GlobeNewswire Inc | Apr 29, 2021 09:00AM EDT

April 29, 2021

Bedminster, NJ, April 29, 2021 (GLOBE NEWSWIRE) -- via NewMediaWire -- Peapack-Gladstone Financial Corporation (NASDAQ Global Select Market: PGC) (the Company) announces its first quarter 2021 results.

This earnings release should be read in conjunction with the Companys Q1 2021 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 $49.61 million, net income of $13.18 million and diluted earnings per share (EPS) of $0.67 for the quarter ended March 31, 2021, compared to $46.27 million, $1.37 million and $0.07, respectively, for the same three month period ended March 31, 2020.

The 2021 quarter included increased noninterest income, principally wealth management income and income from capital markets activities (which includes mortgage banking income, loan level back-to-back swap income, SBA loan income, and corporate advisory fee income). The 2021 quarter also included a significantly reduced provision for loan losses when compared to the same quarter last year. The 2021 quarter included a $225,000 provision while the 2020 quarter included a $20.0 million provision, which was due to the environment at that time created by the COVID-19 pandemic, which led to increased qualitative loss factors when calculating the allowance for loan losses.

The 2021 three-month period also included $1.5 million of severance expense related to certain staff reorganizations within several areas of the Bank. The 2020 three-month period included a tax benefit of $3.2 million 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.

As previously disclosed, on January 28, 2021, the Company authorized the repurchase of up to 948,735 shares, or approximately 5% of its outstanding shares. During the first quarter of 2021 the Company purchased 158,033 shares at an average price of $27.71 for a total cost of $4.4 million under this program.

Douglas L. Kennedy, President and CEO, said, Our capital is strong and we believe that purchasing the 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, During the first quarter of 2021 the Company participated in the 2021 round of the Paycheck Protection Program (PPP) which created much needed funding to qualifying small businesses and organizations. We are proud to say that during the quarter we assisted with over $142 million of PPP loans - $47 million processed, closed and funded by the Bank, and another $95 million referred directly to a third party for processing and funding. The Company plans to sell the $46 million of loans in the second quarter to the same third party, who is extremely proficient in the servicing and forgiveness processes for PPP loans.

EXECUTIVE SUMMARY:

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

March 2021 Quarter Compared to Prior Year Quarter

Three Three Months Months Ended Ended March31, March31, Increase/ (Dollars inmillions, 2021 2020 (Decrease) except pershare data)Net interest $ 31.79 $ 31.75 $ 0.04 0 %incomeWealthmanagement 12.13 9.96 2.17 22 fee income(A)Capitalmarkets 3.57 2.84 0.73 26 activity (B)Other income 2.12 1.72 0.40 23 Total other 17.82 14.52 3.30 23 incomeOperating 31.59 28.24 3.35 12 expenses (C)Pretax incomebefore 18.02 18.03 (0.01 ) (0 )provision forloan lossesProvision forloan and 0.23 20.00 (19.77 ) (99 )lease losses(D)Pretax income 17.79 (1.97 ) 19.76 N/A Income taxexpense/ 4.61 (3.34 ) 7.95 N/A (benefit) (E)Net income $ 13.18 $ 1.37 $ 11.81 862 %(C)Diluted EPS $ 0.6747 $ 0.0700 $ 0.6047 864 % Total Revenue $ 49.61 $ 46.27 $ 3.34 7 %(F) Return onaverage 0.89 % 0.11 % 0.78 assetsannualizedReturn onaverage 10.03 % 1.08 % 8.95 equityannualized

-- The March 2021 quarter included a full quarter of wealth management fee income and expense related to the December lift outs of teams from Lucas Capital Management (Lucas) and Noyes Capital Management (Noyes) - approximately $600,000 of wealth management fee income and approximately $400,000 of operating expenses were recorded in the 2021 quarter. -- Capital markets activity includes loan level back-to-back swap activities, the SBA lending and sale program, corporate advisory activities and mortgage banking activities. There were no fees related to loan level back-to-back swap activities in the quarter ended March 31, 2021, compared to $1.4 million in the March 2020 quarter. -- The quarter ended March 31, 2021 included $1.5 million of severance expense related to certain staff reorganization within several areas of the Bank. This expense reduced pretax income before provision for loan losses and pretax income by $1.5 million each; and reduced net income by $1.1 million; diluted EPS by $0.06; ROA by 0.08%; and ROE by 0.86%, respectively. -- The March 2020 quarter included a provision for loan and lease losses of $20.0 million, primarily due to the environment at that time 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 equals net interest income plus total other income.

