	69,661
Residential loans sold			6,386				2,549
Total residential loans			34,134				72,210
Commercial real estate			14,100				62,225
Multifamily			6,230				56,812
Commercial (C&I) loans (A) (B)			248,868				366,786
SBA			10,990				23,663
Wealth lines of credit (A)			14,800				27,175
Total commercial loans			294,988				536,661
Installment loans			8,532				16,673
Home equity lines of credit (A)			6,890				9,028
Total loans closed		$	344,544			$	634,572

(A) Includes loans and lines of credit that closed in the period but not necessarily funded.(B) Includes equipment finance.

PEAPACK-GLADSTONE FINANCIAL CORPORATIONAVERAGE BALANCE SHEET(Tax-Equivalent Basis, Dollars in Thousands)(Unaudited)

		For the Three Months Ended
		June 30, 2024												June 30, 2023
		Average				Income/				Annualized				Average				Income/				Annualized
		Balance				Expense				Yield				Balance				Expense				Yield
ASSETS:
Interest-earning assets:
Investments:
Taxable (A)		$	801,715			$	5,168				2.58	%		$	806,447			$	4,900				2.43	%
Tax-exempt (A) (B)			—				—				—				1,858				20				4.31
Loans (B) (C):
Mortgages			576,944				5,582				3.87				557,575				4,942				3.55
Commercial mortgages			2,420,570				26,881				4.44				2,504,268				26,839				4.29
Commercial			2,191,370				37,067				6.77				2,241,817				35,457				6.33
Commercial construction			21,628				489				9.04				6,977				165				9.46
Installment			67,034				1,143				6.82				51,269				841				6.56
Home equity			36,576				748				8.18				33,650				633				7.52
Other			200				6				12.00				271				7				10.33
Total loans			5,314,322				71,916				5.41				5,395,827				68,884				5.11
Federal funds sold			—				—				—				—				—				—
Interest-earning deposits			207,287				2,418				4.67				141,968				1,451				4.09
Total interest-earning assets			6,323,324				79,502				5.03	%			6,346,100				75,255				4.74	%
Noninterest-earning assets:
Cash and due from banks			7,537												7,800
Allowance for credit losses			(67,568	)											(63,045	)
Premises and equipment			24,820												23,745
Other assets			99,838												85,969
Total noninterest-earning assets			64,627												54,469
Total assets		$	6,387,951											$	6,400,569
LIABILITIES:
Interest-bearing deposits:
Checking		$	3,094,386			$	29,252				3.78	%		$	2,834,140			$	22,219				3.14	%
Money markets			791,385				6,016				3.04				788,745				3,853				1.95
Savings			105,825				96				0.36				125,555				45				0.14
Certificates of deposit – retail			504,313				5,367				4.26				385,211				2,462				2.56
Subtotal interest-bearing deposits			4,495,909				40,731				3.62				4,133,651				28,579				2.77
Interest-bearing demand – brokered			10,000				134				5.36				10,000				125				5.00
Certificates of deposit – brokered			98,642				1,242				5.04				26,165				196				3.00
Total interest-bearing deposits			4,604,551				42,107				3.66				4,169,816				28,900				2.77
Borrowings			27,247				381				5.59				413,961				5,384				5.20
Capital lease obligation			2,869				22				3.07				4,187				50				4.78
Subordinated debt			133,377				1,686				5.06				133,090				1,597				4.80
Total interest-bearing liabilities			4,768,044				44,196				3.71	%			4,721,054				35,931				3.04	%
Noninterest-bearing liabilities:
Demand deposits			945,231												1,033,176
Accrued expenses and other liabilities			97,470												88,911
Total noninterest-bearing liabilities			1,042,701												1,122,087
Shareholders’ equity			577,206												557,428
Total liabilities and shareholders’ equity		$	6,387,951											$	6,400,569
Net interest income						$	35,306											$	39,324
Net interest spread											1.32	%											1.70	%
Net interest margin (D)											2.25	%											2.49	%

(A) Average balances for available for sale securities are based on amortized cost.(B) Interest income is presented on a tax-equivalent basis using a 21% federal tax rate. (C) Loans are stated net of unearned income and include nonaccrual loans.(D) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

