EX-99.1

Exhibit 99.1

Contact:

Frank A. Cavallaro, SEVP and CFO

Peapack-Gladstone Financial Corporation

T: 908-306-8933

PEAPACK-GLADSTONE FINANCIAL CORPORATION

REPORTS STRONG FOURTH QUARTER RESULTS, AS

NET INTEREST MARGIN CONTINUES TO EXPAND

Bedminster, N.J. – January 26, 2023 – Peapack-Gladstone Financial Corporation (NASDAQ Global Select Market: PGC) (the “Company”) announces its fourth quarter 2022 results.

This earnings release should be read in conjunction with the Company’s Q4 2022 Investor Update, a copy of which is available on our website at www.pgbank.com and via a current report on Form 8-K on the website of the Securities and Exchange Commission at www.sec.gov.

The Company recorded total revenue of $64.85 million, net income of $20.58 million and diluted earnings per share (“EPS”) of $1.12 for the quarter ended December 31, 2022, compared to revenue of $56.17 million, net income of $14.86 million and diluted EPS of $0.78 for the three months ended December 31, 2021.

The Company’s return on average assets, return on average equity, and return on average tangible equity totaled 1.33%, 15.73% and 17.30%, respectively, for the December 2022 quarter, reflecting significant increases from the December 2021 quarterly levels.

The December 2022 quarter results were driven by continued improvement in net interest income and net interest margin, which improved $10.8 million and 66 basis points, when compared to the December 2021 quarter (and $2.5 million and 14 basis points when compared to the September 2022 quarter). This increase was partially offset by a decline in noninterest income, principally wealth management fee income and capital markets activity fee income, due to volatility in the markets.

Douglas L. Kennedy, President and CEO said, “Our fourth quarter results represent a fitting end to a tremendous year for our Company. The consistent improvement of net interest income throughout the year reflects the asset sensitivity of our loan portfolio, as loans continued to reprice upward in the rising rate environment. For the 2022 fiscal year, net income grew 31% and earnings per share improved by 37%. I am extremely pleased with our financial performance and look forward to the year ahead as every member of our team continues to focus on delivering the highest levels of client service and enhancing our differentiated model."

The December 2022 quarter included the following items: 1) $28,000 positive fair value adjustment on an equity security held for CRA investment purposes; 2) $275,000 gain on sale of a property; 3) $25,000 income from life insurance proceeds; 4) $200,000 expense related to accelerated restricted stock vesting related to one employee; and 5) $563,000 income tax expense (net of Federal benefit) related to the first nine months of 2022 brought about by a recent New York City nexus determination change. These items increased total revenue by $328,000, reduced net income by $469,000 and EPS by $0.03, for the December 2022 quarter.

The following are select highlights:

Peapack Private Wealth Management:

•

AUM/AUA in our Peapack Private Wealth Management Division totaled $10 billion at December 31, 2022.

•

Gross new business inflows for Q4 2022 totaled $295 million ($236 million managed).

•

For the year ended December 31, 2022 gross new business inflows totaled $1 billion ($741 million managed).

•

Wealth Management fee income of $13.0 million for Q4 2022 comprised 20% of total revenue for the quarter.

Commercial Banking and Balance Sheet Management:

•

The net interest margin ("NIM") improved by 14 basis points in Q4 2022 compared to Q3 2022 and improved 66 basis points when compared to Q4 2021.

•

Noninterest-bearing demand deposits comprised 24% of total deposits as of December 31, 2022.

•

Core deposits (which includes noninterest-bearing demand and interest-bearing demand, savings and money market accounts) totaled 92% of total deposits at December 31, 2022.

•

Total loans were $5.30 billion at December 31, 2022 reflecting growth of $112 million (2.2% linked quarter or 8.7% annualized) when compared to $5.19 billion at September 30, 2022, and growth of $457 million (9.4%) when compared to $4.84 billion at December 31, 2021.

•

Commercial & industrial lending (“C&I”) loan/lease balances comprised 42% of the total loan portfolio at December 31, 2022.

•

Fee income on unused commercial lines of credit totaled $732,000 for Q4 2022.

Capital Management:

•

Repurchased 140,700 shares of Company stock for a total cost of $5.2 million during Q4 2022. (930,977 shares of Company stock for a total cost of $32.7 million were repurchased during 2022).

•

At December 31, 2022, Regulatory Tier 1 Leverage Ratio stood at 10.9% for Peapack-Gladstone Bank (the "Bank") and 8.9% for the Company; and Regulatory Common Equity Tier 1 Ratio (to Risk-Weighted Assets) stood at 13.5% for the Bank and 11.0% for the Company. These ratios are significantly above well capitalized standards, as capital has benefitted from strong net income generation.

SUMMARY INCOME STATEMENT DETAILS:

The following tables summarize specified financial details for the periods shown.

December 2022 Year Compared to Prior Year


	Year Ended			Year Ended
	December 31,			December 31,			Increase/
(Dollars in millions, except per share data)	2022			2021			(Decrease)
Net interest income	$	176.08		$	138.06		$	38.02		28	%
Wealth management fee income (A)		54.65			52.99			1.66		3
Capital markets activity (B)		9.25			10.62			(1.37	)	(13	)
Other income (C)		2.52			8.64			(6.12	)	(71	)
Total other income		66.42			72.25			(5.83	)	(8	)
Operating expenses (A) (D)		133.80			126.17			7.63		6
Pretax income before provision for credit losses		108.70			84.14			24.56		29
Provision for credit losses		6.35			6.48			(0.13	)	(2	)
Pretax income		102.35			77.66			24.69		32
Income tax expense/(benefit) (E)		28.10			21.04			7.06		34
Net income	$	74.25		$	56.62		$	17.63		31	%
Diluted EPS	$	4.00		$	2.93		$	1.07		37	%

Total Revenue (F)	$	242.50		$	210.31		$	32.19		15	%

Return on average assets		1.20	%		0.94	%		0.26
Return on average equity		14.02	%		10.56	%		3.46

(A) The twelve months ended December 31, 2022 included twelve months of wealth management fee income and expense related to the July 2021 acquisition of Princeton Portfolio Strategies Group, while the twelve months ended December 31, 2021 included six months.

(B) Capital markets activity includes fee income from loan level back-to-back swaps, the Small Business Association ("SBA") lending and sale program, corporate advisory and mortgage banking activities.

(C) Other income for the twelve months ended December 31, 2022 included a $6.6 million loss on sale of securities associated with a balance sheet repositioning executed in the first quarter of 2022, gain on sale of property of $275,000, income from life insurance proceeds of $25,000 and a $1.7 million negative fair value adjustment on a CRA equity security. The December 2021 twelve months included a cost of $842,000 related to the termination of interest rate swaps; a $1.1 million gain on sale of Paycheck Protection Program ("PPP") loans; $722,000 of fee income related to the referral of PPP loans to a third party; $455,000 of additional Bank Owned Life Insurance ("BOLI") income related to the receipt of life insurance proceeds; and a $432,000 negative fair value adjustment on a CRA equity security.

(D) The years ended December 2022 and 2021 each included $1.5 million of severance expense related to certain staff reorganizations within several areas of the Bank. The year ended December 31, 2021 also included $648,000 of expense related to the redemption of subordinated debt; and $2.2 million related to a swap valuation allowance.

(E) The year ended December 31, 2022 included $750,000 of income tax expense (net of Federal benefit) related to recent approval of legislation that changed the nexus standard for New York City business tax.

(F) Total revenue equals the sum of net interest income plus total other income.

