GlobeNewswire Inc | Jul 29, 2020 09:00AM EDT

July 29, 2020

Bedminster, N.J., July 29, 2020 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- Peapack-Gladstone Financial Corporation (NASDAQ Global Select Market: PGC) (the Company) announces its second quarter 2020 results.

Q2 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 revenue of $90.87 million, net income of $9.62 million and diluted earnings per share (EPS) of $0.51 for the six months ended June 30, 2020, compared to $84.04 million, $22.98 million and $1.18, respectively, for the six months ended June 30, 2019. The decrease in net income and EPS for the 2020 year was the result of a $24.90 million provision for loan losses due primarily to the current environment created by the COVID-19 pandemic which led to increased qualitative loss factors when calculating the allowance for loan losses as described in the Q2 2020 Investor Update (and Supplemental Financial Information). The 2020 six-month period included increased net interest income and non-interest income, which was partially offset by increased operating expenses (due in part to the wealth management firm acquired in September 2019). The 2020 six-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.

For the quarter ended June 30, 2020, the Company recorded revenue of $44.59 million, net income of $8.24 million and diluted earnings per share (EPS) of $0.43, compared to $42.29 million, $11.55 million and $0.59, respectively, for the same three-month period last year. The decrease in net income and EPS for the 2020 quarter was the result of a $4.90 million provision for loan losses primarily 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 as described in the Q2 2020 Investor Update (and Supplemental Financial Information). The 2020 quarter included increased net interest income offset by increased operating expenses (due in part to the wealth management firm acquired in September 2019).

As previously announced, on July 25, 2019, the Company authorized the repurchase of up to 960,000 shares, or approximately 5% of its outstanding shares, through June 30, 2020. Early in the first quarter of 2020, under this program, the Company purchased 220,222 shares, at an average price of $29.45, for a total cost of $6.5 million. With these purchases, the Company completed its 960,000 share repurchase program, at an average price of $28.63, for a total cost of $27.5 million.

Douglas L. Kennedy, President and CEO, said, The COVID-19 pandemic continues to have a devastating effect on businesses both locally and nationally. Congress passed the CARES Act to provide fast and direct economic assistance to American workers, families and businesses. One of the key programs created was the Paycheck Protection Program (PPP), which provided much needed funding to qualifying businesses and organizations. During the second quarter, we strategically spent $225,000 on marketing and advertising related to the PPP program. We are proud to say that under this program we assisted businesses with approximately $600 million in loan fundings, saving approximately 50,000 jobs. Additionally, to further assist our clients, we granted loan payment deferrals of approximately $900 million as of June 30, 2020. In order to provide the most benefit to our clients, the majority of deferrals granted were for a six-month period. We will continue to support our clients, local businesses and community service organizations in these difficult times.

Mr. Kennedy went on to note, During the second quarter of 2020, the Company recorded $278,000 of charges related to the closure of the Whitehouse branch. Doug Kennedy, President and CEO, said, We anticipate retaining the majority of the deposits associated with the branch and we expect expense saves that will recoup the charges in less than one year.

For more information about our loan deferrals, including a breakdown by loan type and industry, as well as detail concerning our loan exposure to higher impacted industries, please see the Q2 2020 Investor Update (and Supplemental financial Information).

EXECUTIVE SUMMARY:

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

Year over Year Comparison

Six Six Months Months Ended Ended June30, June30, Increase/ (Dollars inmillions, 2020 2019 (Decrease) except pershare data)Net interest $ 63.72 $ 59.28 $ 4.44 7 %incomeWealthmanagement 19.95 18.74 1.21 6 fee income(A)Capitalmarkets 3.77 2.16 1.61 75 activity (B)Other income 3.43 3.86 (0.43 ) (11 )Total other 27.15 24.76 2.39 10 incomeOperating 57.25 51.89 5.36 10 expensesPretax incomebefore 33.62 32.15 1.47 5 provision forloan lossesProvision forloan and 24.90 1.25 23.65 1,892 lease losses(C)Pretax income 8.72 30.90 (22.18 ) (72 )Income tax(benefit)/ (0.90 ) 7.92 (8.82 ) (111 )expense (D)Net income $ 9.62 $ 22.98 $ (13.36 ) (58 )%Diluted EPS $ 0.51 $ 1.18 $ (0.67 ) (57 )% Total Revenue $ 90.87 $ 84.04 $ 6.83 8 % Return onaverage 0.35 % 0.99 % (0.64 ) assetsannualizedReturn onaverage 3.80 % 9.57 % (5.77 ) equityannualized



-- The six months ended June 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 six months ended June 30, 2020 included a provision for loan and lease losses of $24.90 million. The increase in the provision for loan and lease losses was primarily due to the current environment created by the COVID-19 pandemic. -- The 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.

June 2020 Quarter Compared to Prior Year Quarter

Three Three Months Months Ended Ended June30, June30, Increase/ (Dollars inmillions, except 2020 2019 (Decrease) per share data)Net interest $ 31.97 $ 29.27 $ 2.70 9 %incomeWealthmanagement fee 10.00 9.57 0.43 4 income (A)Capital markets 1.01 1.43 (0.42 ) (29 )activity (B)Other income 1.61 2.02 (0.41 ) (20 )Total other 12.62 13.02 (0.40 ) (3 )incomeOperating 29.01 26.17 2.84 11 expensesPretax incomebefore provision 15.58 16.12 (0.54 ) (3 )for loan lossesProvision forloan and lease 4.90 1.15 3.75 326 losses (C)Pretax income 10.68 14.97 (4.29 ) (29 )Income tax 2.44 3.42 (0.98 ) (29 )expenseNet income $ 8.24 $ 11.55 $ (3.31 ) (29 )%Diluted EPS $ 0.43 $ 0.59 $ (0.16 ) (27 )% Total Revenue $ 44.59 $ 42.29 $ 2.30 5 % Return onaverage assets 0.56 % 0.99 % (0.43 ) annualizedReturn onaverage equity 6.56 % 9.49 % (2.93 ) annualized



-- The June 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 June 2020 quarter included a provision for loan and lease losses of $4.90 million. The increase in the provision for loan and lease losses was primarily due to the current environment created by the COVID-19 pandemic.

