GlobeNewswire Inc | Oct 28, 2020 09:00AM EDT

October 28, 2020

Bedminster, N.J., Oct. 28, 2020 (GLOBE NEWSWIRE) -- via NewMediaWire -- Peapack-Gladstone Financial Corporation (NASDAQ Global Select Market: PGC) (the Company) announces its third quarter 2020 results.

This earnings release should be read in conjunction with the Companys Q3 2020 Investor Update (and Supplemental Financial Information), a copy of which is available on our website at www.pgbank.com and via a current report on Form 8-K on the website of the Securities and Exchange Commission at www.sec.gov.

The Company recorded total revenue of $143.22 million, net income of $23.16 million and diluted earnings per share (EPS) of $1.22 for the nine months ended September 30, 2020, compared to $128.53 million, $35.20 million and $1.81, respectively, for the nine months ended September 30, 2019.

The 2020 nine-month period included increased net interest income and increased non-interest income due principally to earnings from the Paycheck Protection Program (PPP) and increased wealth management income (primarily due to the acquisition of Point View Wealth Management acquired in September 2019) , which was partially offset by increased operating expenses (due in part to the previous mentioned firm acquired in September 2019).

The 2020 nine-month period also included a tax benefit of $3.2 million recorded in the first quarter of 2020 caused by the changes in the treatment of tax net operating losses (NOL) under the provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The decrease in net income and EPS for the 2020 nine-month period was the result of a $30.05 million provision for loan losses due to the current environment created by the COVID-19 pandemic, which led to increased qualitative loss factors when calculating the allowance for loan losses. This compared to a $2.05 million provision for the 2019 nine-month period.

For the quarter ended September 30, 2020, the Company recorded revenue of $52.36 million, net income of $13.55 million and EPS of $0.71, compared to $44.51 million, $12.23 million and $0.63, respectively, for the same three-month period last year.

The 2020 quarter included increased net interest income and increased non-interest income due principally to earnings from the PPP and increased wealth management income (primarily due to the acquisition of Point View in September 2019) , which was partially offset by increased operating expenses (due in part to the previous mentioned firm acquired in September 2019), and an increase in the provision for loan and lease losses to $5.15 million due to the current environment created by the COVID-19 pandemic, compared to an $800,000 provision for loan and lease losses for the 2019 quarter.

Douglas L. Kennedy, President and CEO, said, As I mentioned last quarter, our employees worked tirelessly to process approximately 2,500 PPP applications resulting in approximately $600 million in fundings. The Bank made a decision to sell a significant portion ($355 million) of its PPP loans in the third quarter, which generated a $7.4 million gain. The sale was to a well-respected firm that focuses on the forgiveness and ongoing servicing process associated with PPP loans, who will serve our clients well. Our client relationship is still maintained as we maintained all depository relationships (including those from the PPP loan fundings) and all loan relationships outside of PPP loans. Further the sale has given us the ability to free up internal resources to focus on generating new business and continuing to provide excellent service to our clients.

As of September 30, 2020, the Bank still holds $202 million of PPP loans (almost all of which exceed $2.0 million in original principal amount) with approximately $1.5 million of net deferred fees which will be recognized into income over the two-year maturity of the loan or as forgiven or repaid.

Mr. Kennedy also said, The COVID-19 pandemic continues to have a devastating effect on businesses both locally and nationally. We have allowed our commercial and business clients to have their loan deferred for a six-month period. As of June 30, 2020, our deferrals stood at $914 million. As of September 30, 2020, deferrals were $828 million. An additional $247 million came off deferral status in October bringing deferrals down to $581 million. An additional $449 million is scheduled to come off in November. Further, as of this writing, our deferrals in sectors with COVID elevated residual risk (Hospitality and Food Services and Retail - Non-Grocery Anchored) totaled $95 million or 2% of total loans.

For more information about the Companys loan deferrals, including a breakdown by loan type and industry, as well as detail concerning our loan exposure to industries, please see the Q3 2020 Investor Update (and Supplemental financial Information).

EXECUTIVE SUMMARY:

The following tables summarize specified financial measures for the periods shown.

Year over Year Comparison

Nine Months Nine Months Ended Ended September30, September30, Increase/ (Dollarsinmillions, 2020 2019 (Decrease) except persharedata)Netinterest $ 95.87 $ 89.36 $ 6.51 7 %incomeWealthmanagement 30.07 28.24 1.83 6 fee income(A)Capitalmarkets 4.81 4.93 (0.12 ) (2 )activity(B)Other 12.47 6.00 6.47 108 income (C)Totalother 47.35 39.17 8.18 21 incomeOperating 85.71 78.15 7.56 10 expensesPretaxincomebefore 57.51 50.38 7.13 14 provisionfor loanlossesProvisionfor loan 30.05 2.05 28.00 1,366 and leaselosses (D)Pretax 27.46 48.33 (20.87 ) (43 )incomeIncome taxexpense 4.30 13.13 (8.83 ) (67 )(E)Net income $ 23.16 $ 35.20 $ (12.04 ) (34 )%Diluted $ 1.22 $ 1.81 $ (0.59 ) (33 )%EPS Total $ 143.22 $ 128.53 $ 14.69 11 %Revenue Return onaverage 0.54 % 0.99 % (0.45 ) assetsannualizedReturn onaverage 6.07 % 9.67 % (3.60 ) equityannualized

-- The nine months ended September 30, 2020 included wealth management fee income and expense related to Point View Wealth Management, (Point View), which was acquired effective September 1, 2019. -- Capital markets activity includes loan level back-to-back swap activities, the SBA lending and sale program, and mortgage banking activities. -- The nine months ended September 30, 2020 includes a gain on sale of $7.4 million on the sale of $355 million of PPP loans. -- The nine months ended September 30, 2020 included a provision for loan and lease losses of $30.05 million, which was primarily due to the current environment created by the COVID-19 pandemic. -- The 2020 period included a $3.2 million tax benefit related to the carryback of tax NOLs to prior years when the Federal tax rate was 14% higher.

September 2020 Quarter Compared to Prior Year Quarter

Three Months Three Months Ended Ended September30, September30, Increase/ (Dollarsinmillions, 2020 2019 (Decrease) except persharedata)Netinterest $ 32.15 $ 30.09 $ 2.06 7 %incomeWealthmanagement 10.12 9.50 0.62 7 fee income(A)Capitalmarkets 1.03 2.77 (1.74 ) (63 )activity(B)Other 9.06 2.15 6.91 321 income (C)Totalother 20.21 14.42 5.79 40 incomeOperating 28.46 26.26 2.20 8 expensesPretaxincomebefore 23.90 18.25 5.65 31 provisionfor loanlossesProvisionfor loan 5.15 0.80 4.35 544 and leaselosses (D)Pretax 18.75 17.45 1.30 7 incomeIncome tax 5.20 5.22 (0.02 ) (0 )expenseNet income $ 13.55 $ 12.23 $ 1.32 11 %Diluted $ 0.71 $ 0.63 $ 0.08 12 %EPS Total $ 52.36 $ 44.51 $ 7.85 18 %Revenue Return onaverage 0.89 % 1.00 % (0.11 ) assetsannualizedReturn onaverage 10.53 % 9.87 % 0.66 equityannualized

-- The September 2020 quarter included a full quarter of wealth management fee income and expense related to Point View, which was acquired effective September 1, 2019. -- Capital markets activity includes loan level back-to-back swap activities, the SBA lending and sale program, and mortgage banking activities. -- The quarter ended September 30, 2020 includes a gain on sale of $7.4 million on the sale of $355 million of PPP loans. -- The September 2020 quarter included a provision for loan and lease losses of $5.15 million. The increase in the provision for loan and lease losses was primarily due to the current environment created by the COVID-19 pandemic.

