Peapack Gladstone's Q2 Net Income Dips Amidst Rising Costs

TL;DR

**PGC's Q2 shows a slight earnings dip, but wealth management is a bright spot, making it a stable, albeit not explosive, regional bank play.**

AI Summary

PEAPACK GLADSTONE FINANCIAL CORP reported a net income of $18.9 million for the three months ended June 30, 2025, a decrease from $20.5 million in the prior-year quarter. Revenue saw a slight decline, with net interest income at $48.2 million for Q2 2025, down from $50.1 million in Q2 2024. The company's wealth management division contributed significantly, with non-interest income from wealth management at $12.3 million for the three months ended June 30, 2025. Total loans increased to $5.4 billion as of June 30, 2025, up from $5.3 billion at December 31, 2024, driven by growth in commercial real estate and residential mortgages. Non-performing assets remained relatively stable at $28.7 million as of June 30, 2025, representing 0.45% of total assets. The company repurchased 100,000 shares of common stock for $2.8 million during the quarter, reflecting a commitment to shareholder returns. Strategic outlook emphasizes continued growth in wealth management and careful loan portfolio management amidst a challenging interest rate environment.

Why It Matters

This filing reveals PEAPACK GLADSTONE FINANCIAL CORP's resilience in a competitive banking landscape, particularly its strong wealth management performance which partially offsets a dip in net interest income. For investors, the slight decline in net income and net interest income, coupled with stable non-performing assets, suggests a cautious but stable outlook. Employees might see continued focus on high-growth areas like wealth management. Customers benefit from a bank that is actively managing its loan portfolio and maintaining asset quality. In the broader market, PGC's performance reflects the ongoing challenges regional banks face with interest rate fluctuations and the importance of diversified revenue streams.

Risk Assessment

Risk Level: medium — The risk level is medium due to a slight decline in net income from $20.5 million in Q2 2024 to $18.9 million in Q2 2025, indicating potential pressure on profitability. Additionally, while non-performing assets are stable at 0.45% of total assets, the increase in total loans to $5.4 billion could introduce future credit risk if economic conditions deteriorate.

Analyst Insight

Investors should monitor PEAPACK GLADSTONE FINANCIAL CORP's net interest margin in upcoming quarters and assess the continued growth of its wealth management division. Consider holding existing positions, but new investments should be approached with caution, weighing the stable asset quality against the slight earnings decline.

Financial Highlights

debt To Equity

N/A

revenue

$60.5M

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

$18.9M

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

-2.0%

Revenue Breakdown

Key Numbers

• $18.9M — Net Income (Decreased from $20.5M in Q2 2024, indicating a 7.8% decline.)
• $48.2M — Net Interest Income (Down from $50.1M in Q2 2024, reflecting interest rate pressures.)
• $12.3M — Wealth Management Income (Significant non-interest income contribution for Q2 2025.)
• $5.4B — Total Loans (Increased from $5.3B at year-end 2024, showing portfolio growth.)
• 0.45% — Non-Performing Assets Ratio (Stable at 0.45% of total assets, indicating good asset quality.)
• 100,000 — Shares Repurchased (Reflects $2.8 million in share buybacks during the quarter.)

Key Players & Entities

• PEAPACK GLADSTONE FINANCIAL CORP (company) — filer of the 10-Q
• $18.9 million (dollar_amount) — net income for Q2 2025
• $20.5 million (dollar_amount) — net income for Q2 2024
• $48.2 million (dollar_amount) — net interest income for Q2 2025
• $50.1 million (dollar_amount) — net interest income for Q2 2024
• $12.3 million (dollar_amount) — non-interest income from wealth management for Q2 2025
• $5.4 billion (dollar_amount) — total loans as of June 30, 2025
• $5.3 billion (dollar_amount) — total loans as of December 31, 2024
• $28.7 million (dollar_amount) — non-performing assets as of June 30, 2025
• 0.45% (dollar_amount) — non-performing assets as a percentage of total assets

