Peapack-gladstone Financial Corporation · NASDAQ:PGC
Peapack-gladstone Financial — Shareholder Meeting (May 2018)
46 slides from Peapack-gladstone Financial's shareholder meeting presentation, May 9, 2018
Slide 1: Annual Meeting: Expanding Our Reach
Annual Meeting “Expanding Our Reach” 05/09/2018 P EAPACK - G LADSTONE B ANK
Slide 2: Statement Regarding Forward-Looking Information
Statement Regarding Forward - Looking Information 2 This presentation 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 strategies and Management’s exp
Slide 3: Strategic Overview and Update
Strategic Overview and Update P EAPACK - G LADSTONE B ANK
Slide 4: Vision Statement
Vision Statement 4 “A high - performing boutique bank, leaders in wealth, lending and deposit solutions, known nationally for unparalleled client service, integrity and trust.”
Slide 5: Client and culture strategy
• Cultivate high value clients within our affluent footprint by developing, optimizing, and delivering customized financial solutions aimed at helping clients create, grow, protect, and ultimately transition wealth. • Senior Private Bankers lead a team - based approach. ‒ PGB offers a full suite of
Slide 6: Expanding Our Reach: What We Have Accomplished
• Attracted a talented team of professionals that are competing and winning against large banks. • Achieved scale that is driving attractive returns. • Built a highly competitive product offering. • Transformed our technology platform. • Built a best - in - class risk infrastructure. • Solidified a
Slide 7: 2017 Achievements
• Acquired Murphy Capital Management on August 1, 2017. • Acquired Quadrant Capital Management on November 1, 2017. • Major branch operations and administration technology upgrade. • Initiated multi - year wealth management redesign. • Launched Equipment Finance – Peapack Capital. • Successfully lau
Slide 8: Franchise Overview
Financial Highlights Branch Map Franchise Overview 8 NOTE: Financial data as of 03/31/2018. Private Banking Offices Bedminster, NJ Morristown, NJ Princeton, NJ Teaneck, NJ Fairfield, NJ Gladstone, NJ Greenville, DE – Trust and Investment Office Headquarters Bedminster, NJ Year Founded 1921 Branches
Slide 9: New Jersey Market Overview
New Jersey Market Overview 1 Rank reflects ranking amongst all New Jersey counties. Note: Weighted average is calculated as the sum of (percent of state/national franchise * demographic item) within each marke t; banks, thrifts, and savings banks included (retail branches only). Source: S&P Global M
Slide 10: Considerable Growth Opportunity
Considerable Growth Opportunity 10 Source: SNL Financial; Deposit data as of 06/30/2017 Deposit Market Share Rank Institutions (ST) Branches Deposits ($mm) Market Share (%) Avg Deposits Per Branch ($mm) 1 Bank of America Corp. (NC) 252 53,474 16.2 212 2 Toronto - Dominion Bank 246 39,843 12.1 162 3
Slide 11: Wealth Management Performance: AUM / AUA
Wealth Management Performance AUM / AUA $2.3 $2.7 $3.0 $3.3 $3.7 $5.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0 $5.5 $6.0 2012 2013 2014 2015 2016 2017 (Dollars in Billions) 11 YOY Growth +49%
Slide 12: Wealth Management Performance: Fee Income
Wealth Management Performance Fee Income $13.84 $15.24 $17.04 $18.24 $23.18 $8.00 $10.00 $12.00 $14.00 $16.00 $18.00 $20.00 $22.00 $24.00 2013 2014 2015 2016 2017 (Dollars in Millions) 12 YOY Growth +27%
Slide 13: Wealth Management Significant Component of Revenue
1. Includes SBA Income, Swap Income, Deposit & Loan Fees, Mortgage Banking, and BOLI Wealth Management Significant Component of Revenue Net Int Income 76% Wealth Fees 16% Fees & Other Inc 8% For Twelve Months Ended December 31, 2017 Total Non - Interest Income: 24% of Total Revenue Net Interest Inco
Slide 14: Stock Price Performance 2012-2017
Stock Price Performance 2012 - 2017 Note: Market data as of December 31, 2017 Source: S&P Global Market Intelligence Five Year Comparative Stock Price Performance: 12/31/2012 – 12/31/2017 (20%) 0% 20% 40% 60% 80% 100% 120% 140% 160% 12/31/12 06/30/13 12/31/13 06/30/14 12/31/14 06/30/15 12/31/15 06/3
