Peapack-Gladstone Financial Corporation Reports Results for the Second Quarter of 2013

BEDMINSTER, NJ--(Marketwired - Jul 31, 2013) - Peapack-Gladstone Financial Corporation (NASDAQ: PGC) (the "Corporation" or the "Company") recorded net income available to common shareholders of $4.90 million and diluted earnings per share of $0.55 for the six months ended June 30, 2013. This compared to $5.33 million and $0.61, respectively, for the same six month period last year.

For the quarter ended June 30, 2013, the Corporation recorded net income available to common shareholders of $2.01 million and diluted earnings per share of $0.22. This compared to $2.72 million and $0.31, respectively, for the same quarter last year.

The 2013 quarter and six months ended included a $930 thousand write-down of an REO property, resulting in an after-tax charge of approximately $600 thousand or approximately seven cents per fully diluted share. 

Doug Kennedy, President and CEO, said, "I am pleased to report another quarter of accomplishment. First and foremost, we continued to implement and follow through on our Strategic Plan -- known as "Expanding Our Reach". As previously reported, this Plan focuses on the client experience and organic growth across all lines of business. The Plan calls for expansion of existing lines of business and establishment of a new commercial and industrial (C&I) lending platform through the use of private banking teams, who will lead with deposit gathering and wealth management discussions. The Plan further calls for establishment of a sales force that supports our branches and will serve as a primary point of contact for clients. 

Mr. Kennedy went on to note the following additional highlights for the second quarter of 2013:

• The Company continued with its strategic hiring, including adding a team of eight highly experienced individuals to staff its new Princeton private banking location, led by Market President Sean Murray, who joined the Company from Wilmington Trust in Princeton. 
• Total loan balances of $1.25 billion reached another record level for the Company. This level reflected an increase of 13 percent from the end of June 2012 and an increase of nearly 11 percent (or over 21 percent on an annualized basis) from year end 2012.
• Fee income from the Wealth Management Division reflected growth of over 11 percent when compared to the same quarter last year.
• At June 30, 2013, the market value of assets under administration at Peapack-Gladstone Bank's Wealth Division was $2.52 billion. This level reflected an increase of 22 percent from the end of June 2012 and an increase of 9 percent (or 19 percent on an annualized basis) from year end 2012.
• Mortgage banking income (gain on sale of loans) for the June 2013 quarter grew by nearly 48 percent when compared to the June quarter of 2012.
• Despite a reduced provision for loan losses in the current quarter compared to prior quarters, the allowance for loan losses as a percentage of nonperforming loans reflected improvement.
• Asset quality metrics continued to be strong and improved when compared to prior periods. For example, nonperforming assets declined in both dollars and as a percentage of assets, to just 0.68 percent of total assets as of June 30, 2013.
• The common equity ratio and book value per share at June 30, 2013 reflected improvement when compared to one year ago, despite the negative impact to GAAP capital of the mark-to-market of the investment portfolio available for sale, due to the rise in market interest rates. 
• The total risk-based regulatory capital ratio improved to 13.09 percent from 12.52 percent a year ago, even with over $100 million growth in assets, as well as migration of lower risk weighted investment security cash flows into commercial and multi-family mortgage loans. 
• The Company's stock price has risen nearly 40 percent since the end of 2012.

Net Interest Income and Margin
On a fully tax-equivalent basis, net interest income was $12.60 million for the second quarter of 2013, reflecting a decrease of $461 thousand from the same quarter last year. The net interest margin, on a fully tax-equivalent basis, was 3.22 percent and 3.52 percent for the June 2013 and 2012 quarters, respectively.

Net interest income and the net interest margin for the current quarter reflected declines from the same quarter last year, due to the effect of the lower market yields, which compressed asset yields more than deposit costs. Additionally, a much higher overnight cash balance position maintained during the current quarter also contributed to the compressed margin. Partially offsetting these effects, net interest income and margin were benefitted in the current quarter by the positive effect of increased loans funded by deposits and cash flows from lower yielding investment securities.

Loans
For the second quarter of 2013, average loans totaled $1.20 billion as compared to $1.10 billion for the same quarter in 2012, which was an increase of $98.1 million, or 8.9 percent.

The average commercial mortgage and commercial loan portfolio for the quarter ended June 2013 increased $97.9 million, or 20.0 percent, from the same quarter of 2012. The increase was attributable to a more concerted focus on this type of business in both the New Jersey and New York City markets, as well as demand from high-quality borrowers looking to refinance multifamily and other commercial mortgages held by other institutions.

