Breaking Down Peapack-Gladstone Financial Corporation (PGC) Financial Health: Key Insights for Investors

You're looking at Peapack-Gladstone Financial Corporation (PGC) and wondering if its boutique private banking model can defintely outrun the current rate environment, and honestly, the third quarter 2025 numbers show a mixed bag you need to unpack. The good news is the core business engine is running hot: total deposits grew to a strong $6.6 billion, a 7% jump, and total loans hit $6.0 billion, showing their Metro New York expansion is pulling in real client money. But here's the quick math on the near-term risk: the company reported diluted Earnings Per Share (EPS) of only $0.54, missing the analyst consensus of $0.60, even though net income rose 21% to $9.6 million from the prior quarter. That miss signals a real tension between strong growth and managing operating expenses, especially as wealth management assets under management climbed to $12.9 billion. The opportunity is clear-a tangible book value per share increase of 7% to $34.10 suggests a solid capital base-but the immediate action is to scrutinize those operating costs against the revenue miss of $70.69 million.

Revenue Analysis

You need to understand where Peapack-Gladstone Financial Corporation (PGC) is making its money, and the answer is simple: it's a bank, so most of it comes from lending, but its Wealth Management division is a critical growth engine. For the trailing twelve months ending September 30, 2025, PGC's total revenue reached approximately $248.81 million, showing an aggressive growth trajectory.

The primary revenue streams for PGC, like most regional banks, are split between Net Interest Income (NII) and Noninterest Income (fee income). The near-term trend shows NII expanding significantly, driven by higher loan yields and effective balance sheet management. For the third quarter of 2025 (Q3 2025), the total revenue was $70.69 million.

• Net Interest Income (NII): This is the profit from lending money (interest earned on loans and securities) minus the cost of funding (interest paid on deposits and borrowings). In Q3 2025, NII before provision for credit losses was $50.6 million.
• Noninterest Income: This includes fees from services like wealth management, capital markets, and other banking services. This totaled $20.1 million in Q3 2025.

Year-over-Year Revenue Growth and Segment Contribution

The company is defintely in a high-growth phase. Its revenue for the trailing twelve months ending September 30, 2025, was up 18.63% year-over-year, which is a strong performance in the regional banking sector. Looking at the second quarter of 2025 (Q2 2025) alone, total revenue was up 23.2% over the same period in the prior year, fueled by a strategic push into the Metro New York market. That expansion is clearly paying off in the top line.

Here's the quick math on how the two main business segments contributed to total revenue in Q3 2025. This breakdown shows the importance of the core banking function, but also the increasing diversification from the Wealth Management division.

Note: The $4.3M is a calculated difference ($20.1M total noninterest income - $15.8M wealth management fee income) for illustrative purposes.

Analysis of Revenue Stream Changes

The most significant change is the increasing stability and contribution from the Wealth Management segment. Wealth management fee income contributed 22% of total revenue in Q3 2025, which is a solid, less rate-sensitive revenue stream for a bank. Also, the NII growth is driven by a conscious strategic change: the company's focus on Commercial and Industrial (C&I) lending and its private banking strategy in New York City is delivering higher-yield loans and a better mix of lower-cost deposits, which improves their net interest margin (NIM). This is a strategic shift from pure real estate lending, making the revenue base more resilient. You can read more about the investor base driving this strategy here: Exploring Peapack-Gladstone Financial Corporation (PGC) Investor Profile: Who's Buying and Why?

Profitability Metrics

You want to know if Peapack-Gladstone Financial Corporation (PGC) is making money efficiently, and the short answer is yes, but the cost of that growth is real. The bank's profitability is improving quarter-over-quarter, driven by strong loan growth, but its operational efficiency lags behind industry peers, which is a key risk to monitor.

For the third quarter of 2025 (Q3 2025), Peapack-Gladstone Financial reported a net income of $9.6 million, a solid increase from the prior year's quarter. This performance is largely a function of a strong core banking environment, but the margins tell a more nuanced story about the cost of their New York expansion.

