GlobeNewswire Inc | Feb 1, 2021 09:00AM EST

February 01, 2021

BEDMINSTER, NJ, Feb. 01, 2021 (GLOBE NEWSWIRE) -- via NewMediaWire Peapack-Gladstone Financial Corporation (NASDAQ Global Select Market: PGC) (the Company) announces its fourth quarter and full year 2020 results.

This earnings release should be read in conjunction with the Companys Q4 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 $189.36 million, net income of $26.19 million and diluted earnings per share (EPS) of $1.37 for the year ended December 31, 2020, compared to $174.97 million, $47.43 million and $2.44, respectively, for the year ended December 31, 2019.

The main driver of the decrease in net income and EPS for the 2020 twelve-month period was a $32.40 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 $32.40 million compared to a $4.00 million provision for the 2019 twelve-month period.

The 2020 twelve-month period included increased net interest income and noninterest income. The increase in net interest income was due principally to earnings from the Paycheck Protection Program (PPP). The increase in noninterest income also benefitted from gain on sale of PPP loans and increases in wealth management income (primarily due to the acquisition of Point View Wealth Management acquired in September 2019) and mortgage banking income. These increases were partially offset by increased operating expenses (due in part to the previous mentioned firm acquired in September 2019, prepayment of FHLB advances, valuation allowance for a loan held for sale, the closure of one retail branch and consolidation of two private banking locations).

The 2020 twelve-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 December 31, 2020, the Company recorded total revenue of $46.14 million, net income of $3.03 million and EPS of $0.16, compared to $46.44 million, $12.23 million and $0.64, respectively, for the same three-month period last year.

The 2020 quarter included increased net interest income, due in part to earnings from the PPP, but also due to increased other interest-earnings assets. Noninterest income also increased due to increases in wealth management income and mortgage banking income. These increases were partially offset by increased operating expenses (due in part to the previous mentioned prepayment of FHLB advances ($4.78 million), valuation allowance for loan held for sale ($4.43 million) and consolidation of two private banking offices ($210,000), and an increase in the provision for loan and lease losses to $2.35 million due to the current environment created by the COVID-19 pandemic, compared to a $1.95 million provision for loan and lease losses for the 2019 quarter.

On January 28, 2021, the Company authorized the repurchase of up to 948,735 shares, or approximately 5% of its outstanding shares, through March 31, 2022. Purchases will be conducted in accordance with the limitations set forth in the SECs Rule 10b-18.

Douglas L. Kennedy, President and CEO, said, Our capital is strong and believe that purchasing our Companys stock is an opportunity for us to effectively manage our excess capital, while taking advantage of the Companys discounted valuation relative to peers.

Mr. Kennedy also said, As noted in previous quarters, during 2020 we generally 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. As of December 31, 2020, our deferrals were $74 million (or 1.7% of the loan portfolio).

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 Q4 2020 Investor Update (and Supplemental Financial Information).

EXECUTIVE SUMMARY:

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

Year over Year Comparison

Year Ended Year Ended December31, December31, Increase/ (Dollarsinmillions, 2020 2019 (Decrease) except persharedata)Netinterest $ 127.60 $ 120.27 $ 7.33 6 %incomeWealthmanagement 40.86 38.36 2.50 7 fee income(A)Capitalmarkets 6.65 8.67 (2.02 ) (23 )activity(B)Other 14.25 7.67 6.58 86 income (C)Totalother 61.76 54.70 7.06 13 incomeOperatingexpenses 124.96 104.85 20.11 19 (D)Pretaxincomebefore 64.40 70.12 (5.72 ) (8 )provisionfor loanlossesProvisionfor loan 32.40 4.00 28.40 710 and leaselosses (E)Pretax 32.00 66.12 (34.12 ) (52 )incomeIncome taxexpense 5.81 18.69 (12.88 ) (69 )(F)Net income $ 26.19 $ 47.43 $ (21.24 ) (45 )%Diluted $ 1.37 $ 2.44 $ (1.07 ) (44 )%EPS Total $ 189.36 $ 174.97 $ 14.39 8 %Revenue Return onaverage 0.45 % 0.99 % (0.54 ) assetsannualizedReturn onaverage 5.11 % 9.70 % (4.59 ) equityannualized

-- The twelve months ended December 31, 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. There were $1.6 million of fees related to loan level back-to-back swap activities in 2020 period, compared to $5.8 million in 2019. -- The twelve months ended December 31, 2020 includes a gain on sale of $7.4 million on the sale of $355 million of PPP loans. -- The twelve months ended December 31, 2020 includes a full year of operating expenses related to Point View, $4.8 million for the prepayment of FHLB advances, $4.4 million for the valuation allowance for a loan held for sale, $210,000 for the consolidation of two private banking locations, $278,000 for the closure of a retail branch, and an increase in FDIC premium expense due to credits applied in 2019 available to the banking industry but unavailable in general. -- The twelve months ended December 31, 2020 included a provision for loan and lease losses of $32.40 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.

December 2020 Quarter Compared to Prior Year Quarter

Three Months Three Months Ended Ended December31, December31, Increase/ (Dollarsinmillions, 2020 2019 (Decrease) except persharedata)Netinterest $ 31.74 $ 30.91 $ 0.83 3 %incomeWealthmanagement 10.79 10.12 0.67 7 fee incomeCapitalmarkets 1.85 3.73 (1.88 ) (50 )activity(A)Other 1.76 1.68 0.08 5 incomeTotalother 14.40 15.53 (1.13 ) (7 )incomeOperatingexpenses 39.25 26.70 12.55 47 (B)Pretaxincomebefore 6.89 19.74 (12.85 ) (65 )provisionfor loanlossesProvisionfor loan 2.35 1.95 0.40 21 and leaselosses (C)Pretax 4.54 17.79 (13.25 ) (74 )incomeIncome tax 1.51 5.56 (4.05 ) (73 )expenseNet income $ 3.03 $ 12.23 $ (9.20 ) (75 )%Diluted $ 0.16 $ 0.64 $ (0.48 ) (76 )%EPS Total $ 46.14 $ 46.44 $ (0.30 ) (1 )%Revenue Return onaverage 0.21 % 0.98 % (0.77 ) assetsannualizedReturn onaverage 2.32 % 9.81 % (7.49 ) equityannualized

-- Capital markets activity includes loan level back-to-back swap activities, the SBA lending and sale program, and mortgage banking activities. There were no fees related to loan level back-to-back swap activities in the quarter ended December 31, 2020, compared to $2.5 million in the December 2019 quarter. -- The quarter ended December 31, 2020 includes $4.8 million for the prepayment of FHLB advances, $4.4 million for the valuation allowance for a loan held for sale, $210,000 for the consolidation of two private banking locations, and an increase in FDIC premium expense due to credits applied in the 2019 period that were available to the banking industry in general. -- The December 2020 quarter included a provision for loan and lease losses of $2.35 million.

