Peapack-Gladstone Financial Corporation

First-quarter net income was $14.2 million, up 16% from the prior quarter and 86% year over year. Net interest income rose to approximately $60 million, up 6% sequentially and 32% year over year. Net interest margin expanded 18 basis points to 3.26%. Loans grew $184 million to $6.4 billion, up 12% year over year, and deposits rose $238 million to $6.8 billion, up 9% year over year. Wealth management revenue was $16.5 million, up 7% year over year. Operating expenses were $55.4 million, the efficiency ratio improved to approximately 67%, and provision for credit losses was $7.3 million. Nonperforming assets declined to 0.77% of total assets, and the allowance for credit losses was approximately 1.04% of total loans. Guidance/commentary: management expects margin improvement to continue, but at a slower pace, estimating roughly 2 to 3 basis points of NIM expansion per quarter. They also said they are targeting roughly $175 million to $200 million in both loan growth and deposit growth, and they expect the New York expansion and operating leverage to keep supporting results.

Doug Kennedy framed the quarter as another step in the company’s transformation, emphasizing that the New York expansion has reached critical mass and is driving stronger earnings quality, better funding mix, and positive operating leverage. He said the firm remains disciplined on pricing and underwriting, continues to invest in technology and AI, and believes the business is positioned for continued strength toward its goal of best-in-class returns by the end of 2027. His tone was confident but cautious, noting macro and geopolitical risks, including a potential stagflation backdrop.

Frank Cavallaro highlighted the hard numbers behind the improving trend: net income of $14.2 million, net interest income of about $60 million, operating expenses of $55.4 million, and an efficiency ratio of about 67%. He said the margin improvement was driven by disciplined loan pricing, strong loan growth, and a better funding mix, with incremental spreads on new production around 3.75%, and he reiterated that improvement should continue, though at a slower pace. On capital, he noted the redemption of $100 million of sub-debt and the issuance of $30 million of convertible preferred stock with the option to draw another $20 million through 2027, which lifted Tier 1 capital above 11% and improved flexibility.

Analysts focused on loan growth, deposit mix, margin trajectory, and the uptick in special mention/30-89 day delinquent New York rent-regulated credits. Management said pipelines are strong, loan/deposit growth targets are roughly $175 million to $200 million, and they are not backing away from disciplined pricing even as competition got more aggressive late in the quarter. On the troubled rent-regulated loans, Lisa Chalkan said the issue is largely one sponsor group across multiple loans, some payments were made after quarter-end, and the company is monitoring closely while believing the buildings still have positive cash flow; appraisals were a year old and in the 70% to 85% LTV range.