Here's the quick math on Q3 2025 margins, using Net Interest Income (NII) as the primary revenue source for a bank's 'gross profit,' and Pre-Provision Net Revenue (PPNR) as the proxy for operating profit:

• Net Interest Income Margin (NII/Revenue): Approximately 71.6% (NII of $50.6 million divided by total revenue of $70.7 million).
• Operating Profit Margin (PPNR Margin): Approximately 26.0% ($18.4 million PPNR divided by $70.7 million total revenue).
• Net Profit Margin: Approximately 13.6% ($9.6 million net income divided by $70.7 million total revenue).

The Net Profit Margin for the trailing twelve months (TTM) ending September 30, 2025, was slightly higher at 13.8%, but this is a clear downtrend from the 15.4% recorded last year, suggesting that while the top-line revenue is growing, the expenses are growing faster. That's the cost of building a boutique private bank presence in a high-cost market like Metro New York-a strategic choice that you can read more about in their Mission Statement, Vision, & Core Values of Peapack-Gladstone Financial Corporation (PGC).

To be fair, the bank's Net Interest Margin (NIM) for Q3 2025 was 2.81%, a healthy increase from 2.34% a year ago. Still, this NIM sits at the lower end of the range for large US banks (2.5% to 3.5%) and well below the typical 3.5% to 4.5% seen at comparable community banks. This difference highlights the impact of their funding mix and asset strategy.

Operational efficiency is where the rubber meets the road. We use the Efficiency Ratio-Non-Interest Expense as a percentage of Total Revenue-to measure cost management. The lower the ratio, the better. PGC's Q3 2025 Efficiency Ratio is approximately 74.0% (operating expenses of $52.3 million divided by total revenue of $70.7 million). This is defintely high when you compare it to the expected average of around 61.2% for major US banks in the same quarter.

This high ratio means PGC is spending 74 cents to generate every dollar of revenue. The trend is clear: operating expenses rose to $52.3 million in Q3 2025 from $44.6 million in Q3 2024. This is not a surprise, as the company is intentionally investing in top-tier talent and new geographies to drive future growth, but it means their short-term profitability is being sacrificed for long-term market share.

The action item here is simple: watch the Efficiency Ratio closely. Management needs to show that the new revenue from the New York expansion can outpace the rising compensation and premises costs over the next 18 months, or the current investment will become a permanent drag on the bottom line.

Debt vs. Equity Structure

You want to know how Peapack-Gladstone Financial Corporation (PGC) is financing its growth, and the quick answer is: primarily through equity and a strong deposit base, keeping true debt remarkably low. This is a conservative, capital-focused approach that sets them apart from many peers.

As of September 30, 2025, the company's core long-term debt-specifically, net subordinated debt-stood at just $99.0 million. This is the debt that truly funds their capital structure, not the deposits that are the lifeblood of a bank. This low debt figure is paired with substantial shareholders' equity of $642.6 million. The balance is clear: they prefer equity over external leverage.

• Debt-to-Equity Ratio: 0.15 (Q3 2025, calculated).
• Industry Average (Regional Banks): 0.49.
• Short-Term Debt: Essentially eliminated, with no outstanding overnight borrowings as of June 30, 2025.

Here's the quick math: dividing that $99.0 million in subordinated debt by the $642.6 million in equity gives us a Debt-to-Equity (D/E) ratio of approximately 0.15. This is defintely a low number, especially when you compare it to the US Regional Bank industry average of about 0.49. A lower D/E means less financial leverage (debt) is used to fund assets, which translates to a greater equity cushion for investors.

This conservative stance isn't accidental. The company has actively managed its debt profile in 2025, including a year-to-date repayment of $35.0 million in subordinated debt. Plus, the company has been successfully funding its balance sheet expansion through deposit growth, which increased by $234 million to $6.4 billion at the end of the second quarter of 2025. This strong deposit base reduces the need for costly outside borrowings, which is a smart move in a high-rate environment.

