BEDMINSTER, NJ -- (Marketwire) -- 11/01/12 -- For the quarter ended September 30, 2012, Peapack-Gladstone Financial Corporation (NASDAQ: PGC) (the Company) recorded net income available to common shareholders of $2.83 million and diluted earnings per share (EPS) of $0.32. For the nine months ended September 30, 2012, the Company recorded net income available to common shareholders of $8.16 million and diluted earnings per share of $0.93.
Frank A. Kissel, Chairman stated, "This was another solid quarter for us and it reflects the strength and positive momentum of the Company. We are in a great position as Doug Kennedy takes the reins as CEO. I am confident that Doug's leadership will further energize the Company as we continue on the offensive to grow the business."
Income taxes for the 2011 quarter and nine months ended September 30 included a one-time state tax benefit of $2.99 million, or $0.34 per diluted share, related to the reversal of a previously recorded valuation allowance.
For comparative purposes, the Company believes that comparing earnings excluding the one-time state tax benefit provides a better analysis of earnings trends. The information discussed in the next two paragraphs is a non-GAAP measure.
As detailed in the financial table on page 14, net income available to common shareholders and diluted earnings per share for the quarter ended September 30, 2011, excluding the one-time state tax benefit, was $2.13 million and $0.24. When the 2012 quarter is compared to the 2011 quarter, the 2012 quarter reflects increases of $707 thousand or 33 percent in net income available to common shareholders and 8 cents, also 33 percent, in diluted earnings per share.
Net income and diluted earnings per share for the nine months ended September 30, 2011, excluding the one-time state tax benefit, was $5.65 million and $0.64. When the 2012 nine month period is compared to the 2011 nine month period, the 2012 period reflects increases of $2.52 million or 45 percent in net income available to common shareholders and $0.29 cents, also 45 percent, in diluted earnings per share.
Net Interest Income and Margin
Net interest income, on a fully tax-equivalent basis, was $13.00 million for the third quarter of 2012, up from $12.06 million for the same quarter last year.
On a fully tax-equivalent basis, the net interest margin was 3.50 percent for the September 2012 quarter compared to 3.37 percent for the September 2011 quarter.
In comparing the September 2012 quarter to the September 2011 quarter, the positive effect of increased loans, funded by reduced lower yielding investment securities and increased lower cost core deposits, was partially offset by the effect of lower Treasury yields, which compressed asset yields more than deposit costs.
Average loans totaled $1.10 billion for the third quarter of 2012 as compared to $964 million for the same 2011 quarter, an increase of $134 million.
The average residential mortgage loan portfolio for the third quarter of 2012 increased $87 million when compared to the same quarter of 2011. The increase is attributable to originations retained in the portfolio that have outpaced loan paydowns. During this period of lower interest rates, refinance activity has generally been robust. All of the shorter duration loan production and select longer duration production has been retained in portfolio. However, the Company does sell much of its longer duration, fixed rate loan production as a source of noninterest income and as part of its interest rate risk management strategy in the lower rate environment.
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