Peapack-gladstone Financial Corporation · NASDAQ:PGC
Peapack-gladstone Financial — Investor Presentation (August 2016)
33 slides from Peapack-gladstone Financial's investor presentation, Aug 1, 2016
Slide 1: Strategic Update: Expanding Our Reach
Strategic Update “Expanding Our Reach” Investor Presentation June 30, 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: Financial Targets: 2016 and Beyond
• EPS Growth – High single digit to low double digit EPS growth. • Return on Equity – 10 %+ target run rate by 2018. • Efficiency Ratio – Low to mid 50’s by 2018. • Balance Sheet Growth / Loan Growth – 10% to 15% balance sheet growth; 12% to 18% loan growth. • Loan Mix – Continued diversification in
Slide 4: Our Foundation
A high - performing boutique bank, leaders in wealth, lending and deposit solutions, known nationally for our unparalleled client service, integrity and trust. Our Foundation 4 • Professionalism • Clients First • Compete to Win • Invested in Our Community • One Team Vision Core Principles
Slide 5: Overview, Franchise and Financial Highlights
1. Non - GAAP financial measure; refer to reconciliation on page 32 • Headquartered in Bedminster, NJ. • Four Private Banking locations: Bedminster, Morristown, Princeton, Teaneck. • 21 Branches in four affluent New Jersey counties: Somerset, Morris, Hunterdon, Union. • Delaware Trust Subsidiary. •
Slide 6: Market demographics of New Jersey counties
1. Rank reflects ranking amongst all New Jersey counties Note: Data is pro forma for pending acquisitions; weighted average is calculated as the sum of (percent of state/national franchise * demographic item) within each market; banks , thrifts , and savings banks included (retail branches only ) So
Slide 7: Management team
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 8: People, Market, Business Model, Growth and Profitability
People Market 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 offers consider
Slide 9: 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 10: Wealth Management Overview
• $3.4B in AUA as of 06/30/16. • Over $ 400MM of new organic AUA inflows in 2015, YTD 2016 $175MM with strong pipeline. • Total inflows in 2015 were partially offset by negative market action in the second half of the year and normal closed/disbursed outflows . • Successful integration of Wealth Man
Slide 11: Wealth Management Overview: AUA and Fee Income
Wealth Management Assets Under Admin Wealth Management Fee Income Wealth Management Overview $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 $18.00 2012 2013 2014 2015 6 Mos Ended 06/30/16 (Dollars in Millions) $2.00 $2.25 $2.50 $2.75 $3.00 $3.25 $3.50 2012 2013 2014 2015 Q2 2016 (Dollars in Billions)
Slide 12: Our Strategy Is Attracting Higher Value Clients
Our Strategy Is Attracting Higher Value Clients Account Type New Accounts Three Years or Less % of Total Outstandings 2016 Legacy Accounts Three Years or More % of Total Outstandings 2016 % Increase in Average Account Size Average Deposit $103,000 53% $31,000 47% 232% Average Loan $1,365,000 58% $28
Slide 13: Enviable Revenue Mix
1. Includes SBA Income, SWAP Income, Deposit & Loan Fees, Mortgage Banking, and BOLI Enviable Revenue Mix 76.4% 15.5% 6.4% 0.1% 1 .6% 78.1% 15.7% 5.2% 0.5% 0.5% For the Year Ended December 31, 2015 For the Quarter Ended June 30, 2016 13 Total Fee Income 21.9% of Total Revenue Total Fee Income 23.6%
Slide 14: Positive Operating Leverage & Improved Profitability
1. Revenue defined as net interest income plus all other income 2. Includes $2.50 million of non - recurring charges related to the closure of two branch offices Net Income / Period End FTE Revenue¹ / Period End FTE (Dollars in Thousands) (Dollars in Thousands) Positive Operating Leverage & Improved
Slide 15: Net Income Momentum
1. Reflects reported net income as per 10 - K; includes $ 2.50 million of pre - tax non - recurring charges related to the closure of two branch offices 2. Reflects reported net income as per 10 - Q; includes $1.90 million of pre - tax charges related to increased FDIC premiums Net Income Momentum $
Slide 16: Asset Growth
Asset Growth $0.000 $0.500 $1.000 $1.500 $2.000 $2.500 $3.000 $3.500 $4.000 2012 2013 2014 2015 Q2 2016 (Dollars in Billions) $3.605 16 +14% YOY Annualized Growth $3.365 $2.702 $1.967 $1.668 Year Over Year +25%
