FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 2000
------------------
PEAPACK-GLADSTONE FINANCIAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW JERSEY 22-3537895
------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
158 ROUTE 206 NORTH, GLADSTONE, NEW JERSEY 07934
------------------------------------------ ---------------
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER (908) 234-0700
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No.
------ ---
Number of shares of Common stock outstanding as of September 30, 2000:
3,018,140
1
<PAGE>
PEAPACK-GLADSTONE FINANCIAL CORPORATION
PART I. FINANCIAL INFORMATION
Certain information and footnote disclosures normally included in the
consolidated financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission. It is suggested that
these condensed consolidated financial statements be read in conjunction with
the consolidated financial statements and notes thereto included in the December
31, 1999 Annual Report on Form 10-K for Peapack-Gladstone Financial Corporation
(the "Corporation").
The Corporation considers that all adjustments (all of which are normal
recurring accruals) necessary for a fair statement of the financial position and
results of operations for these periods have been made; however, results for
such interim periods are subject to year-end adjustments. Results for such
interim periods are not necessarily indicative of results for a full year.
<PAGE>
PEAPACK-GLADSTONE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
-------------- ------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 15,093 $ 17,770
Federal funds sold 11,963 15,247
--------- ---------
Total cash and cash equivalents 27,056 33,017
Investment Securities:(approximate market value
$64,564 in 2000 and $61,033 in 1999) 69,450 61,672
Securities Available for Sale:(amortized cost
$86,698 in 2000 and $104,386 in 1999) 82,878 101,324
Loans:
Loans secured by real estate 303,270 261,946
Other loans 28,180 25,987
--------- ---------
Total loans 331,450 287,933
Less: Allowance for loan losses 3,219 2,962
--------- ---------
Net loans 328,231 284,971
Premises and equipment 11,673 9,718
Accrued interest receivable 3,937 3,444
Other assets 3,359 3,389
--------- ---------
TOTAL ASSETS $ 526,584 $ 497,535
========= =========
LIABILITIES
Deposits:
Noninterest-bearing demand deposits $ 97,529 $ 87,034
Interest-bearing deposits:
Checking 93,266 98,699
Savings 75,816 82,962
Money market accounts 50,048 33,605
Certificates of deposit over $100,000 39,381 33,637
Certificates of deposit less than $100,000 114,024 108,151
--------- ---------
Total deposits 470,064 444,088
Accrued expenses and other liabilities 3,643 5,872
--------- ---------
TOTAL LIABILITIES 473,707 449,960
STOCKHOLDERS' EQUITY
Common stock (no par value; stated value $1 2/3
per share; authorized 10,000,000 shares; issued at 9/30/00
3,038,455 shares; issued at 12/31/99 3,027,148 shares.) 5,059 4,599
Surplus 25,078 19,667
Treasury Stock at cost, 20,315 shares in 2000
and 12,493 shares in 1999 (944) (655)
Retained Earnings 25,058 25,918
Accumulated other comprehensive income-
net unrealized (losses) on securities
available for sale (net of income taxes) (1,374) (1,954)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 52,877 47,575
--------- ---------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 526,584 $ 497,535
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
<TABLE>
PEAPACK-GLADSTONE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share data)
(Unaudited)
<CAPTION>
Nine months ended Three months ended
September 30, September 30,
----------------------------- -----------------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 18,240 $ 14,757 $ 6,228 $ 5,103
Interest on investment securities:
Taxable 2,540 2,222 882 729
Tax-exempt 474 419 194 139
Interest on securities available for sale:
Taxable 4,283 4,986 1,296 1,652
Interest on federal funds sold 869 1,134 272 416
Total interest income 26,406 23,518 8,872 8,039
---------- ---------- ---------- ----------
INTEREST EXPENSE
Interest on savings account deposits 3,129 2,670 1,101 907
Interest on certificates of deposit over $100,000 1,279 1,183 506 382
Interest on other time deposits 4,534 3,870 1,696 1,285
---------- ---------- ---------- ----------
Total interest expense 8,942 7,723 3,303 2,574
---------- ---------- ---------- ----------
NET INTEREST INCOME BEFORE
PROVISION FOR LOAN LOSSES 17,464 15,795 5,569 5,465
Provision for loan losses 378 339 126 111
---------- ---------- ---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 17,086 15,456 5,443 5,354
---------- ---------- ---------- ----------
OTHER INCOME
Service charges and fees for other services 1,382 1,577 505 501
Trust Department income 2,827 2,202 950 695
Securities (Losses) Gains (200) 16 (4) 16
Other income 274 119 47 53
---------- ---------- ---------- ----------
Total other income 4,283 3,914 1,498 1,265
OTHER EXPENSES
Salaries and employee benefits 6,678 5,902 2,243 1,987
Premises and equipment 2,162 2,074 646 747
Merger related charges 500 0 0 0
