PGC's Net Income Jumps 26.9% on Strong Loan Growth

TL;DR

**PGC is growing loans and deposits, but the sharp rise in credit loss provisions is a red flag for future profitability.**

AI Summary

PEAPACK GLADSTONE FINANCIAL CORP (PGC) reported a significant increase in net income for the three and nine months ended September 30, 2025. Net income for the three months rose to $9.631 million, up 26.9% from $7.587 million in the prior year, while net income for the nine months increased to $25.167 million, a 6.0% rise from $23.748 million in 2024. This growth was primarily driven by a substantial increase in net interest income before provision for credit losses, which jumped 34.2% to $50.573 million for the three months and 34.8% to $144.368 million for the nine months. Total assets expanded to $7.439 billion as of September 30, 2025, from $7.011 billion at December 31, 2024, largely due to a $506.6 million increase in loans to $6.018 billion. However, the provision for credit losses also saw a sharp increase, rising to $4.790 million for the three months and $15.847 million for the nine months, compared to $1.224 million and $5.762 million respectively in the prior year. Total deposits grew by $433.140 million to $6.562 billion, with noninterest-bearing demand deposits increasing by $210.758 million. Operating expenses also climbed, with compensation and employee benefits increasing by $5.706 million to $36.756 million for the three months.

Why It Matters

This filing reveals PEAPACK GLADSTONE FINANCIAL CORP's robust financial performance, driven by significant loan growth and increased net interest income, which is crucial for investors seeking growth in regional banking. The substantial increase in the provision for credit losses, however, signals potential future asset quality concerns that investors should monitor closely. For employees, continued profitability and asset expansion could mean job security and growth opportunities. Customers benefit from a growing bank with increased lending capacity. In the competitive landscape, PGC's ability to expand its loan portfolio and deposits, particularly noninterest-bearing demand deposits, demonstrates its competitive strength against other regional banks, but rising credit loss provisions could temper future earnings.

Risk Assessment

Risk Level: medium — The risk level is medium due to the significant increase in the provision for credit losses, which jumped from $1,224 thousand in Q3 2024 to $4,790 thousand in Q3 2025, a 291% increase. For the nine months, it rose from $5,762 thousand to $15,847 thousand, a 175% increase. This substantial rise suggests potential deterioration in asset quality or a more conservative outlook on future loan performance, despite overall net income growth.

Analyst Insight

Investors should closely monitor PGC's future credit quality metrics, particularly non-performing assets and charge-offs, to assess if the increased provision for credit losses is a one-time adjustment or indicative of a broader trend. While the growth in net interest income and loans is positive, the rising credit loss provision warrants caution and further due diligence before increasing exposure.

Key Numbers

• $9.631M — Net Income (Q3 2025) (Increased 26.9% from $7.587M in Q3 2024)
• $25.167M — Net Income (9M 2025) (Increased 6.0% from $23.748M in 9M 2024)
• $50.573M — Net Interest Income (Q3 2025) (Increased 34.2% from $37.681M in Q3 2024)
• $144.368M — Net Interest Income (9M 2025) (Increased 34.8% from $107.098M in 9M 2024)
• $4.790M — Provision for Credit Losses (Q3 2025) (Increased 291% from $1.224M in Q3 2024)
• $15.847M — Provision for Credit Losses (9M 2025) (Increased 175% from $5.762M in 9M 2024)
• $6.018B — Loans (September 30, 2025) (Increased $506.6M from $5.512B at December 31, 2024)
• $6.562B — Total Deposits (September 30, 2025) (Increased $433.140M from $6.129B at December 31, 2024)
• $1.323B — Noninterest-bearing demand deposits (September 30, 2025) (Increased $210.758M from $1.112B at December 31, 2024)
• $7.439B — Total Assets (September 30, 2025) (Increased from $7.011B at December 31, 2024)

Key Players & Entities

• PEAPACK GLADSTONE FINANCIAL CORP (company) — registrant
• Peapack Private Bank & Trust (company) — wholly-owned subsidiary of PGC
• Securities and Exchange Commission (regulator) — regulatory body
• $9.631 million (dollar_amount) — net income for three months ended September 30, 2025
• $7.587 million (dollar_amount) — net income for three months ended September 30, 2024
• $25.167 million (dollar_amount) — net income for nine months ended September 30, 2025
• $23.748 million (dollar_amount) — net income for nine months ended September 30, 2024
• $4.790 million (dollar_amount) — provision for credit losses for three months ended September 30, 2025
• $15.847 million (dollar_amount) — provision for credit losses for nine months ended September 30, 2025
• $7.439 billion (dollar_amount) — total assets at September 30, 2025