PEAPACK-GLADSTONE FINANCIAL CORPORATIONAVERAGE BALANCE SHEET(Tax-Equivalent Basis, Dollars in Thousands)(Unaudited)

		For the Three Months Ended
		June 30, 2024												March 31, 2024
		Average				Income/				Annualized				Average				Income/				Annualized
		Balance				Expense				Yield				Balance				Expense				Yield
ASSETS:
Interest-earning assets:
Investments:
Taxable (A)		$	801,715			$	5,168				2.58	%		$	793,675			$	5,136				2.59	%
Tax-exempt (A) (B)			—				—				—				—				—				—
Loans (B) (C):
Mortgages			576,944				5,582				3.87				577,648				5,420				3.75
Commercial mortgages			2,420,570				26,881				4.44				2,460,403				27,541				4.48
Commercial			2,191,370				37,067				6.77				2,240,161				37,559				6.71
Commercial construction			21,628				489				9.04				18,927				428				9.05
Installment			67,034				1,143				6.82				65,287				1,113				6.82
Home equity			36,576				748				8.18				36,406				737				8.10
Other			200				6				12.00				214				7				13.08
Total loans			5,314,322				71,916				5.41				5,399,046				72,805				5.39
Federal funds sold			—				—				—				—				—				—
Interest-earning deposits			207,287				2,418				4.67				140,097				1,522				4.35
Total interest-earning assets			6,323,324				79,502				5.03	%			6,332,818				79,463				5.02	%
Noninterest-earning assets:
Cash and due from banks			7,537												10,105
Allowance for credit losses			(67,568	)											(67,105	)
Premises and equipment			24,820												24,393
Other assets			99,838												87,129
Total noninterest-earning assets			64,627												54,522
Total assets		$	6,387,951											$	6,387,340
LIABILITIES:
Interest-bearing deposits:
Checking		$	3,094,386			$	29,252				3.78	%		$	2,954,698			$	27,433				3.71	%
Money markets			791,385				6,016				3.04				757,753				5,525				2.92
Savings			105,825				96				0.36				108,503				89				0.33
Certificates of deposit – retail			504,313				5,367				4.26				477,793				4,855				4.06
Subtotal interest-bearing deposits			4,495,909				40,731				3.62				4,298,747				37,902				3.53
Interest-bearing demand – brokered			10,000				134				5.36				10,000				126				5.04
Certificates of deposit – brokered			98,642				1,242				5.04				128,341				1,602				4.99
Total interest-bearing deposits			4,604,551				42,107				3.66				4,437,088				39,630				3.57
Borrowings			27,247				381				5.59				235,384				3,467				5.89
Capital lease obligation			2,869				22				3.07				3,215				38				4.73
Subordinated debt			133,377				1,686				5.06				133,303				1,684				5.05
Total interest-bearing liabilities			4,768,044				44,196				3.71	%			4,808,990				44,819				3.73	%
Noninterest-bearing liabilities:
Demand deposits			945,231												916,848
Accrued expenses and other liabilities			97,470												80,499
Total noninterest-bearing liabilities			1,042,701												997,347
Shareholders’ equity			577,206												581,003
Total liabilities and shareholders’ equity		$	6,387,951											$	6,387,340
Net interest income						$	35,306											$	34,644
Net interest spread											1.32	%											1.29	%
Net interest margin (D)											2.25	%											2.20	%

(A) Average balances for available for sale securities are based on amortized cost.(B) Interest income is presented on a tax-equivalent basis using a 21% federal tax rate. (C) Loans are stated net of unearned income and include nonaccrual loans.(D) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

PEAPACK-GLADSTONE FINANCIAL CORPORATIONAVERAGE BALANCE SHEET(Tax-Equivalent Basis, Dollars in Thousands)(Unaudited)

