Peapack-Gladstone Financial Corporation · NASDAQ:PGC
Peapack-Gladstone Financial — Investor Presentation (January 2017)
34 slides from Peapack-Gladstone Financial's investor presentation, Jan 30, 2017
Slide 1: Strategic Update “Expanding Our Reach”
Strategic Update “Expanding Our Reach” Investor Presentation December 31, 2016 P EAPACK - G LADSTONE B ANK
Slide 2: Forward-looking statements
The foregoing contains 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 view of future interest income and net loans, Man agement’s confidence and strategies an
Slide 3: 2016 Highlights
A year ago, we told you we faced headwinds arising from increased risk management spends, higher FDIC premiums, and the effects of stock market volatility on wealth revenue. We also told you that despite these headwinds, we would continue to create shareholder value. We did so, as 2016 results inclu
Slide 4: Financial targets and outlook
• EPS Growth – High single digit to low double digit EPS growth. • Return on Equity – 10% target run rate by late 2017 / early to mid 2018. • Efficiency Ratio – Targeting low to mid 50’s by early to mid 2018. • Balance Sheet Growth / Loan Growth – 10% to 15% annual balance sheet growth; 12% to 18% a
Slide 5: Our Foundation: Core Principles
A high - performing boutique bank, leaders in wealth, lending and deposit solutions, known nationally for our unparalleled client service, integrity and trust. Our Foundation 5 • Professionalism • Clients First • Compete to Win • Invested in Our Community • One Team Vision Core Principles
Slide 6: Franchise Overview
1. See non - GAAP financial measures reconciliation on pages 32 and 33 • Headquartered in Bedminster, NJ. • Four Private Banking locations: Bedminster, Morristown, Princeton, Teaneck. • 20 Branches in four affluent New Jersey counties: Somerset, Morris, Hunterdon, Union. • Delaware Trust Subsidiary.
Slide 7: Our Strategy and client approach
• Full service banking with every conversation aimed at helping clients create , grow , protect & eventually transition their wealth. • Deep understanding of our clients needs , goals, and aspirations. » It’s about the client; not about us. » Risk management tolerance, time horizon, and other tradit
Slide 8: Wealth Management Overview
• $3.7 billion in AUA as of 12/31/16. • Managed AUM inflows totaled $250 million in 2016 with strong end of year pipeline. • Approximately $300 million of traditional bank products (loans, deposits) delivered by Wealth Private Bankers in 2016. • Stage is set for strategic wealth management acquisiti
Slide 9: Wealth Management Overview: AUA and Fee Income
Wealth Management Assets Under Admin Wealth Management Fee Income Wealth Management Overview $8.00 $10.00 $12.00 $14.00 $16.00 $18.00 $20.00 2012 2013 2014 2015 2016 (Dollars in Millions) $2.00 $2.25 $2.50 $2.75 $3.00 $3.25 $3.50 $3.75 2012 2013 2014 2015 2016 (Dollars in Billions) 9 $12.28 $13.84 $
Slide 10: Enviable Revenue Mix
1. Revenue defined as net interest income plus all other income 2. Includes SBA Income, SWAP Income, Deposit & Loan Fees, Mortgage Banking, and BOLI Enviable Revenue Mix 76.9% 14.6% 7.4% 0.1% 1.0% For the Year Ended December 31, 2016 10 Total Non - Interest Income 23.1% of Revenue 1 Net Interest Inc
Slide 11: Positive Operating Leverage
1. Efficiency ratio is calculated as (total operating expenses, excluding provision for losses on REO) as a percentage of (ne t i nterest income plus noninterest income less, gain on securities and gain on loans held for sale at lower of cost or fair value); See non - GAAP financial measures reconci
