Peapack-Gladstone Financial (PGC) - 2025 Q1 - Quarterly Report

Financial Performance - Net income for the first quarter of 2025 was $7,595 thousand, down from $8,631 thousand in Q1 2024, a decrease of 12.00%[14] - Earnings per share (EPS) decreased to $0.43 for Q1 2025 from $0.49 in Q1 2024, a decline of 12.24%[14] - Comprehensive income for the three months ended March 31, 2025, was $16,289 thousand, significantly higher than $5,749 thousand in the same period of 2024[17] - Net income for Q1 2025 was $7,595,000, a decrease of 12.0% compared to $8,631,000 in Q1 2024[23] - Total interest income for the three months ended March 31, 2025, was $86,345 thousand, a 8.63% increase from $79,194 thousand in the same period of 2024[14] - Net interest income after provision for credit losses was $41,034 thousand, compared to $33,748 thousand, reflecting a growth of 21.43%[14] - Operating expenses rose to $49,440 thousand, compared to $40,041 thousand in the prior year, an increase of 23.5%[14] Asset and Loan Growth - Total assets increased to $7,120,652 thousand as of March 31, 2025, compared to $7,011,238 thousand at December 31, 2024, representing a growth of 1.56%[11] - Net loans rose to $5,672,836 thousand, up from $5,439,334 thousand, marking an increase of 4.27% year-over-year[11] - Total loans outstanding as of March 31, 2025, amounted to $5,747,986 thousand, an increase from $5,512,326 thousand as of December 31, 2024, representing a growth of approximately 4.27%[105] - Total deposits increased to $6,286,556 thousand, up from $6,129,022 thousand, indicating a growth of 2.57%[11] - Cash and cash equivalents at the end of Q1 2025 were $231,917,000, compared to $194,838,000 at the end of Q1 2024[23] Credit Loss Provisions - Provision for credit losses increased to $4,471 thousand from $627 thousand, reflecting a substantial rise in credit loss provisions[14] - The allowance for credit losses (ACL) was $75.2 million, an increase from $73.0 million at December 31, 2024, driven by loan growth and economic deterioration[128] - The ACL as a percentage of loans was 1.31% at March 31, 2025, compared to 1.32% at December 31, 2024[128] - Total loans modified due to significant payment delay amounted to $19,287 thousand, representing 1.18% of the total amortized cost basis at period end[123] Wealth Management Division - The Wealth Management Division provides investment management services, personal trust services, and financial planning, with fees primarily based on assets under management (AUM) collected monthly or quarterly[32] - Wealth management fee income grew to $15,435 thousand, up from $14,407 thousand, representing a 7.12% increase[13] - The Wealth Management Division generated noninterest income of $15,584,000 for the three months ended March 31, 2025[148] Securities and Investments - Total securities available for sale amounted to $915,949,000 as of March 31, 2025, with unrealized losses of $87,323,000[99] - The fair value of securities held to maturity was $88,687,000, with unrealized losses of $11,598,000 as of March 31, 2025[99] - The company’s investment securities with a carrying value of $620.4 million were pledged to secure public funds and for other legal purposes as of March 31, 2025[102] Operating Activities - Total cash provided by operating activities was negative at $(7,874,000) for Q1 2025, compared to positive cash flow of $19,109,000 in Q1 2024[23] - Total cash used in investing activities was $(272,214,000) in Q1 2025, compared to cash provided of $78,684,000 in Q1 2024[23] - The Company fully redeemed $35,000,000 in subordinated notes on March 15, 2025, along with $627,000 in unpaid interest[189] Stock and Compensation - The Company recorded a total of $9.0 million in unrecognized compensation cost related to service-based and performance-based restricted stock units, expected to be recognized over a weighted average period of 2.24 years[79] - Stock compensation expense for the first quarters of 2025 and 2024 totaled $3.3 million and $2.7 million, respectively, indicating a year-over-year increase of approximately 22.2%[79] - The Company issued 88,101 service-based restricted stock units during the first three months of 2025, with a grant date fair value of $29.55[77] Risk Management - The Company utilizes a credit risk rating system to assess the expected ability of borrowers to service their debt, which is reviewed annually[107] - An independent loan review firm is engaged quarterly to validate risk ratings and ensure compliance with policies, focusing on loans greater than $1,000,000[108] - The adoption of CECL requires loans in foreclosure to be individually evaluated for potential loss and allowance adequacy[113]