Total loans at June 30, 2013 grew $145.8 million or 13.2 percent when compared to total loans at June 30, 2012.

Total loan originations were $164.3 million for the second quarter of 2013, up from $100.1 million for the same quarter of 2012. Loan originations were $280.8 million for the first six months of 2013, up from $199.9 million for the same six month period of 2012. Included in the total were commercial mortgage/commercial loan originations of $94.8 million for the 2013 quarter compared to $36.7 million for the 2012 quarter. 

Mr. Kennedy said, "I continue to be extremely pleased with our success in generating solid lending growth. As part of our Strategic Plan, we introduced a comprehensive Commercial & Industrial (C&I) lending program and we closed and funded $16 million of volume so far this year. We expect such volume to continue to increase in future periods. Further, our multifamily lenders have generated significant volume and continue to maintain very robust pipelines."

Deposits
For the June 2013 quarter, average total deposits (interest-bearing and noninterest-bearing) increased $87.3 million when compared to the same quarter last year. Over that same period, the Company saw growth in all deposit categories, except certificates of deposit. For the second quarter of 2013, average certificates of deposit (CDs) declined $20.3 million from the same 2012 quarter. These higher-cost CDs were replaced with lower-cost, more stable core deposits.

Total deposits at June 30, 2013 increased $99.8 million, or 7.0 percent from June 30, 2012. The Company continues to successfully focus on:

• Business and personal core deposit generation, particularly checking;
• Municipal relationships within its market territory; and
• Growth in deposits associated with its commercial mortgage/commercial loan growth.

Mr. Kennedy commented, "I continue to believe that our strong and valuable core deposit base and our traditional focus on providing high touch client service are key differentiators for us as we grow our business."

Peapack-Gladstone Bank Trust & Investments
In the second quarter of 2013, Peapack-Gladstone Bank Trust & Investments generated $3.63 million in fee income compared to $3.26 million for the second quarter of 2012, reflecting growth of 11.3 percent. The growth was due to new business, as well as market action coupled with solid investment advisory and management. The market value of the assets under administration of the wealth management division was $2.52 billion at June 30, 2013, up from $2.30 billion at December 31, 2012 and $2.06 billion reported at June 30, 2012.

Mr. Kennedy noted, "Conversations with all clients and potential clients across all lines of business will include a wealth discussion. The wealth management business adds significant value to our Company."

Other Noninterest Income
In the June 2013 quarter, other noninterest income, exclusive of trust fees and securities gains, totaled $1.37 million, reflecting an increase of $65 thousand or 5.0 percent when compared to the same quarter a year ago. The second quarter of 2013 included $412 thousand of income from the sale of newly originated longer duration residential mortgage loans, compared to $279 thousand in the same 2012 quarter. The increase was due to increased production and a balance sheet management decision to retain less longer duration loans in the portfolio.

Operating Expenses
The Company's total operating expenses were $14.08 million for the second quarter of 2013 compared to $11.70 million in the same 2012 quarter. The 2013 quarter included a $930 thousand write-down of an REO property. Salary and benefits expense rose due to: strategic hiring in line with the Company's Strategic Plan; increased commissions related to residential loan originations; certain severance payments associated with organizational restructuring; normal salary increases; and increased bonus/incentive and profit sharing accruals. The 2013 expense levels also included various professional and other fees associated with various training and consulting, some of which was associated with the Strategic Plan.

Mr. Kennedy noted, "We expected higher operating expenses this second quarter of 2013, and we expect that trend will continue in line with our Strategic Plan. Further, we expect revenue and profitability, related to those increased expenses, to generally lag those expenses by several quarters."

Provision for Loan Losses / Asset Quality
For the quarter ended June 30, 2013, the Company's provision for loan losses was $500 thousand compared to $1.5 million provision recorded in the second quarter of 2012. Charge-offs, net of recoveries, for the second quarter of 2013 were $341 thousand compared to $1.3 million for the June 2012 quarter.

Nonperforming assets totaled $11.4 million or 0.68 percent of total assets at June 30, 2013 compared to $22.1 million or 1.40 percent of assets at June 30, 2012. 