September 2020 Quarter Compared to Linked Quarter

Three Months Three Ended Months Ended September30, June30, Increase/ (Dollars inmillions, 2020 2020 (Decrease) except pershare data)Netinterest $ 32.15 $ 31.97 $ 0.18 1 %incomeWealthmanagement 10.12 10.00 0.12 1 fee incomeCapitalmarkets 1.03 1.01 0.02 2 activity(A)Other 9.06 1.61 7.45 463 income (B)Total other 20.21 12.62 7.59 60 incomeOperating 28.46 29.01 (0.55 ) (2 )expensesPretaxincomebefore 23.90 15.58 8.32 53 provisionfor loanlossesProvisionfor loan 5.15 4.90 0.25 5 and leaselossesPretax(loss)/ 18.75 10.68 8.07 76 incomeIncome tax 5.20 2.44 2.76 113 expenseNet income $ 13.55 $ 8.24 $ 5.31 64 %Diluted EPS $ 0.71 $ 0.43 $ 0.28 65 % Total $ 52.36 $ 44.59 $ 7.77 17 %Revenue Return onaverage 0.89 % 0.56 % 0.33 assetsannualizedReturn onaverage 10.53 % 6.56 % 3.97 equityannualized

-- Capital markets activity includes loan level back-to-back swap activities, the SBA lending and sale program, and mortgage banking activities. -- The quarter ended September 30, 2020 includes a gain on sale of $7.4 million on the sale of $355 million of PPP loans.

The Companys near-term priorities include:

-- Continued emphasis on the health and safety of our employees and clients. -- Actively manage credit risk associated with the COVID-19 pandemic. -- Grow and expand our core wealth management and commercial banking businesses. -- Prudently manage costs, capital and liquidity, but remain opportunistic for accretive wealth M&A and talent lift-outs. -- Evaluate office space and branch requirements. -- Accelerate digital enhancement initiatives to improve the client experience. -- Grow fee income to 35% to 45% of total bank revenue.

Other select highlights for the quarter included:

-- Wealth management fee income, which comprised approximately 21% of the Companys total revenue for the nine-months ended September 30, 2020, continues to contribute significantly to the Companys diversified revenue sources. -- As of September 30, 2020, total C&I loans (including PPP loans) comprised 43% of the total loan portfolio. -- Deposits totaled $4.86 billion at September 30, 2020. This reflected net growth of $616 million or 15% (19% annualized) when compared to $4.24 billion at December 31, 2019. -- The Companys core net interest margin stabilized in the quarter when compared to the June 2020 quarter. (See subsequent discussion of Net Interest Income / Net Interest Margin) -- In addition to $1.3 billion (22% of total assets) of balance sheet liquidity (investments, interest-earning deposits and cash) as of September 30, 2020, the Company also has access to approximately $2.7 billion of available secured funding at the Federal Home Loan Bank and the Federal Reserve. -- The Companys and Banks capital ratios at September 30, 2020 remain strong and the Companys tangible book value per share at September 30, 2020 was $25.53 reflecting an increase of 7% from $23.91 at September 30, 2019, despite a higher than normal provision for loan and lease losses during 2020. -- Nonperforming assets at September 30, 2020 declined $18.1 million to $8.7 million, or 0.15% of total assets at September 30, 2020, from $26.8 million or 0.43% at June 30, 2020.

SUPPLEMENTAL QUARTERLY DETAILS

Wealth Management Business

In the September 2020 quarter, the Banks wealth management business generated $10.12 million in fee income, compared to $9.50 million for the September 2019 quarter, and $10.00 million for the June 2020 quarter. The September 2020 and June 2020 quarters included three months of fee income related to Point View, which was acquired effective September 1, 2019, while the September 2019 quarter included one month of fee income.

The market value of the Companys assets under management and/or administration (AUM/AUA) increased from $7.2 billion at June 30, 2020 to a record $7.6 billion at September 30, 2020, reflecting a 6% (22% annualized) increase.

John P. Babcock, President of the Peapack Private Wealth Management division, said, Client retention during the COVID-19 crisis continues to be excellent with negligible account closings and no atypical withdrawal activity. Proactive client outreach continues at full strength. Babcock went on to note, Year-to-date gross client inflows totaled $528 million. We continue to look to grow our wealth business organically and through acquisition, and our pipeline for both is strong. At year-end 2020, we will combine two more of our acquired RIAs with Peapack Private to further integrate our wealth acquisitions.

Loans / Commercial Banking

Total loans of $4.46 billion at September 30, 2020 increased $47 million when compared to the December 31, 2019 balance, and declined $441 million from $4.90 billion at June 30, 2020. Growth as compared to December 31, 2019 was driven by robust PPP loan originations of $596 million during the second quarter of 2020, which was partially offset by the sale of $355 million of PPP loans during the third quarter of 2020. Excluding PPP loan originations, 2020 origination levels were less than 2019 due to the COVID-19 pandemic.

Total C&I loans (including equipment finance leases and loans of $686 million and $202 million of PPP loans) at September 30, 2020 were $1.93 billion. This reflected net growth of $155 million when compared to $1.78 billion at December 31, 2019. Excluding the $202 million of PPP loans at September 30, 2020, total C&I loans declined $47 million in 2020 due to the paydown of several large lines of credit, as well the Companys workout and asset recovery efforts, including several nonaccrual and/or classified credits during Q3 2020.

The Company maintains a well-diversified loan portfolio, by loan type and by industry concentration, as detailed in the Q3 2020 Investor Update (and Supplemental Financial Information).

Mr. Kennedy noted, Our commercial pipelines going into the fourth quarter are strong. Further, and as I noted in prior periods, our Corporate Advisory business complements our commercial banking and wealth management businesses by giving us the capability to engage in high level strategic debt, capital and valuation analysis coupled with succession, estate and wealth planning strategies, enabling us to provide a unique boutique level of service, giving us a competitive advantage over much of our peers. Our Corporate Advisory pipelines are also strong.

Funding / Liquidity / Interest Rate Risk Management

The Company actively manages its deposit base to reduce reliance on wholesale sourced deposits, volatility, and/or operational risk. Total deposits at September 30, 2020 were $4.86 billion reflecting an increase of $616 million when compared to $4.24 billion at December 31, 2019. Noninterest bearing demand deposits increased $309 million, interest bearing demand increased $348 million, brokered deposits declined $50 million, and higher costing CDs declined $62 million. Mr. Kennedy noted, Of our total deposits, only 17 percent are above the FDIC insurance limit, reinforcing the core nature of our deposit base.

For the quarter ended September 30, 2020, the Companys balance sheet liquidity (investments, interest-earning deposits and cash) totaled $1.3 billion (or 22% of assets). In addition to the $1.3 billion of balance sheet liquidity, the Company also had approximately $1.7 billion of secured funding available from the Federal Home Loan Bank. Additionally, the Company also had $1.0 billion of secured funding available from the Federal Reserve Discount Window.

Mr. Kennedy noted, As a commercial bank, a large portion of our loans reprice when the Fed changes rates. The 150-basis point reduction in target Fed Funds near the end of Q1 2020 reduced the Companys interest income earned on assets. However, we were able to strategically reprice our deposits over time to offset much of that decline by the end of 2020.

