Peapack-gladstone Financial Corporation · NASDAQ:PGC
Peapack-gladstone Financial — Investor Presentation (July 2015)
50 slides from Peapack-gladstone Financial's investor presentation, Jul 30, 2015
Slide 1: Executing Our Strategy: Expanding Our Reach
Executing Our Strategy “Expanding Our Reach” P EAPACK - G LADSTONE B ANK December 31, 2014 June 30, 2015
Slide 2: Statement Regarding Forward-Looking Information
2 Statement Regarding Forward - Looking Information The foregoing contains forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. S uch statements are not historical facts and include expressions about Management’s confidence and strategies and Manag
Slide 3: Vision Statement
A high - performing boutique bank, leaders in wealth, lending and deposit solutions, known nationally for our unparalleled client service, integrity and trust. 3 Vision Statement
Slide 4: Company overview and leadership
• Wealth led, relationship - based commercial bank headquartered in “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, Morristo
Slide 5: Financial Targets
• Asset Growth / Loan Growth – 15 % to 20%+ asset growth and 20% to 25% loan growth for 2015. 12% to 17% asset growth and 15% to 20% loan growth annually thereafter . • Funding – Continued funding from diversified funding sources. A large portion of asset growth to be funded by deposits. • Loan Mix
Slide 6: Our Strategy is Delivering Positive Results
6 Our Strategy is Delivering Positive Results (In Billions) 2.30 1.52 1.13 2.69 1.65 1.57 2.99 2.30 2.25 0.75 1.25 1.75 2.25 2.75 3.25 Wealth Division Assets Under Administration Total Deposits Total Loans 2012 2013 2014
Slide 7: Key Performance Metrics
Key Performance Metrics (Dollars in Millions) 7 2012 2013 2014 Private Wealth Management Fee Income $12.3 $13.8 $15.2 Assets Under Administration $2,304 $2,691 $2,987 Commercial Private Banking CRE Loans $258 $290 $308 Multifamily Loans $162 $542 $1,080 C&I Loans $125 $138 $315 Total Commercial Loan
Slide 8: 2014 A Year of Accomplishment
8 Balance Sheet / P&L Records YOY % Growth Total Assets $2.7 Billion + 37% Total Customer Deposits* $2.0 Billion + 21% Total Loans Closed $1.1 Billion + 38% Total Loans Outstanding $2.3 Billion + 43% Total Capital $242.3 Million + 42% Net Income $14.9 Million + 61% Wealth Management AUA $ 3.0 Billio
Slide 9: Capital Raised in 2014 to Support Continued Execution
Great Execution Achieved Our Goal How We Are Using the Money • $50 million target • At - The - Market (ATM) process for cost effectiveness and efficiency • Attractive weighted average price ($18.01 per share) • Support growth for the foreseeable future • New institutional shareholders • Fund anticip
Slide 10: The Peapack-Gladstone Private Banking Model
10 The Peapack - Gladstone Private Banking Model • Full service banking with every conversation central to helping clients create , accumulate , protect and eventually distribute their wealth • Deep understanding of our clients needs , goals and aspirations • It’s about them, not about us • Clients
Slide 11: Private Banking brand image
@ PEAPACK-GLADSTONE FINANCIAL CORPORATION Private Banking ALLBANKING SHOULD BE PRIVATE BANKING Bree Geanerowe Base etme gue wept
Slide 12: PGB's Life Cycle Approach To Private Banking
Starting/Growing Your Business Beginning Your Career Expanding Your Business Career Ascension Transitioning Your Business Executive Leadership Your Legacy PGB’s Life Cycle Approach To Private Banking CREATE ACCUMULATE PROTECT DISTRIBUTE 12
Slide 13: Private Banking Business Model Built on Time-Tested Principles
