Peapack-Gladstone Financial Corporation Reports Strong Results for the First Quarter of 2012
(firmenpresse) - BEDMINSTER, NJ -- (Marketwire) -- 04/24/12 -- For the quarter ended March 31, 2012, Peapack-Gladstone Financial Corporation (NASDAQ: PGC) (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, 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.
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.
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 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, 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.
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.
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."
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.
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 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.
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.
Jeffrey J. Carfora
EVP and CFO
Peapack-Gladstone Financial Corporation
T: 908-719-4308
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Datum: 24.04.2012 - 13:20 Uhr
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