December 2020 Quarter Compared to Linked Quarter

Three Months Three Months Ended Ended December31, September30, Increase/ (Dollarsinmillions, 2020 2020 (Decrease) except persharedata)Netinterest $ 31.74 $ 32.15 $ (0.41 ) (1 )%incomeWealthmanagement 10.79 10.12 0.67 7 fee incomeCapitalmarkets 1.85 1.03 0.82 80 activity(A)Other 1.76 9.06 (7.30 ) (81 )income (B)Totalother 14.40 20.21 (5.81 ) (29 )incomeOperatingexpenses 39.25 28.46 10.79 38 (C)Pretaxincomebefore 6.89 23.90 (17.01 ) (71 )provisionfor loanlossesProvisionfor loan 2.35 5.15 (2.80 ) (54 )and leaselosses (D)Pretax(loss)/ 4.54 18.75 (14.21 ) (76 )incomeIncome tax 1.51 5.20 (3.69 ) (71 )expenseNet income $ 3.03 $ 13.55 $ (10.52 ) (78 )%Diluted $ 0.16 $ 0.71 $ (0.55 ) (77 )%EPS Total $ 46.14 $ 52.36 $ (6.22 ) (12 )%Revenue Return onaverage 0.21 % 0.89 % (0.68 ) assetsannualizedReturn onaverage 2.32 % 10.53 % (8.21 ) 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 quarter ended December 31, 2020 includes $4.8 million for the prepayment of FHLB advances, $4.4 million for the valuation allowance for a loan held for sale and $210,000 for the consolidation of two private banking locations. -- The provision for loan and lease losses for the three months ended December 31, 2020 was less than the provision for the three months ended September 30, 2020 as certain qualitative factors related to COVID-19 pandemic were partially reduced.

The Companys near-term priorities include:

-- Actively deploy/manage capital and liquidity by expanding our lending activities and execution on our recently announced stock repurchase program. -- Grow and expand our core wealth management and commercial banking businesses, including lift-outs, strategic hires, and acquisition of wealth management firms. -- Expand our net interest margin. -- Continue to assess the economic recovery; modify our allowance for credit losses as justified given the economic environment. -- Invest in digital enhancements to improve the client acquisition and experience. -- Grow fee income to 35% to 45% of total bank revenue.

Other select highlights for the quarter included:

-- As previously announced, in the fourth quarter of 2020 the Company successfully completed a private placement of $100 million in fixed-to floating rate subordinated notes due 2030 at a rate of 3.5%. The proceeds raised will be used for general corporate purposes, which will include stock repurchases and could potentially include redemption of the Companys existing 6% subordinated debt and acquisitions of wealth management firms. -- As previously announced, the Company repaid $105 million of FHLB advances at a cost of $4.8 million, which will provide a benefit to interest expense greater than the prepayment penalty over the remaining life of the advances. -- As previously announced, effective in December 2020 the Company completed its lift out of teams from Lucas Capital Management, a registered investment advisor headquartered in Red Bank, NJ, which added nearly $250 million of assets under management and/or administration (AUM/AUA) and Noyes Capital Management, a registered investment advisor headquartered in New Vernon, NJ, which added approximately $150 million of AUM/AUA. -- The Company recorded $210,000 of charges related to the consolidation of two private banking locations. The Company expects to recoup the charges in less than a year. -- Wealth management fee income, which comprised approximately 22% of the Companys total revenue for the twelve-months ended December 31, 2020, continues to contribute significantly to the Companys diversified revenue sources. -- As of December 31, 2020, total C&I loans (including PPP and loans held for sale) comprised 45% of the total loan portfolio. -- Deposits totaled $4.82 billion at December 31, 2020. This reflected net growth of $575 million or 14% compared to $4.24 billion at December 31, 2019. -- The Companys reported and core net interest margin improved in the quarter when compared to the September 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 December 31, 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 December 31, 2020 remain strong and the Companys tangible book value per share at December 31, 2020 was $25.47 (compared to a book value of $27.78), reflecting an increase of over 4% from $24.47 (compared to a book value of $26.61) at December 31, 2019, despite a much higher than normal provision for loan and lease losses during 2020 ($32.4 million in 2020 compared to $4.0 million in 2019). -- Nonperforming assets at December 31, 2020 were $11.5 million, or 0.19% of total assets. Loans past due 30 to 89 days total $5.1 million at December 31, 2020.

SUPPLEMENTAL QUARTERLY DETAILS

Wealth Management Business

In the December 2020 quarter, the Banks wealth management business generated $10.79 million in fee income, compared to $10.12 million for the December 2019 quarter, and $10.12 million for the September 2020 quarter.

The market value of the Companys AUM/AUA increased from $7.6 billion at September 30, 2020 to a record $8.8 billion at December 31, 2020.

In the December 2020 quarter the Company completed the lift out of teams from Lucas Capital Management and Noyes Capital Management which combined added approximately $400 million in AUM/AUA.

John P. Babcock, President of the Peapack Private Wealth Management division, said 2020 new business, new client acquisition and client retention were all strong and aided by favorable market action in the second half of the year, most notably in the quarter ended December 31, 2020. 2020 full year gross inflows totaled over $600 million. Babcock went on to note, We continue to look to grow our wealth business organically and through selective acquisition. At year-end 2020, we combined two of our acquired RIAs Lassus Wherley Associates and Point View Wealth Managementinto the Peapack Private bank entity and we continue to make significant progress on our infrastructure consolidation including launching our new trading platform and a new CRM system, as well as adding more resources to our financial planning team.

Loans / Commercial Banking

Total loans of $4.40 billion at December 31, 2020 (including PPP loans of $196 million) were relatively flat when compared to the December 31, 2019 balance, and declined $54 million from $4.46 billion at September 30, 2020, as paydown and payoff activity remains robust. Excluding PPP loan originations of $596 million, 2020 origination levels of approximately $885 million were less than 2019s level of $1.3 billion, due to the impact of the COVID-19 pandemic in 2020.