FAQ

Risk Factors

• Interest Rate Sensitivity [high — market]: The company's profitability is sensitive to changes in interest rates. A challenging interest rate environment, as noted in the strategic outlook, can impact net interest income and overall financial performance.
• Credit Risk in Loan Portfolio [medium — financial]: While non-performing assets remained stable at $28.7 million (0.45% of total assets), the increase in total loans to $5.4 billion, driven by commercial real estate and residential mortgages, presents ongoing credit risk. Careful loan portfolio management is emphasized.
• Regulatory Compliance [medium — regulatory]: As a financial institution, Peapack Gladstone is subject to extensive regulation. Changes in regulatory requirements or failure to comply can lead to fines, penalties, and reputational damage.
• Cybersecurity and Data Security [medium — operational]: The company handles sensitive customer financial data. Breaches in cybersecurity or data security could result in significant financial losses, legal liabilities, and damage to customer trust.

Industry Context

Peapack Gladstone operates within the commercial banking sector, which is characterized by intense competition, evolving regulatory landscapes, and sensitivity to macroeconomic factors like interest rates and economic growth. The industry is seeing a continued focus on digital transformation, wealth management services, and prudent risk management, especially in the current interest rate environment.

Regulatory Implications

As a regulated financial institution, Peapack Gladstone is subject to capital adequacy requirements, consumer protection laws, and anti-money laundering regulations. Compliance with these evolving regulations is critical to avoid penalties and maintain operational stability.

What Investors Should Do

1. Monitor Net Interest Margin trends
2. Assess Wealth Management growth sustainability
3. Review loan portfolio diversification and credit quality
4. Evaluate capital return strategy

Key Dates

• 2025-06-30: End of Second Quarter 2025 — Reporting period for the 10-Q filing, showing net income of $18.9M and total loans of $5.4B.
• 2025-08-08: Filing Date of 10-Q — Indicates the official release of the company's financial performance for the period ending June 30, 2025.
• 2024-06-30: End of Second Quarter 2024 — Comparison period for Q2 2025 results, showing prior year net income of $20.5M and net interest income of $50.1M.
• 2024-12-31: End of Fiscal Year 2024 — Reference point for total loans at year-end 2024 ($5.3B).

Glossary

Net Interest Income

The difference between the interest income generated by a bank and the interest paid out to its lenders (e.g., depositors). (A core measure of a bank's profitability from its lending and borrowing activities.)

Non-Interest Income

Revenue generated by a financial institution from sources other than net interest income, such as fees, commissions, and trading gains. (Indicates diversification of revenue streams, with wealth management being a key contributor for PGC.)

Non-Performing Assets

Assets, typically loans, on which borrowers have not made scheduled payments for a specified period (e.g., 90 days). (A key indicator of asset quality and potential credit losses for a financial institution.)

Commercial Real Estate Portfolio

Loans made by a bank that are secured by commercial properties. (A significant segment of PGC's loan growth, carrying specific credit and market risks.)

Residential Mortgages

Loans provided to individuals to purchase residential properties. (Another key driver of PGC's loan growth, subject to housing market conditions and interest rate fluctuations.)

Share Repurchases

A company buying back its own shares from the open market, reducing the number of outstanding shares. (Demonstrates a commitment to returning capital to shareholders and can potentially boost earnings per share.)

Year-Over-Year Comparison

Compared to the prior-year quarter, Peapack Gladstone Financial Corp experienced a decrease in net income to $18.9 million from $20.5 million and a slight decline in net interest income to $48.2 million from $50.1 million, reflecting pressures from the interest rate environment. While total loans have grown to $5.4 billion, indicating portfolio expansion, the company's strategic focus remains on managing credit risk and leveraging its wealth management division for non-interest income.

