Peapack-Gladstone Q3 Earnings Rise 92% on Loan and Deposit Growth

Peapack-Gladstone Financial Corporation reported a sharp increase in third-quarter 2026 earnings as loan and deposit growth lifted net interest income, while controlled expenses improved operating efficiency. Net income available to common shareholders rose 92% year over year to $18.5 million, and diluted earnings per share increased 83% to $0.99.

Total revenue climbed 24% from a year earlier to $87.5 million, marking the company’s 10th consecutive quarter of revenue growth. Net interest income rose 33% to $67.5 million as the net interest margin reached 3.34%, up 53 basis points year over year and two basis points from the second quarter.

Compared with the preceding quarter, revenue increased 2% while operating expenses declined 1% to $55.1 million. Non-GAAP pre-tax pre-provision net revenue rose 6% sequentially and 76% year over year to $32.3 million. The GAAP efficiency ratio improved to 63.03% from 64.69% in the second quarter and 73.98% a year earlier.

Net income increased to $19.0 million from $16.0 million in the second quarter. Income tax expense declined 23% sequentially to $4.9 million, while the provision for credit losses increased to $8.5 million from $8.1 million. After preferred-stock dividends, income available to common shareholders rose 17% sequentially. Non-GAAP return on average tangible common equity reached 11.41%, compared with 9.98% in the prior quarter.

Loan and deposit growth supports revenue

Total loans increased by $403 million, or 6%, during the quarter to $7.08 billion. Loans were up $1.05 billion, or 17%, from a year earlier, reflecting growth across commercial real estate, commercial and industrial, multifamily and personal lending. Commercial and industrial loans increased 15% year over year to $3.07 billion.

Deposits rose by $301 million, or 4%, during the quarter and by $796 million, or 12%, year over year to $7.36 billion. Noninterest-bearing demand deposits increased 18% from a year earlier to $1.56 billion. Management said quarterly growth may not be linear but continues to expect about $200 million of loan growth and $200 million of deposit growth per quarter over time.

Wealth management remained a significant source of fee income. Third-quarter wealth revenue increased 9% year over year to $17.3 million, bringing revenue for the first nine months of 2026 to $51.0 million. Wealth assets under management and administration totaled $13.65 billion at September 30.

Credit quality improves as New York portfolio runs off

Credit metrics improved sequentially and from a year earlier. Nonperforming assets declined to $57.8 million, or 0.68% of total assets, from 0.91% at the end of the second quarter and 1.13% a year earlier. Classified loans fell to $89.5 million from $135.0 million a year earlier, while nonperforming loans represented 0.82% of total loans.

The allowance for credit losses was $73.0 million, equal to 1.03% of total loans and 126.35% of nonperforming loans. Net charge-offs totaled $4.7 million for the nine months ended September 30, including charge-offs related to multifamily and commercial and industrial loans.

Peapack-Gladstone continued to reduce its New York rent-regulated multifamily exposure. The portfolio declined 12% year over year to $775 million and represented 11% of total loans, down from 18% a year earlier. At quarter-end, the portfolio had a weighted-average debt-service coverage ratio of 1.29 times and a weighted-average loan-to-value ratio of 64%. It included $38.9 million of nonperforming loans and $24.1 million of loans 30 to 89 days past due.

Capital and outlook

At September 30, the holding company’s common equity Tier 1 ratio was 10.06%, while its total risk-based capital ratio was 11.81%. Both remained above the presentation’s stated well-capitalized thresholds. Tangible common equity to tangible assets, a non-GAAP measure, was 7.60%, compared with 8.10% in the second quarter.

Management’s long-term return objectives remain a return on assets of more than 1.25% and a return on equity above 14%. The company said its priorities include pricing and funding discipline, expense and credit management, capital management, and continued integration of wealth, private banking, commercial banking, credit and treasury services.

The outlook remains subject to the company’s ability to generate sufficient revenue from its strategic investments and integrate its expanded workforce and wealth-management acquisitions. Other identified risks include higher operating expenses, deterioration in the New Jersey and New York economies, interest-rate and competitive pressure on margins, weaker real estate values, credit losses, reduced access to lower-cost funding, deposit and liquidity changes, cybersecurity threats, regulation and geopolitical or fiscal uncertainty.