Total C&I loans (including $196 million of PPP loans) at December 31, 2020 were $1.98 billion. This reflected net growth of $199 million when compared to $1.78 billion at December 31, 2019. Excluding the $196 million of PPP loans at December 31, 2020, total C&I loans remained relatively flat in 2020 despite paydowns of several large lines of credit, as well as the Companys workout and asset recovery efforts, including the workout and recovery of several nonaccrual and/or classified credits during the latter part of 2020.

Although the Bank sold $355 million of PPP loans in the third quarter of 2020 (at a gain of $7.4 million), as of December 31, 2020, the Bank still held $196 million of PPP loans (almost all of which exceed $2.0 million in original principal amount) with approximately $1.2 million of net deferred fees which will be recognized into income over the remaining portion of the original two-year maturity of the loan or as forgiven or repaid.

The Company maintains a well-diversified loan portfolio, by loan type and by industry concentration, as detailed in the Q4 2020 Investor Update (and Supplemental Financial Information).

Mr. Kennedy noted, Our commercial pipelines going into the new year are strong. Further, and as I noted in prior periods, our Corporate Advisory business, which gives us the capability to engage in high level strategic debt, capital and valuation analysis, enables us to provide a unique boutique level of service, giving us a competitive advantage over many 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 December 31, 2020 were $4.82 billion reflecting an increase of $575 million when compared to $4.24 billion at December 31, 2019. Noninterest bearing demand deposits increased $304 million, interest bearing demand increased $339 million, brokered deposits declined $70 million, and higher costing CDs declined $119 million. Mr. Kennedy noted, Of our total deposits, only 17% are not covered by FDIC insurance, reinforcing the core nature of our deposit base.

For the quarter ended December 31, 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 $1.8 billion of secured funding available from the Federal Home Loan Bank. Additionally, the Company also had $988 million of secured funding available from the Federal Reserve Discount Window. As noted previously, during the fourth quarter of 2020, the Bank prepaid $105 million of FHLB advances with an average rate in excess of 3%.

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 the first quarter of 2020 reduced the Companys yield earned on assets. However, we were able and continue to strategically reprice our deposits over time to offset much of that decline. Further, when interest rate rise, our net interest income will improve. Our current modeling indicates that net interest income would improve 8.5% with an immediate 100 basis points rise in rates.

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

Twelve Months Ended Twelve Months Ended December31, 2020 December31, 2019 NII NIM NII NIM NII/NIMexcluding $ 123,099 2.58% $ 119,032 2.67% the belowPrepaymentpremiumsreceived on 1,452 0.02% 1,328 0.03% loanpaydownsEffect ofmaintainingexcess (1,320 ) -0.21% (86 ) -0.07% interestearningcashEffect of 4,371 -0.08% ? 0.00% PPP loansNII/NIM as $ 127,602 2.31% $ 120,274 2.63% reported Three Months Ended Three Months Ended Three Months Ended December31, 2020 September 30, 2020 December31, 2019 NII NIM NII NIM NII NIM NII/NIMexcluding $ 30,897 2.51% $ 30,327 2.45% $ 30,385 2.61% the belowPrepaymentpremiumsreceived on 413 0.02% 104 0.01% 414 0.03% loanpaydownsEffect ofmaintainingexcess (206 ) -0.24% (266 ) -0.24% 115 -0.04% interestearningcashEffect of 631 -0.04% 1,984 -0.02% ? 0.00% PPP loansNII/NIM as $ 31,735 2.25% $ 32,149 2.20% $ 30,914 2.60% reported

As shown above, the Companys reported NIM increased 5 basis points compared to the linked quarter, while core NIM increased 6 basis points compared to the linked quarter. The Bank was able to strategically price down its cost of funds by 7 basis points during the December 2020 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 $460 million of CDs with an average rate of approximately 1.18% 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 $1.85 million for the December 2020 quarter compared to $1.03 million for the September 2020 quarter and $3.73 million for the December 2019 quarter. The December 2020 and September 2020 quarters 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, as there has been, and will continue to be, minimal activity for such in the current environment.

Operating Expenses

The Companys total operating expenses were $39.25 million for the quarter ended December 31, 2020, compared to $28.46 million for the September 2020 quarter and $26.70 million for the December 2019 quarter. The December 2020 quarter included the prepayment of FHLB advances ($4.8 million), a valuation allowance on a loan held for sale ($4.4 million) and consolidation of two private banking offices ($210,000). FDIC insurance expense increased to $665,000 in the December 2020 quarter from $605,000 in the September 2020 quarter and the Company recorded none in the December 2019 quarter. The increase in FDIC expense in 2020 quarter was due to average asset growth. There was no FDIC insurance expense in the December 2019 quarter due to credits applied which were available to the banking industry in general. The 2020 periods also included reduced deferral of expenses directly related to loan originations when compared to 2019 periods, due to reduced 2020 loan origination levels as a result of the impact of the COVID-19 pandemic.

Mr. Kennedy noted, While we continue to manage expenses closely and prudently, we will invest in digital enhancements to improve the client experience and grow and expand our core wealth management and commercial banking businesses, including lift-outs, strategic hires, and wealth M&A.

Income Taxes

The effective tax rate for the three months ended December 31, 2020 was 33.29%, as compared to 27.75% for the September 2020 quarter and 31.23% for the December 2019 quarter. A tax return to book adjustment recorded in the December 2020 quarter, coupled with reduced pretax income in the that quarter, increased the December 2020 effective tax rate by approximately 5%.

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 Q4 2020 Investor Update (and Supplemental Financial Information).

Nonperforming assets at December 31, 2020 (which does not include troubled debt restructured loans that are performing in accordance with their terms) were $11.5 million, or 0.19% of total assets, up slightly from $8.7 million, or 0.15% of total assets, at September 30, 2020 and down significantly from $28.9 million, or 0.56% of total assets, at December 31, 2019. Total loans past due 30 through 89 days and still accruing were $5.1 million at December 31, 2020 (of which $4.7 million made their past due payments in January), compared to $6.6 million at September 30, 2020 and $1.9 million at December 31, 2019. During the third and fourth quarter of 2020, the Companys asset recovery and workout efforts reduced nonperforming and classified assets.

For the quarter ended December 31, 2020, the Companys provision for loan and lease losses was $2.35 million compared to $5.15 million for the September 2020 quarter and $1.95 million for the December 2019 quarter. The increased provision for loan and lease losses in the 2020 quarters when compared to the 2019 quarter 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 decline, net charge-offs/recoveries, and the composition of the loan portfolio.

At December 31, 2020, the allowance for loan and lease losses was $67.31 million (1.53% of total loans), compared to $66.15 million at September 30, 2020 (1.48% of total loans), and $43.68 million at December 31, 2019 (0.99% of total loans).

