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What changed in PEAPACK GLADSTONE FINANCIAL CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of PEAPACK GLADSTONE FINANCIAL CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+351 added−324 removedSource: 10-K (2026-03-11) vs 10-K (2025-03-12)

Top changes in PEAPACK GLADSTONE FINANCIAL CORP's 2025 10-K

351 paragraphs added · 324 removed · 263 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

33 edited+12 added−6 removed66 unchanged
Biggest changeThe key elements of our business strategy include: • a robust wealth management business that provides a diversified and stable source of revenue over time, through organic growth and strategic acquisitions; • an emphasis on commercial banking with private bankers focused on providing high-touch client service through an advice-based approach encompassing corporate and industrial (“C&I”) lending (including equipment finance lending and leasing), wealth management, depository services, electronic banking, Small Business Administration (“SBA”) loans, other commercial real estate lending, and corporate advisory services; • a unified “One Company” culture heavily focused on unparalleled “white glove” customer service designed and centered around best-in-class hospitality standards and delivered by experienced industry professionals across all business lines; • a highly efficient branch network and deposit gathering processes; • a strong balance sheet and measured approach to prudently deploy capital; • a continued expansion of our footprint to include areas that naturally fit with our geography and/or business model; • robust risk management processes, including, but not limited to, active loan portfolio, capital, liquidity, and interest rate risk stress testing; and • a focus on the communities which we serve with a strong commitment to community service and involvement.
Biggest changeThe key elements of our business strategy include: • Maintaining and expanding a robust wealth management business that provides a diversified and stable source of recurring revenue over time, through organic growth and opportunistically through strategic acquisitions; • Emphasizing commercial banking through experienced private bankers who deliver high-touch client service through an advice-based approach encompassing corporate and industrial (“C&I”) lending (including equipment financing), wealth management, treasury management and depository services, electronic banking, commercial real estate lending, and corporate advisory services; • Advancing technology, data and the responsible use of artificial intelligence ("AI") to enhance the client experience through more timely, consistent and personalized service across delivery channels, including digital banking and payments capabilities; • Leveraging AI, analytics and automation to improve operating efficiency and support risk management by streamlining workflows, enhancing monitoring and reporting, and enabling employees to devote more time to higher-value, client-facing activities; • Operating under a unified “One Company” culture focused on high-touch client service, informed by hospitality standards and delivered by experienced industry professionals, and continuously evaluated through Net Promoter Score surveys; • Growing core relationship-based deposits through disciplined deposit gathering processes and a highly efficient financial center network designed to support relationship depth rather than transactional volume; • Maintaining a strong balance sheet and a measured approach to prudently deploy capital; 7 • Continuing measured expansion of our footprint to include areas that naturally fit with our geography and/or business model; • Upholding robust risk management processes, including, active loan portfolio, capital, liquidity, and interest rate risk stress testing; and • Demonstrating a strong commitment to communities which we serve through community engagement and service.
Wellness programs are deeply embedded in our culture and other ancillary benefits such as pet insurance, identity protection coverage and supplemental insurance are provided. Community Involvement 5 We actively reinvest in our communities with the greatest needs. We encourage volunteerism, supporting organizations valued by our employees and clients.
Wellness programs are deeply embedded in our culture and other ancillary benefits such as pet insurance, identity protection coverage and supplemental insurance are provided. 5 Community Involvement We actively reinvest in our communities with the greatest needs. We encourage volunteerism, supporting organizations valued by our employees and our clients.
The operations of the Bank are also subject to the: • Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; • Electronic Funds Transfer Act and Regulation E promulgated thereunder, governing automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services; • Check Clearing for the 21 st Century Act (also known as “Check 21”), which gives “substitute checks,” such as digital check images and copies made from that image, the same legal standing as the original paper check; • The Bank Secrecy Act and the USA PATRIOT Act and their implementing regulations, which require the Bank to maintain a compliance program to detect and prevent money laundering, terrorist financing, and illicit crime, to 11 maintain a customer identification program and other internal controls, conduct customer due diligence, administer training, maintain specified records, and report suspicious activity, among other things; • Regulations of the Office of Foreign Assets Control that enforce economic and trade sanctions programs based on United States foreign policy and national security goals; and • Truth in Savings Act, prescribing disclosure and advertising requirements with respect to deposit accounts.
The operations of the Bank are also subject to the: • Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; • Electronic Funds Transfer Act and Regulation E promulgated thereunder, governing automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services; • Check Clearing for the 21 st Century Act (also known as “Check 21”), which gives “substitute checks,” such as digital check images and copies made from that image, the same legal standing as the original paper check; • The Bank Secrecy Act and the USA PATRIOT Act and their implementing regulations, which require the Bank to maintain a compliance program to detect and prevent money laundering, terrorist financing, and illicit crime, to maintain a customer identification program and other internal controls, conduct customer due diligence, administer training, maintain specified records, and report suspicious activity, among other things; • Regulations of the Office of Foreign Assets Control that enforce economic and trade sanctions programs based on United States foreign policy and national security goals; and • Truth in Savings Act, prescribing disclosure and advertising requirements with respect to deposit accounts.
The Bank’s operations are also subject to federal laws (and their implementing regulations) applicable to credit transactions, such as the: • Truth in Lending Act, governing disclosures of credit terms to consumer borrowers; • Real Estate Settlement Procedures Act, requiring that borrowers for mortgage loans for one- to four-family residential real estate receive various disclosures, including good faith estimates of settlement costs, lender servicing and escrow account practices, and prohibiting certain practices that increase the cost of settlement services; • Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; • Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit; • Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies; and • Fair Debt Collection Practices Act, governing the manner in which consumer debts may be collected.
The Bank’s operations are also subject to federal laws (and their implementing regulations) applicable to credit transactions, such as the: • Truth in Lending Act, governing disclosures of credit terms to consumer borrowers; • Real Estate Settlement Procedures Act, requiring that borrowers for mortgage loans for one- to four-family residential real estate receive various disclosures, including good faith estimates of settlement costs, lender servicing and escrow account practices, and prohibiting certain practices that increase the cost of settlement services; 11 • Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; • Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit; • Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies; and • Fair Debt Collection Practices Act, governing the manner in which consumer debts may be collected.
Capital Requirements Pursuant to the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”), each federal banking agency has promulgated regulations, specifying the levels at which a financial institution would be considered “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” or “critically undercapitalized,” and to take certain mandatory and discretionary supervisory actions based on the capital level of the institution.
Capital Requirements Pursuant to the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”), each federal banking agency has promulgated regulations, specifying the levels at which a financial institution would be considered “well capitalized,” 8 “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” or “critically undercapitalized,” and to take certain mandatory and discretionary supervisory actions based on the capital level of the institution.
The final rule also requires bank service providers to notify any affected bank to or on behalf of which the service provider provides services “as soon as possible” after determining that it has experienced an incident that materially disrupts or degrades, or is reasonably likely to materially disrupt or degrade, covered services provided to such bank for four or more hours.
The final rule also requires bank service providers to notify any affected bank to or on behalf of which the service provider provides services “as soon as possible” after determining that it has experienced an incident that materially disrupts or degrades, or is reasonably 10 likely to materially disrupt or degrade, covered services provided to such bank for four or more hours.
An insured institution’s deposit insurance may be terminated by the FDIC upon an administrative finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any 9 applicable law, regulation, order or regulatory condition imposed in writing.
An insured institution’s deposit insurance may be terminated by the FDIC upon an administrative finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, order or regulatory condition imposed in writing.
Insurance of Deposit Accounts The Bank’s deposits are insured up to applicable limits by the Deposit Insurance Fund ("DIF") of the FDIC. Deposit accounts in the Bank are insured up to $250,000 for each separately insured depositor per account ownership category. The FDIC charges insured depository institutions ("IDI") premiums to maintain the DIF.
Insurance of Deposit Accounts The Bank’s deposits are insured up to applicable limits by the Deposit Insurance Fund ("DIF") of the FDIC. Deposit accounts in the Bank are insured up to $250,000 for each separately insured depositor per account ownership category. 9 The FDIC charges insured depository institutions ("IDI") premiums to maintain the DIF.
The FRB by supervisory letters has advised holding companies that it is has 10 supervisory concerns when the level of dividends is too high and that it would seek to prevent dividends if the dividends paid by a holding company exceeded its earnings.
The FRB by supervisory letters has advised holding companies that it is has supervisory concerns when the level of dividends is too high and that it would seek to prevent dividends if the dividends paid by a holding company exceeded its earnings.
In addition to commercial lending activities, we offer a wide range of consumer banking services, including checking and savings accounts, money market and interest-bearing checking accounts, certificates of deposit, and individual retirement accounts. We also offer residential mortgages, home equity lines of credit and other second mortgage loans. Automated teller machines are available at 18 locations.