December 2022 Quarter Compared to Prior Year Quarter


	Three Months Ended			Three Months Ended
	December 31,			December 31,			Increase/
(Dollars in millions, except per share data)	2022			2021			(Decrease)
Net interest income	$	48.04		$	37.21		$	10.83		29	%
Wealth management fee income		12.98			13.96			(0.98	)	(7	)
Capital markets activity (A)		0.95			3.52			(2.57	)	(73	)
Other income (B)		2.88			1.48			1.40		95
Total other income		16.81			18.96			(2.15	)	(11	)
Operating expenses (C)		33.41			31.70			1.71		5
Pretax income before provision for credit losses		31.44			24.47			6.97		28
Provision for credit losses		1.93			3.75			(1.82	)	(49	)
Pretax income		29.51			20.72			8.79		42
Income tax expense (D)		8.93			5.86			3.07		52
Net income	$	20.58		$	14.86		$	5.72		38	%
Diluted EPS	$	1.12		$	0.78		$	0.34		44	%

Total Revenue (E)	$	64.85		$	56.17		$	8.68		15	%

Return on average assets annualized		1.33	%		0.96	%		0.37
Return on average equity annualized		15.73	%		10.94	%		4.79

(A) Capital markets activity includes fee income from loan level back-to-back swaps, the SBA lending and sale program, corporate advisory and mortgage banking activities.

(B) Other income for the December 2022 quarter included a gain on sale of property of $275,000 and income from life insurance proceeds of $25,000. Other income for the December 2022 and 2021 quarters included a fair value adjustment on a CRA equity security of positive $28,000 and negative $139,000, respectively.

(C) The December 2022 quarter included $200,000 of expense related to accelerated vesting of restricted stock related to one employee. The December 2021 quarter included $893,000 of expense related to a swap valuation allowance.

(D) The three months ended December 31, 2022 included $750,000 of income tax expense (net of Federal benefit) related to the recent approval of legislation that changed the nexus standard for New York City business tax. ($563,000 of that amount related to the first nine months of 2022).

(E) Total revenue equals the sum of net interest income plus total other income.

December 2022 Quarter Compared to Linked Quarter


	Three Months Ended			Three Months Ended
	December 31,			September 30,			Increase/
(Dollars in millions, except per share data)	2022			2022			(Decrease)
Net interest income	$	48.04		$	45.53		$	2.51		6	%
Wealth management fee income		12.98			12.94			0.04		0
Capital markets activity (A)		0.95			0.78			0.17		22
Other income (B)		2.88			2.66			0.22		8
Total other income		16.81			16.38			0.43		3
Operating expenses (C)		33.41			33.56			(0.15	)	(0	)
Pretax income before provision for credit losses		31.44			28.35			3.09		11
Provision for credit losses		1.93			0.60			1.33		222
Pretax income		29.51			27.75			1.76		6
Income tax expense (D)		8.93			7.62			1.31		17
Net income	$	20.58		$	20.13		$	0.45		2	%
Diluted EPS	$	1.12		$	1.09		$	0.03		3	%

Total Revenue (E)	$	64.85		$	61.91		$	2.94		5	%

Return on average assets annualized		1.33	%		1.30	%		0.03
Return on average equity annualized		15.73	%		15.21	%		0.52

(A) Capital markets activity includes fee income from loan level back-to-back swaps, the SBA lending and sale program, corporate advisory and mortgage banking activities.

(B) Other income for the December 2022 quarter included gain on sale of property of $275,000 and income from life insurance proceeds of $25,000. Other income for the December 2022 and September 2022 quarters included a fair value adjustment on a CRA equity security of positive $28,000 and negative $571,000, respectively.

(C) The December 2022 quarter included $200,000 of expense related to accelerated vesting of restricted stock related to one employee.

(E) Total revenue equals the sum of net interest income plus total other income.

SUPPLEMENTAL QUARTERLY DETAILS:

Peapack Private Wealth Management

AUM/AUA in the Bank’s Peapack Private Wealth Management (“PPWM”) Division totaled $10 billion at December 31, 2022. For the December 2022 quarter, PPWM generated $12.98 million in fee income, compared to $12.94 million for the September 30, 2022 quarter and $13.96 million for the December 2021 quarter. The equity market generally improved during Q4 2022, while on a full year basis for 2022, the equity market declined nearly 20%.

John Babcock, President of Peapack Private Wealth Management noted, “Notwithstanding broad market forces that have negatively impacted both the equity and bond markets in 2022, and with economic challenges ahead, our business remains sound and we continue to attract new clients as well as additional funds from existing relationships. In Q4 2022, total new accounts and client additions totaled $295 million ($236 million managed), which brings our 2022 total to $1 billion ($741 million managed). As we enter 2023, our new business pipeline is healthy and we remain focused on delivering excellent service and advice to our clients as well as continuing to integrate and advance our internal operating and technology infrastructure. Our highly skilled professionals, our fiduciary powers and expertise, our financial planning capabilities and our high-touch client service model distinguishes PPWM in our market and are the drivers behind our continued growth and success.”

Loans / Commercial Banking

Total loans were $5.30 billion at December 31, 2022, reflecting growth of $112 million (2.2% linked quarter or 8.7% annualized) when compared to $5.19 billion at September 30, 2022, and growth of $457 million (9.4%) when compared to $4.84 billion at December 31, 2021.

Total C&I loans and leases at December 31, 2022 were $2.21 billion or 42% of the total loan portfolio.

Mr. Kennedy noted, “Our loan growth has historically been strong, however, given economic uncertainty and rising interest rates, we believe loan demand will subside somewhat as we look ahead to 2023. Further, we have tightened our initial underwriting given the higher rate environment and in anticipation of a potential economic downturn. Given that, we believe we will achieve modest loan growth in 2023, resulting in mid-single digit loan growth for the coming year.”

Mr. Kennedy also noted, “We are proud to have built a leading middle market commercial banking franchise, as evidenced by our C&I Portfolio, Treasury Management services, and Corporate Advisory and SBA businesses. Additionally, we are encouraged by the expansion into the Life Insurance Premium Finance business and believe it will prove to be a safe and profitable business line that aligns with the Company's strategy.”

Net Interest Income (NII)/Net Interest Margin (NIM)

The Company’s NII of $48.0 million and NIM of 3.12% for Q4 2022 increased $2.5 million and 14 basis points from NII of $45.5 million and NIM of 2.98%, for the linked quarter (Q3 2022) and increased $10.8 million and 66 basis points from NII of $37.2 million and NIM of 2.46% for the prior year quarter (Q4 2021). When comparing Q4 2022 to Q4 2021, the Bank benefitted from the increases in LIBOR and the Prime rate during 2022. Additionally, the Bank grew its loan portfolio at rates/spreads beneficial to NIM, while reducing lower-yielding liquidity.

Funding / Liquidity / Interest Rate Risk Management

The Company actively manages its deposit base to reduce reliance on wholesale funding, volatility, and/or operational risk. Total deposits decreased $61 million to $5.21 billion at December 31, 2022 from $5.27 billion at December 31, 2021. The deposit outflows for the quarter and year included large relationships strategically utilizing their funds, including investing into our Wealth Management business, acquisitions, further investing in their business, and purchasing real estate and other investments. As noted previously, during the third quarter of 2022, the Company successfully migrated $287 million of interest-bearing checking into noninterest-bearing demand deposits.

Mr. Kennedy noted, “92% of our deposits are demand, savings, or money market accounts, and our noninterest bearing deposits comprise 24% of our total deposits; both metrics reflect the core nature of our deposit base.”

At December 31, 2022, the Company’s balance sheet liquidity (investments available for sale, interest-earning deposits and cash) totaled $788.4 million (or 12% of assets).

