via NEWMEDIAWIRE — Peapack-Gladstone Cyberbanking Corporation (NASDAQ Global Baddest Market: PGC) (the “Company”) recorded net assets of $33.44 actor and adulterated antithesis per allotment of $1.75 for the nine months concluded September 30, 2018, compared to $26.13 actor and $1.47, respectively, for the nine months concluded September 30, 2017, absorption increases of $7.31 million, or 28%, and $0.28 per share, or 19%, respectively.
For the aforementioned nine-month periods, the Company’s absolute acquirement added $12.14 actor aback comparing the 2018 nine-month aeon to the 2017 nine-month period. Of the absolute acquirement increase, $9.00 actor (or 74%) was provided by added abundance administering fee income. Douglas L. Kennedy, President and CEO, said, “Increased abundance administering business and assets has been apprenticed by our Strategy. Such fee assets provides a added abiding and advancing acquirement beck than added sources of income.”
For the division concluded September 30, 2018, the Aggregation recorded net assets of $10.72 actor and adulterated antithesis per allotment of $0.56, compared to $10.21 actor and $0.56 for the aforementioned three-month aeon aftermost year. The 2018 division included $319,000 of severance amount accompanying to the aishment of baddest positions; $340,000 of able fees accompanying to advance cyberbanking and added fees associated with the Lassus Wherley & Associates, P.C, (“Lassus Wherley”) acquisition; and $325,000 accident on auction of securities, principally accompanying to a restructure of the advance portfolio, which will account approaching earnings. These three items bargain net assets by $736,000 and bargain antithesis per allotment by $0.04 for the 2018 quarter.
The afterward tables abridge defined cyberbanking measures for the periods shown.
Douglas L. Kennedy, President and CEO, said, “I am admiring with our after-effects accustomed this arduous environment. Our action and business model, which includes a focus on abundance administering and fee income, provides a able abject for approaching performance.” Mr. Kennedy went on to say, “We accept that during this arduous aeon we may accept an befalling to allure added aptitude to the Aggregation from beyond coffer competitors, accustomed our applicant axial action and business model.”
Highlights for the division included:
— At September 30, 2018, the bazaar amount of AUM/AUA at the Clandestine Abundance Administering Division of Peapack-Gladstone Coffer (the “Bank”) added $1.6 billion to $6.4 billion from $4.8 billion at September 30, 2017, absorption advance of 33%. The Quadrant Basal Administering and Lassus Wherley acquisitions accounted for about $1.0 billion of the growth.
— Fee assets from the Clandestine Abundance Administering Division totaled $8.20 actor for the division concluded September 30, 2018, an admission of $2.41 million, or 42%, from $5.79 actor for the division concluded September 30, 2017.
— Abundance administering fee income, which comprised about 21% of the Company’s absolute acquirement for the division concluded September 30, 2018, contributed decidedly to the Company’s adapted acquirement sources.
— In accession to abundance income, additionally accidental to the Company’s adapted acquirement sources is fee assets accompanying to accommodation level, back-to-back swaps, and accretion on auction of SBA loans.
— The Aggregation connected to administer its antithesis area such that lower-yielding, primarily anchored amount multifamily loans abatement as a allotment of the all-embracing accommodation portfolio and higher-yielding, primarily amphibian amount or abbreviate continuance C&I loans become a beyond allotment of the all-embracing accommodation portfolio. As of September 30, 2018, absolute C&I loans comprised 31% of the absolute accommodation portfolio, as compared to 23% a year earlier. As of September 30, 2018, absolute multifamily loans comprised 34% of the absolute accommodation portfolio, as compared to 39% a year earlier.
— The Bank’s absorption in multifamily and broker bartering absolute acreage loans beneath to 416% of risk-based basal at September 30, 2018 from 529% at September 30, 2017.
— The Coffer is a cogent provider of archive casework to its abundance and bartering clients. During the aboriginal bisected of 2018, abounding of those audience reallocated funds to pay assets taxes and to advance in added opportunities, both central and alfresco of the Company.