Net Interest Income (NII)/Net Interest Margin (NIM)

Nine Months Ended Nine Months Ended September30, 2020 September30, 2019 NII NIM NII NIM NII/NIMexcluding $ 91,901 2.51 % $ 88,762 2.70 % the belowPrepaymentpremiumsreceived on 1,005 0.02 % 914 0.03 % loanpaydownsEffect ofmaintainingexcess (1,000 ) -0.19 % (316 ) -0.08 % interestearningcashEffect of 3,961 -0.01 % ? 0.00 % PPP loansNII/NIM as $ 95,867 2.33 % $ 89,360 2.65 % reported Three Months Ended Three Months Ended Three Months Ended September30, 2020 June 30, 2020 September30, 2019 NII NIM NII NIM NII NIM NII/NIMexcluding $ 30,327 2.45 % $ 29,881 2.45 % $ 29,896 2.67 % the belowPrepaymentpremiumsreceived on 104 0.01 % 376 0.03 % 236 0.02 % loanpaydownsEffect ofmaintainingexcess (266 ) -0.24 % (263 ) -0.19 % (47 ) -0.09 % interestearningcashEffect of 1,984 -0.02 % 1,977 -0.02 % ? 0.00 % PPP loansNII/NIM as $ 32,149 2.20 % $ 31,971 2.27 % $ 30,085 2.60 % reported

As shown above, the Companys reported NIM declined 7 basis points compared to the linked quarter, while core NIM remained flat compared to the linked quarter.

Future net interest income will be benefitted by the repricing of the Companys time certificates of deposit (CDs). Over the next 12-months, approximately $510 million of CDs with an average rate of approximately 1.35% will mature.

Other Noninterest Income (other than Wealth Management fee income)

Noninterest income from Capital Markets activities (loan level back-to-back swap activities, the SBA lending and sale program, and mortgage banking income) totaled $1.03 million for the September 2020 quarter compared to $1.01 million for the June 2020 quarter and $2.77 million for the September 2019 quarter. The September 2020 quarter reflected increased mortgage banking activity due to greater refinance activity in the current low rate environment. The higher mortgage banking activity was offset by a significant decrease in loan level back-to-back swap activities and SBA lending and sale program, as there is, and will continue to be, minimal activity for such in the current environment.

Operating Expenses

The Companys total operating expenses were $28.46 million for the quarter ended September 30, 2020, compared to $29.01 million for the June 2020 quarter and $26.26 million for the September 2019 quarter. The September 2020 and June 2020 quarters included three months of expenses (approximately $500,000 per quarter) related to Point Views operations while the September 2019 quarter included one month. The June 2020 quarter also included a one-time expense of $278,000 related to the consolidation of the Whitehouse branch into the Oldwick branch. Thus far, the Bank has retained the majority of the deposits that were associated with that branch. The Company also spent $225,000 on marketing and advertising related to the PPP program during the June 2020 quarter. FDIC insurance expense increased to $605,000 in the September 2020 quarter from $455,000 in the June 2020 quarter and a credit of $277,000 in the September 2019 quarter. The increase in FDIC expense in the September 2020 quarter was due to average asset growth, which negatively impacted some of the ratios used in calculating the quarterly assessment.

Mr. Kennedy noted, During the fourth quarter of 2020, the Company will consolidate two of its private banking locations into existing offices which will result in future expense savings of approximately $200,000 on an annual basis. We continue to further evaluate office space and branch requirements.

Income Taxes

The effective tax rate for the three months ended September 30, 2020 was 27.75%, as compared to 29.90% for the September 2019 quarter. The slightly higher rate in the September 2019 quarter included higher NJ State Income Tax due to the change in NJ tax law.

During the first quarter of 2020, the Company recorded a $3.34 million tax benefit, principally due to a $3.2 million Federal income tax benefit that resulted from a tax NOL carryback. The Company had a $23 million operating loss for tax purposes in 2018 (when the Federal tax rate was 21%) resulting from accelerated tax depreciation. Under the CARES Act, the Company was allowed to carry this NOL back to a period when the Federal tax rate was 35%, generating a permanent tax benefit.

Asset Quality / Provision for Loan and Lease Losses

For further details, see the Q3 2020 Investor Update (and Supplemental Financial Information).

Nonperforming assets at September 30, 2020 (which does not include troubled debt restructured loans that are performing in accordance with their terms) were $8.7 million, or 0.15% of total assets, down from $26.7 million, or 0.43% of total assets, at June 30, 2020 and $28.9 million, or 0.56% of total assets, at December 31, 2019. The September 30, 2020 balance excludes one $10.0 million commercial loan classified as held for sale. Total loans past due 30 through 89 days and still accruing were $6.6 million at September 30, 2020 (of which $4.1 million made their past due payments in October), compared to $3.8 million at June 30, 2020 and $1.9 million at December 31, 2019. During the third quarter of 2020, the Companys asset recovery and workout efforts reduced nonperforming and classified assets.

For the quarter ended September 30, 2020, the Companys provision for loan and lease losses was $5.15 million compared to $4.90 million for the June 2020 quarter and $800,000 for the September 2019 quarter. The increased provision for loan and lease losses in the September and June 2020 quarters reflect the current environment created by the COVID-19 pandemic which led to increased qualitative loss factors when calculating the allowance for loan losses. The Companys provision for loan and lease losses (and its allowance for loan and lease losses) also reflect, among other things, the Companys assessment of asset quality metrics, net loan growth, net charge-offs/recoveries, and the composition of the loan portfolio.

At September 30, 2020, the allowance for loan and lease losses was $66.15 million (1.56% of total loans, excluding PPP loans), compared to $66.07 million at June 30, 2020 (1.52% of total loans), and $43.68 million at December 31, 2019 (0.99% of total loans).

Capital

The Companys capital position during the September 2020 quarter was benefitted by net income of $13.55 million.

The Companys and Banks capital ratios at September 30, 2020 all remain strong. Such ratios remain well above regulatory well capitalized standards.

The Company employs quarterly capital stress testing run under multiple scenarios, including a no growth, severely adverse case. In such case as of June 30, 2020, the Bank remains well capitalized over a two-year stress period. With a Pandemic stress overlay on this case, the Bank still remains well capitalized over the two-year stress period. For further details, see the Q3 2020 Investor Update (and Supplemental Financial Information).

On October 27, 2020, the Company declared a cash dividend of $0.05 per share payable on November 25, 2020 to shareholders of record on November 10, 2020.

ABOUT THE COMPANY

Peapack-Gladstone Financial Corporation is a New Jersey bank holding company with total assets of $6.0 billion and AUM/AUA administration of $7.6 billion as of September 30, 2020. Founded in 1921, Peapack-Gladstone Bank is a commercial bank that provides innovative wealth management, commercial and retail solutions, including residential lending and online platforms, to businesses and consumers. Peapack Private, the banks wealth management division, offers comprehensive financial, tax, fiduciary and investment advice and solutions, to individuals, families, privately-held businesses, family offices and not-for-profit organizations, which help them to establish, maintain and expand their legacy. Together, Peapack-Gladstone Bank and Peapack Private offer an unparalleled commitment to client service. Visit www.pgbank.com and www.peapackprivate.com for more information.

