Peapack-gladstone Financial Corporation · NASDAQ:PGC
Peapack-gladstone Financial — Investor Presentation (October 2016)
36 slides from Peapack-gladstone Financial's investor presentation, Oct 31, 2016
Slide 1: Strategic Update: Expanding Our Reach
Strategic Update “Expanding Our Reach” Investor Presentation September 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: 3rd Quarter 2016 Highlights
• Growth in EPS – up $0.03 (8%) linked quarter, or 30% annualized. • Wealth assets under administration – grew 9% annualized to $3.50 billion. • Wealth management fee income – comprises 14% of total revenue and contributes significantly to the diversified revenue sources. • Total fee income – (inclu
Slide 4: Financial targets and outlook
• EPS Growth – High single digit to low double digit EPS growth. • Return on Equity – 10 %+ target run rate by late 2017 / early 2018. • Efficiency Ratio – Low to mid 50’s by late 2017 / early 2018. • Balance Sheet Growth / Loan Growth – 10% to 15% annual balance sheet growth; 12% to 18% annual loan
Slide 5: Our Foundation and Core Principles
A high - performing boutique bank, leaders in wealth, lending and deposit solutions, known nationally for our unparalleled client service, integrity and trust. Our Foundation 5 • Professionalism • Clients First • Compete to Win • Invested in Our Community • One Team Vision Core Principles
Slide 6: Overview, Franchise and Financial Highlights
1. Non - GAAP financial measure; refer to reconciliation on page 34. • Headquartered in Bedminster, NJ. • Four Private Banking locations: Bedminster, Morristown, Princeton, Teaneck. • 20 Branches in four affluent New Jersey counties: Somerset, Morris, Hunterdon, Union. • Delaware Trust Subsidiary. •
Slide 7: Market Overview – The Wealth Belt
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 8: 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 9: Mitigating Strategic Risk: Ensuring Our Business Remains Relevant
Mitigating Strategic Risk: Ensuring Our Business Remains Relevant 9 Board’s desire to adapt: • Need for scale • Weak share valuation • Lack of revenue growth • Robust headwinds External pressures: • Flat yield curve • Technology • Regulatory and compliance costs Emerging headwinds: • Fintech disrupt
Slide 10: People, Market, Business Model and Growth
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 11: 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 12: Our Strategy is an ongoing journey
12 Our Strategy is an ongoing journey that continually focuses on: Ensuring our Core Principles are ingrained in all staff: • Formal training on the operating behaviors necessary to deliver the core principles. • Established standard telephone greeting and service protocols utilized throughout the B
Slide 13: Perfecting the Client Experience
Perfecting the Client Experience 13 Listening to our staff and delivering a best in class employee e xperience: • Established P.A.C.E. program ( P eapack A lways C aring for E mployees). • We listened and implemented: - Programs to improve communication: strategy presentations, PGB Weekly. - Career
Slide 14: Wealth Management Overview
• $3.5B in AUA as of 09/30/16. • YTD 2016 AUA inflows are $257MM with strong pipeline. • Successful integration of Wealth Management Consultants (NJ), LLC (May 2015). ‒ E xcellent client retention. • Stage set for continued strategic acquisitions. • Relationship - based residential lending offering
Slide 15: Wealth Management 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 (Dollars in Millions) $2.00 $2.25 $2.50 $2.75 $3.00 $3.25 $3.50 $3.75 2012 2013 2014 2015 09/30/16 (Dollars in Billions) 15 $12.28 $13.84 $15.24 $17.04 $1
Slide 16: Enviable Revenue Mix
1. Revenue defined as net interest income plus all other income 2. Includes SBA Income, SWAP Income, Deposit & Loan Fees, Mortgage Banking, and BOLI Enviable Revenue Mix 77.2% 14.7% 7.1% 0.1% 0.9% 78.1% 15.7% 5.2% 0.5% 0.5% For the Year Ended December 31, 2015 For 9 Mos Ended September 30, 2016 16 T
Slide 17: Positive Operating Leverage & Improved Profitability
* Annualized 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 Levera