June 2020 Quarter Compared to Linked Quarter

Three Three Months Months Ended Ended June30, March31, Increase/ (Dollars inmillions, 2020 2020 (Decrease) except pershare data)Net interest $ 31.97 $ 31.75 $ 0.22 1 %incomeWealthmanagement 10.00 9.96 0.04 0 fee incomeCapitalmarkets 1.01 2.76 (1.75 ) (63 )activity (A)Other income 1.61 1.80 (0.19 ) (11 )Total other 12.62 14.52 (1.90 ) (13 )incomeOperating 29.01 28.24 0.77 3 expensesPretax incomebefore 15.58 18.03 (2.45 ) (14 )provision forloan lossesProvision forloan and 4.90 20.00 (15.10 ) (76 )lease losses(B)Pretax (loss) 10.68 (1.97 ) 12.65 (642 )/incomeIncome tax(benefit)/ 2.44 (3.34 ) 5.78 (173 )expense (C)Net income $ 8.24 $ 1.37 $ 6.87 501 %Diluted EPS $ 0.43 $ 0.07 $ 0.36 514 % Total Revenue $ 44.59 $ 46.27 $ (1.68 ) (4 )% Return onaverage 0.56 % 0.11 % 0.45 assetsannualizedReturn onaverage 6.56 % 1.08 % 5.48 equityannualized



-- Capital markets activity includes loan level back-to-back swap activities, the SBA lending and sale program, and mortgage banking activities. -- The increase in the provision for loan and lease losses for both the March and June quarters was 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.

The Companys near-term priorities include:

-- Continue our emphasis on the health and safety of our employees and clients. -- Adapt the way in which we interact with clients and prospects to reflect the current environment. -- Continue to manage emerging credit risk associated with the environment caused by the COVID-19 pandemic. -- Conservatively manage capital and liquidity in response to current market conditions. -- Pursue new client opportunities presented by the PPP. -- Accelerate digital enhancement initiatives to improve the client experience. -- Continue to grow and expand our wealth management and commercial banking businesses.

Other select highlights for the quarter included:

-- Wealth management fee income, which comprised approximately 22% of the Companys total revenue for the quarter ended June 30, 2020, continues to contribute significantly to the Companys diversified revenue sources. -- Total commercial and industrial (C&I) loans (including equipment finance leases and loans of $694 million and $547 million of PPP loans) at June 30, 2020 were $2.32 billion. This reflected net growth of $798 million (53%) when compared to $1.52 billion at June 30, 2019 and reflected net growth of $506 million when compared to the March 31, 2020 balance (28% growth linked quarter; 112% annualized). -- As of June 30, 2020, total C&I loans (including PPP loans) comprised 47% of the total loan portfolio, as compared to 38% at June 30, 2019. -- Deposits totaled $4.85 billion at June 30, 2020. This reflected net growth of $756 million (18%) when compared to $4.10 billion at June 30, 2019 and net growth of $411 million (9% growth linked quarter; 37% annualized) when compared to the March 31, 2020 balance. -- In addition to $1.2 billion (19% of total assets) of balance sheet liquidity (investments, interest-earning deposits and cash), the Company also has access to approximately $2.8 billion of available secured funding at the Federal Home Loan Bank and the Federal Reserve. -- The Companys and Banks capital ratios at June 30, 2020 remain strong and the Companys tangible book value per share at June 30, 2020 was $24.76 reflecting an increase of 4% from $23.74 at June 30, 2019, despite share repurchases made in the previous quarter and the higher than normal provision for loan losses. -- Asset quality metrics continued to be strong as of June 30, 2020. Nonperforming assets at June 30, 2020 were $26.7 million, or 0.43% of total assets.

SUPPLEMENTAL QUARTERLY DETAILS

Wealth Management Business

In the June 2020 quarter, the Banks wealth management business generated $10.00 million in fee income, compared to $9.57 million for the June 2019 quarter, and $9.96 million for the March 2020 quarter. The June 2020 and March 2020 quarters included three months of fee income related to Point View, which was acquired effective September 1, 2019.

The market value of the Companys assets under management and/or administration (AUM/AUA) increased from $6.4 billion at March 31, 2020 to $7.2 billion at June 30, 2020, reflecting a 13% increase. Changes in the market value of the Companys AUM/AUA are approximately 70% correlated to the changes in value of the S&P index, which increased approximately 20% from March 31, 2020 to June 30, 2020.

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, We continue to look to grow our wealth business organically and through acquisition, and our pipeline for both is strong.

Loans / Commercial Banking

Total loans of $4.90 billion at June 30, 2020 increased from $4.03 billion at June 30, 2019 (22% annual growth), and $484 million (11% growth linked quarter; 44% annualized) from $4.42 billion at March 31, 2020. Growth was driven by robust PPP loan originations of $596 million for the three and six months ended June 30, 2020. As noted last quarter, we expect reduced origination levels (excluding PPP loan originations), relative to 2019 levels, but also expect reduced amortization and paydown levels.

Total C&I loans (including equipment finance leases and loans of $694 million and $547 million of PPP loans) at June 30, 2020 were $2.32 billion. This reflected net growth of $798 million (53%) when compared to $1.52 billion at June 30, 2019 and reflected net growth of $506 million when compared to $1.81 billion at March 31, 2020 (28% growth linked quarter; 112% annualized). Excluding PPP loans, total C&I loans declined slightly in the quarter due to the paydown of several large lines of credit where the borrower did not need the funds.

The Company maintains a well-diversified loan portfolio, by loan type and by industry concentration, as detailed in the Q2 2020 Investor Update (and Supplemental Financial Information).

Mr. Kennedy noted, As I noted in prior periods, our Corporate Advisory business compliments 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.

