Peapack-gladstone Financial Corporation · NASDAQ:PGC
Peapack-gladstone Financial — Q4 2022 Earnings Presentation
30 slides from Peapack-gladstone Financial's earnings presentation, Jan 26, 2023
Slide 1: Investor Update Q4 2022
Investor Update Q4 2022 Peapack-Gladstone Bank Peapack Private Wealth Management The Q4 2022 Investor Update should be read in conjunction with the Q4 2022 Earnings Release issued on January 26, 2023. Exhibit 99.1
Slide 2: Statement Regarding Forward-Looking Information
Statement Regarding Forward-Looking Information 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 may include expressions about Management’s strategies and Management’s expect
Slide 3: Q4 2022 Highlights
Core EPS $1.15; ROA 1.36%; ROE 16.09%; ROTE 17.69%.* Net interest margin up 14 bps compared to linked quarter and 66 bps YOY to 3.12%. Efficiency Ratio 52%. Continued strong asset quality; well-diversified loan portfolio. Wealth Management fees of $13.0MM comprised 20% of total revenue for the quart
Slide 4: Quarterly financial results
4 *Capital Markets consists of Mortgage Banking, SBA Lending, Corporate Advisory and Back-to-Back Swap fee income. 1 Q4 2022 Adjusted excluded life insurance proceeds ($25,000), gain on sale of property ($275,000), and fair value adjustment gain for CRA equity securities ($28,000); Q3 2022 Adjusted
Slide 5: Year-to-date financial results
5 *Capital Markets consists of Mortgage Banking, SBA Lending, Corporate Advisory and Back-to-Back Swap fee income. 1 YTD 2022 Adjusted excluded loss on sale of securities due to a balance sheet reposition strategy ($6.6MM), fair value adjustment loss for CRA equity securities ($1.7MM), life insuranc
Slide 6: Net Interest Margin Continues to Expand
6 NIM (as reported) (%) Net Interest Margin Continues to Expand +27% YOY
Slide 7: Fee Income Has Remained Resilient
Despite Capital Markets Volatility, Fee Income Has Remained Resilient 7 *Capital Markets consists of Corporate Advisory, Mortgage Banking, SBA Lending, and Back-to-Back Swap fee income. 1 YTD 2021 Adjusted excluded a benefit of life insurance proceeds ($153,000), gain on loans held for sale at lower
Slide 8: Peapack Private Wealth Management
AUM/AUA (000s) Fees (000s) Peapack Private Wealth Management 8 $9.9B AUM/AUA 37% EBITDA Margin YTD 2022 18.7% 2017-2022 CAGR $3.5MM Avg Relationship $1B YTD 2022 Gross Inflows
Slide 9: Peapack Private Wealth Management New Business Inflows
9 Peapack Private Wealth Management New Business Inflows AUM/AUA (000s) $701,000 $1,070,000 $843,000 $777,000
Slide 10: Commercial Banking Continues Our Diversification from CRE
Commercial Banking Continues Our Diversification from CRE* (Total construction exposure <1%) 10 $2.8B Outstandings 54% of Total Loans $6.8MM SBA Fees YTD $2.2MM Unused LOC Fees YTD (in millions) $1,585 *NOTE: Excludes MFL which totaled $1.9B as of 12/31/2022. $2,100 $2,474 $2,658 $2,537 $2,839 $3.9M
Slide 11: Diversified Loan Portfolio
11 Multifamily Residential /Consumer NOO CRE Commercial & Industrial Diversified Loan Portfolio Loan Mix as of 12/31/2022 Gross Loans: $5.30 billion Note: Gross loans include loans held for sale. ($2,214MM) ($1,864MM) ($625MM) ($598MM)
Slide 12: Diversification within C&I Lending
Diversification within C&I Lending 12 C&I Loans constitute 42% ($2.2B) of the total loan portfolio and includes 291 distinct NAICS codes.
Slide 13: A Well-Diversified Non-Owner Occupied CRE Portfolio
13 A Well-Diversified Non-Owner Occupied CRE Portfolio Segments experiencing market stress are conservatively underwritten with low LTVs and solid DSCR Non-Owner Occupied CRE constitutes 12% ($625MM) of the total loan portfolio. LTV 51.1% DSCR 1.51x LTV 57.5% DSCR 1.54x LTV 52.4% DSCR 1.63x LTV 50.6
Slide 14: High Quality Multifamily Loan Portfolio
High Quality Multifamily Loan Portfolio 14 Multifamily Portfolio Balance % (in $MM's) NY (Rent Regulated) $906 48.6% NY (Market Rent) $110 5.9% NJ (Rent Regulated) $338 18.1% NJ (Market Rent) $247 13.3% PA (Rent Regulated) $11 0.6% PA (Market Rent) $252 13.5% TOTAL $1,864 100.0% Rent Regulated $1,25
Slide 15: A Well-Seasoned Residential Mortgage and Consumer Loan Portfolio
15 A Well-Seasoned Residential Mortgage and Consumer Loan Portfolio Residential Mortgage and Consumer Loans constitute 11% ($598MM) of the total loan portfolio.
