Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2024	Nov. 01, 2024
Cover [Abstract]
Entity Registrant Name	PEAPACK-GLADSTONE FINANCIAL CORPORATION
Entity Central Index Key	0001050743
Document Type	10-Q
Document Period End Date	Sep. 30, 2024
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		17,585,306
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024
Trading Symbol	PGC
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity File Number	001-16197
Entity Tax Identification Number	22-3537895
Entity Address, Address Line One	500 Hills Drive
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	Bedminster
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07921-0700
City Area Code	908
Local Phone Number	234-0700
Document Quarterly Report	true
Document Transition Report	false
Entity Incorporation, State or Country Code	NJ
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common Stock, no par value
Security Exchange Name	NASDAQ

CONSOLIDATED STATEMENTS OF CONDITION - USD ($)
$ in Thousands

Sep. 30, 2024

Dec. 31, 2023

ASSETS

Cash and due from banks

$ 8,129

$ 5,887

Interest-earning deposits

484,529

181,784

Total cash and cash equivalents

492,658

187,671

Securities available for sale

682,713

550,617

Securities held to maturity (fair value $92,438 at September 30, 2024 and $94,415 at December 31, 2023)

103,158

107,755

CRA equity security, at fair value

13,445

13,166

FHLB and FRB stock, at cost

^[1]

12,459

31,044

Loans held for sale, at fair value

561

100

Loans held for sale, at lower of cost or fair value

4,189

6,695

Loans

5,315,417

5,429,325

Less: allowance for credit losses

71,283

65,888

Net loans

5,244,134

5,363,437

Premises and equipment

25,716

24,166

Accrued interest receivable

31,973

30,676

Bank owned life insurance

47,837

47,581

Goodwill

36,212

Other intangible assets

8,986

9,802

Finance lease right-of-use assets

1,020

2,087

Operating lease right-of-use assets

41,650

12,096

Deferred tax assets, net

8,756

505

Other assets

38,325

53,247

TOTAL ASSETS

6,793,792

6,476,857

Deposits:

Noninterest-bearing demand deposits

1,079,877

957,687

Interest-bearing deposits:

Checking

^[2]

3,316,217

2,882,193

Savings

103,979

111,573

Money market accounts

902,562

740,559

Certificates of deposit - retail

515,297

443,791

Certificates of deposit - listing service

7,454

7,804

Subtotal deposits

5,925,386

5,143,607

Interest-bearing demand - brokered

10,000

Certificates of deposit - brokered

0

120,507

Total deposits

5,935,386

5,274,114

Short-term borrowings

403,814

Finance lease liabilities

1,388

3,430

Operating lease liabilities

44,775

12,876

Subordinated debt, net

133,489

133,274

Accrued expenses and other liabilities

71,140

65,668

TOTAL LIABILITIES

6,186,178

5,893,176

SHAREHOLDERS’ EQUITY

Preferred stock (no par value; authorized 500,000 shares; liquidation preference of $1,000 per share)

Common stock (no par value; stated value $0.83 per share; authorized 42,000,000 shares; issued shares, 21,526,987 at September 30, 2024 and 21,388,917 at December 31, 2023; outstanding shares, 17,577,747 at September 30, 2024 and 17,739,677 at December 31, 2023)

17,946

17,831

Surplus

346,811

346,954

Treasury stock at cost (3,949,240 shares at September 30, 2024 and 3,649,240 shares at December 31, 2023)

(117,509)

(110,320)

Retained earnings

415,186

394,094

Accumulated other comprehensive loss, net of income tax

(54,820)

(64,878)

TOTAL SHAREHOLDERS’ EQUITY

607,614

583,681

TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY

$ 6,793,792

$ 6,476,857

[1]	FHLB means "Federal Home Loan Bank" and FRB means "Federal Reserve Bank."
[2]	Interest-bearing checking includes $1.4 billion at September 30, 2024 and $990.7 million at December 31, 2023 of reciprocal balances in the Reich & Tang or Promontory Demand Deposit Marketplace program.

CONSOLIDATED STATEMENTS OF CONDITION (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Securities held to maturity fair value	$ 92,438	$ 94,415
Preferred stock, par value	$ 0	$ 0
Preferred stock, shares authorized	500,000	500,000
Preferred stock, liquidation preference per share	$ 1,000	$ 1,000
Common stock, stated value	$ 0.83	$ 0.83
Common stock, shares authorized	42,000,000	42,000,000
Common stock, shares issued	21,526,987	21,388,917
Common stock, shares outstanding	17,577,747	17,739,677
Treasury stock, shares	3,949,240	3,649,240

CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
INTEREST INCOME
Interest and fees on loans	$ 73,111	$ 71,846	$ 217,287	$ 204,808
Interest on investments:
Taxable	6,107	5,170	16,411	14,541
Tax-exempt		5		22
Interest on loans held for sale	3	5	15	9
Interest on interest-earning deposits	3,982	1,463	7,922	4,452
Total interest income	83,203	78,489	241,635	223,832
INTEREST EXPENSE
Interest on savings and interest-bearing deposit accounts	38,042	28,851	106,453	76,351
Interest on certificates of deposit	5,540	3,459	15,762	7,650
Interest on borrowed funds		6,569	3,848	13,249
Interest on finance lease liability	15	46	75	149
Interest on subordinated debt	1,685	1,730	5,055	4,966
Subtotal - interest expense	45,282	40,655	131,193	102,365
Interest on interest-bearing demand - brokered	134	136	394	469
Interest on certificates of deposits - brokered	106	1,183	2,950	1,584
Total interest expense	45,522	41,974	134,537	104,418
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES	37,681	36,515	107,098	119,414
Provision for credit losses	1,224	5,856	5,762	9,065
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	36,457	30,659	101,336	110,349
OTHER INCOME
Wealth management fee income	15,150	13,975	45,976	41,989
Service charges and fees	1,327	1,319	3,994	3,897
Bank owned life insurance	390	310	1,221	912
Gain on loans held for sale at fair value (mortgage banking)	15	37	105	73
Gain on loans held for sale at lower of cost or fair value			23
Gain on sale of SBA loans	365	491	1,214	2,194
Corporate advisory fee income	55	85	976	180
Other income	1,162	3,541	5,406	7,147
Fair value adjustment for CRA equity security	474	(404)	279	(404)
Total other income	18,938	19,354	59,194	55,988
OPERATING EXPENSES
Compensation and employee benefits	31,050	25,264	89,410	76,204
Premises and equipment	5,633	5,214	16,490	14,317
FDIC insurance expense	870	741	2,685	2,181
Other operating expense	7,096	6,194	19,231	17,977
Total operating expenses	44,649	37,413	127,816	110,679
INCOME BEFORE INCOME TAX EXPENSE	10,746	12,600	32,714	55,658
Income tax expense	3,159	3,845	8,966	15,403
NET INCOME	$ 7,587	$ 8,755	$ 23,748	$ 40,255
EARNINGS PER SHARE
Basic	$ 0.43	$ 0.49	$ 1.34	$ 2.25
Diluted	$ 0.43	$ 0.49	$ 1.34	$ 2.23
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic	17,616,046	17,856,961	17,691,309	17,876,316
Diluted	17,700,042	18,010,127	17,746,560	18,091,524

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Statement of Comprehensive Income [Abstract]
Net income	$ 7,587	$ 8,755	$ 23,748	$ 40,255
Unrealized gains/(losses) on available for sale securities:
Unrealized holding gains/(losses) arising during the period	23,974	(20,629)	16,637	(18,882)
Before tax	23,974	(20,629)	16,637	(18,882)
Tax effect	(6,400)	5,642	(4,442)	8,820
Net of tax	17,574	(14,987)	12,195	(10,062)
Unrealized gains/(losses) on cash flow hedges:
Unrealized holding gains/(losses) arising during the period	(5,600)	1,861	(2,953)	3,904
Reclassification adjustment for amounts included in net income	0	0	0	(84)
Before tax	(5,600)	1,861	(2,953)	3,820
Tax effect	1,548	(530)	816	(1,200)
Net of tax	(4,052)	1,331	(2,137)	2,620
Total other comprehensive income/(loss)	13,522	(13,656)	10,058	(7,442)
Total comprehensive income/(loss)	$ 21,109	$ (4,901)	$ 33,806	$ 32,813

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock [Member]	Surplus [Member]	Treasury Stock, Common [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]
Balance at Dec. 31, 2022	$ 532,980	$ 17,513	$ 338,706	$ (97,826)	$ 348,798	$ (74,211)
Net income	40,255				40,255
Comprehensive income (loss)	(7,442)					(7,442)
Restricted stock units issued shares		358	(358)
Restricted stock units repurchased on vesting to pay taxes	(3,204)	(89)	(3,115)
Amortization of restricted stock units	8,578		8,578
Cash dividends declared on common stock	(2,666)				(2,666)
Share repurchase	(10,382)			(10,382)
Common stock options exercised	19	1	18
Issuance of shares for Employee Stock Purchase Plan	818	22	796
Issuance of common stock for acquisition		16	(16)
Balance at Sep. 30, 2023	558,956	17,821	344,609	(108,208)	386,387	(81,653)
Balance at Jun. 30, 2023	565,069	17,797	342,137	(105,393)	378,525	(67,997)
Net income	8,755				8,755
Comprehensive income (loss)	(13,656)					(13,656)
Restricted stock units issued shares	(68)	(1)	(67)
Restricted stock units repurchased on vesting to pay taxes	54	1	53
Amortization of restricted stock units	2,269		2,269
Cash dividends declared on common stock	(893)				(893)
Share repurchase	(2,815)			(2,815)
Issuance of shares for Employee Stock Purchase Plan	241	8	233
Issuance of common stock for acquisition		16	(16)
Balance at Sep. 30, 2023	558,956	17,821	344,609	(108,208)	386,387	(81,653)
Balance at Dec. 31, 2023	583,681	17,831	346,954	(110,320)	394,094	(64,878)
Net income	23,748				23,748
Comprehensive income (loss)	10,058					10,058
Restricted stock units issued shares		123	(123)
Restricted stock units repurchased on vesting to pay taxes	(877)	(31)	(846)
Amortization of restricted stock units	4,533		4,533
Modification of restricted stock units distributed in cash	(4,336)		(4,336)
Cash dividends declared on common stock	(2,656)				(2,656)
Share repurchase	(7,189)			(7,189)
Issuance of shares for Employee Stock Purchase Plan	652	23	629
Balance at Sep. 30, 2024	607,614	17,946	346,811	(117,509)	415,186	(54,820)
Balance at Jun. 30, 2024	588,322	17,936	345,164	(114,917)	408,481	(68,342)
Net income	7,587				7,587
Comprehensive income (loss)	13,522					13,522
Amortization of restricted stock units	1,395		1,395
Cash dividends declared on common stock	(882)				(882)
Share repurchase	(2,592)			(2,592)
Issuance of shares for Employee Stock Purchase Plan	262	10	252
Balance at Sep. 30, 2024	$ 607,614	$ 17,946	$ 346,811	$ (117,509)	$ 415,186	$ (54,820)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Shares outstanding			17,739,677
Issuance of shares for Employee Stock Purchase Plan, shares	11,257	8,850	27,016	26,491
Shares outstanding	17,577,747		17,577,747
O2024Q3 Dividends [Member]
Cash dividends declared on common stock, per share	$ 0.05
O2023Q3 Dividends [Member]
Cash dividends declared on common stock, per share		$ 0.05
O2024M9 Dividends [Member]
Cash dividends declared on common stock, per share			$ 0.15
O2023M9 Dividends [Member]
Cash dividends declared on common stock, per share				$ 0.15
Common Stock [Member]
Shares outstanding	17,666,490	17,887,895	17,739,677	17,813,451
Restricted stock units issued, shares		1,495	147,679	429,909
Restricted stock units/awards repurchased on vesting to pay taxes, shares		(515)	(36,625)	(106,452)
Share repurchase, share	(100,000)	(100,000)	(300,000)	(367,014)
Common stock options exercised, shares				1,400
Common stock options exercised, used to exercise, shares				60
Common stock options exercised, net of shares used to exercise, shares				1,340
Issuance of shares for Employee Stock Purchase Plan, shares	11,257	8,850	27,016	26,491
Issuance of common stock for acquisition, shares		19,197		19,197
Shares outstanding	17,577,747	17,816,922	17,577,747	17,816,922

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2024

Sep. 30, 2023

OPERATING ACTIVITIES:

Net income

$ 23,748

$ 40,255

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

2,692

2,720

Amortization of premium and accretion of discount on securities, net

226

458

Amortization of restricted stock

4,533

8,578

Amortization of intangible assets

816

1,048

Amortization of subordinated debt costs

215

216

Provision for credit losses

5,762

9,065

Deferred tax benefit

(11,133)

(10,717)

Stock-based compensation and employee stock purchase plan expense

131

140

Fair value adjustment for equity security

(279)

404

Loans originated for sale

^[1]

(20,856)

(24,786)

Proceeds from sales of loans held for sale

^[1]

24,220

35,963

Gain on loans held for sale

^[1]

(1,319)

(2,267)

Gain on loans held for sale at lower of cost or fair value

(23)

Loss on disposal of fixed assets

76

6

Gain on death benefit

(236)

Increase in cash surrender value of life insurance, net

(174)

(362)

(Increase)/decrease in accrued interest receivable

(1,297)

2,268

Decrease in other assets

(26,279)

(1,019)

Increase in accrued expenses and other liabilities

43,822

6,794

NET CASH PROVIDED BY OPERATING ACTIVITIES

44,645

68,764

INVESTING ACTIVITIES:

Principal repayments, maturities and calls of securities available for sale

496,781

476,363

Principal repayments, maturities and calls of securities held to maturity

4,531

3,638

Redemptions of FHLB and FRB stock

59,623

83,385

Purchase of securities held to maturity

(10,347)

Purchase of securities available for sale

(612,400)

(462,000)

Purchase of FHLB and FRB stock

(41,038)

(86,871)

Proceeds from sales of loans held for sale at lower of cost or fair value

23

Net decrease/(increase) in loans, net of participations sold

113,541

(202,777)

Proceeds from sales of other real estate

116

Purchase of premises and equipment

(4,068)

(2,297)

Disposal of premises and equipment

143

(6)

Proceeds from death benefit

154

NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES

17,290

(200,796)

FINANCING ACTIVITIES:

Net increase in deposits

661,272

54,195

Net (decrease)/increase in short-term borrowings

(403,814)

91,046

Dividends paid on common stock

(2,656)

(2,666)

Exercise of stock options, net of stock swaps

19

Restricted stock repurchased on vesting to pay taxes

(877)

(3,273)

Issuance of restricted stock

69

Modification of restricted stock units distributed in cash

(4,336)

Issuance of shares for employee stock purchase plan

652

818

Shares repurchased

(7,189)

(10,382)

NET CASH PROVIDED BY FINANCING ACTIVITIES

243,052

129,826

Net increase/(decrease) in cash and cash equivalents

304,987

(2,206)

Cash and cash equivalents at beginning of period

187,671

190,075

Cash and cash equivalents at end of period

492,658

187,869

Cash paid during the period for:

Interest

124,717

97,583

Income tax, net

13,753

9,668

Right-of-use asset obtained in exchange for operating lease liabilities

$ 32,483

$ 1,926

[1]	Includes mortgage loans originated with the intent to sell, which are carried at fair value. In addition, this includes the guaranteed portion of Small Business Administration (“SBA”) loans, which are carried at the lower of cost or fair value.