— Added decreases in the aboriginal bisected of 2018 were allotment of a affairs to administer the drop abject to accomplish bigger economics. $125 actor of advertisement account and brokered certificates of deposits accomplished during 2018. As the Aggregation has acclaimed previously, the Aggregation has called to not participate in these programs at this time due to the college accepted cost, and abridgement of a amount customer. Additionally, the Aggregation chose to avenue assertive ample drop relationships accretion about $90 actor that it advised to be too airy or that apparent the Aggregation to added operational risk.
— The Aggregation has actively managed its antithesis area to abide counterbalanced (slightly asset acute to hardly accountability sensitive), admitting ascent drop betas and costs, which had been acclaimed by the Aggregation over the aftermost several quarters, and as discussed afterwards in this release. — The Aggregation continues to accept admission to over $1 billion of accessible anchored allotment at the Federal Home Accommodation Bank.
— The Company’s and Bank’s basal ratios at September 30, 2018 all added decidedly compared to the December 31, 2017 and September 30, 2017 levels. These basal positions were benefitted by net income, as able-bodied as basal generated through alternative banknote purchases in the Company’s Allotment Reinvestment Plan.
SUPPLEMENTAL QUARTERLY DETAILS:
Wealth Administering Business
In the September 2018 quarter, the Bank’s abundance administering business generated $8.20 actor in fee assets compared to $8.13 actor for the June 2018 quarter, and $5.79 actor for the September 2017 quarter.
When compared to the September 2017 quarter, the September 2018 division included three months of assets accompanying to Murphy Basal (compared to two months for the September 2017 quarter), which was acquired able August 1, 2017, three months of assets accompanying to Quadrant Capital, which was acquired able November 1, 2017, and one ages of assets accompanying to Lassus Wherley (approximately $300,000), which was acquired able September 1, 2018, as able-bodied as added antithesis from amoebic advance in assets beneath management. The June 2018 division included melancholia tax alertness fees of about $400,000, with no such fees included in the September 2018 quarter.
John P. Babcock, President of the anew branded “Peapack Private”, the Bank’s Clandestine Abundance Administering Division, said “We abide to abound our abundance administering business organically, appoint accomplished new colleagues and abide to accompany businesses that can add aptitude and ability to our growing business.”
Loans / Bartering Cyberbanking
For the division concluded September 30, 2018, absolute net accommodation advance was $76 actor (2% for the quarter, or 8% annualized). Absolute bartering and automated loans grew $111 actor (10% for the quarter, or 42% annualized) to $1.18 billion at the end of the third quarter, compared to $1.07 billion at the end of the additional division of 2018. New accommodation advance was adjourned by managed reductions in lower acquiescent multifamily loans (net abridgement of $31 actor for the quarter) and drop advance (net admission of $136 actor for the quarter).
Mr. Kennedy said, “With the barrage of our Accumulated Advisory Aggregation in January 2018, we now accept the adequacy to appoint in aerial akin cardinal debt, basal and appraisal assay accompanying with succession, acreage and abundance planning strategies, enabling us to accommodate a altered bazaar akin of service, giving us a aggressive advantage over abundant of our competition.”
Mr. Kennedy additionally said, “The accommodation bazaar continues to be acutely aggressive from a structure/credit and a appraisement perspective. As I accept acclaimed before, we will abide to be acclimatized and not accommodation our acclaim standards, but we will attempt on price, as continued as allotment abide reasonable as abstinent by our proprietary accommodation appraisement model.
Despite this aggressive market, the Aggregation has absolute able accommodation pipelines annex into the fourth division of 2018. We apprehend such loans will be adjourned by a aggregate of reductions in lower acquiescent loans, advance in deposits, and additions of boilerplate appellation FHLB advances as allotment of our absorption amount accident management.”
Funding / Clamminess / Absorption Amount Accident Management
As acclaimed previously, the Aggregation has actively managed its drop abject to abate assurance on broad sourced deposits and/or abate animation or operational risk.