Slide 12: Earnings Momentum
1. 2015 reflects reported net income and EPS as per 10 - K; includes $2.50 million of pre - tax non - recurring charges related to the closure of two branches Earnings Momentum $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 2013 2014 2015 2016 1 YOY Growth +33% 12 Net Income Earnings Per Share $0.40 $0.60
Slide 13: Enhanced Returns
Enhanced Returns 5.00% 5.50% 6.00% 6.50% 7.00% 7.50% 8.00% 8.50% 9.00% 9.50% 10.00% 2013 2014 2015 2016 YOY Growth +16% 13 Return on Average Equity (ROAE) Return on Average Assets (ROAA) 0.40% 0.50% 0.60% 0.70% 0.80% 0.90% 1.00% 2013 2014 2015 2016 7.37% 7.96% 7.71% 8.92% 0.54% 0.63% 0.64% 0.72% YOY
Slide 14: Asset Growth
Asset Growth $0.000 $0.500 $1.000 $1.500 $2.000 $2.500 $3.000 $3.500 $4.000 $4.500 2012 2013 2014 2015 2016 (Dollars in Billions) $3.879 14 YOY Growth +15% $3.365 $2.702 $1.967 $1.668
Slide 15: Gross Loan Growth
Note: Gross loans include loans held for sale Gross Loan Growth 15 $0.000 $0.500 $1.000 $1.500 $2.000 $2.500 $3.000 $3.500 2012 2013 2014 2015 2016 $2.997 $2.251 $1.576 $1.153 $3.314 YOY Growth +11% (Dollars in Billions) Multifamily Commercial & Industrial CRE Residential, Consumer & Oth er
Slide 16: Commercial & Industrial Loans
Commercial & Industrial Loans $0 $100 $200 $300 $400 $500 $600 $700 2012 2013 2014 2015 2016 (Dollars in Millions) $115 $132 $309 $513 $637 16 YOY Growth +24%
Slide 17: Multifamily Loans
Multifamily Loans $100 $300 $500 $700 $900 $1,100 $1,300 $1,500 2012 2013 2014 2015 2016 (Dollars in Millions) $162 $542 $1,080 $1,499 $1,460 17 YOY Decline - 3% Note: Multifamily Loans include loans held for sale
Slide 18: Multifamily Loans as a Percent of Risk Based Capital
Multifamily Loans as a Percent of Risk Based Capital 0.00% 100.00% 200.00% 300.00% 400.00% 500.00% 600.00% 2012 2013 2014 2015 2016 126% 300% 432% 504% 372% 18 Note: Multifamily Loans include loans held for sale
Slide 19: Multifamily portfolio profile
Proven track record of providing solid risk - adjusted returns Geographically diversified portfolio • New York – 51%; Top Markets – Bronx and Brooklyn • New Jersey – 38%; Top Markets – Hudson, Essex, & Morris/Somerset/Union Counties • Pennsylvania – 11%; Top Markets – Suburban Philadelphia and Bucks
Slide 20: Multifamily risk management and stress testing
• Portfolio stress testing performed (top down/bottom up) by an independent third party to estimate potential impact of changing market conditions on asset quality, earnings, liquidity, and capital, and forecasted over two years; Under most adverse stress model, PGB remains well capitalized. • Ongoi
Slide 21: Total Deposit Growth
21 $0.000 $0.500 $1.000 $1.500 $2.000 $2.500 $3.000 $3.500 $4.000 2012 2013 2014 2015 2016 $2.935 $2.299 $1.647 $1.516 $3.412 Total Deposit Growth YOY Growth +16% (Dollars in Billions) Noninterest - bearing DDA Interest - bearing Demand Savings & MMDA Time
Slide 22: Credit Risk Management - Metrics & Performance
1. Nonperforming loans defined as nonaccrual loans plus loans 90+ days past due 2. Texas Ratio defined as nonaccrual loans plus other real estate owned and loans 90+ day past due as a percentage of the sum of tangible common equity and loan loss reserves Texas Ratio² NPLs¹ / Loans NCOs / Average Loa
Slide 23: Robust balance sheet risk management
Robust balance sheet risk management: Capital • Ratios well above well capitalized standards. • Stress test enhanced to bottom up / top down in Q1 2016. • Received first ever bond rating – investment grade from Kroll Bond Rating Agency. • Raised $50 million in subordinated debt, which qualified as r