The foregoing may contain 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 managements confidence and strategies and managements expectations about new and existing programs and products, investments, relationships, opportunities and market conditions. These statements may be identified by such forward-looking terminology as expect, look, believe, anticipate, may or similar statements or variations of such terms. Actual results may differ materially from such forward-looking statements. Factors that may cause results to differ materially from such forward-looking statements include, but are not limited to:

-- our inability to successfully grow our business and implement our strategic plan, including an inability to generate revenues to offset the increased personnel and other costs related to the strategic plan; -- the impact of anticipated higher operating expenses in 2020 and beyond; -- our inability to successfully integrate wealth management firm acquisitions; -- our inability to manage our growth; -- our inability to successfully integrate our expanded employee base; -- an unexpected decline in the economy, in particular in our New Jersey and New York market areas; -- declines in our net interest margin caused by the interest rate environment and/or our highly competitive market; -- declines in value in our investment portfolio; -- impact on our business from a pandemic event on our business, operations, customers, allowance for loan losses and capital levels; -- higher than expected increases in our allowance for loan and lease losses; -- higher than expected increases in loan and lease losses or in the level of nonperforming loans; -- changes in interest rates; -- decline in real estate values within our market areas; -- legislative and regulatory actions (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Basel III and related regulations) that may result in increased compliance costs; -- successful cyberattacks against our IT infrastructure and that of our IT and third party providers; -- higher than expected FDIC insurance premiums; -- adverse weather conditions; -- our inability to successfully generate new business in new geographic markets; -- our inability to execute upon new business initiatives; -- our lack of liquidity to fund our various cash obligations; -- reduction in our lower-cost funding sources; -- our inability to adapt to technological changes; -- claims and litigation pertaining to fiduciary responsibility, environmental laws and other matters; -- our inability to retain key employees; -- demands for loans and deposits in our market areas; -- adverse changes in securities markets; -- changes in accounting policies and practices; and -- other unexpected material adverse changes in our operations or earnings.

Further, given its ongoing and dynamic nature, it is difficult to predict the full impact of theCOVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated and when and whether the gradual reopening of businesses will result in a meaningful increase in economic activity. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations:

-- demand for our products and services may decline, making it difficult to grow assets and income; -- if the economy is unable to substantially reopen, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; -- collateral for loans,especially real estate, may decline in value, which could cause loan losses to increase; -- our allowance for loan losses may have to be increased if borrowers experience financial difficulties, which will adversely affect our net income; -- the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; -- as the result of the decline in the Federal Reserve Boards target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income; -- a material decrease in net income or a net loss over several quarters could result in a decrease in the rate of our quarterly cash dividend; -- our wealth management revenues may decline with continuing market turmoil; -- a worsening of business and economic conditions or in the financial markets could result in an impairment of certain intangible assets, such as goodwill; -- the unanticipated loss or unavailability of key employees due to the outbreak, which could harm our ability to operate our business or execute our business strategy, especially as we may not be successful in finding and integrating suitable successors; -- we may face litigation, regulatory enforcement and reputation risk as a result of our participation in the PPP and the risk that the SBA may not fund some or all PPP loan guaranties; -- our cyber security risks are increased as the result of an increase in the number of employees working remotely; and -- FDIC premiums may increase if the agency experience additional resolution costs.

A discussion of these and other factors that could affect our results is included in our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2019. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Companys expectations.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

(Tables to follow)

PEAPACK-GLADSTONE FINANCIAL CORPORATIONSELECTED CONSOLIDATED FINANCIAL DATA(Dollars in Thousands, except share data)(Unaudited)

For the Three Months Ended Sept 30, June 30, March 31, Dec 31, Sept 30, 2020 2020 2020 2019 2019 Income Statement Data:Interest income $ 40,174 $ 41,649 $ 45,395 $ 45,556 $ 45,948 Interest 8,025 9,678 13,648 14,642 15,863 expenseNet interest 32,149 31,971 31,747 30,914 30,085 incomeWealthmanagement fee 10,119 9,996 9,955 10,120 9,501 incomeService charges 785 695 816 893 882 and feesBank owned life 314 318 328 325 332 insuranceGain on loansheld for saleat fair value 954 550 292 344 198 (Mortgagebanking) (A)Gain/(loss) onloans held forsale at lower 7,429 ? (3 ) (4 ) (6 )of cost orfair value(B)Fee incomerelated to loanlevel, ? 202 1,418 2,459 2,349 back-to-backswaps (A)Gain on sale of 79 258 1,054 929 224 SBA loans (A)Other income 531 482 459 504 902 Securitiesgains/(losses), ? 125 198 (45 ) 34 netTotal other 20,211 12,626 14,517 15,525 14,416 incomeSalaries andemployee 19,202 19,186 19,226 17,954 17,476 benefitsPremises and 4,109 4,036 4,043 3,898 3,849 equipmentFDIC insurance 605 455 250 ? (277 )expenseOther expenses 4,545 5,337 4,716 4,849 5,211 Total operating 28,461 29,014 28,235 26,701 26,259 expensesPretax incomebefore 23,899 15,583 18,029 19,738 18,242 provision forloan lossesProvision forloan and lease 5,150 4,900 20,000 1,950 800 losses (C)Income/(loss)before income 18,749 10,683 (1,971 ) 17,788 17,442 taxesIncome taxexpense/ 5,202 2,441 (3,344 ) 5,555 5,216 (benefit) (D)Net income $ 13,547 $ 8,242 $ 1,373 $ 12,233 $ 12,226 Total revenue $ 52,360 $ 44,597 $ 46,264 $ 46,439 $ 44,501 (E)Per Common Share Data:Earnings per $ 0.72 $ 0.44 $ 0.07 $ 0.64 $ 0.63 share (basic)Earnings per 0.71 0.43 0.07 0.64 0.63 share (diluted)Weightedaverage numberof common sharesoutstanding:Basic 18,908,337 18,872,070 18,858,343 18,966,917 19,314,666 Diluted 19,132,650 19,059,822 19,079,575 19,207,738 19,484,905 Performance Ratios:Return onaverage assets 0.89 % 0.56 % 0.11 % 0.98 % 1.00 %annualized(ROAA)Return onaverage equity 10.53 % 6.56 % 1.08 % 9.81 % 9.87 %annualized(ROAE)Net interestmargin 2.20 % 2.27 % 2.57 % 2.60 % 2.60 %(tax-equivalentbasis)GAAP efficiency 54.36 % 65.06 % 61.03 % 57.5 0% 59.01 %ratio (F)Operatingexpenses / 1.86 % 1.97 % 2.18 % 2.13 % 2.16 %average assetsannualized

-- Gain on loans held for sale at fair value (mortgage banking), fee income related to loan level, back-to-back swaps and gain on sale of SBA loans are all included in capital markets activity as referred to within the earnings release. -- Includes gain on sale of PPP loans of 355 million completed in the September quarter. -- The March 2020, June 2020 and September 2020 quarter included a higher provision for loan and lease losses primarily due to the current environment created by the COVID-19 pandemic. -- The March 2020 quarter included a $3.2 million tax benefit related to the carryback of tax NOLs to prior years when the Federal tax rate was 14% higher. -- Total revenue includes net interest income plus total other income. -- Calculated as total operating expenses as a percentage of total revenue. For Non-GAAP efficiency ratio, see Non-GAAP financial measures reconciliation included in these tables.