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 for the June 2020 quarter increased $411 million (largely noninterest bearing deposits) from the $4.44 billion at March 31, 2020 to $4.85 billion at June 30, 2020 despite decreasing interest bearing demand brokered deposits by $50 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 June 30, 2020, the Companys balance sheet liquidity (investments, interest-earning deposits and cash) remained at $1.2 billion (or 19% of assets). Loan growth in PPP loans were funded by the Paycheck Protection Program Liquidity Facility, which provides funding at 35 basis points and is secured by PPP loans. In late April, the Company repaid the $500 million one-month borrowing from the Federal Home Loan Bank.

As of June 30, 2020, in addition to the $1.2 billion of balance sheet liquidity, the Company also had approximately $1.8 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 had the effect of reducing the Companys interest income earned on assets by approximately $24 million on an annualized basis. However, at the same time, we were able to strategically reprice our deposits over time to offset most of that decline by the end of 2020.

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

Six Months Ended Six Months Ended June30, 2020 June30, 2019 NII NIM NII NIM NII/NIMexcluding $ 61,403 2.54 % $ 58,467 2.73 % the belowPrepaymentpremiumsreceived on 901 0.04 % 678 0.02 % loanpaydownsEffect ofmaintainingexcess (563 ) -0.15 % 130 -0.08 % interestearningcashEffect of 1,977 -0.02 % ? 0.00 % PPP loansNII/NIM as $ 63,718 2.41 % $ 59,275 2.67 % reported Three Months Ended Three Months Ended Three Months Ended June30, 2020 March 31, 2020 June30, 2019 NII NIM NII NIM NII NIM NII/NIMexcluding $ 29,881 2.45 % $ 31,279 2.60 % $ 28,938 2.69 % the belowPrepaymentpremiumsreceived on 376 0.03 % 525 0.05 % 246 0.02 % loanpaydownsEffect ofmaintainingexcess (263 ) -0.19 % (57 ) -0.08 % 84 -0.07 % interestearningcashEffect of 1,977 -0.02 % ? 0.00 % ? 0.00 % PPP loansNII/NIM as $ 31,971 2.27 % $ 31,747 2.57 % $ 29,268 2.64 % reported

As shown above, the Companys reported NIM declined 30 basis points compared to the linked quarter, while core NIM declined only 15 basis points compared to the linked quarter. As noted previously, as a commercial bank, the Company is asset sensitive with a large portion of its commercial loan portfolio tied to one-month LIBOR. The decline in the core NIM was a function of the precipitous decline in one-month LIBOR in the second quarter.

Future net interest income will be benefitted from interest and fees from PPP loans. As of June 30, 2020, excluding PPP loans held for sale, the Company had $558 million of gross PPP loans, with net deferred fees of $11 million that will be amortized to net interest income over the life of the loans, which have a stated maturity of two to five years. However, these loans may be eligible for loan forgiveness by the SBA at an earlier date, which would accelerate the amortization of the net deferred fees.

Future net interest income will also be benefitted by the repricing of the Companys time certificates of deposit (CDs). Over the six-month period of July to December 2020, approximately $300 million of CDs with an average rate of approximately 1.50% 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 $1.01 million for the June 2020 quarter compared to $2.76 million for the March 2020 quarter and $1.43 million for the June 2019 quarter. The June 2020 quarter reflected increased mortgage banking activity due to greater refinance activity in the current low rate environment. The June 2020 quarter also included 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 $29.01 million for the quarter ended June 30, 2020, compared to $28.24 million for the March 2020 quarter and $26.17 million for the June 2019 quarter. The June 2020 and March 2020 quarters included three months of expenses (approximately $500,000 per quarter) related to Point Views operations. The June 2020 quarter also included a one-time expense of $278,000 related to the closure of the Whitehouse branch. The Company believes that it will retain the majority of the deposits that were associated with that branch and will recoup closure expenses in less than one year by saving approximately $300,000 per year in operating expenses going forward. The Company also strategically spent $225,000 on marketing and advertising related to the PPP program during the June 2020 quarter. FDIC insurance expense increased to $455,000 in the June 2020 quarter from $250,000 in the March 2020 quarter and $277,000 in the June 2019 quarter, due to asset growth and a partial credit applied in the March 2020 quarter.

Income Taxes

The Company recorded a $3.34 million tax benefit during the first quarter of 2020, principally as a result of 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. The effective tax rate for the three months ended June 30, 2020 was 22.85%, which included a benefit from a New Jersey state credit related to deferred tax liabilities effected by the surtax imposed by New Jersey in 2019. Excluding such benefit, the effective rate for the June 2020 quarter would have been approximately 26.5%.

Asset Quality / Provision for Loan and Lease Losses

For further details, see the Q2 2020 Investor Update (and Supplemental Financial Information).

Nonperforming assets at June 30, 2020 (which does not include troubled debt restructured loans that are performing in accordance with their terms) were $26.7 million, or 0.43% of total assets, down from $29.4 million, or 0.50% of total assets, at March 31, 2020 and $31.2 million, or 0.64% of total assets, at June 30, 2019. Total loans past due 30 through 89 days and still accruing were $3.8 million at June 30, 2020, compared to $8.3 million at March 31, 2020 and $432,000 at June 30, 2019.

For the quarter ended June 30, 2020, the Companys provision for loan and lease losses was $4.90 million compared to $20.00 million for the March 2020 quarter and $1.15 million for the June 2019 quarter. The increased provision for loan losses in the June and March 2020 quarters reflects the current environment created by the COVID-19 pandemic which led to increased qualitative loss factors when calculating the allowance for loan losses. The first quarter 2020 provision included higher qualitative factors related to elevated unemployment levels and loan deferral requests and approvals. 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 June 30, 2020, the allowance for loan and lease losses was $66.07 million (1.52% of total loans, excluding PPP loans), compared to $63.78 million at March 31, 2020 (1.44% of total loans), and $39.79 million at June 30, 2029 (0.99% of total loans).

Capital / Dividend / Stock Repurchase Program

The Companys capital position during the June 2020 quarter was benefitted by net income of $8.2 million.