In addition to commercial lending activities, we offer a wide range of consumer banking services, including checking and savings accounts, money market and interest-bearing checking accounts, certificates of deposit, and individual retirement accounts. We also offer residential mortgages, home equity lines of credit and other second mortgage loans. Automated teller machines are available at 17 locations.
Institutions with tangible equity (subject to certain adjustments) meeting the specified level and electing to follow the alternative framework would be deemed to comply with the applicable regulatory capital requirements, including the risk-based requirements, and be considered to be “well capitalized.” The Bank has not elected to measure its capital adequacy using the community bank leverage ratio.
Institutions with tangible equity (subject to certain adjustments) meeting the specified level and electing to follow the alternative framework would be deemed to comply with the applicable regulatory capital requirements, including the risk-based requirements, and be considered to be “well capitalized.” The Bank is not required to and has not elected to measure its capital adequacy using the community bank leverage ratio.
Through its branch network in Somerset, Morris, Hunterdon and Union counties and its private banking locations in Bedminster, Morristown, Princeton and Teaneck, New Jersey and in New York City and its private wealth management, commercial private banking, retail private banking and residential lending divisions, along with its online platforms, Peapack Private is committed to offering unparalleled client service.
Through its branch network in Somerset, Morris, Hunterdon and Union counties and its private banking locations in Bedminster, Morristown, Princeton and Teaneck, New Jersey and in New York City and Long Island and its private wealth management, commercial private banking, retail private banking and residential lending divisions, along with its online platforms, Peapack Private is committed to offering unparalleled client service.
Bank holding companies with greater than $3 billion in total consolidated assets are subject to consolidated regulatory capital requirements identical to those applicable to the subsidiary depository institutions. The Company and the Bank were in compliance with the capital requirements, including the capital conservation buffer, as of December 31, 2024.
Bank holding companies with greater than $3 billion in total consolidated assets are subject to consolidated regulatory capital requirements identical to those applicable to the subsidiary depository institutions. The Company and the Bank were in compliance with the capital requirements, including the capital conservation buffer, as of December 31, 2025.
It is headquartered in Bedminster, New Jersey with additional wealth management locations throughout New Jersey in Morristown, Princeton, Red Bank, Summit and Teaneck, and in New York City, as well as at the Bank’s subsidiary, PGB Trust & Investments of Delaware, in Greenville, Delaware.
It is headquartered in Bedminster, New Jersey with additional wealth management locations throughout New Jersey in Morristown, Princeton, Red Bank, Summit and Teaneck, and in New York City and Long Island, as well as at the Bank’s subsidiary, PGB Trust & Investments of Delaware, in Greenville, Delaware.
The Bank’s capital ratios were all above the minimum levels required for it to be considered a “well capitalized” financial institution at December 31, 2024 under the “prompt corrective action” regulations in effect as of such date.
The Bank’s capital ratios were all above the minimum levels required for it to be considered a “well capitalized” financial institution at December 31, 2025 under the “prompt corrective action” regulations in effect as of such date.
When this is not the case, we source candidates from multiple avenues, including referrals, and utilize online platforms such as LinkedIn, Indeed, Monster, Circa, the New Jersey Department of Labor website and our own corporate website. We also post advertisements at our branch locations, participate in on-site career fairs, and reach out to local community organizations to promote open positions.
When this is not the case, we source candidates from multiple avenues, including referrals, and utilize online platforms such as LinkedIn, Indeed, Monster, eQuest, the New Jersey Department of Labor website and our own corporate website. We also post advertisements at our branch locations, participate in external career fairs, and reach out to local community organizations to promote open positions.
The Company was organized under New Jersey law in 1997 by the Board of Directors of Peapack-Gladstone Bank, which changed its name to Peapack Private Bank & Trust effective January 1, 2025 (“Peapack Private”) The Bank is its principal subsidiary. The Bank is a state-chartered commercial bank founded in 1921 under New Jersey laws.
The Company was organized under New Jersey law in 1997. Peapack-Gladstone Bank, which changed its name to Peapack Private Bank & Trust effective January 1, 2025 (“Peapack Private”), is a state-chartered commercial bank founded in 1921 under New Jersey laws, is its principal subsidiary. The Bank is a member of the Federal Reserve System.
We conduct an annual employee engagement survey by utilizing the American Banker ‘Best Banks to Work for Survey’, a third-party survey that collects employee feedback on areas that include, but are not limited to, leadership, corporate culture and communications, training and development resources, satisfaction, pay and benefits and overall engagement. We review the detailed results to identify areas to improve.
We conduct an annual employee engagement survey by utilizing the American Banker "Best Banks to Work for Survey," a third-party survey that collects employee feedback on areas that include, but are not limited to, leadership, corporate culture and communications, training and development resources, satisfaction, pay and benefits and overall engagement.
Our employees are generous with their time in their support of local organizations. In 2024, we performed over 1,600 hours of service and provided financial support to more than 330 charitable organizations. We are proud to be known and recognized locally and nationally for our community involvement.
Our employees are generous with their time in their support of local organizations. In 2025, our employees performed over 1,500 hours of service and we provided $941,000 of financial support to more than 320 charitable organizations. We are proud to be known and recognized locally and nationally for our community involvement.
We conduct regular talent reviews for the purpose of succession planning and developing our employees. In addition to regulatory training, we offer ethics and subject matter training regularly. On an annual basis, we offer career development, performance enhancement and leadership development opportunities. Experiential learning opportunities are also available on an individualized basis.
We conduct regular talent reviews for the purpose of internal mobility and succession planning. In addition to regulatory training, we offer ethics and subject matter training regularly. On an annual basis, we offer career development, performance enhancement and leadership development opportunities. Practical, experience-based learning opportunities are also available on an individualized basis.
As a bank holding company, the Company is supervised by the FRB and is required to file reports with the FRB and provide such additional information as the FRB may require.
Holding Company Supervision The Company is a bank holding company and periodically examined within the meaning of the Bank Holding Company Act. As a bank holding company, the Company is supervised by the FRB and is required to file reports with the FRB and provide such additional information as the FRB may require.
As of December 31, 2024, we had 620 full-time and part-time employees, with 294 at our corporate headquarters, 92 in our New York office, 86 in our branch offices and 148 in other locations. We believe that we have good relationships with all of our employees. Hiring and Promotion We look to hire internally for positions whenever possible.
As of December 31, 2025, we had 682 full-time and part-time employees, with 278 at our corporate headquarters, 152 in our New York offices, 85 in our branch offices and 167 in other locations. We believe that we have good relationships with all of our employees. Hiring and Promotion We look to hire staff internally for positions whenever possible.
Peapack Private Bank & Trust Wealth Management Division The Wealth Management Division is a New Jersey-chartered trust and investment business with $11.9 billion of assets under management and/or administration as of December 31, 2024.
Peapack Private Bank & Trust Wealth Management Division The Wealth Management Division is a New Jersey-chartered trust and investment business that had $13.1 billion of assets under management and/or administration as of December 31, 2025.
The regulations of the FRB and the NJDOBI impact virtually all of our activities, including the minimum levels of capital we must maintain, our ability to pay dividends, our ability to expand through new branches or acquisitions and various other matters. 7 Holding Company Supervision The Company is a bank holding company and periodically examined within the meaning of the Bank Holding Company Act.
The regulations of the FRB and the NJDOBI impact virtually all of our activities, including the minimum levels of capital we must maintain, our ability to pay dividends, our ability to expand through new branches or acquisitions and various other matters.
Tier 2 capital is comprised of capital instruments and related surplus, meeting specified requirements, and may include cumulative preferred stock and long-term perpetual preferred stock, mandatory convertible securities, intermediate preferred stock and subordinated debt. 8 The capital requirements also require the Company and the Bank to maintain a 2.5 percent “capital conservation buffer,” composed entirely of CET1, on top of the minimum risk-weighted asset ratios, effectively resulting in minimum ratios of (i) CET1 to risk-weighted assets of at least 7.0 percent, (ii) Tier 1 capital to risk-weighted assets of at least 8.5 percent, and (iii) total capital to risk-weighted assets of at least 10.5 percent.
The capital requirements also require the Company and the Bank to maintain a 2.5 percent “capital conservation buffer,” composed entirely of CET1, on top of the minimum risk-weighted asset ratios, effectively resulting in minimum ratios of (i) CET1 to risk-weighted assets of at least 7.0 percent, (ii) Tier 1 capital to risk-weighted assets of at least 8.5 percent, and (iii) total capital to risk-weighted assets of at least 10.5 percent.
Compensation and Benefits We seek to attract, motivate and retain the best talent in a competitive marketplace by offering an attractive compensation and benefits package. Compensation includes a market competitive salary, and for eligible positions, annual incentives or cash bonuses and participation in long-term incentive awards as well as an opportunity to participate in our discounted employee stock purchase plan.
Compensation includes a competitive salary, and for eligible positions, annual incentives or cash bonuses and participation in long-term incentive awards as well as an opportunity to participate in our discounted employee stock purchase plan.