PEAPACK-GLADSTONE FINANCIAL CORPORATIONSELECTED CONSOLIDATED FINANCIAL DATA(Dollars in Thousands, except share data)(Unaudited)

For the Nine Months Ended September 30, Change 2020 2019 $ % Income Statement Data:Interest income $ 127,218 $ 135,114 $ (7,896 ) -6 %Interest 31,351 45,754 (14,403 ) -31 %expenseNet interest 95,867 89,360 6,507 7 %incomeWealthmanagement fee 30,070 28,243 1,827 6 %incomeService charges 2,296 2,595 (299 ) -12 %and feesBank owned life 960 996 (36 ) -4 %insuranceGain on loansheld for saleat fair value 1,796 377 1,419 376 %(Mortgagebanking) (A)Gain on loansheld for saleat lower of 7,426 (6 ) 7,432 -123867 %cost or fairvalue (B)Fee incomerelated to loanlevel, 1,620 3,340 (1,720 ) -51 %back-to-backswaps (A)Gain on sale of 1,391 1,216 175 14 %SBA loans (A)Other income 1,472 2,248 (776 ) -35 %Securitiesgains/(losses), 323 162 161 99 %netTotal other 47,354 39,171 8,183 21 %incomeSalaries andemployee 57,614 52,175 5,439 10 %benefitsPremises and 12,188 10,837 1,351 12 %equipmentFDIC insurance 1,310 277 1,033 373 %expenseOther expenses 14,598 14,858 (260 ) -2 %Total operating 85,710 78,147 7,563 10 %expensesPretax incomebefore 57,511 50,384 7,127 14 %provision forloan lossesProvision forloan and lease 30,050 2,050 28,000 1366 %losses (C)Income before 27,461 48,334 (20,873 ) -43 %income taxesIncome tax(benefit)/ 4,299 13,133 (8,834 ) -67 %expense (D)Net income $ 23,162 $ 35,201 $ (12,039 ) -34 % Total revenue $ 143,221 $ 128,531 $ 14,690 11 %(E)Per Common Share Data:Earnings per $ 1.23 $ 1.82 $ (0.59 ) -32 %share (basic)Earnings per 1.22 1.81 (0.59 ) -33 %share (diluted)Weightedaverage numberof common sharesoutstanding:Basic 18,879,688 19,370,627 (490,939 ) -3 %Diluted 19,052,605 19,496,721 (444,116 ) -2 %Performance Ratios:Return onaverage assets 0.54 % 0.99 % (0.45 )% -46 %annualized(ROAA)Return onaverage equity 6.07 % 9.67 % (3.60 )% -37 %annualized(ROAE)Net interestmargin 2.33 % 2.65 % (0.32 )% -12 %(tax-equivalentbasis)GAAP efficiency 59.84 % 60.80 % (0.95 )% -2 %ratio (F)Operatingexpenses / 1.99 % 2.21 % (0.22 )% -10 %average assetsannualized

(A) Gain on loans held for sale at fair value (mortgage banking), fee income related to loan level, back-to-back swaps and gain on sale of SBA loans are all included in capital markets activity as referred to within the earnings release.(B) Includes gain on sale of PPP loans of $355 million completed in the September quarter.(C) The increase in the provision for loan and lease losses in 2020 was primarily due to the current environment created by the COVID-19 pandemic. (D) 2020 year included a $3.2 million tax benefit related to the carryback of tax NOLs to prior years when the Federal tax rate was 14% higher.(E) Total revenue includes net interest income plus total other income.(F) Calculated as total operating expenses as a percentage of total revenue. For Non-GAAP efficiency ratio, see Non-GAAP financial measures reconciliation included in these tables.

PEAPACK-GLADSTONE FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF CONDITION(Dollars in Thousands)(Unaudited)

As of Sept 30, June 30, March 31, Dec 31, Sept 30, 2020 2020 2020 2019 2019 ASSETS Cash and due from $ 8,400 $ 5,608 $ 6,171 $ 6,591 $ 5,770 banksFederal funds sold 102 102 102 102 101 Interest-earning 670,863 617,117 767,730 201,492 221,242 depositsTotal cash and cash 679,365 622,827 774,003 208,185 227,113 equivalentsSecurities 596,929 539,742 400,558 390,755 349,989 available for saleEquity security 15,159 15,159 14,034 10,836 7,881 FHLB and FRB stock, 18,433 18,598 40,871 24,068 21,403 at costResidential 532,120 536,015 532,063 552,019 561,543 mortgageMultifamily 1,168,796 1,178,494 1,203,487 1,210,003 1,197,093 mortgageCommercial mortgage 722,678 761,910 760,648 761,244 721,261 Commercial loans 1,930,984 2,316,125 1,810,214 1,776,450 1,575,076 (A)Consumer loans 51,859 53,111 53,365 54,372 53,829 Home equity lines 52,194 54,006 55,856 57,248 58,423 of creditOther loans 260 272 347 349 380 Total loans 4,458,891 4,899,933 4,415,980 4,411,685 4,167,605 Less: Allowancesfor loan and lease 66,145 66,065 63,783 43,676 41,580 lossesNet loans 4,392,746 4,833,868 4,352,197 4,368,009 4,126,025 Premises and 21,668 21,449 21,243 20,913 20,898 equipmentOther real estate 50 50 50 50 336 ownedAccrued interest 22,192 15,956 11,816 10,494 11,759 receivableBank owned life 46,645 46,479 46,309 46,128 45,940 insuranceGoodwill and other 39,622 39,943 40,265 40,588 41,111 intangible assetsFinance lease 4,517 4,704 4,891 5,078 5,265 right-of-use assetsOperating lease 10,011 10,810 11,553 12,132 10,328 right-of-use assetsOther assets (B) 110,770 111,630 113,668 45,643 57,361 TOTAL ASSETS $ 5,958,107 $ 6,281,215 $ 5,831,458 $ 5,182,879 $ 4,925,409 LIABILITIES Deposits: Noninterest-bearing $ 838,307 $ 911,989 $ 581,085 $ 529,281 $ 544,464 demand depositsInterest-bearing 1,858,529 1,804,102 1,680,452 1,510,363 1,352,471 demand depositsSavings 127,737 123,140 112,668 112,652 115,448 Money market 1,251,349 1,183,603 1,163,410 1,196,313 1,196,188 accountsCertificates of 586,801 629,941 651,000 633,763 583,425 deposit ? RetailCertificates ofdeposit ? Listing 32,677 35,327 38,895 47,430 55,664 ServiceSubtotal ?customer? 4,695,400 4,688,102 4,227,510 4,029,802 3,847,660 depositsIB Demand ? 130,000 130,000 180,000 180,000 180,000 BrokeredCertificates of 33,750 33,736 33,723 33,709 33,696 deposit ? BrokeredTotal deposits 4,859,150 4,851,838 4,441,233 4,243,511 4,061,356 Short-term 15,000 15,000 515,000 128,100 67,000 borrowingsFHLB advances 105,000 105,000 105,000 105,000 105,000 Paycheck ProtectionProgram Liquidity 183,790 535,837 ? ? ? Facility (C)Finance lease 6,976 7,196 7,402 7,598 7,793 liabilityOperating lease 10,318 11,116 11,852 12,423 10,619 liabilitySubordinated debt, 83,585 83,529 83,473 83,417 83,361 netOther liabilities 156,472 163,719 160,173 91,227 94,930 (B)Due to brokers 15,088 ? 10,885 7,951 ? TOTAL LIABILITIES 5,435,379 5,773,235 5,335,018 4,679,227 4,430,059 Shareholders? 522,728 507,980 496,440 503,652 495,350 equityTOTAL LIABILITIES ANDSHAREHOLDERS? $ 5,958,107 $ 6,281,215 $ 5,831,458 $ 5,182,879 $ 4,925,409 EQUITYAssets undermanagement and / oradministration atPeapack-GladstoneBank?s Private $ 7.6 $ 7.2 $ 6.4 $ 7.5 $ 7.0 Wealth ManagementDivision (marketvalue, not includedabove-dollars inbillions)

(A) Includes PPP loans of $202 million at September 30, 2020 and $547 million at June 30, 2020.(B) The increase in other assets and other liabilities at March 31, 2020, June 30, 2020 and September 30, 2020 was primarily due to the change in the fair value of our back-to-back swap program.(C) Represents funding provided by the Federal Reserve for pledged PPP loans at June 30, 2020 and September 30, 2020.