As previously stated, the Company authorized a 5% (960,000 shares) stock repurchase program on July 25, 2019 which the Company completed the program in the first quarter of 2020.

The Companys and Banks capital ratios at June 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 May 31, 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 Q2 2020 Investor Update (and Supplemental Financial Information).

On July 28, 2020, the Company declared a cash dividend of $0.05 per share payable on August 25, 2020 to shareholders of record on August 11, 2020.

ABOUT THE COMPANY

Peapack-Gladstone Financial Corporation is a New Jersey bank holding company with total assets of $6.3 billion and AUM/AUA administration of $7.2 billion as of June 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 how the economy may be reopened. 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 June 30, March 31, Dec 31, Sept 30, June 30, 2020 2020 2019 2019 2019 Income Statement Data:Interest income $ 41,649 $ 45,395 $ 45,556 $ 45,948 $ 44,603 Interest 9,678 13,648 14,642 15,863 15,335 expenseNet interest 31,971 31,747 30,914 30,085 29,268 incomeWealthmanagement fee 9,996 9,955 10,120 9,501 9,568 incomeService charges 695 816 893 882 897 and feesBank owned life 318 328 325 332 326 insuranceGain on loansheld for saleat fair value 550 292 344 198 132 (B) (Mortgagebanking)Loss on loansheld for saleat lower of ? (3 ) (4 ) (6 ) ? cost or fair valueFee incomerelated to loanlevel, 202 1,418 2,459 2,349 721 back-to-back(B) swapsGain on sale of 258 1,054 929 224 573 SBA loans (B)Other income 482 459 504 902 740 Securitiesgains/(losses), 125 198 (45 ) 34 69 netTotal other 12,626 14,517 15,525 14,416 13,026 incomeSalaries andemployee 19,186 19,226 17,954 17,476 17,543 benefitsPremises and 4,036 4,043 3,898 3,849 3,600 equipmentFDIC insurance 455 250 ? (277 ) 277 expenseOther expenses 5,337 4,716 4,849 5,211 4,753 Total operating 29,014 28,235 26,701 26,259 26,173 expensesPretax incomebefore 15,583 18,029 19,738 18,242 16,121 provision forloan lossesProvision forloan and lease 4,900 20,000 1,950 800 1,150 losses (A)Income/(loss)before income 10,683 (1,971 ) 17,788 17,442 14,971 taxesIncome taxexpense/ 2,441 (3,344 ) 5,555 5,216 3,421 (benefit) (C)Net income $ 8,242 $ 1,373 $ 12,233 $ 12,226 $ 11,550 Total revenue $ 44,597 $ 46,264 $ 46,439 $ 44,501 $ 42,294 (D)Per Common Share Data:Earnings per $ 0.44 $ 0.07 $ 0.64 $ 0.63 $ 0.59 share (basic)Earnings per 0.43 0.07 0.64 0.63 0.59 share (diluted)Weightedaverage numberof common sharesoutstanding:Basic 18,872,070 18,858,343 18,966,917 19,314,666 19,447,155 Diluted 19,059,822 19,079,575 19,207,738 19,484,905 19,568,371 Performance Ratios:Return onaverage assets 0.56 % 0.11 % 0.98 % 1.00 % 0.99 %annualized(ROAA)Return onaverage equity 6.56 % 1.08 % 9.81 % 9.87 % 9.49 %annualized(ROAE)Net interestmargin 2.27 % 2.57 % 2.60 % 2.60 % 2.64 %(tax-equivalentbasis)GAAP efficiency 65.06 % 61.03 % 57.50 % 59.01 % 61.88 %ratio (E)Operatingexpenses / 1.97 % 2.18 % 2.13 % 2.16 % 2.25 %average assetsannualized



-- The March 2020 and June 2020 quarters included a higher provision for loan and lease losses primarily due to the current environment created by the COVID-19 pandemic. -- 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. -- 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 Six Months Ended June 30, Change 2020 2019 $ % Income Statement Data:Interest income $ 87,044 $ 89,166 $ (2,122 ) -2 %Interest expense 23,326 29,891 (6,565 ) -22 %Net interest income 63,718 59,275 4,443 7 %Wealth management 19,951 18,742 1,209 6 %fee incomeService charges and 1,511 1,713 (202 ) -12 %feesBank owned life 646 664 (18 ) -3 %insuranceGain on loans heldfor sale at fair 842 179 663 370 %value (Mortgagebanking) (B)Gain on loans heldfor sale at lower (3 ) ? (3 ) N/A of cost or fairvalueFee income relatedto loan level, 1,620 991 629 63 %back-to-back swaps(B)Gain on sale of SBA 1,312 992 320 32 %loans (B)Other income 941 1,346 (405 ) -30 %Securities gains/ 323 128 195 152 %(losses), netTotal other income 27,143 24,755 2,388 10 %Salaries and 38,412 34,699 3,713 11 %employee benefitsPremises and 8,079 6,988 1,091 16 %equipmentFDIC insurance 705 554 151 27 %expenseOther expenses 10,053 9,647 406 4 %Total operating 57,249 51,888 5,361 10 %expensesPretax incomebefore provision 33,612 32,142 1,470 5 %for loan lossesProvision for loanand lease losses 24,900 1,250 23,650 1892 %(A)Income before 8,712 30,892 (22,180 ) -72 %income taxesIncome tax(benefit)/expense (903 ) 7,917 (8,820 ) -111 %(C)Net income $ 9,615 $ 22,975 $ (13,360 ) -58 % Total revenue (D) $ 90,861 $ 84,030 $ 6,831 8 %Per Common Share Data:Earnings per share $ 0.51 $ 1.18 $ (0.67 ) -57 %(basic)Earnings per share 0.51 1.18 (0.67 ) -57 %(diluted)Weighted averagenumber of common shares outstanding:Basic 18,865,206 19,399,071 (533,865 ) -3 %Diluted 18,991,056 19,528,536 (537,480 ) -3 %Performance Ratios: Return on average )assets annualized 0.35 % 0.99 % (0.64 % -65 %(ROAA)Return on average )equity annualized 3.80 % 9.57 % (5.77 % -60 %(ROAE)Net interest margin )(tax-equivalent 2.41 % 2.67 % (0.26 % -10 %basis)GAAP efficiency 63.01 % 61.75 % 1.26 % 2 %ratio (E)Operating expenses )/ average assets 2.07 % 2.23 % (0.16 % -7 %annualized