The Company maintains backup liquidity of approximately $1.5 billion of secured available funding with the Federal Home Loan Bank and $1.8 billion of secured funding from the Federal Reserve Discount Window. The available funding from the Federal Home Loan Bank and the Federal Reserve are secured by the Company’s loan and investment portfolios.

Income from Capital Markets Activities

Noninterest income from Capital Markets activities (detailed below) totaled $950,000 for the December 2022 quarter compared to $784,000 for the September 2022 quarter and $3.52 million for the December 2021 quarter. The December 2021 quarter results were driven by $2.18 million in Corporate Advisory income.


	Year Ended		Year Ended
	December 31,		December 31,
(Dollars in thousands, except per share data)	2022		2021
Gain on loans held for sale at fair value (Mortgage banking)	$	483	$	2,194
Fee income related to loan level, back-to-back swaps		293		—
Gain on sale of SBA loans		6,765		4,939
Corporate advisory fee income		1,704		3,483
Total capital markets activity	$	9,245	$	10,616

	Three Months Ended		Three Months Ended		Three Months Ended
	December 31,		September 30,		December 31,
(Dollars in thousands, except per share data)	2022		2022		2021
Gain on loans held for sale at fair value (Mortgage banking)	$	25	$	60	$	352
Fee income related to loan level, back-to-back swaps		293		—		—
Gain on sale of SBA loans		624		622		989
Corporate advisory fee income		8		102		2,180
Total capital markets activity	$	950	$	784	$	3,521

Other Noninterest Income (other than Wealth Management fee income and Income from Capital Markets Activities)

Other noninterest income was $2.88 million for Q4 2022 compared to $2.66 million for Q3 2022 and $1.48 million for Q4 2021. Q4 2022 included $732,000 of unused line fees compared to $818,000 for Q3 2022 and $179,000 for Q4 2021. Q4 2022 included a gain on sale of property of $275,000. Additionally, Q4 2022 included $294,000 of income recorded by the Equipment Finance Division related to equipment transfers to lessees while Q3 2022 included $547,000 of such income.

Operating Expenses

The Company’s total operating expenses were $33.41 million for the quarter ended December 31, 2022, compared to $33.56 million for the September 2022 quarter and $31.70 million for the December 2021 quarter. The 2022 quarters included increased costs related to employee health insurance and corporate insurance, as well as normal annual merit increases and year-end bonuses. The December 2021 quarter included $893,000 related to a swap valuation allowance.

Mr. Kennedy noted, “While we continue to manage expenses closely and prudently, we have and will continue to invest in our existing team as the market demands in order to retain the talent we have acquired. We will also grow and expand our core wealth management and commercial banking businesses, including strategic hires and lift-outs, and invest in digital and other enhancements to further enhance the client experience.”

Income Taxes

The effective tax rate for the three months ended December 31, 2022 was 30.26%, as compared to 27.47% for the September 2022 quarter and 28.31% for the quarter ended December 31, 2021. The three months ended December 31, 2022 includes $750,000 of income tax expense (net of Federal benefit) related to the recent approval of legislation that changed the nexus standard for New York City business tax. ($563,000 of that amount related to the first nine months of 2022).

Asset Quality / Provision for Credit Losses

Nonperforming assets (which does not include troubled debt restructured loans that are performing in accordance with their terms) were $19.1 million, or 0.30% of total assets at December 31, 2022. Loans past due 30 to 89 days and still accruing were $7.6 million, which included a $4.5 million outstanding loan to US governmental entities.

Criticized and classified loans totaled $107.8 million at December 31, 2022, reflecting declines from both December 31, 2021 and September 30, 2022 levels. The Company currently has no loans or leases on deferral and accruing.

On January 1, 2022, the Company implemented Current Expected Credit Losses (“CECL”) methodology for calculating the Company’s Allowance for Credit Losses (“ACL”). The day one CECL adjustment totaled $5.5 million which resulted in a reduction to the December 31, 2021 ACL, and benefit to Capital, net of tax effect.

For the quarter ended December 31, 2022, the Company’s provision for credit losses was $1.9 million compared to $599,000 for the September 2022 quarter and $3.8 million for the December 2021 quarter. The provision for credit losses in the December 2022 quarter was driven principally by loan growth.

At December 31, 2022, the ACL was $60.83 million (1.15% of total loans), compared to $59.68 million (1.15% of loans) at September 30, 2022. The ALLL at December 31, 2021 (before adoption of CECL) was $61.70 million (1.27% of loans).

Capital

The Company’s capital position during the December 2022 quarter was benefitted by net income of $20.58 million which was partially offset by the repurchase of 140,700 shares through the Company’s stock repurchase program at a total cost of $5.2 million and the quarterly dividend of $896,000.

Mr. Kennedy noted, “Our tangible book value per share improved during Q4 2022 to $27.26 at December 31, 2022 from $26.10 at September 30, 2022.”

The Company’s and Bank’s regulatory capital ratios as of December 31, 2022 remain strong, and generally reflect increases from September 30, 2022 and December 31, 2021 levels. Where applicable, such ratios remain well above regulatory well capitalized standards.

The Company employs quarterly capital stress testing – adverse case and severely adverse case. In the most recent completed stress test (as of September 30, 2022), under the severely adverse case, and no growth scenario, the Bank remains well capitalized over a two-year stress period. With an additional stress overlay (impacting the industries most affected by the Pandemic more severely), the Bank still remains well capitalized over the two-year stress period.

On January 26, 2023, the Company declared a cash dividend of $0.05 per share payable on February 23, 2023 to shareholders of record on February 9, 2023.

ABOUT THE COMPANY

Peapack-Gladstone Financial Corporation is a New Jersey bank holding company with total assets of $6.4 billion and assets under management/administration of $10 billion as of December 31, 2022. Founded in 1921, Peapack-Gladstone Bank is a commercial bank that provides innovative wealth management, commercial and retail solutions, including residential lending and online platforms, to businesses and consumers. Peapack Private, the bank’s wealth management division, offers comprehensive financial, tax, fiduciary and investment advice and solutions to individuals, families, privately-held businesses, family offices and not-for-profit organizations, which help them to establish, maintain and expand their legacy. Together, Peapack-Gladstone Bank and Peapack Private offer an unparalleled commitment to client service. Visit www.pgbank.com and www.peapackprivate.com for more information.

The foregoing may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management’s confidence and strategies and management’s expectations about new and existing programs and products, investments, relationships, opportunities and market conditions. These statements may be identified by such forward-looking terminology as “expect,” “look,” “believe,” “anticipate,” “may” or similar statements or variations of such terms. Actual results may differ materially from such forward-looking statements. Factors that may cause results to differ materially from such forward-looking statements include, but are not limited to:

•

our ability to successfully grow our business and implement our strategic plan, including our ability to generate revenues to offset the increased personnel and other costs related to the strategic plan;

•

the impact of anticipated higher operating expenses in 2023 and beyond;

•

our ability to successfully integrate wealth management firm acquisitions;

•

our ability to manage our growth;

•

our ability to successfully integrate our expanded employee base;

•

an unexpected decline in the economy, in particular in our New Jersey and New York market areas, including potential recessionary conditions;

•

declines in our net interest margin caused by the interest rate environment and/or our highly competitive market;

•

declines in the value in our investment portfolio;

•

impact from a pandemic event on our business, operations, customers, allowance for credit losses and capital levels;

•

the continuing impact of the COVID-19 pandemic on our business and results of operation;

•

higher than expected increases in our allowance for credit losses;

•

higher than expected increases in loan and lease losses or in the level of delinquent, nonperforming, classified and criticized loans;

•

inflation and changes in interest rates, which may adversely impact or margins and yields, reduce the fair value of our financial instruments, reduce our loan originations and lead to higher operating costs;

•

decline in real estate values within our market areas;

•

legislative and regulatory actions (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Basel III and related regulations) that may result in increased compliance costs;

•

successful cyberattacks against our IT infrastructure and that of our IT and third-party providers;

•

higher than expected FDIC insurance premiums;

•

adverse weather conditions;

•

the current or anticipated impact of military conflict, terrorism or other geopolitical events;

•

our inability to successfully generate new business in new geographic markets;

•

a reduction in our lower-cost funding sources;

•

our inability to adapt to technological changes;

•

claims and litigation pertaining to fiduciary responsibility, environmental laws and other matters;

•

our inability to retain key employees;

•

demands for loans and deposits in our market areas;

•

adverse changes in securities markets;

•

changes in governmental regulation, including, but not limited to, any increase in FDIC insurance premiums and changes in the monetary policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System;

•

changes in accounting policies and practices; and

•

other unexpected material adverse changes in our operations or earnings.