PEAPACK-GLADSTONE FINANCIAL CORPORATIONSELECTED BALANCE SHEET DATA(Dollars in Thousands)(Unaudited)

As of Sept 30, June 30, March Dec 31, Sept 30, 31, 2020 2020 2020 2019 2019 Asset Quality:Loans pastdue over 90days and $ ? $ ? $ ? $ ? $ ? stillaccruingNonaccrual 8,611 26,697 29,324 28,881 29,383 loans (A)Other real 50 50 50 50 336 estate ownedTotalnonperforming $ 8,661 $ 26,747 $ 29,374 $ 28,931 $ 29,719 assets Nonperformingloans to 0.19 % 0.54 % 0.66 % 0.65 % 0.71 %total loansNonperformingassets to 0.15 % 0.43 % 0.50 % 0.56 % 0.60 %total assets Performing $ 2,278 $ 2,376 $ 2,389 $ 2,357 $ 2,527 TDRs (B)(C) Loans pastdue 30through 89 $ 6,609 $ 3,785 $ 8,261 $ 1,910 $ 6,333 days andstillaccruing (D) Loans subjectto special $ 129,700 $ 27,922 $ 13,222 $ 13,643 $ 21,870 mention Classified $ 41,263 $ 63,562 $ 58,938 $ 58,908 $ 53,882 loans Impaired $ 15,514 $ 33,708 $ 36,369 $ 35,924 $ 36,627 loans Allowance forloan and lease losses:Beginning of $ 66,065 $ 63,783 $ 43,676 $ 41,580 $ 39,791 periodProvision forloan and 5,150 4,900 20,000 1,950 800 lease losses(Charge-offs)/recoveries, (5,070 ) (2,618 ) 107 146 989 netEnd of period $ 66,145 $ 66,065 $ 63,783 $ 43,676 $ 41,580 ALLL tononperforming 768.15 % 247.46 % 217.51 % 151.23 % 141.51 %loansALLL to total 1.56 % 1.52 % 1.44 % 0.99 % 1.00 %loans (E)General ALLLto total 1.56 % 1.42 % 1.30 % 0.93 % 0.93 %loans (E)(F)

(A) Excludes one commercial loan held for sale of $10.0 million at September 30, 2020.(B) Amounts reflect TDRs that are paying according to restructured terms.(C) Amount does not include $15.2 million at September 30, 2020, $23.2 million at June 30, 2020, $25.9 million at March 31, 2020, $25.8 million at December 31, 2019 and $19.7 million at September 30, 2019, of TDRs included in nonaccrual loans.(D) Of the $6.6 million at September 30, 2020, $4.1 million made their past due payments in October. Includes a non-owner occupied CRE loan with a balance of $3.5 million at March 31, 2020. This loan was brought fully current in early April 2020. The $6.3 million at September 30, 2019 included one $4.3 million commercial real estate loan that was in process of a rate modification (not a TDR modification). The loan was brought fully current in early October 2019.(E) The September 30, 2020 and June 30, 2020 ALLL coverage ratios exclude PPP loans of $202 million and $547 million, respectively, from total loans.(F) Total ALLL less specific reserves equals general ALLL.

PEAPACK-GLADSTONE FINANCIAL CORPORATIONSELECTED BALANCE SHEET DATA(Dollars in Thousands)(Unaudited)

September30, December 31, September30, 2020 2019 2019 Capital Adequacy Equity to total 8.77 % 9.72 % 10.06 %assets (A)(J)Tangible Equityto tangible 8.16 % 9.01 % 9.30 %assets (B)Tangible Equityto tangibleassets excluding 8.45 % 9.01 % 9.30 %PPP loans(C)Book value per $ 27.62 $ 26.61 $ 26.07 share (D)Tangible BookValue per share $ 25.53 $ 24.47 $ 23.91 (E)

September30, December 31, September30, 2020 2019 2019 RegulatoryCapital ? HoldingCompanyTier I $ 483,782 8.54 % $ 463,521 9.33 % $ 455,179 9.43 % leverageTier Icapital to 483,782 11.76 463,521 11.14 455,179 11.23 risk-weightedassetsCommon equitytier Icapital ratio 483,747 11.75 463,520 11.14 455,177 11.23 torisk-weightedassetsTier I & IIcapital to 618,993 15.04 590,614 14.20 580,120 14.31 risk-weightedassets RegulatoryCapital ? BankTier I $ 547,761 9.68 % $ 527,833 10.63 % $ 534,351 11.08 % leverage (F)Tier Icapital to 547,761 13.33 527,833 12.70 534,351 13.20 risk-weightedassets (G)Common equitytier Icapital ratio 547,726 13.33 527,832 12.70 534,349 13.20 torisk-weightedassets (H)Tier I & IIcapital to 599,314 14.58 571,509 13.76 575,931 14.23 risk-weightedassets (I)

(A) Equity to total assets is calculated as total shareholders equity as a percentage of total assets at period end. (B) 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. See Non-GAAP financial measures reconciliation included in these tables. (C) Tangible equity and tangible assets excluding PPP loans are calculated by excluding the balance of intangible assets from shareholders equity and excluding the balance of intangible assets and PPP loans from total assets. Tangible equity as a percentage of tangible assets excluding PPP loans at period end is calculated by dividing tangible equity by tangible assets excluding PPP loans at period end. See Non-GAAP financial measures reconciliation included in these tables. (D) Book value per common share is calculated by dividing shareholders equity by period end common shares outstanding (E) Tangible book value per excludes intangible assets. Tangible book value per share is calculated by dividing tangible equity by period end common shares outstanding. See Non-GAAP financial measures reconciliation tables. (F) Regulatory well capitalized standard = 5.00% ($283 million) (G) Regulatory well capitalized standard = 8.00% ($329 million) (H) Regulatory well capitalized standard = 6.50% ($267 million) (I) Regulatory well capitalized standard = 10.00% ($411 million) (J) PPP loans with a balance of $202 million increased total assets at September 30, 2020. Equity to total assets would be 9.08% if PPP loans were excluded from total assets.

PEAPACK-GLADSTONE FINANCIAL CORPORATIONLOANS CLOSED(Dollars in Thousands)(Unaudited)

For the Quarters Ended Sept 30, June 30, March 31, Dec 31, Sept 30, 2020 2020 2020 2019 2019 Residentialloans $ 32,599 $ 18,627 $ 14,831 $ 17,115 $ 19,073 retainedResidential 54,521 37,061 19,391 21,255 15,846 loans soldTotalresidential 87,120 55,688 34,222 38,370 34,919 loansCommercial 1,613 748 8,858 52,630 43,414 real estateMultifamily 1,500 11,960 61,998 63,627 77,138 Commercial(C&I) loans 118,048 99,294 42,908 174,946 228,903 (A) (B)SBA (C) 4,962 595,651 13,830 19,195 3,510 Wealth linesof credit 2,000 500 3,250 42,575 6,980 (A)Totalcommercial 128,123 708,153 130,844 352,973 359,945 loansInstallment 253 950 256 984 362 loansHome equitylines of 4,759 4,280 3,632 2,414 5,631 credit (A)Total loans $ 220,255 $ 769,071 $ 168,954 $ 394,741 $ 400,857 closed

For the Nine Months Ended Sept 30, Sept 30, 2020 2019 Residential loans retained $ 66,057 $ 51,910 Residential loans sold 110,973 28,721 Total residential loans 177,030 80,631 Commercial real estate 11,219 98,643 Multifamily 75,458 156,864 Commercial (C&I) loans (A) (B) 260,250 513,975 SBA (C) 614,443 16,300 Wealth lines of credit (A) 5,750 21,085 Total commercial loans 967,120 806,867 Installment loans 1,459 2,417 Home equity lines of credit (A) 12,671 10,864 Total loans closed $ 1,158,280 $ 900,779

(A) Includes loans and lines of credit that closed in the period but not necessarily funded.(B) Includes equipment finance.(C) Includes PPP loans of $596 million for the three months ended June 30, 2020 and for the nine months ended September 30, 2020.