		For the Six Months Ended
		June 30, 2024												June 30, 2023
		Average				Income/								Average				Income/
		Balance				Expense				Yield				Balance				Expense				Yield
ASSETS:
Interest-earning assets:
Investments:
Taxable (A)		$	797,695			$	10,304				2.58	%		$	798,828			$	9,371				2.35	%
Tax-exempt (A) (B)			—				—				—				1,861				38				4.08
Loans (B) (C):
Mortgages			577,296				11,001				3.81				543,650				9,225				3.39
Commercial mortgages			2,440,487				54,422				4.46				2,491,527				52,756				4.23
Commercial			2,215,762				74,626				6.74				2,221,921				68,827				6.20
Commercial construction			20,278				917				9.04				5,644				253				8.97
Installment			66,161				2,257				6.82				45,638				1,450				6.35
Home equity			36,491				1,485				8.14				33,744				1,223				7.25
Other			207				13				12.56				273				14				10.26
Total loans			5,356,682				144,721				5.40				5,342,397				133,748				5.01
Federal funds sold			—				—				—				—				—				—
Interest-earning deposits			173,692				3,940				4.54				152,538				2,989				3.92
Total interest-earning assets			6,328,069				158,965				5.02	%			6,295,624				146,146				4.64	%
Noninterest-earning assets:
Cash and due from banks			8,821												9,117
Allowance for credit losses			(67,336	)											(62,310	)
Premises and equipment			24,607												23,835
Other assets			94,044												86,288
Total noninterest-earning assets			60,136												56,930
Total assets		$	6,388,205											$	6,352,554
LIABILITIES:
Interest-bearing deposits:
Checking		$	3,024,541			$	56,686				3.75	%		$	2,701,519			$	38,700				2.87	%
Money markets			774,569				11,540				2.98				955,470				8,726				1.83
Savings			107,164				185				0.35				133,377				74				0.11
Certificates of deposit – retail			491,053				10,223				4.16				371,657				4,191				2.26
Subtotal interest-bearing deposits			4,397,327				78,634				3.58				4,162,023				51,691				2.48
Interest-bearing demand – brokered			10,000				259				5.18				18,011				333				3.70
Certificates of deposit – brokered			113,492				2,844				5.01				26,064				401				3.08
Total interest-bearing deposits			4,520,819				81,737				3.62				4,206,098				52,425				2.49
Borrowings			131,315				3,848				5.86				260,292				6,680				5.13
Capital lease obligation			3,042				60				3.94				4,339				103				4.75
Subordinated debt			133,340				3,370				5.05				133,053				3,236				4.86
Total interest-bearing liabilities			4,788,516				89,015				3.72	%			4,603,782				62,444				2.71	%
Noninterest-bearing liabilities:
Demand deposits			931,040												1,104,440
Accrued expenses and other liabilities			89,545												93,650
Total noninterest-bearing liabilities			1,020,585												1,198,090
Shareholders’ equity			579,104												550,682
Total liabilities and shareholders’ equity		$	6,388,205											$	6,352,554
Net interest income						$	69,950											$	83,702
Net interest spread											1.30	%											1.93	%
Net interest margin (D)											2.22	%											2.68	%

(A) Average balances for available for sale securities are based on amortized cost.(B) Interest income is presented on a tax-equivalent basis using a 21% federal tax rate. (C) Loans are stated net of unearned income and include nonaccrual loans.(D) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

PEAPACK-GLADSTONE FINANCIAL CORPORATIONNON-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 common shares outstanding, as compared to book value per common share, which we calculate by dividing shareholders’ equity by common shares outstanding at period end. 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 other real estate owned 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 a reasonable measure of core expenses relative to core revenue.

We believe these non-GAAP financial measures provide information that is important to investors and useful in understanding our financial position, results and ratios because 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.