March 2021 Quarter Compared to Linked Quarter

Three Three Months Months Ended Ended March31, December31, Increase/ (Dollars inmillions, 2021 2020 (Decrease) except pershare data)Netinterest $ 31.79 $ 31.74 $ 0.05 0 %incomeWealthmanagement 12.13 10.79 1.34 12 fee income(A)Capitalmarkets 3.57 1.90 1.67 88 activity(B)Other 2.12 1.71 0.41 24 incomeTotal other 17.82 14.40 3.42 24 incomeOperatingexpenses 31.59 39.25 (7.66 ) (20 )(C)Pretaxincomebefore 18.02 6.89 11.13 162 provisionfor loanlossesProvisionfor loan 0.23 2.35 (2.12 ) (90 )and leaselossesPretax 17.79 4.54 13.25 292 incomeIncome tax 4.61 1.51 3.10 205 expenseNet income $ 13.18 $ 3.03 $ 10.15 335 %(C)Diluted EPS $ 0.67 $ 0.16 $ 0.51 319 % Total $ 49.61 $ 46.14 $ 3.47 8 %Revenue (D) Return onaverage 0.89 % 0.21 % 0.68 assetsannualizedReturn onaverage 10.03 % 2.32 % 7.71 equityannualized

-- The March 2021 quarter included a full quarter of wealth management fee income and expense related to the lift outs of teams from Lucas and Noyes - approximately $600,000 of wealth management fee income and approximately $400,000 of operating expenses were recorded in the 2021 quarter. -- Capital markets activity includes loan level back-to-back swap activities, the SBA lending and sale program, corporate advisory and mortgage banking activities. -- The quarter ended March 31, 2021 included $1.5 million of severance expense related to certain staff reorganization within several areas of the Bank. This expense reduced pretax income before provision for loan losses and pretax income by $1.5 million each; and reduced net income by $1.1 million; diluted EPS by $0.06; ROA by 0.08%; and ROE by 0.86%, respectively. The December 31, 2020 quarter included $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. -- Total revenue equals net interest income plus total other income.

The Companys near-term priorities include:

-- Actively deploy/manage capital and liquidity by expanding our lending activities and executing on our recently announced stock repurchase program. -- Continue to grow and expand our core Wealth Management, Commercial Banking and Capital Markets businesses through core operations, strategic hires, lift-outs, and acquisition of wealth management firms. -- Expand our Net Interest Margin. -- Investment in digital enhancements. -- Continue to target fee income at 35% - 45% of total bank revenue. -- Drive ROA to greater than 1% and return on average tangible common equity to greater than 14%.

Other select highlights for the quarter included:

-- Total noninterest income totaled $17.8 million for the March 2021 quarter, accounting for 36% of total revenue (within our target of 35% to 45% of total revenue). -- Wealth management fee income, which comprised approximately 24% of the Companys total revenue for the three-months ended March 31, 2021, continues to contribute significantly to the Companys diversified revenue sources. -- The Company completed its first major corporate advisory/investment banking deal. -- As of March 31, 2021, total C&I loans (including PPP loans held in portfolio and held for sale) comprised 45% of the total loan portfolio. -- Deposits totaled $4.94 billion at March 31, 2021. This reflected net growth of $504 million or 11% compared to $4.44 billion at March 31, 2020, despite managed reductions in higher cost CDs of $184 million. -- The Companys net interest margin improved in the quarter when compared to the December 2020 quarter (see subsequent discussion of Net Interest Income / Net Interest Margin). -- In addition to $1.4 billion (23% of total assets) of balance sheet liquidity (investments, interest-earning deposits and cash) as of March 31, 2021, the Company also has access to approximately $2.8 billion of available secured funding at the Federal Home Loan Bank and the Federal Reserve. -- Nonperforming assets at March 31, 2021 were $11.8 million, or 0.20% of total assets. Loans past due 30 to 89 days totaled $1.6 million at March 31, 2021. Loans on deferral status as of March 31, 2021 were $43 million (less than 1% of total loans). -- As previously announced, the Company opened a retail location in Boonton/Mountain Lakes, New Jersey.



SUPPLEMENTAL QUARTERLY DETAILS

Wealth Management Business

In the March 2021 quarter, the Banks wealth management business generated $12.13 million in fee income, compared to $9.96 million for the March 2020 quarter, and $10.79 million for the December 2020 quarter.

The market value of the Companys AUM/AUA increased from $8.8 billion at December 31, 2020 to $9.4 billion at March 31, 2021.

In the quarter ended March 31, 2021 the Company successfully integrated the previously announced teams from Lucas and Noyes which combined added approximately $400 million in AUM/AUA during the fourth quarter of 2020.

John P. Babcock, President of the Peapack Private Wealth Management division, said, 2021 showed continued strong new business, new client acquisition and client retention. We ended 2020 with a very strong Q4 and this continued into Q1 2021 with gross inflows of over $250 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 as well as on-boarded two lift outs in Morristown and Red Bank NJ. 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 $4.44 billion at March 31, 2021 (including PPP loans of $233 million, of which $46 million are held for sale) increased $36 million from $4.40 billion at December 31, 2020. Excluding net PPP loan growth during the March 2021 quarter, loan balances were relatively flat to year-end. Loan origination levels for the March 2021 quarter were approximately $330 million (excluding PPP loans), but paydown and payoff activity remains robust.

Total C&I loans (including the PPP loans) at March 31, 2021 were $1.98 billion or 45% of the total loan portfolio. While C&I origination levels have been strong, as noted just above, paydown and payoff activity has also been robust, including 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 in 2021.

Mr. Kennedy noted, Our commercial loan (C&I, Equipment Finance and CRE/Multifamily) pipelines are strong going into the second quarter, standing at approximately $350 million with likelihood of closing during the second quarter of 2021.

Mr. Kennedy also noted, As I have mentioned in the past, 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.