According to estimates from the United States Census Bureau, as of 2019-2023, New Jersey had a total population exceeding 9.5 million and a median household income of $101,050, and Somerset County, where we are headquartered, is one of the wealthiest counties in New Jersey, with a median household income of $135,960; compared to a U.S. median household income of $78,538.
According to estimates from the United States Census Bureau, as of 2020-2024, New Jersey had a total population exceeding 9.5 million and a median household income of $103,556, and Somerset County, where we are headquartered, is one of the wealthiest counties in New Jersey, with a median household income of $140,374, compared to a New York City median household income of $80,483 and a U.S. median household income of $80,734.
Our strategy focuses on maintaining hiring levels that are representative of the communities in which we serve, as well as improving diversity representation in our senior roles.
Diversity, Equity and Inclusion We are an employer that supports diversity, equity and inclusion in our workplace. Our strategy focuses on hiring qualified individuals that are representative of the communities in which we serve, as well as improving diversity representation in our senior roles.
We invite all employees to participate and have received a high level of survey participation. Based on our survey results, we have been awarded recognition as one of American Banker's ‘Best Banks to Work For’ for the previous seven years (2018-2024). Diversity, Equity and Inclusion We are an employer that supports diversity, equity and inclusion in our workplace.
Based on our survey results, we have been awarded recognition as one of American Banker's "Best Banks to Work For" for the previous eight years (2018-2025), and recognition from Crain’s as a Best Place to Work in NYC for the second consecutive year (2024 and 2025).
We have dedicated actions to cultivate a more diverse workforce, with focus in the areas of brand awareness and sourcing, recruiting and hiring, cultural awareness and appreciation, and furthering our development opportunities for all employees.
We have dedicated actions to cultivating a more diverse, inclusive workforce, with a focus on brand awareness and recruitment, cultural awareness, and enhancing the development opportunities for all employees. Our Cultural Ambassador Committee, established in 2019, consists of non-executive employees and is sponsored by our CEO, Chief Human Resource Officer and our President of Commercial Banking.
We have six employee resource groups, focusing on areas such as wellness, the environment, volunteerism, and diversity and inclusion. Additionally, we maintain an Anti-Discrimination and Harassment Policy as well as a workplace harassment training course which must be completed annually by all employees.
Additionally, we maintain an Anti-Discrimination and Harassment Policy as well as a workplace harassment training course which must be completed annually by all employees. Employee Health and Safety The safety, health and well-being of our employees and clients is extremely important to us. Employees are provided with workplace flexibility when needed to assist them with managing personal matters.
The major bank failures in early 2023 heightened awareness around liquidity and balance sheet management, and competition for core funding. Due to this, we believe it is more important than ever to remain grounded in our relationship-based approach while continuing to diversify our business model further.
These dynamics reinforced the importance of our deposit-led, relationship-driven private banking model and the need to continue diversifying revenue streams. The major bank failures in early 2023 further heightened awareness around liquidity, funding stability and balance sheet management, and intensified competition for core funding. In response, we reinforced our relationship-based model and focused on disciplined balance sheet and funding execution.
Our Cultural Ambassador Committee, established in 2019, consists of non-executive employees and is sponsored by our CEO, Chief Human Resource Officer and our President of Commercial Banking. The Committee was created to sustain and evolve our corporate culture through ongoing communication, awareness, engagement and advocacy of our core principles, including diversity, inclusion and volunteerism.
The Committee was created to sustain and evolve our corporate culture through ongoing communication, appreciation, engagement and advocacy of our core principles, including inclusion and volunteerism. We have seven employee groups, focusing on areas such as wellness, the environment, volunteerism, and diversity and inclusion.
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The Bank is a member of the Federal Reserve System.
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We also participate annually in the Crain’s Best Places to Work in NYC survey which assesses similar areas. We review the detailed results from both surveys to identify areas to improve. We invite all employees to participate and continue to receive high levels of survey participation.
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Employee Health and Safety The safety, health and well-being of our employees and clients is extremely important to us. Employees are permitted a new flexible work arrangement offered by management provided their performance remains in good standing.
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This enables employees to continue to be connected and productive while operating remotely. Virtual meeting and work management productivity tools continue to be utilized to maintain a safe and productive work environment. Compensation and Benefits We seek to attract, motivate and retain the best talent in a competitive marketplace by offering a desirable compensation and benefits package.
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The combination of working remotely and in the office helps maintain a healthier workplace and enables employees to continue to be productive, completing tasks with less interruption when remote, while still having the opportunity to collaborate with peers in the workplace. Virtual meeting and teleconference platforms continue to be utilized to maintain a safe and productive work environment.
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Following the successful execution of the “Expanding Our Reach” strategy, we recognized refinements were necessary in response to several industry headwinds, including: • Margin and earnings pressure driven by changes in the yield curve and broader interest rate environment, including elevated funding costs and competitive pricing, along with increasing competition from digital bank and financial technology solutions; 6 • Ongoing investment in compliance, risk management, and cybersecurity to meeting evolving expectations and manage operational risk, including continued focus on efficiency as the regulatory environment for smaller banks evolves; • The continued shift in customer behavior toward digital channels and faster payments, requiring ongoing investment in technology while maintaining high service levels; and • Increased competition for talent and clients, heightening the importance of service differentiation and relationship depth to maintain and grow market share.
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Almost ten years after the launch and successful execution of the “Expanding Our Reach” strategy, we recognized refinements were necessary to address several industry headwinds that assume: • margin pressure is likely to continue for the foreseeable future given the expansion of digital banks and nature of economic cycles, including the current economic climate with a continued flattening or inversion of the yield curve, elevated interest rates, and intense competition for deposits, especially locally; • costs associated with compliance, risk management and cybersecurity would continue to increase significantly, and the increasing utilization of technology externally by clients and internally by banks would require significant investment to remain competitive and demand higher returns on capital; 6 • our clients have become so accustomed to automation and technology, which only accelerated because of the COVID-19 pandemic, that there would continue to be a shift from transactions in traditional branches in favor of electronic delivery channels; and • given the technology evolution and resulting pressure from a competitive standpoint, strong and updated technology is a requirement, but our differentiation must be in the level and quality of service we provide.
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Our emphasis on primary operating accounts and deep client relationships strengthened our funding profile and enhanced the resiliency of our balance sheet. In 2024, we expanded across Metropolitan New York by adding experienced private banking teams and strengthening key control and support functions, which drove strong performance and validated our expansion strategy.
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In 2024, we took a significant step forward to expand throughout the metropolitan New York region. By hiring very experienced professionals in sales, client service, operations, compliance, credit and risk management, we focused on generating core deposits and saw remarkable success in 2024 production with no signs of momentum slowing as we enter into 2025.
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Effective January 1, 2025, we rebranded the Bank as Peapack Private Bank & Trust to better align our brand with our strategic vision and private banking model.
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These strategic decisions have positioned us well to address the headwinds noted above and continue to become the preferred alternative to the large banks in the region.
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Throughout 2025, we continued to build momentum enabling us to hire additional teams and expand throughout the greater Metropolitan New York area, including Westchester and Long Island, while also opening our New York City flagship financial center in April 2025.
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We also strengthened our commercial real estate platform through key hires, expanded our equipment finance capabilities, and continued to invest in wealth management to support our expanding footprint.
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This execution has transformed our balance sheet and strengthened our funding profile through meaningful growth in core relationship deposits and an improved funding mix, while supporting disciplined lending, margin expansion, and positive operating leverage.
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With a single point-of-contact model and high-touch service, we believe we have established Peapack Private Bank & Trust as the boutique alternative to large banks in the Metropolitan New York region, and we enter 2026 with strong momentum and a scalable foundation for continued, more profitable growth over time.
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Tier 2 capital is comprised of capital instruments and related surplus, meeting specified requirements, and may include cumulative preferred stock and long-term perpetual preferred stock, mandatory convertible securities, intermediate preferred stock and subordinated debt.
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On December 16, 2025, the FDIC issued an interim final rule that would reduce the special assessment rate for the eighth collection quarter from 3.36 basis points to 2.97 basis points.
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Under the interim final rule, upon termination of the receiverships, the FDIC will either provide an offset to regular quarterly deposit insurance assessments for IDIs subject to the special assessment, if the amount collected exceeds losses, or collect from IDIs subject to the special assessment a one-time final shortfall special assessment if losses at the termination of the receiverships exceed the amount collected.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

59 edited+31 added−7 removed94 unchanged
Biggest changeRisks Related to Capital We may need to raise additional capital in the future, which may not be available when needed or available on acceptable terms. We are required by federal regulatory authorities to maintain adequate levels of capital to support our operations. We may at some point need to raise additional capital to support continued growth.
Biggest changeWe are required by federal regulatory authorities to maintain adequate levels of capital to support our operations. We may at some point need to raise additional capital to support continued growth. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets at that time, which are outside our control, and on its financial performance.
