Peapack-Gladstone Financial Corporation Reports Strong Results for the First Quarter of 2012

April 24, 2012

BEDMINSTER, NJ--(Marketwire -04/24/12)- For the quarter ended March 31, 2012, Peapack-Gladstone Financial Corporation (PGC - News) (the Corporation) recorded net income of $3.08 million and diluted earnings per share of $0.30. This quarter's results reflected growth of 44 percent and 67 percent, respectively, when compared to net income of $2.14 million and diluted earnings per share of $0.18 for the quarter ended March 31, 2011. The current quarter's net income and earnings per share also reflected growth of 22 percent and 15 percent, respectively, when compared to net income of $2.53 million and diluted earnings per share of $0.26 for the immediately preceding quarter ended December 31, 2011.

Frank A. Kissel, Chairman and CEO, stated, "This has been another solid quarter for us. Earnings have continued to grow, reinforcing our belief that the local economy continues to stabilize."

Mr. Kissel also noted that the final redemption of the Treasury's original investment under the Capital Purchase Program (CPP) early in the first quarter of 2012 will save the Corporation approximately $720 thousand in dividend expense on an annual basis going forward.

The Corporation's provision for loan losses for the quarter ended March 31, 2012 was $1.50 million, lower than the $2.00 million provision recorded in the March 2011 quarter and also lower than the $1.75 million provision recorded in the December 2011 quarter.

Net Interest Income and Margin

Net interest income, on a fully tax-equivalent basis, was $13.07 million for the first quarter of 2012, up from $12.79 million for the fourth quarter of 2011, and up from $12.37 million for the first quarter of 2011.

On a fully tax-equivalent basis, the net interest margin was 3.54 percent for the March 2012 quarter compared to 3.46 percent for the December 2011 quarter, and 3.54 percent for the March 2011 quarter.

In comparing the first quarter of 2012 to the fourth quarter of 2011, the March 2012 quarter benefited from a continued increase in loans and a reduction in investment securities.

In comparing the March 2012 quarter to the March 2011 quarter, lower Treasury yields compressed asset yields. This effect was more than offset by the effect of increased loans, funded by core deposit growth, reduced investment securities and reduced short term/overnight deposits.

Loans
Average loans totaled $1.05 billion for the first quarter of 2012 as compared to $937 million for the same 2011 quarter, reflecting an increase of $116 million.

The average residential mortgage loan portfolio for the first quarter of 2012 increased $82 million when compared to the same quarter of 2011. The increase is attributable to originations retained in the portfolio that have outpaced loan paydowns. During this period of lower interest rates, refinance activity has generally been robust. Many of these loans have been retained in portfolio. However, the Corporation does sell its longer-term, fixed-rate loan production as a source of noninterest income and as part of its interest rate risk management strategy in the lower rate environment.

The average commercial mortgage and commercial loan portfolio for the first quarter of 2012 increased $41 million from the first quarter of 2011. The increase was attributable to commercial mortgage demand, principally from high quality borrowers looking to refinance multi-family and other commercial mortgages held by other institutions.

From December 31, 2011 to March 31, 2012, the total loan portfolio grew $40 million, or over 15 percent (annualized), to $1.08 billion. Mr. Kissel stated, "We have been extremely focused on finding new solid lending opportunities. Loan originations were $100 million for the first three months of 2012, up from $90 million for the same period of 2011. Included in the total were commercial mortgage/commercial loan originations of $37 million for the 2012 period." Mr. Kissel went on to say, "We anticipate that we will continue to benefit from funding our loan production with cash flows from our investment portfolio. And, we will continue to employ our conservative underwriting practices that have served us so well."

As of March 31, 2012, the residential first mortgage loan pipeline stood at $51 million and the commercial mortgage/commercial loan pipeline stood at $50 million, with many other lending opportunities in the discussion stage.

Deposits
Average total deposits (interest-bearing and noninterest-bearing) increased $72 million for the March 2012 quarter from the same quarter last year.

Average noninterest-bearing checking balances grew $53 million for the first quarter of 2012 when compared to the first quarter of 2011. Average interest-bearing checking balances for the quarter ended March 31, 2012 rose $39 million from the same quarter in 2011. Average savings accounts increased $13 million from the first quarter of 2011 to the first quarter of 2012.

