EX-99.1 2 pgc-ex991_138.htm EX-99.1

Q2 2020 Investor Update (and Supplemental Financial Information) 06.30.2020 Peapack-Gladstone Bank Exhibit 99.1

Statement Regarding Forward-Looking Information This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and may include expressions about Management’s strategies and Management’s expectations about financial results, 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 actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to: 1) 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; 2) the impact of anticipated higher operating expenses in 2020 and beyond; 3) our inability to successfully integrate wealth management firm acquisitions; 4) our inability to manage our growth; 5) our inability to successfully integrate our expanded employee base; 6) an unexpected decline in the economy, in particular in our New Jersey and New York market areas; 7) declines in our net interest margin caused by the interest rate environment (including the shape of yield curve) and our highly competitive market; 8) declines in the value in our investment portfolio; 9) higher than expected increases in our allowance for loan and lease losses; 10) higher than expected increases in loan and lease losses or in the level of nonperforming loans; 11) unexpected changes in interest rates; 12) an unexpected decline in real estate values within our market areas; 13) 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; 14) changes in monetary policy by the Federal Reserve Board; 15) changes to legislation or policy, including tax or accounting matters; 16) successful cyberattacks against our IT infrastructure and that of our IT providers; 17) higher than expected FDIC insurance premiums; 18) adverse weather conditions; 19) our inability to successfully generate business in new geographic markets; 20) our inability to execute upon new business initiatives; 21) our lack of liquidity to fund our various cash obligations; 22) reduction in our lower-cost funding sources; 23) our inability to adapt to technological changes; 24) claims and litigation pertaining to fiduciary responsibility, environmental laws and other matters; 25) effects related to a prolonged shutdown of the federal government that could impact SBA and other government lending programs; and 26) 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 the COVID-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 how the economy may be reopened. 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: 1) demand for our products and services may decline, making it difficult to grow assets and income; 2) 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; 3) collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; 4) our allowance for loan losses may have to be increased if borrowers experience financial difficulties, which will adversely affect our net income; 5) the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; 6) as the result of the decline in the Federal Reserve Board’s target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income; 7) 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; 8) our wealth management revenues may decline with continuing market turmoil; 9) our cyber security risks are increased as the result of an increase in the number of employees working remotely; and 10) FDIC premiums may increase if the agency experience additional resolution costs. The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations. Although we believe that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements.

Niche wealth management and commercial banking strategy with a proven track record of delivering strong organic growth. Demonstrated ability to acquire and integrate wealth management businesses that are immediately accretive to earnings. High level of fee and other income – 30% of total revenue for the six months ended June 30, 2020. Attractive geographic franchise; we operate in three of the top ten most affluent counties in the U.S. Highly efficient branch network with deposit balances averaging $255MM per branch. Strong ALLL coverage of 1.52% of total loans (excluding PPP loans). Talented team of professionals with extensive large bank experience focused on delivering an exceptional client experience. Robust digital strategy launched to enable clients to conduct business when, where, and with whom they want. Moody’s investment grade of Baa3; Kroll investment grade of BBB-. Investment Considerations

Actively manage emerging credit risk associated with the COVID-19 pandemic. Conservatively manage capital and liquidity in response to current market conditions. Maintained our dividend. Aggressively repriced our deposits. Actively engaged in the PPP lending program (11.2% of total loans), which will benefit future net interest income. Adding new clients presented by the PPP program. Continue to expand our Wealth Management business organically and through acquisition. Bi-Weekly updates to the Federal Reserve Bank and New Jersey Department of Banking and Insurance. Weekly participation by Doug Kennedy in FRBNY Board Meetings/updates. Remain cautious, disciplined, and focused in the continued execution of our Strategy. Shareholder Focus

ALLL Methodology *Excludes PPP Loans of $547MM.

