Peapack-gladstone Financial Corporation · NASDAQ:PGC
Peapack-gladstone Financial — FY2015 Earnings Presentation
25 slides from Peapack-gladstone Financial's earnings presentation, Feb 2, 2016
Slide 1: Executing Our Strategy: Expanding Our Reach
Executing Our Strategy “Expanding Our Reach” December 31, 2015 P EAPACK - G LADSTONE B ANK
Slide 2: Quarterly and Annual EPS and Net Income
2 $0.20 $0.25 $0.30 $0.35 $0.40 Q4 2014 Q3 2015 Q4 2015 Adj* Quarterly EPS 0.38 0.35 0.32 * Yr 2015 Adj and Q4 2015 Adj as shown excludes $2.5MM of charges related to the closure of two branch offices. Including these charges, net income and EPS would have been $19,972 and $1.29 for the year and $4,
Slide 3: Total Assets, Loans, C&I and Multifamily Loans
3 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 Yr 2012 Yr 2013 Yr 2014 Yr 2015 Total Assets (In Millions) $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 Yr 2012 Yr 2013 Yr 2014 Yr 2015 Total Loans (In Millions) $0 $100 $200 $300 $400 $500 $600 Yr 2012 Yr 2013 Yr 2014 Yr 2015 Total C&I
Slide 4: Non Performing Assets and Past Due Loans
4 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 0.90% 1.00% Yr 2012 Yr 2013 Yr 2014 Yr 2015 Non Performing Assets Ratio (%) (NPAs as a % of Assets) 0.91 0.44 0.30 0.22 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 Yr 2012 Yr 2013 Yr 2014 Yr 2015 Non Performing Assets ($) (In
Slide 5: Total Capital, Book Value, Deposits
5 $0 $50 $100 $150 $200 $250 $300 Yr 2012 Yr 2013 Yr 2014 Yr 2015 Total Capital (In Millions) 276 242 171 122 $10.00 $12.00 $14.00 $16.00 $18.00 $20.00 Yr 2012 Yr 2013 Yr 2014 Yr 2015 Book Value Per Share (Capital/Shares) *“Customer” Deposits are defined as deposits excluding brokered CDs and broker
Slide 6: Wealth Division Assets Under Administration and Fee Income
6 $2,000 $2,500 $3,000 $3,500 Yr 2012 Yr 2013 Yr 2014 Yr 2015 Wealth Division Assets Under Admin (In Millions) $10,000 $12,000 $14,000 $16,000 $18,000 Yr 2013 Yr 2014 Yr 2015 Wealth Fee Income (In Thousands) 2,304 2,691 2,987 3,322 13,838 17,039 15,242 • Over $400MM of new AUA inflows in 2015, not i
Slide 7: Three Year Stock Price Performance
7 Stock Price Source: SNL (10%) 0% 10% 20% 30% 40% 50% 60% 70% 80% 12/31/12 06/30/13 12/31/13 06/30/14 12/31/14 06/30/15 12/31/15 PGC +46.4% KBW Nasdaq Bank +42.5% Q4 2013: Subscription Rights Offering Completed on 12/9/2013 Q4 2014: At - the Market Offering Completed on 12/31/2014 Three Year Stock
Slide 8: Strategic Update
On track with executing our Strategy – Expanding Our Reach : • Continued focus on growing the Wealth business. • Transitioning from Multifamily to C&I and relationship based residential lending. • CRE, including Multifamily, focused on cross - sell to enhance client profitability. Pricing/profitabil
Slide 9: Looking Forward to 2016: We Have Some Headwinds
• Multi agency CRE guidance issued in December has implications as it relates to our 700% CRE concentration and recent high rate of growth in Multifamily loans. • Certain risk management expense spends are being pulled forward in 2016 – (approximately $2MM , estimated cost ). • We anticipate $4MM in
Slide 10: We remain on course and focused on enhancing shareholder value
We remain on course and are focused on enhancing shareholder value: • Our Strategy – Expanding Our Reach – remains unchanged; Multifamily loans have reached their peak at 50% of total loans; a gradual slow down is underway. • C&I , Relationship based Mortgage Lending, and Wealth Management businesse
Slide 11: Safety and Soundness