The amount of each allowance account represents management's best estimate of current expected credit losses on these financial instruments considering available information, from internal and external sources, relevant to assessing exposure to credit loss over the contractual term of the instrument. Relevant available information includes historical credit loss experience, current economic conditions, and reasonable and supportable forecasts.
The amount of each allowance account represents management's best estimate of current expected credit losses on these financial instruments considering available information, from internal and external sources, relevant to assessing exposure to credit loss over the contractual term of the instrument. Relevant available information includes historical credit loss experience, current economic conditions, and reasonable and supportable economic forecasts.
Although we have developed, and continue to invest in, systems and processes that are designed to detect and prevent security breaches and cyber-attacks, a breach of our systems and global payments infrastructure of those of our fintech partners and processors could result in: losses to us and our customers; loss of business and/or customers; damage to its reputation; the incurrence of additional expenses (including the cost of investigation and remediation and the cost of notification to consumers, credit monitoring and forensics, and fees and fines imposed by the card networks); disruption to our business; an inability to grow our online services or other businesses; additional regulatory scrutiny, investigation or penalties; and/or exposure to civil litigation and possible financial liability - any of which could have a material adverse effect on our reputation, business, financial condition and results of operations.
Although we have developed, and continue to invest in, systems and processes that are designed to detect and prevent security breaches and cyber-attacks, a breach of our systems and/or global payments infrastructure of those of our fintech partners and processors could result in: losses to us and our customers; loss of business and/or customers; damage to our reputation; the incurrence of additional expenses (including the cost of investigation and remediation and the cost of notification to consumers, credit monitoring and forensics, and fees and fines imposed by the card networks); disruption to our business; an inability to grow our online services or other businesses; additional regulatory scrutiny, investigation or penalties; and/or exposure to civil litigation and possible financial liability - any of which could have a material adverse effect on our reputation, business, financial condition and results of operations.
Any material interruption in our customers' supply chains, such as a material interruption of the resources required to conduct their business, such as those resulting from interruptions in service by third-party providers, trade restrictions, such as increase tariffs or quotas, embargoes or customs restrictions, reductions in federal subsidies or grants, social or labor unrest, natural disasters, epidemics or pandemics or political disputes and military conflicts, that cause a material disruption in our customers' supply changes, could have a negative impact on their business and ability to repay their borrowings with us. in the event of disruptions in our customers' supply chains, the labor and materials they rely on in the ordinary course of business may not be available at reasonable rates or at all.
Any material interruption in our customers' supply chains, such as a material interruption of the resources required to conduct their business, such as those resulting from interruptions in service by third-party providers, trade restrictions, such as increase tariffs or quotas, embargoes or customs restrictions, reductions in federal subsidies or grants, social or labor unrest, natural 13 disasters, epidemics or pandemics or political disputes and military conflicts, that cause a material disruption in our customers' supply changes, could have a negative impact on their business and ability to repay their borrowings with us. in the event of disruptions in our customers' supply chains, the labor and materials they rely on in the ordinary course of business may not be available at reasonable rates or at all.
Disruptions or failures in the physical infrastructure or operating systems that support our businesses, customers or third parties, or cyber-attacks or security breaches of the networks, systems or devices that our customers or third parties use to access our products and services could result in customer attrition, financial losses, the inability of our customers or vendors to transact business with us, violations of applicable privacy and other laws, regulatory 19 fines, penalties or intervention, reputational damage, reimbursement or other costs, and/or additional compliance costs, any of which could materially adversely affect our results of operations or financial condition.
Disruptions or failures in the physical infrastructure or operating systems that support our businesses, customers or third parties, or cyber-attacks or security breaches of the networks, systems or devices that our customers or third parties use to access our products and services could result in customer attrition, financial losses, the inability of our customers or vendors to transact business with us, violations of applicable privacy and other laws, regulatory fines, penalties or intervention, reputational damage, reimbursement or other costs, and/or additional compliance costs, any of which could materially adversely affect our results of operations or financial condition.
As a public company, we are also subject to the corporate governance standards set forth in the Sarbanes-Oxley Act, as well as any rules or regulations promulgated by the SEC and the NASDAQ Stock Market. The fiscal, monetary and regulatory policies of the federal government and its agencies could adversely affect the Company’s business, financial condition, and results of operations.
As a public company, we are also subject to the corporate governance standards set forth in the Sarbanes-Oxley Act, as well as any rules or regulations promulgated by the SEC and the NASDAQ Stock Market. 17 The fiscal, monetary and regulatory policies of the federal government and its agencies could adversely affect the Company’s business, financial condition, and results of operations.
Our acquisition 17 activities could be material to us. For example, we could issue additional shares of common stock in a merger transaction, which could dilute current shareholders' ownership interest and the per share book value of our common stock. Further, an acquisition could require us to use a substantial amount of cash, other liquid assets, and/or incur debt.
Our acquisition activities could be material to us. For example, we could issue additional shares of common stock in a merger transaction, which could dilute current shareholders’ ownership interest and the per share book value of our common stock. Further, an acquisition could require us to use a substantial amount of cash, other liquid assets, and/or incur debt.
Many of our competitors enjoy advantages, including greater financial resources, more aggressive marketing campaigns, better brand recognition and more branch locations. These competitors may offer higher interest rates than we do, which could decrease the deposits that we attract or require us to increase our rates to retain existing deposits or attract new deposits.
Many of our competitors enjoy advantages, including greater financial resources, more aggressive marketing campaigns, better brand recognition and more branch locations. These competitors may offer higher interest rates than we 20 do, which could decrease the deposits that we attract or require us to increase our rates to retain existing deposits or attract new deposits.
The Federal Reserve Board policies require, among other things, that a bank holding company maintain a minimum capital base and the Federal Reserve Board in supervisory guidance has cautioned bank holding companies about paying out too much of their earnings in dividends and has stated that banks should not pay out more in dividends than they earn.
The Federal Reserve Board policies require, among other things, that a bank holding company maintain a minimum capital base and the Federal Reserve Board in supervisory guidance has cautioned bank holding companies about paying out too much of their 19 earnings in dividends and has stated that banks should not pay out more in dividends than they earn.
We regularly evaluate opportunities to acquire and invest in banks and in other complementary businesses. As a result, we may engage in negotiations or discussions that, if they were to result in a transaction, could have a material effect on our operating results and financial condition, including on our short- and long-term liquidity and capital structure.
We regularly evaluate opportunities to acquire banks and in other complementary businesses. As a result, we may engage in negotiations or discussions that, if they were to result in a transaction, could have a material effect on our operating results and financial condition, including on our short- and long-term liquidity and capital structure.
Stockholders’ equity increases or decreases by the amount of the change in the unrealized gain or loss (the difference between the estimated fair value and the amortized cost) of the available-for-sale debt securities portfolio, net of the related tax expense 15 or benefit, under the category of accumulated other comprehensive income (loss).
Stockholders’ equity increases or decreases by the amount of the change in the unrealized gain or loss (the difference between the estimated fair value and the amortized cost) of the available-for-sale debt securities portfolio, net of the related tax expense or benefit, under the category of accumulated other comprehensive income (loss).
Further, the demand for deposits may be reduced due to a variety of factors such as demographic patterns, changes in customer preferences, reductions in consumers’ disposable income, the 18 monetary policy of the FRB or regulatory actions that decrease customer access to particular products.
Further, the demand for deposits may be reduced due to a variety of factors such as demographic patterns, changes in customer preferences, reductions in consumers’ disposable income, the monetary policy of the FRB or regulatory actions that decrease customer access to particular products.
We may be held liable to a governmental entity or to third parties for property damage, personal injury, investigation or clean-up costs incurred by these parties in connection with environmental contamination. The costs associated with investigation or remediation activities could be substantial.
We may be held liable to a governmental entity or to 15 third parties for property damage, personal injury, investigation or clean-up costs incurred by these parties in connection with environmental contamination. The costs associated with investigation or remediation activities could be substantial.
The occurrence of any system failures, interruptions, or breaches in security could expose us to reputation risk, litigation, regulatory scrutiny and possible financial liability that could have a material adverse effect on our financial condition and results of operations.
The occurrence of 21 any system failures, interruptions, or breaches in security could expose us to reputation risk, litigation, regulatory scrutiny and possible financial liability that could have a material adverse effect on our financial condition and results of operations.
The determination of the appropriate level of allowance for credit losses inherently involves a high degree of subjectivity and requires us to make significant estimates related to current and expected future credit risks and trends, all of which may undergo material changes.
The determination of the appropriate level of allowance for credit losses inherently involves a high degree of subjectivity and requires us to make significant estimates related to current 14 and expected future credit risks and trends, all of which may undergo material changes.
The Bank is also subject to a number of federal laws, which, among other things, require it to lend to various sectors of the economy and population, and establish and maintain comprehensive programs relating to anti-money laundering and 16 customer identification.