The Company maintains a well-diversified loan portfolio, as noted in the Q1 2021 Investor Update (and Supplemental Financial Information).

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 March 31, 2021 were $4.94 billion reflecting an increase of $504 million when compared to $4.44 billion at March 31, 2020 and an increase of $126 million from $4.82 billion at December 31, 2020. Compared to the quarter ended March 31, 2020, noninterest bearing demand deposits increased $328 million and interest-bearing demand increased $307 million, while brokered deposits declined $70 million, and higher costing CDs declined $184 million. Mr. Kennedy noted, Our noninterest bearing deposits comprise 19% of our customer deposits, and only 17% of our total deposits are not covered by FDIC insurance; both statistics reinforce the core nature of our deposit base.

For the quarter ended March 31, 2021, the Companys balance sheet liquidity (investments, interest-earning deposits and cash) totaled $1.4 billion (or 23% of assets). In addition to the $1.4 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 had $990 million 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 the first quarter of 2020 reduced the Companys yield earned on assets. However, we were able to and we continue to strategically reprice our deposits over time to offset much of that decline. Further, when interest rates rise, we expect that our net interest income will improve. Our current modeling indicates that net interest income would improve 6.3% with an immediate 100 basis points rise in rates.

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

Three Months Ended Three Months Ended Three Months Ended March31, 2021 December 31, 2020 March31, 2020 NII NIM NII NIM NII NIM NII/NIMexcluding $ 30,565 2.49% $ 30,897 2.51% $ 31,279 2.60% the belowPrepaymentpremiumsreceived on 704 0.05% 413 0.02% 525 0.05% loanpaydownsEffect ofmaintainingexcess (195 ) -0.21% (206 ) -0.24% (57 ) -0.08% interestearningcashEffect of 719 -0.05% 631 -0.04% ? 0.00% PPP loansNII/NIM as $ 31,793 2.28% $ 31,735 2.25% $ 31,747 2.57% reported



As shown above, the Companys reported NIM increased 3 basis points compared to the linked quarter. The Bank strategically lowered its cost of deposits by 8 basis points and generated an additional $291,000 of prepayment premiums compared to the linked quarter. These positives were partially offset by a reduced yield on loans (decline of 4 basis points) and the full 90-day impact from the mid-December 2020 $100 million, 3.5% subordinated debt issuance.

Future net interest income and net interest margin should benefit from the following:

-- $415 million of CDs at an average rate of 0.76% mature within one year. -- $67 million of term money market accounts at an average rate of 0.50% are set to reprice on July 1, 2021. -- $50 million of subordinated debt at a coupon of 6% becomes callable on June 30, 2021.

Income from Capital Markets Activities

Noninterest income from Capital Markets activities (the SBA lending and sale program, mortgage banking activity, corporate advisory activity and loan level back-to-back swap activities) totaled $3.57 million for the March 2021 quarter compared to $1.90 million for the December 2020 quarter and $2.84 million for the March 2020 quarter. The March 2021 quarter results were driven by a $1.45 million gain on sale of SBA loans, which was benefitted by certain changes to SBA lending requirements. The March 2021 and December 2020 quarters reflected increased mortgage banking activity due to greater refinance activity in the low rate environment. During March 2021, the Company also recorded $1.1 million of corporate advisory fee income. This included the Companys first major corporate advisory/investment banking event. These transactions tend to be larger and take longer to complete. As noted previously, the pipeline of such business is fairly robust. The March 2021 quarter included no income from loan level, back-to-back swap activities, as there has been, and will continue to be, minimal activity for such in the current environment. The March 2020 quarter included $1.4 million of such income.

Other Noninterest Income (other than Wealth Management fee income and Income from Capital Markets Activities)

The March 2021 quarter included approximately $300,000 of additional Bank Owned life Insurance income, compared to prior quarters, due to receipt of life insurance proceeds. Such proceeds were nontaxable. The 2021 quarter also included a $282,000 gain on sale of $8 million of loans that had some past payment issues and were classified as held for sale as of December 31, 2020. Partially offsetting these positives, the Company recorded a $265,000 securities loss related to the valuation of certain community investment equity securities.

Operating Expenses

The Companys total operating expenses were $31.59 million for the quarter ended March 31, 2021, compared to $39.25 million for the December 2020 quarter and $28.24 million for the March 2020 quarter. The March 2021 quarter included $1.5 million of severance expense related to certain staff reorganization within several areas of the Bank, as well as a full quarters worth of expense related to Lucas and Noyes (approximately $400,000). 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).

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 March 31, 2021 was 25.94%, as compared to 33.29% for the December 2020 quarter and a tax benefit in the quarter ended March 31, 2020. The March 31, 2021 benefitted from life insurance proceeds that were not taxable and from the vesting of restricted stock at prices higher than grant prices. 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 Q1 2021 Investor Update (and Supplemental Financial Information).

Nonperforming assets at March 31, 2021 (which does not include troubled debt restructured loans that are performing in accordance with their terms) were $11.8 million, or 0.20% of total assets, up slightly from $11.5 million, or 0.19% of total assets, at December 31, 2020 and down significantly from $29.4 million, or 0.50% of total assets, at March 31, 2020. Total loans past due 30 through 89 days and still accruing declined to $1.6 million at March 31, 2021, from $5.1 million at December 31, 2020 and $8.3 million at March 31, 2020. During the latter half of 2020 and first quarter of 2021, the Companys asset recovery and workout efforts reduced nonperforming and classified assets.

