Peapack-Gladstone Financial (PGC) - 2022 Q1 - Quarterly Report

Financial Performance - Net interest income after provision for credit losses was $37,247 thousand for the three months ended March 31, 2022, compared to $31,568 thousand for the same period in 2021, reflecting a year-over-year increase of 17.93%[15] - Wealth management fee income grew to $14,834 thousand, up 22.29% from $12,131 thousand in the prior year[15] - The company reported a net income of $13,441 thousand for Q1 2022, slightly up from $13,178 thousand in Q1 2021, reflecting a growth of 1.99%[15] - Total income for the three months ended March 31, 2022, was $54,336,000, up 9.3% from $49,613,000 in the prior year[148] - The company reported total operating expenses of $36,544,000 for the three months ended March 31, 2022, an increase from $31,819,000 in the same period of 2021, marking a rise of 14.8%[148] Asset and Loan Growth - Total assets increased to $6,255,664 thousand as of March 31, 2022, up from $6,077,993 thousand at December 31, 2021, representing a growth of 2.93%[12] - Net loans rose to $5,063,816 thousand, an increase of 6.71% from $4,745,024 thousand at the end of 2021[12] - Total deposits increased to $5,387,416 thousand, up 2.30% from $5,266,149 thousand at December 31, 2021[12] - As of March 31, 2022, total loans outstanding reached $5,122,202 thousand, an increase from $4,806,721 thousand as of December 31, 2021, representing a growth of approximately 6.56%[112] Credit Loss Provisions - The provision for credit losses increased to $2,375 thousand in Q1 2022, compared to $225 thousand in Q1 2021, indicating a significant rise in expected credit losses[15] - The allowance for credit losses (ACL) totaled $58.386 million as of March 31, 2022, based on the CECL methodology[133] - The provision for credit losses for the three months ended March 31, 2022, was $2,375,000, compared to $225,000 for the same period in 2021, indicating a significant increase in credit loss provisions[148] Shareholder Equity and Dividends - Total shareholders' equity decreased to $523,426,000 as of March 31, 2022, down from $546,388,000 at the end of Q1 2021, reflecting a decline of 4.17%[19] - Cash dividends declared on common stock were $920,000, consistent with the previous year's $949,000, indicating a stable dividend policy[21] Securities and Investments - The company reported a total of $654,287 thousand in securities available for sale as of March 31, 2022, with unrealized losses of $53,507 thousand[108] - The fair value of the company's investment in a CRA investment fund was $14,000 thousand as of March 31, 2022, with a loss of $682 thousand for the three months ended March 31, 2022[111] - The fair value of U.S. government-sponsored agencies as of March 31, 2022, was $218,263,000, while mortgage-backed securities-residential were valued at $340,513,000[157] Loan Modifications and TDRs - The company approved total loan modifications under the CARES Act amounting to $947.0 million, with $12.7 million remaining outstanding as of March 31, 2022[72] - The Company allocated $2.5 million of specific reserves on Troubled Debt Restructurings (TDRs) as of March 31, 2022[126] - The Bank modified 542 loans with a balance of $947.0 million, resulting in the deferral of principal and/or interest[125] Risk Management and Credit Quality - The company employs a credit risk rating system that categorizes commercial loans based on borrowers' ability to service their debt, with annual assessments conducted[116] - Loans classified as "Substandard" are characterized by a well-defined weakness that jeopardizes debt liquidation, indicating potential losses[119] - The adoption of CECL requires loans in foreclosure to be individually evaluated for potential loss and allowance adequacy, enhancing risk management practices[121] Economic and Market Conditions - The company faces risks related to the ongoing COVID-19 pandemic, which may adversely affect its business operations and financial condition[202] - The allowance for credit losses is subject to significant judgment and may require adjustments based on economic conditions, particularly in the New Jersey and New York markets[208] Changes in Accounting Standards - The Company adopted ASU 2016-13 on January 1, 2022, which replaced the incurred loss methodology with CECL for estimating expected credit losses[207] - The company expects that the amendments in ASU 2022-02 will not have a material effect on its consolidated financial statements[199]