Capital / Dividends
As noted in prior quarters, the preferred stock issued in January 2009 under Treasury's Capital Purchase Program (CPP) was fully redeemed early in the first quarter of 2012. At June 30, 2013, the Company's leverage ratio, tier 1 and total risk based capital ratios were 7.39 percent, 11.84 percent and 13.09 percent, respectively. The Company's ratios are all above the levels necessary to be considered well-capitalized under regulatory guidelines applicable to banks. Additionally, the Company's common equity ratio (common equity to total assets) at June 30, 2013 was 7.39 percent of total assets, reflecting growth from 7.32 percent at December 31, 2012 and from 7.24 percent of total assets at June 30, 2012, despite the negative impact to GAAP capital of the June 30, 2013 mark-to-market of the investment portfolio available for sale, due to the rise in market interest rates.

As previously announced, on July 18, 2013, the Board of Directors declared a regular cash dividend of $0.05 per share payable on August 15, 2013 to shareholders of record on August 1, 2013.

As previously announced, on April 19, 2013 the Company filed a Form S-3 Registration Statement registering $50 million in securities, to be issued in the future from time to time at indeterminate prices ("Shelf Registration"). This Shelf Registration will enable the Company to efficiently take advantage of the capital markets from time to time in the future, as needed to support growth associated with its Strategic Plan. Mr. Kennedy noted, "We will be very careful in any decision to issue capital, making our decision only after appropriate and comprehensive analysis and vetting." 

ABOUT THE COMPANY
Peapack-Gladstone Financial Corporation is a bank holding company with total assets of $1.68 billion as of June 30, 2013. Established in 1921, Peapack-Gladstone Bank is a commercial bank that offers a full range of quality banking products and services to businesses and consumers through its New Jersey locations, an online branch, a wealth management division, and its subsidiary, PGB Trust & Investments of Delaware. For additional information about Peapack-Gladstone Bank or to open an account online, visit www.pgbank.com or call 908-234-0700. Member FDIC. Equal Housing Lender.

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 our net interest margin caused by the low interest rate and highly competitive market;
• declines in value in our investment portfolio;
• higher than expected increases in our allowance for loan losses;
• higher than expected increases in loan losses or in the level of nonperforming loans;
• unexpected changes in interest rates;
• inability to successfully grow our business and implement our strategic plan, including an inability to generate revenues to offset the increased personnel and other costs related to the strategic plan;
• inability to manage our growth;
• a continued or unexpected decline in real estate values within our market areas;
• legislative and regulatory actions (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Basel III and related regulations) subject us to additional regulatory oversight which may result in increased compliance costs;
• successful cyber attacks against our IT infrastructure and that of our IT providers;
• higher than expected FDIC insurance premiums;
• lack of liquidity to fund our various cash obligations;
• reduction in our lower-cost funding sources;
• our inability to adapt to technological changes;
• claims and litigation pertaining to fiduciary responsibility, environmental laws and other matters; and
• other unexpected material adverse changes in our operations or earnings.

A discussion of these and other factors that could affect our results is included in our SEC filings, including our Annual Report on form 10-K for the year ended December 31, 2012. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Corporation's expectations.

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

(Tables to Follow)

