Peapack-gladstone Financial Corporation · NASDAQ:PGC
Peapack-gladstone Financial — Shareholder Meeting (April 2016)
63 slides from Peapack-gladstone Financial's shareholder meeting presentation, Apr 26, 2016
Slide 1: Executing Our Strategy: Expanding Our Reach – Annual Meeting
Executing Our Strategy “Expanding Our Reach” Annual Meeting April 26, 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: Company Profile
• Wealth led, relationship - based commercial bank headquartered in the “wealth belt” of New Jersey delivering private bank level service. • 94 years in business. • Strong leadership team. • Growth Strategy – “Expanding Our Reach” – launched in Q1 2013. • Four Private Banking locations: Bedminster,
Slide 4: Our Growth Strategy Was Designed to…
1. Address continued spread compression brought about through a flat yield curve and persistent low rate environment. 2. Mitigate the elevated costs associated with compliance and increased regulatory requirements . 3. Enable us to effectively adapt to migrating consumer preferences away from brick
Slide 5: Our Value Centered Vision Statement
A high - performing boutique bank, leaders in wealth, lending and deposit solutions, known nationally for our unparalleled client service, integrity and trust. 5 Our Value Centered Vision Statement
Slide 6: Our Core Principles
• Professionalism • Clients First • Compete to Win • Invested in Our Community • One Team 6 Our Core Principles “Tried and True Since 1921”
Slide 7: The Peapack-Gladstone Private Banking Model
• Full service banking with every conversation aimed at helping clients create , grow , protect & eventually t ransition their wealth. • Deep understanding of our clients needs , goals, and aspirations. » It’s about the client; not a bout us. » Risk management tolerance , time horizon, and other tra
Slide 8: Our Private Banking Brand Premier Elite
8 Our Private Banking Brand Premier Elite
Slide 9: Three Year Stock Performance vs. KBW Bank Index
9 Three Year Comparative Stock Price Performance Historical PGC Stock Price Performance vs. KBW Bank Index Peers (10%) 0% 10% 20% 30% 40% 50% 60% 70% 80% 04/22/13 08/22/13 12/22/13 04/22/14 08/22/14 12/22/14 04/22/15 08/22/15 12/22/15 04/22/16 PGC +31.9% KBW Nasdaq Bank +28.0% Note: Market data as o
Slide 10: Three Year Stock Performance vs. NJ Peers
10 Three Year Comparative Stock Price Performance Historical PGC Stock Price Performance vs. NJ Peers (10%) 0% 10% 20% 30% 40% 50% 60% 70% 80% 04/22/13 08/22/13 12/22/13 04/22/14 08/22/14 12/22/14 04/22/15 08/22/15 12/22/15 04/22/16 PGC +31.9% NJ Banks¹ +12.3% 1. NJ Peers defined as commercial banks
Slide 11: Three Year Stock Performance vs. Nasdaq Bank Index
11 Note: Market data as of April 22, 2016 Source: SNL Financial Three Year Comparative Stock Price Performance Historical PGC Stock Price Performance vs. Nasdaq Bank Index Peers (10%) 0% 10% 20% 30% 40% 50% 60% 70% 80% 04/22/13 08/22/13 12/22/13 04/22/14 08/22/14 12/22/14 04/22/15 08/22/15 12/22/15
Slide 12: Annual Net Income
12 $0 $5,000 $10,000 $15,000 $20,000 $25,000 Yr 2013 Yr 2014 Yr 2015 Adj* (In Thousands) 9,261 14,890 21,525 *Yr 2015 Adj as shown excludes $2.5MM of non - recurring charges related to the closure of two branch offices. Including these ch arges, net income and EPS would have been $19,972 and $1.29 f
Slide 13: Annual EPS
13 *Yr 2013: $42MM in common issued 12/2013. **Yr 2014: $50MM in common issued 12/2014. ***Yr 2015 Adj as shown excludes $2.5MM of non - recurring charges related to the closure of two branch offices. Including these charges, net income and EPS would have been $19,972 and $1.29 for the year. See non
Slide 14: Total Assets
14 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 Yr 2012 Yr 2013 Yr 2014 Yr 2015 (In Millions) 1,668 1,967 2,702 3,365 Total Assets Year Over Year +25%
Slide 15: Total Loans
15 Total Loans 1,133 1,574 2,250 2,913 Year Over Year +33% $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 Yr 2012 Yr 2013 Yr 2014 Yr 2015 (In Millions) 1,133 1,574 2,250 2,995* *Includes Multifamily Loans Held for Sale
Slide 16: Loans 30-89 Days Past Due
16 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% Yr 2012 Yr 2013 Yr 2014 Yr 2015 (% of Total Loans) 0.33 0.19 0.08 0.07 Loans 30 - 89 Days Past Due
Slide 17: Non Performing Assets
17 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 0.90% 1.00% Yr 2012 Yr 2013 Yr 2014 Yr 2015 (NPAs as a % of Assets) 0.91 0.44 0.30 0.22 Non Performing Assets *Does not include TDR loans that are performing in accordance with their terms.