Other expense 3,036 3,197 820 1,220
---------- ---------- ---------- ----------
Total other expenses 12,376 11,173 3,709 3,954
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAX EXPENSE 8,993 8,197 3,232 2,665
Income tax expense 3,070 2,737 1,096 762
---------- ---------- ---------- ----------
NET INCOME $ 5,923 $ 5,460 $ 2,136 $ 1,903
========== ========== ========== ==========
EARNINGS PER SHARE (Reflects 5% stock
dividends effective November 1,
2000 and 1999)
Basic $ 1.96 $ 1.80 $ 0.70 $ 0.62
Diluted $ 1.92 $ 1.75 $ 0.69 $ 0.60
Average basic shares outstanding 3,018,513 2,996,349 3,020,867 2,997,569
Average diluted shares outstanding 3,077,444 3,074,864 3,079,798 3,076,084
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
PEAPACK-GLADSTONE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------------
2000 1999
-------- --------
<S> <C> <C>
Balance, Beginning of Period $ 47,575 $ 44,461
Comprehensive income:
Net Income 5,923 5,460
Unrealized holding gains/(losses) on securities
arising during the period, net of tax 451 (2,349)
Less: Reclassification adjustment for losses/gains
included in net income 129 (10)
-------- --------
Unrealized holding losses on securities
arising during the period, net of tax 580 (2,339)
-------- --------
Total Comprehensive income 6,503 3,121
Common Stock Options Exercised 139 20
Purchase of Treasury Stock (170) 0
Cash Dividends Declared (1,170) (919)
-------- --------
Balance, September 30, $ 52,877 $ 46,683
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
PEAPACK-GLADSTONE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------------
2000 1999
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income: $ 5,923 $ 5,460
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 757 694
Amortization of premium and accretion of
discount on securities, net 184 239
Provision for loan losses 378 339
Losses/(Gains) on security sales 200 (16)
Increase in interest receivable (493) (218)
Decrease in other assets 30 218
(Decrease) in other liabilities (1,576) (1,644)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 5,403 5,072
-------- --------
INVESTING ACTIVITIES:
Proceeds from maturities of investment securities 12,485 12,753
Proceeds from maturities of securities available
for sale 24,815 6,280
Proceeds from calls of investment securities 10 4,600
Proceeds from sales and calls of securities available
for sale 10,484 17,663
Purchase of investment securities (20,320) (17,871)
Purchase of securities available for sale (17,263) (20,802)
Net decrease in short term investments 0 1,911
Net increase in loans (43,638) (21,597)
Purchase of premises and equipment (2,712) (634)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (36,139) (17,697)
-------- --------
FINANCING ACTIVITIES:
Net increase in deposits 25,976 6,559
Dividends paid (1,170) (919)
Exercise of stock options 139 24
Treasury stock options (170) 0
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 24,775 5,664
-------- --------
Net decrease in cash and cash equivalents (5,961) (6,961)
-------- --------
Cash and cash equivalents at beginning of period 33,017 55,629
-------- --------
Cash and cash equivalents at end of period $ 27,056 $ 48,668
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest on deposits $ 8,081 $ 5,929
Income taxes 3,105 2,174
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE>
PEAPACK-GLADSTONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements of Peapack-Gladstone Financial Corporation
are prepared on the accrual basis and include the accounts of the Corporation
and its wholly-owned subsidiary, the Peapack-Gladstone Bank. All significant
intercompany balances and transactions have been eliminated from the
accompanying consolidated financial statements.
Effective January 7, 2000, the Corporation acquired Chatham Savings, FSB. The
acquisition has been accounted for as a pooling-of-interests and, accordingly,
the financial statements include the accounts and activities of Chatham for all
periods presented. The transaction resulted in the issuance of 305,730 shares of
the Corporation's common stock.
Prior periods have been restated as follows:
For the three months ended September 30, 1999
<TABLE>
<CAPTION>
As Previously Reported As Restated
---------------------- -----------
<S> <C> <C>
Net Interest Income after Provision for Loan Losses $ 4,607,000 $ 5,354,000
=========== ===========
Net Income $ 1,718,000 $ 1,903,000
=========== ===========
For the nine months ended September 30, 1999
<CAPTION>
As Previously Reported As Restated
---------------------- -----------
<S> <C> <C>
Net Interest Income after Provision for Loan Losses $13,329,000 $15,456,000
=========== ===========
Net Income $ 4,980,000 $ 5,460,000
=========== ===========
As of December 31, 1999:
Stockholders' Equity $40,715,000 $47,575,000
=========== ===========
</TABLE>
In the first half of 2000, the Corporation recorded a pre-tax merger charge of
$500,000 which primarily consisted of severance costs, professional fees and
consolidation costs directly attributable to the merger.
2. ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is maintained at a level that management considers
adequate to reflect the risk of future losses inherent in the Corporation's loan
portfolio. In its evaluation of the adequacy of the allowance for loan losses,
management considers past loan loss experience, changes in the composition of
non-performing loans, the condition of borrowers facing financial pressure, the
relationship of the current level of the allowance to the credit portfolio and
to non-performing loans and existing economic conditions. The process of
determining the adequacy of the allowance is necessarily judgmental and subject
to changes in external conditions. The allowance is increased by provisions
charged to expense and reduced by net charge-offs.
3. EARNINGS PER COMMON SHARE - BASIC AND DILUTED
Basic earnings per share is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding.
Diluted earnings per share includes any additional common shares as if all
potentially dilutive common shares were issued (i.e., stock options).
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<PAGE>
4. COMPREHENSIVE INCOME
The Corporation's total comprehensive income for the nine months ended September
30, 2000 and 1999 was $6,503,000 and $3,121,000. Total comprehensive income for
the three months ended September 30, 2000 and September 30, 1999 was $2,792,000
and $1,620,000. The difference between the Corporation's net income and total
comprehensive income for the nine and three months ended September 30, 2000 and
1999 relates to the change in the net unrealized losses on securities available
for sale during the applicable period of time less adjustments for realized
gains and losses.
5. RECENT ACCOUNTING PRONOUNCEMENTS
In June 2000, the FASB issued Statement of Financial Accounting Standards (SFAS)
No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities, an Amendment to FASB Statement No. 133." SFAS No. 138 amends certain
aspects of SFAS No. 133 to simplify the accounting for derivatives and hedges
under SFAS No. 133. SFAS No. 138 is effective upon the Corporation's adoption of
SFAS No. 133 (January 1, 2001). The initial adoption of SFAS No. 138 is not
expected to have material impact on the Corporation's financial statements.
In September 2000, the FASB issued SFAS No. 140, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities (A Replacement
of FASB Statement 125)." SFAS No. 140 supersedes and replaces the guidance in
SFAS No. 125 and accordingly, provides guidance on the following topics:
securitization transactions involving financial assets; sales of financial
assets such as receivables, loans, and securities; factoring transactions; wash
sales; servicing assets and liabilities; collateralized borrowing arrangements;
securities lending transactions; repurchase agreements; loan participations, and
extinguishments of liabilities. While most of the provisions of SFAS No. 140 are
effective for transactions entered into after March 31, 2001, corporations with
fiscal year ends that hold beneficial interest from previous securitizations
will be required to make additional disclosures in their December 31, 2000
financial statements. The initial adoption of SFAS No. 140 is not expected to
have a material impact on the Corporation's financial statements.
8
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL: This Form 10-Q contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 which involve risks and
uncertainties. Such statements are not historical facts and include expressions
about management's confidence and strategies and management's expectations about
new and existing programs and products, relationships, opportunities, technology
and market conditions. You can identify forward looking statements by looking
for words such as "expect", "look", "believe", "anticipate", "may", "will", or
similar statements or variations of such terms. These forward-looking statements
involve certain risks and uncertainties. Actual results may differ materially
from the results the forward-looking statements contemplate because of, among
others, the following factors: the direction of interest rates is different than
anticipated, declines in the levels of loan quality and origination volume,
relationships with major customers including sources for loans, a decline in
trust business, as well as the adverse effects of economic conditions and legal
and regulatory barriers and structure. The Corporation is under no obligation to
update any forward looking statements at any time.
RESULTS OF OPERATIONS: Net income for the nine months ended September 30, 2000
was $5,923,000, or $1.92 per diluted share including a merger related charge of
$423,000, net of tax or $0.14 per diluted share. These results compare to net
income of $5,460,000, or $1.75 per diluted share for the same period in 1999.
(all data has been restated for the Chatham Savings, FSB merger and earnings per
share amounts have been restated to give effect to 5 percent stock dividends
issued November 1, 2000 and 1999). Excluding the merger related charge the
annualized return on average assets was 1.63% while the annualized return on
average equity was 17.13%
Net income was $2,136,000 or $0.69 per diluted share for the three month period
ended September 30, 2000, compared with $1,903,000 or $0.60 per diluted share
for the same period in 1999.