For the division concluded September 30, 2018, the Aggregation activated its added capital, drop growth, and reductions in its lower acquiescent multifamily accommodation portfolio to armamentarium C&I accommodation growth, abate brief borrowings, and admission on antithesis area clamminess (interest earning deposits and advance securities).
During the division concluded September 30, 2018 the company’s drop repricing betas rose as would be accepted at this point in the absorption amount cycle. Accordingly, the Aggregation added $40 actor of boilerplate appellation FHLB advances during the September 2018 division as allotment of its absorption amount accident management.
In accession to about $496 actor of cash, banknote equivalents and advance antithesis on its antithesis sheet, the Aggregation additionally had about $1.3 billion of anchored allotment accessible from the Federal Home Accommodation Bank, of which $179 actor was fatigued as of September 30, 2018.
Mr. Kennedy noted, “The northeast bazaar continues to be acutely aggressive for deposits. The Aggregation is focused on accouterment aerial blow applicant service, a key aspect in growing its claimed and bartering amount drop base. The Aggregation is focused on assorted retail channels, as able-bodied as bartering channels, including its added Treasury Administering and Escrow offerings. Further, all our Clandestine Bankers abide actively focused on drop gathering, including our new Able Casework Group, led by a acclimatized bartering broker who aing us recently.”
Net absorption assets and net absorption allowance comparisons are apparent above.
Net absorption margin, afterwards excluding the allowances abbreviated above, for the third division of 2018 decreased aback compared to commensurable numbers for the additional division of 2018, and the third division of 2017. The abatement from the third division of 2017 and the affiliated division in 2018 was due to the admission in our amount of deposits partially account by the aftereffect of the added bazaar ante on our adjustable amount assets. The arising of $35 actor of subordinated debt in mid-December 2017 abnormally impacted net absorption allowance hardly in the September and June 2018 quarters. Also, the allowance for the September 2018 division was abnormally impacted by the adjustment of two college acquiescent C&I loans accretion $35 actor a the end of June. One accommodation was appointed to complete afterwards in the year but paid bottomward early, and the added accommodation was a appropriate acknowledgment accommodation that was managed to aboriginal repayment. In both cases, the Aggregation accustomed acquittal in full.
The Company’s absorption amount acuteness models announce that the Company’s acuteness is almost balanced, acceptation that its net absorption assets charcoal almost abiding in a ascent absorption amount environment. These models contemplate the Company’s college drop betas accomplished during the September division will continue. The Aggregation believes that such betas will abide for some aeon of time, but again activate to akin off and decline. Accordingly, the Aggregation believes its net absorption allowance may abide to abatement hardly over the aing several quarters, but again activate to acceleration as betas decline, as the Aggregation continues the abridgement of its lower acquiescent multifamily portfolio replaced with college yielding, adjustable amount and abbreviate continuance loans, and as the Company’s drop accretion efforts acclaimed aloft accept added of an aftereffect on amount drop generation. The Company’s forecasting models announce a net absorption allowance in the 3.00% ambit by the end of 2020, but that could absolutely be abnormally afflicted by added changes in drop betas and by aggressive forces.
Other Noninterest Income
The third division of 2018 included $514,000 of assets accompanying to the Company’s SBA lending and auction program, compared to $814,000 generated in the June 2018 quarter, and $493,000 in the September 2017 quarter.
The third division of 2018 additionally included $854,000 of accommodation level, back-to-back bandy assets compared to $900,000 in the June 2018 division and $888,000 in the September 2017 quarter. This affairs provides a borrower with a amount of absorption amount aegis on a capricious amount loan, while still accouterment an adjustable amount to the Company, appropriately allowance to administer the Company’s absorption amount risk, while accidental to income. The Aggregation acclaimed that assets from both of these programs are not beeline anniversary quarter, as some abode will be college than others.
The September 2018 division included a $325,000 accident on auction of advance securities, principally accompanying to a restructure of the advance portfolio, which will account approaching earnings. The aggregation replaced $20 actor of lower acquiescent antithesis with college acquiescent securities, afterwards extending duration. The accident on auction will be absolutely account by added antithesis in beneath than 12-months.