Supporting Clients During a Global Pandemic Approved Deferrals by Loan Type (Deferrals as of 06/30/2020) *Risk Based Capital

Capital Stress Testing Quarterly Capital Stress Testing run under multiple scenarios. In the 05/31/20 severely adverse case, no growth scenario, the Bank remains well capitalized over a two-year stress period. Severely adverse case major assumptions: GDP growth -10% Unemployment -10% Decline in housing prices -28% Decline in CRE Valuations -34% With a Pandemic stress overlay, the Bank still remains well capitalized over a two-year stress period. “Pandemic stress” was layered on top of the severely adverse case. Pandemic stress major assumptions: Select industries identified as highly impacted. In those industries migration rates increased by 15% and collateral deterioration increased by 15%. GDP growth Fed COVID U-Shape -40% Unemployment Fed COVID U-Shape -15% Decline in housing prices Fed COVID U-Shape -28% Decline in CRE Valuations Fed COVID U-Shape -34%

Commercial Loan Portfolio By NAICS Codes “Highly Impacted” industries highlighted in green As of 06/30/2020 Overall The industries designated by management to be most impacted by COVID total ~22%, $939MM of Total Loans (as of 06/30/2020). Pre-virus debt service and collateral values were strong. Real Estate-Retail is the greatest concentration of Total Loans at ~7%; none of the other designated “Highly Impacted” industries consist of greater than 5% of Total Loans. Negligible direct oil and gas; no construction with exposure to market absorption risk. Potential Risk Mitigants Real Estate-Retail consists of ~$161MM of Grocery/Pharmacy anchored properties, ~53% of the Retail portfolio. Hotels and Other Hospitality total ~$109MM of the Accommodations and Food Services industry and carried an ~53% LTV pre-COVID. The Manufacturing portfolio is well-diversified with no single product consisting of more than a quarter of the entire portfolio. 1 Excludes PPP Loans of $547MM. 2 Risk Based Capital

Risk Mitigants within “Highly Impacted” Industries As of 06/30/2020 Real Estate - Retail Portfolio has an average LTV of 58% and average DSC of 1.40x. It is anticipated that grocery and pharmacy anchored properties will outperform the portfolio as they will be first to recover as stay-at-home orders are lifted. Accommodation First mortgages on flagged properties located in NJ/NY with experienced multi-property operators. LTV on Hotels & Other Hospitality is 53.36%. Portfolio review conducted in April 2020 and follow up scheduled for Q3. Monitoring individual property performance along with market specific data in terms of vacancy and average daily rates. Food Services 76% of the portfolio consists of fast food or casual dining concepts, which are expected to recover by leveraging take out and drive through. Portfolio is largely C&I loans with no real estate collateral. Portfolio review conducted in April 2020 and follow up scheduled for Q3. Monitoring performance closely including overall cash flow and same store sales. Accommodations & Food Services *Risk Based Capital

Quality Performance within “Highly Impacted” Industries (Transportation and Manufacturing performing better than originally anticipated) As of 06/30/2020 Transportation Portfolio review conducted in April 2020 and follow up scheduled for Q3. Approximately 90% of the exposure in the Equipment Finance portfolio consists of non-cancellable leases on essential business equipment. No significant payment deferrals have been requested or granted. *Risk Based Capital Portfolio review conducted in April 2020 and follow up scheduled for Q3. Portfolio is well-diversified in terms of subsector. No significant payment deferrals have been requested or granted. Over 50% of exposure has no COVID-19 impact. Manufacturing

Non-Performing Assets¹ / Assets Criticized & Classified / Total Loans Net Charge-Offs / Average Loans Asset Quality Metrics* Loan Loss Reserves / Total Loans 1 Non-performing assets include nonaccrual loans, restructured loans and other real estate owned. *Excludes PPP Loans of $547MM. Note: Q2’20 reflects data for the three months ended 06/30/2020; Net Charge-Offs / Average Loans reflects annualized data for the period. Source: S&P Global Market Intelligence, PGC management.

Diversified Loan Portfolio Loan Mix as of 06/30/2020 Gross Loans: $4,900 million Note: Gross loans include loans held for sale.

Diversification within C&I Lending C&I Loans (excluding PPP) constitute 36% of the total loan portfolio.

Well-Seasoned Diversified Multifamily Loan Portfolio Multifamily Portfolio Balance % (in $MM's) NY (Rent Regulated) $410 34.8% NY (Market Rent) $35 3.0% NJ (Rent Regulated) $291 24.6% NJ (Market Rent) $166 14.1% PA (Rent Regulated) $19 1.6% PA (Market Rent) $258 21.9% TOTAL $1,179 100.0% Rent Regulated $720 61.1% Market Rent $459 38.9% TOTAL $1,179 100.0% Current LTV 59.7% Current DSCR 1.57x Current Debt Yield 10.5% Multifamily constitutes 24% of the total loan portfolio.