-- 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. -- 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 -- 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. -- 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 CORPORATION CONSOLIDATED STATEMENTS OF CONDITION(Dollars in Thousands)(Unaudited)

As of June 30, March 31, Dec 31, Sept 30, June 30, 2020 2020 2019 2019 2019 ASSETS Cash and due from $ 5,608 $ 6,171 $ 6,591 $ 5,770 $ 5,351 banksFederal funds sold 102 102 102 101 101 Interest-earning 617,117 767,730 201,492 221,242 298,575 depositsTotal cash and cash 622,827 774,003 208,185 227,113 304,027 equivalentsSecurities 539,742 400,558 390,755 349,989 378,839 available for saleEquity security 15,159 14,034 10,836 7,881 4,847 FHLB and FRB stock, 18,598 40,871 24,068 21,403 18,338 at costResidential 536,015 532,063 552,019 561,543 572,926 mortgageMultifamily 1,178,494 1,203,487 1,210,003 1,197,093 1,129,476 mortgageCommercial mortgage 761,910 760,648 761,244 721,261 694,674 Commercial loans 2,316,125 1,810,214 1,776,450 1,575,076 1,518,591 (B)Consumer loans 53,111 53,365 54,372 53,829 53,995 Home equity lines 54,006 55,856 57,248 58,423 62,522 of creditOther loans 272 347 349 380 424 Total loans 4,899,933 4,415,980 4,411,685 4,167,605 4,032,608 Less: Allowancesfor loan and lease 66,065 63,783 43,676 41,580 39,791 lossesNet loans 4,833,868 4,352,197 4,368,009 4,126,025 3,992,817 Premises and 21,449 21,243 20,913 20,898 20,987 equipmentOther real estate 50 50 50 336 ? ownedAccrued interest 15,956 11,816 10,494 11,759 11,594 receivableBank owned life 46,479 46,309 46,128 45,940 45,744 insuranceGoodwill and other 39,943 40,265 40,588 41,111 31,941 intangible assetsFinance lease 4,704 4,891 5,078 5,265 5,452 right-of-use assetsOperating lease 10,810 11,553 12,132 10,328 11,017 right-of-use assetsOther assets (A) 111,630 113,668 45,643 57,361 45,631 TOTAL ASSETS $ 6,281,215 $ 5,831,458 $ 5,182,879 $ 4,925,409 $ 4,871,234 LIABILITIES Deposits: Noninterest-bearing $ 911,989 $ 581,085 $ 529,281 $ 544,464 $ 544,431 demand depositsInterest-bearing 1,804,102 1,680,452 1,510,363 1,352,471 1,388,821 demand depositsSavings 123,140 112,668 112,652 115,448 112,438 Money market 1,183,603 1,163,410 1,196,313 1,196,188 1,207,358 accountsCertificates of 629,941 651,000 633,763 583,425 570,384 deposit ? RetailCertificates ofdeposit ? Listing 35,327 38,895 47,430 55,664 58,541 ServiceSubtotal ?customer? 4,688,102 4,227,510 4,029,802 3,847,660 3,881,973 depositsIB Demand ? 130,000 180,000 180,000 180,000 180,000 BrokeredCertificates of 33,736 33,723 33,709 33,696 33,682 deposit ? BrokeredTotal deposits 4,851,838 4,441,233 4,243,511 4,061,356 4,095,655 Short-term 15,000 515,000 128,100 67,000 ? borrowingsFHLB advances 105,000 105,000 105,000 105,000 105,000 Paycheck ProtectionProgram Liquidity 535,837 ? ? ? ? Facility (C)Finance lease 7,196 7,402 7,598 7,793 7,985 liabilityOperating lease 11,116 11,852 12,423 10,619 11,269 liabilitySubordinated debt, 83,529 83,473 83,417 83,361 83,305 netOther liabilities 163,719 160,173 91,227 94,930 74,132 (A)Due to brokers ? 10,885 7,951 ? ? TOTAL LIABILITIES 5,773,235 5,335,018 4,679,227 4,430,059 4,377,346 Shareholders? 507,980 496,440 503,652 495,350 493,888 equityTOTAL LIABILITIES ANDSHAREHOLDERS? $ 6,281,215 $ 5,831,458 $ 5,182,879 $ 4,925,409 $ 4,871,234 EQUITYAssets undermanagement and / oradministration at Peapack-GladstoneBank?s Private $ 7.2 $ 6.4 $ 7.5 $ 7.0 $ 6.6 Wealth Management Division (marketvalue, not includedabove-dollars inbillions)

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

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

As of June 30, March Dec 31, Sept 30, June 30, 31, 2020 2020 2019 2019 2019 Asset Quality: Loans past dueover 90 days $ ? $ ? $ ? $ ? $ ? and stillaccruingNonaccrual 26,697 29,324 28,881 29,383 31,150 loansOther real 50 50 50 336 ? estate ownedTotalnonperforming $ 26,747 $ 29,374 $ 28,931 $ 29,719 $ 31,150 assets Nonperformingloans to total 0.54 % 0.66 % 0.65 % 0.71 % 0.77 %loansNonperformingassets to 0.43 % 0.50 % 0.56 % 0.60 % 0.64 %total assets Performing $ 2,376 $ 2,389 $ 2,357 $ 2,527 $ 3,772 TDRs (A)(B) Loans past due30 through 89 $ 3,785 $ 8,261 $ 1,910 $ 6,333 $ 432 days and stillaccruing (C) Classified $ 57,776 $ 58,938 $ 58,908 $ 53,882 $ 56,135 loans Impaired loans $ 33,708 $ 36,369 $ 35,924 $ 36,627 $ 34,941 Allowance forloan and lease losses:Beginning of $ 63,783 $ 43,676 $ 41,580 $ 39,791 $ 38,653 periodProvision forloan and lease 4,900 20,000 1,950 800 1,150 lossesRecoveries(charge-offs), (2,618 ) 107 146 989 (12 )netEnd of period $ 66,065 $ 63,783 $ 43,676 $ 41,580 $ 39,791 ALLL tononperforming 247.46 % 217.51 % 151.23 % 141.51 % 127.74 %loansALLL to total 1.518 % 1.444 % 0.990 % 0.998 % 0.987 %loans (D)General ALLLto total loans 1.418 % 1.301 % 0.927 % 0.932 % 0.956 %(D)(E)