Overall checking and savings growth is attributable to the Corporation's relationship orientation. The Corporation has successfully focused on: business and personal core deposit generation, particularly checking; establishing municipal relationships within its market territory; and growth in deposits associated with its commercial mortgage/commercial loan growth.

Average certificates of deposit (CDs) declined $25 million for the March 2012 quarter from the March 2011 quarter. The Corporation allowed higher-cost CDs to run-off, and replaced those funds with lower cost, more stable core deposits.

From December 31, 2011 to March 31, 2012, total deposits declined $32 million, as various municipalities utilized funds that were held on deposit at year end. The Corporation's deposit mix continued to consist primarily of lower-cost, more stable core deposits (checking, savings and money markets).

Mr. Kissel commented, "Our low-cost, stable core deposit base significantly increases our franchise value."

PGB Trust and Investments
PGB Trust and Investments generated $3.18 million in fee income in the first quarter of 2012 compared to $2.72 million for the first quarter of 2011, reflecting nearly 17 percent growth. The market value of the assets under administration of the Trust Division stood at $2.06 billion at March 31, 2012, up from $1.96 billion and $1.99 billion reported at December 31, 2011 and March 31, 2011, respectively.

Craig C. Spengeman, President of PGB Trust & Investments, commented, "We have been successful in guiding clients through these challenging economic periods, characterized by an extended low interest rate environment and volatile equity markets. As a result, we continue to see growth in new relationships engaging our services and advice. Recent key additions to staff were made to enhance our ability to both grow and service our valued clients, generation to generation."

Other Noninterest Income
Other noninterest income, exclusive of Trust fees, totaled $1.55 million in the March 2012 quarter compared to $1.45 million in the same quarter a year ago. The 2012 quarter included: increased income from Bank Owned Life Insurance, due to additional purchases during the March 2012 quarter; increased securities gains from the strategic sales of securities; partially offset by a loss on sale of an OREO property.

Operating Expenses
The Corporation's total operating expenses were $11.08 million in the March 2012 quarter compared to $11.24 million in the March 2011 quarter. The 2012 expense levels included costs for the Corporation to keep up with the increased regulatory burden on financial institutions. The net effect of these new/additional costs were offset by various operational efficiencies and reduced FDIC insurance expense due to a regulatory change in the calculation of FDIC assessments.

Asset Quality
At March 31, 2012, nonperforming assets totaled $22.0 million or 1.39 percent of total assets, compared to $26.3 million or 1.65 percent of assets at December 31, 2011 and $22.5 million or 1.48 percent of assets at March 31, 2011. Mr. Kissel commented, "I noted last quarter that the Corporation was in active negotiations for the sale of its largest commercial OREO property. That sale was completed during the first quarter of 2012. We have been pleased with the overall progress in resolving problem assets, and we believe that progress will continue. In fact, we believe that several problem loan/property workouts are on the horizon."

Capital / Dividends
As noted earlier, the final redemption of the Treasury's original investment under the Capital Purchase Program (CPP) was completed early in the first quarter of 2012. At March 31, 2012, including the effect from this redemption, the Corporation's leverage ratio, tier 1 and total risk based capital ratios were 7.00 percent, 11.21 percent and 12.46 percent, respectively. The Corporation's ratios are all above the levels necessary to be considered well capitalized under regulatory guidelines applicable to Banks. Additionally, the Corporation's common equity ratio (common equity to total assets) at March 31, 2012 was 7.04 percent of total assets of $1.58 billion, reflecting growth from 6.81 percent of total assets at December 31, 2011.

The Corporation's preferred dividend and accretion for the March 2012 quarter was $474 thousand, up from the December 2011 quarter due to the January 2012 $14.4 million final CPP redemption. The preferred dividend and accretion recorded in the March 2011 quarter was $570 thousand.

As previously announced, on April 19, 2012 the Board of Directors declared a regular cash dividend of $0.05 per share payable on May 17, 2012 to shareholders of record on May 3, 2012.

ABOUT THE CORPORATION
Peapack-Gladstone Financial Corporation is a bank holding company with total assets of $1.58 billion as of March 31, 2012. Peapack-Gladstone Bank, its wholly owned community bank, was established in 1921, and has 23 branches in Somerset, Hunterdon, Morris, Middlesex and Union Counties. The Bank's Trust Division, PGB Trust and Investments, operates at the Bank's corporate offices located at 500 Hills Drive in Bedminster and at four other locations in Clinton, Morristown and Summit, New Jersey and Bethlehem, Pennsylvania. To learn more about Peapack-Gladstone Financial Corporation and its 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 or 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.