PEAPACK-GLADSTONE FINANCIAL CORPORATIONAVERAGE BALANCE SHEETUNAUDITEDTHREE MONTHS ENDED(Tax-Equivalent Basis, Dollars in Thousands)

September30, 2020 September30, 2019 Average Income/ Average Income/ Balance Expense Yield Balance Expense Yield ASSETS: Interest-earning assets:Investments: Taxable (A) $ 553,607 $ 2,182 1.58 % $ 393,386 $ 2,477 2.52 %Tax-exempt (A) (B) 9,127 116 5.08 13,497 165 4.89 Loans (B) (C): Mortgages 529,500 4,437 3.35 567,097 4,811 3.39 Commercial 1,929,319 15,115 3.13 1,856,216 17,870 3.85 mortgagesCommercial 2,134,399 17,653 3.31 1,530,131 18,605 4.86 Commercial 4,395 55 5.01 2,619.00 51 7.79 constructionInstallment 52,659 377 2.86 53,891 560 4.16 Home equity 53,373 444 3.33 58,573 736 5.03 Other 283 7 9.89 396 11 11.11 Total loans 4,703,928 38,088 3.24 4,068,923 42,644 4.19 Federal funds sold 102 ? 0.25 101 ? 0.25 Interest-earning 652,832 159 0.10 256,865 1,362 2.12 depositsTotalinterest-earning 5,919,596 40,545 2.74 % 4,732,772 46,648 3.94 %assetsNoninterest-earning assets:Cash and due from 7,479 5,628 banksAllowance for loan (68,110 ) (40,806 ) and lease lossesPremises and 21,511 21,121 equipmentOther assets 242,017 151,265 Totalnoninterest-earning 202,897 137,208 assetsTotal assets $ 6,122,493 $ 4,869,980 LIABILITIES: Interest-bearing deposits:Checking $ 1,828,780 $ 1,130 0.25 % $ 1,410,837 $ 4,467 1.27 %Money markets 1,235,040 920 0.30 1,184,589 4,227 1.43 Savings 125,016 16 0.05 113,961 16 0.06 Certificates of 642,732 2,529 1.57 649,393 3,781 2.33 deposit ? retailSubtotalinterest-bearing 3,831,568 4,595 0.48 3,358,780 12,491 1.49 depositsInterest-bearing 130,000 636 1.96 180,000 901 2.00 demand ? brokeredCertificates of 33,742 267 3.17 33,688 267 3.17 deposit ? brokeredTotalinterest-bearing 3,995,310 5,498 0.55 3,572,468 13,659 1.53 depositsBorrowings 475,465 1,221 1.03 114,584 886 3.09 Capital lease 7,054 84 4.76 7,866 94 4.78 obligationSubordinated debt 83,552 1,222 5.85 83,329 1,224 5.88 Totalinterest-bearing 4,561,381 8,025 0.70 % 3,778,247 15,863 1.68 %liabilitiesNoninterest-bearing liabilities:Demand deposits 872,560 512,497 Accrued expensesand other 173,816 83,554 liabilitiesTotalnoninterest-bearing 1,046,376 596,051 liabilitiesShareholders? 514,736 495,682 equityTotal liabilitiesand shareholders? $ 6,122,493 $ 4,869,980 equityNet interest income $ 32,520 $ 30,785 Net interest spread 2.04 % 2.26 %Net interest margin 2.20 % 2.60 %(D)

-- Average balances for available for sale securities are based on amortized cost. -- Interest income is presented on a tax-equivalent basis using a 21% federal tax rate. -- Loans are stated net of unearned income and include nonaccrual loans. -- Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

PEAPACK-GLADSTONE FINANCIAL CORPORATIONAVERAGE BALANCE SHEETUNAUDITEDTHREE MONTHS ENDED(Tax-Equivalent Basis, Dollars in Thousands)

September30, 2020 June 30, 2020 Average Income/ Average Income/ Balance Expense Yield Balance Expense Yield ASSETS: Interest-earning assets:Investments: Taxable (A) $ 553,607 $ 2,182 1.58 % $ 437,288 $ 2,108 1.93 %Tax-exempt (A) (B) 9,127 116 5.08 10,137 129 5.09 Loans (B) (C): Mortgages 529,500 4,437 3.35 530,087 4,497 3.39 Commercial 1,929,319 15,115 3.13 2,083,310 16,147 3.10 mortgagesCommercial 2,134,399 17,653 3.31 2,038,530 18,204 3.57 Commercial 4,395 55 5.01 3,296 44 5.34 constructionInstallment 52,659 377 2.86 52,859 371 2.81 Home equity 53,373 444 3.33 54,869 453 3.30 Other 283 7 9.89 318 7 8.81 Total loans 4,703,928 38,088 3.24 4,763,269 39,723 3.34 Federal funds sold 102 ? 0.25 102 ? 0.25 Interest-earning 652,832 159 0.10 497,764 109 0.09 depositsTotalinterest-earning 5,919,596 40,545 2.74 % 5,708,560 42,069 2.95 %assetsNoninterest-earning assets:Cash and due from 7,479 5,437 banksAllowance for loan (68,110 ) (64,109 ) and lease lossesPremises and 21,511 21,462 equipmentOther assets 242,017 234,357 Totalnoninterest-earning 202,897 197,147 assetsTotal assets $ 6,122,493 $ 5,905,707 LIABILITIES: Interest-bearing deposits:Checking $ 1,828,780 $ 1,130 0.25 % $ 1,748,753 $ 1,642 0.38 %Money markets 1,235,040 920 0.30 1,207,816 1,473 0.49 Savings 125,016 16 0.05 118,878 16 0.05 Certificates of 642,732 2,529 1.57 676,498 3,147 1.86 deposit ? retailSubtotalinterest-bearing 3,831,568 4,595 0.48 3,751,945 6,278 0.67 depositsInterest-bearing 130,000 636 1.96 150,330 700 1.86 demand ? brokeredCertificates of 33,742 267 3.17 33,729 264 3.13 deposit ? brokeredTotalinterest-bearing 3,995,310 5,498 0.55 3,936,004 7,242 0.74 depositsBorrowings 475,465 1,221 1.03 330,514 1,127 1.36 Capital lease 7,054 84 4.76 7,270 87 4.79 obligationSubordinated debt 83,552 1,222 5.85 83,496 1,222 5.85 Totalinterest-bearing 4,561,381 8,025 0.70 % 4,357,284 9,678 0.89 %liabilitiesNoninterest-bearing liabilities:Demand deposits 872,560 873,926 Accrued expensesand other 173,816 171,814 liabilitiesTotalnoninterest-bearing 1,046,376 1,045,740 liabilitiesShareholders? 514,736 502,683 equityTotal liabilitiesand shareholders? $ 6,122,493 $ 5,905,707 equityNet interest income $ 32,520 $ 32,391 Net interest spread 2.04 % 2.06 %Net interest margin 2.20 % 2.27 %(D)

-- Average balances for available for sale securities are based on amortized cost. -- Interest income is presented on a tax-equivalent basis using a 21% federal tax rate. -- Loans are stated net of unearned income and include nonaccrual loans. -- Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

PEAPACK-GLADSTONE FINANCIAL CORPORATIONAVERAGE BALANCE SHEETUNAUDITEDNINE MONTHS ENDED(Tax-Equivalent Basis, Dollars in Thousands)

