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PEAPACK GLADSTONE FINANCIAL CORP (PGC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered strong core growth but a headline miss vs. Street: diluted EPS was $0.43 as provision expenses rose, despite NIM expansion and higher NII . EPS consensus was ~$0.51 and revenue consensus ~$63.8M; actuals were ~$0.43 EPS and ~$59.9M revenue, implying misses on both metrics*.
  • Core banking momentum accelerated: loans grew $236M to $5.8B (+17% annualized) and total deposits rose $158M to $6.3B; NIM widened 22 bps q/q to 2.68% as NYC core deposit traction continued .
  • Credit costs were the swing factor: provision increased to $4.5M on loan growth, higher charge-offs, and model drivers; delinquencies 30–89 days rose to $28.3M; criticized/classified loans increased to $217.5M, while NPAs edged lower to $97.2M .
  • Wealth management remained a diversified earnings pillar (24% of revenue): fee income was $15.4M, AUM/AUA $11.8B, with $341M of new inflows; sequential AUM eased with markets/mix .
  • Strategic catalysts: continued NYC expansion (new 300 Park Ave branch) and rebrand to Peapack Private Bank & Trust underpin lower-cost deposits and NIM trajectory; dividend maintained at $0.05 .

*Values retrieved from S&P Global.

What Went Well and What Went Wrong

  • What Went Well
    • Margin and NII momentum: NIM expanded to 2.68% (from 2.46% in Q4 and 2.20% in Q1’24) and NII rose 9% q/q to $45.5M, aided by core deposit mix and NYC growth .
    • Core growth: loans +$236M q/q to $5.8B; deposits +$158M to $6.3B; noninterest-bearing demand rose $72M and comprised 46% of deposit growth .
    • Strategic progress/tone: CEO highlighted NYC expansion “ahead of expectations,” >$1.2B of new core relationship deposits in <2 years (30% noninterest bearing) and opening of a marquee 300 Park Ave branch; rebranding underscores boutique private bank positioning .
  • What Went Wrong
    • Earnings pressure from credit costs: provision rose to $4.5M (vs. $1.7M in Q4 and $0.6M in Q1’24), reducing net income to $7.6M and diluted EPS to $0.43 .
    • Asset quality mixed: 30–89 day delinquencies climbed to $28.3M (from $4.9M in Q4), criticized/classified loans increased to $217.5M; though NPAs declined slightly to $97.2M (1.36% of assets) .
    • Expense intensity: operating expenses increased to $49.4M (+3% q/q, +23% y/y) on NYC expansion, higher health insurance, and annual merit increases, keeping the GAAP efficiency ratio elevated at ~76.8% .

Financial Results

Overall performance vs prior periods and estimates

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Total Revenue ($M)53.08 56.62 61.84 64.36
Diluted EPS ($)0.48 0.43 0.52 0.43
Net Interest Margin (%)2.20 2.34 2.46 2.68
ROAA (%)0.54 0.46 0.54 0.43
ROAE (%)5.94 5.12 6.15 4.98
GAAP Efficiency Ratio (%)75.44 78.86 77.40 76.82

Q1 2025 vs S&P Global consensus

MetricConsensusActualSurprise
EPS ($)0.505*0.434*Miss (~$0.07, ~-14%)*
Revenue ($M)63.83*59.89*Miss (~$3.94M, ~-6%)*

*Values retrieved from S&P Global.

Revenue mix (document-based)

Metric ($M)Q1 2024Q3 2024Q4 2024Q1 2025
Net Interest Income34.38 37.68 41.91 45.51
Wealth Mgmt Fee Income14.41 15.15 15.48 15.44
Capital Markets Activity1.27 0.44 0.11 0.46
Other Income3.02 3.35 4.34 2.95
Total Revenue53.08 56.62 61.84 64.36

Key KPIs and balance sheet

KPIQ1 2024Q4 2024Q1 2025
Loans ($B)5.36 5.52 5.76
Deposits ($B)5.48 6.13 6.29
NIB Demand Deposits ($B)0.915 1.113 1.185
C&I Mix of Loans (%)42 43 44
NIM (%)2.20 2.46 2.68
Provision for Credit Losses ($M)0.63 1.74 4.47
ACL / Loans (%)1.24 1.32 1.31
NPAs / Assets (%)1.09 1.43 1.36
Past Due 30–89 Days ($M)73.70 4.87 28.32
Criticized + Classified ($M)177.3 191.9 217.5
Wealth AUM/AUA ($B)11.5 11.9 11.8
Tangible Book Value/Share ($)30.21 31.89 32.56
Tier 1 Leverage (Bank/Co.) (%)11.02 / 9.36 10.57 / 9.01 10.05 / 8.98

Notes: Tangible book value and efficiency ratio are non-GAAP; see reconciliations in the releases .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per shareQ2 2025 payment$0.05 (Q4 2024 declared) $0.05 declared for payment May 22, 2025 Maintained
Financial guidance (revenue, margin, opex, tax, segment)N/ANot providedNot provided in Q1 PRN/A

The company did not provide explicit quantitative forward guidance in the Q1 2025 materials reviewed .