 

                   PEAPACK-GLADSTONE FINANCIAL CORPORATION
                    CONSOLIDATED STATEMENTS OF CONDITION
                           (Dollars in thousands)
                                 (Unaudited)

                                               As of
                      ------------------------------------------------------
                                   December  September
                       March 31,     31,        30,      June 30,  March 31,
                          2012       2011       2011       2011       2011
                      ---------- ---------- ---------- ---------- ----------

ASSETS
Cash and due from
 banks                $    5,146 $    7,097 $    8,135 $    8,678 $    7,348
Federal funds sold           100        100        100        100        100
Interest-earning
 deposits                 28,144     35,856     66,424     51,606     42,234
                      ---------- ---------- ---------- ---------- ----------
  Total cash and cash
   equivalents            33,390     43,053     74,659     60,384     49,682

Securities held to
 maturity                 88,667    100,719    121,241    140,572    151,993
Securities available
 for sale                281,770    319,520    311,927    249,837    271,687
FHLB and FRB Stock,
 at cost                   5,594      4,569      4,699      4,704      4,619

Loans held for sale,
 at fair value             3,214      2,841        722      1,813      1,168

Residential mortgage     518,111    498,482    438,828    432,735    432,413
Commercial mortgage      358,822    330,559    317,066    316,197    300,659
Commercial loans         119,351    123,845    129,039    128,839    133,614
Construction loans        12,517     13,713     14,893     15,385     17,693
Consumer loans            19,769     19,439     20,345     20,184     19,278
Home equity lines of
 credit                   47,831     50,291     51,458     48,805     45,512
Other loans                1,504      2,016      1,564      3,612      1,130
                      ---------- ---------- ---------- ---------- ----------
  Total loans          1,077,905  1,038,345    973,193    965,757    950,299
  Less: Allowance for
   loan losses            13,496     13,223     13,843     14,056     14,386
                      ---------- ---------- ---------- ---------- ----------
  Net loans            1,064,409  1,025,122    959,350    951,701    935,913

Premises and
 equipment                31,482     31,941     32,497     33,098     33,386
Other real estate
 owned                     3,391      7,137      3,264      3,000      3,000
Accrued interest
 receivable                3,842      4,078      3,788      4,391      4,587
Bank owned life
 insurance                30,490     27,296     27,767     27,537     27,301
Deferred tax assets,
 net                      26,767     26,731     27,543     24,689     26,039
Other assets               6,524      7,328      7,831      9,014     11,343
                      ---------- ---------- ---------- ---------- ----------
  TOTAL ASSETS        $1,579,540 $1,600,335 $1,575,288 $1,510,740 $1,520,718
                      ========== ========== ========== ========== ==========

LIABILITIES
Deposits:
  Noninterest bearing
   demand deposits    $  288,130 $  297,459 $  254,646 $  238,788 $  235,977
  Interest-bearing
   deposits
    Checking             318,239    341,180    337,900    322,801    302,589
    Savings               98,743     92,322     89,527     86,828     85,741
    Money market
     accounts            512,464    516,920    511,059    507,159    526,355
    CD's $100,000 and
     over                 73,927     71,783     76,100     73,186     73,966
    CD's less than
     $100,000            120,140    124,228    127,778    132,949    139,022
                      ---------- ---------- ---------- ---------- ----------
  Total deposits       1,411,643  1,443,892  1,397,010  1,361,711  1,363,650
Overnight borrowings      22,900          -          -          -          -
Federal home loan
 bank advances            17,566     17,680     20,793     20,905     24,016
Capital lease
 obligation                9,127      9,178      6,396      6,426      6,383
Other liabilities          7,170      6,614     30,406      6,489     14,585
                      ---------- ---------- ---------- ---------- ----------
  TOTAL LIABILITIES    1,468,406  1,477,364  1,454,605  1,395,531  1,408,634
Shareholders' Equity     111,134    122,971    120,683    115,209    112,084
                      ---------- ---------- ---------- ---------- ----------
  TOTAL LIABILITIES
   AND SHAREHOLDERS'
   EQUITY             $1,579,540 $1,600,335 $1,575,288 $1,510,740 $1,520,718
                      ========== ========== ========== ========== ==========