The Company plans to adopt CECL effective January 1, 2021 and does not expect its Day One CECL adjustment to be material.

Capital

The Companys capital position during the December 2020 quarter was benefitted by net income of $3.03 million.

The Companys and Banks capital ratios at December 31, 2020 all remain strong. Such ratios remain well above regulatory well capitalized standards.

As previously noted, and as previously announced, in the fourth quarter of 2020 the Company successfully completed a private placement of $100 million in fixed-to floating rate subordinated notes due 2030 at a rate of 3.5%. Such funds benefitted the Companys Regulatory Tier 2 Capital. The proceeds raised will be used for general corporate purposes, which will include stock repurchases and could potentially include redemption of the Companys existing 6% subordinated debt and acquisitions of wealth management firms.

The Company employs quarterly capital stress testing run under multiple scenarios, including a no growth, severely adverse case. In such case as of September 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 Q4 2020 Investor Update (and Supplemental Financial Information).

As previously announced on January 28, 2021, the Company declared a cash dividend of $0.05 per share payable on February 26, 2021 to shareholders of record on February 11, 2021.

ABOUT THE COMPANY

Peapack-Gladstone Financial Corporation is a New Jersey bank holding company with total assets of $5.9 billion and AUM/AUA administration of $8.8 billion as of December 31, 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 2021 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 Dec 31, Sept 30, June 30, March 31, Dec 31, 2020 2020 2020 2020 2019 Income Statement Data:Interest income $ 38,532 $ 40,174 $ 41,649 $ 45,395 $ 45,556 Interest 6,797 8,025 9,678 13,648 14,642 expenseNet interest 31,735 32,149 31,971 31,747 30,914 incomeWealthmanagement fee 10,791 10,119 9,996 9,955 10,120 incomeService charges 859 785 695 816 893 and feesBank owned life 313 314 318 328 325 insuranceGain on loansheld for saleat fair value 1,470 954 550 292 344 (Mortgagebanking) (A)Gain/(loss) onloans held forsale at lower ? 7,429 ? (3 ) (4 )of cost orfair value(B)Fee incomerelated to loanlevel, ? ? 202 1,418 2,459 back-to-backswaps (A)Gain on sale of 375 79 258 1,054 929 SBA loans (A)Other income 640 531 482 459 504 Securitiesgains/(losses), (42 ) ? 125 198 (45 )netTotal other 14,406 20,211 12,626 14,517 15,525 incomeSalaries andemployee 19,902 19,202 19,186 19,226 17,954 benefitsPremises and 4,189 4,109 4,036 4,043 3,898 equipmentFDIC insurance 665 605 455 250 ? expenseFHLB prepayment 4,784 ? ? ? ? penaltyValuationallowance loans 4,425 ? ? ? ? held for sale(C)Other expenses 5,284 4,545 5,337 4,716 4,849 Total operating 39,249 28,461 29,014 28,235 26,701 expensesPretax incomebefore 6,892 23,899 15,583 18,029 19,738 provision forloan lossesProvision forloan and lease 2,350 5,150 4,900 20,000 1,950 losses (D)Income/(loss)before income 4,542 18,749 10,683 (1,971 ) 17,788 taxesIncome taxexpense/ 1,512 5,202 2,441 (3,344 ) 5,555 (benefit) (E)Net income $ 3,030 $ 13,547 $ 8,242 $ 1,373 $ 12,233 Total revenue $ 46,141 $ 52,360 $ 44,597 $ 46,264 $ 46,439 (F)Per Common Share Data:Earnings per $ 0.16 $ 0.72 $ 0.44 $ 0.07 $ 0.64 share (basic)Earnings per 0.16 0.71 0.43 0.07 0.64 share (diluted)Weightedaverage numberof common sharesoutstanding:Basic 18,947,864 18,908,337 18,872,070 18,858,343 18,966,917 Diluted 19,334,569 19,132,650 19,059,822 19,079,575 19,207,738 Performance Ratios:Return onaverage assets 0.21 % 0.89 % 0.56 % 0.11 % 0.98 %annualized(ROAA)Return onaverage equity 2.32 % 10.53 % 6.56 % 1.08 % 9.81 %annualized(ROAE)Net interestmargin 2.25 % 2.20 % 2.27 % 2.57 % 2.60 %(tax-equivalentbasis)GAAP efficiency 85.06 % 54.36 % 65.06 % 61.03 % 57.50 %ratio (F)Operatingexpenses / 2.66 % 1.86 % 1.97 % 2.18 % 2.13 %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 December 2020 quarter reflects a $4.4 million write-down of a commercial real estate loan associated with an assisted living facility. -- The March 2020, June 2020 and September 2020 quarters included a higher provision for loan and lease losses primarily due to the 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 Twelve Months Ended December 31, Change 2020 2019 $ % Income Statement Data:Interest income $ 165,750 $ 180,670 $ (14,920 ) -8 %Interest expense 38,148 60,396 (22,248 ) -37 %Net interest 127,602 120,274 7,328 6 %incomeWealth management 40,861 38,363 2,498 7 %fee incomeService charges 3,155 3,488 (333 ) -10 %and feesBank owned life 1,273 1,321 (48 ) -4 %insuranceGain on loansheld for sale atfair value 3,266 721 2,545 353 %(Mortgagebanking) (A)Gain/(loss) onloans held forsale at lower of 7,426 (10 ) 7,436 -74360 %cost orfair value (B)Fee incomerelated to loanlevel, 1,620 5,799 (4,179 ) -72 %back-to-backswaps (A)Gain on sale of 1,766 2,145 (379 ) -18 %SBA loans (A)Other income 2,112 2,752 (640 ) -23 %Securities gains/ 281 117 164 140 %(losses), netTotal other 61,760 54,696 7,064 13 %incomeSalaries and 77,516 70,129 7,387 11 %employee benefitsPremises and 16,377 14,735 1,642 11 %equipmentFDIC insurance 1,975 277 1,698 613 %expenseFHLB prepayment 4,784 ? 4,784 N/A penaltyValuationallowance loans 4,425 ? 4,425 N/A held for sale (C)Other expenses 19,882 19,707 175 1 %Total operating 124,959 104,848 20,111 19 %expensesPretax incomebefore provision 64,403 70,122 (5,719 ) -8 %for loan lossesProvision forloan and lease 32,400 4,000 28,400 710 %losses (D)Income before 32,003 66,122 (34,119 ) -52 %income taxesIncome tax(benefit)/expense 5,811 18,688 (12,877 ) -69 %(E)Net income $ 26,192 $ 47,434 $ (21,242 ) -45 % Total revenue (F) $ 189,362 $ 174,970 $ 14,392 8 %Per Common Share Data:Earnings per $ 1.39 $ 2.46 $ (1.07 ) -43 %share (basic)Earnings per 1.37 2.44 (1.07 ) -44 %share (diluted)Weighted averagenumber of common sharesoutstanding:Basic 18,896,825 19,268,870 (372,045 ) -2 %Diluted 19,081,187 19,411,448 (330,261 ) -2 %Performance Ratios:Return on average )assets annualized 0.45 % 0.99 % (0.54 % -54 %(ROAA)Return on average )equity annualized 5.11 % 9.70 % (4.59 % -47 %(ROAE)Net interestmargin 2.31 % 2.63 % (0.32 ) -12 %(tax-equivalent %basis)GAAP efficiency 65.99 % 59.92 % 6.07 % 10 %ratio (F)Operatingexpenses / 2.16 % 2.19 % (0.03 ) -1 %average assets %annualized