A discussion of these and other factors that could affect our results is included in our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2021. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

(Tables to follow)

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in Thousands, except share data)

(Unaudited)


	For the Three Months Ended
	Dec 31,			Sept 30,			June 30,			March 31,			Dec 31,
	2022			2022			2022			2022			2021
Income Statement Data:
Interest income	$	64,202		$	55,013		$	48,520		$	44,140		$	42,075
Interest expense		16,162			9,488			5,627			4,518			4,863
Net interest income		48,040			45,525			42,893			39,622			37,212
Wealth management fee income		12,983			12,943			13,891			14,834			13,962
Service charges and fees		1,150			1,060			1,063			952			996
Bank owned life insurance		321			299			310			313			308
Gain on loans held for sale at fair value (Mortgage banking) (A)		25			60			151			247			352
Gain/(loss) on loans held for sale at lower of cost or fair value		—			—			—			—			(265	)
Fee income related to loan level, back-to-back swaps (A)		293			—			—			—			—
Gain on sale of SBA loans (A)		624			622			2,675			2,844			989
Corporate advisory fee income (A)		8			102			33			1,561			2,180
Other income		1,380			1,868			860			1,254			581
Loss on securities sale, net (B)		—			—			—			(6,609	)		—
Fair value adjustment for CRA equity security		28			(571	)		(475	)		(682	)		(139	)
Total other income		16,812			16,383			18,508			14,714			18,964
Salaries and employee benefits (C)		22,489			22,656			21,882			22,449			20,105
Premises and equipment		4,898			4,534			4,640			4,647			4,519
FDIC insurance expense		455			510			503			471			402
Swap valuation allowance		—			—			—			673			893
Other expenses		5,570			5,860			5,634			5,929			5,785
Total operating expenses		33,412			33,560			32,659			34,169			31,704
Pretax income before provision for credit losses		31,440			28,348			28,742			20,167			24,472
Provision for credit losses (D)		1,930			599			1,449			2,375			3,750
Income before income taxes		29,510			27,749			27,293			17,792			20,722
Income tax expense (E)		8,931			7,623			7,193			4,351			5,867
Net income	$	20,579		$	20,126		$	20,100		$	13,441		$	14,855

Total revenue (F)	$	64,852		$	61,908		$	61,401		$	54,336		$	56,176
Per Common Share Data:
Earnings per share (basic)	$	1.15		$	1.11		$	1.10		$	0.73		$	0.80
Earnings per share (diluted)		1.12			1.09			1.08			0.71			0.78
Weighted average number of common shares outstanding:
Basic		17,915,058			18,072,385			18,325,605			18,339,013			18,483,268
Diluted		18,382,193			18,420,661			18,637,340			18,946,683			19,070,594
Performance Ratios:
Return on average assets annualized (ROAA)		1.33	%		1.30	%		1.30	%		0.87	%		0.96	%
Return on average equity annualized (ROAE)		15.73	%		15.21	%		15.43	%		9.88	%		10.94	%
Return on average tangible common equity annualized (ROATCE) (G)		17.30	%		16.73	%		17.00	%		10.85	%		12.03	%
Net interest margin (tax-equivalent basis)		3.12	%		2.98	%		2.83	%		2.69	%		2.46	%
GAAP efficiency ratio (H)		51.52	%		54.21	%		53.19	%		62.88	%		56.44	%
Operating expenses / average assets annualized		2.15	%		2.17	%		2.11	%		2.22	%		2.05	%

(A) Gain on loans held for sale at fair value (mortgage banking), fee income related to loan level, back-to-back swaps, gain on sale of SBA loans and corporate advisory fee income are all included in “capital markets activity” as referred to within the earnings release.

(B) Loss on sale of securities was a result of a balance sheet repositioning employed in the March 2022 quarter.

(D) Commencing on January 1, 2022, the allowance calculation is based on the CECL methodology. Prior to January 1, 2022, the calculation was based on the incurred loss methodology.

(E) The three months ended December 31, 2022 included $750,000 income tax expense (net federal benefit) related to the twelve months of 2022 brought about by a recent New York City nexus determination change which included $563,000 from prior quarters.

(F) Total revenue equals the sum of net interest income plus total other income.

(G) Return on average tangible common equity is calculated by dividing tangible common equity by annualized net income. See Non-GAAP financial measures reconciliation included in these tables.

(H) Calculated as total operating expenses as a percentage of total revenue. For Non-GAAP efficiency ratio, see the Non-GAAP financial measures reconciliation included in these tables.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in Thousands, except share data)

(Unaudited)


	For the Twelve Months Ended
	December 31,						Change
	2022			2021			$			%
Income Statement Data:
Interest income	$	211,875		$	160,067		$	51,808			32	%
Interest expense		35,795			22,006			13,789			63	%
Net interest income		176,080			138,061			38,019			28	%
Wealth management fee income		54,651			52,987			1,664			3	%
Service charges and fees		4,225			3,697			528			14	%
Bank owned life insurance		1,243			1,696			(453	)		-27	%
Gain on loans held for sale at fair value (Mortgage banking) (A)		483			2,194			(1,711	)		-78	%
Gain on loans held for sale at lower of cost or fair value (B)		—			1,142			(1,142	)		-100	%
Fee income related to loan level, back-to-back swaps (A)		293			—			293		N/A
Gain on sale of SBA loans (A)		6,765			4,939			1,826			37	%
Corporate advisory fee income (A)		1,704			3,483			(1,779	)		-51	%
Loss on swap termination		—			(842	)		842			-100	%
Other income		5,362			3,379			1,983			59	%
Loss on securities sale, net (C)		(6,609	)		—			(6,609	)	N/A
Fair value adjustment for CRA equity security		(1,700	)		(432	)		(1,268	)		294	%
Total other income		66,417			72,243			(5,826	)		-8	%
Salaries and employee benefits (D)		89,476			81,864			7,612			9	%
Premises and equipment		18,719			17,165			1,554			9	%
FDIC insurance expense		1,939			2,071			(132	)		-6	%
Swap valuation allowance		673			2,243			(1,570	)		-70	%
Other expenses		22,993			22,824			169			1	%
Total operating expenses		133,800			126,167			7,633			6	%
Pretax income before provision for credit losses		108,697			84,137			24,560			29	%
Provision for credit losses (E)		6,353			6,475			(122	)		-2	%
Income before income taxes		102,344			77,662			24,682			32	%
Income tax expense (F)		28,098			21,040			7,058			34	%
Net income	$	74,246		$	56,622		$	17,624			31	%

Total revenue (G)	$	242,497		$	210,304		$	32,193			15	%
Per Common Share Data:
Earnings per share (basic)	$	4.09		$	3.01		$	1.08			36	%
Earnings per share (diluted)		4.00			2.93			1.07			37	%
Weighted average number of common shares outstanding:
Basic		18,161,605			18,788,679			(627,074	)		-3	%
Diluted		18,568,098			19,292,602			(724,504	)		-4	%
Performance Ratios:
Return on average assets (ROAA)		1.20	%		0.94	%		0.26	%		28	%
Return on average equity (ROAE)		14.02	%		10.56	%		3.46	%		33	%
Return on average tangible common equity (ROATCE) (H)		15.43	%		11.56	%		3.87	%		33	%
Net interest margin (tax-equivalent basis)		2.91	%		2.38	%		0.53	%		22	%
GAAP efficiency ratio (I)		55.18	%		59.99	%		(4.81	)%		-8	%
Operating expenses / average assets		2.16	%		2.10	%		0.06	%		3	%

(B) Includes gain on sale of $57 million of PPP loans completed in the twelve months ended December 31, 2021.

