Peapack-Gladstone Financial Corporation (PGC) Q3 2024 earnings summary

Executive summary

• Q3 2024 net income was $7.6 million, down from $8.8 million in Q3 2023, with diluted EPS of $0.43; nine-month net income was $23.7 million, down from $40.3 million year-over-year.

• Revenue for Q3 2024 was $56.6 million, up slightly from $55.9 million in Q3 2023; nine-month revenue was $166.3 million, down from $175.4 million.

• Deposits grew $279 million in Q3 to $5.9 billion, with noninterest-bearing demand deposits up $130 million.

• Loan balances increased $51 million in Q3 to $5.3 billion, reversing earlier contraction.

• Expansion into New York City and private banking strategy drove higher operating expenses and core deposit growth.

Financial highlights

• Net interest income for Q3 2024 was $37.7 million, up from $36.5 million in Q3 2023; net interest margin improved to 2.34%.

• Wealth management fee income grew to $15.2 million in Q3 2024, representing 27% of total revenue.

• Operating expenses increased 19% to $44.6 million in Q3 2024, reflecting full run rate of NYC expansion costs.

• Provision for credit losses was $1.2 million in Q3 2024, down from $5.9 million in Q3 2023.

• Nonperforming assets at $80.5 million (1.18% of assets), slightly improved from Q2.

Outlook and guidance

• Management expects higher operating expenses to persist due to ongoing expansion and strategic initiatives.

• New York expansion is expected to be accretive to earnings in early 2025.

• Net interest margin is expected to benefit from continued core deposit growth and reduced reliance on higher-cost funding.

• Strong C&I loan pipeline heading into Q4; loan demand expected to improve.

• Moody’s reaffirmed investment grade ratings with stable outlook.