Slide 16: Credit Quality Metrics
NPAs / Assets (%) ALLL (ACL) / Non-Performing Loans (%) 1 30-89 Days Past Due / Gross Loans (%) Credit Quality Metrics 16 Classified Loans / Gross Loans (%) 1 Commencing on 01/01/2022, the allowance calculation is based on the CECL methodology. Prior to 01/01/2022, the calculation was based on the i
Slide 17: Personal Banking
Personal Banking* 17 $325MM average deposits per personal banking location** New York City MSA with branches in 3 of top 15 wealthiest US counties #1 Deposit Growth in Top 10 14% CAGR since 2012 92% Core Unique private banking service model Growth Upside 6% market share in an $89B deposit market *Na
Slide 18: PGC's Comparative Valuation to Wealth Management Peers
18 PGC’s Comparative Valuation to Wealth Management Peers Note: Pricing data as of 01/18/2023; TBV as reported for the period ended 09/30/2022 and not pro forma for pending acquisitions. Wealth Management Institutions: UVSP – Univest Financial Corp., CATC – Cambridge Bancorp, WSFS – WSFS Financial C
Slide 19: Peer financials and valuation comparison
Financials at and for the nine Balance Sheet YTD Profitability Valuation as of January 18, 2023 months ended September 30, 2022 LLR/ Price / Core Loans/ Gross NPAs / TCE / Core Core Cost of Fee Inc / NIX / Effic. 2023E 2024E Deposit Market Assets Deps. Loans Assets TA ROAA ROAE NIM Deps. AA Rev. AA
Slide 20: PGC Valuation: Sum-of-the-Parts Analysis
PGC Valuation: Sum-of-the-Parts Analysis (implied bank value trading at 89% TBV) 20 Assuming M&A EBITDA multiples of 12-15x for established and growing wealth management firms indicates substantial embedded value in Peapack Private Wealth Management (PPWM):
Slide 21: Investment highlights
Current valuation lags wealth management peers despite favorable key performance metrics. $10B AUM/AUA ($55MM annualized revenue) wealth management business provides a differentiated business model with significant barriers to entry. This will continue to deliver superior shareholder value. Wealth m
Slide 22: Appendix
Appendix Peapack-Gladstone Bank
Slide 23: Quarterly Balance Sheet Summary
23 Quarterly Balance Sheet Summary (Dollars in thousands)
Slide 24: Asset Quality
24 1 Amounts reflect TDRs that are paying according to restructured terms. 2 Excludes TDRs included in nonaccrual loans in the following amounts: $13.4MM 12/31/2022; $12.9MM at 09/30/2022; and $1.1MM at 12/31/2021. 3 Includes $4.5MM outstanding to U.S. governmental entities at 12/31/2022. 4 Commenci
Slide 25: Capital Summary
25 1 Tangible equity and tangible assets are calculated by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. Tangible equity as a percentage of tangible assets at period end is calculated by dividing tangible equity by tangible assets at period end.
Slide 26: Quarter Non-GAAP Financial Measures Reconciliation
Quarter Non-GAAP Financial Measures Reconciliation 26 1 Q4 2022 Adjusted excluded life insurance proceeds ($25,000), gain on sale of property ($275,000), and fair value adjustment gain for CRA equity securities ($28,000); Q3 2022 Adjusted excluded fair value adjustment loss for CRA equity securities
Slide 27: Quarter Non-GAAP Financial Measures Reconciliation
Quarter Non-GAAP Financial Measures Reconciliation (Dollars in thousands, except per share data) 27 We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial position, results and ratios. Our management inte
Slide 28: YTD Non-GAAP Financial Measures Reconciliation
YTD Non-GAAP Financial Measures Reconciliation 28 1 YTD 2022 Adjusted excluded loss on sale of securities due to a balance sheet reposition strategy ($6.6MM), fair value adjustment loss for CRA equity securities ($1.7MM), life insurance proceeds ($25,000), gain on sale of property ($275,000); YTD 20
Slide 29: YTD Non-GAAP Financial Measures Reconciliation
YTD Non-GAAP Financial Measures Reconciliation (Dollars in thousands, except per share data) 29 We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial position, results and ratios. Our management internal
Slide 30: 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 Frank A. Cavallaro Senior EVP & Chief Financial Officer (908) 306-8933
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