Trust division assets
 under administration
 (market value, not
 included above)      $2,063,729 $1,957,146 $1,857,527 $2,005,859 $1,997,214





 
                  PEAPACK-GLADSTONE FINANCIAL CORPORATION
                        SELECTED BALANCE SHEET DATA
                           (Dollars in thousands)
                                (Unaudited)

                                            As of
                 ----------------------------------------------------------
                              December    September
                  March 31,      31,         30,      June 30,    March 31,
                    2012        2011        2011        2011        2011
                 ----------  ----------  ----------  ----------  ----------
Asset Quality:
Loans past due
 over 90 days
 and still
 accruing        $        -  $      345  $      836  $      412  $      323
Nonaccrual loans     18,598      18,865      22,103      14,943      19,173
Other real
 estate owned         3,391       7,137       3,264       3,000       3,000
                 ----------  ----------  ----------  ----------  ----------
  Total
   nonperforming
   assets        $   21,989  $   26,347  $   26,203  $   18,355  $   22,496
                 ==========  ==========  ==========  ==========  ==========

Nonperforming
 loans to total
 loans                 1.73%       1.85%       2.36%       1.59%       2.05%
Nonperforming
 assets to total
 assets                1.39%       1.65%       1.66%       1.21%       1.48%

Accruing TDR's
 (A)             $    7,842  $    7,281  $    5,519  $    8,171  $    3,787

Loans past due
 30 through 89
 days and still
 accruing        $    7,619  $   11,632  $    9,706  $    8,200  $    5,419

Classified Loans $   48,546  $   49,101  $   52,031  $   51,586  $   51,186

Impaired Loans   $   26,568  $   26,212  $   27,529  $   23,115  $   26,056

Allowance for
 loan losses:
  Beginning of
   period        $   13,223  $   13,843  $   14,056  $   14,386  $   14,282
  Provision for
   loan losses        1,500       1,750       1,500       2,000       2,000
  Charge-offs,
   net               (1,227)     (2,370)     (1,713)     (2,330)     (1,896)
                 ----------  ----------  ----------  ----------  ----------
  End of period  $   13,496  $   13,223  $   13,843  $   14,056  $   14,386
                 ==========  ==========  ==========  ==========  ==========

ALLL to
 nonperforming
 loans                72.57%      68.83%      60.35%      91.54%      73.79%
ALLL to total
 loans                 1.25%       1.27%       1.42%       1.46%       1.51%

Capital
 Adequacy:
Tier I leverage
                       7.00%       7.73%       7.86%       7.63%       7.59%

Tier I capital
 to risk-
 weighted assets
                      11.21%      12.51%      12.73%      12.67%      12.25%

Tier I & II
 capital to
 risk-weighted
 assets               12.46%      13.76%      13.98%      13.92%      13.51%



Common equity to
 Total assets          7.04%       6.81%       6.78%       6.71%       6.46%

Book value per
 Common share    $    12.70  $    12.47  $    12.09  $    11.48  $    11.13


(A) Does not include $6.0 million at March 31, 2012, $3.8 million at
December 31, 2011, $3.9 million at September 30, 2011, $1.3 million at June
30, 2011 and $1.1 million at March 31, 2011 of TDR's included in nonaccrual
loans.





 
                  PEAPACK-GLADSTONE FINANCIAL CORPORATION
                    SELECTED CONSOLIDATED FINANCIAL DATA
                 (Dollars in thousands, except share data)
                                (Unaudited)