Earnings Call Themes & Trends

Note: A Q1 2025 earnings call transcript was not located in the document set. Themes below reflect management messaging from Q3–Q1 press releases.

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
NYC expansion/core depositsNYC initiative managing >$730M core deposits; deposit growth, NIM improving NYC deposits +$950M in last 12 months; expansion exceeding expectations >$1.2B new core deposits in NYC (30% NIB); opened 300 Park Ave branch; rebrand to Peapack Private Bank & Trust Strengthening
NIM trajectoryNIM +9 bps to 2.34% NIM +12 bps to 2.46% NIM +22 bps to 2.68% Improving
Asset quality focus (CRE/multifamily)Elevated but stabilizing metrics; provision moderated NPAs rose on 3 multifamily loans; specific reserves added Delinquencies rose (30–89 days), provision higher; NPAs down slightly; issues concentrated in specific multifamily borrowers Mixed
Liquidity coverageOn/off-balance liquidity ~4.2B; >290% of uninsured deposits Liquidity ~4.4B; 282% coverage Liquidity ~4.4B; 283% coverage Stable/ample
Expense trajectoryNYC expansion at full run rate in Q3 Q4 opex up; one-time rebranding items Q1 opex up on NYC, healthcare, merit increases Elevated near term

Management Commentary

  • “Our Metro New York expansion continues to deliver results ahead of expectations… more than $1.2 billion in new core relationship deposit balances which are comprised of 30% in noninterest bearing demand account balances.” — Douglas L. Kennedy, President & CEO .
  • “This branch opening at a prime location in mid-town Manhattan combined with our re-branding… demonstrates the evolution of our Company to become the premier boutique private bank in Metro New York.” — Douglas L. Kennedy .
  • “Q1 2025 saw continued strong client inflows… $341 million. Our new business pipeline is healthy…” — John Babcock, President, Wealth Management .
  • “We continue to make investments related to our strategic decision to expand into New York City… while investing in enhancements to the client experience.” — Douglas L. Kennedy on expenses .
  • On credit: Issues “are isolated to a small number of specific borrowers and sponsors” in multifamily; building “appropriate reserve coverage” .

Q&A Highlights

A Q1 2025 earnings call transcript was not available in the document set; therefore, Q&A themes and any guidance clarifications could not be reviewed.

Estimates Context

  • Consensus vs. actual (S&P Global): EPS $0.505 est. vs $0.434 actual; Revenue $63.83M est. vs $59.89M actual — both misses*. Differences between S&P’s “Revenue” construct and company “Total Revenue” ($64.36M) reflect definitional methodology for banks (NII + noninterest income) vs. data vendor mapping .
  • Areas where estimates may adjust: Higher run-rate provision and rising criticized/classified balances may drive near-term EPS estimate reductions; however, continued NIM expansion and core growth support outer-quarter upward revisions to NII.

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Core growth/NIM story intact and accelerating: NYC-driven core funding mix improved NIM to 2.68% (+22 bps q/q), with continued loan (+$236M) and deposit (+$158M) growth — a constructive backdrop for NII in coming quarters .
  • Earnings cadence hinges on credit costs: Provision of $4.5M and higher delinquencies weighed on EPS; credit normalization and resolution of specific multifamily exposures are key to re-rating .
  • Expense discipline vs. investment: NYC build-out, healthcare, and merit increases elevated opex; watch efficiency trajectory as revenue scales with branch and relationship maturation .
  • Wealth management remains a stabilizer: $15.4M fees (24% of revenue) and $341M inflows underpin diversified revenue amid rate/credit cycles .
  • Capital and liquidity are solid: CET1 (Bank) 12.52%, leverage (Bank) 10.05%; total liquidity ~$4.4B covering ~283% of uninsured/uncollateralized deposits .
  • Dividend steady at $0.05; tangible book compounding: TBV/share rose to $32.56 (+2% q/q), supporting downside protection while core profitability rebuilds .
  • Near-term trading: Expect sensitivity to updates on criticized/classified loans and provisions; positive surprises likely tied to sustained NIM expansion and deposit mix improvements, plus NYC revenue ramp .

Sources: Q1 2025 8-K/press release and supplemental tables ; Q4 2024 8-K/press release ; Q3 2024 8-K/press release . Estimates: S&P Global (asterisked values).