PEAPACK-GLADSTONE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in Thousands)
(Unaudited)
						As of
							June 30,			March 31,			Dec 31,			Sept 30,			June 30,
							2013			2013			2012			2012			2012
ASSETS
Cash and due from banks						$	5,978		$	5,030		$	6,733		$	5,466		$	5,639
Federal funds sold							101			100			100			100			100
Interest-earning deposits							60,783			94,147			112,395			49,354			29,024
		Total cash and cash equivalents					66,862			99,277			119,228			54,920			34,763
Securities held to maturity							-			-			-			76,698			84,779
Securities available for sale							270,334			283,448			304,479			253,489			257,318
FHLB and FRB Stock, at cost							4,729			4,643			4,639			4,639			4,818
Loans held for sale, at fair value							4,684			1,828			6,461			8,443			2,259
Loans held for sale, at lower of cost
	or fair value						-			-			13,749			-			-
Residential mortgage							532,356			523,051			515,014			504,407			526,726
Commercial mortgage							534,371			455,670			420,086			391,976			384,289
Commercial loans							106,598			105,305			115,372			115,602			116,493
Construction loans							9,179			9,180			9,328			9,639			6,804
Consumer loans							19,552			20,782			21,188			21,542			20,885
Home equity lines of credit							47,583			46,778			49,635			51,440			49,057
Other loans							2,545			997			1,961			1,876			2,128
		Total loans					1,252,184			1,161,763			1,132,584			1,096,482			1,106,382
		Less: Allowance for loan losses					13,438			13,279			12,735			13,893			13,686
		Net loans					1,238,746			1,148,484			1,119,849			1,082,589			1,092,696
Premises and equipment							29,021			29,429			30,030			30,472			30,979
Other real estate owned							3,347			4,141			3,496			3,392			3,073
Accrued interest receivable							3,972			3,768			3,864			4,040			3,447
Bank owned life insurance							31,490			31,283			31,088			30,887			30,688
Deferred tax assets, net							8,608			10,384			9,478			25,861			26,430
Other assets							17,797			18,647			21,475			8,060			7,355
		TOTAL ASSETS				$	1,679,590		$	1,635,332		$	1,667,836		$	1,583,490		$	1,578,605
LIABILITIES
Deposits:
		Noninterest-bearing
			demand deposits			$	326,916		$	307,730		$	298,095		$	306,711		$	304,651
		Interest-bearing deposits
				Checking			352,196			336,934			346,877			332,786			323,813
				Savings			115,823			114,804			109,686			103,572			104,631
				Money market accounts			559,439			547,302			583,197			504,863			495,929
				CD's $100,000 and over			65,607			67,902			68,741			72,168			78,268
				CD's less than $100,000			102,945			106,432			109,831			112,586			115,793
		Total deposits					1,522,926			1,481,104			1,516,427			1,432,686			1,423,085
Overnight borrowings							-			-			-			-			-
Federal home loan bank advances							12,000			12,099			12,218			12,335			16,451
Capital lease obligation							8,864			8,918			8,971			9,024			9,076
Other Liabilities							11,687			8,605			8,163			11,967			15,758
		TOTAL LIABILITIES					1,555,477			1,510,726			1,545,779			1,466,012			1,464,370
Shareholders' equity							124,113			124,606			122,057			117,478			114,235
		TOTAL LIABILITIES AND
			SHAREHOLDERS' EQUITY			$	1,679,590		$	1,635,332		$	1,667,836		$	1,583,490		$	1,578,605
Assets under administration at
	Peapack-Gladstone Bank Trust
	& Investments (market value,
	not included above)					$	2,520,424		$	2,544,465		$	2,303,612		$	2,146,920		$	2,062,798

PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED BALANCE SHEET DATA
(Dollars in Thousands)
(Unaudited)
					As of
					June 30,				March 31,				Dec 31,						Sept 30,				June 30,
					2013				2013				2012						2012				2012
Asset Quality:
Loans past due over 90 days
	and still accruing			$	-			$	-			$	-					$	-			$	-
Nonaccrual loans					8,075				11,290				11,732			(C)			16,958				19,011
Other real estate owned					3,347				4,141				3,496						3,392				3,073
		Total nonperforming assets		$	11,422			$	15,431			$	15,228			(C)		$	20,350			$	22,084
Nonperforming loans to
	total loans				0.64	%			0.97	%			1.04	%		(C)			1.55	%			1.72	%
Nonperforming assets to
	total assets				0.68	%			0.94	%			0.91	%		(C)			1.29	%			1.40	%
Accruing TDR's (A)				$	6,131			$	5,986			$	6,415			(C)		$	7,625			$	7,647
Loans past due 30 through 89
	days and still accruing			$	1,544			$	1,791			$	3,786					$	2,536			$	2,836
Classified loans (B)				$	32,123			$	35,945			$	32,014			(C)		$	47,017			$	47,102
Impaired loans (B)				$	17,977			$	21,046			$	18,147			(C)		$	24,584			$	26,658
Allowance for loan losses:
		Beginning of period		$	13,279			$	12,735			$	13,893					$	13,686			$	13,496
		Provision for loan losses			500				850				4,525						750				1,500
		Charge-offs, net			(341	)			(306	)			(5,683	)					(543	)			(1,310	)
		End of period		$	13,438			$	13,279			$	12,735					$	13,893			$	13,686
ALLL to nonperforming loans					166.41	%			117.62	%			108.55	%		(C)			81.93	%			71.99	%
ALLL to total loans					1.07	%			1.14	%			1.12	%		(C)			1.27	%			1.24	%
Capital Adequacy:
Tier I leverage					7.39	%			7.37	%			7.27	%					7.31	%			7.15	%
Tier I capital to risk-weighted assets					11.84	%			12.16	%			11.83	%					11.51	%			11.27	%
Tier I & II capital to
	risk-weighted assets				13.09	%			13.41	%			13.08	%					12.76	%			12.52	%
Common equity to total assets					7.39	%			7.62	%			7.32	%					7.42	%			7.24	%
Book value per common share				$	13.93			$	14.05			$	13.87					$	13.38			$	13.02