Our Private Banking Business Model is Built on PGB’s Time - Tested Principles 13 • Professionalism • Clients First • Compete to Win • Invested in Our Community • One Team
Slide 14: Private Banking Model Addresses Market Opportunities
Our Private Banking Model Addresses a Number of Market Opportunities • We are known as the bank for the affluent and have an established core competency in wealth management • Favorable macro economic trends regarding wealth accumulation • The metro New York MSA has a plethora of these market opport
Slide 15: Drive Sales Efforts and Revenue Generation
Drive Sales Efforts and Revenue Generation Future Outlook • Aggressively introduce our wealth capabilities • Partner with Retail and Commercial • Wealth is at the forefront of every conversation 15 Core Strategies • Recruit additional proven Wealth Private Bankers • Team approach with a Wealth Priva
Slide 16: Acquisition of Wealth Management Consultants LLC
16 Acquisition of Wealth Management Consultants LLC • Largely strategic driven: x Executive Leadership of Wealth Management Consultants (WMC) remains unchanged x Adds additional depth to our capability to provide expert advice x Augments our ability to deliver advice led wealth solutions x Provides
Slide 17: PGB Wealth Trends are Positive
17 $2.0 $ 2.3 $ 2.7 $3.0 $3.5 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 2011 2012 2013 2014 Pro-Forma* PGB Wealth Trends are Positive Assets Under Administration ($ Billions) *Includes pro - forma for Q1 results plus acquisition of Wealth Management Consultants, LLC
Slide 18: Continue CRE & Multifamily Focus; Grow C&I Lending
Continue CRE & Multifamily Focus Grow Commercial and Industrial Lending (C&I) Future Outlook • Lending efforts increasingly migrate to relationship - based • Multifamily concentration will be managed via participations sold • Typically floating rates of interest • Long - term relationships; clients
Slide 19: Our Loan Composition has Evolved
19 Our Loan Composition has Evolved Residential Mortgage Loans Commercial Mortgages C & I 12/31/2012 12/31/2014 37% 52% 11% 62% 24% 14%
Slide 20: Our Asset Quality Remains Strong
Our Asset Quality Remains Strong (In Thousands) 20 8,763 787 768 15,228 8,571 8,174 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 12/31/2012 12/31/2013 12/31/2014 Net Charge-Offs Non-Performing Assets
Slide 21: Past Due Loans are at Historic Lows
21 Past Due Loans are at Historic Lows 30 – 89 Days (In Thousands) 3,786 2,953 1,755 1,500 2,000 2,500 3,000 3,500 4,000 12/31/2012 12/31/2013 12/31/2014
Slide 22: Loan Growth – New Jersey Commercial Banks
42.8% 18.4% 17.1% 16.6% 12.6% 10.4% 8.0% 7.5% 7.4% - 26.8% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% PGC BCB Provident VLY Amboy Oritani Boiling Springs Lakeland Columbia Sun *Source: Stockton Financial Corp. NJ Commercial Banks >$1B, excludes mergers. Loan Growth – New Jersey Commerci
Slide 23: Multifamily Concentration Risk Management
• Detailed Quarterly Monitoring • Semi - Annual Capital Stress Testing • Participations Sold • Strong Underwriting Standards: x Minimum 1.30x DSCR x Maximum 75% LTV • Geographic Diversity (See Next Slide) • High Quality Portfolio (See Next Slide) Multifamily Concentration Risk Management 23
Slide 24: Multifamily Concentration Portfolio Attributes
• Geographic Diversity x New York: 46% x New Jersey: 43% x Pennsylvania: 11% x Top NY Markets (*Rent Regulated Market): Bronx, Manhattan, and Brooklyn x Top NJ Markets: Hudson, Essex, and Morris Counties x Top PA Markets: Philadelphia suburbs, Bucks County • High Quality Portfolio x Average LTV: 61%