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Insider Trading Arrangements [Line Items]
Rule 10b51 Arrangement Adopted Flag	false
Non Rule 10b51 Arrangement Adopted Flag	false
Rule 10b51 Arrangement Trmntd Flag	false
Non Rule 10b51 Arrangement Trmntd Flag	false

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Certain information and footnote disclosures normally included in the audited consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2023 for Peapack-Gladstone Financial Corporation (the “Corporation” or the “Company”). In the opinion of Management of the Corporation, the accompanying unaudited consolidated interim financial statements contain all adjustments (consisting solely of normal and recurring accruals) necessary to present fairly the financial position as of September 30, 2024, and the results of operations, comprehensive income, changes in shareholders’ equity and cash flow statements for the three and nine months ended September 30, 2024 and 2023. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the full year or for any future period.

Principles of Consolidation and Organization: The consolidated financial statements of the Company are prepared on the accrual basis and include the accounts of the Company and its wholly-owned subsidiary, Peapack-Gladstone Bank (the “Bank”). The consolidated financial statements also include the Bank’s wholly-owned subsidiaries:

•

Peapack Capital Corporation (“PCC”)

•

Peapack-Gladstone Mortgage Group, Inc., which owns 99 percent of Peapack Ventures, LLC and 79 percent of Peapack-Gladstone Realty, Inc., a New Jersey real estate investment company

•

PGB Trust & Investments of Delaware, which owns one percent of Peapack Ventures, LLC

•

Peapack Ventures, LLC, which owns the remaining 21 percent of Peapack-Gladstone Realty, Inc.

•

Peapack-Gladstone Realty, Inc.

•

PGB Securities, Inc.

While the following notes to the consolidated financial statements include the consolidated results of the Company, the Bank and their subsidiaries, these notes primarily reflect the Bank’s and its subsidiaries’ activities. All significant intercompany balances and transactions have been eliminated from the accompanying consolidated financial statements.

Basis of Financial Statement Presentation: The consolidated financial statements have been prepared in accordance with GAAP. In preparing the financial statements, Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the statement of condition and revenues and expenses for the periods presented. Actual results could differ from those estimates.

Segment Information: The Company’s business is conducted through two business segments: (1) its banking segment (“Banking”), which involves the delivery of loan and deposit products to customers, and (2) the Peapack Private Wealth Management Division ("Peapack Private"), which includes investment management services to individuals and institutions. Management uses certain methodologies to allocate income and expense to the business segments.

The Banking segment includes: commercial (including commercial and industrial (“C&I”) and equipment financing), commercial real estate, multifamily, commercial construction, residential and consumer lending activities; treasury management services; C&I advisory services; escrow management; deposit generation; operation of ATMs; telephone and internet banking services; merchant credit card services and customer support services.

Peapack Private includes: investment management services for individuals and institutions; personal trust services, including services as executor, trustee, administrator, custodian; and other financial planning and advisory services. This segment also includes the activity from the Delaware subsidiary, PGB Trust & Investments of Delaware. The majority of wealth management fees are collected on a monthly or quarterly basis and are calculated on either a fixed or tiered fee schedule, based upon the market value of assets under management and/or administration (“AUMs”). Other non AUM-based revenues such as personal or fiduciary tax return preparation fees, executor fees, trust termination fees and/or financial planning and advisory fees are charged as services are rendered.

Cash and Cash Equivalents: For purposes of the statements of cash flows, cash and cash equivalents include cash and due from banks, interest-earning deposits and federal funds sold. Generally, federal funds are sold for one-day periods. Cash equivalents are of original maturities of 90 days or less. Net cash flows are reported for customer loan and deposit transactions and short-term borrowings with original maturities of 90 days or less.

Interest-Earning Deposits in Other Financial Institutions: Interest-earning deposits in other financial institutions mature within one year and are carried at cost.

Securities: Under Accounting Standards Update ("ASU") 2016-13, debt securities available-for-sale are measured at fair value and subject to impairment testing. When an available-for-sale debt security is considered impaired, the Company must determine if the decline in fair value has resulted from a credit-related loss or other factors and then, (1) recognize an allowance for credit losses ("ACL") by a charge to earnings for the credit-related component (if any) of the decline in fair value, and (2) recognize in other comprehensive income (loss) any non-credit related components of the fair value change. If the amount of the amortized cost basis expected to be recovered increases in a future period, the valuation reserve would be reduced, but not more than the amount of the current existing reserve for that security.

Debt securities are classified as held to maturity and carried at amortized cost when Management has the positive intent and ability to hold them to maturity. Under ASU 2016-13, held-to-maturity securities in a loss position are evaluated to determine if the decline in fair value has resulted from a credit-related loss or other factors, and then recognize a charge to earnings for the decline in fair value. The Company also has an investment in a Community Reinvestment Act (“CRA”) investment fund, which is classified as an equity security.

Interest income includes amortization of purchase premiums and discounts. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated, and premiums on callable debt securities, which are amortized to the earliest call date. Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

Federal Home Loan Bank (FHLB) and Federal Reserve Bank ("FRB") Stock: The Bank is a member of the FHLB system. Members are required to own a certain amount of FHLB stock, based on the level of borrowings and other factors. FHLB stock is carried at cost, classified as a restricted security and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.

The Bank is also a member of the Federal Reserve Bank of New York and required to own a certain amount of FRB stock. FRB stock is carried at cost and classified as a restricted security. Dividends are reported as income.

Loans Held for Sale: Mortgage loans originated with the intent to sell in the secondary market are carried at fair value, as determined by outstanding commitments from investors.

Mortgage loans held for sale are generally sold with servicing rights released; therefore, no servicing rights are recorded. Gains and losses on sales of mortgage loans, shown as gain on loans held for sale at fair value (mortgage loans) on the Statement of Income, are based on the difference between the selling price and the carrying value of the related loan sold.

SBA loans originated with the intent to sell in the secondary market are carried at the lower of cost or fair value. SBA loans are generally sold with the servicing rights retained. Gains and losses on the sale of SBA loans are based on the difference between the selling price and the carrying value of the related loan sold. Total SBA loans serviced totaled $157.0 million and $162.9 million as of September 30, 2024 and December 31, 2023, respectively. SBA loans held for sale totaled $4.5 million and $7.2 million at September 30, 2024 and December 31, 2023, respectively.

Loans originated with the intent to hold and subsequently transferred to loans held for sale are carried at the lower of cost or fair value. These are loans that the Company no longer has the intent to hold for the foreseeable future.

Loans: Loans that Management has the intent and ability to hold for the foreseeable future or until maturity are stated at the principal amount outstanding. Interest on loans is recognized based upon the principal amount outstanding. Loans are stated at face value, less purchased premium and discounts and net deferred fees. Loan origination fees and certain direct loan origination costs are deferred and recognized on a level-yield method over the life of the loan as an adjustment to the loan’s yield. The definition of recorded investment in loans includes accrued interest receivable and deferred fees/costs, however, for the Company’s loan disclosures, accrued interest and deferred fees/costs were excluded as the impact was not material.

Loans are considered past due when they are not paid within 30 days in accordance with contractual terms. The accrual of income on loans, including individually evaluated loans, is discontinued if, in the opinion of Management, principal or interest is not likely to be paid in accordance with the terms of the loan agreement, or when principal or interest is past due 90 days unless the asset is

both well secured and in the process of collection. All interest accrued but not received for loans placed on nonaccrual status are reversed against interest income. Payments received on nonaccrual loans are recorded as principal payments. A nonaccrual loan is returned to accrual status only when interest and principal payments are brought current and future payments are reasonably assured, generally when the Bank receives contractual payments for a minimum of six consecutive months. Commercial loans are generally charged off, in whole or in part, after an analysis is completed which indicates that collectability of the full principal balance is in doubt. Consumer closed-end loans are generally charged off after they become 120 days past due and open-end loans after 180 days. Subsequent payments are credited to income only if collection of principal is not in doubt. If principal and interest payments are brought contractually current and future collectability is reasonably assured, loans may be returned to accrual status. Nonaccrual mortgage loans are generally charged off to the extent that the value of the underlying collateral does not cover the outstanding principal balance. The majority of the Company’s loans are secured by real estate in New Jersey, New York and Pennsylvania.

Allowance for Credit Losses: Current expected credit losses ("CECL") requires the immediate recognition of estimated credit losses expected to occur over the estimated remaining life of the asset. The forward-looking concept of CECL requires loss estimates to consider historical experience, current conditions and reasonable and supportable economic forecasts.

The allowance for credit losses (“ACL”) on loans held for investment is the combination of the allowance for loan losses and the reserve for unfunded loan commitments. The allowance for loan losses is reported as a reduction of the amortized cost basis of loans, while the reserve for unfunded loan commitments is included within "other liabilities" on the Consolidated Statements of Condition. The estimate of credit loss incorporates assumptions for both the likelihood and amount of funding over the estimated life of the commitments, including adjustments for current conditions and reasonable and supportable forecasts. Management periodically reviews and updates its assumptions for estimated funding rates. The amortized cost basis of loans does not include accrued interest receivable, which is included in "accrued interest receivable" on the Consolidated Statements of Condition. The "Provision for credit losses" on the Consolidated Statements of Income is a combination of the provision for credit losses and the provision for unfunded loan commitments.

ACL in accordance with CECL methodology

With respect to pools of similar loans that are collectively evaluated, an appropriate level of general allowance is determined by portfolio segment using a non-linear discounted cash flow (“DCF”) model. The DCF model captures losses over the historical charge-off and prepayment cycle and applies those losses at a loan level over the remaining maturity of the loan. The model then calculates a historical loss rate using the average losses over the reporting period, which is then applied to each segment utilizing a standard reversion rate. This loss rate is then supplemented with adjustments for reasonable and supportable forecasts of relevant economic indicators, including but not limited to unemployment rates and national consumer price and confidence indices. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. Also included in the ACL are qualitative factors based on the risks present for each portfolio segment. These qualitative factors include the following: levels of and trends in delinquencies and impaired loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures and practices; experience, ability and depth of lending management and other relevant staffing and experience; industry conditions; and effects of changes in credit concentrations. It is also possible that these factors could include social, political, economic, and terrorist events or activities. All of these factors are susceptible to change, which may be significant. The ACL results in two forms of allocations, specific and general. These two components represent the total ACL deemed adequate to cover current expected credit losses in the loan portfolio.

When management identifies loans that do not share common risk characteristics (i.e., are not similar to other loans within a pool) they are evaluated on an individual basis. These loans are not included in the collective evaluation. For loans identified as having a likelihood of foreclosure or that the borrower is experiencing financial difficulty, a collateral dependent approach is used. These are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral. Under CECL, for collateral dependent loans, the Company has adopted the practical expedient method to measure the ACL based on the fair value of collateral. The ACL is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required.

The CECL methodology requires a significant amount of management judgment in determining the appropriate ACL. Several of the steps in the methodology are subjective including, among other things: segmenting the loan portfolio; determining the amount of loss history to consider; selecting predictive econometric regression models that use appropriate macroeconomic variables; determining the methodology to forecast prepayments; selecting the most appropriate economic forecast scenario; determining the length of the reasonable and supportable forecast and reversion periods; estimating expected utilization rates on unfunded loan commitments; and assessing relevant and appropriate qualitative factors. In addition, the CECL methodology is dependent on economic forecasts, which are inherently imprecise and may change from period to period. Although the ACL is considered appropriate, there can be no assurance that it will be sufficient to absorb future losses.

In determining an appropriate amount for the allowance, the Bank segments and aggregates the loan portfolio based on common characteristics. The following segments have been identified:

Primary Residential Mortgages. The Bank originates one to four family residential mortgage loans in the Tri-State area (which is comprised of New York, New Jersey and Connecticut), Pennsylvania and Florida. Loans are secured by first liens on the primary residence or investment property. Primary risk characteristics associated with residential mortgage loans typically involve: major living or lifestyle changes to the borrower, including unemployment or other loss of income; unexpected significant expenses, such as for major medical issues or catastrophic events; and divorce or death. In addition, residential mortgage loans that have adjustable rates could expose the borrower to higher debt service requirements in a rising interest rate environment. Further, real estate values could drop significantly and cause the value of the property to fall below the loan amount, creating additional potential loss exposure for the Bank.

Junior Lien Loan on Residence (which include home equity lines of credit). The Bank provides junior lien loans (“JLL”) and revolving home equity lines of credit against one to four family properties in the Tri-State area. These loans are subordinate to a first mortgage, which may be from another lending institution. Primary risk characteristics associated with JLLs and home equity lines of credit typically involve: major living or lifestyle changes to the borrower, including unemployment or other loss of income; unexpected significant expenses, such as for major medical issues or catastrophic events; and divorce or death. In addition, home equity lines of credit typically are made with variable or floating interest rates, which could expose the borrower to higher debt service requirements in a rising interest rate environment. Further, real estate values could drop significantly and cause the value of the property to fall below the loan amount, creating additional potential loss exposure for the Bank.

Multifamily. The Bank provides mortgage loans for multifamily properties (i.e., buildings which have five or more residential units). Multifamily loans are expected to be repaid from the cash flows of the underlying property so the collective amount of rents must be sufficient to cover all operating expenses, property management and maintenance, taxes and debt service. Increases in vacancy rates, interest rates, other changes in general economic conditions or changes in rent regulation can have an impact on the borrower and its ability to repay the loan.

Owner-Occupied Commercial Real Estate Loans. The Bank provides mortgage loans for owner-occupied commercial real estate properties in the Tri-State area and Pennsylvania. Commercial real estate properties primarily include retail buildings/shopping centers, hotels, office/medical buildings and industrial/warehouse space. Some properties are mixed use as they are a combination of building types, such as a building with retail space on the ground floor and either residential apartments or office suites on the upper floors. Commercial real estate loans are generally considered to have a higher degree of credit risk as they may be dependent on the ongoing success and operating viability of a fewer number of tenants who are occupying the property and who may have a greater degree of exposure to economic conditions.

Investment Commercial Real Estate Loans. The Bank provides mortgage loans for properties managed as an investment property (non-owner-occupied) in the Tri-State area and Pennsylvania. Non-owner-occupied properties primarily include retail buildings/shopping centers, hotels, office/medical buildings and industrial/warehouse space. Some properties are considered mixed use. Commercial real estate loans are generally considered to have a higher degree of credit risk as they may be dependent on the ongoing success and operating viability of a fewer number of tenants who are occupying the property and who may have a greater degree of exposure to economic conditions.

Commercial and Industrial Loans. The Bank provides lines of credit and term loans to operating companies for business purposes. The loans are generally secured by business assets such as accounts receivable, inventory, business vehicles and equipment as well as the stock of a company, if privately held. Commercial and industrial loans are typically repaid first by the cash flows generated by the borrower’s business operations. The primary risk characteristics are specific to the underlying business and its ability to generate sustainable profitability and resulting positive cash flows. Factors that may influence a business’ profitability include, but are not limited to, demand for its products or services, quality and depth of management, degree of competition, regulatory changes, and general economic conditions. To mitigate the risk characteristics of commercial and industrial loans, these loans often include commercial real estate as collateral and the Bank will often require more frequent reporting requirements from the borrower in order to better monitor its business performance. However, the ability of the Bank to foreclose and realize sufficient value from the assets is often highly uncertain.

Leasing Finance. PCC offers a range of finance solutions nationally. PCC provides term loans and leases secured by assets financed for U.S. based mid-size and large companies. Facilities tend to be fully drawn under fixed-rate terms. PCC serves a broad range of industries including transportation, manufacturing, heavy construction and utilities.

Asset risk in PCC’s portfolio is generally recognized through changes to loan income, or through changes to lease-related income streams due to fluctuations in lease rates. Changes to lease income can occur when the existing lease contract expires, the asset comes off lease or the business seeks to enter a new lease agreement. Asset risk may also change through depreciation, resulting from changes in the residual value of the operating lease asset or through impairment of the asset carrying value, which can occur at any time during the life of the asset.