For the quarter ended March 31, 2021, the Companys provision for loan and lease losses was $225,000 compared to $2.35 million for the December 2020 quarter and $20.00 million for the March 2020 quarter. The decreased provision for loan and lease losses in the 2021 quarter when compared to the 2020 quarters reflect the reduced qualitative loss factors when calculating the allowance for loan losses as loan deferrals entered into during the COVID-19 pandemic have come down significantly from prior year (declined from $914 million at June 30, 2020 to $43 million at March 31, 2021). 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 charge-offs/recoveries, and the composition of the loan portfolio.

At March 31, 2021, the allowance for loan and lease losses was $67.54 million (1.52% of total loans), compared to $67.31 million at December 31, 2020 (1.53% of total loans), and $63.78 million at March 31, 2020 (1.44% of total loans). The Company has elected to take additional time to adopt CECL and will implement effective January 1, 2022.

Capital

The Companys capital position during the March 2021 quarter was benefitted by net income of $13.18 million which was offset by the purchase of shares through the Companys stock repurchase program. The Company purchased 158,033 shares at an average price of $27.71 for a total cost of $4.4 million. Capital was also impacted by an increase in the unrealized loss on our securities of $13.4 million during the March 2021 quarter, as medium-term market interest rates rose during the quarter impacting the market value of securities.

The Companys and Banks capital ratios at March 31, 2021 all remain strong. Such ratios remain well above regulatory well capitalized standards.

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 December 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 Q1 2021 Investor Update (and Supplemental Financial Information).

As previously announced, on April 27, 2021, the Company declared a cash dividend of $0.05 per share payable on May 25, 2021 to shareholders of record on May 11, 2021.

ABOUT THE COMPANY

Peapack-Gladstone Financial Corporation is a New Jersey bank holding company with total assets of $6.0 billion and assets under management/administration of $9.4 billion as of March 31, 2021. 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; -- 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, 2020. 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 March 31, Dec 31, Sept 30, June 30, March 31, 2021 2020 2020 2020 2020 Income Statement Data:Interest income $ 38,239 $ 38,532 $ 40,174 $ 41,649 $ 45,395 Interest 6,446 6,797 8,025 9,678 13,648 expenseNet interest 31,793 31,735 32,149 31,971 31,747 incomeWealthmanagement fee 12,131 10,791 10,119 9,996 9,955 incomeService charges 846 859 785 695 816 and feesBank owned life 611 313 314 318 328 insuranceGain on loansheld for saleat fair value 1,025 1,470 954 550 292 (Mortgagebanking) (A)Gain/(loss) onloans held forsale at lower 282 ? 7,429 ? (3 )of cost or fair value(B)Fee incomerelated to loanlevel, ? ? ? 202 1,418 back-to-back swaps (A)Gain on sale of 1,449 375 79 258 1,054 SBA loans (A)Corporateadvisory fee 1,098 50 75 65 75 income (A)Other income 643 590 456 417 384 Securities(losses)/gains, (265 ) (42 ) ? 125 198 netTotal other 17,820 14,406 20,211 12,626 14,517 incomeSalaries andemployee 21,990 19,902 19,202 19,186 19,226 benefits (C)Premises and 4,113 4,189 4,109 4,036 4,043 equipmentFDIC insurance 585 665 605 455 250 expenseFHLB prepayment ? 4,784 ? ? ? penaltyValuationallowance loans ? 4,425 ? ? ? held for sale(D)Other expenses 4,906 5,284 4,545 5,337 4,716 Total operating 31,594 39,249 28,461 29,014 28,235 expensesPretax incomebefore 18,019 6,892 23,899 15,583 18,029 provision forloan lossesProvision forloan and lease 225 2,350 5,150 4,900 20,000 losses (E)Income/(loss)before income 17,794 4,542 18,749 10,683 (1,971 )taxesIncome taxexpense/ 4,616 1,512 5,202 2,441 (3,344 )(benefit) (F)Net income $ 13,178 $ 3,030 $ 13,547 $ 8,242 $ 1,373 Total revenue $ 49,613 $ 46,141 $ 52,360 $ 44,597 $ 46,264 (G)Per Common Share Data:Earnings per $ 0.70 $ 0.16 $ 0.72 $ 0.44 $ 0.07 share (basic)Earnings per 0.67 0.16 0.71 0.43 0.07 share (diluted)Weightedaverage numberof common sharesoutstanding:Basic 18,950,305 18,947,864 18,908,337 18,872,070 18,858,343 Diluted 19,531,689 19,334,569 19,132,650 19,059,822 19,079,575 Performance Ratios:Return onaverage assets 0.89 % 0.21 % 0.89 % 0.56 % 0.11 %annualized(ROAA)Return onaverage equity 10.03 % 2.32 % 10.53 % 6.56 % 1.08 %annualized(ROAE)Return onaveragetangible common 10.94 % 2.51 % 11.41 % 7.13 % 1.17 %equity (ROATCE)(H)Net interestmargin 2.28 % 2.25 % 2.20 % 2.27 % 2.57 %(tax-equivalentbasis)GAAP efficiency 63.68 % 85.06 % 54.36 % 65.06 % 61.03 %ratio (I)Operatingexpenses / 2.14 % 2.66 % 1.86 % 1.97 % 2.18 %average assetsannualized