Net income for the nine month period ended September 30, 2000 reflected higher
net interest income and other income, offset by higher other expenses, including
merger-related charges. Net income for the three month period ended September
30, 2000 reflected higher net interest income, other income, and lower other
expenses.
EARNINGS ANALYSIS
NET INTEREST INCOME: Net interest income is the largest source of the
Corporation's operating income. Net interest income on a tax equivalent basis
increased to $17,510,000 from $15,846,000, an increase of 10.5 percent for the
nine months ended September 30, 2000 as compared to the nine months ended
September 30, 1999. The increase in net interest income is due to higher average
balances of loans and higher average interest rates earned on earning assets,
partially offset by lower average investments and federal funds sold. Also
contributing to the increase was higher interest bearing liabilities and demand
deposits, partially offset by higher interest rates paid on interest bearing
liabilities. The net interest margin was 4.68 percent for the nine months ended
September 30, 2000 compared with 4.65 percent for the same period in 1999.
Average interest earning assets increased $36.6 million, or 8.1 percent for the
first nine months of 2000 over the comparable 1999 amount. This was primarily
the result of increased average loans, up $57.1 million, offset in part by lower
average investment securities and federal funds sold, lower by $13.2 million and
$7.3 million, respectively.
Average interest-bearing liabilities for the first nine months of 2000 increased
$19.2 million or 5.5 percent from the same period in 1999. Average
interest-bearing checking and money market accounts increased $4.2 million and
$10.2 million, respectively. Average demand deposits increased by $8.4 million
or 9.6 percent over the comparable 1999 average balance.
Average interest rates on interest earning assets increased during the nine
months ended September 30, 2000 to 7.24 percent from 7.00 percent for the
comparable period in 1999. The largest increase in average rates was for federal
funds sold and investment securities, which rose 162 and 8 basis points,
respectively. Average rates earned on loans rose 5 basis points to 7.68 percent.
Average interest rates on interest-bearing liabilities rose by 28 basis points
to 3.23 percent from 2.95 percent. Overall, the growth in interest earning
assets coupled with the increase in average interest rates earned, offset in
part by higher interest rates paid on interest-bearing liabilities, as compared
to 1999, caused the net interest margin to increase to 4.68 percent from 4.65
percent.
Net interest income on a tax equivalent basis increased to $5,595,000 from
$5,331,000 for the three months ended September 30, 2000 as compared with the
same period in 1999. This can be attributed to a $40.6 million increase in
average interest earning assets and a corresponding 24 basis point increase in
rates earned on overall interest
9
<PAGE>
earning assets. Offsetting this increase was higher interest rates paid on
interest-bearing liabilities up 61 basis points from the third quarter of 1999.
The net interest margin declined to 4.30 percent from 4.56 percent for the same
period a year ago.
OTHER INCOME: Other income continues to represent a considerable source of
income for the Corporation. Excluding losses and gains on securities
transactions, total other income amounted to $4,083,000 for the nine months
ended September 30, 2000 compared with $3,898,000 for the nine months ended
September 30, 1999. For the quarter ended September 30, 2000 total other income,
excluding losses/gains on securities transactions, was $1,502,000 compared with
$1,249,000 for the quarter ended September 30, 1999. The largest component of
other income is Trust Department Income which rose $625,000 or 28 percent as
compared to the first nine months of 1999. The book value of assets under
management in the Trust Department increased by $57.9 million to $696.1 million
at September 30, 2000 as compared to September 30, 1999. Service charges and
fees for other services declined $195,000 for the first nine months of 2000 as
compared to the same period a year ago. This reduction was due to mortgage
banking activities related to residential mortgage loans at Chatham Savings,
FSB, in 1999 that has been discontinued.
During the second quarter, the Corporation sold a residential mortgage loan
servicing portfolio for a pre-tax gain of $211,000. This portfolio, acquired in
the Chatham Savings, FSB merger was not compatible with existing lines of
business.
In the second quarter of 2000, the Corporation sold securities at a loss in the
amount of $197,000. The higher rate earned on the reinvestment of the proceeds
is expected to increase interest income in future years in excess of the loss.
OTHER EXPENSES: Other expenses totaled $12,376,000 and $3,709,000 for the nine
and three months ended September 30, 2000. Excluding merger-related charges,
other expenses totaled $11,876,000 for the first nine months of 2000, an
increase of $703,000 or 6 percent for the same period in 1999. Salaries and
benefits expense, the largest component of other expense increased $776,000 or
13 percent during the first nine months of 2000 as compared to the same period
in 1999. This increase was primarily due to upward salary adjustments to attract
and maintain qualified employees and additions to the professional staff. Other
expenses declined $245,000 or 6 percent in the third quarter of 2000 as compared
to the same period in 1999. This decline is primarily attributed to
non-recurring consulting costs of $185,000 which were incurred during the third
quarter of 1999.