Credit risk in PCC’s portfolio generally results from the potential default of borrowers or lessees, which may be driven by customer specific or broader industry-related conditions. Credit losses can impact multiple parts of the income statement including loss of interest/lease/rental income and/or higher costs and expenses related to the repossession, refurbishment, re-marketing and or re-leasing of assets.

Construction. The Bank provides commercial construction loans for properties located in the Tri-state area. Risks common to commercial construction loans are cost overruns, inaccurate estimates of the period of construction, changes in market demand for property, inadequate long-term financing arrangements and declines in real estate values. Changes in market demand for property could lead to longer marketing times resulting in higher carrying costs, declining values, and higher interest rates.

Consumer and Other. These are loans to individuals for household, family and other personal expenditures as well as obligations of states and political subdivisions in the U.S. This also represents all other loans that cannot be categorized in any of the previous mentioned loan segments. Consumer loans generally have higher interest rates and shorter terms than residential loans but tend to have higher credit risk due to the type of collateral securing the loan or in some cases the absence of collateral.

Loan Modifications: On January 1, 2023, the Company adopted ASU 2022-02, which replaced the accounting and recognition of troubled debt restructurings. ASU 2022-02 eliminates the accounting guidance on troubled debt restructurings for creditors in ASC 310-40 and amends the guidance on “vintage disclosures” to require disclosure of current-period gross write-offs by year of origination. ASU 2022-02 also updates the requirements related to accounting for credit losses under ASC 326 and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial difficulty.

Leases: At inception, contracts are evaluated to determine whether the contract constitutes a lease agreement. For contracts that are determined to be an operating lease, a corresponding right-of-use (“ROU”) asset and operating lease liability are recorded as separate line items on the statement of condition. An ROU asset represents the Company’s right to use an underlying asset during the lease term and a lease liability represents the Company’s commitment to make contractually obligated lease payments. Operating lease ROU assets and liabilities are recognized at the commencement date of the lease and are based on the present value of lease payments over the lease term. The measurement of the operating lease ROU asset includes any lease payments made.

If the rate implicit in the lease is not readily determinable, the incremental collateralized borrowing rate is used to determine the present value of lease payments. This rate gives consideration to the applicable FHLB collateralized borrowing rates and is based on the information available at the commencement date. The Company has elected to apply the short-term lease measurement and recognition exemption to leases with an initial term of 12 months or less; therefore, these leases are not recorded on the Company’s statement of condition, but rather, lease expense is recognized over the lease term on a straight-line basis. The Company’s lease agreements may include options to extend or terminate the lease. The Company’s decision to exercise renewal options is based on an assessment of its current business needs and market factors at the time of the renewal. The Company maintains certain property and equipment under direct financing and operating leases. Substantially all of the leases in which the Company is the lessee are comprised of real estate property for branches and office space and are classified as operating leases.

The ROU asset is measured at the amount of the lease liability adjusted for lease incentives received, any cumulative prepaid or accrued rent if the lease payments are uneven throughout the lease term, any unamortized initial direct costs, and any impairment of the ROU asset. Operating lease expense consists of a single lease cost allocated over the remaining lease term on a straight-line basis, variable lease payments not included in the lease liability, and any impairment of the ROU asset.

There are no terms or conditions related to residual value guarantees and no restrictions or covenants that would impact the Company’s ability to pay dividends or to incur additional financial obligations.

Derivatives: At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”); (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”); or (3) an instrument with no hedging designation. For a fair value hedge, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item, are recognized in current earnings as fair values change. For a cash flow hedge, the gain or loss on the derivative is

reported in other comprehensive income and is reclassified into earnings in the same periods during which the hedged transaction affects earnings. For cash flow hedges, changes in the fair value of derivatives that are not highly effective in hedging the changes in fair value or expected cash flows of the hedged item are recognized immediately in current earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings, as non-interest income. When hedge accounting is discontinued on a fair value hedge that no longer qualifies as an effective hedge, the derivative continues to be reported at fair value in the statement of condition, but the carrying amount of the hedged item is no longer adjusted for future changes in fair value. The adjustment to the carrying amount of the hedged item that existed at the date hedge accounting is discontinued is amortized over the remaining life of the hedged item into earnings.

Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged. Net cash settlements on derivatives that do not qualify for hedge accounting are reported in non-interest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged.

The Company formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions at the inception of the hedging relationship. This documentation includes linking fair value or cash flow hedges to specific assets and liabilities on the statement of condition or to specific firm commitments or forecasted transactions. The Company discontinues hedge accounting when it determines that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative is settled or terminated, a hedged forecasted transaction is no longer probable, a hedged firm commitment is no longer firm, or treatment of the derivative as a hedge is no longer appropriate or intended.

When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as non-interest income. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transactions are still expected to occur, gains or losses that were accumulated in other comprehensive income are amortized into earnings over the same periods which the hedged transactions will affect earnings.

The Company also offers facility specific / loan level swaps to its customers and offsets its exposure from such contracts by entering into mirror image swaps with a financial institution / swap counterparty (loan level / back-to-back swap program). The customer accommodations and any offsetting swaps are treated as non-hedging derivative instruments which do not qualify for hedge accounting (“standalone derivatives”). The notional amount of the swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual contracts. The fair value of the swaps is recorded as both an asset and a liability, in other assets and other liabilities, respectively, in equal amounts for these transactions. The Company is exposed to losses if a customer counterparty fails to make its payments under a contract in which the Company is in a net receiving position. At this time, the Company anticipates that its counterparties will be able to fully satisfy their obligations under the agreements. All of the contracts to which the Company is a party settle monthly. Further, the Company has netting agreements with the dealers with which it does business.

Stock-Based Compensation: The Company’s 2021 Long-Term Stock Incentive Plan allows the granting of shares of the Company’s common stock as incentive stock options, nonqualified stock options, restricted stock awards, restricted stock units and stock appreciation rights to directors, officers and employees of the Company and its subsidiaries. There are no shares remaining for issuance with respect to the stock incentive plans approved in 2006 and 2012.

Options granted under this plan are, in general, exercisable not earlier than one year after the date of grant, at a price equal to the fair value of common stock on the date of grant and expire not more than ten years after the date of grant. Stock options may vest during a period of up to five years after the date of grant. The Company has a policy of using authorized but unissued shares to satisfy option exercises.

Upon adoption of ASU 2016-09, “Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting,” the Company has elected to account for forfeitures as they occur, rather than estimate expected forfeitures.

Changes in options outstanding during the nine months ended September 30, 2024 were as follows:


						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
	Number of			Exercise		Contractual		Value
	Options			Price		Term		(In thousands)
Balance, January 1, 2024		1,400		$	19.15
Exercised during 2024		—			—
Expired during 2024		(1,400	)		19.15
Forfeited during 2024		—			—
Balance, September 30, 2024		—		$	—		—	$	—
Vested and expected to vest		—		$	—		—	$	—
Exercisable at September 30, 2024		—		$	—		—	$	—

There were no stock options granted during the three or nine months ended September 30, 2024.

As of September 30, 2024, there was no unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Company's stock incentive plans.

The Company issued performance-based and service-based restricted stock units in 2023. Service-based units vest ratably over a three- or five-year period. There were no service-based restricted stock units granted under the 2021 Long-Term Stock Incentive Plan during the first nine months of 2024.

The performance-based awards are dependent upon the Company meeting certain performance criteria and, to the extent the performance criteria are met, will cliff vest at the end of the performance period, which is generally three years. There were no performance-based restricted stock units granted under the 2021 Long-Term Stock Incentive Plan in the first nine months of 2024.

Changes in non-vested shares dependent on performance criteria for the nine months ended September 30, 2024 were as follows:


				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Balance, January 1, 2024		176,364		$	32.40
Granted during 2024		4,705			31.36
Vested during 2024 (1)		(45,592	)		31.36
Forfeited during 2024		—			—
Balance, September 30, 2024		135,477		$	32.71

(1) Settled in cash.

Changes in service-based restricted stock awards/units for the nine months ended September 30, 2024 were as follows:


				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Balance, January 1, 2024		626,742		$	29.62
Granted during 2024		—			—
Vested during 2024 (1)		(248,028	)		27.83
Shares to be settled in cash		(120,046	)		22.13
Forfeited during 2024		(6,647	)		31.98
Balance, September 30, 2024		252,021		$	29.81

(1) Includes 100,349 shares that settled in cash.

As of September 30, 2024, there was $7.8 million of total unrecognized compensation cost related to service-based and performance-based restricted stock units. That cost is expected to be recognized over a weighted average period of 1.07 years. Stock compensation expense recorded for the third quarters of 2024 and 2023 totaled $3.4 million and $2.3 million, respectively. Stock compensation expense recorded for the nine months ended September 30, 2024 and 2023 totaled $9.3 million and $8.6 million, respectively.

Phantom Plan: During the first quarter of 2024, the Company adopted the Peapack-Gladstone Financial Corporation 2024 Phantom Stock Plan ("Phantom Plan"). The Phantom Plan allows the Company to issue performance-based and service-based awards which will be paid in cash. The award of a phantom unit entitles the participant to a cash payment equal to the value of the unit on the vesting date, which is the fair market value of a common share of the Company's stock on such vesting date.

The Company issued performance-based and service-based phantom units in 2024. Service-based phantom units vest ratably over a three-year period. There were 262,811 service-based phantom units granted under the Phantom Plan during the first nine months of 2024. Additionally, there are 120,046 restricted stock units that will settle in cash in 2025 and 2026.

The performance-based phantom units are dependent upon the Company meeting certain performance criteria and, to the extent the performance criteria are met, will cliff vest at the end of the performance period, which is three years. There were 110,047 performance-based units granted under the Phantom Plan in the first nine months of 2024.

Phantom units are recorded in salary and employee benefits expense based on the fair value of the units on the balance sheet date. The fair value of these awards is updated at each balance sheet date and changes in the fair value of the vested portions of the awards are recorded as increases or decreases to compensation expense within salary and employee benefits in the Consolidated Statements of Income. All of the outstanding phantom units at September 30, 2024 met the criteria to be treated under liability classification in accordance with ASC 718, given that these awards will settle in cash on the vesting date.

Compensation expense for the phantom units is based on the fair value of the units as of the balance sheet date as further discussed above, and such costs are recognized ratably over the service period of the awards. As the fair value of liability awards is required to be re-measured each period end, stock compensation expense amounts recognized in future periods for these awards will vary. The estimated future cash payments of these awards are presented as liabilities within "Accrued expenses and other liabilities" in the Consolidated Statement of Condition. As of September 30, 2024, there was $8.6 million of unrecognized compensation costs related to non-vested phantom units.

Employee Stock Purchase Plan (“ESPP”): The 2014 ESPP expired in April 2024 and was replaced by the 2024 ESPP, which was approved by shareholders on April 30, 2024 and allowed for the issuance of 150,000 shares.

The ESPP allows for the purchase of shares during four three-month Offering Periods of each calendar year. The Offering Periods end on March 31, June 30, September 30 and December 31 of each calendar year.

Each participant in the Offering Period is granted an option to purchase a number of shares and may contribute between one percent and 15 percent of their compensation. At the end of each Offering Period, the number of shares to be purchased by the employee is determined by dividing the employee’s contributions accumulated during the Offering Period by the applicable purchase price. The purchase price is an amount equal to 85 percent of the closing market price of a share of common stock on the purchase date. Participation in the ESPP is voluntary and employees can cancel their purchases at any time during the period without penalty. The fair value of each share purchase right is determined using the Black-Scholes option pricing model.

The Company recorded $56,000 and $34,000 in salaries and employee benefits expense for the three months ended September 30, 2024 and 2023, respectively, related to the ESPP. Total shares issued under the ESPP during the third quarter ended September 30, 2024 and 2023 were 11,257 and 8,850, respectively.

The Company recorded $131,000 and $140,000 in salaries and employee benefits expense for the nine months ended September 30, 2024 and 2023, respectively, related to the ESPP. Total shares issued under the ESPP during the nine months ended September 30, 2024 and 2023 were 27,016 and 26,491, respectively.

Earnings per share – Basic and Diluted: The following is a reconciliation of the calculation of basic and diluted earnings per share. Basic net income per share is calculated by dividing net income available to shareholders by the weighted average shares outstanding during the reporting period. Diluted net income per share is computed similarly to that of basic net income per share, except that the denominator is increased to include the number of additional shares that would have been outstanding utilizing the

Treasury Stock Method if all shares underlying potentially dilutive stock options were issued and all shares of restricted stock, stock warrants or restricted stock units were to vest during the reporting period.


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands, except per share data)	2024		2023		2024		2023
Net income available to common shareholders	$	7,587	$	8,755	$	23,748	$	40,255

Basic weighted average shares outstanding		17,616,046		17,856,961		17,691,309		17,876,316
Plus: common stock equivalents		83,996		153,166		55,251		215,208
Diluted weighted average shares outstanding		17,700,042		18,010,127		17,746,560		18,091,524
Net income per share
Basic	$	0.43	$	0.49	$	1.34	$	2.25
Diluted		0.43		0.49		1.34		2.23

For the three months ended September 30, 2024 and 2023, restricted stock units totaling 125,152 and 235,902, respectively, were not included in the computation of diluted earnings per share because they were anti-dilutive. For the nine months ended September 30, 2024 and 2023, restricted stock units totaling 277,141 and 416,712, respectively, were not included in the computation of diluted earnings per share because they were anti-dilutive. Anti-dilutive shares are common stock equivalents with weighted average exercise prices in excess of the average market value for the periods presented.

Income Taxes: The Company files a consolidated Federal income tax return. Separate state income tax returns are filed for each subsidiary based on current laws and regulations.

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in its financial statements or tax returns. The measurement of deferred tax assets and liabilities is based on the enacted tax rates. Such tax assets and liabilities are adjusted for the effect of a change in tax rates in the period of enactment.

The Company recognizes a tax position as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50 percent likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

The Company is no longer subject to examination by the U.S. Federal tax authorities for years prior to 2020 or by New Jersey tax authorities for years prior to 2018.

The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are any such matters that will have a material effect on the financial statements.

Restrictions on Cash: Cash on hand or on deposit with the Federal Reserve Bank of New York was required to meet regulatory reserve and clearing requirements.

Comprehensive Income: Comprehensive income consists of net income and the change during the period in the Company’s net unrealized gains or losses on securities available for sale and unrealized gains and losses on cash flow hedge, net of tax, less adjustments for realized gains and losses.

Transfers of Financial Assets: Transfers of financial assets are accounted for as sales, when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Goodwill and Other Intangible Assets: Goodwill is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree (if any), over the fair value of any net assets acquired and liabilities assumed as of the date of acquisition in a purchase business combination. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized but tested for impairment at least annually or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed.

Goodwill was primarily attributable to the Bank’s wealth management acquisitions. Management monitors the impact of changes in the financial markets and includes these assessments in our impairment process.

The Company has selected December 31 as the date to perform the annual impairment test. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill, which includes assembled workforce has an indefinite life on our statement of financial condition.

Other intangible assets, which primarily consist of customer relationship intangible assets arising from acquisitions, are amortized on an accelerated basis over their estimated useful lives, which range from 5 to 15 years.

INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2024

Investment Securities Available For Sale [Abstract]

INVESTMENT SECURITIES AVAILABLE FOR SALE

2. INVESTMENT SECURITIES

A summary of amortized cost and approximate fair value of investment securities available for sale and held to maturity included in the Consolidated Statements of Condition as of September 30, 2024 and December 31, 2023 follows:


	September 30, 2024
			Gross		Gross			Allowance
	Amortized		Unrealized		Unrealized			for		Fair
(In thousands)	Cost		Gains		Losses			Credit Losses		Value
Securities Available for Sale:
U.S government-sponsored agencies	$	244,808	$	—	$	(39,795	)	$	—	$	205,013
Mortgage-backed securities–residential		476,695		2,845		(37,458	)		—		442,082
SBA pool securities		24,291		—		(2,878	)		—		21,413
Corporate bond		15,500		29		(1,324	)		—		14,205
Total securities available for sale	$	761,294	$	2,874	$	(81,455	)	$	—	$	682,713
Securities Held to Maturity:
U.S. government-sponsored agencies	$	40,000	$	—	$	(2,302	)	$	—	$	37,698
Mortgage-backed securities–residential		63,158		—		(8,418	)		—		54,740
Total securities held to maturity	$	103,158	$	—	$	(10,720	)	$	—	$	92,438


	December 31, 2023
			Gross		Gross			Allowance
	Amortized		Unrealized		Unrealized			for		Fair
(In thousands)	Cost		Gains		Losses			Credit Losses		Value
Securities Available for Sale:
U.S government-sponsored agencies	$	244,794	$	—	$	(47,103	)	$	—	$	197,691
Mortgage-backed securities–residential		363,893		80		(43,177	)		—		320,796
SBA pool securities		27,148		—		(3,744	)		—		23,404
Corporate bond		10,000		—		(1,274	)		—		8,726
Total securities available for sale	$	645,835	$	80	$	(95,298	)	$	—	$	550,617
Securities Held to Maturity:
U.S. government-sponsored agencies	$	40,000	$	—	$	(3,369	)	$	—	$	36,631
Mortgage-backed securities–residential		67,755		—		(9,971	)		—		57,784
Total securities held to maturity	$	107,755	$	—	$	(13,340	)	$	—	$	94,415

The following tables present the Company’s available for sale and held to maturity securities with continuous unrealized losses and the approximate fair value of these investments as of September 30, 2024 and December 31, 2023.


	September 30, 2024
	Duration of Unrealized Loss
	Less Than 12 Months					12 Months or Longer					Total
	Approximate					Approximate					Approximate
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(In thousands)	Value		Losses			Value		Losses			Value		Losses
Securities Available for Sale:
U.S. government-sponsored agencies	$	—	$	—		$	205,013	$	(39,795	)	$	205,013	$	(39,795	)
Mortgage-backed securities residential		8,162		(101	)		229,706		(37,357	)		237,868		(37,458	)
SBA pool securities		—		—			21,088		(2,878	)		21,088		(2,878	)
Corporate bond		—		—			8,676		(1,324	)		8,676		(1,324	)
Total securities available for sale	$	8,162	$	(101	)	$	464,483	$	(81,354	)	$	472,645	$	(81,455	)
Securities Held to Maturity:
U.S. government-sponsored agencies	$	—	$	—		$	37,698	$	(2,302	)	$	37,698	$	(2,302	)
Mortgage-backed securities residential		—		—			54,740		(8,418	)		54,740		(8,418	)
Total securities held to maturity	$	—	$	—		$	92,438	$	(10,720	)	$	92,438	$	(10,720	)
Total securities	$	8,162	$	(101	)	$	556,921	$	(92,074	)	$	565,083	$	(92,175	)


	December 31, 2023
	Duration of Unrealized Loss
	Less Than 12 Months					12 Months or Longer					Total
	Approximate					Approximate					Approximate
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(In thousands)	Value		Losses			Value		Losses			Value		Losses
Securities Available for Sale:
U.S. government-sponsored agencies	$	—	$	—		$	197,691	$	(47,103	)	$	197,691	$	(47,103	)
Mortgage-backed securities residential		36,634		(963	)		217,513		(42,214	)		254,147		(43,177	)
SBA pool securities		655		(1	)		22,749		(3,743	)		23,404		(3,744	)
Corporate bond		—		—			8,726		(1,274	)		8,726		(1,274	)
Total securities available for sale	$	37,289	$	(964	)	$	446,679	$	(94,334	)	$	483,968	$	(95,298	)
Securities Held to Maturity:
U.S. government-sponsored agencies	$	—	$	—		$	36,631	$	(3,369	)	$	36,631	$	(3,369	)
Mortgage-backed securities residential		9,647		(135	)		48,137		(9,836	)		57,784		(9,971	)
Total securities held to maturity	$	9,647	$	(135	)	$	84,768	$	(13,205	)	$	94,415	$	(13,340	)
Total securities	$	46,936	$	(1,099	)	$	531,447	$	(107,539	)	$	578,383	$	(108,638	)

Available for sale and held to maturity securities are evaluated to determine if a decline in fair value below the amortized cost basis has resulted from a credit loss or other factors. An impairment related to credit factors would be recorded through an allowance for credit losses. The allowance is limited to the amount by which the security’s amortized cost basis exceeds the fair value. An impairment that has not been recorded through an allowance for credit losses is recorded through other comprehensive income, net of applicable taxes. Investment securities will be written down to fair value through the Consolidated Statements of Income when management intends to sell, or may be required to sell, the securities before they recover in value. The issuers of securities currently in a continuous loss position continue to make timely principal and interest payments and none of these securities were past due or were placed in nonaccrual status at September 30, 2024. Substantially all of the investment securities are backed by loans guaranteed by either U.S. government agencies or U.S government-sponsored entities, and Management believes that default is highly unlikely given the lack of historical credit losses and governmental backing. Management believes that the unrealized losses on these securities are a function of changes in market interest rates and credit spreads, not changes in credit quality. Therefore, no allowance for credit losses was recorded for the nine months ended September 30, 2024 or 2023, respectively.

The Company has an investment in a CRA investment fund with a fair value of $13.4 million at September 30, 2024. This investment is classified as an equity security in our Consolidated Statements of Condition. This security had a gain of $474,000 and $279,000 for the three and nine months ended September 30, 2024, respectively. This amount was included in the fair value adjustment for CRA equity security on the Consolidated Statements of Income.

LOANS AND LEASES

9 Months Ended

Sep. 30, 2024

Receivables [Abstract]

LOANS AND LEASES

3. LOANS AND LEASES

Loans outstanding, excluding those held for sale, by general ledger classification, as of September 30, 2024 and December 31, 2023, consisted of the following:


			% of					% of
	September 30,		Totals			December 31,		Total
(Dollars in thousands)	2024		Loans			2023		Loans
Residential mortgage	$	590,813		11.12	%	$	578,327		10.65	%
Multifamily mortgage		1,784,861		33.58			1,836,390		33.82
Commercial mortgage		578,559		10.88			637,625		11.74
Commercial loans (including equipment financing)		2,221,243		41.79			2,260,524		41.64
Commercial construction		22,421		0.42			17,721		0.33
Home equity lines of credit		38,971		0.73			36,464		0.67
Consumer loans, including fixed rate home equity loans		78,160		1.47			62,036		1.14
Other loans		389		0.01			238		0.01
Total loans	$	5,315,417		100.00	%	$	5,429,325		100.00	%

In determining an appropriate amount for the allowance, the Bank segments and aggregated the loan portfolio based on common characteristics. The following pool segments identified as of September 30, 2024 and December 31, 2023 are based on the CECL methodology:


			% of					% of
	September 30,		Totals			December 31,		Total
(Dollars in thousands)	2024		Loans			2023		Loans
Primary residential mortgage	$	590,681		11.12	%	$	585,126		10.78	%
Junior lien loan on residence		42,159		0.79			40,203		0.74
Multifamily property		1,784,861		33.59			1,836,390		33.85
Owner-occupied commercial real estate		269,743		5.08			255,110		4.70
Investment commercial real estate		979,188		18.43			1,061,197		19.56
Commercial and industrial		1,306,170		24.58			1,314,781		24.23
Lease financing		231,284		4.35			251,423		4.63
Construction		28,578		0.54			17,987		0.33
Consumer and other		80,795		1.52			63,906		1.18
Total loans		5,313,459		100.00	%		5,426,123		100.00	%
Net deferred costs		1,958					3,202
Total loans including net deferred costs	$	5,315,417				$	5,429,325

The following tables present the recorded investment in nonaccrual and loans past due 90 days or over still on accrual by class of loans as of September 30, 2024 and December 31, 2023:


			September 30, 2024
	Nonaccrual				Loans Past Due
	With No				90 Days or Over
	Allowance				And Still
(In thousands)	for Credit Loss		Nonaccrual		Accruing Interest
Primary residential mortgage	$	2,136	$	2,136	$	—
Junior lien loan on residence		96		96		—
Multifamily property		15,294		33,337		—
Investment commercial real estate		—		11,715		—
Commercial and industrial		3,641		29,810		—
Lease financing		2,555		3,355		—
Consumer and other		4		4		—
Total	$	23,726	$	80,453	$	—


			December 31, 2023
	Nonaccrual				Loans Past Due
	With No				90 Days or Over
	Allowance				And Still
(In thousands)	for Credit Loss		Nonaccrual		Accruing Interest
Primary residential mortgage	$	1,263	$	1,263	$	—
Junior lien loan on residence		100		100		—
Multifamily property		16,645		16,645		—
Investment commercial real estate		9,881		9,881		—
Commercial and industrial		3,965		31,430		—
Lease financing		946		2,002		—
Consumer and other		3		3		—
Total	$	32,803	$	61,324	$	—

The following tables present the aging of the recorded investment in past due loans as of September 30, 2024 and December 31, 2023 by class of loans, excluding nonaccrual loans:


	September 30, 2024
	30-59		60-89		90 Days or
	Days		Days		Greater		Total
(In thousands)	Past Due		Past Due		Past Due		Past Due
Primary residential mortgage	$	2,170	$	1,144	$	—	$	3,314
Junior lien loan on residence		52		—		—		52
Multifamily property		—		28,080		—		28,080
Total	$	2,222	$	29,224	$	—	$	31,446


	December 31, 2023
	30-59		60-89		90 Days or
	Days		Days		Greater		Total
(In thousands)	Past Due		Past Due		Past Due		Past Due
Primary residential mortgage	$	2,448	$	1,061	$	—	$	3,509
Junior lien on residence		84		—		—		84
Multifamily property		11,814		—		—		11,814
Commercial and industrial		7,297		11,498		—		18,795
Consumer and other		387		—		—		387
Total	$	22,030	$	12,559	$	—	$	34,589

There were several loan modifications made during the first nine months of 2024, which included one investment commercial real estate loan, one commercial loan and one equipment finance of $17.3 million, $11.7 million and $10.5 million, respectively, that were completed during the third quarter of 2024. Loans past due 30 through 89 days at September 30, 2024 included $19.7 million of multifamily loans to two sponsors. Subsequent to September 30, 2024 these loans have been placed on nonaccrual status and downgraded to substandard.

Credit Quality Indicators:

The Company places all commercial loans into various credit risk rating categories based on an assessment of the expected ability of the borrowers to properly service their debt. The assessment considers numerous factors including, but not limited to, current financial information on the borrower, historical payment experience, strength of any guarantor, nature of and value of any collateral, acceptability of the loan structure and documentation, relevant public information and current economic trends. This credit risk rating analysis is performed when the loan is initially underwritten and then annually based on set criteria in the loan policy.

In addition, the Bank has engaged an independent loan review firm to validate risk ratings and to ensure compliance with our policies and procedures. This review of the following types of loans is performed quarterly:

•

A large sample of relationships or new lending to existing relationships greater than $1,000,000 booked since the prior review;

•

All criticized and classified rated borrowers with relationship exposure of more than $500,000;

•

A large sample of Pass-rated (including Pass Watch) borrowers with total relationships in excess of $1,000,000 and a small sample of Pass related relationships less than $1,000,000;

•

All leveraged loans of $1,000,000 or greater;

•

At least two borrowing relationships managed by each commercial banker;

•

Any new Federal Reserve Board Regulation O loan commitments over $1,000,000; and

•

Any other credits requested by Bank senior management or a member of the Board of Directors and any borrower for which the reviewer determines a review is warranted based upon knowledge of the portfolio, local events, industry stresses, etc.

The review excludes borrowers with commitments of less than $500,000.

The Company uses the following regulatory definitions for criticized and classified risk ratings:

Special Mention: These loans have a potential weakness that deserves Management’s close attention. If left uncorrected, the potential weaknesses may result in deterioration of the repayment prospects for the loans or of the institution’s credit position at some future date.

Substandard: These loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful: These loans have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, based on currently existing facts, conditions and values.

Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be pass-rated loans.

With the adoption of CECL, loans that are in the process of or expected to be in foreclosure are deemed to be collateral dependent with respect to measuring potential loss and allowance adequacy and are individually evaluated by Management. Loans that do not share common risk characteristics are also evaluated on an individual basis. All other loans are evaluated using a non-linear discounted cash flow methodology for measuring potential loss and allowance adequacy.

The following is a summary of the credit risk profile of loans by internally assigned grade as of September 30, 2024 and December 31, 2023 based on originations for the periods indicated; the years represent the year of origination for non-revolving loans:


	Grade as of September 30, 2024 for Loans Originated During
											2019				Revolving-
(In thousands)	2024		2023		2022		2021		2020		and Prior		Revolving		Term		Total
Primary residential mortgage:
Pass	$	41,801	$	90,809	$	110,932	$	76,105	$	53,790	$	208,748	$	—	$	5,680	$	587,865
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		1,087		97		—		450		1,182		—		—		2,816
Doubtful		—		—		—		—		—		—		—		—		—
Total primary residential mortgages		41,801		91,896		111,029		76,105		54,240		209,930		—		5,680		590,681
Current period gross charge-offs		—		43		—		—		—		—		—		—		43

Junior lien loan on residence:
Pass		—		819		1,188		103		—		1,080		32,410		6,463		42,063
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		95		1		96
Doubtful		—		—		—		—		—		—		—		—		—
Total junior lien loan on residence		—		819		1,188		103		—		1,080		32,505		6,464		42,159
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Multifamily property:
Pass		17,512		51,742		455,228		598,057		118,001		438,991		4,939		3,524		1,687,994
Special mention		—		—		3,405		28,343		—		20,962		—		—		52,710
Substandard		—		—		13,366		—		—		30,791		—		—		44,157
Doubtful		—		—		—		—		—		—		—		—		—
Total multifamily property		17,512		51,742		471,999		626,400		118,001		490,744		4,939		3,524		1,784,861
Current period gross charge-offs		—		—		—		2,088		—		3,291		—		—		5,379

Owner-occupied commercial real estate:
Pass		26,172		4,233		23,033		43,842		19,096		125,011		15,315		10,546		267,248
Special mention		—		—		—		1,161		—		1,334		—		—		2,495
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total owner-occupied commercial real estate		26,172		4,233		23,033		45,003		19,096		126,345		15,315		10,546		269,743
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Investment commercial real estate:
Pass		24,234		124,323		170,365		138,114		55,937		357,040		14,443		26,592		911,048
Special mention		—		—		—		—		—		25,189		—		13,910		39,099
Substandard		—		—		9,786		—		—		19,255		—		—		29,041
Doubtful		—		—		—		—		—		—		—		—		—
Total investment commercial real estate		24,234		124,323		180,151		138,114		55,937		401,484		14,443		40,502		979,188
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Commercial and industrial:
Pass		165,508		140,258		168,705		129,582		14,002		24,813		549,628		26,371		1,218,867
Special mention		—		210		—		10,983		—		1,350		6,193		615		19,351
Substandard		—		1,894		30,266		52		2,049		3,563		27,419		2,709		67,952
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial and industrial		165,508		142,362		198,971		140,617		16,051		29,726		583,240		29,695		1,306,170
Current period gross charge-offs		—		—		—		—		241		—		—		—		241

Lease financing:
Pass		31,987		45,673		41,099		53,629		28,090		27,450		—		—		227,928
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		801		—		—		—		2,555		—		—		3,356
Doubtful		—		—		—		—		—		—		—		—		—
Total lease financing		31,987		46,474		41,099		53,629		28,090		30,005		—		—		231,284