(D) The twelve months ended December 31, 2022 and 2021 each included $1.5 million of severance expense related to corporate restructuring.

(E) Commencing on January 1, 2022, the allowance calculation is based on the CECL methodology. Prior to January 1, 2022, the calculation was based on the incurred loss methodology.

(F)The twelve months ended December 31, 2022 included $750,000 income tax expense (net federal benefit) brought about by a recent New York City nexus determination.

(G) Total revenue equals the sum of net interest income plus total other income.

(H) Return on average tangible common equity is calculated by dividing tangible common equity by annualized net income. See Non-GAAP financial measures reconciliation included in these tables.

(I) Calculated as total operating expenses as a percentage of total revenue. For Non-GAAP efficiency ratio, see the Non-GAAP financial measures reconciliation included in these tables.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in Thousands)

(Unaudited)


	As of
	Dec 31,		Sept 30,		June 30,		March 31,		Dec 31,
	2022		2022		2022		2022		2021
ASSETS
Cash and due from banks	$	5,937	$	5,066	$	6,203	$	8,849	$	5,929
Federal funds sold		—		—		—		—		—
Interest-earning deposits		184,138		103,214		147,222		105,111		140,875
Total cash and cash equivalents		190,075		108,280		153,425		113,960		146,804
Securities available for sale		554,648		497,880		556,791		601,163		796,753
Securities held to maturity		102,291		103,551		105,048		106,816		108,680
CRA equity security, at fair value		12,985		12,957		13,528		14,003		14,685
FHLB and FRB stock, at cost (A)		30,672		14,986		13,710		18,570		12,950

Residential mortgage		525,756		519,088		512,341		513,289		501,340
Multifamily mortgage		1,863,915		1,856,675		1,876,783		1,850,097		1,595,866
Commercial mortgage		624,625		638,903		657,812		669,899		662,626
Commercial and industrial loans		2,213,762		2,099,917		2,048,474		2,041,720		2,009,252
Consumer loans		38,014		37,412		37,675		35,322		33,687
Home equity lines of credit		34,496		36,375		36,023		38,604		40,803
Other loans		304		259		236		226		238
Total loans		5,300,872		5,188,629		5,169,344		5,149,157		4,843,812
Less: Allowances for credit losses (B)		60,829		59,683		59,022		58,386		61,697
Net loans		5,240,043		5,128,946		5,110,322		5,090,771		4,782,115

Premises and equipment		23,831		23,781		22,804		22,960		23,044
Other real estate owned		116		116		116		—		—
Accrued interest receivable		25,157		17,816		23,468		22,890		21,589
Bank owned life insurance		47,147		47,072		46,944		46,805		46,663
Goodwill and other intangible assets		47,333		47,698		48,082		48,471		48,902
Finance lease right-of-use assets		2,835		3,021		3,209		3,395		3,582
Operating lease right-of-use assets		12,873		13,404		14,192		14,725		9,775
Due from brokers (C)		—		—		—		120,245		—
Other assets (D)		63,587		67,753		39,528		30,890		62,451
TOTAL ASSETS	$	6,353,593	$	6,087,261	$	6,151,167	$	6,255,664	$	6,077,993

LIABILITIES
Deposits:
Noninterest-bearing demand deposits	$	1,246,066	$	1,317,954	$	1,043,225	$	1,023,208	$	956,482
Interest-bearing demand deposits		2,143,611		2,149,629		2,456,988		2,362,987		2,287,894
Savings		157,338		166,821		168,441		162,116		154,914
Money market accounts		1,228,234		1,178,112		1,217,516		1,304,017		1,307,051
Certificates of deposit – Retail		318,573		345,047		375,387		384,909		409,608
Certificates of deposit – Listing Service		25,358		30,647		31,348		31,348		31,382
Subtotal “customer” deposits		5,119,180		5,188,210		5,292,905		5,268,585		5,147,331
IB Demand – Brokered		60,000		85,000		85,000		85,000		85,000
Certificates of deposit – Brokered		25,984		25,974		25,963		33,831		33,818
Total deposits		5,205,164		5,299,184		5,403,868		5,387,416		5,266,149
Short-term borrowings		379,530		32,369		—		122,085		—
Finance lease liability		4,696		5,003		5,305		5,573		5,820
Operating lease liability		13,704		14,101		14,756		15,155		10,111
Subordinated debt, net		132,987		132,916		132,844		132,772		132,701
Other liabilities (D)		84,532		88,174		74,070		69,237		116,824
TOTAL LIABILITIES		5,820,613		5,571,747		5,630,843		5,732,238		5,531,605
Shareholders’ equity		532,980		515,514		520,324		523,426		546,388
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY	$	6,353,593	$	6,087,261	$	6,151,167	$	6,255,664	$	6,077,993
Assets under management and / or administration at Peapack-Gladstone Bank’s Private Wealth Management Division (market value, not included above-dollars in billions)	$	9.9	$	9.3	$	9.5	$	10.7	$	11.1

(A) FHLB means "Federal Home Loan Bank" and FRB means "Federal Reserve Bank."

(B) Commencing on January 1, 2022, the allowance calculation is based on the CECL methodology. Prior to January 1, 2022, the calculation was based on the incurred loss methodology.

(C) Includes $120 million due from FHLB related to securities sales at March 31, 2022. The $120 million received on April 1, 2022, was used to reduce short term borrowings.

(D) The change in other assets and other liabilities was primarily due to the change in the fair value of our back-to-back swap program.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED BALANCE SHEET DATA

(Dollars in Thousands)

(Unaudited)


	As of
	Dec 31,			Sept 30,			June 30,			March 31,			Dec 31,
	2022			2022			2022			2022			2021
Asset Quality:
Loans past due over 90 days and still accruing	$	—		$	—		$	—		$	—		$	—
Nonaccrual loans		18,974			15,724			15,078			15,884			15,573
Other real estate owned		116			116			116			—			—
Total nonperforming assets	$	19,090		$	15,840		$	15,194		$	15,884		$	15,573

Nonperforming loans to total loans		0.36	%		0.30	%		0.29	%		0.31	%		0.32	%
Nonperforming assets to total assets		0.30	%		0.26	%		0.25	%		0.25	%		0.26	%

Performing TDRs (A)(B)	$	965		$	2,761		$	2,272		$	2,375		$	2,479

Loans past due 30 through 89 days and still accruing (C)	$	7,592		$	7,248		$	3,126		$	606		$	8,606

Loans subject to special mention	$	64,842		$	82,107		$	98,787		$	110,252		$	116,490

Classified loans	$	42,985		$	27,507		$	27,167		$	47,386		$	50,702

Impaired loans	$	16,486		$	13,047		$	13,227		$	16,147		$	18,052

Allowance for credit losses ("ACL"):
Beginning of quarter	$	59,683		$	59,022		$	58,386		$	61,697		$	65,133
Day one CECL adjustment		—			—			—			(5,536	)		—
Provision for credit losses (D)		2,103			665			646			2,489			3,750
(Charge-offs)/recoveries, net (E)		(957	)		(4	)		(10	)		(264	)		(7,186	)
End of quarter	$	60,829		$	59,683		$	59,022		$	58,386		$	61,697

ACL to nonperforming loans		320.59	%		379.57	%		391.44	%		367.58	%		396.18	%
ACL to total loans		1.15	%		1.15	%		1.14	%		1.13	%		1.27	%
General ACL to total loans (F)		1.12	%		1.10	%		1.09	%		1.09	%		1.19	%

(A) Amounts reflect troubled debt restructurings (“TDRs”) that are paying according to restructured terms.

