Peapack-Gladstone Financial Corporation Reports Continued Strong Results for the Third Quarter of 2012
(firmenpresse) - BEDMINSTER, NJ -- (Marketwire) -- 11/01/12 -- For the quarter ended September 30, 2012, Peapack-Gladstone Financial Corporation (NASDAQ: PGC) (the Company) recorded net income available to common shareholders of $2.83 million and diluted earnings per share (EPS) of $0.32. For the nine months ended September 30, 2012, the Company recorded net income available to common shareholders of $8.16 million and diluted earnings per share of $0.93.
Frank A. Kissel, Chairman stated, "This was another solid quarter for us and it reflects the strength and positive momentum of the Company. We are in a great position as Doug Kennedy takes the reins as CEO. I am confident that Doug's leadership will further energize the Company as we continue on the offensive to grow the business."
Income taxes for the 2011 quarter and nine months ended September 30 included a one-time state tax benefit of $2.99 million, or $0.34 per diluted share, related to the reversal of a previously recorded valuation allowance.
For comparative purposes, the Company believes that comparing earnings excluding the one-time state tax benefit provides a better analysis of earnings trends. The information discussed in the next two paragraphs is a non-GAAP measure.
As detailed in the financial table on page 14, net income available to common shareholders and diluted earnings per share for the quarter ended September 30, 2011, excluding the one-time state tax benefit, was $2.13 million and $0.24. When the 2012 quarter is compared to the 2011 quarter, the 2012 quarter reflects increases of $707 thousand or 33 percent in net income available to common shareholders and 8 cents, also 33 percent, in diluted earnings per share.
Net income and diluted earnings per share for the nine months ended September 30, 2011, excluding the one-time state tax benefit, was $5.65 million and $0.64. When the 2012 nine month period is compared to the 2011 nine month period, the 2012 period reflects increases of $2.52 million or 45 percent in net income available to common shareholders and $0.29 cents, also 45 percent, in diluted earnings per share.
Net interest income, on a fully tax-equivalent basis, was $13.00 million for the third quarter of 2012, up from $12.06 million for the same quarter last year.
On a fully tax-equivalent basis, the net interest margin was 3.50 percent for the September 2012 quarter compared to 3.37 percent for the September 2011 quarter.
In comparing the September 2012 quarter to the September 2011 quarter, the positive effect of increased loans, funded by reduced lower yielding investment securities and increased lower cost core deposits, was partially offset by the effect of lower Treasury yields, which compressed asset yields more than deposit costs.
Average loans totaled $1.10 billion for the third quarter of 2012 as compared to $964 million for the same 2011 quarter, an increase of $134 million.
The average residential mortgage loan portfolio for the third quarter of 2012 increased $87 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. All of the shorter duration loan production and select longer duration production has been retained in portfolio. However, the Company does sell much of its longer duration, fixed rate loan production as a source of noninterest income and as part of its interest rate risk management strategy in the lower rate environment.
The average commercial mortgage and commercial loan portfolio for the third quarter of 2012 increased $53 million from the third quarter of 2011. The increase was attributable to commercial mortgage demand, principally from high quality borrowers looking to refinance multifamily and other commercial mortgages held by other institutions.
From December 31, 2011 to September 30, 2012, total loans grew $58 million or 7.5% annualized. Total loan originations were $281 million for the first nine months of 2012, up from $206 million for the same nine month period of 2011. Included in the total were commercial mortgage/commercial loan originations of $95 million for the 2012 nine month period, up from $76 million for the 2011 nine month period.
Douglas L. Kennedy, CEO said, "I am pleased to have joined a Company that has been so successful in generating new solid lending opportunities. I look forward to continuing to grow our loan book as we move into 2013."
As of September 30, 2012, the residential first mortgage loan pipeline (loans approved, but not closed and funded) stood at $49 million and the commercial mortgage/commercial loan pipeline stood at a record $81 million, with many other lending opportunities in the discussion stage.
Average total deposits (interest-bearing and noninterest-bearing) increased $57 million for the September 2012 quarter from the same quarter last year.
Average noninterest-bearing checking balances grew $59 million for the third quarter of 2012 when compared to the third quarter of 2011. Average interest-bearing checking balances for the quarter ended September 30, 2012 grew $14 million from the same quarter in 2011. Average savings accounts increased $16 million from the third quarter of 2011 to the third quarter of 2012.
Overall checking and savings growth continues to be attributable to the Company's relationship orientation. The Company 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 $15 million for the September 2012 quarter from the September 2011 quarter. These higher-cost CDs were replaced with lower cost, more stable core deposits.