FAQ

Filing Documents

• pgc-20250930.htm (10-Q) — 11313KB
• pgc-ex10_1.htm (EX-10.1) — 83KB
• pgc-ex10_2.htm (EX-10.2) — 83KB
• pgc-ex10_3.htm (EX-10.3) — 84KB
• pgc-ex31_1.htm (EX-31.1) — 15KB
• pgc-ex31_2.htm (EX-31.2) — 15KB
• pgc-ex32.htm (EX-32) — 15KB
• 0001193125-25-271685.txt ( ) — 45954KB
• pgc-20250930.xsd (EX-101.SCH) — 2405KB
• pgc-20250930_htm.xml (XML) — 14662KB

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION Item 1

Financial Statements (Unaudited)

Financial Statements (Unaudited) 3 Consolidated Statements of Condition at September 30, 2025 and December 31, 2024 3 Consolidated Statements of Income for the three and nine months ended September 30, 2025 and 2024 4 Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2025 and 2024 5 Consolidated Statements of Changes in Shareholders' Equity for the three and nine months ended September 30, 2025 and 2024 6 Consolidated Statements of Cash Flows for the nine months ended September 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 51 Item 3

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 71 Item 4

Controls and Procedures

Controls and Procedures 74

OTHER INFORMATION

PART II OTHER INFORMATION Item 1

Legal Proceedings

Legal Proceedings 74 Item 1A

Risk Factors

Risk Factors 74 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 75 Item 3 Defaults Upon Senior Securities 75 Item 4 Mine Safety Disclosures 75 Item 5 Other Information 75 Item 6 Exhibits 77 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) September 30, December 31, 2025 2024 ASSETS Cash and due from banks $ 8,514 $ 8,492 Interest-earning deposits 338,672 382,875 Total cash and cash equivalents 347,186 391,367 Securities available for sale 756,578 784,544 Securities held to maturity (fair value $ 88,259 at September 30, 2025 and $ 88,650 at December 31, 2024) 97,414 101,635 CRA equity security, at fair value 13,403 13,041 FHLB and FRB stock, at cost (A) 11,387 12,373 Loans held for sale, at lower of cost or fair value 8,298 8,594 Loans 6,018,967 5,512,326 Less: allowance for credit losses 68,642 72,992 Net loans 5,950,325 5,439,334 Premises and equipment 37,756 28,888 Accrued interest receivable 34,120 29,898 Bank owned life insurance 48,381 47,981 Goodwill 36,212 36,212 Other intangible assets 7,899 8,714 Finance lease right-of-use assets 879 985 Operating lease right-of-use assets 37,692 40,289 Deferred tax assets, net 12,532 16,381 Other assets 39,580 51,002 TOTAL ASSETS $ 7,439,642 $ 7,011,238 LIABILITIES Deposits: Noninterest-bearing demand deposits $ 1,323,492 $ 1,112,734 Interest-bearing deposits: Checking 3,509,403 3,334,269 Savings 104,524 103,136 Money market accounts 1,226,506 1,078,024 Certificates of deposit - retail 397,338 483,998 Certificates of deposit - listing service 899 6,861 Subtotal deposits 6,562,162 6,119,022 Interest-bearing demand - brokered — 10,000 Total deposits 6,562,162 6,129,022 Finance lease liabilities 1,227 1,348 Operating lease liabilities 41,139 43,569 Subordinated debt, net 98,981 133,561 Due to brokers 25,125 18,514 Accrued expenses and other liabili

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Certain information and footnote disclosure 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 September 30, 2025, and the results of operations, comprehensive income and changes in shareholders' equity for the three and nine months ended September 30, 2025 and 2024. The cash flow statements are presented for the nine months ended September 30, 2025 and 2024. The results of operations for the three and nine months ended September 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

View Full Filing

View this 10-Q filing on SEC EDGAR