-- Gain on loans held for sale at fair value (mortgage banking), fee income related to loan level, back-to-back swaps, gain on sale of SBA loans and corporate advisory fee income are all included in capital markets activity as referred to within the earnings release. -- Includes gain on sale of PPP loans of $355 million completed in the September quarter. -- The March 2021 quarter included $1.5 million of severance expense related to corporate restructuring. -- The December 2020 quarter reflects a $4.4 million write-down of a commercial real estate held for sale 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 equals net interest income plus total other income. -- Return on average tangible common equity is calculated by dividing tangible common equity by annualized net income. See Non-GAAP financial measures reconciliation included in these tables. -- 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 March 31, Dec 31, Sept 30, June 30, March 31, 2021 2020 2020 2020 2020 ASSETS Cash and due from $ 8,159 $ 10,629 $ 8,400 $ 5,608 $ 6,171 banksFederal funds sold 102 102 102 102 102 Interest-earning 468,276 642,591 670,863 617,117 767,730 depositsTotal cash and cash 476,537 653,322 679,365 622,827 774,003 equivalentsSecurities 875,301 622,689 596,929 539,742 400,558 available for saleEquity security 14,852 15,117 15,159 15,159 14,034 FHLB and FRB stock, 13,699 13,709 18,433 18,598 40,871 at costResidential 498,884 520,188 532,120 536,015 532,063 mortgageMultifamily 1,178,940 1,127,198 1,168,796 1,178,494 1,203,487 mortgageCommercial mortgage 697,599 694,034 722,678 761,910 760,648 Commercial loans 1,982,570 1,975,337 1,930,984 2,316,125 1,810,214 (A)Consumer loans 36,519 37,016 51,859 53,111 53,365 Home equity lines 45,624 50,547 52,194 54,006 55,856 of creditOther loans 199 225 260 272 347 Total loans 4,440,335 4,404,545 4,458,891 4,899,933 4,415,980 Less: Allowancesfor loan and lease 67,536 67,309 66,145 66,065 63,783 lossesNet loans 4,372,799 4,337,236 4,392,746 4,833,868 4,352,197 Premises and 23,260 21,609 21,668 21,449 21,243 equipmentOther real estate 50 50 50 50 50 ownedAccrued interest 23,916 22,495 22,192 15,956 11,816 receivableBank owned life 46,448 46,809 46,645 46,479 46,309 insuranceGoodwill and other 43,524 43,891 39,622 39,943 40,265 intangible assetsFinance lease 4,143 4,330 4,517 4,704 4,891 right-of-use assetsOperating lease 10,186 9,421 10,011 10,810 11,553 right-of-use assetsOther assets (B) 64,912 99,764 110,770 111,630 113,668 TOTAL ASSETS $ 5,969,627 $ 5,890,442 $ 5,958,107 $ 6,281,215 $ 5,831,458 LIABILITIES Deposits: Noninterest-bearing $ 908,922 $ 833,500 $ 838,307 $ 911,989 $ 581,085 demand depositsInterest-bearing 1,987,567 1,849,254 1,858,529 1,804,102 1,680,452 demand depositsSavings 141,743 130,731 127,737 123,140 112,668 Money market 1,256,605 1,298,885 1,251,349 1,183,603 1,163,410 accountsCertificates of 474,668 530,222 586,801 629,941 651,000 deposit ? RetailCertificates ofdeposit ? Listing 31,631 32,128 32,677 35,327 38,895 ServiceSubtotal ?customer? 4,801,136 4,674,720 4,695,400 4,688,102 4,227,510 depositsIB Demand ? 110,000 110,000 130,000 130,000 180,000 BrokeredCertificates of 33,777 33,764 33,750 33,736 33,723 deposit ? BrokeredTotal deposits 4,944,913 4,818,484 4,859,150 4,851,838 4,441,233 Short-term 15,000 15,000 15,000 15,000 515,000 borrowingsFHLB advances (C) ? ? 105,000 105,000 105,000 Paycheck ProtectionProgram Liquidity 168,180 177,086 183,790 535,837 ? Facility (D)Finance lease 6,528 6,753 6,976 7,196 7,402 liabilityOperating lease 10,509 9,737 10,318 11,116 11,852 liabilitySubordinated debt, 181,837 181,794 83,585 83,529 83,473 net (E)Other liabilities 120,219 154,466 156,472 163,719 160,173 (B)Due to brokers ? ? 15,088 ? 10,885 TOTAL LIABILITIES 5,447,186 5,363,320 5,435,379 5,773,235 5,335,018 Shareholders? 522,441 527,122 522,728 507,980 496,440 equityTOTAL LIABILITIES ANDSHAREHOLDERS? $ 5,969,627 $ 5,890,442 $ 5,958,107 $ 6,281,215 $ 5,831,458 EQUITYAssets undermanagement and / oradministration at