The company's regulatory capital ratios, like the Common Equity Tier 1 Ratio and Tier 1 Leverage Ratio, remain strong and above the regulatory well-capitalized standards as of mid-2025. This shows their capital structure is built for stability. What this estimate hides is that PGC is a bank, so its total liabilities (deposits) are massive, but those aren't the same as the long-term debt used to fund the holding company's capital, which is what the D/E ratio for a bank's solvency truly measures.

For a deeper dive into the company's overall financial health, you can read the full post: Breaking Down Peapack-Gladstone Financial Corporation (PGC) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You want to know if Peapack-Gladstone Financial Corporation (PGC) can cover its short-term debts, and the answer is a qualified yes, typical for a bank: its liquidity position is strong, backed by significant off-balance sheet resources, even if its traditional ratios look low. The real strength is in its cash flow generation and access to external funding, not just its on-balance sheet cash.

Here's the quick math on their short-term position, keeping in mind that for a bank, the most common current liabilities are customer deposits, and its current assets are primarily short-term investments and cash.

• Current Ratio: Using the latest full-year 2024 figures, the Current Ratio (Current Assets / Current Liabilities) was approximately 0.96x ($5.87 billion / $6.13 billion). This is below the general 1.0x benchmark, but it's defintely not a concern for a bank whose business model is built on deposits (short-term liability) funding loans (long-term asset).
• Quick Ratio: The Quick Ratio, which excludes less-liquid assets like inventory (not a major factor for a bank) and includes cash and marketable securities, was reported at around 0.1x for the last quarter of 2024. That seems low, but it's standard for a commercial bank. The key is their access to immediate funding.

Working Capital and Balance Sheet Trends (2025)

The trend in working capital-the difference between current assets and current liabilities-is driven by deposit and loan growth, which is positive. Through the first nine months of 2025, Peapack-Gladstone Financial Corporation saw deposits grow by $433 million, or 7%, reaching $6.6 billion as of September 30, 2025. This growth in core relationship deposits shows strong client acquisition, but it also increases current liabilities. To offset this, total loans increased by $506 million to $6.0 billion in the same period, indicating solid asset deployment. The bank is actively managing its balance sheet to fund its expansion, which you can read more about in their Mission Statement, Vision, & Core Values of Peapack-Gladstone Financial Corporation (PGC).

Cash Flow Statement Overview and Liquidity Strength

The cash flow statement shows a solid operational core and strategic investment. The Q3 2025 operating cash flow was a strong $70.21 million, significantly higher than the previous year, which points to excellent cash collection efficiency. This is the engine of the business. Anyway, the full-year 2024 figures give a clearer picture of the overall capital movement:

What this estimate hides is the total liquidity cushion. As of June 30, 2025, the company's on-balance sheet liquidity (cash, interest-earning deposits, and available-for-sale investments) totaled $1.1 billion, or 15% of total assets. Plus, they maintain an additional $3.5 billion in off-balance sheet liquidity via secured borrowing facilities with the Federal Home Loan Bank and the Federal Reserve Discount Window. That means their total on and off-balance sheet liquidity is about $4.6 billion. This massive liquidity stack is the real measure of their ability to handle any short-term funding pressure.

Valuation Analysis

You're looking at Peapack-Gladstone Financial Corporation (PGC) and wondering if the market has it right. The direct takeaway is that, based on key metrics from the end of the third quarter of 2025, the stock appears to be undervalued relative to its tangible book value, despite a challenging stock price trend over the last year.

As a seasoned analyst, I see a clear disconnect between the company's financial health and its market price. The stock traded recently around $26.00 as of mid-November 2025, but its valuation multiples suggest a compelling entry point for a patient investor.

Is Peapack-Gladstone Financial Corporation (PGC) Overvalued or Undervalued?