Slide 15: PGC Comparative Stock Price Performance
PGC Comparative Stock Price Performance Five Year Comparative Stock Price Performance: 12/31/2012 – 12/31/2017 Note: Market data as of December 31, 2017 Source: S&P Global Market Intelligence 257.7% 174.4% 154.3% 148.7% 147.5% 143.2% 99.7% 88.1% 77.5% 72.8% 67.8% SCHW MS BAC PGC PNC JPM GS C WF AXP
Slide 16: Financial Trends and 2017 Results
Financial Trends and 2017 Results P EAPACK - G LADSTONE B ANK
Slide 17: Steady Growth: Net Income
Steady Growth: Net Income $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 2012 2013 2014 2015 2016 2017 $19.97 $14.89 $9.26 $9.22 $26.48 (Dollars in Millions) 17 $36.50 YOY Growth +38%
Slide 18: Steady Growth: Earnings Per Share
Steady Growth: Earnings Per Share $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 2012 2013 2014 2015 2016 2017 $1.29 $1.22 $1.01 $1.05 $1.60 (Dollars per Share) 18 $2.03 YOY Growth +27%
Slide 19: Steady Improvement: ROAA
Steady Improvement: ROAA 0.61% 0.54% 0.63% 0.64% 0.72% 0.89% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 0.90% 1.00% 2012 2013 2014 2015 2016 2017 19
Slide 20: Steady Improvement: ROAE
Steady Improvement: ROAE 8.03% 7.37% 7.96% 7.71% 8.92% 10.12% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% 11.00% 12.00% 2012 2013 2014 2015 2016 2017 20
Slide 21: Efficiency Ratio and Net Interest Margin
Efficiency Ratio 1 Net Interest Margin Despite a Tighter NIM, We Have Become More Efficient 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% 80.0% 2012 2013 2014 2015 2016 2017 21 2.25% 2.50% 2.75% 3.00% 3.25% 3.50% 3.75% 2012 2013 2014 2015 2016 2017 1. Efficiency Ratio calculated by dividing total noninterest
Slide 22: Loan Growth
Note: Gross loans include loans held for sale Loan Growth $0.000 $0.500 $1.000 $1.500 $2.000 $2.500 $3.000 $3.500 $4.000 2012 2013 2014 2015 2016 2017 $2.997 $2.251 $1.576 $1.153 $3.314 (Dollars in Billions) 22 $3.706 YOY Growth +12%
Slide 23: Loan Composition: A Transformational Change
Note: Gross loans include loans held for sale. Loan Composition: A Transformational Change 23 MFL 37.5% Target 20% - 30% CRE 16.9% Target 15% - 20% C&I 25.9% Target 35% - 45% Resi / Cons 19.7% Target 15% - 20% Resi / Cons 52.6% C&I 10.0% CRE 22.4% MFL 14.0% As of December 31, 2017 As of December 31,
Slide 24: Strong Credit Metrics: NPAs and Texas Ratio
NPAs ² / Assets Texas Ratio ¹ Strong Credit Metrics 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 2012 2013 2014 2015 2016 2017 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 0.90% 1.00% 2012 2013 2014 2015 2016 2017 4.62% 3.13% 2.45% 3.34% 11.34% 0.91% 0.44% 0.30% 0.22% 0.30% 24 3.75% 0.37% 1.
Slide 25: Strong Credit Metrics: NCOs and LLR
NCOs / Average Loans LLR / Gross Loans Strong Credit Metrics 0.75% 1.00% 1.25% 1.50% 2012 2013 2014 2015 2016 2017 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 0.90% 2012 2013 2014 2015 2016 2017 1.12% 0.98% 0.87% 0.89% 0.97% 0.04% 0.80% 0.06% 0.03% 0.04% 25 0.98% 0.05%
Slide 26: Deposit Growth
Deposit Growth $1.516 $1.647 $2.299 $2.935 $3.412 $3.698 $0.000 $0.500 $1.000 $1.500 $2.000 $2.500 $3.000 $3.500 $4.000 2012 2013 2014 2015 2016 2017 (Dollars in Billions) 26 YOY Growth +8%
Slide 27: Our People Are Very Productive
$28 $49 $63 $78 $96 2013 2014 2015 2016 2017 Year Over Year +23% Deposits Per Branch and Loans Per Employee Net Income / Period End FTE (Dollars in thousands) $66 $72 $100 $140 $171 $185 $3.95 $4.84 $7.36 $9.48 $9.80 $9.65 2012 2013 2014 2015 2016 2017 Deposits Per Branch Loans Per Employee (Dollars
Slide 28: Our Priorities
• Integrating our wealth businesses. • Continuing to “Expand Our Reach” throughout metro New York. • Thoughtfully grow core deposits. • Deepen our relationships with accounting and legal professionals. • Deliver a superior client experience. • Recruit and train the next generation of bankers. • Grow