-- 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 2020 quarter. -- The 2020 year reflects a $4.4 million write down of a commercial real estate loan associated with an assisted living facility. -- The increase in the provision for loan and lease losses in 2020 was primarily due to the environment created by the COVID-19 pandemic. -- 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 CORPORATIONCONSOLIDATED STATEMENTS OF CONDITION(Dollars in Thousands)(Unaudited)

As of Dec 31, Sept 30, June 30, March 31, Dec 31, 2020 2020 2020 2020 2019 ASSETS Cash and due from $ 10,629 $ 8,400 $ 5,608 $ 6,171 $ 6,591 banksFederal funds sold 102 102 102 102 102 Interest-earning 642,591 670,863 617,117 767,730 201,492 depositsTotal cash and cash 653,322 679,365 622,827 774,003 208,185 equivalentsSecurities available 622,689 596,929 539,742 400,558 390,755 for saleEquity security 15,117 15,159 15,159 14,034 10,836 FHLB and FRB stock, 13,709 18,433 18,598 40,871 24,068 at costResidential mortgage 520,188 532,120 536,015 532,063 552,019 Multifamily mortgage 1,127,198 1,168,796 1,178,494 1,203,487 1,210,003 Commercial mortgage 694,034 722,678 761,910 760,648 761,244 Commercial loans (A) 1,975,337 1,930,984 2,316,125 1,810,214 1,776,450 Consumer loans 37,016 51,859 53,111 53,365 54,372 Home equity lines of 50,547 52,194 54,006 55,856 57,248 creditOther loans 225 260 272 347 349 Total loans 4,404,545 4,458,891 4,899,933 4,415,980 4,411,685 Less: Allowances forloan and lease 67,309 66,145 66,065 63,783 43,676 lossesNet loans 4,337,236 4,392,746 4,833,868 4,352,197 4,368,009 Premises and 21,609 21,668 21,449 21,243 20,913 equipmentOther real estate 50 50 50 50 50 ownedAccrued interest 22,495 22,192 15,956 11,816 10,494 receivableBank owned life 46,809 46,645 46,479 46,309 46,128 insuranceGoodwill and other 43,891 39,622 39,943 40,265 40,588 intangible assetsFinance lease 4,330 4,517 4,704 4,891 5,078 right-of-use assetsOperating lease 9,421 10,011 10,810 11,553 12,132 right-of-use assetsOther assets (B) 99,764 110,770 111,630 113,668 45,643 TOTAL ASSETS $ 5,890,442 $ 5,958,107 $ 6,281,215 $ 5,831,458 $ 5,182,879 LIABILITIES Deposits: Noninterest-bearing $ 833,500 $ 838,307 $ 911,989 $ 581,085 $ 529,281 demand depositsInterest-bearing 1,849,254 1,858,529 1,804,102 1,680,452 1,510,363 demand depositsSavings 130,731 127,737 123,140 112,668 112,652 Money market 1,298,885 1,251,349 1,183,603 1,163,410 1,196,313 accountsCertificates of 530,222 586,801 629,941 651,000 633,763 deposit ? RetailCertificates ofdeposit ? Listing 32,128 32,677 35,327 38,895 47,430 ServiceSubtotal ?customer? 4,674,720 4,695,400 4,688,102 4,227,510 4,029,802 depositsIB Demand ? Brokered 110,000 130,000 130,000 180,000 180,000 Certificates of 33,764 33,750 33,736 33,723 33,709 deposit ? BrokeredTotal deposits 4,818,484 4,859,150 4,851,838 4,441,233 4,243,511 Short-term 15,000 15,000 15,000 515,000 128,100 borrowingsFHLB advances (C) ? 105,000 105,000 105,000 105,000 Paycheck ProtectionProgram Liquidity 177,086 183,790 535,837 ? ? Facility (D)Finance lease 6,753 6,976 7,196 7,402 7,598 liabilityOperating lease 9,737 10,318 11,116 11,852 12,423 liabilitySubordinated debt, 181,794 83,585 83,529 83,473 83,417 net (E)Other liabilities 154,466 156,472 163,719 160,173 91,227 (B)Due to brokers ? 15,088 ? 10,885 7,951 TOTAL LIABILITIES 5,363,320 5,435,379 5,773,235 5,335,018 4,679,227 Shareholders? equity 527,122 522,728 507,980 496,440 503,652 TOTAL LIABILITIES ANDSHAREHOLDERS? EQUITY $ 5,890,442 $ 5,958,107 $ 6,281,215 $ 5,831,458 $ 5,182,879 Assets undermanagement and / oradministration atPeapack-GladstoneBank?s Private $ 8.8 $ 7.6 $ 7.2 $ 6.4 $ 7.5 Wealth ManagementDivision (marketvalue, not includedabove-dollars inbillions)

-- Includes PPP loans of $196 million at December 31, 2020, $202 million at September 30, 2020 and $547 million at June 30, 2020. -- The increase in other assets and other liabilities at March 31, 2020, June 30, 2020, September 30, 2020 and December 31, 2020 was primarily due to the change in the fair value of our back-to-back swap program. -- The Company prepaid $105 million of FHLB Advances with a weighted-average rate of 3.20% during the December 2020 quarter. -- Represents funding provided by the Federal Reserve for pledged PPP loans. -- The increase was due to the completion of a $100 million subordinated debt offering in December 22, 2020.