-- Amounts reflect TDRs that are paying according to restructured terms. -- Amount does not include $23.2 million at June 30, 2020, $25.9 million at March 31, 2020, $25.8 million at December 31, 2019, $19.7 million at September 30, 2019, and $19.8 million at June 30, 2019, of TDRs included in nonaccrual loans. -- 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. -- The June 30, 2020 ALLL coverage ratios exclude PPP loans of $547 million from total loans. -- Total ALLL less specific reserves equals general ALLL.

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

June30, December 31, June30, 2020 2019 2019 Capital Adequacy Equity to total 8.09 % 9.72 % 10.14 %assets (A)(J)Tangible Equityto tangible 7.50 % 9.01 % 9.55 %assets (B)Tangible Equityto tangible 8.22 % 9.01 % 9.55 %assets excluding PPP loans (C)Book value per $ 26.87 $ 26.61 $ 25.38 share (D)Tangible BookValue per share $ 24.76 $ 24.47 $ 23.74 (E)

June30, December 31, June30, 2020 2019 2019 RegulatoryCapital ? HoldingCompanyTier I $ 468,898 8.57 % $ 463,521 9.33 % $ 462,675 10.01 % leverageTier Icapital to 468,898 11.35 463,521 11.14 462,675 11.96 risk-weightedassetsCommon equitytier Icapital ratio 468,863 11.35 463,520 11.14 462,673 11.96 torisk-weightedassetsTier I & IIcapital to 604,258 14.62 590,614 14.20 585,771 15.14 risk-weightedassets RegulatoryCapital ? BankTier I $ 534,794 9.79 % $ 527,833 10.63 % $ 533,043 11.54 % leverage (F)Tier Icapital to 534,794 12.96 527,833 12.70 533,043 13.79 risk-weightedassets (G)Common equitytier Icapital ratio 534,759 12.95 527,832 12.70 533,041 13.79 torisk-weightedassets (H)Tier I & IIcapital to 586,574 14.21 571,509 13.76 572,834 14.82 risk-weightedassets (I)



-- Equity to total assets is calculated as total shareholders equity as a percentage of total assets at period end. -- 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. -- 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. -- Book value per common share is calculated by dividing shareholders equity by period end common shares outstanding -- 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. -- Regulatory well capitalized standard = 5.00% ($273 million) -- Regulatory well capitalized standard = 6.50% ($268 million) -- Regulatory well capitalized standard = 8.00% ($330 million) -- Regulatory well capitalized standard = 10.00% ($413 million) -- PPP loans with a balance of $547 million increased our total assets at June 30, 2020. Equity to total assets would be 8.86% if PPP loans were excluded from total assets.

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

For the Quarters Ended June 30, March 31, Dec 31, Sept 30, June 30, 2020 2020 2019 2019 2019 Residentialloans $ 18,627 $ 14,831 $ 17,115 $ 19,073 $ 21,998 retainedResidential 37,061 19,391 21,255 15,846 9,785 loans soldTotalresidential 55,688 34,222 38,370 34,919 31,783 loansCommercial 748 8,858 52,630 43,414 34,204 real estateMultifamily 11,960 61,998 63,627 77,138 58,604 Commercial(C&I) loans 99,294 42,908 174,946 228,903 143,944 (A) (B)SBA (C) 595,651 13,830 19,195 3,510 3,740 Wealth linesof credit 500 3,250 42,575 6,980 6,725 (A)Totalcommercial 708,153 130,844 352,973 359,945 247,217 loansInstallment 950 256 984 362 1,497 loansHome equitylines of 4,280 3,632 2,414 5,631 3,626 credit (A)Total loans $ 769,071 $ 168,954 $ 394,741 $ 400,857 $ 284,123 closed

For the Six Months Ended June 30, June 30, 2020 2019 Residential loans retained $ 33,458 $ 32,837 Residential loans sold 56,452 12,875 Total residential loans 89,910 45,712 Commercial real estate 9,606 55,229 Multifamily 73,958 79,726 Commercial (C&I) loans (A) (B) 142,202 285,072 SBA (C) 609,481 12,790 Wealth lines of credit (A) 3,750 14,105 Total commercial loans 838,997 446,922 Installment loans 1,206 2,055 Home equity lines of credit (A) 7,912 5,233 Total loans closed $ 938,025 $ 499,922

(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 and six months ended June 30, 2020.