(Dollars in thousands, except per share data)

		Three Months Ended
		June 30,				March 31,				Dec 31,				Sept 30,				June 30,
Tangible Book Value Per Share		2024				2024				2023				2023				2023
Shareholders’ equity		$	588,322			$	582,379			$	583,681			$	558,956			$	565,069
Less: Intangible assets, net			45,470				45,742				46,014				46,286				46,624
Tangible equity		$	542,852			$	536,637			$	537,667			$	512,670			$	518,445
Less: other comprehensive loss			(68,342	)			(67,760	)			(64,878	)			(81,653	)			(67,997	)
Tangible equity excluding other comprehensive loss		$	611,194			$	604,397			$	602,545			$	594,323			$	586,442
Period end shares outstanding			17,666,490				17,761,538				17,739,677				17,816,922				17,887,895
Tangible book value per share		$	30.73			$	30.21			$	30.31			$	28.77			$	28.98
Tangible book value per share excluding other comprehensive loss		$	34.60			$	34.03			$	33.97			$	33.36			$	32.78
Book value per share			33.30				32.79				32.90				31.37				31.59
Tangible Equity to Tangible Assets
Total assets		$	6,505,350			$	6,408,553			$	6,476,857			$	6,521,581			$	6,479,700
Less: Intangible assets, net			45,470				45,742				46,014				46,286				46,624
Tangible assets		$	6,459,880			$	6,362,811			$	6,430,843			$	6,475,295			$	6,433,076
Less: other comprehensive loss			(68,342	)			(67,760	)			(64,878	)			(81,653	)			(67,997	)
Tangible assets excluding other comprehensive loss		$	6,528,222			$	6,430,571			$	6,495,721			$	6,556,948			$	6,501,073
Tangible equity to tangible assets			8.40	%			8.43	%			8.36	%			7.92	%			8.06	%
Tangible equity to tangible assets excluding other comprehensive loss			9.36	%			9.40	%			9.28	%			9.06	%			9.02	%
Equity to assets			9.04	%			9.09	%			9.01	%			8.57	%			8.72	%

(Dollars in thousands)

		Three Months Ended
		June 30,				March 31,				Dec 31,				Sept 30,				June 30,
Return on Average Tangible Equity		2024				2024				2023				2023				2023
Net income		$	7,530			$	8,631			$	8,599			$	8,755			$	13,145
Average shareholders’ equity		$	577,206			$	581,003			$	561,055			$	565,153			$	557,428
Less: Average intangible assets, net			45,624				45,903				46,167				46,468				46,828
Average tangible equity		$	531,582			$	535,100			$	514,888			$	518,685			$	510,600
Return on average tangible common equity			5.67	%			6.45	%			6.68	%			6.75	%			10.30	%

		For the Six Months Ended
		June 30,				June 30,
Return on Average Tangible Equity		2024				2023
Net income		$	16,161			$	31,500
Average shareholders’ equity		$	579,104			$	550,682
Less: Average intangible assets, net			45,764				47,007
Average tangible equity			533,340				503,675
Return on average tangible common equity			6.06	%			12.51	%

(Dollars in thousands)

		Three Months Ended
		June 30,				March 31,				Dec 31,				Sept 30,				June 30,
Efficiency Ratio		2024				2024				2023				2023				2023
Net interest income		$	35,042			$	34,375			$	36,675			$	36,515			$	38,921
Total other income			21,555				18,701				17,590				19,354				18,575
Add:
Fair value adjustment for CRA equity security			84				111				(585	)			404				209
Less:
Gain on loans held for sale at lower of cost or fair value			(23	)			—				—				—				—
Income from life insurance proceeds			—				(181	)			—				—				—
Total recurring revenue			56,658				53,006				53,680				56,273				57,705
Operating expenses			43,126				40,041				37,616				37,413				37,692
Less:
Accelerated Expense for Retirement			—				—				—				—				1,665
Total operating expense			43,126				40,041				37,616				37,413				36,027
Efficiency ratio			76.12	%			75.54	%			70.07	%			66.48	%			62.43	%

(Dollars in thousands)

		For the Six Months Ended
		June 30,				June 30,
Efficiency Ratio		2024				2023
Net interest income		$	69,417			$	82,899
Total other income			40,256				36,634
Add:
Fair value adjustment for CRA equity security			195				—
Less:
Gain on loans held for sale at lower of cost or fair value			(23	)			—
Income from life insurance proceeds			(181	)			—
Total recurring revenue			109,664				119,533
Operating expenses			83,167				73,266
Less:
Accelerated Expense for Retirement			—				1,965
Branch Closure Expense			—				175
Total operating expense			83,167				71,126
Efficiency ratio			75.84	%			59.50	%