Peapack-Gladstone Bank?s Private $ 9.4 $ 8.8 $ 7.6 $ 7.2 $ 6.4Wealth Management Division (marketvalue, not includedabove-dollars inbillions)

-- Includes PPP loans of $233 million at March 31, 2021, $196 million at December 31, 2020, $202 million at September 30, 2020 and $547 million at June 30, 2020. -- The change in other assets and other liabilities 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 March 31, Dec 31, Sept 30, June 30, March 31, 2021 2020 2020 2020 2020 Asset Quality:Loans pastdue over 90days and $ ? $ ? $ ? $ ? $ ? stillaccruingNonaccrual 11,767 11,410 8,611 26,697 29,324 loans (A)Other real 50 50 50 50 50 estate ownedTotalnonperforming $ 11,817 $ 11,460 $ 8,661 $ 26,747 $ 29,374 assets Nonperformingloans to 0.27 % 0.26 % 0.19 % 0.54 % 0.66 %total loansNonperformingassets to 0.20 % 0.19 % 0.15 % 0.43 % 0.50 %total assets Performing $ 197 $ 201 $ 2,278 $ 2,376 $ 2,389 TDRs (B)(C) Loans pastdue 30through 89days and $ 1,622 $ 5,053 $ 6,609 $ 3,785 $ 8,261 stillaccruing (D)(E) Loans subjectto special $ 166,013 $ 162,103 $ 129,700 $ 27,922 $ 13,222 mention Classified $ 25,714 $ 37,771 $ 41,263 $ 63,562 $ 58,938 loans Impaired $ 11,964 $ 16,204 $ 15,514 $ 33,708 $ 36,369 loans Allowance forloan and lease losses:Beginning of $ 67,309 $ 66,145 $ 66,065 $ 63,783 $ 43,676 periodProvision forloan and 225 2,350 5,150 4,900 20,000 lease losses(Charge-offs)/recoveries, 2 (1,186 ) (5,070 ) (2,618 ) 107 netEnd of period $ 67,536 $ 67,309 $ 66,145 $ 66,065 $ 63,783 ALLL tononperforming 573.94 % 589.91 % 768.15 % 247.46 % 217.51 %loansALLL to total 1.52 % 1.53 % 1.48 % 1.35 % 1.44 %loansGeneral ALLLto total 1.45 % 1.47 % 1.48 % 1.26 % 1.30 %loans (F)

-- Excludes one commercial loan held for sale of $5.6 million at March 31, 2021. 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 $3.9 million at March 31, 2021, $4.0 million at December 31, 2020, $5.2 million at September 30, 2020, $23.2 million at June 30, 2020 and $25.9 million at March 31, 2020 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. -- Total ALLL less specific reserves equals general ALLL.

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

March31, December 31, March31, 2021 2020 2020 Capital Adequacy Equity to total 8.75 % 8.95 % 8.51 %assets (A)(J)Tangible Equityto tangible 8.08 % 8.27 % 7.88 %assets (B)Tangible Equityto tangibleassets excluding 8.41 % 8.55 % 7.88 % PPP loans(C)Book value per $ 27.45 $ 27.78 $ 26.33 share (D)Tangible BookValue per share $ 25.16 $ 25.47 $ 24.20 (E)

March31, December 31, March31, 2021 2020 2020RegulatoryCapital ? HoldingCompanyTier I $ 491,384 8.66% $ 483,535 8.53% $ 458,640 8.93%leverageTier Icapital to 491,384 12.00 483,535 11.93 458,640 10.71risk-weightedassetsCommon equitytier Icapital ratio 491,355 12.00 483,500 11.93 458,639 10.71 torisk-weightedassetsTier I & IIcapital to 724,599 17.70 716,210 17.67 595,770 13.91risk-weightedassets RegulatoryCapital ? BankTier I $ 564,533 9.95% $ 549,575 9.71% $ 527,433 10.28%leverage (F)Tier Icapital to 564,533 13.79 549,575 13.55 527,433 12.33risk-weightedassets (G)Common equitytier Icapital ratio 564,504 13.78 549,540 13.55 527,432 12.33 torisk-weightedassets (H)Tier I & IIcapital to 615,925 15.04 600,478 14.81 581,025 13.58risk-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% ($284 million) -- Regulatory well capitalized standard = 8.00% ($328 million) -- Regulatory well capitalized standard = 6.50% ($266 million) -- Regulatory well capitalized standard = 10.00% ($410 million) -- PPP loans with a balance of $233 million and $196 million increased total assets at March 31, 2021 and December 31, 2020, respectively.

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

For the Quarters Ended March 31, Dec 31, Sept 30, June 30, March 31, 2021 2020 2020 2020 2020Residential loans $ 15,814 $ 22,316 $ 32,599 $ 18,627 $ 14,831retainedResidential loans 45,873 64,630 54,521 37,061 19,391soldTotal residential 61,687 86,946 87,120 55,688 34,222loansCommercial real 38,363 ? 1,613 748 8,858estateMultifamily 85,009 1,184 1,500 11,960 61,998Commercial (C&I) 129,141 218,235 118,048 99,294 42,908loans (A) (B)SBA (C) 58,730 8,355 4,962 595,651 13,830Wealth lines of 2,475 3,925 2,000 500 3,250credit (A)Total commercial 313,718 231,699 128,123 708,153 130,844loansInstallment loans 63 690 253 950 256Home equity lines 1,899 2,330 4,759 4,280 3,632of credit (A)Total loans closed $ 377,367 $ 321,665 $ 220,255 $ 769,071 $ 168,954

-- Includes loans and lines of credit that closed in the period but not necessarily funded. -- Includes equipment finance. -- Includes PPP loans of $47 million for the quarter ended March 31, 2021 and $596 million for the three months ended June 30, 2020.