Slide 25: Retail Private Banking
Optimize Our Branch Network Enhance Our Sales/Service Culture Deepen Relationships • Culture of robust deposit generation • Qualified referrals • Leverage our Advisory Board and Community Ambassadors • Utilize Salesforce to manage sales efforts • Transition to an advice - based solutions • Intensifi
Slide 26: Deposit Growth – New Jersey Commercial Banks
36.4% 24.3% 22.3% 11.2% 6.2% 3.9% 3.4% 3.2% 1.4% - 12.6% -15.0% -5.0% 5.0% 15.0% 25.0% 35.0% 45.0% PGC VLY Oritani Provident BCB Columbia Amboy Lakeland Boiling Springs Sun *Source: Stockton Financial Corp. NJ Commercial Banks >$1B, excludes mergers . Deposit Growth – New Jersey Commercial Banks Yea
Slide 27: Community Support
• We are fully invested in our community – this is one of the five core principles we live by • In 2014: x 200+ organizations supported x Over 1,500 hours of community service x Over $360K in charitable donations • We strive, and have programs in place, to make homeownership a reality for all • Reco
Slide 28: We Have Added Considerable Talent
We Have Added Considerable Talent WEALTH COMMERCIAL RETAIL HSBC Morgan Sta nley Oritani Bank Wilmington Trust Bank of America Investors Bank BNY Mellon Citibank Provident/Team Capital Wells Fargo Hudson Valley Bank Fulton Bank Bank of America/U.S. Trust M & T Bank Bank of America Merrill Lynch Trust
Slide 29: Responsibly Managing Our Costs: Efficiency Ratio Trend
29 As We Invest to Grow Revenue, We Are Responsibly Managing Our Costs Efficiency Ratio Trend 71.4% 80.7% 78.8% 75.6% 70.1% 67.4% 66.6% 66.0% 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% 80.0% 85.0%
Slide 30: Efficiency is Delivering Positive Operating Leverage
30 33 49 15 20 25 30 35 40 45 50 55 60 12/31/2012 12/31/2014 Net Income/Employee (In Thousands) Efficiency is Delivering Positive Operating Leverage and Improved Profitability 48% 249 290 225 230 235 240 245 250 255 260 265 270 275 280 285 290 12/31/2012 12/31/2014 Revenue/Employee (In Thousands) 16
Slide 31: We Have An Enviable Revenue Mix
77% 17% 5% <1% <1% NII before Provision for LL - 77% Wealth Fee Income - 17% 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 We Have An Enviable Revenue
Slide 32: Enterprise Risk Management
Safety and Soundness • Superior credit risk oversight • Strong policies and procedures and best practices in governance • Forward looking perspective of emerging risks Enterprise Risk Management Foundational Excellence Communication Promote Strong Risk Culture Leadership • Strong internal committee
Slide 33: Liquidity, Interest Rate Risk and Capital
Liquidity Interest Rate Risk Capital • Standby liquidity with the Federal Home Loan Bank is managed to optimize capacity. At year - end, $670 million undrawn • In addition, an investment securities portfolio with $265 million is available • Interest rate shock simulation results for Net Interest Inc
Slide 34: Diversified Funding Sources
Retail, from branches and mobile • Demand deposits, money markets and CD’s Business • Operating accounts and business money market • Treasury Services platform to support client defined requirements Wealth clients • Deposit solutions as part of comprehensive wealth management platform Reciprocal ins
Slide 35: Diversified Funding Sources (continued)
Brokered • Long dated (up to 10 years) time deposits for interest rate risk management; tenors not available from retail sources • Money market, provided by the reciprocal deposit partner, from conduit pools; provides supplemental liquidity and a basis for efficient swaps for interest rate risk mana
Slide 36: Elements of Interest Rate Risk Management