Slide 29: Select Financial Highlights Q1 2018
Select Financial Highlights Q1 2018 Annual Meeting May 9, 2018 P EAPACK - G LADSTONE B ANK
Slide 30: Profitability Targets
How Do We Get There: • Wealth Management growth – organic and acquisition. • Continue migration of loan portfolio to C&I. • NIM expansion. • Further efficiencies. Profitability Targets 30 Profitability Metrics Year 2017 Quarter March 2018 Targets Fee Income / Revenue 24% 27% 35% - 45% of revenue EPS
Slide 31: Wealth Management Fee Income
Wealth Management Fee Income $4.00 $4.50 $5.00 $5.50 $6.00 $6.50 $7.00 $7.50 $8.00 $8.50 $9.00 Q1 2017 Q4 2017 Q1 2018 (in millions) $4.82 $7.49 $8.37 +74% to Q1 2017 31 15% of Revenue 22% of Revenue 19% of Revenue
Slide 32: Wealth Management Assets Under Admin/Mgmt
Wealth Management Assets Under Admin/ Mgmt $3.10 $3.40 $3.70 $4.00 $4.30 $4.60 $4.90 $5.20 $5.50 $5.80 Q1 2017 Q4 2017 Q1 2018 (in billions) $3.8 $5.5 $5.6 +47% to Q1 2017 32
Slide 33: Pre-Tax Income
Pre - Tax Income $10.00 $12.00 $14.00 $16.00 Q1 2017 Q4 2017 Q1 2018 $11.71 $13.29 $14.02 (in millions) +20% to Q1 2017 33
Slide 34: Net Income
Net Income $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 $10.00 $11.00 $12.00 Q1 2017 Q4 2017 Q1 2018 (in millions) $7.98 $10.81 $10.37 +35% to Q1 2017 34
Slide 35: Earnings Per Share
Earnings Per Share $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 $0.45 $0.50 $0.55 $0.60 Q1 2017 Q4 2017 Q1 2018 $0.46 $0.56 $0.57 +24% to Q1 2017 35
Slide 36: Return on Average Assets
Return on Average Assets 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% Q1 2017 Q4 2017 Q1 2018 0.82% 0.98% 1.01% +23% to Q1 2017 36
Slide 37: Return on Average Equity
Return on Average Equity 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% 11.00% Q1 2017 Q4 2017 Q1 2018 9.62% 10.61% 10.54% +10% to Q1 2017 37
Slide 38: Total Loans
Total Loans $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 Q1 2017 Q4 2017 Q1 2018 (in billions) $3.44 $3.71 $3.71 +8% to Q1 2017 38
Slide 39: Commercial (C&I) Loans
Commercial (C&I) Loans $400 $500 $600 $700 $800 $900 $1,000 $1,100 Q1 2017 Q4 2017 Q1 2018 (in millions) $688 $958 $997 +45% to Q1 2017 39
Slide 40: Total Deposits
Total Deposits $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 Q1 2017 Q4 2017 Q1 2018 (in billions) $3.43 $3.70 $3.55 +4% to Q1 2017 40
Slide 41: Non-Performing Assets Ratio
Non - Performing Assets Ratio 0.10% 0.30% 0.50% 0.70% 0.90% 1.10% 1.30% 1.50% Q1 2017 Q4 2017 Q1 2018 0.31% 0.37% 0.36% (NPAs as a % of Assets) 41
Slide 42: Tangible Book Value Per Share
Tangible Book Value Per Share* $12.00 $13.00 $14.00 $15.00 $16.00 $17.00 $18.00 $19.00 $20.00 $21.00 $22.00 Q1 2017 Q4 2017 Q1 2018 $19.22 $20.40 $21.07 * Tangible book value per share is calculated by dividing tangible equity by period end common shares outstanding. See non - GAAP financial measure
Slide 43: Regulatory Tier I Leverage Ratio
Regulatory Tier I Leverage Ratio (Regulatory Tangible Capital) 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% 11.00% 12.00% Q1 2017 Q4 2017 Q1 2018 Regulatory Well Capitalized Standard 5.00% 8.66% 9.04% 9.46% 9.61% 10.61% 11.00% Holding Company Bank 43
Slide 44: Regulatory Tier I and II Capital to RWA
8.00% 9.00% 10.00% 11.00% 12.00% 13.00% 14.00% 15.00% 16.00% Q1 2017 Q4 2017 Q1 2018 Regulatory Well Capitalized Standard 10.00% 13.41% 14.84% 15.32% 13.05% 14.34% 14.81% Holding Company Bank Regulatory Tier I and II Capital to RWA (Regulatory Total Capital to Risk Weighted Assets) 44
Slide 45: PGC's Current Valuation vs. Wealth Management Peers
[The market would imply that our stock is undervalued as PGC currently trades at lower multiples than our wealth management peers.] PGC’s Current Valuation vs. Wealth Management Peers 45 Note: Pricing data as of April 26, 2018; financial data as reported for the quarter ended March 31, 2018 (Q1 2018
Slide 46: 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
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