The significant components of other expense include advertising, data
processing, trust department, telephone, postage, stationery and professional
fees which totaled $1,825,000 and $543,000 for the nine and three months ended
September 30, 2000.
NON-PERFORMING ASSETS: Non-performing assets include loans past due in excess of
90 days and still accruing, non-accrual loans, and other real estate owned
(OREO). Non-performing assets totaled $363,000 at September 30, 2000 compared
with $591,000 at December 31, 1999, a decrease of $228,000 or 39 percent.
The following table sets forth non-performing assets on the dates indicated, in
conjunction with asset quality ratios:
<TABLE>
<CAPTION>
(in thousands) September 30, 2000 December 31, 1999
------------------ -----------------
<S> <C> <C>
Loans past due in excess of 90 days and still accruing $171 $205
Non-accrual loans 192 386
Other real estate owned 0 0
---- ----
Total non-performing assets $363 $591
==== ====
Non-performing loans as a % of loans 0.11% 0.21%
Non-performing assets as a % of loans plus other real
estate owned 0.11% 0.21%
Allowance as a % of loans 0.97% 1.03%
</TABLE>
PROVISION FOR LOAN LOSSES: For the nine months ended September 30, 2000, the
provision for loan losses was $378,000, compared to $339,000 for the same period
last year. The amount of the loan loss provision and the level of the allowance
for possible loan losses are based upon a number of factors including
Management's evaluation of potential losses in the portfolio, after
consideration of appraised collateral values, financial condition and past
credit history of the borrowers as well as prevailing and anticipated economic
conditions. Net charge-offs were $119,000 during the first nine months of 2000
as compared with net recoveries of $9,000 during the same period in 1999.
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<PAGE>
A summary of the allowance for loan losses for the nine month period ended
September 30, follows:
(In thousands) 2000 1999
------- -------
Balance, January 1, $ 2,962 $ 2,428
Provision charged to expense 378 339
Loans charged off (162) (70)
Recoveries 41 79
------- -------
Balance, September 30, $ 3,219 $ 2,776
======= =======
INCOME TAXES: Income tax expense as a percentage of pre-tax income was 34
percent for both the nine and three months ended September 30, 2000, as compared
to 33 percent and 29 percent for the same periods in 1999. The lower effective
tax rate in 1999 is attributable to a tax strategy implemented in July 1999 to
minimize state tax expense.
CAPITAL RESOURCES: Maintaining a strong capital position is an important goal of
the Corporation. At September 30, 2000, total shareholders' equity (including
net unrealized (losses)) was $52,877,000, representing a 13.3% increase over the
same period in 1999. The Federal Reserve Board has adopted risk-based capital
guidelines for banks. The minimum guidelines for the ratio of total capital to
risk-weighted assets is 8%. At least half of the total capital is to be
comprised of common stock, retained earnings, minority interests in the equity
accounts of consolidated subsidiaries, non-cumulative preferred stock, less
goodwill and certain other intangibles ("Tier 1 Capital"). The remainder may
consist of other preferred stock, certain other instruments and a portion of the
loan loss allowance. At September 30, 2000, the Bank's Tier 1 Capital and Total
Capital ratios were 19.80% and 21.10%, respectively.
In addition, the Federal Reserve Board has established minimum leverage ratio
guidelines. These guidelines provide for a minimum ratio of Tier 1 Capital to
average total assets of 3% for banks that meet certain specified criteria,
including having the highest regulatory rating. All other banks are generally
required to maintain a leverage ratio of at least 3% plus an additional cushion
of 100 to 200 basis points. The Bank's leverage ratio at September 30, 2000 was
9.55% and the Corporation's leverage ratio was 10.34%.
MARKET RISK: The Corporation continues to monitor its exposure to various market
risk sensitive instruments. These instruments and procedures employed to monitor
market risks are listed in the Corporation's 1999 Annual Report. There has been
no significant change in market risk since December 31, 1999.
11
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
None
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on the 9th day of November 2000.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
(Registrant)
BY
-----------------------------
(FRANK A. KISSEL, PRESIDENT
AND CHIEF EXECUTIVE OFFICER)
------------------------------
(ARTHUR F. BIRMINGHAM, SENIOR
VICE PRESIDENT AND TREASURER)
13
