Peapack-Gladstone Financial Corporation — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue increased 24% year-over-year to $87.5 million, marking the tenth consecutive quarter of revenue growth.
• Net interest income rose 33% year-over-year to $67.5 million and increased 6% sequentially to $67.5 million from $63.9 million in Q2 2026.
• Net interest margin expanded to 3.34%, an increase of 53 basis points year-over-year and 2 basis points sequentially.
• Net income available to common shareholders was $18.5 million ($0.99 diluted EPS), compared to $15.8 million ($0.86 diluted EPS) in the prior quarter and $9.6 million ($0.54 diluted EPS) in Q3 2025.
• Diluted earnings per share increased 83% year-over-year and 17% on a linked-quarter basis.
• Operating expenses increased 5% year-over-year to $55.1 million but declined 1% sequentially to $55.1 million from $55.7 million in Q2 2026.
• The GAAP efficiency ratio improved 166 basis points year-over-year to 63.03% and improved 166 basis points sequentially from 64.69% in Q2 2026.
• Return on average assets (annualized) was 0.93% in Q3 2026, up from 0.53% in Q3 2025.
• Return on average common equity (annualized) was 10.70% in Q3 2026, up from 6.12% in Q3 2025.
• Return on average tangible common equity (annualized) was 11.41% in Q3 2026, up from 6.59% in Q3 2025.
• Provision for credit losses totaled $8.5 million in Q3 2026, compared to $8.1 million in Q2 2026 and $4.8 million in Q3 2025.
• Allowance for credit losses (ACL) was $73.0 million (1.03% of total loans) at September 30, 2026, up from $69.2 million (1.04% of total loans) at June 30, 2026.
• Net charge-offs were $4.7 million in Q3 2026, consisting of $1.7 million related to two multifamily properties and $2.8 million related to seven commercial and industrial loans, partially offset by $25,000 in recoveries.
• Shareholders' equity was $735.6 million at September 30, 2026, an increase of $93 million year-over-year.
• Book value per share increased 6% year-over-year to $38.67; tangible book value per share increased 6% year-over-year to $36.24.

Guidance and Future Outlook:

• Management expressed confidence in the fourth quarter, citing strong pipelines and confidence in teams.
• Strategic focus includes increasing productivity across the platform, maintaining pricing and expense discipline, and translating relationship growth into higher returns.
• Credit and capital discipline remain central to execution.
• The company anticipates continued relationship-based balance sheet growth while maintaining prudent capital levels.

Business Segments and Product Lines:

• Loans: Total loans reached $7.1 billion at September 30, 2026, an increase of $1.1 billion year-over-year.
  • Commercial and industrial (C&I) loans totaled $3.1 billion, representing 43% of the total loan portfolio.
  • Commercial mortgage activity was bolstered by sponsor demand for stabilized assets and refinancing.
  • C&I growth was driven by business expansion and capital investment.
• Deposits: Total deposits reached $7.4 billion at September 30, 2026, an increase of $796 million year-over-year.
  • Noninterest-bearing deposits increased $232 million year-over-year, representing 29% of total deposit growth over the last twelve months.
  • Short-term borrowings increased $206 million during the quarter to supplement deposit funding.
• Wealth Management:
  • Assets under management and administration totaled $13.6 billion, up 6% year-over-year.
  • Wealth management fee income was $17.3 million, representing 20% of total revenue.
  • Generated $346 million of gross client inflows during the quarter.
  • The division integrates investment management, trust, tax, financial planning, lending, and liquidity capabilities.
• Loan Originations: Total loans closed were $930.7 million in Q3 2026, compared to $677.2 million in Q2 2026 and $667.5 million in Q3 2025.
  • Commercial loans closed totaled $769.1 million in Q3 2026.
  • Residential loans closed totaled $27.8 million in Q3 2026.

Market and Competitive Landscape:

• The company operates in the Metropolitan New York market, with investments in experienced teams across New York City, Westchester, and Long Island.
• Management notes the ability to compete effectively with much larger institutions through a relationship-first model that integrates commercial banking, personal banking, treasury management, and wealth management.
• The company maintains a well-diversified funding base with no reliance on brokered funding.

Risks and Challenges:

• Forward-looking statements highlight risks including the ability to generate revenues to offset increased personnel and other costs related to the strategic plan.
• Potential impacts from anticipated higher operating expenses in 2026 and beyond.
• Risks associated with integrating wealth management firm and team acquisitions and an expanded employee base.
• Economic risks include unexpected declines in the economy, recessionary conditions in New Jersey and New York, and declines in real estate values.
• Interest rate environment risks include declines in net interest margin due to rate environment, yield curve shape, and market competition.
• Credit risks include higher than expected increases in allowance for credit losses, charge-offs, and delinquent loans.
• Regulatory risks include changes in FDIC insurance premiums, Basel III regulations, and other legislative actions.
• Operational risks include cybersecurity threats, data breaches, and technology implementation failures.

Management Commentary and Tone:

• CEO Douglas L. Kennedy stated that investments in experienced teams are translating into deeper client relationships and strong loan and deposit growth.
• Kennedy emphasized that the strength of loan growth is measured by its pace and quality, noting a coordinated approach integrating multiple banking services through a single point of contact.
• Kennedy highlighted progress in reducing nonperforming assets and delinquent loan balances, reflecting active management of individual credit situations.
• The tone is confident, citing "earnings momentum," "meaningful positive operating leverage," and "continued sustainability in delivering enhanced shareholder value."

Other Key Points:

• Preferred Stock Issuance: The company issued the remaining $20 million of 6% non-cumulative perpetual convertible preferred stock on July 24, 2026, completing a $50 million commitment from Strategic Value Bank Partners.
• Dividend Reinvestment Plan: The company reinstated a feature allowing participants to purchase shares at a 3% discount to the current market price, effective with the next dividend payment in November 2026.
• Liquidity: The loan-to-deposit ratio was 96%. Balance sheet liquidity totaled $1.1 billion (13% of total assets), with additional secured borrowing facilities of approximately $4.2 billion available through the Federal Home Loan Bank and Federal Reserve Discount Window. Total on and off-balance sheet liquidity was $5.3 billion (214% of uninsured/uncollateralized deposits).
• Capital Ratios:
  • Tier 1 Leverage Ratio: 9.29% for the Company and 9.13% for the Bank.
  • Common Equity Tier 1 Ratio: 10.06% for the Company and 10.59% for the Bank.
  • All ratios remain well above regulatory well-capitalized standards.
• Asset Quality: Nonperforming assets declined 20% sequentially to $57.8 million (0.68% of total assets) from $72.2 million (0.91% of total assets) at June 30, 2026. Loans past due 30 through 89 days and still accruing decreased to $39.4 million (0.56% of total loans).
• Tax Rate: The effective tax rate was 20.5% for Q3 2026, compared to 28.4% in Q2 2026 and 29.2% in Q3 2025, including a discrete income tax benefit of approximately $1.8 million related to transferable production tax credits.