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PEAPACK GLADSTONE FINANCIAL CORP (PGC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered broad-based improvement: Total revenue rose to $61.84M, diluted EPS increased to $0.52 (+21% QoQ), and net income reached $9.24M (+22% QoQ); NIM expanded to 2.46% from 2.34% in Q3 2024 and 2.29% in Q4 2023, supported by deposit growth and mix shift .
  • Core relationship deposits grew sharply in 2024 (Q4 total deposits $6.13B, +$855M YoY), enabling full repayment of 2023 short-term borrowings and strengthening liquidity; AUM/AUA reached $11.9B, with wealth fees at $15.5M in Q4 .
  • Operating expenses increased to $47.86M (+7% QoQ; +27% YoY), driven by NYC expansion and one-time rebranding costs; tax rate declined to 24.5% on discrete items .
  • Asset quality mixed: nonperforming assets rose to 1.43% of assets on three multifamily loans migrating to nonaccrual, while 30–89 day past due and criticized/classified balances declined meaningfully QoQ .
  • No formal numerical guidance was provided; dividend of $0.05 per share declared for payment on Feb 21, 2025; the bank rebranded to Peapack Private Bank & Trust effective Jan 1, 2025—a potential narrative catalyst around brand unification and NYC growth .

What Went Well and What Went Wrong

What Went Well

  • Deposit and loan momentum: “Core relationship deposits grew $438 million… [and] outstanding loans grew by $201 million, or 15% on an annualized basis,” highlighting traction in NYC expansion and C&I pipelines .
  • NIM and NII improvement: Net interest income rose $4.23M QoQ to $41.91M; NIM expanded to 2.46% as lower-cost core deposits replaced borrowings; management: “Our single point of contact private banking strategy continues to deliver lower cost core deposit relationships” .
  • Wealth franchise strength: AUM/AUA reached $11.9B; Q4 wealth fees were $15.48M (25% of revenue). Babcock: “Our new business pipeline is healthy… high-touch client service model… continues to drive our growth and success” .

What Went Wrong

  • Elevated expense base: Operating expenses climbed to $47.86M (+$3.21M QoQ), reflecting NYC expansion and one-time rebranding costs, pressuring efficiency ratio to ~78% .
  • Asset quality: Nonperforming assets increased to $100.2M (1.43% of assets) due to three multifamily loans; provision rose to $1.74M QoQ (though down YoY vs Q4 2023) .
  • Capital markets income softness: Capital markets activity fell to $114k vs $435k in Q3 and $296k YoY; one-time fair value adjustment of $953k on Visa B sale in other income partially offset .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Total Revenue ($USD Millions)$54.27 $56.62 $61.84
Net Interest Income ($USD Millions)$36.68 $37.68 $41.91
Total Other Income ($USD Millions)$17.59 $18.94 $19.93
Operating Expenses ($USD Millions)$37.62 $44.65 $47.86
Provision for Credit Losses ($USD Millions)$5.03 $1.22 $1.74
Net Income ($USD Millions)$8.60 $7.59 $9.24
Diluted EPS ($USD)$0.48 $0.43 $0.52
NIM (Tax-Equivalent, %)2.29% 2.34% 2.46%
ROAA (Annualized, %)0.53% 0.46% 0.54%
ROAE (Annualized, %)6.13% 5.12% 6.15%

Revenue mix and fee components:

MetricQ4 2023Q3 2024Q4 2024
Wealth Mgmt Fee Income ($USD Millions)$13.76 $15.15 $15.48
Capital Markets Activity ($USD Millions)$0.296 $0.435 $0.114
Other Noninterest Income ($USD Millions)$3.53 $3.35 $4.34

Balance sheet and franchise KPIs:

KPIQ4 2023Q3 2024Q4 2024
Total Deposits ($USD Billions)$5.27 $5.94 $6.13
Total Loans ($USD Billions)$5.44 $5.32 $5.52
Noninterest-Bearing Demand Deposits ($USD Billions)$0.96 $1.08 $1.11
AUM/AUA (Private Wealth, $USD Billions)$10.9 $12.1 $11.9
Book Value per Share ($)$32.90 $34.57 $34.45
Tangible Book Value per Share ($)$30.31 $32.00 $31.89

Asset quality:

MetricQ4 2023Q3 2024Q4 2024
Nonperforming Assets / Total Assets (%)0.95% 1.18% 1.43%
Nonperforming Loans / Total Loans (%)1.13% 1.51% 1.81%
Allowance for Credit Losses ($USD Millions)$65.89 $71.28 $72.99

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Formal financial guidance (Revenue/EPS/Margins/OpEx)FY/Q1 2025None providedNone providedMaintained N/A
Dividend per shareQ1 2025 (payable 2/21/2025)$0.05 quarterly$0.05 quarterlyMaintained
Strategic brandEffective 1/1/2025Rebrand announced (11/1/2024)Rebrand to Peapack Private Bank & TrustImplemented

Note: No explicit numeric revenue/EPS/margin guidance was issued in Q4 materials .