	Grade as of September 30, 2024 for Loans Originated During
											2019				Revolving-
(In thousands)	2024		2023		2022		2021		2020		and Prior		Revolving		Term		Total
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Construction:
Pass		—		—		—		—		—		—		28,578		—		28,578
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial construction loans		—		—		—		—		—		—		28,578		—		28,578
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Consumer and other loans:
Pass		29,855		3,063		—		238		129		3,678		40,947		2,881		80,791
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		4		—		4
Doubtful		—		—		—		—		—		—		—		—		—
Total consumer and other loans		29,855		3,063		—		238		129		3,678		40,951		2,881		80,795
Current period gross charge-offs		—		—		—		—		—		2		—		19		21

Total:
Pass		337,069		460,920		970,550		1,039,670		289,045		1,186,811		686,260		82,057		5,052,382
Special mention		—		210		3,405		40,487		—		48,835		6,193		14,525		113,655
Substandard		—		3,782		53,515		52		2,499		57,346		27,518		2,710		147,422
Doubtful		—		—		—		—		—		—		—		—		—
Total Loans	$	337,069	$	464,912	$	1,027,470	$	1,080,209	$	291,544	$	1,292,992	$	719,971	$	99,292	$	5,313,459
Total Current Period Gross Charge-offs	$	—	$	43	$	—	$	2,088	$	241	$	3,293	$	—	$	19	$	5,684


	Grade as of December 31, 2023 for Loans Originated During
											2018				Revolving-
(In thousands)	2023		2022		2021		2020		2019		and Prior		Revolving		Term		Total
Primary residential mortgage:
Pass	$	94,688	$	114,532	$	80,175	$	56,191	$	35,418	$	196,251	$	—	$	5,535	$	582,790
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		473		935		928		—		—		2,336
Doubtful		—		—		—		—		—		—		—		—		—
Total primary residential mortgages		94,688		114,532		80,175		56,664		36,353		197,179		—		5,535		585,126
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Junior lien loan on residence:
Pass		872		1,394		135		—		530		808		29,620		6,680		40,039
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		163		1		164
Doubtful		—		—		—		—		—		—		—		—		—
Total junior lien loan on residence		872		1,394		135		—		530		808		29,783		6,681		40,203
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Multifamily property:
Pass		52,072		476,972		645,093		119,934		209,299		295,226		8,451		—		1,807,047
Special mention		—		—		—		—		—		1,650		—		—		1,650
Substandard		—		1,572		7,491		—		10,370		8,260		—		—		27,693
Doubtful		—		—		—		—		—		—		—		—		—
Total multifamily property		52,072		478,544		652,584		119,934		219,669		305,136		8,451		—		1,836,390
Current period gross charge-offs		—		—		2,223		—		—		—		—		—		2,223

Owner-occupied commercial real estate:
Pass		4,333		23,590		39,563		19,457		11,788		126,430		17,559		10,731		253,451
Special mention		—		—		1,197		—		—		—		462		—		1,659
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total owner-occupied commercial real estate		4,333		23,590		40,760		19,457		11,788		126,430		18,021		10,731		255,110
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Investment commercial real estate:
Pass		125,568		173,660		150,026		57,811		144,447		314,411		30,124		13,379		1,009,426
Special mention		—		—		—		—		21,936		3,834		—		14,172		39,942
Substandard		—		9,881		—		—		1,948		—		—		—		11,829
Doubtful		—		—		—		—		—		—		—		—		—
Total investment commercial real estate		125,568		183,541		150,026		57,811		168,331		318,245		30,124		27,551		1,061,197
Current period gross charge-offs		—		1,199		—		—		—		—		—		—		1,199

Commercial and industrial:
Pass		226,699		216,864		191,389		39,003		26,570		16,845		516,844		23,687		1,257,901
Special mention		—		—		758		—		1,161		190		14,232		194		16,535
Substandard		1,212		22,297		1,467		1,865		953		2,524		7,571		2,456		40,345
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial and industrial		227,911		239,161		193,614		40,868		28,684		19,559		538,647		26,337		1,314,781
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Lease financing:
Pass		50,706		42,447		61,547		39,710		24,113		19,287		—		—		237,810
Special mention		—		9,631		511		—		1,375		94		—		—		11,611
Substandard		1,056		—		—		—		946		—		—		—		2,002
Doubtful		—		—		—		—		—		—		—		—		—


	Grade as of December 31, 2023 for Loans Originated During
											2018				Revolving-
(In thousands)	2023		2022		2021		2020		2019		and Prior		Revolving		Term		Total
Total lease financing		51,762		52,078		62,058		39,710		26,434		19,381		—		—		251,423
Current period gross charge-offs		—		4,800		—		—		—		794		—		—		5,594

Construction:
Pass		—		—		—		—		—		—		17,987		—		17,987
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial construction loans		—		—		—		—		—		—		17,987		—		17,987
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Consumer and other loans:
Pass		3,934		—		301		158		—		4,141		51,788		3,581		63,903
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		3		—		3
Doubtful		—		—		—		—		—		—		—		—		—
Total consumer and other loans		3,934		—		301		158		—		4,141		51,791		3,581		63,906
Current period gross charge-offs		—		—		—		—		—		—		139		—		139

Total:
Pass		558,872		1,049,459		1,168,229		332,264		452,165		973,399		672,373		63,593		5,270,354
Special mention		—		9,631		2,466		—		24,472		5,768		14,694		14,366		71,397
Substandard		2,268		33,750		8,958		2,338		15,152		11,712		7,737		2,457		84,372
Doubtful		—		—		—		—		—		—		—		—		—
Total Loans	$	561,140	$	1,092,840	$	1,179,653	$	334,602	$	491,789	$	990,879	$	694,804	$	80,416	$	5,426,123
Total Current Period Gross Charge-offs	$	—	$	5,999	$	2,223	$	—	$	—	$	794	$	139	$	—	$	9,155

At September 30, 2024, $80.0 million of substandard loans were individually evaluated, compared to $60.6 million at December 31, 2023. The increase in individually evaluated substandard loans was primarily due to six multifamily loans with a balance of $31.8 million that were graded as substandard during the nine months of 2024, offset by the sale of two multifamily individually evaluated loans totaling $15.1 million.

Loan Modifications:

On January 1, 2023, the Company adopted Accounting Standards Update 2022-02, which replaced the accounting and recognition of troubled debt restructurings. The Company will provide modifications, which may include other than insignificant delays in payment of amounts due, extension of the terms of the notes or reduction in the interest rates on the notes. In certain instances, the Company may grant more than one type of modification. All accruing modified loans were paying in accordance with their modified terms as of September 30, 2024. The Company has not committed to lend additional amounts as of September 30, 2024 to customers with outstanding loans that are classified as modified loans.

The following table provides information related to the modifications during the three months ended September 30, 2024 by pool segment and type of concession granted:


	Significant Payment Delay
	Three Months Ended September 30, 2024
			% of Total
	Amortized		Class of
	Cost Basis		Financing
(Dollars in thousands)	at Period End		Receivable
Primary residential mortgage	$	542		0.09	%
Investment commercial real estate		17,326		1.77	%
Commercial and industrial		68		0.01	%
Total	$	17,936		1.87	%


	Significant Payment Delay
	and Term Extension
	Three Months Ended September 30, 2024
			% of Total
	Amortized		Class of
	Cost Basis		Financing
(Dollars in thousands)	at Period End		Receivable
Commercial and industrial	$	10,521		0.81	%
Total	$	10,521		0.81	%

The following tables provide information related to the modifications during the nine months ended September 30, 2024 by pool segment and type of concession granted:


	Interest Rate Reduction and Term Extension
	Nine Months Ended September 30, 2024
			% of Total
	Amortized		Class of
	Cost Basis		Financing
(Dollars in thousands)	at Period End		Receivable
Commercial and industrial	$	12,169		0.93	%
Total	$	12,169		0.93	%


	Significant Payment Delay
	Nine Months Ended September 30, 2024
			% of Total
	Amortized		Class of
	Cost Basis		Financing
(Dollars in thousands)	at Period End		Receivable
Primary residential mortgage	$	542		0.09	%
Investment commercial real estate		17,326		1.77	%
Commercial and industrial		11,780		0.90	%
Total	$	29,648		2.76	%


	Significant Payment Delay
	and Term Extension
	Nine Months Ended September 30, 2024
			% of Total
	Amortized		Class of
	Cost Basis		Financing
(Dollars in thousands)	at Period End		Receivable
Commercial and industrial	$	10,521		0.81	%
Total	$	10,521		0.81	%

There were no modifications during the three months ended September 30, 2023.

The following tables provide information related to the modifications during the nine months ended September 30, 2023 by pool segment and type of concession granted:


	Significant Pay Delay
	Nine Months Ended September 30, 2023
			% of Total
	Amortized		Class of
	Cost Basis		Financing
(Dollars in thousands)	at Period End		Receivable
Commercial and industrial	$	248		0.02	%
Total	$	248		0.02	%


	Interest Rate Reduction
	Nine Months Ended September 30, 2023
			% of Total
	Amortized		Class of
	Cost Basis		Financing
(Dollars in thousands)	at Period End		Receivable
Commercial and industrial	$	3,077		0.23	%
Total	$	3,077		0.23	%

The following table depicts the payment status of the loans that were modified to a borrower experiencing financial difficulties on or after January 1, 2023, the date we adopted ASU 2022-02, through September 30, 2024:


	Payment Status at September 30, 2024
			30-89 Days		90+ Days
(Dollars in thousands)	Current		Past Due		Past Due
Primary residential mortgage	$	542	$	118	$	—
Investment commercial real estate		17,326		—		—
Commercial and industrial		34,470		2,799		248
Total	$	52,338	$	2,917	$	248

The following table presents loans by class modified that failed to comply with the modified terms in the twelve months following modification and resulted in a payment default at September 30, 2024:


	Amortized Cost Basis of Modified Loans
	That Subsequently Defaulted
	Nine Months Ended September 30, 2024
	Significant		Interest
(Dollars in thousands)	Pay Delay		Rate Reduction
Primary residential mortgage	$	118	$	—
Total	$	118	$	—

The following table presents loans by class modified that failed to comply with the modified terms in the twelve months following modification and resulted in a payment default at September 30, 2023:


	Amortized Cost Basis of Modified Loans
	That Subsequently Defaulted
	Nine Months Ended September 30, 2023
	Significant		Interest
(Dollars in thousands)	Pay Delay		Rate Reduction
Commercial and industrial	$	248	$	—
Total	$	248	$	—

ALLOWANCE FOR CREDIT LOSSES

9 Months Ended

Sep. 30, 2024

Credit Loss [Abstract]

ALLOWANCE FOR CREDIT LOSSES

4. ALLOWANCE FOR CREDIT LOSSES

On January 1, 2022, the Company adopted ASU 2016-13, which replaced the incurred loss methodology with an expected loss methodology that is referred to as the CECL methodology. See Note 1, Summary of Significant Accounting Policies for additional information on Topic 326.

The Company does not estimate expected credit losses on accrued interest receivable (“AIR”) on loans, as AIR is reversed or written off when the full collection of the AIR related to a loan becomes doubtful. AIR on loans totaled $28.9 million at September 30, 2024 and $27.8 million at December 31, 2023.

The following tables present the loan balances by segment, and the corresponding balances in the allowance as of September 30, 2024 and December 31, 2023. The allowance was based on the CECL methodology.


	September 30, 2024
			Ending ACL
			Attributable				Ending ACL
	Total		To		Total		Attributable
	Individually		Individually		Loans		To Loans				Total
	Evaluated		Evaluated		Collectively		Collectively		Total		Ending
(In thousands)	Loans		Loans		Evaluated		Evaluated		Loans		ACL
Primary residential mortgage	$	1,658	$	—	$	589,023	$	4,411	$	590,681	$	4,411
Junior lien loan on residence		96		—		42,063		200		42,159		200
Multifamily property		33,337		2,242		1,751,524		10,539		1,784,861		12,781
Owner-occupied commercial real estate		—		—		269,743		4,909		269,743		4,909
Investment commercial real estate		11,715		745		967,473		13,411		979,188		14,156
Commercial and industrial		29,810		6,501		1,276,360		24,808		1,306,170		31,309
Lease financing		3,356		197		227,928		1,524		231,284		1,721
Construction		—		—		28,578		770		28,578		770
Consumer and other loans		—		—		80,795		1,026		80,795		1,026
Total ACL	$	79,972	$	9,685	$	5,233,487	$	61,598	$	5,313,459	$	71,283


	December 31, 2023
			Ending ACL
			Attributable				Ending ACL
	Total		To		Total		Attributable
	Individually		Individually		Loans		To Loans				Total
	Evaluated		Evaluated		Collectively		Collectively		Total		Ending
(In thousands)	Loans		Loans		Evaluated		Evaluated		Loans		ACL
Primary residential mortgage	$	652	$	—	$	584,474	$	3,931	$	585,126	$	3,931
Junior lien loan on residence		100		—		40,103		177		40,203		177
Multifamily property		16,645		—		1,819,745		8,782		1,836,390		8,782
Owner-occupied commercial real estate		—		—		255,110		4,840		255,110		4,840
Investment commercial real estate		9,881		—		1,051,316		15,403		1,061,197		15,403
Commercial and industrial		31,430		4,518		1,283,351		25,189		1,314,781		29,707
Lease financing		2,002		20		249,421		1,643		251,423		1,663
Construction		—		—		17,987		516		17,987		516
Consumer and other loans		—		—		63,906		869		63,906		869
Total ACL	$	60,710	$	4,538	$	5,365,413	$	61,350	$	5,426,123	$	65,888

Individually evaluated loans include nonaccrual loans of $80.0 million at September 30, 2024 and $60.6 million at December 31, 2023. Individually evaluated loans did not include any performing modified loans at September 30, 2024. An allowance of $229,000 was allocated to modified loans at September 30, 2024.

The allowance for credit losses was $71.3 million as of September 30, 2024, compared to $65.9 million at December 31, 2023. The increase in the allowance for credit losses (“ACL”) was primarily related to an increase in the ACL related to multifamily loans, which was driven by the increase in individually evaluated loans of $16.7 million to $33.3 million and certain qualitative adjustments made during the first nine months of 2024. The allowance for credit losses as a percentage of loans was 1.34 percent at September 30, 2024, compared to 1.21 percent at December 31, 2023.

Under Topic 326, the Company's methodology for determining the ACL on loans is based upon key assumptions, including historic net charge-offs, economic forecasts, reversion periods, prepayments and qualitative adjustments. The allowance is measured on a collective, or pool, basis when similar risk characteristics exist. Loans that do not share common risk characteristics are evaluated on an individual basis and are excluded from the collective evaluation.

The following tables present collateral dependent loans individually evaluated by segment as of September 30, 2024 and December 31, 2023:


	September 30, 2024
							Average
	Unpaid						Individually
	Principal		Recorded		Related		Evaluated
(In thousands)	Balance		Investment (A)		Allowance		Loans
With no related allowance recorded:
Primary residential mortgage (A)	$	1,754	$	1,658	$	—	$	1,539
Junior lien loan on residence (A)		99		96		—		103
Multifamily property (B)		15,320		15,295		—		17,526
Commercial and industrial (A)(C)(D)		3,902		2,733		—		3,798
Lease financing (E)		2,671		2,555		—		1,662
Total loans with no related allowance	$	23,746	$	22,337	$	—	$	24,628
With related allowance recorded:
Multifamily property (B)	$	18,138	$	18,042	$	2,242	$	10,090
Investment commercial real estate (D)		14,430		11,715		745		10,684
Commercial and industrial (A)(C)(D)(E)		29,513		27,077		6,501		22,184
Lease financing (E)		841		801		197		889
Total loans with related allowance	$	62,922	$	57,635	$	9,685	$	43,847
Total loans individually evaluated	$	86,668	$	79,972	$	9,685	$	68,475

(A) Secured by residential real estate.