(B) Excludes TDRs included in nonaccrual loans in the following amounts: $13.4 million at December 31, 2022; $12.9 million at September 30, 2022; $13.5 million at June 30, 2022; $13.6 million at March 31, 2022; and $1.1 million at December 31, 2021.

(D) Commencing on January 1, 2022, the allowance calculation is based on the CECL methodology. Prior to January 1, 2022, the calculation was based on the incurred loss methodology. Provision to roll forward the ACL excludes a credit of $173,000 at December 31, 2022, a credit of $66,000 at September 30, 2022, a provision of $803,000 at June 30, 2022 and a credit of $114,000 at March 31, 2022 related to off-balance sheet commitments.

(E) Net charge-offs for the quarter ended December 31, 2022 included a charge-off of $1.2 million of a previously established specific reserve on one commercial real estate loan.

(F) Total ACL less specific reserves equals general ACL.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED BALANCE SHEET DATA

(Dollars in Thousands)

(Unaudited)


	As of
	December 31,				September 30,				December 31,
	2022				2022				2021
Capital Adequacy
Equity to total assets (A)			8.39	%			8.47	%			8.99	%
Tangible equity to tangible assets (B)			7.70	%			7.75	%			8.25	%
Book value per share (C)		$	29.92			$	28.77			$	29.70
Tangible book value per share (D)		$	27.26			$	26.10			$	27.05

Tangible equity to tangible assets excluding other comprehensive loss*			8.77	%			8.88	%			8.44	%
Tangible book value per share excluding other comprehensive loss*		$	31.43			$	30.29			$	27.72

*Excludes other comprehensive loss of $74.2 million for the quarter ended December 31, 2022, $75.0 million for the quarter ended September 30, 2022, and $12.4 million for the quarter ended December 31, 2021. See Non-GAAP financial measures reconciliation included in these tables.


	As of
	December 31,				September 30,			December 31,
	2022				2022			2021
Regulatory Capital – Holding Company
Tier I leverage	$	557,627	8.90%		$	540,464	8.70%	$	508,231	8.29%
Tier I capital to risk-weighted assets		557,627		11.02		540,464	10.86		508,231	10.62
Common equity tier I capital ratio to risk-weighted assets		557,609		11.02		540,440	10.86		508,207	10.62
Tier I & II capital to risk-weighted assets		745,197		14.73		733,988	14.74		700,790	14.64

Regulatory Capital – Bank
Tier I leverage (E)	$	680,138	10.85%		$	670,717	10.79%	$	612,762	9.99%
Tier I capital to risk-weighted assets (F)		680,137		13.45		670,717	13.48		612,762	12.80
Common equity tier I capital ratio to risk-weighted assets (G)		680,119		13.45		670,693	13.48		612,738	12.80
Tier I & II capital to risk-weighted assets (H)		741,719		14.67		731,325	14.69		672,614	14.05

(A) Equity to total assets is calculated as total shareholders’ equity as a percentage of total assets at quarter end.

(B) Tangible equity and tangible assets are calculated by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. Tangible equity as a percentage of tangible assets at quarter end is calculated by dividing tangible equity by tangible assets at quarter end. See Non-GAAP financial measures reconciliation included in these tables.

(D) Tangible book value per share excludes intangible assets. Tangible book value per share is calculated by dividing tangible equity by quarter end common shares outstanding. See Non-GAAP financial measures reconciliation tables.

(E) Regulatory well capitalized standard (including capital conservation buffer) = 4.00% ($251 million)

(F) Regulatory well capitalized standard (including capital conservation buffer) = 8.50% ($430 million)

(G) Regulatory well capitalized standard (including capital conservation buffer) = 7.00% ($354 million)

(H) Regulatory well capitalized standard (including capital conservation buffer) = 10.50% ($531 million)

PEAPACK-GLADSTONE FINANCIAL CORPORATION

LOANS CLOSED

(Dollars in Thousands)

(Unaudited)


	For the Quarters Ended
	Dec 31,		Sept 30,		June 30,		March 31,		Dec 31,
	2022		2022		2022		2022		2021
Residential loans retained	$	28,051	$	17,885	$	35,172	$	41,547	$	22,953
Residential loans sold		1,840		4,898		9,886		15,669		20,694
Total residential loans		29,891		22,783		45,058		57,216		43,647
Commercial real estate		6,747		7,320		13,960		25,575		16,134
Multifamily		37,500		4,000		74,564		265,650		162,740
Commercial (C&I) loans/leases (A) (B)		238,568		251,249		332,801		143,029		341,886
SBA		17,431		5,682		10,534		26,093		27,630
Wealth lines of credit (A)		7,700		4,450		12,575		9,400		7,500
Total commercial loans		307,946		272,701		444,434		469,747		555,890
Installment loans		1,845		1,253		100		131		94
Home equity lines of credit (A)		3,815		5,614		3,897		1,341		5,359
Total loans closed	$	343,497	$	302,351	$	493,489	$	528,435	$	604,990


	For the Twelve Months Ended
	Dec 31,		Dec 31,
	2022		2021
Residential loans retained	$	122,655	$	112,695
Residential loans sold		32,293		116,040
Total residential loans		154,948		228,735
Commercial real estate		53,602		81,684
Multifamily		381,714		624,285
Commercial (C&I) loans (A) (B)		965,647		755,433
SBA (C)		59,740		113,906
Wealth lines of credit (A)		34,125		23,195
Total commercial loans		1,494,828		1,598,503
Installment loans		3,329		360
Home equity lines of credit (A)		14,667		13,933
Total loans closed	$	1,667,772	$	1,841,531

(A) Includes loans and lines of credit that closed in the period but not necessarily funded.