Slide 18: Total Deposits
18 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 Yr 2012 Yr 2013 Yr 2014 Yr 2015 (In Millions) 1,516 1,647 2,299 2,935 Total Deposits Year Over Year +28%
Slide 19: Total Capital
19 $0 $50 $100 $150 $200 $250 $300 Yr 2012 Yr 2013 Yr 2014 Yr 2015 (In Millions) 122 171 242 276 Total Capital Year Over Year +14%
Slide 20: Tangible Book Value Per Share
20 Tangible Book Value Per Share $10.00 $12.00 $14.00 $16.00 $18.00 $20.00 Yr 2012 Yr 2013 Yr 2014 Yr 2015 13.81 14.75 16.32 17.40 Year Over Year +7%
Slide 21: Our Team is More Productive
21 Our Team is More Productive… 0 50 100 150 200 250 300 350 12/31/12 12/31/13 12/31/14 12/31/15 Existing New 10% 90% 74% 26% 45% 296 322 311 319 100% 55% (Full Time Equivalent Employees)
Slide 22: Strategy Delivering Positive Operating Leverage
22 0 50 100 150 200 250 300 350 400 Yr 2013 Yr 2014 Yr 2015 0 10 20 30 40 50 60 70 80 Yr 2013 Yr 2014 Yr 2015 228 339 285 48 67 Revenue/Average FTE (In Thousands ) Net Income*/Average FTE (In Thousands ) 29 *Net income for the 2015 year as shown excludes $2.5MM of charges related to the closure of t
Slide 23: We are Learning More About Our Clients through CRM
23 We are Learning More About Our Clients through CRM • In years past, we had limited visibility into relationships or profitability . • Our new Customer Relationship Management (CRM) platform launched in 2014 and expanded in 2015, enables us to view client relationships holistically. • Wealth, depo
Slide 24: Our Strategy Has Attracted Higher Value Clients
24 Our Strategy Has Attracted Higher Value Clients Account Type New Accounts Three Years or Less % of Total Outstandings 03/31/2016 Legacy Accounts Three Years or More % of Total Outstandings 03/31/2016 % Increase in Average Account Size Average Deposit $103,000 53% $31,000 47% 232% Average Loan $1,
Slide 25: We Score High on Client Engagement
25 Despite Transformational Change, We Score High on Client Engagement Our PGB Experience Score… • 5,000 Households surveyed. • Approximately 1,000 Responses. • Overall score 48. • Elite clients score 73. • Benchmark score 23.* • Tells us why clients like us and why they don’t. • Head of Client Expe
Slide 26: Our Employees Are Engaged
26 Our Employees Are Engaged Some Highlights Overall Survey Score 91% Bank Strategy will succeed 94% Senior Management is working hard 96% Private Banking culture 91% Teamwork is important 99% My manager/respect 94% Engagement/values 95% Work satisfaction/like people at the bank 97% Work environment
Slide 27: 2015 Accomplishments: Wealth Management
27 • Successful integration of Wealth Management Consultants (NJ), LLC in May 2015 with excellent client retention; slightly accretive to earnings in 2015 and expect realization of more synergies in 2016 and 2017. • Stage set for continued strategic acquisitions. • Over $400MM of new AUA inflows in
Slide 28: Wealth Management Fee Income
28 $10,000 $12,000 $14,000 $16,000 $18,000 Yr 2013 Yr 2014 Yr 2015 (In Thousands) 13,838 15,242 17,039 Wealth Management Fee Income Year Over Year +12%
Slide 29: Wealth Management Assets Under Admin
29 $2,000 $2,500 $3,000 $3,500 Yr 2012 Yr 2013 Yr 2014 Yr 2015 (In Millions) 2,304 2,691 2,987 3,322 Wealth Management Assets Under Admin Year Over Year +11%