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

As of Dec 31, Sept 30, June 30, March Dec 31, 31, 2020 2020 2020 2020 2019 Asset Quality:Loans pastdue over 90days and $ ? $ ? $ ? $ ? $ ? stillaccruingNonaccrual 11,410 8,611 26,697 29,324 28,881 loans (A)Other real 50 50 50 50 50 estate ownedTotalnonperforming $ 11,460 $ 8,661 $ 26,747 $ 29,374 $ 28,931 assets Nonperformingloans to 0.26 % 0.19 % 0.54 % 0.66 % 0.65 %total loansNonperformingassets to 0.19 % 0.15 % 0.43 % 0.50 % 0.56 %total assets Performing $ 201 $ 2,278 $ 2,376 $ 2,389 $ 2,357 TDRs (B)(C) Loans pastdue 30through 89days and $ 5,053 $ 6,609 $ 3,785 $ 8,261 $ 1,910 stillaccruing (D)(E) Loans subjectto special $ 162,103 $ 129,700 $ 27,922 $ 13,222 $ 13,643 mention Classified $ 37,771 $ 41,263 $ 63,562 $ 58,938 $ 58,908 loans Impaired $ 16,204 $ 15,514 $ 33,708 $ 36,369 $ 35,924 loans Allowance forloan and lease losses:Beginning of $ 66,145 $ 66,065 $ 63,783 $ 43,676 $ 41,580 periodProvision forloan and 2,350 5,150 4,900 20,000 1,950 lease losses(Charge-offs)/recoveries, (1,186 ) (5,070 ) (2,618 ) 107 146 netEnd of period $ 67,309 $ 66,145 $ 66,065 $ 63,783 $ 43,676 ALLL tononperforming 589.91 % 768.15 % 247.46 % 217.51 % 151.23 %loansALLL to total 1.53 % 1.48 % 1.35 % 1.44 % 0.99 %loans (F)General ALLLto total 1.47 % 1.48 % 1.26 % 1.30 % 0.93 %loans (G)

-- Excludes residential and commercial loans held for sale of $8.5 million at December 31, 2020. Excludes one commercial loan held for sale of $10.0 million at September 30, 2020. -- Amounts reflect TDRs that are paying according to restructured terms. -- Amount does not include $4.0 million at December 31, 2020, $5.2 million at September 30, 2020, $23.2 million at June 30, 2020, $25.9 million at March 31, 2020 and $25.8 million at December 31, 2019 of TDRs included in nonaccrual loans. -- Excludes a residential loan held for sale of $93,000 at December 31, 2020. -- December 31, 2020 includes $1.3 million of residential loans that are classified as delinquent due to an escrow payment shortage due to a recent change in escrow payment requirement. -- If PPP loans of $196 million were excluded from loans at December 31, 2020, the ALLL/loans ratio would be 1.61%; if PPP loans of $202 million were excluded from loans at September 30, 2020, ALLL/ loans ratio would be 1.56%; and if PPP loans of $547 million were excluded from loans at June 30, 2020, ALLL/loans ratio would be 1.52%. -- Total ALLL less specific reserves equals general ALLL.

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

December31, September 30, December31, 2020 2020 2019 Capital Adequacy Equity to total 8.95 % 8.77 % 9.72 %assets (A)(J)Tangible Equityto tangible 8.27 % 8.16 % 9.01 %assets (B)Tangible Equityto tangibleassets excluding 8.55 % 8.45 % 9.01 %PPP loans(C)Book value per $ 27.78 $ 27.62 $ 26.61 share (D)Tangible BookValue per share $ 25.47 $ 25.53 $ 24.47 (E)

December31, September 30, December31, 2020 2020 2019 RegulatoryCapital ? HoldingCompanyTier I $ 483,535 8.53% $ 483,782 8.54% $ 463,521 9.33% leverageTier Icapital to 483,535 11.93 483,782 11.76 463,521 11.14 risk-weightedassetsCommon equitytier Icapital ratio 483,500 11.93 483,747 11.75 463,520 11.14 torisk-weightedassetsTier I & IIcapital to 716,210 17.67 618,993 15.04 590,614 14.20 risk-weightedassets RegulatoryCapital ? BankTier I $ 549,575 9.71% $ 547,761 9.68% $ 527,833 10.63% leverage (F)Tier Icapital to 549,575 13.55 547,761 13.33 527,833 12.70 risk-weightedassets (G)Common equitytier Icapital ratio 549,540 13.55 547,726 13.33 527,832 12.70 torisk-weightedassets (H)Tier I & IIcapital to 600,478 14.81 599,314 14.58 571,509 13.76 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% ($283 million) -- Regulatory well capitalized standard = 8.00% ($324 million) -- Regulatory well capitalized standard = 6.50% ($264 million) -- Regulatory well capitalized standard = 10.00% ($406 million) -- PPP loans with a balance of $196 million and $202 million increased total assets at December 31, 2020 and September 30, 2020, respectively. Equity to total assets would be 9.26% and 9.08% if PPP loans were excluded from total assets at December 31, 2020 and September 30, 2020, respectively.

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

For the Quarters Ended Dec 31, Sept 30, June 30, March 31, Dec 31, 2020 2020 2020 2020 2019 Residential loans $ 22,316 $ 32,599 $ 18,627 $ 14,831 $ 17,115 retainedResidential loans 64,630 54,521 37,061 19,391 21,255 soldTotal residential 86,946 87,120 55,688 34,222 38,370 loansCommercial real ? 1,613 748 8,858 52,630 estateMultifamily 1,184 1,500 11,960 61,998 63,627 Commercial (C&I) 218,235 118,048 99,294 42,908 174,946 loans (A) (B)SBA (C) 8,355 4,962 595,651 13,830 19,195 Wealth lines of 3,925 2,000 500 3,250 42,575 credit (A)Total commercial 231,699 128,123 708,153 130,844 352,973 loansInstallment loans 690 253 950 256 984 Home equity lines 2,330 4,759 4,280 3,632 2,414 of credit (A)Total loans closed $ 321,665 $ 220,255 $ 769,071 $ 168,954 $ 394,741

For the Twelve Months Ended Dec 31, Dec 31, 2020 2019 Residential loans retained $ 88,373 $ 69,025 Residential loans sold 175,603 49,976 Total residential loans 263,976 119,001 Commercial real estate 11,219 151,273 Multifamily 76,642 220,491 Commercial (C&I) loans (A) (B) 478,485 688,921 SBA (C) 622,798 35,495 Wealth lines of credit (A) 9,675 63,660 Total commercial loans 1,198,819 1,159,840 Installment loans 2,149 3,401 Home equity lines of credit (A) 15,001 13,278 Total loans closed $ 1,479,945 $ 1,295,520

-- Includes loans and lines of credit that closed in the period but not necessarily funded. -- Includes equipment finance. -- Includes PPP loans of $596 million for the three months ended June 30, 2020 and for the twelve months ended December 31, 2020.