September30, 2020 September 30, 2019 Average Income/ Average Income/ Balance Expense Yield Balance Expense Yield ASSETS: Interest-earning assets:Investments: Taxable (A) $ 467,881 $ 6,749 1.92 % $ 391,032 $ 7,800 2.66 %Tax-exempt (A) (B) 9,930 376 5.05 15,904 581 4.87 Loans (B) (C): Mortgages 531,563 13,510 3.39 568,902 14,541 3.41 Commercial 1,989,256 49,745 3.33 1,822,341 53,472 3.91 mortgagesCommercial 1,977,597 54,450 3.67 1,442,827 52,659 4.87 Commercial 4,440 187 5.62 883 51 8 constructionInstallment 53,165 1,212 3.04 54,552 1,722 4.21 Home equity 54,627 1,512 3.69 60,695 2,319 5.09 Other 321 23 9.55 394 32 10.83 Total loans 4,610,969 120,639 3.49 3,950,594 124,796 4.21 Federal funds sold 102 ? 0.25 101 ? 0.25 Interest-earning 468,064 820 0.23 245,153 3,897 2.12 depositsTotalinterest-earning 5,556,946 128,584 3.09 % 4,602,784 137,074 3.97 %assetsNoninterest-earning assets:Cash and due from 6,149 5,436 banksAllowance for loan (58,896 ) (39,638 ) and lease lossesPremises and 21,373 21,253 equipmentOther assets 212,716 133,830 Totalnoninterest-earning 181,342 120,881 assetsTotal assets $ 5,738,288 $ 4,723,665 LIABILITIES: Interest-bearing deposits:Checking $ 1,706,558 $ 6,219 0.49 % $ 1,321,248 $ 12,299 1.24 %Money markets 1,211,720 5,374 0.59 1,196,778 12,978 1.45 Savings 118,291 47 0.05 113,552 48 0.06 Certificates of 672,308 9,370 1.86 622,509 10,476 2.24 deposit ? retailSubtotalinterest-bearing 3,708,877 21,010 0.76 3,254,087 35,801 1.47 depositsInterest-bearing 153,358 2,259 1.96 180,000 2,476 1.83 demand ? brokeredCertificates of 33,729 794 3.14 45,412 958 2.81 deposit ? brokeredTotalinterest-bearing 3,895,964 24,063 0.82 3,479,499 39,235 1.50 depositsBorrowings 330,324 3,360 1.36 108,526 2,558 3.14 Capital lease 7,266 261 4.79 8,052 290 4.80 obligationSubordinated debt 83,496 3,667 5.86 83,272 3,671 5.88 Totalinterest-bearing 4,317,050 31,351 0.97 % 3,679,349 45,754 1.66 %liabilitiesNoninterest-bearing liabilities:Demand deposits 763,414 494,023 Accrued expensesand other 149,187 64,806 liabilitiesTotalnoninterest-bearing 912,601 558,829 liabilitiesShareholders? 508,637 485,487 equityTotal liabilitiesand shareholders? $ 5,738,288 $ 4,723,665 equityNet interest income $ 97,233 $ 91,320 Net interest spread 2.12 % 2.31 %Net interest margin 2.33 % 2.65 %(D)



(A) Average balances for available for sale securities are based on amortized cost.(B) Interest income is presented on a tax-equivalent basis using a 21% federal tax rate. (C) Loans are stated net of unearned income and include nonaccrual loans.(D) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

PEAPACK-GLADSTONE FINANCIAL CORPORATIONNON-GAAP FINANCIAL MEASURES RECONCILIATION

Tangible book value per share and tangible equity as a percentage of tangible assets at period end are non-GAAP financial measures derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from shareholders equity and total assets, respectively. We calculate tangible book value per share by dividing tangible equity by period end common shares outstanding, as compared to book value per common share, which we calculate by dividing shareholders equity by period end common shares outstanding. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios.

The efficiency ratio is a non-GAAP measure of expense control relative to recurring revenue. We calculate the efficiency ratio 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 excluding net gains/(losses) on loans held for sale at lower of cost or fair value and excluding net gains on securities from this calculation, which we refer to below as recurring revenue. We believe that this provides one reasonable measure of core expenses relative to core revenue.

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 internally assesses our performance based, in part, on these measures. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titles measures reported by other companies. A reconciliation of the non-GAAP measures of tangible common equity, tangible book value per share and efficiency ratio to the underlying GAAP numbers is set forth below.

Non-GAAP Financial Reconciliation

(Dollars in thousands, except share data)

Three Months Ended Sept 30, June 30, March 31, Dec 31, Sept 30, Tangible BookValue Per 2020 2020 2020 2019 2019 ShareShareholders? $ 522,728 $ 507,980 $ 496,440 $ 503,652 $ 495,350 equityLess:Intangible 39,622 39,943 40,265 40,588 41,111 assets, netTangible 483,106 468,037 456,175 463,064 454,239 equity Period endshares 18,924,953 18,905,135 18,852,523 18,926,810 18,999,241 outstandingTangible bookvalue per $ 25.53 $ 24.76 $ 24.20 $ 24.47 $ 23.91 shareBook value 27.62 26.87 26.33 26.61 26.07 per share TangibleEquity to TangibleAssetsTotal assets $ 5,958,107 $ 6,281,215 $ 5,831,458 $ 5,182,879 $ 4,925,409 Less:Intangible 39,622 39,943 40,265 40,588 41,111 assets, netTangible 5,918,485 6,241,272 5,791,193 5,142,291 4,884,298 assetsLess: PPP 201,991 547,004 ? ? ? LoansTangibleAssets 5,716,494 5,694,268 5,791,193 5,142,291 4,884,298 excluding PPPLoansTangibleequity to 8.16 % 7.50 % 7.88 % 9.01 % 9.30 %tangibleassetsTangibleequity totangible 8.45 % 8.22 % 7.88 % 9.01 % 9.30 %assetsexcluding PPPloansEquity to 8.77 % 8.09 % 8.51 % 9.72 % 10.06 %assets (A)

(A) Equity to total assets would be 9.08% if PPP loans of $202 million were excluded from total assets as of September 30, 2020. Equity to total assets would be 8.86% if PPP loans of $547 million were excluded from total assets as of June 30, 2020.

Three Months Ended Sept 30, June 30, March Dec 30, Sept 30, 31,Efficiency 2020 2020 2020 2019 2019 RatioNet interest $ 32,149 $ 31,971 $ 31,747 $ 30,914 $ 30,085 incomeTotal other 20,211 12,626 14,517 15,525 14,416 incomeLess: Loss/(gain) on loans held forsaleat lower ofcost or fair (7,429 ) ? 3 4 6 valueLess: Incomefrom life ? ? ? ? ? insuranceproceedsAdd:Securities ? (125 ) (198 ) 45 (34 )(gains)/losses, netTotalrecurring 44,931 44,472 46,069 46,488 44,473 revenue Operating 28,461 29,014 28,235 26,701 26,259 expensesLess: ORE ? ? ? ? ? provisionTotaloperating 28,461 29,014 28,235 26,701 26,259 expense Efficiency 63.34 % 65.24 % 61.29 % 57.44 % 59.04 %ratio

For the Nine Months Ended Sept 30, Sept 30, Efficiency Ratio 2020 2019 Net interest income $ 95,867 $ 89,360 Total other income 47,354 39,171 Add: Securities (gains)/losses, net (323 ) (162 )Less: Loss/(gain) on loans held for sale at lower of cost or fair value (7,426 ) ? Total recurring revenue 135,472 128,369 Operating expenses 85,710 78,147 Less: ORE provision ? ? Total operating expense 85,710 78,147 Efficiency ratio 63.27 % 60.88 %

Contact:

Jeffrey J. Carfora, SEVP and CFO

Peapack-Gladstone Financial Corporation

T: 908-719-4308