Safety and Soundness • Superior credit risk oversight with a view toward supporting additional growth • Strong policies and procedures and best practices in governance • Forward looking perspective of emerging risks Communication Promote Strong Risk Culture Exceptional Talent • Strong internal commi
Slide 12: Multifamily Risk Management
• Experienced dedicated “big bank” risk team. • Detailed quarterly monitoring. • Semi - annual capital stress testing. • Over $200MM in participations sold in 2015 to several institutions. • Strong underwriting standards: x Minimum 1.30x DSCR. x Maximum 75% LTV. x Extensive stress testing of interes
Slide 13: Multifamily Portfolio Attributes
Geographic Diversity: • New York: 50% • New Jersey: 39% • Pennsylvania: 11% • Top NY Markets (rent regulated market): Bronx and Brooklyn • Top NJ Markets: Hudson, Essex, and Morris/Somerset/Union counties • Top PA Markets: Philadelphia suburbs, Bucks County High Quality Portfolio: • Average loan siz
Slide 14: Financial Targets: 2016 and Beyond
• EPS Growth – EPS slightly down in 2016 due to accelerated risk management costs, increased FDIC premiums, and market volatility. High single digit to low double digit “normalized EPS growth” thereafter . • Return on Equity – 10 %+ target run rate by 2017 has been delayed due to risk management exp
Slide 15: Appendix
Appendix
Slide 16: Company overview and leadership
• Wealth led, relationship - based commercial bank headquartered in “wealth belt” of New Jersey delivering private bank level service. • 95 years in business. • Strong leadership team. • Growth Strategy – “Expanding Our Reach” – launched in Q1 2013. • Four Private Banking locations: Bedminster, Morr
Slide 17: Vision Statement
A high - performing boutique bank, leaders in wealth, lending and deposit solutions, known nationally for our unparalleled client service, integrity and trust. 17 Vision Statement
Slide 18: People, Market, Growth and Profitability
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 19: We Have Added Considerable Talent
WEALTH COMMERCIAL RETAIL BNY Mellon Morgan Sta nley Bank of America Wells Fargo Bank of America Wells Fargo Bank of America/U.S. Trust Citibank JP Morgan Chase Merrill Lynch Trust Co. Chase PNC Bank HSBC TD Bank Investors Bank Wilmington Trust/M&T Wells Fargo Provident Bank Capital One Fulton Bank H
Slide 20: We Have An Enviable Revenue Mix
78% 16% 5% <1% <1% NII before Provision for LL - 78% Wealth Fee Income - 16% 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. 20 We Have An Enviable Reve
Slide 21: Efficiency Delivering Positive Operating Leverage
21 Efficiency is Delivering Positive Operating Leverage and Improved Profitability 0 50 100 150 200 250 300 350 400 Yr 2013 Yr 2014 Yr 2015 0 10 20 30 40 50 60 70 80 Yr 2013 Yr 2014 Yr 2015 228 339 285 48 67 Revenue/Average FTE (In Thousands) Net Income*/Average FTE (In Thousands) 29 *Net income for
Slide 22: 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, approximately $850 million undrawn • Interest rate shock simulation results for Net Interest Income and Economic Value of Equity monitored by ALCO and the Board of
Slide 23: Diversified Customer 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
Slide 24: Brokered, Listing Service and Secured Funding
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 man
Slide 25: Interest Rate Risk Management
• We manage to shorter duration / adjustable rate assets. • Created a loan participation program. • Customer deposit relationships strong. • Focus CDs on medium to longer term where pricing is more efficient. • Disciplined interest rate SWAP program to extend liability duration (cash flow hedges). •
Peapack-Gladstone Financial — FY2015 Earnings Presentation on 6ix