(B) Secured by multifamily residential properties.

(C) Secured by commercial real estate.

(D) Secured by all business assets.

(E) Secured by machinery and equipment.


	December 31, 2023
							Average
	Unpaid						Individually
	Principal		Recorded		Related		Evaluated
(In thousands)	Balance		Investment		Allowance		Loans
With no related allowance recorded:
Primary residential mortgage (A)	$	712	$	652	$	—	$	428
Junior lien loan on residence (A)		100		100		—		8
Multifamily property (B)		18,868		16,645		—		5,964
Investment commercial real estate (C)		12,500		9,881		—		5,781
Commercial and industrial (A)(C)(D)		6,275		3,965		—		2,146
Lease financing (E)		1,035		946		—		2,067
Total loans with no related allowance	$	39,490	$	32,189	$	—	$	16,394
With related allowance recorded:
Commercial and industrial (C)(D)(E)	$	28,359	$	27,465	$	4,518	$	9,814
Lease financing (E)		1,079		1,056		20		1,611
Total loans with related allowance	$	29,438	$	28,521	$	4,538	$	11,425
Total loans individually evaluated for impairment	$	68,928	$	60,710	$	4,538	$	27,819

(A) Secured by residential real estate.

(B) Secured by multifamily residential properties.

(C) Secured by commercial real estate.

(D) Secured by all business assets.

(E) Secured by machinery and equipment.

Interest income recognized on individually evaluated loans for the three and nine months ended September 30, 2024 and 2023 was not material. The Company did not recognize any income on non-accruing loans for the three and nine months ended September 30, 2024 and 2023.

The activity in the allowance for credit losses for the three months ended September 30, 2024 and September 30, 2023 is summarized below:


	July 1,										September 30,
	2024										2024
	Beginning							Provision			Ending
(In thousands)	ACL		Charge-offs			Recoveries		(Credit) (A)			ACL
Primary residential mortgage	$	4,191	$	(43	)	$	—	$	263		$	4,411
Junior lien loan on residence		187		—			—		13			200
Multifamily property		12,601		—			—		180			12,781
Owner-occupied commercial real estate		4,712		—			—		197			4,909
Investment commercial real estate		14,452		—			—		(296	)		14,156
Commercial and industrial		28,568		—			2,115		626			31,309
Lease financing		1,690		—			4		27			1,721
Construction		655		—			—		115			770
Consumer and other loans		928		(4	)		—		102			1,026
Total ACL	$	67,984	$	(47	)	$	2,119	$	1,227		$	71,283

(A) Provision to roll forward the ACL excludes a credit of $3,000 for off-balance sheet commitments.


	July 1,										September 30,
	2023										2023
	Beginning							Provision			Ending
(In thousands)	ACL		Charge-offs			Recoveries		(Credit) (A)			ACL
Primary residential mortgage	$	3,148	$	—		$	—	$	115		$	3,263
Junior lien loan on residence		151		—			—		3			154
Multifamily property		10,537		—			—		45			10,582
Owner-occupied commercial real estate		4,708		—			—		(46	)		4,662
Investment commercial real estate		13,548		—			—		(23	)		13,525
Commercial and industrial		27,433		—			—		4,701			32,134
Lease financing		2,063		—			—		904			2,967
Construction		421		—			—		131			552
Consumer and other loans		695		(57	)		1		114			753
Total ACL	$	62,704	$	(57	)	$	1	$	5,944		$	68,592

(A) Provision to roll forward the ACL excludes a provision of $88,000 for off-balance sheet commitments.


	January 1,										September 30,
	2024										2024
	Beginning							Provision			Ending
(In thousands)	ACL		Charge-offs			Recoveries		(Credit) (A)			ACL
Primary residential mortgage	$	3,931	$	(43	)	$	—	$	523		$	4,411
Junior lien loan on residence		177		—			—		23			200
Multifamily property		8,782		(5,379	)		—		9,378			12,781
Owner-occupied commercial real estate		4,840		—			—		69			4,909
Investment commercial real estate		15,403		—			—		(1,247	)		14,156
Commercial and industrial		29,707		(241	)		2,120		(277	)		31,309
Lease financing		1,663		—			3,214		(3,156	)		1,721
Construction		516		—			—		254			770
Consumer and other loans		869		(21	)		2		176			1,026
Total ACL	$	65,888	$	(5,684	)	$	5,336	$	5,743		$	71,283

(A)

Provision to roll forward the ACL excludes a provision of $19,000 for off-balance sheet commitments.


	January 1,										September 30,
	2023										2023
	Beginning							Provision			Ending
(In thousands)	ACL		Charge-offs			Recoveries		(Credit) (A)			ACL
Primary residential mortgage	$	2,894	$	—		$	—	$	369		$	3,263
Junior lien loan on residence		154		—			—		—			154
Multifamily property		8,849		—			—		1,733			10,582
Owner-occupied commercial real estate		4,835		—			—		(173	)		4,662
Investment commercial real estate		15,480		(1,199	)		—		(756	)		13,525
Commercial and industrial		25,530		—			—		6,604			32,134
Lease financing		2,314		—			—		653			2,967
Construction		236		—			—		316			552
Consumer and other loans		537		(118	)		6		328			753
Total ACL	$	60,829	$	(1,317	)	$	6	$	9,074		$	68,592

(A)

Provision to roll forward the ACL excludes a credit of $9,000 for off-balance sheet commitments.

Allowance for Credit Losses on Off-Balance Sheet Commitments

The following tables present the activity in the ACL for off-balance sheet commitments for the nine months ended September 30, 2024 and 2023:


	January 1,
	2024				September 30,
	Beginning		Provision		2024
(In thousands)	ACL		(Credit)		Ending ACL
Off balance sheet commitments	$	687	$	19	$	706
Total ACL	$	687	$	19	$	706


	January 1,
	2023					September 30,
	Beginning		Provision			2023
(In thousands)	ACL		(Credit)			Ending ACL
Off balance sheet commitments	$	752	$	(9	)	$	743
Total ACL	$	752	$	(9	)	$	743

DEPOSITS

9 Months Ended

Sep. 30, 2024

Deposits [Abstract]

DEPOSITS

5. DEPOSITS

Certificates of deposit that met or exceeded $250,000 totaled $140.7 million and $105.9 million at September 30, 2024 and December 31, 2023, respectively. These totals exclude brokered certificates of deposit, which the Company had none at September 30, 2024 and $120.5 million at December 31, 2023.

The following table sets forth the details of total deposits as of September 30, 2024 and December 31, 2023:


	September 30,				December 31,
	2024				2023
(Dollars in thousands)
Noninterest-bearing demand deposits	$	1,079,877	18.19	%	$	957,687	18.16	%
Interest-bearing checking (A)		3,316,217	55.87			2,882,193	54.65
Savings		103,979	1.75			111,573	2.12
Money market		902,562	15.21			740,559	14.04
Certificates of deposit - retail		515,297	8.68			443,791	8.41
Certificates of deposit - listing service		7,454	0.13			7,804	0.15
Subtotal deposits		5,925,386	99.83			5,143,607	97.53
Interest-bearing demand - Brokered		10,000	0.17			10,000	0.19
Certificates of deposit - Brokered		—	—			120,507	2.28
Total deposits	$	5,935,386	100.00	%	$	5,274,114	100.00	%

(A)

Interest-bearing checking includes $1.4 billion at September 30, 2024 and $990.7 million at December 31, 2023 of reciprocal balances in the Reich & Tang or Promontory Demand Deposit Marketplace program.

The scheduled maturities of certificates of deposit, including brokered certificates of deposit, as of September 30, 2024, are as follows:


(In thousands)
2024	$	158,997
2025		337,013
2026		24,070
2027		1,240
2028		871
2029 and later		560
Total	$	522,751

FEDERAL HOME LOAN BANK ADVANCES AND OTHER BORROWINGS

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

FEDERAL HOME LOAN BANK ADVANCES AND OTHER BORROWINGS

6. FEDERAL HOME LOAN BANK ADVANCES AND OTHER BORROWINGS

At September 30, 2024, the Company had no overnight borrowings with the FHLB compared to $403.8 million of overnight borrowings at the FHLB at a rate of 5.62 percent at December 31, 2023. At September 30, 2024, the Company also had available unused short-term overnight borrowing capacity through the FHLB of $1.8 billion, $22.0 million from correspondent banks and $1.8 billion at the Federal Reserve Bank of New York.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Section 50
-Paragraph 6
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-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

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+ Details

BUSINESS SEGMENTS

9 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

BUSINESS SEGMENTS

7. BUSINESS SEGMENTS

The Company assesses its results among two operating segments, Banking and Peapack Private. Management uses certain methodologies to allocate income and expense to the business segments. A funds transfer pricing methodology is used to assign interest income and interest expense. Certain indirect expenses are allocated to segments. These include support unit expenses such as technology and operations and other support functions. Taxes are allocated to each segment based on the effective rate for the period shown.

Banking

The Banking segment includes: commercial (includes C&I and equipment finance), commercial real estate, multifamily, commercial construction, residential and consumer lending activities; treasury management services; C&I advisory services; escrow management; deposit generation; operation of ATMs; telephone and internet banking services; merchant credit card services and customer support and sales.

Peapack Private

Peapack Private which includes the operations of PGB Trust & Investments of Delaware, consists of: investment management services provided for individuals and institutions; personal trust services, including services as executor, trustee, administrator, custodian and guardian; and other financial planning, tax preparation and advisory services.

The following tables present the statements of income and total assets for the Company’s reportable segments for the three and nine months ended September 30, 2024 and 2023.


	Three Months Ended September 30, 2024
			Peapack
(In thousands)	Banking		Private		Total
Net interest income	$	37,077	$	604	$	37,681
Noninterest income		3,604		15,334		18,938
Total income		40,681		15,938		56,619

Provision for credit losses		1,224		—		1,224
Compensation and benefits		23,988		7,062		31,050
Premises and equipment expense		4,794		839		5,633
FDIC expense		870		—		870
Other operating expense		5,013		2,083		7,096
Total operating expense		35,889		9,984		45,873
Income before income tax expense		4,792		5,954		10,746
Income tax expense		1,404		1,755		3,159
Net income	$	3,388	$	4,199	$	7,587


	Three Months Ended September 30, 2023
			Peapack
(In thousands)	Banking		Private		Total
Net interest income	$	35,811	$	704	$	36,515
Noninterest income		5,120		14,234		19,354
Total income		40,931		14,938		55,869

Provision for credit losses		5,856		—		5,856
Compensation and employee benefits		18,440		6,824		25,264
Premises and equipment expense		4,436		778		5,214
FDIC insurance expense		741		—		741
Other operating expense		4,188		2,006		6,194
Total operating expense		33,661		9,608		43,269
Income before income tax expense		7,270		5,330		12,600
Income tax expense		2,275		1,570		3,845
Net income	$	4,995	$	3,760	$	8,755


	Nine Months Ended September 30, 2024
			Peapack
(In thousands)	Banking		Private		Total
Net interest income	$	105,299	$	1,799	$	107,098
Noninterest income		12,616		46,578		59,194
Total income		117,915		48,377		166,292

Provision for credit losses		5,762		—		5,762
Compensation and employee benefits		67,585		21,825		89,410
Premises and equipment expense		14,214		2,276		16,490
FDIC insurance expense		2,685		—		2,685
Other operating expense		13,231		6,000		19,231
Total operating expense		103,477		30,101		133,578
Income before income tax expense		14,438		18,276		32,714
Income tax expense		3,958		5,008		8,966
Net income	$	10,480	$	13,268	$	23,748

Total assets at period end	$	6,663,410	$	130,382	$	6,793,792


	Nine Months Ended September 30, 2023
			Peapack
(In thousands)	Banking		Private		Total
Net interest income	$	116,004	$	3,410	$	119,414
Noninterest income		13,027		42,961		55,988
Total income		129,031		46,371		175,402

Provision for credit losses		9,065		—		9,065
Compensation and employee benefits		54,558		21,646		76,204
Premises and equipment expense		12,072		2,245		14,317
FDIC insurance expense		2,181		—		2,181
Other operating expense		11,317		6,660		17,977
Total operating expense		89,193		30,551		119,744
Income before income tax expense		39,838		15,820		55,658
Income tax expense		11,021		4,382		15,403
Net income	$	28,817	$	11,438	$	40,255

Total assets at period end	$	6,405,796	$	115,785	$	6,521,581

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

FAIR VALUE

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

FAIR VALUE

8. FAIR VALUE

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate the fair value:

Investment Securities: The fair values for investment securities are determined by quoted market prices (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3).

Loans Held for Sale, at Fair Value: The fair value of loans held for sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan or other observable market data, such as outstanding commitments from third party investors (Level 2).

Derivatives: The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2). Our derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services.

Individually Evaluated Loans: The fair value of collateral dependent loans with specific allocations of the allowance for credit losses is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Individually evaluated loans may, in some cases, also be measured by the discounted cash flow methodology where payments are anticipated. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Other Real Estate Owned: Nonrecurring adjustments to certain commercial and residential real estate properties classified as other real estate owned (“OREO") are measured at fair value, less estimated costs to sell. Fair values are based on recent real estate

appraisals. These appraisals may use a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by Management. Once received, a third party conducts a review of the appraisal for compliance with the Uniform Standards of Professional Appraisal Practice and appropriate analysis methods for the type of property. Subsequently, a member of the Credit Department reviews the assumptions and approaches utilized in the appraisal, as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Appraisals on collateral dependent impaired loans and other real estate owned (consistent for all loan types) are obtained on an annual basis, unless a significant change in the market or other factors warrants a more frequent appraisal. On an annual basis, Management compares the actual selling price of any collateral that has been sold to the most recent appraised value to determine what additional adjustment should be made to the appraisal value to arrive at fair value for other properties. The most recent analysis performed indicated that a discount up to 15 percent should be applied to appraisals on properties. The discount is determined based on the nature of the underlying properties, aging of appraisals and other factors. For each collateral-dependent impaired loan, we consider other factors, such as certain indices or other market information, as well as property specific circumstances to determine if an adjustment to the appraised value is needed. In situations where there is evidence of change in value, the Bank will determine if there is a need for an adjustment to the specific reserve on the collateral dependent impaired loans. When the Bank applies an interim adjustment, it generally shows the adjustment as an incremental specific reserve against the loan until it has received the full updated appraisal. All collateral-dependent impaired loans and other real estate owned valuations were supported by an appraisal less than 12 months old or in the process of obtaining an appraisal as of September 30, 2024.