(B) Includes equipment finance.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

(Tax-Equivalent Basis, Dollars in Thousands)

(Unaudited)


	For the Three Months Ended
	December 31, 2022								December 31, 2021
	Average			Income/					Average			Income/
	Balance			Expense		Yield			Balance			Expense		Yield
ASSETS:
Interest-earning assets:
Investments:
Taxable (A)	$	761,164		$	3,859		2.03	%	$	885,390		$	3,104		1.40	%
Tax-exempt (A) (B)		1,999			20		4.00			5,443			54		3.97

Loans (B) (C):
Mortgages		516,721			4,017		3.11			510,562			3,799		2.98
Commercial mortgages		2,497,847			25,007		4.00			2,209,160			17,708		3.21
Commercial		2,136,355			29,314		5.49			1,826,640			16,660		3.65
Commercial construction		4,213			68		6.46			20,426			176		3.45
Installment		36,648			496		5.41			33,400			253		3.03
Home equity		36,067			550		6.10			41,955			346		3.30
Other		292			8		10.96			270			6		8.89
Total loans		5,228,143			59,460		4.55			4,642,413			38,948		3.36
Federal funds sold		—			—		—			—			—		—
Interest-earning deposits		161,573			1,258		3.11			513,650			178		0.14
Total interest-earning assets		6,152,879			64,597		4.20	%		6,046,896			42,284		2.80	%
Noninterest-earning assets:
Cash and due from banks		6,723								11,517
Allowance for credit losses		(60,070	)							(65,542	)
Premises and equipment		23,682								23,117
Other assets		83,641								182,154
Total noninterest-earning assets		53,976								151,246
Total assets	$	6,206,855							$	6,198,142

LIABILITIES:
Interest-bearing deposits:
Checking	$	2,222,130		$	9,165		1.65	%	$	2,321,970		$	1,327		0.23	%
Money markets		1,246,179			3,438		1.10			1,290,334			678		0.21
Savings		161,569			12		0.03			152,570			20		0.05
Certificates of deposit – retail		360,589			922		1.02			453,127			725		0.64
Subtotal interest-bearing deposits		3,990,467			13,537		1.36			4,218,001			2,750		0.26
Interest-bearing demand – brokered		81,739			497		2.43			85,000			387		1.82
Certificates of deposit – brokered		25,979			210		3.23			33,810			267		3.16
Total interest-bearing deposits		4,098,185			14,244		1.39			4,336,811			3,404		0.31
Borrowings		43,710			497		4.55			25,890			25		0.39
Capital lease obligation		4,803			58		4.83			5,913			71		4.80
Subordinated debt		132,947			1,363		4.10			132,659			1,363		4.11
Total interest-bearing liabilities		4,279,645			16,162		1.51	%		4,501,273			4,863		0.43	%
Noninterest-bearing liabilities:
Demand deposits		1,303,432								1,042,477
Accrued expenses and other liabilities		100,372								111,357
Total noninterest-bearing liabilities		1,403,804								1,153,834
Shareholders’ equity		523,406								543,035
Total liabilities and shareholders’ equity	$	6,206,855							$	6,198,142
Net interest income				$	48,435							$	37,421
Net interest spread							2.69	%							2.37	%
Net interest margin (D)							3.12	%							2.46	%

(A) Average balances for available for sale securities are based on amortized cost.

(B) Interest income is presented on a tax-equivalent basis using a 21% federal tax rate.

(D) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

(Tax-Equivalent Basis, Dollars in Thousands)

(Unaudited)


	For the Three Months Ended
	December 31, 2022								September 30, 2022
	Average			Income/					Average			Income/
	Balance			Expense		Yield			Balance			Expense		Yield
ASSETS:
Interest-earning assets:
Investments:
Taxable (A)	$	761,164		$	3,859		2.03	%	$	754,180		$	2,853		1.51	%
Tax-exempt (A) (B)		1,999			20		4.00			3,226			30		3.72

Loans (B) (C):
Mortgages		516,721			4,017		3.11			513,864			3,861		3.01
Commercial mortgages		2,497,847			25,007		4.00			2,510,616			23,121		3.68
Commercial		2,136,355			29,314		5.49			2,016,590			23,362		4.63
Commercial construction		4,213			68		6.46			12,073			143		4.74
Installment		36,648			496		5.41			38,338			399		4.16
Home equity		36,067			550		6.10			36,706			451		4.91
Other		292			8		10.96			263			7		10.65
Total loans		5,228,143			59,460		4.55			5,128,450			51,344		4.00
Federal funds sold		—			—		—			—			—		—
Interest-earning deposits		161,573			1,258		3.11			232,158			1,162		2.00
Total interest-earning assets		6,152,879			64,597		4.20	%		6,118,014			55,389		3.62	%
Noninterest-earning assets:
Cash and due from banks		6,723								8,296
Allowance for credit losses		(60,070	)							(59,464	)
Premises and equipment		23,682								23,580
Other assets		83,641								97,583
Total noninterest-earning assets		53,976								69,995
Total assets	$	6,206,855							$	6,188,009

LIABILITIES:
Interest-bearing deposits:
Checking	$	2,222,130		$	9,165		1.65	%	$	2,408,206		$	5,127		0.85	%
Money markets		1,246,179			3,438		1.10			1,237,975			1,557		0.50
Savings		161,569			12		0.03			168,281			5		0.01
Certificates of deposit – retail		360,589			922		1.02			391,340			791		0.81
Subtotal interest-bearing deposits		3,990,467			13,537		1.36			4,205,802			7,480		0.71
Interest-bearing demand – brokered		81,739			497		2.43			85,000			345		1.62
Certificates of deposit – brokered		25,979			210		3.23			25,968			210		3.23
Total interest-bearing deposits		4,098,185			14,244		1.39			4,316,770			8,035		0.74
Borrowings		43,710			497		4.55			3,810			29		3.04
Capital lease obligation		4,803			58		4.83			5,106			61		4.78
Subordinated debt		132,947			1,363		4.10			132,874			1,363		4.10
Total interest-bearing liabilities		4,279,645			16,162		1.51	%		4,458,560			9,488		0.85	%
Noninterest-bearing liabilities:
Demand deposits		1,303,432								1,116,843
Accrued expenses and other liabilities		100,372								83,446
Total noninterest-bearing liabilities		1,403,804								1,200,289
Shareholders’ equity		523,406								529,160
Total liabilities and shareholders’ equity	$	6,206,855							$	6,188,009
Net interest income				$	48,435							$	45,901
Net interest spread							2.69	%							2.77	%
Net interest margin (D)							3.12	%							2.98	%

(A) Average balances for available for sale securities are based on amortized cost.

(B) Interest income is presented on a tax-equivalent basis using a 21% federal tax rate.

(D) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

(Tax-Equivalent Basis, Dollars in Thousands)

(Unaudited)


	For the Twelve Months Ended
	December 31, 2022								December 31, 2021
	Average			Income/					Average			Income/
	Balance			Expense		Yield			Balance			Expense		Yield
ASSETS:
Interest-earning assets:
Investments:
Taxable (A)	$	803,982		$	13,854		1.72	%	$	838,174		$	11,577		1.38	%
Tax-exempt (A) (B)		3,521			137		3.89			6,579			296		4.50

Loans (B) (C):
Mortgages		513,189			15,165		2.96			503,616			15,359		3.05
Commercial mortgages		2,478,891			87,488		3.53			2,032,318			63,298		3.11
Commercial		2,046,735			90,225		4.41			1,881,683			66,652		3.54
Commercial construction		12,600			533		4.23			20,420			692		3.39
Installment		36,685			1,447		3.94			34,390			1,030		3.00
Home equity		37,755			1,656		4.39			44,735			1,479		3.31
Other		274			26		9.49			247			21		8.50
Total loans		5,126,129			196,540		3.83			4,517,409			148,531		3.29
Federal funds sold		—			—		—			48			—		0.13
Interest-earning deposits		171,491			2,763		1.61			477,477			545		0.11
Total interest-earning assets		6,105,123			213,294		3.49	%		5,839,687			160,949		2.76	%
Noninterest-earning assets:
Cash and due from banks		8,046								10,396
Allowance for credit losses		(60,037	)							(67,075	)
Premises and equipment		23,312								23,094
Other assets		111,893								197,893
Total noninterest-earning assets		83,214								164,308
Total assets	$	6,188,337							$	6,003,995