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

June30, 2020 June30, 2019 Average Income/ Average Income/ Balance Expense Yield Balance Expense Yield ASSETS: Interest-earning assets:Investments: Taxable (A) $ 437,288 $ 2,108 1.93 % $ 392,079 $ 2,639 2.69 %Tax-exempt (A) (B) 10,137 129 5.09 16,913 206 4.87 Loans (B) (C): Mortgages 530,087 4,497 3.39 568,020 4,835 3.40 Commercial 2,083,310 16,147 3.10 1,786,086 17,581 3.94 mortgagesCommercial 2,038,530 18,204 3.57 1,417,112 17,303 4.88 Commercial 3,296 44 5.34 ? ? ? constructionInstallment 52,859 371 2.81 54,565 585 4.29 Home equity 54,869 453 3.30 63,112 818 5.18 Other 318 7 8.81 375 10 10.67 Total loans 4,763,269 39,723 3.34 3,889,270 41,132 4.23 Federal funds sold 102 ? 0.25 101 ? 0.25 Interest-earning 497,764 109 0.09 241,129 1,265 2.10 depositsTotalinterest-earning 5,708,560 42,069 2.95 % 4,539,492 45,242 3.99 %assetsNoninterest-earning assets:Cash and due from 5,437 5,280 banksAllowance for loan (64,109 ) (39,138 ) and lease lossesPremises and 21,462 21,176 equipmentOther assets 234,357 127,798 Totalnoninterest-earning 197,147 115,116 assetsTotal assets $ 5,905,707 $ 4,654,608 LIABILITIES: Interest-bearing deposits:Checking $ 1,748,753 $ 1,642 0.38 % $ 1,266,909 $ 4,123 1.30 %Money markets 1,207,816 1,473 0.49 1,197,998 4,415 1.47 Savings 118,878 16 0.05 112,693 16 0.06 Certificates of 676,498 3,147 1.86 610,493 3,461 2.27 deposit ? retailSubtotalinterest-bearing 3,751,945 6,278 0.67 3,188,093 12,015 1.51 depositsInterest-bearing 150,330 700 1.86 180,000 836 1.86 demand ? brokeredCertificates of 33,729 264 3.13 46,639 326 2.80 deposit ? brokeredTotalinterest-bearing 3,936,004 7,242 0.74 3,414,732 13,177 1.54 depositsBorrowings 330,514 1,127 1.36 105,000 838 3.19 Capital lease 7,270 87 4.79 8,052 97 4.82 obligationSubordinated debt 83,496 1,222 5.85 83,272 1,223 5.87 Totalinterest-bearing 4,357,284 9,678 0.89 % 3,611,056 15,335 1.70 %liabilitiesNoninterest-bearing liabilities:Demand deposits 873,926 497,853 Accrued expensesand other 171,814 58,721 liabilitiesTotalnoninterest-bearing 1,045,740 556,574 liabilitiesShareholders? 502,683 486,978 equityTotal liabilitiesand shareholders? $ 5,905,707 $ 4,654,608 equityNet interest income $ 32,391 $ 29,907 Net interest spread 2.06 % 2.29 %Net interest margin 2.27 % 2.64 %(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)

June30, 2020 March 31, 2020 Average Income/ Average Income/ Balance Expense Yield Balance Expense Yield ASSETS: Interest-earning assets:Investments: Taxable (A) $ 437,288 $ 2,108 1.93 % $ 411,806 $ 2,459 2.39 %Tax-exempt (A) (B) 10,137 129 5.09 10,534 131 4.97 Loans (B) (C): Mortgages 530,087 4,497 3.39 535,114 4,576 3.42 Commercial 2,083,310 16,147 3.10 1,955,808 18,483 3.78 mortgagesCommercial 2,038,530 18,204 3.57 1,758,137 18,593 4.23 Commercial 3,296 44 5.34 5,629 88 6.25 constructionInstallment 52,859 371 2.81 53,983 464 3.44 Home equity 54,869 453 3.30 55,654 614 4.41 Other 318 7 8.81 364 9 9.89 Total loans 4,763,269 39,723 3.34 4,364,689 42,827 3.92 Federal funds sold 102 ? 0.25 102 ? 0.25 Interest-earning 497,764 109 0.09 251,566 552 0.88 depositsTotalinterest-earning 5,708,560 42,069 2.95 % 5,038,697 45,969 3.65 %assetsNoninterest-earning assets:Cash and due from 5,437 5,517 banksAllowance for loan (64,109 ) (44,368 ) and lease lossesPremises and 21,462 21,145 equipmentOther assets 234,357 161,452 Totalnoninterest-earning 197,147 143,746 assetsTotal assets $ 5,905,707 $ 5,182,443 LIABILITIES: Interest-bearing deposits:Checking $ 1,748,753 $ 1,642 0.38 % $ 1,540,798 $ 3,447 0.89 %Money markets 1,207,816 1,473 0.49 1,192,049 2,981 1.00 Savings 118,878 16 0.05 110,905 15 0.05 Certificates of 676,498 3,147 1.86 698,019 3,694 2.12 deposit ? retailSubtotalinterest-bearing 3,751,945 6,278 0.67 3,541,771 10,137 1.14 depositsInterest-bearing 150,330 700 1.86 180,000 923 2.05 demand ? brokeredCertificates of 33,729 264 3.13 33,715 263 3.12 deposit ? brokeredTotalinterest-bearing 3,936,004 7,242 0.74 3,755,486 11,323 1.21 depositsBorrowings 330,514 1,127 1.36 183,398 1,012 2.21 Capital lease 7,270 87 4.79 7,475 90 4.82 obligationSubordinated debt 83,496 1,222 5.85 83,439 1,223 5.86 Totalinterest-bearing 4,357,284 9,678 0.89 % 4,029,798 13,648 1.35 %liabilitiesNoninterest-bearing liabilities:Demand deposits 873,926 542,557 Accrued expensesand other 171,814 101,662 liabilitiesTotalnoninterest-bearing 1,045,740 644,219 liabilitiesShareholders? 502,683 508,426 equityTotal liabilitiesand shareholders? $ 5,905,707 $ 5,182,443 equityNet interest income $ 32,391 $ 32,321 Net interest spread 2.06 % 2.30 %Net interest margin 2.27 % 2.57 %(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 SHEETUNAUDITEDSIX MONTHS ENDED(Tax-Equivalent Basis, Dollars in Thousands)

