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PEAPACK GLADSTONE FINANCIAL CORP (PGC)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue rose 23% year-over-year to $69.74M on stronger net interest income and margin expansion; diluted EPS was $0.45, up from $0.43 in Q1, as operating leverage remained positive .
  • Wall Street consensus expected $0.62 EPS* and $69.78M revenue*; the company posted $0.45 EPS and $69.74M revenue, a material EPS miss and a slight revenue miss (likely driven by higher operating expenses and elevated credit provisions) .
  • Balance sheet and funding remained solid: deposits increased to $6.36B, noninterest-bearing demand deposits reached $1.24B, NIM improved to 2.77%, and total available liquidity was $4.6B with strong regulatory capital ratios (Company CET1 10.99%; Bank CET1 12.29%) .
  • Asset quality was mixed: nonperforming assets climbed to $115.0M (1.60% of assets) and the provision for credit losses rose to $6.59M, including a $5.8M specific reserve for one equipment financing relationship—an investor focus for near-term stock reactions .

What Went Well and What Went Wrong

What Went Well

  • Net interest income increased 6% sequentially to $48.29M; NIM expanded 9 bps to 2.77%, supported by lower-cost core deposits, driving a third consecutive quarter of positive operating leverage .
  • Wealth platform set new records: AUM/AUA reached $12.3B, fee income was $15.94M, and new inflows totaled $193M; “Our new business pipeline is healthy… our high-touch client service model… continues to drive our growth” — John Babcock, President of Wealth Management .
  • Deposit growth and mix improved: total deposits reached $6.36B, with 1,650 newly funded accounts totaling $282M at a 1.88% weighted average cost; noninterest-bearing deposits rose by $53M in Q2 .

What Went Wrong

  • EPS missed consensus materially; operating expenses climbed to $51.89M (+5% QoQ) due to NYC expansion costs, health insurance, merit increases, and production team additions in Long Island, pressuring bottom-line results .
  • Provision for credit losses increased to $6.59M (vs. $4.47M in Q1) on economic drivers and a specific $5.8M reserve; NPAs rose to $115.0M (1.60% of assets), and criticized/classified loans increased to $232.7M .
  • Wealth management fee income was below prior-year quarter ($15.94M vs. $16.42M), reflecting softer market/fee dynamics despite strong inflows .

Financial Results

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Total Revenue ($USD Millions)$56.60 $61.84 $64.36 $69.74
Diluted EPS ($USD)$0.42 $0.52 $0.43 $0.45
Net Interest Income ($USD Millions)$35.04 $41.91 $45.51 $48.29
Net Interest Margin (%)2.25% 2.46% 2.68% 2.77%
Operating Expenses ($USD Millions)$43.13 $47.86 $49.44 $51.89
Provision for Credit Losses ($USD Millions)$3.91 $1.74 $4.47 $6.59

Segment and fee mix

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Wealth Mgmt Fee Income ($USD Millions)$16.42 $15.48 $15.44 $15.94
Capital Markets Activity ($USD Millions)$0.59 $0.11 $0.46 $0.80
Other Noninterest Income ($USD Millions)$4.55 $2.13 $2.95 $4.71

Key balance sheet and KPI snapshot

KPIQ4 2024Q1 2025Q2 2025
Total Deposits ($USD Billions)$6.129 $6.287 $6.363
Noninterest-Bearing Demand Deposits ($USD Billions)$1.113 $1.185 $1.238
Total Loans ($USD Billions)$5.521 $5.757 $5.825
AUM/AUA ($USD Billions)$11.9 $11.8 $12.3
Balance Sheet Liquidity ($USD Billions)$1.2 $1.1 $1.1
Total Available Liquidity ($USD Billions)$4.4 $4.4 $4.6
Tier 1 Leverage Ratio (Company %)9.01% 8.98% 8.94%
CET1 Ratio (Company %)11.51% 11.19% 10.99%
Tier 1 Leverage Ratio (Bank %)10.57% 10.05% 9.99%
CET1 Ratio (Bank %)13.50% 12.52% 12.29%
Dividend per Share ($USD)$0.05 (Dec 19, 2024) $0.05 (Mar 27, 2025) $0.05 (Jun 26, 2025)

Consensus vs. actual (Q2 2025)

MetricConsensusActualSurprise
EPS ($USD)$0.62*$0.45 -$0.17*
Revenue ($USD Millions)$69.78*$69.74 -$0.03*

Values retrieved from S&P Global*

Guidance Changes

No formal quantitative guidance was issued. Management reiterated confidence in expansion-driven operating leverage and deposit mix improvements but did not provide revenue/EPS/NIM/Opex guidance ranges .