LIABILITIES:
Interest-bearing deposits:
Checking	$	2,363,412		$	17,861		0.76	%	$	2,078,658		$	4,426		0.21	%
Money markets		1,253,032			6,113		0.49			1,260,865			2,882		0.23
Savings		162,396			26		0.02			146,210			75		0.05
Certificates of deposit – retail		397,128			2,971		0.75			483,889			4,058		0.84
Subtotal interest-bearing deposits		4,175,968			26,971		0.65			3,969,622			11,441		0.29
Interest-bearing demand – brokered		84,178			1,579		1.88			96,301			1,721		1.79
Certificates of deposit – brokered		29,778			942		3.16			33,790			1,058		3.13
Total interest-bearing deposits		4,289,924			29,492		0.69			4,099,713			14,220		0.35
Borrowings		26,631			600		2.25			110,077			473		0.43
Capital lease obligation		5,241			250		4.77			6,260			300		4.79
Subordinated debt		132,839			5,453		4.10			156,888			7,013		4.47
Total interest-bearing liabilities		4,454,635			35,795		0.80	%		4,372,938			22,006		0.50	%
Noninterest-bearing liabilities:
Demand deposits		1,107,943								959,912
Accrued expenses and other liabilities		96,331								134,948
Total noninterest-bearing liabilities		1,204,274								1,094,860
Shareholders’ equity		529,428								536,197
Total liabilities and shareholders’ equity	$	6,188,337							$	6,003,995
Net interest income				$	177,499							$	138,943
Net interest spread							2.69	%							2.26	%
Net interest margin (D)							2.91	%							2.38	%

(A) Average balances for available for sale securities are based on amortized cost.

(B) Interest income is presented on a tax-equivalent basis using a 21% federal tax rate.

(D) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

NON-GAAP FINANCIAL MEASURES RECONCILIATION

Tangible book value per share and tangible equity as a percentage of tangible assets at period end are non-GAAP financial measures derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. We calculate tangible book value per share by dividing tangible equity by common shares outstanding, as compared to book value per common share, which we calculate by dividing shareholders’ equity by common shares outstanding at period end. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios.

The efficiency ratio is a non-GAAP measure of expense control relative to recurring revenue. We calculate the efficiency ratio by dividing total noninterest expenses, excluding other real estate owned provision, as determined under GAAP, by net interest income and total noninterest income as determined under GAAP, but excluding net gains/(losses) on loans held for sale at lower of cost or fair value and excluding net gains on securities from this calculation, which we refer to below as recurring revenue. We believe that this provides a reasonable measure of core expenses relative to core revenue.

We believe these non-GAAP financial measures provide information that is important to investors and useful in understanding our financial position, results and ratios because our management internally assesses our performance based, in part, on these measures. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titles measures reported by other companies. A reconciliation of the non-GAAP measures of tangible common equity, tangible book value per share and efficiency ratio to the underlying GAAP numbers is set forth below.

(Dollars in thousands, except share data)


	Three Months Ended
	Dec 31,			Sept 30,			June 30,			March 31,			Dec 31,
Tangible Book Value Per Share	2022			2022			2022			2022			2021
Shareholders’ equity	$	532,980		$	515,514		$	520,324		$	523,426		$	546,388
Less: Intangible assets, net		47,333			47,698			48,082			48,471			48,902
Tangible equity	$	485,647		$	467,816		$	472,242		$	474,955		$	497,486
Less: other comprehensive loss		(74,211	)		(74,983	)		(58,727	)		(40,938	)		(12,374	)
Tangible equity excluding other comprehensive loss	$	559,858		$	542,799		$	530,969		$	515,893		$	509,860

Period end shares outstanding		17,813,451			17,920,571			18,190,009			18,370,312			18,393,888
Tangible book value per share	$	27.26		$	26.10		$	25.96		$	25.85		$	27.05
Tangible book value per share excluding other comprehensive loss	$	31.43		$	30.29		$	29.19		$	28.08		$	27.72
Book value per share		29.92			28.77			28.60			28.49			29.70

Tangible Equity to Tangible Assets
Total assets	$	6,353,593		$	6,087,261		$	6,151,167		$	6,255,664		$	6,077,993
Less: Intangible assets, net		47,333			47,698			48,082			48,471			48,902
Tangible assets	$	6,306,260		$	6,039,563		$	6,103,085		$	6,207,193		$	6,029,091
Less: other comprehensive loss		(74,211	)		(74,983	)		(58,727	)		(40,938	)		(12,374	)
Tangible assets excluding other comprehensive loss	$	6,380,471		$	6,114,546		$	6,161,812		$	6,248,131		$	6,041,465

Tangible equity to tangible assets		7.70	%		7.75	%		7.74	%		7.65	%		8.25	%
Tangible equity to tangible assets excluding other comprehensive loss		8.77	%		8.88	%		8.62	%		8.26	%		8.44	%
Equity to assets		8.39	%		8.47	%		8.46	%		8.37	%		8.99	%


	Three Months Ended
	Dec 31,			Sept 30,			June 30,			March 31,			Dec 31,
Return on Average Tangible Equity	2022			2022			2022			2022			2021
Net income	$	20,579		$	20,126		$	20,100		$	13,441		$	14,855

Average shareholders’ equity	$	523,406		$	529,160		$	521,197		$	544,179		$	543,035
Less: Average intangible assets, net		47,531			47,922			48,291			48,717			49,151
Average tangible equity	$	475,875		$	481,238		$	472,906		$	495,462		$	493,884

Return on average tangible common equity		17.30	%		16.73	%		17.00	%		10.85	%		12.03	%


	For the Twelve Months Ended
	Dec 31,			Dec 31,
Return on Average Tangible Equity	2022			2021
Net income	$	74,246		$	56,622

Average shareholders’ equity	$	529,428		$	536,197
Less: Average intangible assets, net		48,111			46,275
Average tangible equity		481,317			489,922

Return on average tangible common equity		15.43	%		11.56	%


	Three Months Ended
	Dec 31,			Sept 30,			June 30,			March 31,			Dec 31,
Efficiency Ratio	2022			2022			2022			2022			2021
Net interest income	$	48,040		$	45,525		$	42,893		$	39,622		$	37,212
Total other income		16,812			16,383			18,508			14,714			18,964
Add:
Fair value adjustment for CRA equity security		(28	)		571			475			682			139
Less:
Loss/(gain) on loans held for sale
at lower of cost or fair value		—			—			—			—			265
Loss on securities sale, net		—			—			—			6,609			—
Gain on sale of property		(275	)		—			—			—			—
Income from life insurance proceeds		(25	)		—			—			—			—
Total recurring revenue		64,524			62,479			61,876			61,627			56,580

Operating expenses		33,412			33,560			32,659			34,169			31,704
Less:
Swap valuation allowance		—			—			—			673			893
Severance expense		—			—			—			1,476			—
Total operating expense		33,412			33,560			32,659			32,020			30,811

Efficiency ratio		51.78	%		53.71	%		52.78	%		51.96	%		54.46	%


	For the Twelve Months Ended
	Dec 31,			Dec 31,
Efficiency Ratio	2022			2021
Net interest income	$	176,080		$	138,061
Total other income		66,417			72,243
Add:
Fair value adjustment for CRA equity security		1,700			432
Less:
Loss on swap termination		—			842
Income from life insurance proceeds		—			(455	)
Loss/(gain) on loans held for sale
at lower of cost or fair value		—			(1,142	)
Loss on securities sale, net		6,609			—
Gain on sale of property		(275	)		—
Income from life insurance proceeds		(25	)		—
Total recurring revenue		250,506			209,981

Operating expenses		133,800			126,167
Less:
Write-off of subordinated debt costs		—			648
Swap valuation allowance		673			2,243
Severance expense		1,476			1,532
Total operating expense		131,651			121,744

Efficiency ratio		52.55	%		57.98	%