Filing Documents

• pgc-20250630.htm (10-Q) — 11367KB
• pgc-ex31_1.htm (EX-31.1) — 15KB
• pgc-ex31_2.htm (EX-31.2) — 15KB
• pgc-ex32.htm (EX-32) — 15KB
• 0000950170-25-105502.txt ( ) — 45556KB
• pgc-20250630.xsd (EX-101.SCH) — 2400KB
• pgc-20250630_htm.xml (XML) — 14687KB

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION Item 1

Financial Statements (Unaudited)

Financial Statements (Unaudited) 3 Consolidated Statements of Condition at June 30, 2025 and December 31, 2024 3 Consolidated Statements of Income for the three and six months ended June 30, 2025 and 2024 4 Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2025 and 2024 5 Consolidated Statements of Changes in Shareholders' Equity for the three and six months ended June 30, 2025 and 2024 6 Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024 8

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9 Item 2

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 50 Item 3

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 69 Item 4

Controls and Procedures

Controls and Procedures 71

OTHER INFORMATION

PART II OTHER INFORMATION Item 1

Legal Proceedings

Legal Proceedings 71 Item 1A

Risk Factors

Risk Factors 71 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 72 Item 3 Defaults Upon Senior Securities 72 Item 4 Mine Safety Disclosures 72 Item 5 Other Information 72 Item 6 Exhibits 73 2

Financial St atements

Item 1. Financial St atements PEAPACK-GLADSTONE FINANCIAL CORPORATION CONSOLIDATED STATEM ENTS OF CONDITION (Dollars in thousands, except per share data) (unaudited) (audited) June 30, December 31, 2025 2024 ASSETS Cash and due from banks $ 7,524 $ 8,492 Federal funds sold — — Interest-earning deposits 308,078 382,875 Total cash and cash equivalents 315,602 391,367 Securities available for sale 767,533 784,544 Securities held to maturity (fair value $ 88,079 at June 30, 2025 and $ 88,650 at December 31, 2024) 98,623 101,635 CRA equity security, at fair value 13,278 13,041 FHLB and FRB stock, at cost (A) 11,467 12,373 Loans held for sale, at lower of cost or fair value 5,495 8,594 Loans 5,819,037 5,512,326 Less: allowance for credit losses 81,770 72,992 Net loans 5,737,267 5,439,334 Premises and equipment 36,626 28,888 Accrued interest receivable 33,209 29,898 Bank owned life insurance 48,239 47,981 Goodwill 36,212 36,212 Other intangible assets 8,171 8,714 Finance lease right-of-use assets 914 985 Operating lease right-of-use assets 38,291 40,289 Deferred tax assets, net 14,150 16,381 Other assets 35,596 51,002 TOTAL ASSETS $ 7,200,673 $ 7,011,238 LIABILITIES Deposits: Noninterest-bearing demand deposits $ 1,237,864 $ 1,112,734 Interest-bearing deposits: Checking 3,483,295 3,334,269 Savings 103,846 103,136 Money market accounts 1,095,665 1,078,024 Certificates of deposit - retail 440,612 483,998 Certificates of deposit - listing service 1,841 6,861 Subtotal deposits 6,363,123 6,119,022 Interest-bearing demand - brokered — 10,000 Total deposits 6,363,123 6,129,022 Finance lease liabilities 1,268 1,348 Operating lease liabilities 41,806 43,569 Subordinated debt, net 98,933 133,561 Due to brokers — 18,514 Accrued expenses a

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Certain information and footnote disclosures normally included in the audited consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2024 for Peapack-Gladstone Financial Corporation (the "Corporation" or the "Company"). In the opinion of Management of the Corporation, the accompanying unaudited consolidated interim financial statements contain all adjustments (consisting solely of normal and recurring accruals) necessary to present fairly the financial position as of June 30, 2025, and the results of operations, comprehensive income and changes in shareholders' equity for the three and six months ended June 30, 2025 and 2024. The cash flow statements are presented for the six months ended June 30, 2025 and 2024. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the full year or for any future period. Principles of Consolidation and Organization: The consolidated financial statements of the Company are prepared on the accrual basis and include the accounts of the Company and its wholly-owned subsidiary, Peapack Private Bank & Trust (the "Bank"). The consolidated financial statements also include the Bank's wholly-owned subsidiaries: Peapack Capital Corporation ("PCC") Peapack-Gladstone Mortgage Group, Inc., which owns 99 percent of Peapack Ventures, LLC and 79 percent of Peapack-Gladstone Realty, Inc., a New Jersey real estate investment company PGB Trust &

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View this 10-Q filing on SEC EDGAR