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per Share ($USD)Q3 2025 payment$0.05 (prior practice) $0.05 (declared Jun 26, 2025; payable Aug 21; record Aug 7) Maintained

Earnings Call Themes & Trends

Note: A Q2 2025 earnings call transcript was not available via our tools; themes below reflect the earnings release and investor update.

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Metro NYC expansion and depositsNew York initiative drove $950M of new deposits; core relationships grew; NIM improved Deposits reached $6.36B; 1,650 new accounts ($282M, 1.88% cost); five Long Island teams added; positive operating leverage third consecutive quarter Improving
Net interest margin and spreadNIM expanded to 2.46% in Q4; 2.68% in Q1; >4% spreads on originations NIM 2.77%; incremental spread > 4.50% YTD on new business Improving
Asset quality, multifamily, criticized loansNPAs rose to $100.2M in Q4; criticized/classified declined to $191.9M; Q1 criticized/classified increased to $217.5M; issues isolated to specific borrowers NPAs increased to $115.0M; criticized/classified loans rose to $232.7M; $5.8M specific reserve; management monitoring multifamily exposures Deteriorating
Operating expenses and efficiencyElevated Opex due to NYC expansion; re-branding costs in Q4; Opex $47.9M in Q4, $49.4M in Q1 Opex $51.9M; continued investment in growth; positive operating leverage maintained Mixed (investment-driven)
Liquidity and capitalLiquidity $1.2B; total available liquidity $4.4B; no overnight borrowings; strong capital ratios Liquidity $1.1B; total available liquidity $4.6B; Company CET1 10.99%, Bank CET1 12.29% Stable to improving
Wealth management performanceAUM/AUA $11.9B in Q4; Q1 AUM/AUA $11.8B; fee income steady AUM/AUA record $12.3B; fee income $15.94M; inflows $193M Improving

Management Commentary

  • “Our Metro New York expansion continues to deliver strong results… we have successfully on-boarded over 700 new relationships… and have managed to deliver a third consecutive quarter of positive operating leverage.” — Douglas L. Kennedy, President & CEO .
  • “Q2 2025 saw continued strong client inflows… our high-touch client service model distinguishes us… and continues to drive our growth and success.” — John Babcock, President of Wealth Management .
  • “During the current year, we have originated loans that carried an average spread of more than 450 basis points above our current cost of funds.” — Douglas L. Kennedy .
  • “We continue to make investments related to our strategic decision to expand into Metro New York City… while investing in enhancements to the client experience.” — Douglas L. Kennedy .

Q&A Highlights

A Q2 2025 earnings call transcript could not be located via our document tools or public search; accordingly, detailed Q&A themes, guidance clarifications, and tone changes cannot be provided. MarketBeat lists the Q2 2025 announcement resources and call scheduling without transcript content .

Estimates Context

  • EPS missed consensus by approximately $0.17 ($0.45 actual vs. $0.62* consensus) as operating expenses rose and provision for credit losses increased .
  • Revenue was essentially in line but modestly below consensus ($69.74M actual vs. $69.78M* consensus); estimates were based on a small analyst base (# of EPS estimates: 3; # of revenue estimates: 2*)—heightening sensitivity to operational deltas.
  • Estimate revisions are likely to reflect continued NIM improvement tempered by near-term asset quality provisioning and investment-driven Opex, until new teams’ production ramps .

Values retrieved from S&P Global*

Key Takeaways for Investors

  • Near-term: Expect EPS volatility as credit provisioning normalizes and expansion investments flow through Opex; watch criticized/classified loan trends and multifamily sponsor performance .
  • NIM and NII tailwinds: Lower-cost core deposit growth and >450 bps incremental spreads support margin expansion; constructive for medium-term earnings power .
  • Wealth stability: Record AUM/AUA and steady fee income provide diversified revenue support; inflows suggest durable growth and fee visibility .
  • Liquidity/capital: $4.6B total available liquidity and CET1 of 10.99% (Company) / 12.29% (Bank) anchor resilience; dividend maintained at $0.05 per share .
  • Expansion execution: Five new Long Island teams and NYC flagship location are catalysts; monitor positive operating leverage and revenue capture versus hiring costs .
  • Asset quality watchlist: Rising NPAs and specific reserves warrant caution; track trend resolution and reserve adequacy each quarter .
  • Trading setup: The significant EPS miss vs. consensus may pressure shares near-term; improving NIM/NII and deposit mix provide a bid if credit trends stabilize and Opex growth moderates .