A Well-Diversified Non-Owner Occupied CRE Portfolio Non-Owner Occupied CRE constitutes 16% of the total loan portfolio.

Fortress Balance Sheet 1 Substantially all of the Bank's loans and securities are pledged for back up liquidity purposes. 2 Net of $120m of term borrowing. 3 Excludes securities, the majority of which are pledged against secured funding.

NPAs to Total Assets Total Loans (in billions) Capital (in millions) Total Deposits (in billions) Financial Performance* *Includes PPP loans of $547MM in total loans.

1 Includes SBA Income, Swap Income, Deposit & Loan Fees, Mortgage Banking, and BOLI. Net Interest Income 70% Wealth Management Fees 22% Fees & Other Inc 8% Six Months Ended 06/30/2020 Net Interest Income before Provision Wealth Management Fee Income Fees & Other Income 1 Total Non-Interest Income: 30% of Total Revenue Wealth Management and Other Fees Continue to Provide a Diversified Revenue Mix

Our Vision: A leading wealth management boutique, offering superior advice delivered by top quality professionals, with a differentiated client experience compared to large bank competitors. Q2 2020: Wealth fees totaled $10MM reflecting an increase of $428,000, or 4%, from the same 2019 period and comprised 22% of total bank revenue. Client retention during COVID-19 crisis has been excellent with negligible account closings and no atypical withdrawal activity. Proactive client outreach continues at full strength. Positive market action of approximately $800MM during Q2. Approximate 70% correlation to S&P index. AUM/AUA client inflows of approximately $109MM. Continue to pursue acquisition opportunities in the NY Metro area and in FL. New clients obtained through PPP present potential new wealth management opportunities in second half of 2020. Robust wealth management pipeline for Q3/Q4 2020. Peapack Private Wealth Management

Emphasis on the health and safety of our employees and clients. Adapt the way in which we interact with clients and prospects to reflect the current environment. Actively manage emerging credit risk associated with the environment caused by the COVID-19 pandemic. Conservatively manage capital and liquidity in response to current market conditions. Pursue new client opportunities presented by the PPP. Accelerate digital enhancement initiatives to improve the client experience. Continue to grow and expand our Wealth Management and Commercial Banking businesses. Grow fee income to 35% - 45% of total bank revenue. Priorities

Appendix Peapack-Gladstone Bank

Financial Highlights Branch Map Franchise Overview NOTE: Financial data as of 06/30/2020. Private Banking Offices Bedminster, NJ Morristown, NJ Princeton, NJ Teaneck, NJ Fairfield, NJ Gladstone, NJ Greenville, DE (Trust Subsidiary) New Providence, NJ Summit, NJ Bonita Springs, FL Headquarters Bedminster, NJ Year Founded 1921 Branches 19 Total Assets $6.3 Bil Gross Loans $4.9 Bil Total Deposits $4.9 Bil Deposits Per Branch $255 Mil Wealth Management AUM/AUA $7.2 Bil Fee/Other Income / Revenue 30% Market Cap $354 Mil Moody’s Rating (Investment Grade) Baa3 Kroll Rating (Investment Grade) BBB-

Attractive Franchise We Operate in 3 of the Top 10 Wealthiest Communities in the United States Branch/Deposit Share: FDIC 06/30/2019

A high-performing boutique bank, leaders in wealth, lending and deposit solutions, known nationally for our unparalleled client service, integrity and trust. Professionalism Clients First Compete to Win Invested in Our Community One Team Vision Senior Private Bankers lead a team-based approach. PGB offers a full suite of banking, commercial, advisory and wealth management services to support client financial needs. Team members focus on understanding needs, goals, and aspirations with consideration of risk tolerance, time horizon, and other traditional variables. Deliver exceptional client experience. For our high net worth individual clients, we develop, optimize, and deliver customized financial solutions aimed at helping clients create, grow, protect, and ultimately transition their wealth. For privately-owned businesses, we provide customized lending, advisory, treasury management and capital market solutions. We also provide comprehensive wealth management advice and services that includes investment, estate, tax and wealth planning considerations for business owners. “All Banking Should Be Private Banking” Private Banking Model Core Principles Our Foundation