To be fair, the market has been tough on regional banks. Peapack-Gladstone Financial Corporation (PGC)'s stock price has decreased by 29.40% over the last 12 months, which is a significant drop that signals investor concern about the banking sector and the company's expansion expenses. Still, when we look at the core valuation ratios-the real measure of value for a bank-the picture changes.

Here's the quick math on the most relevant metrics:

• Price-to-Earnings (P/E) Ratio: The trailing twelve months (TTM) non-GAAP Earnings Per Share (EPS) was $1.94. Dividing the recent stock price of $25.98 by this EPS gives us a P/E ratio of about 13.39. This is a reasonable multiple, suggesting the stock is neither extremely cheap nor expensive on an earnings basis.
• Price-to-Book (P/B) Ratio: This is the most critical metric for a bank. With a recent stock price of $25.98 and a tangible book value per share (TBVPS) of $34.10 as of September 30, 2025, the P/B ratio is a low 0.76. Trading at 76 cents on the dollar for tangible assets is a defintely sign of undervaluation.
• Enterprise Value-to-EBITDA (EV/EBITDA): For a bank like Peapack-Gladstone Financial Corporation, which generates revenue primarily from interest income and fees, this metric isn't typically the primary valuation tool. P/E and P/B are far more useful because a bank's core business model is about managing assets and liabilities, not just operating expenses.

Dividend and Analyst Consensus

The company maintains a steady dividend, which is a good sign of management confidence and capital strength. The annual dividend is currently $0.20 per share, which translates to a modest dividend yield of about 0.77% at the current price. What this estimate hides is the sustainability of that dividend. The TTM payout ratio is only about 10.31%, meaning the company uses a very small portion of its earnings to pay the dividend, leaving plenty of room for capital retention and growth.

The analyst community agrees that the stock is cheap. As of November 2025, the consensus rating is a 'Buy,' with a high level of conviction: 100% of the two analysts covering the stock recommend a Buy (50% Strong Buy, 50% Buy). The average price target is set at $36.21, which implies an expected upside of over 40% from the current trading price. This strong consensus, coupled with the low P/B ratio, points to a clear opportunity.

To understand the strategic vision driving this valuation, you should review the Mission Statement, Vision, & Core Values of Peapack-Gladstone Financial Corporation (PGC).

Your next step is to look at the firm's asset quality and loan book to confirm the low P/B ratio isn't masking a hidden credit risk, as that's the only thing that could justify this kind of discount.

Risk Factors

You need a clear picture of what could derail Peapack-Gladstone Financial Corporation's (PGC) strong growth narrative, and the near-term risk boils down to managing the costs of their expansion while keeping a close eye on credit quality. The bank is defintely executing a high-growth strategy, but that comes with a higher operational expense base and increased provisioning for potential loan losses that are eating into profit margins.

The most immediate challenge is the profitability squeeze from their strategic push into the Metro New York market. This expansion is driving great deposit and loan growth-total loans hit $6.02 billion as of September 30, 2025, up significantly-but it's expensive. Operating expenses for Q3 2025 surged to $52.3 million, compared to $44.6 million a year ago. Here's the quick math: that growth-related spending is why the Q3 2025 diluted Earnings Per Share (EPS) of $0.54 missed the analyst consensus of $0.60. You are paying for growth upfront, and the net profit margin has narrowed to 13.8% from 15.4% last year. That's a clear operational risk.

• Manage operating expenses to protect net profit margin.
• Ensure new market revenue outpaces expansion costs quickly.

On the financial risk front, credit quality requires careful monitoring. While total assets are robust at $7.44 billion, the provision for credit losses jumped to $4.8 million in Q3 2025, a notable increase from $1.2 million in the prior year period. This signals management is setting aside more capital for potential defaults, which is prudent but impacts net income. Nonperforming assets were a concern earlier in the year, reaching $115.0 million at June 30, 2025, though the allowance for credit losses stood at $68.6 million as of September 30, 2025. This ratio is something to watch, as some analysts suggest the allowance for bad loans coverage is still low.