The Bank is also subject to a number of federal laws, which, among other things, require it to lend to various sectors of the economy and population, and establish and maintain comprehensive programs relating to anti-money laundering and customer identification.
The level of the commercial real estate loan portfolio may subject the Bank to additional regulatory scrutiny. Federal bank regulatory agencies have promulgated joint guidance on sound risk management practices for financial institutions with concentrations in commercial real estate lending.
The level of the commercial real estate loan portfolio may subject the Bank to additional regulatory scrutiny. Federal bank regulatory agencies have promulgated guidance on sound risk management practices for financial institutions with concentrations in commercial real estate lending.
Other negative impacts could be volatile capital markets, an adverse impact on the U.S. economy and the U.S. dollar, as well as increased default rates among borrowers in light of increased economic uncertainty.
Other negative impacts could be volatile capital markets, an adverse impact on the U.S. economy and the U.S. dollar, as well as increased default rates among 12 borrowers in light of increased economic uncertainty.
Information security and cyber-security risks have increased significantly in recent years because of new technologies, the use of the Internet and other electronic delivery channels (including mobile devices) to conduct financial transactions. Accordingly, we may be required to expend additional resources to continue to enhance our protective measures or to investigate and remediate any information security vulnerabilities or exposures.
Information security and cybersecurity risks have increased significantly in recent years because of new technologies, the use of the Internet and other electronic delivery channels (including mobile devices) to conduct financial transactions. Accordingly, we may be required to expend additional resources to continue to enhance our protective measures or to investigate and remediate any information security vulnerabilities or exposures.
While it is management’s belief that policies and procedures with respect to the Bank’s commercial real estate loan portfolio have been implemented consistent with this guidance, bank regulators could require that additional policies and procedures be implemented consistent with their interpretation of the guidance that may result in additional costs or that may result in the curtailment of commercial real estate lending that would adversely affect the Bank’s loan originations and profitability.
While it is management’s belief that policies and procedures with respect to the Bank’s commercial real estate loan portfolio have been implemented consistent with this guidance, bank regulators could require that additional policies and procedures be implemented consistent that may result in additional costs or that may result in the curtailment of commercial real estate lending that would adversely affect the Bank’s loan originations and profitability.
We are unable to predict changes in market interest rates, which are affected by many factors beyond our control, including inflation, unemployment, money supply, governmental policy, domestic and international events and changes in the United States and other financial markets. In addition, changes in interest rates can affect the average life of loans and investment securities.
We are unable to predict changes in market interest rates, which are affected by many factors beyond our control, including inflation, unemployment, money supply, governmental policy, the imposition of tariffs, domestic and international events and changes in the United States and other financial markets. In addition, changes in interest rates can affect the average life of loans and investment securities.
Additionally, our risk exposure to security matters may remain elevated or increase in the future due to, among other things, the increasing size and prominence of the Company in the financial services industry, our expansion of Internet and mobile banking tools and products based on customer needs and an increased level of employees working remotely.
Additionally, our risk exposure to security matters may remain elevated or increase in the future due to, among other things, the increasing size and prominence of the Company in the financial services industry, our continued expansion of our footprint; our expansion of Internet and mobile banking tools and products based on customer needs and an increased level of employees working remotely.
Deposit balances can decrease when customers perceive alternative investments as providing a better risk/return tradeoff, which are strongly influenced by such external factors as the direction and level of interest rates, local and national economic conditions and the availability and attractiveness of alternative investments.
Deposit balances can decrease when customers perceive alternative investments as providing a better risk/return tradeoff, which is strongly influenced by such external factors as the direction and level of interest rates, local and national economic conditions and the availability and attractiveness of alternative investments.
We face the risk that the design of our controls and procedures, including those to mitigate the risk of fraud by employees or outsiders, may prove to be inadequate or are circumvented, thereby causing delays in the detection of errors or inaccuracies in data and information.
We are subject to operational risk. We face the risk that the design of our controls and procedures, including those to mitigate the risk of fraud by employees or outsiders, may prove to be inadequate or are circumvented, thereby causing delays in the detection of errors or inaccuracies in data and information.
The imposition of any such penalties or orders could have a material adverse effect on the wealth management segment's operating results and financial condition. We may be adversely affected as a result of new or revised legislation or regulations. Regulatory changes have imposed and may continue to impose additional costs, which could adversely impact our profitability. 21 Item 1B.
The imposition of any such penalties or orders could have a material adverse effect on the wealth management segment’s operating results and financial condition. We may be adversely affected as a result of new or revised legislation or regulations. Regulatory changes have imposed and may continue to impose additional costs, which could adversely impact our profitability.
The guidance focuses 14 on exposure to commercial real estate loans that are dependent on the cash flow from the real estate held as collateral and that are likely to be at greater risk to conditions in the commercial real estate market (as opposed to real estate collateral held as a secondary source of repayment or in an abundance of caution).
The guidance focuses on exposure to commercial real estate loans that are dependent on the cash flows from the real estate held as collateral and that are likely to be at greater risk to conditions in the commercial real estate market (as opposed to real estate collateral held as a secondary source of repayment or in an abundance of caution).
We are exposed to the risks of public health issues, natural disasters, pandemics, severe weather, acts of war or terrorism, and other potential external events, any of which could have a significant impact on our ability to conduct business.
Other Risks Related to Our Business We are exposed to the risks of public health issues, natural disasters, severe weather, acts of war or terrorism, government shutdowns, geopolitical events and other potential external events. 16 We are exposed to the risks of public health issues, natural disasters, pandemics, severe weather, acts of war or terrorism, and other potential external events, any of which could have a significant impact on our ability to conduct business.
Many of our competitors have greater resources than we have. Our ability to successfully attract and retain wealth management clients is dependent upon our ability to compete with competitors’ investment products, level of investment performance, client services and marketing and distribution capabilities. If we are not successful, our results of operations and financial condition may be negatively impacted.
Our ability to successfully attract and retain wealth management clients is dependent upon our ability to compete with competitors’ investment products, level of investment performance, client services and marketing and distribution capabilities. If we are not successful, our results of operations and financial condition may be negatively impacted.
Based on these factors, the Bank had a concentration in commercial real estate lending, as such loans represented 347 percent of total bank capital as of December 31, 2024.
Based on these factors, the Bank had a concentration in commercial real estate lending, as such loans represented 367 percent of total bank capital as of December 31, 2025.
At December 31, 2024, the Company maintained a debt securities portfolio of $886.2 million, of which $784.5 million was classified as available-for-sale. The estimated fair value of the available-for-sale debt securities portfolio may change depending on the credit quality of the underlying issuer, market liquidity, changes in interest rates and other factors.
At December 31, 2025, the Company maintained a debt securities portfolio of $870.1 million, of which $774.2 million was classified as available-for-sale. The estimated fair value of the available-for-sale debt securities portfolio may change depending on the credit quality of the underlying issuer, market liquidity, changes in interest rates and other factors.
In addition, bank regulatory agencies periodically review our allowance for credit losses and may require an increase in credit loss expense or the recognition of further loan charge-offs, based on judgments different than those of management.
In addition, bank regulatory agencies periodically review our allowance for credit losses and may require an increase in credit loss expense or the recognition of further loan charge-offs, based on judgments different than those of management. Furthermore, if we incur charge-offs, we may need to recognize additional credit loss expense to increase the applicable allowance.
Our concentrations of loans in certain industries could have adverse effects on credit quality. As of December 31, 2024, the Company’s loan portfolio included loans to: (i) lessors of office buildings of $95.3 million, or 1.7 percent of total loans; and (ii) borrowers in the retail industry of $210.6 million, or 3.8 percent of total loans.
Our concentrations of loans in certain industries could have adverse effects on credit quality. As of December 31, 2025, the Company’s loan portfolio included loans to: (i) lessors of office buildings of $166.0 million, or 2.7 percent of total loans; and (ii) borrowers in the retail industry of $289.5 million, or 4.6 percent of total loans.
New investors may also have rights, preferences and privileges senior to our current shareholders, which may adversely impact our current shareholders. We are subject to certain capital requirements, which may adversely impact our return on equity, require us to raise additional capital, or constrain us from paying dividends or repurchasing shares.
We are subject to certain capital requirements, which may adversely impact our return on equity, require us to raise additional capital, or constrain us from paying dividends or repurchasing shares.
A sharp downturn in real estate values in our market area could leave our loans under-secured, which could adversely affect our earnings. Inflation can have an adverse impact on our business and on our customers.
A sharp downturn in real estate values in our market area could leave our loans under-secured, which could adversely affect our earnings. Inflation can have an adverse impact on our business and on our customers. Inflation risk can negatively impact the value of assets or income from investments as inflation decreases the value of money.
This could be in response to adverse market conditions or in pursuit of other investment opportunities. If the assets under management we supervise decline and there is a related decrease in fees, it will negatively affect our results of operations. We may not be able to attract and retain wealth management clients.