Douglas L. Kennedy President & Chief Executive Officer 908.719.6554 40 years experience; Before joining in 2012, he served as President of the NJ Market for Capital One Bank. He has held key executive level positions and had great success building formidable regional and national specialty banking business at Fleet Bank, Summit Bancorp and Bank of America. He is a current Member of the NJ Chamber of Commerce Board of Directors, Montclair State University Board of Trustees, and Sacred Heart University Board of Trustees. He is also a Board Member of the NJBankers Association and is a Member of the Board of Directors of the Federal Reserve Bank of New York (New York Fed). John P. Babcock Senior EVP & President, Peapack Private 908.719.3301 40 years experience; Prior to joining PGB in 2014, John had worked as a senior-level executive at large national banking institutions as well as at mid-sized regionals and larger community banks over his 40-year career. He started his career at the former Midlantic National Bank in the credit training program and was a corporate banker until 2000. For the last 20 years, he has led private banking and wealth management businesses and regions, most recently as the managing director in charge of the Northeast U.S. for the HSBC Private Bank. Prior to HSBC, he was a managing director at U.S. Trust Company where he was the New York Metro market - the largest of U.S. Trust’s 53 markets in the U.S and, prior to that, he was the NY Private Banking Head for The Bank of New York. He is a 1980 graduate of Tulane University’s Freeman School of Business and earned an MBA from Fairleigh Dickinson University. Jeffrey J. Carfora, CPA Senior EVP & Chief Financial Officer 908.719.4308 40 years experience; Joining as Executive Vice President and CFO in March 2009, he was promoted to Senior Executive Vice President in August 2013. Previously, he was affiliated with Penn Federal Savings Bank (where he joined as CFO and was later promoted to COO), Carteret Bank, and Marine Midland Bank. He began his career in 1980 with PriceWaterhouseCoopers. Robert A. Plante Executive Vice President Chief Operating Officer 908.470.3329 37 years experience; Before joining in 2017, served as executive vice president and chief operations officer/chief information officer at IDB New York, a $9.8 billion commercial bank, where he was a member of the credit risk, market risk and asset liability committees, responsible for all back-office support functions including payments, deposits, commercial and residential lending, treasury, custody, commercial cash management and information technology. Experienced Leadership Team

Quarterly Income Statement Summary (Dollars in thousands, except per share data) 1 The March 2020 and June 2020 quarters included a higher provision for loan and lease losses primarily due to the current environment created by the COVID-19 pandemic. 2 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. 3 Efficiency Ratio calculated by dividing total noninterest expense, by net interest income and total noninterest income.

Asset Quality 1 Amount does not include $23.2 million at June 30, 2020, $25.9 million at March 31, 2020, $25.8 million at December 31, 2019, $19.7 million at September 30, 2019, and $19.8 million at June 30, 2019 of TDRs included in nonaccrual loans. 2 The June 30, 2020 ALLL coverage ratios exclude PPP loans of $547 million from total loans.

Capital Summary 1 PPP loans with a balance of $547 million increased our total assets at June 30, 2020. Equity to total assets would be 8.86% if PPP loans were excluded from total assets. 2 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 on page 29. 3 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 on page 29. 4 Tangible book value per share is calculated by dividing tangible equity by period end common shares outstanding. See non-GAAP financial measures reconciliation on page 29.

Non-GAAP Financial Measures Reconciliation (Dollars in thousands, except per share data) 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. 1 PPP loans with a balance of $547 million increased our total assets at June 30, 2020. Equity to total assets would be 8.86% if PPP loans were excluded from total assets.

Peapack-Gladstone Financial Corporation 500 Hills Drive, Suite 300 P.O. Box 700 Bedminster, New Jersey 07921 (908) 234-0700 www.pgbank.com Douglas L. Kennedy President & Chief Executive Officer (908) 719-6554 dkennedy@pgbank.com Jeffrey J. Carfora Senior EVP & Chief Financial Officer (908) 719-4308 jcarfora@pgbank.com John P. Babcock Senior EVP & President of Peapack Private Wealth Management (908) 719-3301 jbabcock@pgbank.com Contacts Corporate Headquarters Contact