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

December31, 2020 December31, 2019 Average Income/ Average Income/ Balance Expense Yield Balance Expense Yield ASSETS: Interest-earning assets:Investments: Taxable (A) $ 636,417 $ 2,033 1.28 % $ 393,549 $ 2,428 2.47 %Tax-exempt (A) (B) 8,137 101 4.96 12,037 147 4.88 Loans (B) (C): Mortgages 520,123 4,372 3.36 557,132 4,780 3.43 Commercial 1,865,953 14,796 3.17 1,959,902 18,588 3.79 mortgagesCommercial 1,943,855 16,587 3.41 1,662,026 18,413 4.43 Commercial 10,376 108 4.16 4,842.00 81.00 6.69 constructionInstallment 44,581 320 2.87 54,562 524 3.84 Home equity 51,545 429 3.33 58,082 662 4.56 Other 281 6 8.54 379 10 10.55 Total loans 4,436,714 36,618 3.30 4,296,925 43,058 4.01 Federal funds sold 102 ? 0.25 102 ? 0.25 Interest-earning 614,024 148 0.10 159,759 560 1.40 depositsTotalinterest-earning 5,695,394 38,900 2.73 % 4,862,372 46,193 3.80 %assetsNoninterest-earning assets:Cash and due from 9,632 5,600 banksAllowance for loan (68,862 ) (42,374 ) and lease lossesPremises and 21,698 20,946 equipmentOther assets 238,856 166,868 Totalnoninterest-earning 201,324 151,040 assetsTotal assets $ 5,896,718 $ 5,013,412 LIABILITIES: Interest-bearing deposits:Checking $ 1,850,917 $ 1,059 0.23 % $ 1,407,151 $ 3,489 0.99 %Money markets 1,273,681 811 0.25 1,169,413 3,456 1.18 Savings 128,195 17 0.05 112,597 16 0.06 Certificates of 602,068 2,106 1.40 660,159 3,734 2.26 deposit ? retailSubtotalinterest-bearing 3,854,861 3,993 0.41 3,349,320 10,695 1.28 depositsInterest-bearing 113,696 514 1.81 180,000 981 2.18 demand ? brokeredCertificates of 33,756 267 3.16 33,702 267 3.17 deposit ? brokeredTotalinterest-bearing 4,002,313 4,774 0.48 3,563,022 11,943 1.34 depositsBorrowings 244,753 616 1.01 221,462 1,383 2.50 Capital lease 6,832 82 4.80 7,669 92 4.80 obligationSubordinated debt 94,437 1,325 5.61 83,385 1,224 5.87 Totalinterest-bearing 4,348,335 6,797 0.63 % 3,875,538 14,642 1.51 %liabilitiesNoninterest-bearing liabilities:Demand deposits 858,004 539,501 Accrued expensesand other 166,933 99,702 liabilitiesTotalnoninterest-bearing 1,024,937 639,203 liabilitiesShareholders? 523,446 498,671 equityTotal liabilitiesand shareholders? $ 5,896,718 $ 5,013,412 equityNet interest income $ 32,103 $ 31,551 Net interest spread 2.10 % 2.29 %Net interest margin 2.25 % 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)

December31, 2020 September 30, 20020 Average Income/ Average Income/ Balance Expense Yield Balance Expense Yield ASSETS: Interest-earning assets:Investments: Taxable (A) $ 636,417 $ 2,033 1.28 % $ 553,607 $ 2,182 1.58 %Tax-exempt (A) (B) 8,137 101 4.96 9,127 116 5.08 Loans (B) (C): Mortgages 520,123 4,372 3.36 529,500 4,437 3.35 Commercial 1,865,953 14,796 3.17 1,929,319 15,115 3.13 mortgagesCommercial 1,943,855 16,587 3.41 2,134,399 17,653 3.31 Commercial 10,376 108 4.16 4,395 55 5.01 constructionInstallment 44,581 320 2.87 52,659 377 2.86 Home equity 51,545 429 3.33 53,373 444 3.33 Other 281 6 8.54 283 7 9.89 Total loans 4,436,714 36,618 3.30 4,703,928 38,088 3.24 Federal funds sold 102 ? 0.25 102 ? 0.25 Interest-earning 614,024 148 0.10 652,832 159 0.10 depositsTotalinterest-earning 5,695,394 38,900 2.73 % 5,919,596 40,545 2.74 %assetsNoninterest-earning assets:Cash and due from 9,632 7,479 banksAllowance for loan (68,862 ) (68,110 ) and lease lossesPremises and 21,698 21,511 equipmentOther assets 238,856 242,017 Totalnoninterest-earning 201,324 202,897 assetsTotal assets $ 5,896,718 $ 6,122,493 LIABILITIES: Interest-bearing deposits:Checking $ 1,850,917 $ 1,059 0.23 % $ 1,828,780 $ 1,130 0.25 %Money markets 1,273,681 811 0.25 1,235,040 920 0.30 Savings 128,195 17 0.05 125,016 16 0.05 Certificates of 602,068 2,106 1.40 642,732 2,529 1.57 deposit ? retailSubtotalinterest-bearing 3,854,861 3,993 0.41 3,831,568 4,595 0.48 depositsInterest-bearing 113,696 514 1.81 130,000 636 1.96 demand ? brokeredCertificates of 33,756 267 3.16 33,742 267 3.17 deposit ? brokeredTotalinterest-bearing 4,002,313 4,774 0.48 3,995,310 5,498 0.55 depositsBorrowings 244,753 616 1.01 475,465 1,221 1.03 Capital lease 6,832 82 4.80 7,054 84 4.76 obligationSubordinated debt 94,437 1,325 5.61 83,552 1,222 5.85 Totalinterest-bearing 4,348,335 6,797 0.63 % 4,561,381 8,025 0.70 %liabilitiesNoninterest-bearing liabilities:Demand deposits 858,004 872,560 Accrued expensesand other 166,933 173,816 liabilitiesTotalnoninterest-bearing 1,024,937 1,046,376 liabilitiesShareholders? 523,446 514,736 equityTotal liabilitiesand shareholders? $ 5,896,718 $ 6,122,493 equityNet interest income $ 32,103 $ 32,520 Net interest spread 2.10 % 2.04 %Net interest margin 2.25 % 2.20 %(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 SHEETUNAUDITEDTWELVE MONTHS ENDED(Tax-Equivalent Basis, Dollars in Thousands)