Earnings Call Themes & Trends

Transcript was not available; themes below reflect quarterly earnings releases.

TopicQ2 2024 (Previous Mentions)Q3 2024 (Previous Mentions)Q4 2024 (Current Period)Trend
NYC expansion and depositsCore deposits +$354M QoQ; full repayment of short-term borrowings; NYC team additions Deposits +$279M QoQ; NYC relationships >$730M; accretive early 2025 Core deposits +$438M QoQ; NYC relationships ~$950M over 12 months; strong loan demand Strengthening
Net interest marginNIM 2.25% (+5 bps QoQ) on lower-cost funding and paying down borrowings NIM 2.34% (+9 bps QoQ) aided by noninterest-bearing mix NIM 2.46% (+12 bps QoQ; +17 bps YoY) Improving
Asset qualityNPA 1.26% of assets; provision $3.91M; charge-offs from problem loans sale NPA 1.18%; provision $1.22M; criticized/classified decreased NPA 1.43% (three multifamily to nonaccrual); provision $1.74M; 30–89 day past due and criticized/classified declined Mixed (isolated issues)
Wealth management growthAUM/AUA $11.5B; wealth fees $16.4M AUM/AUA $12.1B record; fees $15.2M AUM/AUA $11.9B; fees $15.5M; healthy pipeline Solid/stable
Expenses/efficiencyOpex $43.13M; NYC build driving higher run-rate Opex $44.65M; full run-rate NYC expansion Opex $47.86M; rebranding one-time costs; efficiency ~78% Elevated near term
Liquidity and fundingDeposits +$382M; brokered down; liquidity $933M; total liquidity 304% of uninsured deposits Deposits +$661M YTD; total liquidity $4.2B (293% uninsured deposits) Total on/off-balance liquidity $4.4B (282% uninsured deposits); borrowings repaid Strong

Management Commentary

  • CEO Douglas L. Kennedy: “Our expansion into New York City continues to exceed expectations… $950 million in new customer relationship deposits over the last twelve months… strong loan demand as outstanding loans grew by $201 million” .
  • CEO on rebrand: “We have re-branded… Peapack Private Bank & Trust… reflects our commitment to… private banking… and wealth management solutions through a single point of contact” .
  • Wealth President John Babcock: “Q4 2024 saw continued strong client inflows totaling… $163 million ($142 million managed)… high-touch client service model… continues to drive our growth” .
  • Expense discipline with client experience focus: “We continue to look for opportunities to create efficiencies… while investing in enhancements to the client experience” .

Q&A Highlights

  • Earnings call transcript for Q4 2024 was not available; no Q&A highlights could be reviewed [Functions ListDocuments returned none].
  • Noted clarifications from the release: Q4 tax rate decline due to discrete favorable adjustments; opex elevation tied to NYC expansion and rebranding; NIM aided by funding mix and asset growth .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS/revenue was unavailable due to SPGI request limits at time of retrieval; therefore, we cannot quantify beats/misses this quarter. Analysts may revisit assumptions around: (1) expense trajectory amid NYC build and rebranding, (2) NIM path given continued deposit mix improvements, and (3) asset-quality dispersion in multifamily, given the migration of three loans to nonaccrual and reserve builds .
  • If needed, we can re-attempt to fetch consensus later once SPGI access resets.

Key Takeaways for Investors

  • NIM expansion and core deposit momentum remain the near-term earnings drivers; continued growth in noninterest-bearing demand deposits should support funding costs and margin resilience .
  • Expense pressure will likely persist near term as NYC expansion and rebranding flow through; monitor efficiency ratio progress and management’s cost actions versus revenue ramp .
  • Asset quality requires continued vigilance: multifamily nonaccruals increased, but early-stage delinquencies and criticized/classified balances declined QoQ, suggesting issues remain isolated and managed with specific reserves .
  • Wealth management stability provides diversified fee ballast (25% of Q4 revenue), with healthy pipelines and inflows, supporting revenue mix against rate-cycle volatility .
  • Liquidity and capital are robust (Tier 1 leverage 10.57% bank; CET1 13.50% bank), with full repayment of short-term borrowings and substantial available secured capacity—an anchor in a higher-for-longer environment .
  • Dividend continuity ($0.05/share) and TBVPS growth (+5% YoY) underscore capital discipline while investing for growth; track AOCI sensitivity to rates given Q4 decline .
  • Brand unification to Peapack Private Bank & Trust plus NYC expansion is a narrative catalyst; watch for tangible evidence of accretion (loan growth, deposit mix, fee cross-sell) through 2025 .