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

March31, 2021 March31, 2020 Average Income/ Average Income/ Balance Expense Yield Balance Expense Yield ASSETS: Interest-earning assets:Investments: Taxable (A) $ 761,187 $ 2,629 1.38 % $ 411,806 $ 2,459 2.39 %Tax-exempt (A) (B) 7,980 98 4.91 10,534 131 4.97 Loans (B) (C): Mortgages 501,590 3,954 3.15 535,114 4,576 3.42 Commercial 1,840,363 14,420 3.13 1,955,808 18,483 3.78 mortgagesCommercial 1,932,692 16,455 3.41 1,758,137 18,593 4.23 Commercial 15,606 139 3.56 5,629 88 6.25 constructionInstallment 37,695 276 2.93 53,983 464 3.44 Home equity 48,853 399 3.27 55,654 614 4.41 Other 246 5 8.13 364 9 9.89 Total loans 4,377,045 35,648 3.26 4,364,689 42,827 3.92 Federal funds sold 102 ? 0.25 102 ? 0.25 Interest-earning 555,331 128 0.09 251,566 552 0.88 depositsTotalinterest-earning 5,701,645 38,503 2.70 % 5,038,697 45,969 3.65 %assetsNoninterest-earning assets:Cash and due from 11,129 5,517 banksAllowance for loan (71,160 ) (44,368 ) and lease lossesPremises and 22,634 21,145 equipmentOther assets 228,134 161,452 Totalnoninterest-earning 190,737 143,746 assetsTotal assets $ 5,892,382 $ 5,182,443 LIABILITIES: Interest-bearing deposits:Checking $ 1,908,380 $ 978 0.20 % $ 1,540,798 $ 3,447 0.89 %Money markets 1,259,597 794 0.25 1,192,049 2,981 1.00 Savings 135,202 17 0.05 110,905 15 0.05 Certificates of 533,488 1,470 1.10 698,019 3,694 2.12 deposit ? retailSubtotalinterest-bearing 3,836,667 3,259 0.34 3,541,771 10,137 1.14 depositsInterest-bearing 110,000 493 1.79 180,000 923 2.05 demand ? brokeredCertificates of 33,769 261 3.09 33,715 263 3.12 deposit ? brokeredTotalinterest-bearing 3,980,436 4,013 0.40 3,755,486 11,323 1.21 depositsBorrowings 186,006 209 0.45 183,398 1,012 2.21 Capital lease 6,608 79 4.78 7,475 90 4.82 obligationSubordinated debt 181,795 2,145 4.72 83,439 1,223 5.86 Totalinterest-bearing 4,354,845 6,446 0.59 % 4,029,798 13,648 1.35 %liabilitiesNoninterest-bearing liabilities:Demand deposits 848,325 542,557 Accrued expensesand other 163,569 101,662 liabilitiesTotalnoninterest-bearing 1,011,894 644,219 liabilitiesShareholders? 525,643 508,426 equityTotal liabilitiesand shareholders? $ 5,892,382 $ 5,182,443 equityNet interest income $ 32,057 $ 32,321 Net interest spread 2.11 % 2.30 %Net interest margin 2.28 % 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 SHEETUNAUDITEDTHREE MONTHS ENDED(Tax-Equivalent Basis, Dollars in Thousands)