• Manage to shorter duration / adjustable rate assets • Created a loan participation program • Core deposit relationships • Focus CDs on medium to longer term • Disciplined interest rate SWAP program to extend liability duration (cash flow hedges) • Offer loan level interest rate SWAP product to sel
Slide 37: What is Compelling About Our Company
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 • Operate in three of the top ten most affluent counties nationwide • New York MSA offers considerable opportunity • Large and small banks under
Slide 38: Select Financial Highlights Q2 2015
Select Financial Highlights Q2 2015 P EAPACK - G LADSTONE B ANK
Slide 39: Strong Earnings: Net Income
39 Strong Earnings Net Income (In Millions) $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 Q2 2014 Q1 2015 Q2 2015 $5.24 $5.01 $3.78
Slide 40: Strong Earnings: Diluted Earnings Per Share
40 Strong Earnings Diluted Earnings Per Share $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 Q2 2014 Q1 2015 Q2 2015 $0.34 $0.33 $0.32 Shares Outstanding for Diluted EPS Q2 2015: $15,233,151 Q1 2015: 15,070,352 Q2 2014: 11,846,075
Slide 41: Strong Earnings: Net Interest Income
41 Strong Earnings Net Interest Income (In Millions) $5.0 $7.0 $9.0 $11.0 $13.0 $15.0 $17.0 $19.0 $21.0 $23.0 Q2 2014 Q1 2015 Q2 2015 $19.6 $20.3 $16.9
Slide 42: Strong Earnings: Wealth Division Fee Income
42 Strong Earnings Wealth Division Fee Income (In Millions) $3.00 $3.20 $3.40 $3.60 $3.80 $4.00 $4.20 $4.40 $4.60 Q2 2014 Q1 2015 Q2 2015 $4.03 $4.53 $4.01
Slide 43: Strong Improvement in Operating Leverage
43 Strong Improvement in Operating Leverage Efficiency Ratio* 56.0% 58.0% 60.0% 62.0% 64.0% 66.0% 68.0% 70.0% Q2 2014 Q1 2015 Q2 2015 *Calculated as (total operating expenses) as a percentage of (total revenue less gain on sale of securities). 67.4% 62.6% 61.0%
Slide 44: Strong Growth: Loans
44 Strong Growth Loans (In Billions) $1.00 $1.20 $1.40 $1.60 $1.80 $2.00 $2.20 $2.40 $2.60 $2.80 $3.00 Q2 2014 Q4 2014 Q1 2015 Q2 2015 $2.25 $2.74 $1.87 $2.44
Slide 45: Strong Growth: Customer Deposits
45 Strong Growth Customer Deposits (In Billions)* $1.00 $1.20 $1.40 $1.60 $1.80 $2.00 $2.20 $2.40 Q2 2014 Q4 2014 Q1 2015 Q2 2015 $1.98 $2.15 $1.83 *Excludes brokered CDs and Brokered Overnight Interest Bearing Checking Deposits. $2.28
Slide 46: Strong Growth: Wealth Division Assets Under Administration
46 Strong Growth Wealth Division Assets Under Administration (In Billions)* $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 Q2 2014 Q4 2014 Q1 2015 Q2 2015 $3.0 $3.5 $2.8 $3.1 *Includes acquisition of Wealth Management Consultants, LLC.
Slide 47: Strong Asset Quality: Net Charge Offs
47 Strong Asset Quality Net Charge Offs (In Thousands) $0 $100 $200 $300 $400 $500 $600 Q2 2014 Q4 2014 Q1 2015 Q2 2015 $69 $533 $47 $14
Slide 48: Strong Asset Quality: Non-Performing Assets Ratio
48 Strong Asset Quality Non - Performing Assets Ratio 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% 0.40% Q2 2014 Q4 2014 Q1 2015 Q2 2015 0.30% 0.35% 0.26% 0.26%
Slide 49: Strong Capital Position: Tier I Leverage
49 Strong Capital Position Tier I Leverage (Regulatory Tangible Capital) 7.00% 7.50% 8.00% 8.50% 9.00% 9.50% 10.00% Q2 2014 Q4 2014 Q1 2015 Q2 2015 9.11% 8.01% 8.48% Regulatory Well Capitalized Standard 5.00% 8.80%
Slide 50: Improvement in Book Value Per Share
50 Improvement in Book Value Per Share $14.50 $15.00 $15.50 $16.00 $16.50 $17.00 $17.50 Q2 2014 Q4 2014 Q1 2015 Q2 2015 $15.48 $16.36 $16.61 $17.02
Peapack-Gladstone Financial — Investor Presentation (July 2015) on 6ix