June30, 2020 June 30, 2019 Average Income/ Average Income/ Balance Expense Yield Balance Expense Yield ASSETS: Interest-earning assets:Investments: Taxable (A) $ 424,547 $ 4,567 2.15 % $ 389,835 $ 5,323 2.73 %Tax-exempt (A) (B) 10,335 260 5.03 17,128 416 4.86 Loans (B) (C): Mortgages 532,601 9,073 3.41 569,818 9,730 3.42 Commercial 2,019,559 34,629 3.43 1,805,123 35,603 3.94 mortgagesCommercial 1,898,334 36,798 3.88 1,398,452 34,053 4.87 Commercial 4,462 132 5.92 ? ? ? constructionInstallment 53,421 835 3.13 54,889 1,162 4.23 Home equity 55,261 1,067 3.86 61,773 1,583 5.13 Other 341 16 9.38 394 21 10.66 Total loans 4,563,979 82,550 3.62 3,890,449 82,152 4.22 Federal funds sold 102 ? 0.25 101 ? 0.25 Interest-earning 374,665 661 0.35 239,201 2,535 2.12 depositsTotalinterest-earning 5,373,628 88,038 3.28 % 4,536,714 90,426 3.99 %assetsNoninterest-earning assets:Cash and due from 5,477 5,339 banksAllowance for loan (54,238 ) (39,044 ) and lease lossesPremises and 21,304 21,321 equipmentOther assets 197,904 124,965 Totalnoninterest-earning 170,447 112,581 assetsTotal assets $ 5,544,075 $ 4,649,295 LIABILITIES: Interest-bearing deposits:Checking $ 1,644,776 $ 5,089 0.62 % $ 1,275,711 $ 7,833 1.23 %Money markets 1,199,932 4,454 0.74 1,202,973 8,750 1.45 Savings 114,892 31 0.05 113,345 32 0.06 Certificates of 687,258 6,841 1.99 608,845 6,695 2.20 deposit ? retailSubtotalinterest-bearing 3,646,858 16,415 0.90 3,200,874 23,310 1.46 depositsInterest-bearing 165,165 1,623 1.97 180,000 1,575 1.75 demand ? brokeredCertificates of 33,722 527 3.13 51,371 691 2.69 deposit ? brokeredTotalinterest-bearing 3,845,745 18,565 0.97 3,432,245 25,576 1.49 depositsBorrowings 256,956 2,139 1.66 105,448 1,672 3.17 Capital lease 7,373 177 4.80 8,147 196 4.81 obligationSubordinated debt 83,467 2,445 5.86 83,243 2,447 5.88 Totalinterest-bearing 4,193,541 23,326 1.11 % 3,629,083 29,891 1.65 %liabilitiesNoninterest-bearing liabilities:Demand deposits 708,242 484,632 Accrued expensesand other 136,738 55,274 liabilitiesTotalnoninterest-bearing 844,980 539,906 liabilitiesShareholders? 505,554 480,306 equityTotal liabilitiesand shareholders? $ 5,544,075 $ 4,649,295 equityNet interest income $ 64,712 $ 60,535 Net interest spread 2.17 % 2.34 %Net interest margin 2.41 % 2.67 %(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 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 June 30, March 31, Dec 31, Sept 30, June 30, Tangible BookValue Per 2020 (B) 2020 (A) 2019 2019 2019 ShareShareholders? $ 507,980 $ 496,440 $ 503,652 $ 495,350 $ 493,888 equityLess:Intangible 39,943 40,265 40,588 41,111 31,941 assets, netTangible 468,037 456,175 463,064 454,239 461,947 equity Period endshares 18,905,135 18,852,523 18,926,810 18,999,241 19,456,312 outstandingTangible bookvalue per $ 24.76 $ 24.20 $ 24.47 $ 23.91 $ 23.74 shareBook value 26.87 26.33 26.61 26.07 25.38 per share TangibleEquity to TangibleAssetsTotal assets $ 6,281,215 $ 5,831,458 $ 5,182,879 $ 4,925,409 $ 4,871,234 Less:Intangible 39,943 40,265 40,588 41,111 31,941 assets, netTangible 6,241,272 5,791,193 5,142,291 4,884,298 4,839,293 assetsLess: PPP 547,004 ? ? ? ? LoansTangibleAssets 5,694,268 5,791,193 5,142,291 4,884,298 4,839,293 excluding PPPLoansTangibleequity to 7.50 % 7.88 % 9.01 % 9.30 % 9.55 %tangibleassetsTangibleequity totangible 8.22 % 7.88 % 9.01 % 9.30 % 9.55 %assetsexcluding PPPloansEquity to 8.09 % 8.51 % 9.72 % 10.06 % 10.14 %assets (A)

(A) PPP loans with a balance of $547 million increased our total assets at June 30, 2020. Equity to total assets would be 8.86% if PPP loans were excluded from total assets.

Three Months Ended June 30, March Dec 31, Sept 30, June 30, 31,Efficiency 2020 2020 2019 2019 2019 RatioNet interest $ 31,971 $ 31,747 $ 30,914 $ 30,085 $ 29,268 incomeTotal other 12,626 14,517 15,525 14,416 13,026 incomeLess: Loss onloans held for saleat lower ofcost or fair ? 3 4 6 ? valueLess: Incomefrom life ? ? ? ? ? insuranceproceedsAdd:Securities (125 ) (198 ) 45 (34 ) (69 )(gains)/losses, netTotalrecurring 44,472 46,069 46,488 44,473 42,225 revenue Operating 29,014 28,235 26,701 26,259 26,173 expensesLess: ORE ? ? ? ? ? provisionTotaloperating 29,014 28,235 26,701 26,259 26,173 expense Efficiency 65.24 % 61.29 % 57.44 % 59.04 % 61.98 %ratio

For the Six Months Ended June 30, June 30, Efficiency Ratio 2020 2019 Net interest income $ 63,718 $ 59,275 Total other income 27,143 24,755 Add: Securities (gains)/losses, net (323 ) (128 )Less: Loss/(gain) on loans held for sale at lower of cost or fair value 3 ? Total recurring revenue 90,541 83,902 Operating expenses 57,249 51,888 Less: ORE provision ? ? Total operating expense 57,249 51,888 Efficiency ratio 63.23 % 61.84 %

Contact:

Jeffrey J. Carfora, SEVP and CFO

Peapack-Gladstone Financial Corporation

T: 908-719-4308