If the assets under management we supervise decline and there is a related decrease in fees, it will negatively affect our results of operations. 22 We may not be able to attract and retain wealth management clients. Due to strong competition, our wealth management business may not be able to attract and retain clients.
These businesses generally have fewer financial resources in terms of capital or borrowing capacity than larger entities. Due to our geographic concentration, a downturn in the local economy could make it more difficult to attract deposits and could cause higher losses and delinquencies on our loans than if the loans were more geographically diversified.
Due to our geographic concentration, a downturn in the local economy could make it more difficult to attract deposits and could cause higher losses and delinquencies on our loans than if the loans were more geographically diversified.
As a practical matter, restrictions on the ability of the Bank to pay dividends act as restrictions on the amount of funds available for the payment of dividends by the Company. As a New Jersey-chartered commercial bank, the Bank is subject to the restrictions on the payment of dividends contained in the New Jersey Banking Act of 1948, as amended.
As a practical matter, restrictions on the ability of the Bank to pay dividends act as restrictions on the amount of funds available for the payment of dividends by the Company.
Due to strong competition, our wealth management business may not be able to attract and retain clients. Competition is strong because there are numerous well-established and successful investment management and wealth advisory firms with which we compete, including commercial banks and trust companies, investment advisory firms, mutual fund companies, stock brokerage firms, and other financial companies.
Competition is strong because there are numerous well-established and successful investment management and wealth advisory firms with which we compete, including commercial banks and trust companies, investment advisory firms, mutual fund companies, stock brokerage firms, and other financial companies. Many of our competitors have greater resources than we have.
Risks Related to Interest Rates Changes in interest rates may adversely affect our earnings and financial condition. Our net income depends primarily upon our net interest income, which is the difference between interest income earned on loans, investments and other interest-earning assets and the interest expense incurred on deposits and borrowed funds.
Our net income depends primarily upon our net interest income, which is the difference between interest income earned on loans, investments and other interest-earning assets and the interest expense incurred on deposits and borrowed funds. Different types of assets and liabilities may react differently, and at different times, to changes in market interest rates.
Depending on industries and markets involved, changes to tax law and increase or reduced public expenditures could affect us directly or the business operations of our customers.
Additionally, Congress and the administration through executive orders controls fiscal policy through decisions on taxation and expenditures. Depending on industries and markets involved, changes to tax law and increased or reduced public expenditures could affect us directly or the business operations of our customers.
Different types of assets and liabilities may react differently, and at different times, to changes in market interest rates. We expect that we will periodically experience “gaps” in the interest rate sensitivities of our assets and liabilities. That means either our interest-bearing liabilities will be more sensitive to changes in market interest rates than our interest-earning assets, or vice versa.
This imbalance can create significant earnings volatility because market interest rates change over time and we expect that we will periodically experience “gaps” in the interest rate sensitivities of our assets and liabilities. That means either our interest-bearing liabilities will be more sensitive to changes in market interest rates than our interest-earning assets, or vice versa.
We have exposure to many different industries and counterparties, and we routinely execute transactions with counterparties in the financial services industry, including brokers and dealers, investment banks, commercial banks, and other institutional clients. Some of these transactions expose us to credit risk if there is a default by our client or counterparty.
We have exposure to many different industries and counterparties, and we routinely execute transactions with counterparties in the financial services industry, including brokers and dealers, investment banks, commercial banks, and other institutional clients.
Risks Related to Economic Matters Negative developments in the financial services industry and U.S. and global credit markets and the U.S. debt obligations may adversely impact our operations and results. Our businesses and operations, which primarily consist of lending money, accepting deposits and investing in securities, are sensitive to general business and economic conditions in the United States.
Risks Related to Economic Matters Negative developments in the financial services industry and U.S. and global credit markets and the U.S. debt obligations may adversely impact our operations and results.
Some of these impacts might occur even in the absence of an actual default but as a consequence of extended political negotiations around the threat of such a default and a government shutdown. We are more sensitive to adverse changes in the local economy than our more geographically diversified competitors.
Some of these impacts might occur even in the absence of an actual default but as a consequence of extended political negotiations around the threat of such a default and/or a government shutdown. Our earnings are impacted by general business and economic conditions.
Unlike larger regional banks that operate in large geographies, much of our business is with clients located within Central and Northern New Jersey, Pennsylvania, as well as New York City. Our business loans are generally made to small to mid-sized businesses, most of whose success depends on the regional economy.
We are more sensitive to adverse changes in the local economy than our more geographically diversified competitors. Unlike larger regional banks that operate in large geographies, much of our business is with clients located within Central and Northern New Jersey, Pennsylvania, as well as metropolitan New York.
If we cannot raise additional capital when needed, the ability to further expand its operations could be materially impaired. Further, if we raise capital through the issuance of additional shares of our common stock, it would dilute the ownership interests of existing shareholders and may dilute the per share book value of our common stock.
Further, if we raise capital through the issuance of additional shares of our common stock, it would dilute the ownership interests of existing shareholders and may dilute the per share book value of our common stock. New investors may also have rights, preferences and privileges senior to our current shareholders, which may adversely impact our current shareholders.
At December 31, 2024, our total multifamily rent regulated exposure in New York was approximately $939 million, or 17 percent, of the total loan portfolio. If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings would decrease. We maintain allowances for credit losses on loans and off-balance sheet credit exposures.
If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings would decrease. We maintain allowances for credit losses on loans and off-balance sheet credit exposures.
Under that Act, the Bank may pay dividends only out of retained earnings, and out of surplus to the extent that surplus exceeds 50 percent of stated capital. The Company is also subject to Federal Reserve Board policies, which may, in certain circumstances, limit its ability to pay dividends.
The Company is also subject to Federal Reserve Board policies, which may, in certain circumstances, limit its ability to pay dividends.
Our other directors do not have significant experience in cybersecurity risk management in other business entities comparable to the Company and rely on the Chief Information Officer and other consultants for cybersecurity guidance. 20 We are subject to operational risk.
Our other directors do not have significant experience in cybersecurity risk management in other business entities comparable to the Company and rely on the Chief Information Officer and other consultants for cybersecurity guidance. During the first quarter of 2026, management established a bank level Technology Committee to provide focused oversight of technology-related matters and associated risks.
If the U.S. economy weakens, our growth and profitability from our lending, deposit and investment operations could be constrained. Uncertainty about the federal fiscal policymaking process and the medium and long-term fiscal outlook of the federal government is a concern for businesses, consumers and investors in the United States.
Uncertainty about the federal fiscal policymaking process and the medium- and long-term fiscal outlook of the federal government is a concern for businesses, consumers and investors in the United States. In addition, economic conditions in foreign countries could affect the stability of global financial markets, which could hinder U.S. economic growth.
In addition, if we are the owner or former owner of a contaminated site, we may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from the property. Any significant environmental liabilities could cause a material adverse effect on our business, financial condition, results of operations and prospects.
In addition, if we are the owner or former owner of a contaminated site, we may be subject to claims by third parties based on damages and costs resulting from environmental contamination emanating from the property. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental liability.
However, in September, the FRB reduced rates by 50 basis points and by an additional 25 basis points in November and 12 December. As inflation increases and market interest rates rise the value of our investment securities, particularly those with longer maturities, would decrease, although this effect can be more pronounced for floating rate instruments.
As inflation increases and market interest rates rise the value of our investment securities, particularly those with longer maturities, would decrease, although this effect can be more pronounced for floating rate instruments. In addition, inflation generally increases the cost of goods and services we use in our business operations, such as electricity and other utilities, which increases our noninterest expenses.
Assets under management may decline for various reasons including declines in the market value of the assets, which could be caused by price declines in the securities markets. Assets under management may also decrease due to redemptions and other withdrawals by clients or termination of contracts.
Assets under management may also decrease due to redemptions and other withdrawals by clients or termination of contracts. This could be in response to adverse market conditions or in pursuit of other investment opportunities.
As a result, the value of the 13 collateral located in New York securing our multifamily loans or the future net operating income of such properties could potentially become impaired. Moreover, following Covid, New York City rent regulated buildings have had an increased level of non-paying tenants with a very protracted eviction process, which has negatively impacted rent collections.
Moreover, following COVID, New York City rent regulated buildings have had an increased level of non-paying tenants with a very protracted eviction process, which has negatively impacted rent collections. At December 31, 2025, our total multifamily rent regulated exposure in New York was approximately $854.1 million, or 13.7 percent, of the total loan portfolio.
These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits.
These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits. The FRB's policies determine in large part the cost of funds for lending and investing and the return earned on those loans and investments, both of which affect our net interest margin.
The monetary policies and regulations of the FRB have had a significant effect on the overall economy and the operating results of financial institutions in the past and are expected to continue to do so in the future. Additionally, Congress and the administration through executive orders controls fiscal policy through decisions on taxation and expenditures.