                                    For The Three Months Ended
                                December September
                     March 31,    31,       30,          June 30, March 31,
                        2012      2011      2011           2011      2011
                     --------- --------- ---------      --------- ---------
Income Statement
 Data:
Interest income      $  14,214 $  14,101 $  13,594      $  14,099 $  14,257
Interest expense         1,323     1,485     1,699          1,916     2,036
                     --------- --------- ---------      --------- ---------
  Net interest
   income               12,891    12,616    11,895         12,183    12,221
Provision for loan
 losses                  1,500     1,750     1,500          2,000     2,000
                     --------- --------- ---------      --------- ---------
  Net interest
   income after
   provision for
   loan losses          11,391    10,866    10,395         10,183    10,221
Trust Fees               3,176     2,584     2,555          2,829     2,718
Other income             1,157     1,350     1,170          1,218     1,255
Securities
 gains/(losses), net       390       316       248            277       196
                     --------- --------- ---------      --------- ---------
  Total other income     4,723     4,250     3,973          4,324     4,169
                     --------- --------- ---------      --------- ---------
Salaries and
 employee benefits       6,113     5,651     5,789          5,817     5,973
Premises and
 equipment               2,331     2,313     2,322          2,386     2,350
FDIC insurance
 expense                   352       278       253            397       604
Other expenses           2,284     3,306     2,209          2,435     2,316
                     --------- --------- ---------      --------- ---------
  Total operating
   expenses             11,080    11,548    10,573         11,035    11,243
                     --------- --------- ---------      --------- ---------
Income before income
 taxes                   5,034     3,568     3,795          3,472     3,147
Income tax
 (benefit)/expense       1,951     1,041    (1,537) (A)     1,304     1,006
                     --------- --------- ---------      --------- ---------
Net income               3,083     2,527     5,332  (B)     2,168     2,141
Dividends and
 accretion on
 preferred stock           474       220       219            219       570
                     --------- --------- ---------      --------- ---------
Net income available
 to Common
 shareholders        $   2,609 $   2,307 $   5,113  (B) $   1,949 $   1,571
                     ========= ========= =========      ========= =========

Per Common Share
 Data:

Earnings per share
 (basic)             $    0.30 $    0.26 $    0.58  (C) $    0.22 $    0.18
Earnings per share
 (diluted)                0.30      0.26      0.58  (C)      0.22      0.18

Performance Ratios:

Return on Average
 Assets                   0.78%     0.64%     1.39% (D)      0.57%     0.57%
Return on Average
 Common Equity            9.47%     8.61%    19.87% (E)      7.82%     6.44%


Net Interest Margin
 (Taxable Equivalent
 Basis)                   3.54%     3.46%     3.37%          3.49%     3.54%



 

 (A) Income taxes for the third quarter 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 now indicate 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 $2.344
     million and $2.125 million, respectively for the third quarter.
 (C) EPS excluding the one-time state tax benefit of $2.988 million is $0.24
     for the third quarter. See below, for more information on this non-GAAP
     measure.
 (D) ROA excluding the one-time state tax benefit of $2.988 million is 0.61%
     for the third quarter. See below, for more information on this non-GAAP
     measure.
 (E) ROE excluding the one-time state tax benefit of $2.988 million is 8.26%
     for the third quarter. See below, for more information on this non-GAAP
     measure.





 
                  PEAPACK-GLADSTONE FINANCIAL CORPORATION
                    SELECTED CONSOLIDATED FINANCIAL DATA
                 (Dollars in thousands, except share data)
                                (Unaudited)

                                                           For The
                                                      Three Months Ended
                                                          March 31,
                                                      2012          2011
                                                 ------------  ------------
Income Statement Data:
Interest income                                  $     14,214  $     14,257
Interest expense                                        1,323         2,036
                                                 ------------  ------------
  Net interest income                                  12,891        12,221
Provision for loan losses                               1,500         2,000
                                                 ------------  ------------
  Net interest income after provision for loan
   losses                                              11,391        10,221
Trust fees                                              3,176         2,718
Other income                                            1,157         1,255
Securities gains, net                                     390           196
                                                 ------------  ------------
  Total other income                                    4,723         4,169
                                                 ------------  ------------
Salaries and employee benefits                          6,113         5,973
Premises and equipment                                  2,331         2,350
FDIC insurance expense                                    352           604
Other expenses                                          2,284         2,316
                                                 ------------  ------------
  Total operating expenses                             11,080        11,243
                                                 ------------  ------------
Income before income taxes                              5,034         3,147
Income tax expense                                      1,951         1,006
                                                 ------------  ------------
Net income                                              3,083         2,141
Dividends and accretion on preferred stock                474           570
                                                 ------------  ------------
Net income available to Common shareholders      $      2,609  $      1,571
                                                 ============  ============

Per Common Share Data:
Earnings per share (basic)                       $       0.30  $       0.18
Earnings per share (diluted)                             0.30          0.18


Performance Ratios:
Return on Average Assets                                 0.78%         0.57%
Return on Average Common Equity                          9.47%         6.44%

Net Interest Margin (Taxable Equivalent Basis)           3.54%         3.54%



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 than 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 its consolidated financial statements in their entirety and not to rely on any single financial measure.