Slide 17: Organic Gross Loan Growth
Note: Gross loans include loans held for sale Organic Gross Loan Growth 17 $0.000 $0.500 $1.000 $1.500 $2.000 $2.500 $3.000 $3.500 2012 2013 2014 2015 Q2 2016 $2.997 $2.251 $1.576 $1.153 $3.213 Year Over Year +28% +14% YOY Annualized Growth (Dollars in Billions) Multifamily Commercial & Industrial C
Slide 18: Loan Composition
Gross Loans: $3.213 Billion Loan Composition 06/30/2016 Multifamily Commercial & Industrial CRE Residential, Consumer & Other 48.6% 19.2% 17.9% 14.3% 18 Target: 25% - 30% Target: 15% - 25% Target: 15% - 20% Target: 35% - 45%
Slide 19: Credit Metrics and Performance
1. Nonperforming loans defined as nonaccrual loans plus loans 90+ days past due 2. Nonperforming assets defined as nonaccrual loans, loans 90+ days past due, and real estate owned 3. NCOs/average loans for Q2 2016 reflects quarterly ratio, not an annualized value Note: Total loans exclude loans held
Slide 20: Multifamily loan portfolio
Proven track record of providing solid risk - adjusted returns Geographically diversified portfolio – as of June 30, 2016: • New York – 50%; Top Markets – Bronx and Brooklyn • New Jersey – 40%; Top Markets – Hudson, Essex, & Morris/Somerset/Union Counties • Pennsylvania – 10%; Top Markets – Suburban
Slide 21: Commercial & Industrial Loans
Commercial & Industrial Loans $0 $100 $200 $300 $400 $500 $600 2012 2013 2014 2015 06/30/16 (Dollars in Millions) $115 $132 $309 $513 $576 21 +25% YOY Annualized Growth Year Over Year +66%
Slide 22: Deposit Growth
22 $0.000 $0.500 $1.000 $1.500 $2.000 $2.500 $3.000 $3.500 2012 2013 2014 2015 06/30/16 $2.935 $2.299 $1.647 $1.516 $3.109 Deposit Growth Year Over Year +28% +12% YOY Annualized Growth (Dollars in Billions) Noninterest - bearing DDA Interest - bearing Demand Savings & MMDA Time
Slide 23: Core Deposit Base
Total Deposits: $3.109 B illion MRQ Cost of Int. - bearing Deposits: 0.62% MRQ Cost of Total Deposits : 0.53% Core Deposit Base 06/30/2016 Noninterest-bearing Demand Interest-bearing Demand Savings & MMDA Time 35.3% 31.6% 18.0% 15.1% 23
Slide 24: Credit risk management
• 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, and capital, and forecasted over two years. • Ongoing third party loan participations/sales to validate underwriting guidelin
Slide 25: Capital, Liquidity, & Interest Rate Risk Management
Robust balance sheet risk management: Capital • Stress test enhanced to bottom up / top down on a quarterly basis initiated in Q1 2016. • Ten stress scenarios. Liquidity • $81 million in cash and cash equivalents. • $206 million of unencumbered securities . • Nearly $1 billion additional borrowing c
Slide 26: Financial Highlights
Financial Highlights P EAPACK - G LADSTONE B ANK
Slide 27: Historical Income Statement (as reported)
1.Includes $2.50 million of non - recurring charges related to the closure of two branch offices 2. Includes $1.90 million of pre - tax charges related to increased FDIC premiums 3. Efficiency Ratio calculated by dividing total noninterest expenses, excluding ORE provision, as determined under GAAP,
Slide 28: Quarterly Income Statement (as reported)
Quarterly Income Statement (as reported) 28 1.Includes $2.50 million of non - recurring charges related to the closure of two branch offices 2. Includes $1.90 million of pre - tax charges related to increased FDIC premiums 3. Efficiency Ratio calculated by dividing total noninterest expenses, exclud
Slide 29: Historical Balance Sheet
Historical Balance Sheet 29 1. See non - GAAP reconciliation on page 32 for values (Dollars in Thousands, Except Per Share Amounts) Period Ended 2012 2013 2014 2015 June 30, 2016 Cash and Equivalents $119,228 $35,147 $31,207 $70,160 $81,330 Total Securities 309,118 278,479 344,245 209,614 220,839 To
Slide 30: Appendix
Appendix P EAPACK - G LADSTONE B ANK
Slide 31: 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 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: Contacts
Peapack - Gladstone Financial Corporation 500 Hills Drive, Suite 300 P.O. Box 700 Bedminster, New Jersey 07921 (908) 234 - 0700 www.pgbank.com Douglas L. Kennedy President & Chief Executive Officer (908) 719 - 6554 dkennedy@pgbank.com John P. Babcock Senior EVP & President Private Wealth Management
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