Its policies can also adversely affect borrowers, potentially increasing the risk that they may fail to repay their loans. The monetary policies and regulations of the FRB have had a significant effect on the overall economy and the operating results of financial institutions in the past and are expected to continue to do so in the future.
Our business operations could be adversely affected if we were unable to attract new employees and retain and motivate our existing employees. Risks Related to Our Wealth Management Business Revenues and profitability from our wealth management business may be adversely affected by any reduction in assets under management, which could reduce fees earned.
Risks Related to Our Wealth Management Business Revenues and profitability from our wealth management business may be adversely affected by any reduction in assets under management, which could reduce fees earned. The wealth management business derives the majority of its revenue from non-interest income, which consists of trust, investment advisory and other servicing fees.
The wealth management business derives the majority of its revenue from non-interest income, which consists of trust, investment advisory and other servicing fees. Substantial revenues are generated from investment management contracts with clients. Under these contracts, the investment advisory fees paid to us are typically based on the market value of assets under management.
Substantial revenues are generated from investment management contracts with clients. Under these contracts, the investment advisory fees paid to us are typically based on the market value of assets under management. Assets under management may decline for various reasons including declines in the market value of the assets, which could be caused by price declines in the securities markets.
Our ability to raise additional capital, if needed, will depend on conditions in the capital markets at that time, which are outside our control, and on its financial performance. Accordingly, we cannot be assured of our ability to raise additional capital if needed or on terms acceptable to us.
Accordingly, we cannot be assured of our ability to raise additional capital if needed or on terms acceptable to us. If we cannot raise additional capital when needed, the ability to further expand our operations could be materially impaired.
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In addition, economic conditions in foreign countries could affect the stability of global financial markets, which could hinder U.S. economic growth.
Added
Our businesses and operations, which primarily consist of lending money, accepting deposits and investing in securities and wealth management and financial advisory services, are sensitive to general business and economic conditions in the United States. If the U.S. economy weakens, our growth and profitability from our lending, deposit, investment and wealth management operations could be constrained.
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Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. The Federal Reserve Board raised certain benchmark interest rates to combat inflation.
Added
Our operations and profitability are impacted by general business and economic conditions, including long-term and short-term interest rates, the shape of the interest rate curve, inflation, the imposition of tariffs or other domestic or international governmental policies, money supply, supply chain issues, political issues, legislative, tax, accounting and regulatory changes, fluctuations in both debt and equity capital markets, broad trends in industry and finance, values of real estate and other collateral and the strength of the U.S. economy and the local economies in which we operate, all of which are beyond our control.
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In addition, inflation generally increases the cost of goods and services we use in our business operations, such as electricity and other utilities, which increases our noninterest expenses.
Added
Negative changes in these general business and economic conditions could have the following consequences, any of which could have a material adverse effect on the business, financial condition, liquidity and results of operations: • Demand for the products and services may decline; • Our allowance for credit losses may increase; • Loan delinquencies, problem assets, and foreclosures may increase; • Our funding costs and noninterest expenses may increase; • The value of our securities portfolio may decrease; • Collateral for loans, especially real estate, may decline in value, thereby reducing customers' borrowing power, and reducing the value of assets and collateral associated with existing loans; and • The net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments.
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A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, any of which, could adversely affect our business, financial condition and results of operations.
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Our business loans are generally made to small to mid-sized businesses, most of whose success depends on the regional economy. These businesses generally have fewer financial resources in terms of capital or borrowing capacity than larger entities.
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Furthermore, if any charge-offs related to loans or off-balance sheet credit exposures in future periods exceed our allowances for credit losses on loans or off-balance sheet credit exposures, we will need to recognize additional credit loss expense to increase the applicable allowance.
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Inflation rose sharply at the end of 2021 and remained elevated through the first half of calendar 2024, before beginning to moderate in the latter half of 2024 and into calendar 2025. However, inflation levels continue to exceed the Federal Reserve Board’s long-term target of 2.0%.
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A decrease can occur even though the securities are not sold. Other Risks Related to Our Business We are exposed to the risks of public health issues, natural disasters, severe weather, acts of war or terrorism, government shutdowns, geopolitical events and other potential external events.
Added
As a result, the value of the collateral located in New York securing our multifamily loans or the future net operating income of such properties could potentially become impaired. Further restrictions on rent-regulated properties may be enacted or existing restrictions strengthened as a result of the outcome of the recent New York City mayoral election.
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The FRB's policies determine in large part the cost of funds for lending and investing and the return earned on those loans and investments, both of which affect our net interest margin. its policies can also adversely affect borrowers, potentially increasing the risk that they may fail to repay their loans.
Added
Any significant environmental liabilities could cause a material adverse effect on our business, financial condition, results of operations and prospects. Risks Related to Interest Rates Changes in interest rates may adversely affect our earnings and financial condition.
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When short-term rates are higher than long-term rates, that is referred to as an inverted yield curve. If the yield curve inversion re-occurs, the difference between rates paid on deposits and received on loans could narrow significantly resulting in a decrease in net interest income and our profitability. Our interest-bearing liabilities generally have shorter contractual maturities than our interest-earning assets.
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Furthermore, the rates we earn on our other interest-earning assets and the rates we pay on our interest-bearing liabilities are generally fixed for a contractual period of time.
Added
At December 31, 2025, accumulated other comprehensive losses were $47.6 million, net of tax, primarily related to unrealized holding losses in the available-for- sale investment securities portfolio, which negatively impacted stockholders’ equity, as well as book value per common share. A decrease can occur even though the securities are not sold.
Added
Defaults by, or even rumors or questions about, one or more financial services institutions, or the financial services industry generally, could lead to market-wide liquidity problems and losses or defaults by us or by other institutions and organizations. Some of these transactions expose us to credit risk if there is a default by our client or counterparty.
Added
We face a risk of non-compliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations. The Bank Secrecy Act, the USA PATRIOT Act of 2001, and other laws and regulations require financial institutions to institute and maintain an effective anti-money laundering program and file suspicious activity and currency transaction reports as appropriate.
Added
The federal Financial Crimes Enforcement Network is authorized to impose significant civil money penalties for violations of those requirements and has engaged in coordinated enforcement efforts with federal banking regulators, as well as the U.S. Department of Justice, Drug Enforcement Administration, and Internal Revenue Service.
Added
We are also subject to increased scrutiny of our compliance with the rules enforced by the Office of Foreign Assets Control and compliance with the Foreign Corrupt Practices Act.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Information Security Officer reports summaries of key issues, including significant cybersecurity and/or privacy incidents, discussed at committee meetings and the actions taken to the Bank’s board of directors.
Biggest changeThe Information Security Officer reports summaries of key issues, including significant cybersecurity and/or privacy incidents, discussed at committee meetings and the actions taken to the Bank’s board of directors. During the first quarter of 2026, management established a bank level Technology Committee to provide focused oversight of technology-related matters and associated risks.
The information security program is periodically reviewed by such personnel with the goal of addressing changing threats and conditions. We employ an in-depth, layered, defensive strategy that embraces a “trust by design” philosophy when designing new products, services, and technology. We leverage people, processes, and technology as part of the Bank’s efforts to manage and maintain cybersecurity controls.
The information security program is periodically reviewed by such personnel with the goal of addressing changing threats and conditions. We employ an in-depth, layered, defensive strategy that embraces a “trust by design” philosophy when designing new products, services, and technology. We leverage people, processes, and technology as part of the Bank’s efforts to manage 24 and maintain cybersecurity controls.
Included in the responsibilities of this management team is the oversight and the administration of the cybersecurity risk assessment, defense operations, incident 22 response, vulnerability assessment, threat intelligence, identity access governance, third-party risk management, and business resilience. The Bank’s board of directors has approved management committees including the Information Technology Steering Committee, which focuses on technology and cyber-related business impact.
Included in the responsibilities of this management team is the oversight and the administration of the cybersecurity risk assessment, defense operations, incident response, vulnerability assessment, threat intelligence, identity access governance, third-party risk management, and business resilience. The Bank’s board of directors has approved management committees including the Information Technology Steering Committee, which focuses on technology and cyber-related business impact.
Cybersecurity is a critical component of this program, given the increasing reliance on technology, our expansion of Internet and mobile banking tools, an increased level of employees working remotely and the potential of cyber threats.
Cybersecurity is a critical component of this program, given the increasing reliance on technology, our overall growth, including our expansion of Internet and mobile banking tools, an increased level of employees working remotely and the potential of cyber threats.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. PR OPERTIES The Company owns eight branches and leases eight branches. The Company also leases an administrative and operations office building in Bedminster, New Jersey, private banking offices in Princeton and Teaneck, New Jersey and New York City and wealth offices in Greenville, Delaware, Morristown, New Providence, Red Bank and Summit, New Jersey and Bonita Springs, Florida.