The following tables summarize, at the dates indicated, assets measured at fair value on a recurring basis, including financial assets for which the Company has elected the fair value option:

Assets Measured on a Recurring Basis


			Fair Value Measurements Using
			Quoted
			Prices in
			Active		Significant
			Markets For		Other		Significant
			Identical		Observable		Unobservable
	September 30,		Assets		Inputs		Inputs
(In thousands)	2024		(Level 1)		(Level 2)		(Level 3)
Assets:
Available for sale:
U.S. government-sponsored agencies	$	205,013	$	—	$	205,013	$	—
Mortgage-backed securities-residential		442,082		—		442,082		—
SBA pool securities		21,413		—		21,413		—
Corporate bond		14,205		—		14,205		—
CRA investment fund		13,445		13,445		—		—
Derivatives:
Cash flow hedges		3,970		—		3,970		—
Loan level swaps		14,297		—		14,297		—
Total	$	714,425	$	13,445	$	700,980	$	—

Liabilities:
Derivatives:
Cash flow hedges		109		—		109		—
Loan level swaps		14,297		—		14,297		—
Total	$	14,406	$	—	$	14,406	$	—

Assets Measured on a Recurring Basis


			Fair Value Measurements Using
			Quoted
			Prices in
			Active		Significant
			Markets For		Other		Significant
			Identical		Observable		Unobservable
	December 31,		Assets		Inputs		Inputs
(In thousands)	2023		(Level 1)		(Level 2)		(Level 3)
Assets:
Securities available for sale:
U.S. government-sponsored agencies	$	197,691	$	—	$	197,691	$	—
Mortgage-backed securities-residential		320,796		—		320,796		—
SBA pool securities		23,404		—		23,404		—
Corporate bond		8,726		—		8,726		—
CRA investment fund		13,166		13,166		—		—
Derivatives:
Cash flow hedges		6,814		—		6,814		—
Loan level swaps		23,826		—		23,826		—
Total	$	594,423	$	13,166	$	581,257	$	—

Liabilities:
Derivatives:
Loan level swaps	$	23,826	$	—	$	23,826	$	—
Total	$	23,826	$	—	$	23,826	$	—

The Company has elected the fair value option for certain loans held for sale. These loans are intended for sale and the Company believes that the fair value is the best indicator of the resolution of these loans. Interest income is recorded based on the contractual terms of the loan and in accordance with the Company’s policy on loans held for investment. None of these loans are 90 days or more past due or on nonaccrual as of September 30, 2024 and December 31, 2023.

The following table presents residential loans held for sale, at fair value, at the dates indicated:


(In thousands)	September 30, 2024		December 31, 2023
Residential loans contractual balance	$	554	$	98
Fair value adjustment		7		2
Total fair value of residential loans held for sale	$	561	$	100

The following tables summarize, at the dates indicated, assets measured at fair value on a non-recurring basis:


			Fair Value Measurements Using
			Quoted
			Prices in
			Active		Significant
			Markets For		Other		Significant
			Identical		Observable		Unobservable
	September 30,		Assets		Inputs		Inputs
(In thousands)	2024		(Level 1)		(Level 2)		(Level 3)
Assets:
Individually evaluated loans:
Multifamily property	$	15,800	$	—	$	—	$	15,800
Investment commercial real estate		10,970		—		—		10,970
Commercial and industrial		20,575		—		—		20,575
Lease financing		604		—		—		604

         
        Fair Value Measurements Using

         
        Quoted

         
        Prices in

         
        Active

        Significant

         
        Markets For

        Other

        Significant

         
        Identical

        Observable

        Unobservable

         
        December 31,

        Assets

        Inputs

        Inputs

        (In thousands)

        2023

        (Level 1)

        (Level 2)

        (Level 3)

        Assets:

        Individually evaluated loans:

Commercial and industrial

$

22,947

$

—

$

—

$

22,947

Lease financing

1,035

—

—

1,035

The carrying amounts and estimated fair values of financial instruments at September 30, 2024 are as follows:


			Fair Value Measurements at September 30, 2024 using
	Carrying
(In thousands)	Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	492,658	$	492,658	$	—	$	—	$	492,658
Securities available for sale		682,713		—		682,713		—		682,713
Securities held to maturity		103,158		—		92,438		—		92,438
CRA investment fund		13,445		13,445		—		—		13,445
FHLB and FRB stock		12,459		—		—		—	N/A
Loans held for sale, at fair value		561		—		561		—		561
Loans held for sale, at lower of cost or fair value		4,189		—		4,540		—		4,540
Loans, net of allowance for credit losses		5,244,134		—		—		5,075,349		5,075,349
Accrued interest receivable		31,973		—		3,112		28,861		31,973
Accrued interest receivable loan level swaps (A)		1,159		—		1,159		—		1,159
Cash flow hedges		3,970		—		3,970		—		3,970
Loan level swaps		14,297		—		14,297		—		14,297
Financial liabilities
Deposits	$	5,935,386	$	5,412,635	$	521,577	$	—	$	5,934,212
Subordinated debt		133,489		—		—		120,402		120,402
Accrued interest payable		10,252		7,046		2,142		1,064		10,252
Accrued interest payable loan level swaps (B)		1,159		—		1,159		—		1,159
Cash flow hedges		109		—		109		—		109
Loan level swap		14,297		—		14,297		—		14,297

(A)

Included in other assets in the Consolidated Statement of Condition.

(B)

Included in accrued expenses and other liabilities in the Consolidated Statement of Condition.

The carrying amounts and estimated fair values of financial instruments at December 31, 2023 are as follows:


			Fair Value Measurements at December 31, 2023 using
	Carrying
(In thousands)	Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	187,671	$	187,671	$	—	$	—	$	187,671
Securities available for sale		550,617		—		550,617		—		550,617
Securities held to maturity		107,755		—		94,415		—		94,415
CRA investment fund		13,166		13,166		—		—		13,166
FHLB and FRB stock		31,044		—		—		—	N/A
Loans held for sale, at fair value		100		—		100		—		100
Loans held for sale, at lower of cost or fair value		6,695		—		7,201		—		7,201
Loans, net of allowance for loan and lease losses		5,363,437		—		—		5,294,942		5,294,942
Accrued interest receivable		30,676		—		2,868		27,808		30,676
Accrued interest receivable loan level swaps (A)		1,373		—		1,373		—		1,373
Cash flow hedges		6,814		—		6,814		—		6,814
Loan level swaps		23,826		—		23,826		—		23,826
Financial liabilities
Deposits	$	5,274,114	$	4,702,012	$	567,696	$	—	$	5,269,708
Short-term borrowings		403,814		—		403,814		—		403,814
Subordinated debt		133,274		—		—		111,924		111,924
Accrued interest payable		7,115		4,989		1,968		158		7,115
Accrued interest payable loan level swaps (B)		1,373		—		1,373		—		1,373
Loan level swaps		23,826		—		23,826		—		23,826

(A)

Included in other assets in the Consolidated Statement of Condition.

(B)

Included in accrued expenses and other liabilities in the Consolidated Statement of Condition.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 107
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-107

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 100
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-100

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2E
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
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-Section 50
-Paragraph 6A
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 940
-SubTopic 820
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478119/940-820-50-1

+ Details

REVENUE FROM CONTRACTS WITH CUSTOMERS

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

9. REVENUE FROM CONTRACTS WITH CUSTOMERS

All of the Company’s revenue from contracts with customers within the scope of ASC 606 is recognized within noninterest income.

The following tables present the sources of noninterest income for the periods indicated:


	For the Three Months Ended September 30,
(In thousands)	2024		2023
Service charges on deposits
Overdraft fees	$	123	$	129
Interchange income		256		283
Other		948		907
Wealth management fees (A)		15,150		13,975
Corporate advisory fee income		55		85
Other (B)		2,406		3,975
Total noninterest other income	$	18,938	$	19,354


	For the Nine Months Ended September 30,
(In thousands)	2024			2023
Service charges on deposits
Overdraft fees	$	345		$	392
Interchange income		761			903
Other		2,888			2,602
Wealth management fees (A)		45,976			41,989
Loss on sale of property		(4	)		—
Corporate advisory fee income		976			180
Other (B)		8,252			9,922
Total noninterest other income	$	59,194		$	55,988

(A)

Includes investment brokerage fees.

(B)

All of the other category is outside the scope of ASC 606.

The following table presents the sources of noninterest income by operating segment for the periods indicated:


	For the Three Months Ended September 30,						For the Three Months Ended September 30,
	2024						2023
(In thousands)			Wealth						Wealth
Revenue by Operating Segment	Banking		Management		Total		Banking		Management		Total
Service charges on deposits
Overdraft fees	$	123	$	—	$	123	$	129	$	—	$	129
Interchange income		256		—		256		283		—		283
Other		948		—		948		907		—		907
Wealth management fees (A)		—		15,150		15,150		—		13,975		13,975
Corporate advisory fee income		55		—		55		85		—		85
Other (B)		2,222		184		2,406		3,716		259		3,975
Total noninterest income	$	3,604	$	15,334	$	18,938	$	5,120	$	14,234	$	19,354


	For the Nine Months Ended September 30,								For the Nine Months Ended September 30,
(In thousands)	2024								2023
Revenue by Operating				Wealth							Wealth
Segment	Banking			Management		Total			Banking		Management		Total
Service charges on deposits
Overdraft fees	$	345		$	—	$	345		$	392	$	—	$	392
Interchange income		761			—		761			903		—		903
Other		2,888			—		2,888			2,602		—		2,602
Wealth management fees (A)		—			45,976		45,976			—		41,989		41,989
Loss on sale of property		(4	)		—		(4	)		—		—		—
Corporate advisory fee income		976			—		976			180		—		180
Other (B)		7,650			602		8,252			8,950		972		9,922
Total noninterest income	$	12,616		$	46,578	$	59,194		$	13,027	$	42,961	$	55,988

(A)

Includes investment brokerage fees.

(B)

All of the other category is outside the scope of ASC 606.

A description of the Company’s revenue streams accounted for under ASC 606 follows:

Service charges on deposit accounts: The Company earns fees from its deposit customers for certain transaction account maintenance, and overdraft fees. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer’s account balance.

Interchange income: The Company earns interchange fees from debit cardholder transactions conducted through the Visa payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. Interchange income is presented gross of cardholder rewards. Cardholder rewards are included in other expenses in the statement of income. Cardholder rewards reduced interchange income for the third quarter of 2024 by $6,000 and $2,000 for the same quarter in 2023. Cardholder rewards reduced interchange income by $12,000 and $6,000 for the nine months ended September 30, 2024 and 2023, respectively.

Wealth management fees (gross): The Company earns wealth management fees from its contracts with wealth management clients to manage assets for investment, and/or to transact on their accounts. These fees are primarily earned over time as the Company charges its clients on a monthly or quarterly basis in accordance with its investment advisory agreements. Fees are generally assessed based on a tiered scale of the market value of AUM at month end. Fees that are transaction based, including trade execution services, are recognized at the point in time that the transaction is executed (i.e. trade date).

Investment brokerage fees (net): The Company earns fees from investment brokerage services provided to its customers by a third-party service provider. The Company receives commissions from the third-party service provider twice a month based upon customer activity for the month. The fees are recognized monthly, and a receivable is recorded until commissions are generally paid by the 15th of the following month. Because the Company (i) acts as an agent in arranging the relationship between the customer and the third-party service provider and (ii) does not control the services rendered to the customers, investment brokerage fees are presented net of related costs.

Gains/(losses) on sales of property: The Company records a gain or loss from the sale of property when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of property to the buyer, the Company assesses whether the buyer is committed to perform its obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the property asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain/(loss) on sale if a significant financing component is present. The Company recorded a loss on sale of property of $4,000 for the nine months ended September 30, 2024.

Corporate advisory fee income: The Company provides our clients with financial advisory and underwriting services. Investment banking revenues, which includes mergers and acquisition advisory fees and private placement fees, are recorded when the performance obligation for the transaction is satisfied under the terms of each engagement. Reimbursed expenses are reported in other revenue on the statement of operations. Expenses related to investment banking are recognized as non-compensation expenses on the statement of operations. Amounts received and unearned are included on the statement of financial condition. Expenses related to investment banking deals not completed are recognized in non-compensation expenses on the statement of operations.

The Company’s mergers and acquisition advisory fees generally consist of a nonrefundable up-front fee and success fee. The nonrefundable fee is recorded as deferred revenue upon receipt and recognized at a point in time when the performance obligation is satisfied, or when the transaction is deemed by management to be terminated. Management’s judgment is required in determining when a transaction is considered to be terminated.

Other: All of the other income items are outside the scope of ASC 606.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org/606/tableOfContent

+ Details

OTHER OPERATING EXPENSES

9 Months Ended

Sep. 30, 2024

Other Income and Expenses [Abstract]

OTHER OPERATING EXPENSES

10. OTHER OPERATING EXPENSES

The following table presents the major components of other operating expenses for the periods indicated:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands)	2024		2023		2024		2023
Professional and legal fees	$	2,014	$	1,619	$	5,069	$	4,143
Trust department expense		1,064		977		2,938		2,856
Telephone		390		407		1,182		1,138
Advertising		340		482		1,308		1,584
Amortization of intangible assets		272		339		816		1,048
Branch/office restructure		—		—		—		175
Other operating expenses		3,016		2,370		7,918		7,033
Total other operating expenses	$	7,096	$	6,194	$	19,231	$	17,977

ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

9 Months Ended

Sep. 30, 2024

Stockholders' Equity Note [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

11. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

The following is a summary of the accumulated other comprehensive income/(loss) balances, net of tax, for the three months ended September 30, 2024 and 2023:


							Other
							Comprehensive
				Other			Income/(Loss)
				Comprehensive			Three Months
	Balance at			Income/(Loss)			Ended			Balance at
	July 1,			Before			September 30,			September 30,
(In thousands)	2024			Reclassifications			2024			2024
Net unrealized holding gain/(loss) on securities available for sale, net of tax	$	(75,188	)	$	17,574		$	17,574		$	(57,614	)

Gain/(loss) on cash flow hedges		6,846			(4,052	)		(4,052	)		2,794

Accumulated other comprehensive gain/(loss), net of tax	$	(68,342	)	$	13,522		$	13,522		$	(54,820	)


							Other
							Comprehensive
				Other			Income/(Loss)
				Comprehensive			Three Months
	Balance at			Income/(Loss)			Ended			Balance at
	July 1,			Before			September 30,			September 30,
(In thousands)	2023			Reclassifications			2023			2023
Net unrealized holding gain/(loss) on securities available for sale, net of tax	$	(76,047	)	$	(14,987	)	$	(14,987	)	$	(91,034	)

Gain/(loss) on cash flow hedges		8,050			1,331			1,331			9,381

Accumulated other comprehensive gain/(loss), net of tax	$	(67,997	)	$	(13,656	)	$	(13,656	)	$	(81,653	)

The following is a summary of the accumulated other comprehensive income/(loss) balances, net of tax, for the nine months ended September 30, 2024 and 2023:


							Amount		Other
							Reclassified		Comprehensive
				Other			From		Income/(Loss)
				Comprehensive			Accumulated		Nine Months
	Balance at			Income/(Loss)			Other		Ended			Balance at
	January 1,			Before			Comprehensive		September 30,			September 30,
(In thousands)	2024			Reclassifications			Income/(Loss)		2024			2024
Net unrealized holding gain/(loss) on securities available for sale, net of tax	$	(69,809	)	$	12,195		$	—	$	12,195		$	(57,614	)

Gain/(loss) on cash flow hedges		4,931			(2,137	)		—		(2,137	)		2,794

Accumulated other comprehensive gain/(loss), net of tax	$	(64,878	)	$	10,058		$	—	$	10,058		$	(54,820	)


							Amount			Other
							Reclassified			Comprehensive
				Other			From			Income/(Loss)
				Comprehensive			Accumulated			Nine Months
	Balance at			Income/(Loss)			Other			Ended			Balance at
	January 1,			Before			Comprehensive			September 30,			September 30,
(In thousands)	2023			Reclassifications			Income/(Loss)			2023			2023
Net unrealized holding gain/(loss) on securities available for sale, net of tax	$	(80,972	)	$	(10,062	)	$	—		$	(10,062	)	$	(91,034	)

Gain/(loss) on cash flow hedges		6,761			2,680			(60	)		2,620			9,381

Accumulated other comprehensive gain/(loss), net of tax	$	(74,211	)	$	(7,382	)	$	(60	)	$	(7,442	)	$	(81,653	)

The following represents the reclassifications out of accumulated other comprehensive income/(loss) for the nine months ended September 30, 2024 and 2023:


	Nine Months Ended
	September 30,
(In thousands)	2024		2023			Affected Line Item in Income
Unrealized gains/(losses) on cash flow hedge derivatives:
Reclassification adjustment for amounts included in net income	$	—	$	(84	)	Interest Expense
Tax effect		—		24		Income tax expense
Total reclassifications, net of tax	$	—	$	(60	)

DERIVATIVES

9 Months Ended

Sep. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES

12. DERIVATIVES

The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.