Slide 30: Wealth Management Provides an Enviable Revenue Mix
78% 16% 5% <1% <1% NII before Provision for LL - 78% Wealth Fee Income - 16% Fees & Other Income - 5% Gain on Sale of Loans (Mortgage Banking) - <1% Gain on Sale of Securities - <1% Revenue equals Net Interest Income before Provision for Loan Losses plus all other income. 30 Wealth Management Provid
Slide 31: Residential Lending
31 • First full year since repositioning. • Relationship based offering positioned as a lead product for wealth, deposits, and commercial lending. » Portfolio up to 7/1 ARMS; longer duration loans typically sold . » Separate lending criteria, pricing sheet and relationship economics required. » Exce
Slide 32: 2015 Accomplishments: Commercial & Industrial Lending
32 • Highly customized strategy developed and implemented. » Advice led strategy engages all clients in wealth oriented discussions. » Industry product verticals have been identified, established, and are growing . • Our focus is yielding good results. » C&I loan portfolio grew $204MM (66%). » New c
Slide 33: Total Commercial & Industrial Loans
33 $0 $100 $200 $300 $400 $500 $600 Yr 2012 Yr 2013 Yr 2014 Yr 2015 (In Millions) 115 132 309 513 Total Commercial & Industrial Loans Year Over Year +66%
Slide 34: 2015 Accomplishments: Commercial Real Estate
34 • We continue to grow at a disciplined and healthy pace. » CRE portfolio (excluding Multifamily) increased by $105MM (34%) with 20 new relationships. » Multifamily increased by $419MM (39%); MFL loan participations totaled $201MM. • Our strategic focus has shifted to creating full banking relatio
Slide 35: Total Multifamily Loans
35 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 Yr 2012 Yr 2013 Yr 2014 Yr 2015 (In Millions) 162 542 1,080 1,499* Total Multifamily Loans Year Over Year +39% *Includes Multifamily Loans Held for Sale
Slide 36: Our Multifamily Portfolio At A Glance
Our Multifamily Portfolio At A Glance As of 12/31/2015: • Current Balance: $1.5B • To date, Participations Sold: 101 loans for $257MM • # Loans in Portfolio: 545 • Average Net Loan Size: $ 2.75MM • Weighted Average LTV: 65% • Weighted Average DSCR (after underwriting stress): 1.5x • Geographically D
Slide 37: 2015 Accomplishments: Retail & Community Private Banking
37 • Over one third of total new client deposits generated in 2015 came from Retail and Community Private Banking. • Financial Needs Assessment Process (FINAP) has yielded positive results with approximately $42MM in closed wealth business in 2015. • FINAP process being employed this year to improve
Slide 38: Total Customer Deposits
38 Total Customer Deposits* $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 Yr 2012 Yr 2013 Yr 2014 Yr 2015 (In Millions) *“Customer” Deposits are defined as deposits excluding brokered CDs and brokered overnight interest - bearing demand deposits. 1,511 1,632 1,979 2,642 Year Over Year +33%
Slide 39: Enhanced CRE Risk Management
Enhanced CRE Risk Management • As previously announced, we will invest $2MM in 2016 ($675M invested in Q1) to enhance CRE Risk Management practices. • 65,000+ data points collected and loaded to a data warehouse; we now have considerable insights to our portfolio and are have a better understanding