March31, 2021 December 31, 2020 Average Income/ Average Income/ Balance Expense Yield Balance Expense Yield ASSETS: Interest-earning assets:Investments: Taxable (A) $ 761,187 $ 2,629 1.38 % $ 636,417 $ 2,033 1.28 %Tax-exempt (A) (B) 7,980 98 4.91 8,137 101 4.96 Loans (B) (C): Mortgages 501,590 3,954 3.15 520,123 4,372 3.36 Commercial 1,840,363 14,420 3.13 1,865,953 14,796 3.17 mortgagesCommercial 1,932,692 16,455 3.41 1,943,855 16,587 3.41 Commercial 15,606 139 3.56 10,376 108 4.16 constructionInstallment 37,695 276 2.93 44,581 320 2.87 Home equity 48,853 399 3.27 51,545 429 3.33 Other 246 5 8.13 281 6 8.54 Total loans 4,377,045 35,648 3.26 4,436,714 36,618 3.30 Federal funds sold 102 ? 0.25 102 ? 0.25 Interest-earning 555,331 128 0.09 614,024 148 0.10 depositsTotalinterest-earning 5,701,645 38,503 2.70 % 5,695,394 38,900 2.73 %assetsNoninterest-earning assets:Cash and due from 11,129 9,632 banksAllowance for loan (71,160 ) (68,862 ) and lease lossesPremises and 22,634 21,698 equipmentOther assets 228,134 238,856 Totalnoninterest-earning 190,737 201,324 assetsTotal assets $ 5,892,382 $ 5,896,718 LIABILITIES: Interest-bearing deposits:Checking $ 1,908,380 $ 978 0.20 % $ 1,850,917 $ 1,059 0.23 %Money markets 1,259,597 794 0.25 1,273,681 811 0.25 Savings 135,202 17 0.05 128,195 17 0.05 Certificates of 533,488 1,470 1.10 602,068 2,106 1.40 deposit ? retailSubtotalinterest-bearing 3,836,667 3,259 0.34 3,854,861 3,993 0.41 depositsInterest-bearing 110,000 493 1.79 113,696 514 1.81 demand ? brokeredCertificates of 33,769 261 3.09 33,756 267 3.16 deposit ? brokeredTotalinterest-bearing 3,980,436 4,013 0.40 4,002,313 4,774 0.48 depositsBorrowings 186,006 209 0.45 244,753 616 1.01 Capital lease 6,608 79 4.78 6,832 82 4.80 obligationSubordinated debt 181,795 2,145 4.72 94,437 1,325 5.61 Totalinterest-bearing 4,354,845 6,446 0.59 % 4,348,335 6,797 0.63 %liabilitiesNoninterest-bearing liabilities:Demand deposits 848,325 858,004 Accrued expensesand other 163,569 166,933 liabilitiesTotalnoninterest-bearing 1,011,894 1,024,937 liabilitiesShareholders? 525,643 523,446 equityTotal liabilitiesand shareholders? $ 5,892,382 $ 5,896,718 equityNet interest income $ 32,057 $ 32,103 Net interest spread 2.11 % 2.10 %Net interest margin 2.28 % 2.25 %(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 March 31, Dec 31, Sept 30, June 30, March 31, Tangible BookValue Per 2021 2020 2020 2020 2020 ShareShareholders? $ 522,441 $ 527,122 $ 522,728 $ 507,980 $ 496,440 equityLess:Intangible 43,524 43,891 39,622 39,943 40,265 assets, netTangible 478,917 483,231 483,106 468,037 456,175 equity Period endshares 19,034,870 18,974,703 18,924,953 18,905,135 18,852,523 outstandingTangible bookvalue per $ 25.16 $ 25.47 $ 25.53 $ 24.76 $ 24.20 shareBook value 27.45 27.78 27.62 26.87 26.33 per share TangibleEquity to TangibleAssetsTotal assets $ 5,969,627 $ 5,890,442 $ 5,958,107 $ 6,281,215 $ 5,831,458 Less:Intangible 43,524 43,891 39,622 39,943 40,265 assets, netTangible 5,926,103 5,846,551 5,918,485 6,241,272 5,791,193 assetsLess: PPP 232,721 195,574 201,991 547,004 ? LoansTangibleAssets 5,693,382 5,650,977 5,716,494 5,694,268 5,791,193 excluding PPPLoansTangibleequity to 8.08 % 8.27 % 8.16 % 7.50 % 7.88 %tangibleassetsTangibleequity totangible 8.41 % 8.55 % 8.45 % 8.22 % 7.88 %assetsexcluding PPPloansEquity to 8.75 % 8.95 % 8.77 % 8.09 % 8.51 %assets (A)

-- Equity to total assets would be 9.11% if PPP loans of $233 million were excluded from total assets of March 31, 2021. 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 March 31, Dec 31, Sept 30, June 30, March 31, Return onAverage 2021 2020 2020 2020 2020 TangibleEquityNet income $ 13,178 $ 3,030 $ 13,547 $ 8,242 $ 1,373 Averageshareholders? $ 525,643 $ 523,446 $ 514,736 $ 502,683 $ 508,426 equityLess:Average 43,742 40,336 39,811 40,139 40,459 intangibleassets, netAveragetangible 481,901 483,110 474,925 462,544 467,967 equity Return onaverage 10.94 % 2.51 % 11.41 % 7.13 % 1.17 %tangiblecommon equity

Three Months Ended March Dec 31, Sept 30, June 30, March 31, 31,Efficiency 2021 2020 2020 2020 2020 RatioNet interest $ 31,793 $ 31,735 $ 32,149 $ 31,971 $ 31,747 incomeTotal other 17,820 14,406 20,211 12,626 14,517 incomeLess: Loss/(gain) on loans held forsaleat lower ofcost or fair (282 ) ? (7,429 ) ? 3 valueLess: Incomefrom life (302 ) ? ? ? ? insuranceproceedsAdd:Securities 265 42 ? (125 ) (198 )(gains)/losses, netTotalrecurring 49,294 46,183 44,931 44,472 46,069 revenue Operating 31,594 39,249 28,461 29,014 28,235 expensesLess: FHLBprepayment ? 4,784 ? ? ? penalty Valuationallowance ? 4,425 ? ? ? loans held forsale Severance 1,532 ? ? ? ? expenseTotaloperating 30,062 30,040 28,461 29,014 28,235 expense Efficiency 60.99 % 65.05 % 63.34 % 65.24 % 61.29 %ratio

Contact:

Jeffrey J. Carfora, SEVP and CFO

Peapack-Gladstone Financial Corporation

T: 908-719-4308