Peapack-gladstone Financial Corporation · NASDAQ:PGC
Peapack-gladstone Financial — Investor Presentation (July 2017)
26 slides from Peapack-gladstone Financial's investor presentation, Jul 28, 2017
Slide 1: Investor Presentation: Expanding Our Reach Strategic Update
Investor Presentation “Expanding Our Reach” Strategic Update 06/30/2017 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: The Peapack-Gladstone Private Banking Model
• 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 4: People, Market, Unique 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 5: Headwinds: Markets, Government, Technology
Markets • Tighter margins due to a flattening yield curve. Government • Increased regulatory and compliance costs. Technology • Continued migration from “bricks and mortar” to technology based delivery channels. Launched in 2013, “Expanding Our Reach” was Designed to Mitigate These Headwinds 5
Slide 6: Market demographics and branch markets
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 7: Central to Our Strategy: Wealth Management
• $3.9 billion in AUA as of 06/30/17. • YTD 2017 Managed AUM inflows of $244 million vs. $250 million in all of 2016. • Murphy Capital Management acquisition announced 05/26/2017. • Stage is set for additional strategic wealth management acquisitions. • Wealth and relationship - based residential le
Slide 8: Wealth Management Assets Under Admin and Fee Income
Wealth Management Assets Under Admin Wealth Management Fee Income Wealth Management Performance $8.00 $10.00 $12.00 $14.00 $16.00 $18.00 $20.00 2012 2013 2014 2015 2016 6/30/17 (Dollars in Millions) $2.0 $2.3 $2.5 $2.8 $3.0 $3.3 $3.5 $3.8 $4.0 2012 2013 2014 2015 2016 6/30/17 (Dollars in Billions) $
Slide 9: Wealth Provides an Enviable Revenue Mix
1. Includes SBA Income, SWAP Income, Deposit & Loan Fees, Mortgage Banking, and BOLI Wealth Provides an Enviable Revenue Mix 76.9% 14.6% 7.4% 0.1% 1.0% 77.6% 14.6% 7.8% For Six - Mos Ended June 30, 2017 For the Year Ended December 31, 2016 Total Fee Income: 22.4% of Total Revenue Total Fee Income: 2
Slide 10: 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 6/30/17 $2.997 $2.251 $1.576 $1.153 $3.314 (Dollars in Billions) 10 $3.667
Slide 11: Loan Mix Transformational Change
Loan Mix Transformational Change Multifamily Commercial & Industrial CRE Resident ial , Consumer & Other 41.0% 16.6% 21.9% 20.5% 14.0% 10.0% 22.4% 53.6% 12/31/2012 6/30/2017 Target: 25% - 35% Target: 30% - 35% Target: 15% - 20% Target: 15% - 25% 11
Slide 12: Commercial & Industrial Loans
Commercial & Industrial Loans $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 2012 2013 2014 2015 2016 6/30/17 (Dollars in Millions) $115 $132 $309 $513 $637 12 $801
Slide 13: Multifamily Loans as a Percentage of Risk Based Capital are Declining
Multifamily Loans as a Percentage of Risk Based Capital are Declining $100 $300 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 2012 2013 2014 2015 2016 6/30/17 (Dollars in Millions) $162 $542 $1,080 $1,499 $1,460 Note: Multifamily Loans include loans held for sale 504% RBC 13 $1,505 372% RBC 352% RBC
Slide 14: Multifamily loan portfolio profile
Proven track record of providing solid risk - adjusted returns and liquidity on an as needed basis. Geographically diversified portfolio – as of June 30, 2017: • New York – 52%; Top Markets – Bronx and Brooklyn • New Jersey – 36%; Top Markets – Essex, Hudson, Passaic • Pennsylvania – 12%; Top Market
Slide 15: 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 16: Operating Efficiency: Deposits Per Branch
Operating Efficiency: Deposits Per Branch $50 $70 $90 $110 $130 $150 $170 $190 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 6/30/17 (Dollars in Millions) $66 $171 $72 $100 16 $100 $140 $179
Slide 17: Operating Efficiency: Loans Per Employee
Operating Efficiency: Loans Per Employee $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 12/31/13 12/31/14 12/31/15 12/31/16 6/30/17 (Dollars in Thousands) 4,835 7,357 9,484 9,804 17 9,991
Slide 18: 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 19: 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 $35.00 2013 2014 2015 2016 6/30/16 6/30/17 1 Net Income Earnings Per Share $0.40 $
Slide 20: Enhanced Returns
Enhanced Returns 6.00% 6.50% 7.00% 7.50% 8.00% 8.50% 9.00% 9.50% 10.00% 2013 2014 2015 2016 6/30/17 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 6/30/17 7.37% 7.96% 7.71% 8.92% 0.54% 0.63% 0.64% 0.72% 1. 2015 includes $
Slide 21: Our Strategy is Delivering Value
Our Strategy is Delivering Value Note: Market data as of June 30, 2017 Source: SNL Financial One Year Comparative Stock Price Performance 21 (10%) 0% 10% 20% 30% 40% 50% 60% 70% 80% 06/30/16 07/31/16 08/31/16 09/30/16 10/31/16 11/30/16 12/31/16 01/31/17 02/28/17 03/31/17 04/30/17 05/31/17 06/30/17 P
Slide 22: Upside Potential
• Historical double digit EPS growth. Target double digit EPS growth • Significant wealth management business. • Significant growth in commercial business. • Trading below high performing peers. Upside Potential 22
Slide 23: Financial targets and outlook
• EPS Growth – Low double digit EPS growth. • Return on Equity – 10% target run rate 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 and loan growth • Loan Mix – Continued diversification i
Slide 24: Appendix
Appendix P EAPACK - G LADSTONE B ANK
Slide 25: Executive management biographies
Douglas L. Kennedy President & Chief Executive Officer 908.719.6554 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 b
Slide 26: 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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