Slide 40: Capital, Liquidity, and Interest Rate Risk Management
Balance sheet risk management includes stress testing: • Capital – Stressed semi - annually using multiple scenarios, including some with DFST assumptions. Quarterly testing going forward. • Liquidity – $1.1 billion available in the first quarter. The Bank had $926MM of secured borrowing capacity av
Slide 41: Summary: People, Market, Business Model, Risk Management, Valuation
People Market Growth and Profitability • Very talented team with ties to the market place • High levels of motivation and engagement • Act as a single team • We operate in three of the top ten most affluent counties nationwide • New York MSA offers considerable growth opportunity • Large and small b
Slide 42: Select Financial Highlights Q1 2016
Select Financial Highlights Q1 2016 Annual Meeting April 26, 2016 P EAPACK - G LADSTONE B ANK
Slide 43: Pretax Income (as reported)
43 Pretax Income (as reported) $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 $10.00 Q1 2015 Q4 2015 Q1 2016 (in millions) $8.35 $6.60 $8.77
Slide 44: Pretax Income (as adjusted)
44 Pretax Income (as adjusted) $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 Q1 2015 Q4 2015 Q1 2016 (in millions) $8.35 $9.10 $10.07 (A) – the quarter ended 12/31/2015 included $2.5MM of charges related to the closure of two branch offices. Excluding these $2.5MM of charges, pretax income would have
Slide 45: Net Income (as reported)
45 Net Income (as reported) $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 Q1 2015 Q4 2015 Q1 2016 (in millions) $5.01 $4.34 $5.49
Slide 46: Net Income (as adjusted)
46 Net Income (as adjusted) $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 Q1 2015 Q4 2015 Q1 2016 (in millions) $5.01 $5.90 $6.30 (A) – the quarter ended 12/31/2015 included $2.5MM of charges related to the closure of two branch offices. Excluding these $2.5MM of charges, net income would have bee
Slide 47: Diluted Earnings Per Share (as reported)
47 Diluted Earnings Per Share (as reported) $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 Q1 2015 Q4 2015 Q1 2016 $0.33 $0.28 $0.34 Shares Outstanding for Diluted EPS Q1 2016 16,016,972 Q4 2015 15,721,876 Q1 2015 15,070,352
Slide 48: Diluted Earnings Per Share (as adjusted)
48 Diluted Earnings Per Share (as adjusted) $0.30 $0.31 $0.32 $0.33 $0.34 $0.35 $0.36 $0.37 $0.38 $0.39 $0.40 Q1 2015 Q4 2015 Q1 2016 $0.33 $0.39 $0.38 Shares Outstanding for Diluted EPS Q1 2016 16,016,972 Q4 2015 15,721,876 Q1 2015 15,070,352 (A) – the quarter ended 12/31/2015 included $2.5MM of ch
Slide 49: Return on Average Common Equity (as reported)
49 Return on Average Common Equity (as reported) 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% Q1 2015 Q4 2015 Q1 2016 8.13% 7.83% 6.37%
Slide 50: Return on Average Common Equity (as adjusted)
50 Return on Average Common Equity (as adjusted) 7.60% 7.80% 8.00% 8.20% 8.40% 8.60% 8.80% 9.00% 9.20% Q1 2015 Q4 2015 Q1 2016 8.13% 8.65% 8.99% ( A) – the quarter ended 12/31/2015 included $2.5MM of charges related to the closure of two branch offices. Excluding these $2.5MM of charges, ROAE would
Slide 51: Total Revenue