Interest Rate Swaps Designated as Cash Flow Hedges: Interest rate swaps with a notional amount of $360.0 million and $310.0 million as of September 30, 2024 and December 31, 2023, respectively, were designated as cash flow hedges of certain interest-bearing deposits. On a quarterly basis, the Company performs a qualitative hedge effectiveness assessment. This assessment takes into consideration any adverse developments related to the counterparty’s risk of default and any negative events or circumstances that affect the factors that originally enabled the Company to assess that it could reasonably support, qualitatively, an expectation that the hedging relationship was and will continue to be highly effective. As of September 30, 2024, there were no events or market conditions that would result in hedge ineffectiveness. The aggregate fair value of the swaps is recorded in other assets/liabilities with changes in fair value recorded in other comprehensive income. The amount included in accumulated other comprehensive income would be reclassified to current earnings should the hedges no longer be considered effective. The Company expects the hedges to remain fully effective during the remaining terms of the swaps.

The following table presents information about the interest rate swaps designated as cash flow hedges as of September 30, 2024 and December 31, 2023:


(Dollars in thousands)	September 30, 2024			December 31, 2023
Notional amount	$	360,000		$	310,000
Weighted average pay rate		2.29	%		2.22	%
Weighted average receive rate		4.20	%		4.14	%
Weighted average maturity	2.60 years			2.98 years
Unrealized gain/(loss), net	$	3,861		$	6,814

Number of contracts		14			12


	September 30, 2024
	Notional		Fair
(In thousands)	Amount		Value
Interest rate swaps related to interest-bearing deposits	$	360,000	$	3,861
Total included in other assets	$	335,000		3,970
Total included in other liabilities	$	25,000		(109	)


	December 31, 2023
	Notional		Fair
(In thousands)	Amount		Value
Interest rate swaps related to interest-bearing deposits	$	310,000	$	6,814
Total included in other assets		310,000		6,814
Total included in other liabilities		—		—

SUBORDINATED DEBT

9 Months Ended

Sep. 30, 2024

Subordinated Debt [Abstract]

SUBORDINATED DEBT

13. SUBORDINATED DEBT

In December 2017, the Company issued $35.0 million in aggregate principal amount of fixed-to-floating subordinated notes (the “2017 Notes”) to certain institutional investors. The 2017 Notes are non-callable for five years, have a stated maturity of December 15, 2027, and had a fixed interest rate of 4.75 percent until December 15, 2022. From December 16, 2022 to the maturity date or early redemption date, the interest rate will reset quarterly to a level equal to the then current three-month London Interbank Offered Rate (“LIBOR”) rate plus 254 basis points, payable quarterly in arrears (which was 8.14 percent at September 30, 2024). Debt issuance costs incurred totaled $875,000 and are being amortized to maturity.

In December 2020, the Company issued $100.0 million in aggregate principal amount of fixed-to-floating subordinated notes (the “2020 Notes”) to certain institutional investors. The 2020 Notes are non-callable for five years, have a stated maturity of December 22, 2030, and bear interest at a fixed rate of 3.50 percent until December 22, 2025. From December 23, 2025 to the maturity date or early redemption date, the interest rate will reset quarterly to a level equal to the then current three-month Secured Overnight Financing Rate (“SOFR”) plus 326 basis points, payable quarterly in arrears. Debt issuance costs incurred totaled $1.9 million and are being amortized to maturity.

Subordinated debt is presented net of issuance costs on the Consolidated Statements of Condition. The subordinated debt issuances are included in the Company’s regulatory total capital amount and ratio.

LEASES

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

LEASES

14. LEASES

The Company maintains certain property and equipment under direct financing and operating leases. As of September 30, 2024, the Company's operating lease ROU asset and operating lease liability totaled $41.7 million and $44.8 million, respectively. As of December 31, 2023, the Company's operating lease ROU asset and operating lease liability totaled $12.1 million and $12.9 million, respectively. The increase in the Company’s operating lease liability and ROU asset was primarily due to the modification of the existing lease on the main office which had an operating lease liability balance of $19.0 million and an ROU asset balance of $18.2 million as of September 30, 2024. Additionally, the Company executed a lease for our New York City location, which resulted in an operating lease liability of $15.0 million and an ROU asset of $13.4 million as of September 30, 2024. A weighted average discount rate of 4.39 percent and 2.72 percent was used in the measurement of the ROU asset and lease liability as of September 30, 2024 and December 31, 2023, respectively.

The Company's leases have remaining lease terms between two months to 12 years, with a weighted average lease term of 9.46 years at September 30, 2024. The Company's leases had remaining lease terms between four months to 13 years, with a weighted average lease term of 6.75 years at December 31, 2023. The Company’s lease agreements may include options to extend or terminate the lease. The Company’s decision to exercise renewal options is based on an assessment of its current business needs and market factors at the time of the renewal.

Total operating lease costs were $1.7 million and $792,000 for the three months ended September 30, 2024 and 2023, respectively. The variable lease costs were $104,000 and $58,000 for the three months ended September 30, 2024 and 2023, respectively.

Total operating lease costs were $4.0 million and $2.4 million for the nine months ended September 30, 2024 and 2023, respectively. The variable lease costs were $262,000 and $200,000 for the nine months ended September 30, 2024 and 2023, respectively.

The following is a schedule of the Company's operating lease liabilities by contractual maturity as of September 30, 2024:


(In thousands)
2024		1,282
2025		6,162
2026		6,173
2027		5,839
2028		5,659
Thereafter		30,195
Total lease payments		55,310
Less: imputed interest		10,535
Total present value of lease payments	$	44,775

The following table shows the supplemental cash flow information related to the Company’s direct finance and operating leases for the periods indicated:


	For the Nine Months Ended September 30,
(In thousands)	2024		2023
Right-of-use asset obtained in exchange for lease obligation	$	32,483	$	1,926
Operating cash flows from operating leases		3,108		2,184
Operating cash flows from direct finance leases		74		149
Financing cash flows from direct finance leases		308		561

ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Sep. 30, 2024

Accounting Changes and Error Corrections [Abstract]

ACCOUNTING PRONOUNCEMENTS

15. ACCOUNTING PRONOUNCEMENTS

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments In Response to the SEC's Disclosure Update and Simplification Initiative to clarify or improve disclosure and presentation requirements on a variety of topics and align the requirements in the FASB accounting standard codification with the Securities and Exchange Commission ("SEC") regulations. The amendments will be effective for the Company only if the SEC removes the related disclosure requirement from its existing regulations no later than June 30, 2027. If the SEC timely removes such a related requirement from its existing regulations, the corresponding amendments within the ASU will become effective for the Company on the same date with early adoption permitted. The Company does not expect the amendments in this update to have a material impact on our consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures (Topic 280), to improve reportable segment disclosure requirements through enhanced disclosures about significant segment and interim periods with fiscal years beginning after December 15, 2024 with early adoption permitted. The Company does not expect this ASU to have a material effect on our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Tax - Improvements to Income Tax Disclosures (Topic 740), which requires reporting companies to break out their income tax expense and tax rate reconciliation in more detail. For public companies, the requirements will become effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company does not expect this ASU to have a material effect on our consolidated financial statements.

In March 2024, the FASB issued ASU No. 2024-01, Compensation-Stock Compensation (Topic 718): Scope Applications of Profits Interests and Similar Awards. ASU 2024-01 adds an example to Topic 718 which illustrates how to apply the scope guidance to determine whether profits interest and similar awards should be accounted for as share-based payment arrangements under Topic 718 or under other U.S. GAAP. ASU 2024-01 is effective for annual periods beginning after December 15, 2024, although early adoption is permitted. Upon adoption of ASU 2024-01, the Company does not expect this ASU to have an impact on our consolidated financial statements.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Principles of Consolidation and Organization

Principles of Consolidation and Organization: The consolidated financial statements of the Company are prepared on the accrual basis and include the accounts of the Company and its wholly-owned subsidiary, Peapack-Gladstone Bank (the “Bank”). The consolidated financial statements also include the Bank’s wholly-owned subsidiaries:

•

Peapack Capital Corporation (“PCC”)

•

Peapack-Gladstone Mortgage Group, Inc., which owns 99 percent of Peapack Ventures, LLC and 79 percent of Peapack-Gladstone Realty, Inc., a New Jersey real estate investment company

•

PGB Trust & Investments of Delaware, which owns one percent of Peapack Ventures, LLC

•

Peapack Ventures, LLC, which owns the remaining 21 percent of Peapack-Gladstone Realty, Inc.

•

Peapack-Gladstone Realty, Inc.

•

PGB Securities, Inc.

While the following notes to the consolidated financial statements include the consolidated results of the Company, the Bank and their subsidiaries, these notes primarily reflect the Bank’s and its subsidiaries’ activities. All significant intercompany balances and transactions have been eliminated from the accompanying consolidated financial statements.

Basis of Financial Statement Presentation

Basis of Financial Statement Presentation: The consolidated financial statements have been prepared in accordance with GAAP. In preparing the financial statements, Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the statement of condition and revenues and expenses for the periods presented. Actual results could differ from those estimates.

Segment Information

Segment Information: The Company’s business is conducted through two business segments: (1) its banking segment (“Banking”), which involves the delivery of loan and deposit products to customers, and (2) the Peapack Private Wealth Management Division ("Peapack Private"), which includes investment management services to individuals and institutions. Management uses certain methodologies to allocate income and expense to the business segments.

The Banking segment includes: commercial (including commercial and industrial (“C&I”) and equipment financing), commercial real estate, multifamily, commercial construction, residential and consumer lending activities; treasury management services; C&I advisory services; escrow management; deposit generation; operation of ATMs; telephone and internet banking services; merchant credit card services and customer support services.

Peapack Private includes: investment management services for individuals and institutions; personal trust services, including services as executor, trustee, administrator, custodian; and other financial planning and advisory services. This segment also includes the activity from the Delaware subsidiary, PGB Trust & Investments of Delaware. The majority of wealth management fees are collected on a monthly or quarterly basis and are calculated on either a fixed or tiered fee schedule, based upon the market value of assets under management and/or administration (“AUMs”). Other non AUM-based revenues such as personal or fiduciary tax return preparation fees, executor fees, trust termination fees and/or financial planning and advisory fees are charged as services are rendered.

Cash and Cash Equivalents

Cash and Cash Equivalents: For purposes of the statements of cash flows, cash and cash equivalents include cash and due from banks, interest-earning deposits and federal funds sold. Generally, federal funds are sold for one-day periods. Cash equivalents are of original maturities of 90 days or less. Net cash flows are reported for customer loan and deposit transactions and short-term borrowings with original maturities of 90 days or less.

Interest-Earning Deposits in Other Financial Institutions

Interest-Earning Deposits in Other Financial Institutions: Interest-earning deposits in other financial institutions mature within one year and are carried at cost.

Securities

Securities: Under Accounting Standards Update ("ASU") 2016-13, debt securities available-for-sale are measured at fair value and subject to impairment testing. When an available-for-sale debt security is considered impaired, the Company must determine if the decline in fair value has resulted from a credit-related loss or other factors and then, (1) recognize an allowance for credit losses ("ACL") by a charge to earnings for the credit-related component (if any) of the decline in fair value, and (2) recognize in other comprehensive income (loss) any non-credit related components of the fair value change. If the amount of the amortized cost basis expected to be recovered increases in a future period, the valuation reserve would be reduced, but not more than the amount of the current existing reserve for that security.

Debt securities are classified as held to maturity and carried at amortized cost when Management has the positive intent and ability to hold them to maturity. Under ASU 2016-13, held-to-maturity securities in a loss position are evaluated to determine if the decline in fair value has resulted from a credit-related loss or other factors, and then recognize a charge to earnings for the decline in fair value. The Company also has an investment in a Community Reinvestment Act (“CRA”) investment fund, which is classified as an equity security.

Interest income includes amortization of purchase premiums and discounts. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated, and premiums on callable debt securities, which are amortized to the earliest call date. Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

Federal Home Loan Bank (FHLB) and Federal Reserve Bank (FRB) Stock

Federal Home Loan Bank (FHLB) and Federal Reserve Bank ("FRB") Stock: The Bank is a member of the FHLB system. Members are required to own a certain amount of FHLB stock, based on the level of borrowings and other factors. FHLB stock is carried at cost, classified as a restricted security and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.

The Bank is also a member of the Federal Reserve Bank of New York and required to own a certain amount of FRB stock. FRB stock is carried at cost and classified as a restricted security. Dividends are reported as income.

Loans Held for Sale

Loans Held for Sale: Mortgage loans originated with the intent to sell in the secondary market are carried at fair value, as determined by outstanding commitments from investors.

Mortgage loans held for sale are generally sold with servicing rights released; therefore, no servicing rights are recorded. Gains and losses on sales of mortgage loans, shown as gain on loans held for sale at fair value (mortgage loans) on the Statement of Income, are based on the difference between the selling price and the carrying value of the related loan sold.

SBA loans originated with the intent to sell in the secondary market are carried at the lower of cost or fair value. SBA loans are generally sold with the servicing rights retained. Gains and losses on the sale of SBA loans are based on the difference between the selling price and the carrying value of the related loan sold. Total SBA loans serviced totaled $157.0 million and $162.9 million as of September 30, 2024 and December 31, 2023, respectively. SBA loans held for sale totaled $4.5 million and $7.2 million at September 30, 2024 and December 31, 2023, respectively.

Loans originated with the intent to hold and subsequently transferred to loans held for sale are carried at the lower of cost or fair value. These are loans that the Company no longer has the intent to hold for the foreseeable future.

Loans

Loans: Loans that Management has the intent and ability to hold for the foreseeable future or until maturity are stated at the principal amount outstanding. Interest on loans is recognized based upon the principal amount outstanding. Loans are stated at face value, less purchased premium and discounts and net deferred fees. Loan origination fees and certain direct loan origination costs are deferred and recognized on a level-yield method over the life of the loan as an adjustment to the loan’s yield. The definition of recorded investment in loans includes accrued interest receivable and deferred fees/costs, however, for the Company’s loan disclosures, accrued interest and deferred fees/costs were excluded as the impact was not material.

Loans are considered past due when they are not paid within 30 days in accordance with contractual terms. The accrual of income on loans, including individually evaluated loans, is discontinued if, in the opinion of Management, principal or interest is not likely to be paid in accordance with the terms of the loan agreement, or when principal or interest is past due 90 days unless the asset is

both well secured and in the process of collection. All interest accrued but not received for loans placed on nonaccrual status are reversed against interest income. Payments received on nonaccrual loans are recorded as principal payments. A nonaccrual loan is returned to accrual status only when interest and principal payments are brought current and future payments are reasonably assured, generally when the Bank receives contractual payments for a minimum of six consecutive months. Commercial loans are generally charged off, in whole or in part, after an analysis is completed which indicates that collectability of the full principal balance is in doubt. Consumer closed-end loans are generally charged off after they become 120 days past due and open-end loans after 180 days. Subsequent payments are credited to income only if collection of principal is not in doubt. If principal and interest payments are brought contractually current and future collectability is reasonably assured, loans may be returned to accrual status. Nonaccrual mortgage loans are generally charged off to the extent that the value of the underlying collateral does not cover the outstanding principal balance. The majority of the Company’s loans are secured by real estate in New Jersey, New York and Pennsylvania.

Allowance for Credit Losses