From December 31, 2011 to September 30, 2012, total deposits declined slightly, as various municipalities utilized funds in 2012 that were held on deposit at year end.
Mr. Kennedy commented, "This is a strong and valuable deposit franchise, as evidenced by our high level of lower-cost, more stable core deposits. Additionally, I see lots of opportunities in our core markets."
PGB Trust & Investments generated $2.92 million in fee income in the third quarter of 2012 compared to $2.56 million for the third quarter of 2011, reflecting 14 percent growth. The market value of the assets under administration of the wealth management division stood at $2.15 billion at September 30, 2012, up from $1.96 billion reported at December 31, 2011 and up from $1.86 billion reported at September 30, 2011.
Mr. Kennedy noted, "The Wealth Management business adds significant value to the Company. I look forward to our Company continuing to grow and provide personalized service to this valued client base."
Other noninterest income, exclusive of Trust fees, totaled $1.64 million in the September 2012 quarter compared to $1.42 million in the same quarter a year ago, reflecting an increase of $223 thousand. The 2012 quarter included $358 thousand of fee income from sale of longer term, fixed rate residential mortgage loans, compared to $115 thousand in the same 2011 quarter. The $243 thousand increase was due to higher residential mortgage loan origination levels, as well as a decision to retain less fixed rate loans in the portfolio. The 2012 quarter also included $22 thousand of gains from sales of other real estate owned. These positives were slightly offset by reduced gains from the strategic sales of securities and reduced service charges, as customers have been more diligent in managing their accounts.
The Company's total operating expenses were $11.99 million in the September 2012 quarter compared to $10.57 million in the September 2011 quarter. The 2012 expense levels included: costs for the Company to keep up with the increased regulatory burden on financial institutions; costs associated with key additions to staff in PGB Trust & Investments, to enhance their ability to grow and service their client base; increased commissions related to increased loan originations; normal salary increases; and increased bonus and profit sharing accruals. Additionally, the valuation of post retirement benefits for non-employee directors contributed approximately $475 thousand to operating expenses this quarter, due to an increase in the estimated future benefit amounts and, to a lesser extent, lower market rates required to be used in discounting such benefits. Also, initial expenses associated with the CEO search contributed approximately $75 thousand to expense levels this quarter. With the CEO search completed in the fourth quarter of 2012, the Company anticipates additional final costs to be recorded in that quarter. The net effect of the additional costs in the third quarter of 2012 were partially offset by various operational efficiencies.
The Company's provision for loan losses for the quarter ended September 30, 2012 was $750 thousand, lower than the $1.50 million provision recorded in the September 2011 quarter.
The Company continues to see improvement in credit metrics, as well as the overall condition of borrowers. Charge-offs, net of recoveries, for the third quarter of 2012 were $543 thousand, compared to $1.7 million for the same quarter of 2011. For the September 2012 quarter, nonperforming loans have declined and loans 30 through 89 days past due have declined significantly.
At September 30, 2012, nonperforming assets totaled $20.4 million or 1.29 percent of total assets, compared to $26.3 million or 1.65 percent of assets at December 31, 2011 and $26.2 million or 1.66 percent of assets at September 30, 2011.
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 September 30, 2012, including the effect from this redemption, the Company's leverage ratio, tier 1 and total risk based capital ratios were 7.31 percent, 11.51 percent and 12.76 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 September 30, 2012 was 7.42 percent of total assets, reflecting growth from 6.81 percent of total assets at December 31, 2011.
As previously announced, on October 18, 2012, the Board of Directors declared a regular cash dividend of $0.05 per share payable on November 16, 2012 to shareholders of record on November 1, 2012.
Peapack-Gladstone Financial Corporation is a bank holding company with total assets of $1.58 billion as of September 30, 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 wealth management division, PGB Trust & 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 and that of our IT providers;
higher than expected FDIC insurance premiums;
lack of liquidity to funds 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 that U.S. Generally Accepted Accounting Principles ("GAAP") that management uses in its analysis of the Corporation's performance. Management believes these non-GAAP financial measures provide information useful to investors in understanding the Corporation's financial results. Management believes that the Corporation's presentation and discussion, together with the accompanying reconciliation, provides a complete understanding of factors and trends affecting the Corporation's business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and the Corporation strongly encourages investors to review it consolidated financial statements in their entirety and not to rely on any single financial measure.
Jeffrey J. Carfora
EVP and CFO
Peapack-Gladstone Financial Corporation
T: 908-719-4308
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Datum: 01.11.2012 - 23:50 Uhr
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