51 Total Revenue Diversified Revenue Mix $23.00 $24.00 $25.00 $26.00 $27.00 $28.00 $29.00 $30.00 Q1 2015 Q4 2015 Q1 2016 $25.47 $28.54 $29.67 (in millions)
Slide 52: Net Interest Income
52 Net Interest Income $17.00 $18.00 $19.00 $20.00 $21.00 $22.00 $23.00 $24.00 Q1 2015 Q4 2015 Q1 2016 (in millions) $19.58 $22.82 $23.41
Slide 53: Wealth Division Fee Income
53 Wealth Division Fee Income $3.85 $3.90 $3.95 $4.00 $4.05 $4.10 $4.15 $4.20 $4.25 $4.30 $4.35 Q1 2015 Q4 2015 Q1 2016 (in millions) $4.03 $4.31 $4.30
Slide 54: Efficiency Ratio (as reported)
54 Efficiency Ratio* (as reported) 58.00% 60.00% 62.00% 64.00% 66.00% 68.00% 70.00% 72.00% Q1 2015 Q4 2015 Q1 2016 62.58% *Calculated as (total operating expenses) as a percentage of (total revenue less gain on sale of securities). 70.05% 65.22%
Slide 55: Efficiency Ratio (as adjusted)
55 Efficiency Ratio* (as adjusted) 59.50% 60.00% 60.50% 61.00% 61.50% 62.00% 62.50% 63.00% Q1 2015 Q4 2015 Q1 2016 62.58% *Calculated as (total operating expenses) as a percentage of (total revenue less gain on sale of securities). (A ) – the quarter ended 12/31/2015 included $2.5MM of charges relat
Slide 56: Total Loans
56 Total Loans $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 Q1 2015 Q4 2015 Q1 2016 (in billions) $2.44 *Includes Multifamily Loans Held for Sale $3.00* $3.07*
Slide 57: Customer Deposits
57 Customer Deposits* $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 Q1 2015 Q4 2015 Q1 2016 (in billions) $2.15 * Excludes brokered CDs and brokered overnight interest bearing checking deposits. $2.64 $2.75
Slide 58: Wealth Division Assets Under Admin
58 Wealth Division Assets Under Admin $2.90 $2.95 $3.00 $3.05 $3.10 $3.15 $3.20 $3.25 $3.30 $3.35 Q1 2015 Q4 2015 Q1 2016 (in billions) $3.05 $3.32 $3.31
Slide 59: Non-Performing Assets Ratio
59 Non - Performing Assets Ratio 0.20% 0.21% 0.22% 0.23% 0.24% 0.25% 0.26% 0.27% Q1 2015 Q4 2015 Q1 2016 0.26% 0.22% 0.23% ( NPAs as a % of Assets )
Slide 60: Regulatory Tier I Leverage Ratio
60 Regulatory Tier I Leverage Ratio (Regulatory Tangible Capital) 7.00% 7.50% 8.00% 8.50% 9.00% 9.50% 10.00% Q1 2015 Q4 2015 Q1 2016 8.80% 8.10% 8.19% Regulatory Well Capitalized Standard 5.00% Regulatory Adequately Capitalized Standard 4.00%
Slide 61: Regulatory Tier I and II Capital to RWA
61 Regulatory Tier I and II Capital to RWA (Regulatory Total Capital to Risk Weighted Assets) 10.00% 10.50% 11.00% 11.50% 12.00% 12.50% 13.00% 13.50% 14.00% Q1 2015 Q4 2015 Q1 2016 12.50% 11.40% 11.58% Regulatory Well Capitalized Standard 10.00% Regulatory Adequately Capitalized Standard 8 .00%
Slide 62: Tangible Book Value Per Share
62 Tangible Book Value Per Share* $16.00 $16.20 $16.40 $16.60 $16.80 $17.00 $17.20 $17.40 $17.60 Q1 2015 Q4 2015 Q1 2016 $16.57 $17.40 $17.51 * Tangible equity divided by period end common shares outstanding less restricted shares not yet vested.
Slide 63: 2016 Outlook and Targets
• EPS Growth – revised from slightly down/flat to flat/slightly up for 2016. Anticipate high single digit to low double digit “normalized” EPS growth thereafter . • Return on Equity – 10 %+ target run rate by 2017 may be delayed due to accelerated risk management investments and “transitory” increas
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