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Mar 31, 2022
Peapack-Gladstone Q1 2022 Earnings Report
Strong first quarter results driven by continued loan growth, margin improvement and increased wealth management and capital markets fees.
Key Takeaways
Peapack-Gladstone Financial Corporation reported a strong first quarter with total revenue of $54.33 million, net income of $13.44 million, and diluted earnings per share of $0.71. The results were driven by continued loan growth, increased net interest income and margin, and solid wealth management and capital markets fee income.
Total loans grew 6% to $5.15 billion at March 31, 2022 compared to December 31, 2021.
Wealth Management fee income increased 22% to $14.8 million for Q1 2022 compared to Q1 2021.
U.S. Small Business Association Income and corporate advisory fees totaled $4.4 million for the first quarter of 2022.
The net interest margin improved by 23 basis points in Q1 2022 compared to Q4 2021.
Peapack-Gladstone
Peapack-Gladstone
Forward Guidance
Peapack-Gladstone Financial Corporation anticipates mid to high single digit loan growth for the remainder of 2022 and expects to benefit from a rise in interest rates.
Positive Outlook
- Commercial loan pipelines continue to be strong going into the new year, standing at approximately $300 million with the likelihood of a second quarter closing.
- The Bank benefitted from the increase in LIBOR during Q1 and is positioned to continue to benefit from a rise in interest rates.
- 38% of the loan portfolio reprices within three months and 50% within one-year.
- Balance sheet repositioning resulted in an attractive earn-back period on the loss on sale of securities, with future net interest margin improving by four basis points.
- The on-balance sheet and off-balance sheet liquidity profile of the Bank remain strong.
Challenges Ahead
- AUM/AUA were negatively impacted in Q1 2022 as the S&P was down 5% in Q1 2022.
- The 2022 first quarter included a $6.6 million loss on the sale of securities associated with a balance sheet repositioning executed in the quarter.
- The 2022 first quarter also included $1.5 million of severance expense associated with certain staff reorganizations within several areas of the Peapack-Gladstone Bank during the quarter.
- The Company's capital position during the March 2022 quarter was affected by an increase in the unrealized loss on available-for-sale securities in the first quarter of 2022 due to the significant rise in medium-term Treasury yields.
- Current modeling, with what we believe include very conservative deposit beta assumptions (average of 45%), indicates net interest income will improve approximately 2% in year one and 8.5% in year two after a 200 basis point rate shock.