Slide 18: 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 Net Income Momentum $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 2013 2014 2015 9 Mos Ended 09/30/15 9 Mos Ended 09/30/16 (Dollars in Millions) $9.26 $1
Slide 19: 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 Q3 2016 (Dollars in Billions) $3.774 19 +16% Annualized Growth $3.365 $2.702 $1.967 $1.668
Slide 20: Organic Gross Loan Growth
Note: Gross loans include loans held for sale Organic Gross Loan Growth 20 $0.000 $0.500 $1.000 $1.500 $2.000 $2.500 $3.000 $3.500 2012 2013 2014 2015 Q3 2016 $2.997 $2.251 $1.576 $1.153 $3.266 +12% Annualized Growth (Dollars in Billions) Multifamily Commercial & Industrial CRE Residential, Consumer
Slide 21: Loan Composition
Gross Loans: $3.266 Billion Loan Composition 09/30/2016 Multifamily Commercial & Industrial CRE Residential, Consumer & Other 47% 20% 18% 15% 21 Target: 25% - 30% Target: 15% - 25% Target: 15% - 20% Target: 35% - 45%
Slide 22: Credit Metrics and 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 ta ngible common equity and loan loss reserves 3. NCOs/average loans for nine months ended
Slide 23: Multifamily loan portfolio
Proven track record of providing solid risk - adjusted returns Geographically diversified portfolio – as of September 30, 2016: • New York – 52%; Top Markets – Bronx and Brooklyn • New Jersey – 37%; Top Markets – Hudson, Essex, & Morris/Somerset/Union Counties • Pennsylvania – 11%; Top Markets – Sub
Slide 24: Commercial & Industrial Loans
Commercial & Industrial Loans $0 $100 $200 $300 $400 $500 $600 2012 2013 2014 2015 09/30/16 (Dollars in Millions) $115 $132 $309 $513 $598 24 +22% Annualized Growth
Slide 25: Total Deposit Growth
25 $0.000 $0.500 $1.000 $1.500 $2.000 $2.500 $3.000 $3.500 2012 2013 2014 2015 09/30/16 $2.935 $2.299 $1.647 $1.516 $3.300 Total Deposit Growth +17% Annualized Growth (Dollars in Billions) Noninterest - bearing DDA Interest - bearing Demand Savings & MMDA Time
Slide 26: Total Deposit Base Composition
Total Deposits: $3.300 B illion MRQ Cost of Int. - bearing Deposits: 0.62% MRQ Cost of Total Deposits : 0.53% Total Deposit Base Composition 09/30/2016 Noninterest-bearing Demand Interest-bearing Demand Savings & MMDA Time 34% 34% 17% 15% 26
Slide 27: Credit risk management and stress testing
• 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 28: Robust balance sheet risk management
Robust balance sheet risk management: Capital • Ratios well above well capitalized standards. • Stress test enhanced to bottom up / top down on a quarterly basis initiated in Q1 2016. • Ten stress scenarios. Liquidity • $160 million in cash and cash equivalents. • $223 million of unencumbered securi
Slide 29: Financial Highlights
Financial Highlights P EAPACK - G LADSTONE B ANK
Slide 30: Historical Income Statement
1.Includes $2.50 million of non - recurring charges related to the closure of two branch offices 2. Efficiency Ratio calculated by dividing total noninterest expenses, excluding ORE provision, as determined under GAAP, by net interest income and total noninterest income as determined under GAAP, but
Slide 31: Quarterly Income Statement
Quarterly Income Statement (as reported) 31 1.Includes $2.50 million of non - recurring charges related to the closure of two branch offices 2. Efficiency Ratio calculated by dividing total noninterest expenses, excluding ORE provision, as determined under GAAP, by net interest income and total noni
Slide 32: Historical Balance Sheet
Historical Balance Sheet 32 1. See non - GAAP reconciliation on page 34 for values (Dollars in Thousands, Except Per Share Amounts) Period Ended 2012 2013 2014 2015 Sept 30, 2016 Cash and Equivalents $119,228 $35,147 $31,207 $70,160 $159,555 Total Securities 309,118 278,479 344,245 209,614 263,709 T
Slide 33: Appendix
Appendix P EAPACK - G LADSTONE B ANK
Slide 34: 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 35: 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 36: 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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