External and financial market risks are always present for a bank, primarily interest rate volatility. Peapack-Gladstone Financial Corporation has done a good job managing its funding costs, with the Net Interest Margin (NIM) improving to 2.81% in Q3 2025. Still, any sudden shift in the Federal Reserve's rate policy could pressure the NIM. The bank's Accumulated Other Comprehensive Loss (AOCI) related to its securities portfolio, which was $(50.5 million) in Q3 2025, remains sensitive to rate changes, though it is narrowing. The good news is their capital position is strong; the company's Tier 1 Leverage Ratio of 8.86% is well above regulatory minimums, providing a significant buffer against market shocks.

The company is mitigating these risks by focusing on core relationship deposits-which grew by $708 million in the first nine months of 2025-to secure lower-cost funding. Plus, they reduced subordinated debt to $99.0 million from $133.6 million, which lowers interest expense. Their strategic direction, outlined in their Mission Statement, Vision, & Core Values of Peapack-Gladstone Financial Corporation (PGC), is to be a premier boutique private bank, which should yield higher-margin, fee-based revenue over time to offset the current expense trajectory.

Growth Opportunities

You're looking for a clear path to future returns, and for Peapack-Gladstone Financial Corporation (PGC), that path is paved with high-net-worth clients in the Metro New York market. The core takeaway is this: the company's strategic, costly expansion into New York City is now the primary engine for revenue and earnings growth, transforming it into a boutique private bank.

The firm, which rebranded as Peapack Private Bank & Trust on January 1, 2025, is focused on a single point of contact (SPOC) model, which is a key differentiator against larger, more impersonal institutions. This strategy is working: over the last two years, their newly hired teams have brought in over 850 new client relationships, adding more than $1.75 billion in core relationship deposits and over $900 million in new loans to the balance sheet. That's defintely a significant shift.

Growth Drivers and Strategic Focus

The company's future growth is not reliant on a single product but on the synergy between its commercial banking and wealth management segments. The strategy is simple: embed a private banking team in a lucrative market and let them cross-sell. Here's the quick math on their focus:

• Wealth Management: Assets Under Management and Administration (AUM/AUA) grew by $1.0 billion to $12.9 billion at the end of Q3 2025, up from $11.9 billion at year-end 2024.
• Commercial Lending: Commercial and Industrial (C&I) lending is the loan growth engine, accounting for a massive 69% of new business originations during the third quarter of 2025.
• Market Expansion: They are still adding talent, like the five production teams added in Long Island in Q2 2025, to deepen their New York metropolitan footprint.

This focus on C&I and wealth management fee income-which contributed $15.8 million in Q3 2025-provides a more diversified revenue stream than a traditional bank. Anyway, the investment in new teams and the New York expansion is a near-term headwind on operating expenses, but it's a necessary cost for long-term scale.

2025 Projections and Earnings Estimates

While the company is investing heavily, the growth is translating to the bottom line. For the third quarter of 2025, Peapack-Gladstone Financial Corporation reported diluted Earnings Per Share (EPS) of $0.54 on revenue of $70.69 million. What this estimate hides is the sequential improvement: net income of $9.6 million for Q3 2025 represented a 21% increase compared to the previous quarter.

Looking at the full picture for the current fiscal year, the consensus EPS forecast for the fiscal year ending December 2025 stands at $2.06. Analysts are projecting a significant earnings ramp-up next year, with expectations for EPS to grow by over 49% in the following year as the expansion costs moderate and the new client relationships mature. This is a classic growth-stock trajectory in a regional bank's clothing.

The competitive advantage here is their deep expertise in wealth management, delivered with a fiduciary standard (meaning they are legally required to act in the client's best financial interest), which appeals to the affluent clientele they are targeting. You can explore this further in Exploring Peapack-Gladstone Financial Corporation (PGC) Investor Profile: Who's Buying and Why?