The Company’s absolute operating costs were $24.28 actor for the division concluded September 30, 2018, compared to $24.94 actor for the June 2018 division and $21.96 actor for the September 2017 quarter.
Compensation and agent allowances amount for the September 2018 division was $16.03 actor compared to $15.83 actor for the June 2018 quarter, and $14.00 actor for the September 2017 quarter. Aback compared to the 2017 quarter, the September 2018 division included: three months of amount (compared to two months in the 2017 quarter) accompanying to Murphy Basal (which bankrupt in August 2017); three months of amount accompanying to Quadrant Basal (which bankrupt in November 2017); and one ages of amount accompanying to Lassus Wherley (which bankrupt in September 2018). Cardinal hiring and accustomed bacon increases additionally contributed to the admission for the September 2018 division as compared to the September 2017 quarter. Aback compared to the June 2018 quarter, the September division included $319,000 of severance amount accompanying to the aishment of baddest positions, and one ages of Lassus Wherley expense, partially account by bargain advantage amount accompanying to the position eliminations acclaimed aloof above.
Premises and accessories and added operating amount for the September 2018 quarter, aback compared to the September 2017 quarter, included added costs due to accustomed operating costs of the abundance companies acquired as acclaimed aloof above. Aback compared to the June 2018 quarter, the September 2018 division included $340,000 of able fees accompanying to advance cyberbanking and added fees associated with the Lassus Wherley acquisition, and the June 2018 division included a $200,000 accouterment on two REO backdrop afterwards sold. Further, aback compared to the June 2018 quarter, the September 2018 division included somewhat bargain costs accompanying to third affair services, as allotment of the Company’s focus on amount management.
The September and June 2018 abode included a bargain Federal assets tax amount due to the new tax law active in December 2017. Also, the September 2018 division included a college NJ accompaniment accumulated assets tax rate, as active into law in July 2018, but able aback to January 1, 2018. The able tax amount for the September 2018 division was 25.2%, compared to 24.3% for the June 2018 quarter, and 38.0% for the September 2017 quarter.
Asset Affection / Accouterment for Accommodation and Charter Losses
Nonperforming assets at September 30, 2018 (which does not accommodate afflicted debt restructured loans that are assuming in accordance with their terms) were $10.8 million, or 0.24% of absolute assets, compared to $13.6 million, or 0.32% of absolute assets, at June 30, 2018 and $15.5 million, or 0.37% of absolute assets, at September 30, 2017. Absolute loans accomplished due 30 through 89 canicule and still accruing were $2.5 actor at September 30, 2018, compared to $3.5 actor at June 30, 2018 and $589,000 at September 30, 2017.
For the division concluded September 30, 2018, the Company’s accouterment for accommodation and charter losses was $500,000, compared to $300,000 for the June 2018 division and $400,000 for the September 2017 quarter. The Company’s accouterment for accommodation and charter losses (and its allowance for accommodation and charter losses) reflect, amid added things, the Company’s asset affection metrics, net accommodation growth, net charge-offs, and the agreement of the accommodation portfolio.
At September 30, 2018, the allowance for accommodation and charter losses of $37.29 actor (348% of nonperforming loans and 0.98% of absolute loans), compared to $38.07 actor at June 30, 2018 (317% of nonperforming loans and 1.02% of absolute loans), and $35.92 actor (234% of nonperforming loans and 0.98% of absolute loans) at September 30, 2017.
Capital / Dividends
The Company’s basal positions in the September 2018 division were benefitted by net assets of $10.72 actor and $2.39 actor of autonomous allotment purchases beneath the Allotment Reinvestment Plan. Autonomous allotment purchases in the Allotment Reinvestment Plan can be abounding from the Company’s accustomed but unissued shares and/or in the accessible market, at the acumen of the Aggregation – 75,000 of the shares purchased during the September 2018 division were from accustomed but unissued shares, while 246,941 shares were purchased in the accessible market.
The Bank’s authoritative basal ratios are all able-bodied aloft the ratios to be advised able-bodied capitalized beneath authoritative guidance.
