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Jun 30, 2022
Peapack-Gladstone Q2 2022 Earnings Report
Strong second quarter results reported as net interest margin continued to expand.
Key Takeaways
Peapack-Gladstone Financial Corporation reported strong second quarter results, driven by improvement in net interest income and net interest margin, which improved 45 basis points compared to the June 2021 quarter. The quarter also included increases in wealth management fee income and SBA fee income, when compared to the June 2021 quarter.
AUM/AUA in Peapack Private Wealth Management Division totaled $9.5 billion.
Wealth Management fee income increased 7% to $13.9 million compared to Q2 2021.
Total loans grew 7% (13% annualized) to $5.17 billion compared to December 31, 2021.
U.S. Small Business Association (“SBA”) Income continues to be a driver in fee income recording $2.7 million.
Peapack-Gladstone
Peapack-Gladstone
Forward Guidance
Company believes it will achieve modest loan growth for the remainder of 2022, resulting in mid to high single digit growth for all of 2022. Current modeling indicates net interest income will improve approximately 3% in year one and 8% in year two, after a 200-basis point rate shock.
Positive Outlook
- Company is positioned to continue to benefit from a rise in interest rates.
- 25% of loan portfolio reprices within one-month.
- 37% of loan portfolio reprices within three-months.
- 47% of loan portfolio reprices within one-year.
- Tangible book value per share improved slightly during Q2 2022 to $25.96.
Challenges Ahead
- Economic uncertainty and rising interest rates may cause loan demand to subside somewhat.
- Company has tightened initial underwriting in anticipation of a potential economic downturn and higher rate environment.
- Capital spent on stock repurchases.
- Capital affected by the increased unrealized loss on AFS securities.
- Continued market declines in 2022 further impacted the results in the June 2022 quarter, as the S&P was down another 16% in Q2 2022 (and YTD down 21%).