December31, 2020 December 31, 2019 Average Income/ Average Income/ Balance Expense Yield Balance Expense Yield ASSETS: Interest-earning assets:Investments: Taxable (A) $ 510,245 $ 8,782 1.72 % $ 391,666 $ 10,228 2.61 %Tax-exempt (A) (B) 9,479 477 5.03 14,930 728 4.88 Loans (B) (C): Mortgages 528,687 17,882 3.38 565,935 19,321 3.41 Commercial 1,958,262 64,541 3.30 1,857,014 72,061 3.88 mortgagesCommercial 1,969,115 71,037 3.61 1,498,077 71,071 4.74 Commercial 5,932 295 4.97 1,881 132 7 constructionInstallment 51,007 1,532 3.00 54,555 2,246 4.12 Home equity 53,853 1,940 3.60 60,036 2,981 4.97 Other 311 29 9.32 391 42 10.74 Total loans 4,567,167 157,256 3.44 4,037,889 167,854 4.16 Federal funds sold 102 ? 0.25 102 ? 0.25 Interest-earning 504,753 968 0.19 223,629 4,457 1.99 depositsTotalinterest-earning 5,591,746 167,483 3.00 % 4,668,216 183,267 3.93 %assetsNoninterest-earning assets:Cash and due from 7,025 5,477 banksAllowance for loan (61,401 ) (40,328 ) and lease lossesPremises and 21,455 21,176 equipmentOther assets 219,287 142,156 Totalnoninterest-earning 186,366 128,481 assetsTotal assets $ 5,778,112 $ 4,796,697 LIABILITIES: Interest-bearing deposits:Checking $ 1,742,846 $ 7,279 0.42 % $ 1,342,901 $ 15,789 1.18 %Money markets 1,227,295 6,185 0.50 1,189,880 16,434 1.38 Savings 120,780 63 0.05 113,312 63 0.06 Certificates of 654,652 11,476 1.75 631,999 14,210 2.25 deposit ? retailSubtotalinterest-bearing 3,745,573 25,003 0.67 3,278,092 46,496 1.42 depositsInterest-bearing 143,388 2,773 1.93 180,000 3,457 1.92 demand ? brokeredCertificates of 33,735 1,061 3.15 42,460 1,225 2.89 deposit ? brokeredTotalinterest-bearing 3,922,696 28,837 0.74 3,500,552 51,178 1.46 depositsBorrowings 308,814 3,976 1.29 136,992 3,941 2.88 Capital lease 7,157 343 4.79 7,956 382 4.80 obligationSubordinated debt 86,246 4,992 5.79 83,300 4,895 5.88 Totalinterest-bearing 4,324,913 38,148 0.88 % 3,728,800 60,396 1.62 %liabilitiesNoninterest-bearing liabilities:Demand deposits 787,191 505,486 Accrued expensesand other 153,648 73,601 liabilitiesTotalnoninterest-bearing 940,839 579,087 liabilitiesShareholders? 512,360 488,810 equityTotal liabilitiesand shareholders? $ 5,778,112 $ 4,796,697 equityNet interest income $ 129,335 $ 122,871 Net interest spread 2.12 % 2.31 %Net interest margin 2.31 % 2.63 %(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 Dec 31, Sept 30, June 30, March 31, Dec 31, Tangible BookValue Per 2020 2020 2020 2020 2019 ShareShareholders? $ 527,122 $ 522,728 $ 507,980 $ 496,440 $ 503,652 equityLess:Intangible 43,891 39,622 39,943 40,265 40,588 assets, netTangible 483,231 483,106 468,037 456,175 463,064 equity Period endshares 18,974,703 18,924,953 18,905,135 18,852,523 18,926,810 outstandingTangible bookvalue per $ 25.47 $ 25.53 $ 24.76 $ 24.20 $ 24.47 shareBook value 27.78 27.62 26.87 26.33 26.61 per share TangibleEquity to TangibleAssetsTotal assets $ 5,890,442 $ 5,958,107 $ 6,281,215 $ 5,831,458 $ 5,182,879 Less:Intangible 43,891 39,622 39,943 40,265 40,588 assets, netTangible 5,846,551 5,918,485 6,241,272 5,791,193 5,142,291 assetsLess: PPP 195,574 201,991 547,004 ? ? LoansTangibleAssets 5,650,977 5,716,494 5,694,268 5,791,193 5,142,291 excluding PPPLoansTangibleequity to 8.27 % 8.16 % 7.50 % 7.88 % 9.01 %tangibleassetsTangibleequity totangible 8.55 % 8.45 % 8.22 % 7.88 % 9.01 %assetsexcluding PPPloansEquity to 8.95 % 8.77 % 8.09 % 8.51 % 9.72 %assets (A)

-- Equity to total assets would be 9.26% if PPP loans of $196 million were excluded from total assets as of December 31, 2020. 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 Dec 31, Sept 30, June 30, March Dec 31, 31,Efficiency 2020 2020 2020 2020 2019 RatioNet interest $ 31,735 $ 32,149 $ 31,971 $ 31,747 $ 30,914 incomeTotal other 14,406 20,211 12,626 14,517 15,525 incomeLess: (Gain)/losson loans held for sale at lowerof cost or ? (7,429 ) ? 3 4 fair value Securitieslosses/ 42 ? (125 ) (198 ) 45 (gains), netTotalrecurring 46,183 44,931 44,472 46,069 46,488 revenue Operating 39,249 28,461 29,014 28,235 26,701 expensesLess: FHLBprepayment 4,784 ? ? ? ? penalty Valuationallowance 4,425 ? ? ? ? loans held forsaleTotaloperating 30,040 28,461 29,014 28,235 26,701 expense Efficiency 65.05 % 63.34 % 65.24 % 61.29 % 57.44 %ratio

For the Twelve Months Ended Dec 31, Dec 31, Efficiency Ratio 2020 2019 Net interest income $ 127,602 $ 120,274 Total other income 61,760 54,696 Less: Securities (gains)/losses, net (281 ) (117 ) (Gain)/loss on loans held for sale at lower of cost or fair value (7,426 ) 10 Total recurring revenue 181,655 174,863 Operating expenses 124,959 104,848 Less: FHLB prepayment penalty 4,784 ? Valuation allowance loans held for sale 4,425 ? Total operating expense 115,750 104,848 Efficiency ratio 63.72 % 59.96 %

Contact:Jeffrey J. Carfora, SEVP and CFOPeapack-Gladstone Financial CorporationT: 908-719-4308