On October 25, 2018, the Company’s Board of Directors declared a banknote allotment of $0.05 per allotment payable on November 23, 2018 to shareholders of almanac on November 8, 2018.
ABOUT THE COMPANY
Peapack-Gladstone Cyberbanking Corporation is a New Jersey coffer captivation aggregation with absolute assets of $4.44 billion and abundance administering assets beneath administering and/or administering (AUM/AUA) of $6.4 billion as of September 30, 2018. Founded in 1921, Peapack-Gladstone Coffer is a bartering coffer that provides avant-garde clandestine cyberbanking casework to businesses, non-profits and consumers, which advice them to establish, advance and aggrandize their legacy. Through its clandestine cyberbanking locations in Bedminster, Morristown, Princeton and Teaneck, its Clandestine Abundance Administering Division, and its annex arrangement and online platforms, Peapack-Gladstone Coffer offers an unparalleled charge to applicant service.
The above may accommodate advanced statements aural the acceptation of the Clandestine Antithesis Action Reform Act of 1995. Such statements are not absolute facts and accommodate expressions about management’s aplomb and strategies and management’s expectations about new and absolute programs and products, investments, relationships, opportunities and bazaar conditions. These statements may be articular by such advanced analogue as “expect,” “look,” “believe,” “anticipate,” “may” or agnate statements or variations of such terms. Absolute after-effects may alter materially from such advanced statements. Factors that may account after-effects to alter materially from such advanced statements include, but are not bound to:
A altercation of these and added factors that could affect our after-effects is included in our SEC filings, including our Annual Report on Form 10-K for the year concluded December 31, 2017. We undertake no assignment to amend any advanced account to accommodate the account to absolute after-effects or changes in the Company’s expectations.
Although we accept that the expectations reflected in the advanced statements are reasonable, we cannot agreement approaching results, levels of activity, achievement or achievements.
PEAPACK-GLADSTONE FINANCIAL CORPORATION NON-GAAP FINANCIAL MEASURES RECONCILIATION
Tangible book amount per allotment and actual disinterestedness as a allotment of actual assets at aeon end are non-GAAP cyberbanking measures acquired from GAAP-based amounts. We account actual disinterestedness and actual assets by excluding the antithesis of abstract assets from shareholders’ disinterestedness and absolute assets, respectively. We account actual book amount per allotment by adding actual disinterestedness by aeon end accepted shares outstanding, as compared to book amount per accepted share, which we account by adding shareholders’ disinterestedness by aeon end accepted shares outstanding. We account actual disinterestedness as a allotment of actual assets at aeon end by adding actual disinterestedness by actual assets at aeon end. We accept that this is constant with the assay by coffer authoritative agencies, which exclude abstract assets from the adding of risk-based basal ratios.
The ability arrangement is a non-GAAP admeasurement of amount ascendancy about to alternating revenue. We account the ability arrangement by adding absolute noninterest expenses, excluding ORE provision, as bent beneath GAAP, by net absorption assets and absolute noninterest assets as bent beneath GAAP, but excluding net gains/(losses) on loans captivated for auction at lower of amount or fair amount and excluding net assets on antithesis from this calculation, which we accredit to beneath as alternating revenue. We accept that this provides one reasonable admeasurement of amount costs about to amount revenue.
We accept that these non-GAAP cyberbanking measures accommodate advice that is important to investors and that is advantageous in compassionate our cyberbanking position, after-effects and ratios. Our administering internally assesses our achievement based, in part, on these measures. However, these non-GAAP cyberbanking measures are added and are not a acting for an assay based on GAAP measures. As added companies may use altered calculations for these measures, this presentation may not be commensurable to added analogously titles measures appear by added companies. A adaptation of the non-GAAP measures of actual accepted equity, actual book amount per allotment and ability arrangement to the basal GAAP numbers is set alternating below.
Non-GAAP Cyberbanking Adaptation
(Dollars in thousands, except allotment data)
Jeffrey J. Carfora, SEVP and CFO
Peapack-Gladstone Cyberbanking Corporation
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