 

                                                 For the Three
                                                  Months Ended
                                            September 30, 2011
                                           -------------------

Net Income:
As reported                                $             5,332
Less: Valuation allowance reversal                       2,988
                                           -------------------
Net income, excluding valuation allowance
 reversal                                                2,344
                                           ===================

Net income available to common
 shareholders:
As reported                                $             5,113
Less: Valuation Allowance Reversal                       2,988
                                           -------------------
Net income, excluding valuation allowance
 reversal                                                2,125
                                           ===================

Per Common Share Data:
Earnings per share (basic):
As reported                                $              0.58
Less: Valuation allowance reversal                        0.34
                                           -------------------
Earnings per share (basic), excluding
 valuation allowance reversal                             0.24
                                           ===================

Earnings per share (diluted):
As reported                                $              0.58
Less: Valuation allowance reversal                        0.34
                                           -------------------
Earnings per share (diluted), excluding
 valuation allowance reversal                             0.24
                                           ===================

Performance Ratios:
Return on Average Assets:
As reported                                               1.39%
Return on Average Assets, excluding
 valuation allowance reversal                             0.61%

Return on Average Common Equity:
As reported                                              19.87%
Return on Average Common Equity, excluding
 valuation allowance reversal                             8.26%





 
                  PEAPACK-GLADSTONE FINANCIAL CORPORATION
                           AVERAGE BALANCE SHEET
                                 UNAUDITED
                             THREE MONTHS ENDED
                (Tax-Equivalent Basis, Dollars in Thousands)

                           March 31, 2012              March 31, 2011
                     --------------------------- ---------------------------
                       Average    Income/          Average    Income/
                       Balance    Expense  Yield   Balance    Expense  Yield
                     ----------  --------  ----- ----------  --------  -----
ASSETS:
Interest-Earning
 Assets:
  Investments:
    Taxable (1)      $  350,306  $  2,052  2.34% $  384,083  $  2,269  2.36%
    Tax-Exempt (1)
     (2)                 49,843       381  3.06      35,587       345  3.88
  Loans Held for
   Sale                   1,602        23  5.60         733        16  8.65
  Loans (2) (3)       1,052,960    11,917  4.53     937,073    11,747  5.01
  Federal Funds Sold        100         -  0.10         100         -  0.28
  Interest-Earning
   Deposits              21,988        17  0.30      41,927        28  0.27
                     ----------  --------  ----  ----------  --------  ----
  Total Interest-
   Earning Assets     1,476,799  $ 14,390  3.90%  1,399,503  $ 14,405  4.12%
                     ----------  --------  ----  ----------  --------  ----
Noninterest-Earning
 Assets:
  Cash and Due from
   Banks                  7,687                       7,877
  Allowance for Loan
   Losses               (13,753)                    (14,934)
  Premises and
   Equipment             31,751                      33,640
  Other Assets           78,781                      71,404
                     ----------                  ----------
  Total Noninterest-
   Earning Assets       104,466                      97,987
                     ----------                  ----------
Total Assets         $1,581,265                  $1,497,490
                     ==========                  ==========

LIABILITIES:
 Interest-Bearing
 Deposits
  Checking           $  336,541  $    113  0.13% $  298,003  $    303  0.41%
  Money Markets         516,357       304  0.24     522,473       623  0.48
  Savings                94,732        29  0.12      82,168        53  0.26
  Certificates of
   Deposit              193,992       596  1.23     219,359       775  1.41
                     ----------  --------  ----  ----------  --------  ----
    Total Interest-
     Bearing
     Deposits         1,141,622     1,042  0.37   1,122,003     1,754  0.63
  Borrowings             37,237       172  1.85      24,639       203  3.30
  Capital Lease
   Obligation             9,145       109  4.77       6,334        79  4.98
                     ----------  --------  ----  ----------  --------  ----
  Total Interest-
   Bearing
   Liabilities        1,188,004     1,323  0.45   1,152,976     2,036  0.71
                     ----------  --------  ----  ----------  --------  ----
Noninterest Bearing
 Liabilities
  Demand Deposits       275,157                     222,415
  Accrued Expenses
   and Other
   Liabilities            6,407                       6,065
                     ----------                  ----------
  Total Noninterest-
   Bearing
   Liabilities          281,564                     228,480
Shareholders' Equity    111,697                     116,034
                     ----------                  ----------
  Total Liabilities
   and Shareholders'
   Equity            $1,581,265                  $1,497,490
                     ==========                  ==========
  Net Interest
   Income                        $ 13,067                    $ 12,369
                                 ========                    ========
    Net Interest
     Spread                                3.45%                       3.41%
                                           ====                        ====
    Net Interest
     Margin (4)                            3.54%                       3.54%
                                           ====                        ====