(a)		Does not include $3.3 million at June 30, 2013, $3.3 million at March 31, 2013, $2.9 million at December 31, 2012, $5.7 million at September 31, 2012 and $6.1 million at June 30, 2012 of TDR's included in nonaccrual loans.
(b)		Classified loans include all impaired loans.  Impaired loans include all nonaccrual loans and all TDRs.
(c)		Does not include classified Loans Held for Sale, as these loans were carried at lower of cost or fair value and were being marketed for sale as of 12/31/12.  The sale closed during Q1 2013.

PEAPACK-GLADSTONE FINANCIAL CORPORATION
LOANS CLOSED AND FUNDED
(Dollars in Thousands)
(Unaudited)
					For the Quarters Ended
					June 30,			March 31,			Dec 31,			Sept 30,			June 30,
					2013			2013			2012			2012			2012
Residential loans retained				$	37,352		$	31,430		$	34,699		$	24,334		$	36,714
Residential loans sold					26,651			25,402			20,677			28,046			17,399
Total residential loans					64,003			56,832			55,376			52,380			54,113
CRE/multifamily					88,675			42,608			52,925			20,775			34,774
Commercial loans					6,170			9,930			2,150			1,000			1,960
Small business banking &
	Installment loans				2,866			2,693			2,657			3,677			4,632
Home equity lines of credit					2,619			4,452			2,501			3,346			4,635
		Total loan originations		$	164,333		$	116,515		$	115,609		$	81,178		$	100,114

				For the Six Months Ended
				June 30,			June 30,
				2013			2012
Residential loans retained				$	68,782		$	81,471
Residential loans sold					52,053			31,014
Total residential loans					120,835			112,485
CRE/multifamily					131,283			69,836
Commercial loans					16,100			3,610
Small business banking &
	Installment loans				5,559			6,339
Home equity lines of credit					7,071			7,613
		Total loan originations		$	280,848		$	199,883

PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except share data)
(Unaudited)
						For the Three Months Ended
						June 30,				March 31,				Dec 31,				Sept 30,				June 30,
						2013				2013				2012				2012				2012
Income Statement Data:
Interest income					$	13,460			$	13,432			$	13,792			$	13,982			$	14,102
Interest expense						1,012				1,005				1,033				1,132				1,199
		Net interest income				12,448				12,427				12,759				12,850				12,903
Provision for loan losses						500				850				4,525				750				1,500
			Net interest income after provision for loan losses			11,948				11,577				8,234				12,100				11,403
Trust fees						3,628				3,368				2,929				2,918				3,259
Gain on sale of classified loans						-				522				-				-				-
	Gain on loans sold (Mortgage Banking)					412				470				370				358				279
Other income						958				955				973				1,048				1,026
Securities gains, net						238				289				3,078				235				107
		Total other income				5,236				5,604				7,350				4,559				4,671
Salaries and employee benefits						7,935				7,079				8,045				7,029				6,408
Premises and equipment						2,338				2,304				2,433				2,290				2,413
FDIC insurance expense						280				280				267				299				290
Other expenses						3,526				2,630				2,808				2,375				2,593
		Total operating expenses				14,079				12,293				13,553				11,993				11,704
Income before income taxes						3,105				4,888				2,031				4,666				4,370
Income tax expense						1,096				1,995				973				1,834				1,647
Net income						2,009				2,893				1,058				2,832				2,723
	Dividends and accretion on preferred stock					-				-				-				-				-
	Net income available to common shareholders				$	2,009			$	2,893			$	1,058			$	2,832			$	2,723
Per Common Share Data:
Earnings per share (basic)					$	0.23			$	0.33			$	0.12			$	0.32			$	0.31
Earnings per share (diluted)						0.22				0.32				0.12				0.32				0.31
Performance Ratios:
Return on average assets						0.48	%			0.71	%			0.26	%			0.72	%			0.69	%
Return on average common
	equity					6.41	%			9.40	%			3.52	%			9.77	%			9.65	%
	Net interest margin (Taxable equivalent basis)					3.22	%			3.28	%			3.42	%			3.50	%			3.52	%

PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except share data)
(Unaudited)
			For the
			Six Months Ended
			June 30,
			2013				2012
Income Statement Data:
Interest income			$	26,892			$	28,316
Interest expense				2,017				2,522
	Net interest income			24,875				25,794
Provision for loan losses				1,350				3,000
	Net interest income after provision for loan losses			23,525				22,794
Trust fees				6,996				6,435
Gain on loans sold (Mortgage Banking)				882				467
Other income				2,435				1,995
Securities gains, net				527				497
	Total other income			10,840				9,394
Salaries and employee benefits				15,014				12,521
Premises and equipment				4,642				4,744
FDIC insurance expense				560				642
Other expenses				6,156				4,877
	Total operating expenses			26,372				22,784
Income before income taxes				7,993				9,404
Income tax expense				3,091				3,598
Net income				4,902				5,806
Dividends and accretion on preferred stock				-				474
Net income available to common shareholders			$	4,902			$	5,332
Per Common Share Data:
Earnings per share (basic)			$	0.55			$	0.61
Earnings per share (diluted)				0.55				0.61
Performance Ratios:
Return on average assets				0.60	%			0.73	%
Return on average common equity				7.89	%			9.56	%
Net interest margin
	(Tax equivalent basis)			3.25	%			3.53	%

PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
THREE MONTHS ENDED
(Tax-Equivalent Basis, Dollars in Thousands)
				June 30, 2013										June 30, 2012
				Average				Income/						Average				Income/
				Balance				Expense			Yield			Balance				Expense			Yield
ASSETS:
Interest-Earning Assets:
	Investments:
		Taxable (1)		$	220,954			$	1,085		1.96	%		$	312,362			$	1,770		2.27	%
		Tax-exempt (1) (2)			50,479				322		2.55				45,556				332		2.92
	Loans held for sale				2,512				50		8.12				1,137				18		6.57
	Loans (2) (3)				1,199,235				12,087		4.03				1,101,095				12,124		4.40
	Federal funds sold				101				-		0.10				100				-		0.10
	Interest-earning deposits				92,319				66		0.29				22,306				14		0.26
		Total interest-earning assets			1,565,600			$	13,610		3.48	%			1,482,556			$	14,258		3.85	%
Noninterest-Earning Assets:
	Cash and due from banks				5,865										5,846
	Allowance for loan losses				(13,523	)									(13,990	)
	Premises and equipment				29,248										31,284
	Other assets				71,862										76,469
		Total noninterest-earning assets			93,452										99,609
Total assets				$	1,659,052									$	1,582,165
LIABILITIES:
Interest-Bearing Deposits:
	Checking			$	356,060			$	74		0.08	%		$	326,920			$	90		0.11	%
	Money markets				551,150				239		0.17				505,532				257		0.20
	Savings				114,028				15		0.05				99,958				13		0.05
	Certificates of deposit				171,931				486		1.13				192,261				563		1.17
		Total interest-bearing deposits			1,193,169				814		0.27				1,124,671				923		0.33
	Borrowings				12,025				92		3.06				36,586				168		1.84
	Capital lease obligation				8,884				106		4.77				9,093				108		4.75
	Total interest-bearing liabilities				1,214,078				1,012		0.33				1,170,350				1,199		0.41
Noninterest-Bearing Liabilities:
	Demand deposits				311,227										292,459
	Accrued expenses and other liabilities				8,298										6,438
	Total noninterest-bearing liabilities				319,525										298,897
Shareholders' equity					125,449										112,918
	Total liabilities and shareholders' equity			$	1,659,052									$	1,582,165
Net interest income								$	12,598									$	13,059
	Net interest spread										3.15	%									3.44	%
	Net interest margin (4)										3.22	%									3.52	%

PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
THREE MONTHS ENDED
(Tax-Equivalent Basis, Dollars in Thousands)
					June 30, 2013									March 31, 2013
					Average			Income/						Average			Income/
					Balance			Expense		Yield				Balance			Expense		Yield
ASSETS:
Interest-Earning Assets:
	Investments:
		Taxable (1)		$	220,954		$	1,085		1.96	%		$	248,641		$	1,277		2.05	%
		Tax-exempt (1) (2)			50,479			322		2.55				49,749			325		2.61
	Loans held for sale				2,512			50		8.12				16,890			196		4.63
	Loans (2) (3)				1,199,235			12,087		4.03				1,143,056			11,738		4.11
	Federal funds sold				101			-		0.10				101			-		0.10
	Interest-earning deposits				92,319			66		0.29				77,612			48		0.25
		Total interest-earning assets			1,565,600		$	13,610		3.48	%			1,536,049		$	13,584		3.54	%
Noninterest-Earning Assets:
	Cash and due from banks				5,865									5,833
	Allowance for loan losses				(13,523)									(13,075)
	Premises and equipment				29,248									29,808
	Other assets				71,862									75,111
		Total noninterest-earning assets			93,452									97,677
Total assets				$	1,659,052								$	1,633,726
LIABILITIES:
Interest-Bearing Deposits:
	Checking			$	356,060		$	74		0.08	%		$	350,483		$	79		0.09	%
	Money markets				551,150			239		0.17				552,863			214		0.15
	Savings				114,028			15		0.05				110,662			14		0.05
	Certificates of deposit				171,931			486		1.13				176,551			500		1.13
		Total interest-bearing deposits			1,193,169			814		0.27				1,190,559			807		0.27
	Borrowings				12,025			92		3.06				12,139			92		3.03
	Capital lease obligation				8,884			106		4.77				8,936			106		4.74
	Total interest-bearing liabilities				1,214,078			1,012		0.33				1,211,634			1,005		0.33
Noninterest-Bearing Liabilities:
	Demand deposits				311,227									290,835
	Accrued expenses and other liabilities				8,298									8,107
	Total noninterest-bearing liabilities				319,525									298,942
	Shareholders' equity				125,449									123,150
	Total liabilities and shareholders' equity			$	1,659,052								$	1,633,726
Net interest income							$	12,598								$	12,579
	Net interest spread									3.15	%								3.21	%
	Net interest margin (4)									3.22	%								3.28	%

PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
UNAUDITED
SIX MONTHS ENDED
(Tax-Equivalent Basis, Dollars in Thousands)
					June 30, 2013									June 30, 2012
					Average			Income/						Average			Income/
					Balance			Expense		Yield				Balance			Expense		Yield
ASSETS:
Interest-Earning Assets:
	Investments:
		Taxable (1)		$	234,721		$	2,362		2.01	%		$	331,334		$	3,822		2.31	%
		Tax-exempt (1) (2)			50,116			646		2.58				47,699			714		2.99
	Loans held for sale				9,661			246		5.10				1,370			41		6.00
	Loans (2) (3)				1,171,300			23,825		4.07				1,077,028			24,041		4.46
	Federal funds sold				101			-		0.10				100			-		0.10
	Interest-earning deposits				85,006			114		0.27				22,147			31		0.28
		Total interest-earning assets			1,550,905		$	27,193		3.51	%			1,479,678		$	28,649		3.87	%
Noninterest-Earning Assets:
	Cash and due from banks				5,849									6,766
	Allowance for loan losses				(13,300)									(13,872)
	Premises and equipment				29,526									31,518
	Other assets				73,475									77,369
		Total noninterest-earning assets			95,550									101,781
Total assets				$	1,646,455								$	1,581,459
LIABILITIES:
Interest-Bearing Deposits:
	Checking			$	353,286		$	153		0.09	%		$	331,731		$	203		0.12	%
	Money markets				552,003			454		0.16				510,944			561		0.22
	Savings				112,354			28		0.05				97,345			42		0.09
	Certificates of deposit				174,228			986		1.13				193,127			1,159		1.20
		Total interest-bearing deposits			1,191,871			1,621		0.27				1,133,147			1,965		0.35
	Borrowings				12,082			184		3.05				36,912			340		1.84
	Capital lease obligation				8,910			212		4.76				9,119			217		4.76
	Total interest-bearing liabilities				1,212,863			2,017		0.33				1,179,178			2,522		0.43
Noninterest-Bearing Liabilities:
	Demand deposits				301,087									283,808
	Accrued expenses and other liabilities				8,199									6,166
	Total noninterest-bearing liabilities				309,286									289,974
Shareholders' equity					124,306									112,307
	Total liabilities and shareholders' equity			$	1,646,455								$	1,581,459
Net interest income							$	25,176								$	26,127
	Net interest spread									3.18	%								3.44	%
	Net interest margin (4)									3.25	%								3.53	%