Slide 24: People, Market, Business Model
People Market Efficiency, Growth, and Profitability • Shared common vision • Very talented team with ties to the market • High levels of motivation and engagement • Act as a single team • Entrepreneurial culture • We operate in three of the top ten most affluent counties nationwide • New York MSA of
Slide 25: PGC Comparative Stock Price Performance
PGC Comparative Stock Price Performance 1/1/2016 - 12/31/2016 25 (30%) (20%) (10%) 0% 10% 20% 30% 40% 50% 60% 01/01/16 02/11/16 03/23/16 05/03/16 06/13/16 07/24/16 09/03/16 10/14/16 11/24/16 PGC +49.8% Proxy Peers +44.1% NASDAQ Bank +35.0% KBW Nasdaq Bank +25.6%
Slide 26: Appendix (Including Financial Highlights)
Appendix (Including Financial Highlights) P EAPACK - G LADSTONE B ANK
Slide 27: Executive management biographies
Douglas L. Kennedy President & Chief Executive Officer 38 years experience; Before joining in 2012, he served as President of the NJ Market for Capital One Bank. He has held key executive level positions and had great success building formidable regional and national specialty banking business at Fl
Slide 28: New Jersey market demographics
Population Household Income Median HHI Total Projected $100K - $199K > $200K Projected Branches Population Change Change % of % of HHI Change in Market 20172010-20172017-2022 Number Total Number Total 20172017-2022 NJ Market (County) Total PGC (Actual) (%) (%) (Actual)Market (Actual)Market ($) (%)Ra
Slide 29: Historical Income Statement
1. 2015 includes $2.50 million of non - recurring charges related to the closure of two branch offices 2. See non - GAAP financial measures reconciliation on page 33 Historical Income Statement (as reported) 29 1 2013 2014 2015 2016 Summary Income Statement Interest Income $57,053 $75,575 $99,142 $1
Slide 30: Quarterly Income Statement
Quarterly Income Statement (as reported) 30 1. December 31, 2015 includes $2.50 million of non - recurring charges related to the closure of two branch offices 2. See non - GAAP financial measures reconciliation on page 33 Dec 31, March 31, June 30, Sept 30, Dec 31, 2015 2016 2016 2016 2016 Summary
Slide 31: Historical Balance Sheet
Historical Balance Sheet 31 1. See non - GAAP financial measures reconciliation on page 32 2012 2013 2014 2015 2016 Cash and Equivalents $119,228 $35,147 $31,207 $70,160 $162,691 Total Securities 309,118 278,479 344,245 209,614 319,201 Total Cash & Securities 428,346 313,626 375,452 279,774 481,892
Slide 32: Non-GAAP Financial Measures Reconciliation
We believe that these non - GAAP financial measures provide information that is important to investors and that is useful in under standing our financial position, results and ratios. Our management internally assesses our performance based, in part, on these measures. However, these non - GAAP fina
Slide 33: Non-GAAP Financial Measures Reconciliation
We believe that these non - GAAP financial measures provide information that is important to investors and that is useful in under standing our financial position, results and ratios. Our management internally assesses our performance based, in part, on these measures. However, these non - GAAP fina
Slide 34: Contacts
Peapack - Gladstone Financial Corporation 500 Hills Drive, Suite 300 P.O. Box 700 Bedminster, New Jersey 07921 (908) 234 - 0700 www.pgbank.com (NASDAQ Global Select Market: PGC) Douglas L. Kennedy President & Chief Executive Officer (908) 719 - 6554 dkennedy@pgbank.com John P. Babcock Senior EVP & P
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