 
                  PEAPACK-GLADSTONE FINANCIAL CORPORATION
                           AVERAGE BALANCE SHEET
                                 UNAUDITED
                             THREE MONTHS ENDED
                (Tax-Equivalent Basis, Dollars in Thousands)

                           March 31, 2012             December 31, 2011
                     --------------------------- ---------------------------
                       Average    Income/          Average    Income/
                       Balance    Expense  Yield   Balance    Expense  Yield
                     ----------  --------  ----- ----------  --------  -----
ASSETS:
Interest-Earning
 Assets:
  Investments:
    Taxable (1)      $  350,306  $  2,052  2.34% $  369,741  $  2,111  2.28%
    Tax-Exempt (1)
     (2)                 49,843       381  3.06      47,564       386  3.25
  Loans Held for
   Sale                   1,602        23  5.60       1,661        23  5.53
  Loans (2) (3)       1,052,960    11,917  4.53     992,617    11,706  4.72
  Federal Funds Sold        100         -  0.10         100         -  0.15
  Interest-Earning
   Deposits              21,988        17  0.30      66,318        53  0.32
                     ----------  --------  ----  ----------  --------  ----
  Total Interest-
   Earning Assets     1,476,799  $ 14,390  3.90%  1,478,001  $ 14,279  3.86%
                     ----------  --------  ----  ----------  --------  ----
Noninterest-Earning
 Assets:
  Cash and Due from
   Banks                  7,687                       8,466
  Allowance for Loan
  Losses                (13,753)                    (13,648)
  Premises and
   Equipment             31,751                      32,170
  Other Assets           78,781                      77,099
                     ----------                  ----------
  Total Noninterest-
   Earning Assets       104,466                     104,087
                     ----------                  ----------
Total Assets         $1,581,265                  $1,582,088
                     ==========                  ==========

LIABILITIES:
Interest-Bearing
 Deposits
  Checking           $  336,541  $    113  0.13% $  344,560  $    181  0.21%
  Money Markets         516,357       304  0.24     519,705       371  0.29
  Savings                94,732        29  0.12      90,983        46  0.20
  Certificates of
   Deposit              193,992       596  1.23     200,158       643  1.28
                     ----------  --------  ----  ----------  --------  ----
  Total Interest-
   Bearing Deposits   1,141,622     1,042  0.37   1,155,406     1,241  0.43
  Borrowings             37,237       172  1.85      18,860       164  3.48
  Capital Lease
   Obligation             9,145       109  4.77       6,436        80  4.97
                     ----------  --------  ----  ----------  --------  ----
  Total Interest-
   Bearing
   Liabilities        1,188,004     1,323  0.45   1,180,702     1,485  0.50
                     ----------  --------  ----  ----------  --------  ----
Noninterest Bearing
 Liabilities
  Demand Deposits       275,157                     268,135
  Accrued Expenses
   and Other
   Liabilities            6,407                      12,113
                     ----------                  ----------
  Total Noninterest-
   Bearing
   Liabilities          281,564                     280,248
Shareholders' Equity    111,697                     121,138
                     ----------                  ----------
  Total Liabilities
   and Shareholders'
   Equity            $1,581,265                  $1,582,088
                     ==========                  ==========
  Net Interest
   Income                        $ 13,067                    $ 12,794
                                 ========                    ========
    Net Interest
     Spread                                3.45%                       3.36%
                                           ====                        ====
    Net Interest
     Margin (4)                            3.54%                       3.46%
                                           ====                        ====

(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.