Biggest changeThe Company also leases an administrative and operations office building in Bedminster, New Jersey, private banking offices in Princeton, Teaneck, and Lakewood, New Jersey, New York City, Garden City and Melville, Long Island, Rye Brook, New York and wealth offices in Greenville, Delaware, Morristown, Red Bank and Summit, New Jersey. 25
Added
Item 2. PR OPERTIES The Company owns nine branches and leases eight branches.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMINE SAF ETY DISCLOSURE Not applicable. 23 PART II
Biggest changeMINE SAF ETY DISCLOSURE Not applicable. 26 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThese shares are repurchased pursuant to the terms of the applicable plan and not under the Company's stock repurchase plan. (2) The Company's 2023 Stock Repurchase Plan expired on December 31, 2024.
Biggest changeSuch shares are repurchased pursuant to the applicable plan and are not under the Company's share repurchase program. (2) On January 30, 2025, the Company's Board of Directors approved a plan to repurchase up to 880,000 shares, which was approximately 5 percent of the outstanding shares as of that date, through December 31, 2026.
Stock Performance Graph The following graph compares the cumulative total return on a hypothetical $100 investment made on December 31, 2019 (Five Year Total Return Performance), in (a) the Company’s common stock; (b) the KBW NASDAQ Regional Banking Index (top 50 U.S. banks); and (c) the Proxy Peer Group.
Stock Performance Graph The following graph compares the cumulative total return on a hypothetical $100 investment made on December 31, 2020 (Five Year Total Return Performance), in (a) the Company’s common stock; (b) the KBW NASDAQ Regional Banking Index (top 50 U.S. banks); and (c) the Proxy Peer Group.
The Peer Group is comprised of the bank peer group included in the Company’s 2024 Proxy that the Company utilized for monitoring its executive compensation.
The Peer Group is comprised of the bank peer group included in the Company’s 2025 Proxy that the Company utilized for monitoring its executive compensation.
Item 5. MARKET FOR REGIST RANT'S COMMON EQUITY RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The common stock of the Company is traded on the NASDAQ Global Select Market under the symbol “PGC”. On March 3, 2025, there were approximately 1,206 registered shareholders of record.
Item 5. MARKET FOR REGIST RANT'S COMMON EQUITY RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The common stock of the Company is traded on the NASDAQ Global Select Market under the symbol “PGC”. On March 3, 2026, there were approximately 1,117 registered shareholders of record.
Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs Total Number of Shares Withheld (1) Average Price Paid Per Share Maximum Number of Shares That May Yet Be Purchased Under the Plans Or Programs (2) October 1, 2024 - October 31, 2024 — — $ — 177,673 November 1, 2024 - November 30, 2024 — — — 177,673 December 1, 2024 - December 31, 2024 — 451 35.37 177,673 Total 0 451 $ 35.37 (1) Represents shares withheld to satisfy tax withholding obligations upon the exercise of stock options and vesting of restricted stock awards.
Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs Total Number of Shares Withheld (1) Average Price Paid Per Share Maximum Number of Shares That May Yet Be Purchased Under the Plans Or Programs (2) October 1, 2025 - October 31, 2025 — — $ — 680,000 November 1, 2025 - November 30, 2025 — — — 680,000 December 1, 2025 - December 31, 2025 — — — 680,000 Total — — $ — (1) Represents shares withheld to satisfy tax withholding obligations upon the exercise of stock options and/or the vesting of restricted stock awards/units.
(Note that banks that have since been acquired or did not file their required reports on a timely basis have been excluded.) The Peer Group consists of: Arrow Financial Corporation, Cambridge Bancorp, Customers Bancorp, Inc., Dime Community Bancshares, Inc., Eagle Bancorp, Inc., Enterprise Bancorp, Inc., Lakeland Bancorp, Inc.
(Note that banks that have since been acquired or did not file their required reports on a timely basis have been excluded.) The Peer Group consists of: Amerant Bancorp Inc., Arrow Financial Corporation, Berkshire Hills Bancorp, Inc.
The Company believes each of these indexes/groups are more closely aligned with the operations of the Company. 24 Period Ended Index 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Peapack-Gladstone Financial Corporation $ 100.00 $ 74.42 $ 116.48 $ 123.17 $ 99.38 $ 107.60 KBW NASDAQ Regional Banking Index 100.00 91.29 124.74 116.10 115.64 130.90 Peer Group 100.00 81.50 123.32 103.05 95.55 103.79 Stock Repurchases The following table sets forth information for the quarter ended December 31, 2024 with respect to common shares repurchased and common shares withheld to satisfy withholding obligations upon the exercise of stock options and vesting of restricted stock awards/units.
The Company believes each of these indexes/groups are more closely aligned with the operations of the Company. 27 Period Ended Index 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 Peapack-Gladstone Financial Corporation $ 100.00 $ 156.52 $ 165.51 $ 133.54 $ 144.59 $ 126.56 KBW NASDAQ Regional Banking Index 100.00 136.64 127.17 126.67 143.39 152.71 Peer Group 100.00 153.44 133.29 116.25 133.62 133.90 Stock Repurchases The following table sets forth information for the quarter ended December 31, 2025 with respect to common shares repurchased and common shares withheld to satisfy withholding obligations upon the exercise of stock options and vesting of restricted stock awards/units.
(included through 5/15/2024 when it was acquired by Provident Financial Services), OceanFirst Financial Corp., Orrstown Financial Services, Inc., Peoples Financial Services Corp., Provident Financial Services, Inc., Sandy Spring Bancorp, Inc., The First of Long Island Corporation, Tompkins Financial Corporation, Univest Financial Corporation, and Washington Trust Bancorp, Inc.
(Staten Island, NY), OceanFirst Financial Corp., Orrstown Financial Services, Inc., Sandy Spring Bancorp, Inc. (included through 3/31/25 when it was acquired by Atlantic Union Bankshares), Stock Yards Bancorp, Inc., Tompkins Financial Corporation, Univest Financial Corporation, and Washington Trust Bancorp, Inc.
Removed
Sales of Unregistered Securities On September 1, 2019, the Company acquired Point View, a registered investment adviser (“RIA”) in Summit, New Jersey, which had approximately $325 million of assets under management at closing for cash and stock due on closing, and contingent post-closing payments of common stock based upon Point View’s post-acquisition performance.
Added
(included through 8/29/25 when it merged with Brookline Bancorp), Capital Bancorp, Inc., ConnectOne Bancorp, Inc., Dime Community Bancshares, Inc., Eagle Bancorp, Inc., Enterprise Bancorp, Inc. (included through 6/30/2025 when it was acquired by Independent Bank Corp.), Flushing Financial Corporation, Kearny Financial Corp., MetroCity Bankshares, Inc., Metropolitan Bank Holding Corp., Northfield Bancorp, Inc.
Removed
The contingent payments, to the extent earned, were payable on or about September 15 of 2020, 2021, 2022 and 2023. The Company issued 14,220 shares of Company common stock to the Point View shareholder on each of September 17, 2021, and September 19, 2022.
Added
The timing and amount of shares repurchased will depend on certain factors, including but not limited to, market conditions, the Company's liquidity and capital requirements and alternative uses of capital. Item 6. [RES ERVED]
Removed
On August 8, 2023, the Company issued 19,197 shares of Company common stock to the Point View shareholder. These Company shares were issued without registration under the Securities Act of 1933, as amended (the “Securities Act”) in reliance on Section 4(a)(2) of the Securities Act. Item 6. [RES ERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYears Ended December 31, Change (In thousands) 2024 2023 2022 2024 vs 2023 2023 vs 2022 Total fee income $ 61,458 $ 55,747 $ 54,651 $ 5,711 $ 1,096 Compensation and benefits (included in Operating Expenses section above) 29,859 29,425 27,501 434 1,924 Other operating expense (included in Operating Expenses section above) 11,570 11,876 13,021 (306 ) (1,145 ) Assets under management and/or administration (AUM) (market value) 11.9 billion 10.9 billion 9.9 billion 2024 compared to 2023 The market value of assets under management and/or administration (“AUM”) at December 31, 2024 and 2023 was $11.9 billion and $10.9 billion, respectively, an increase of 9 percent, primarily due to an improved equity market and net business inflows.
Biggest changeYears Ended December 31, Change (In thousands) 2025 2024 2023 2025 vs 2024 2024 vs 2023 Total fee income $ 63,240 $ 61,458 $ 55,747 $ 1,782 $ 5,711 Assets under management and/or administration (AUM) (market value) 13.1 billion 11.9 billion 10.9 billion The following table presents a roll forward of the Wealth Management Division's assets under management and/or administration for the years ended December 31, 2025, 2024 and 2023. 2025 2024 2023 (In billions) AUM AUA AUM AUA AUM AUA Beginning AUM/AUA $ 10.6 $ 1.3 $ 9.7 $ 1.3 $ 8.6 $ 1.3 Inflows 0.9 0.1 0.6 0.2 0.7 0.3 Outflows (1.0 ) (0.2 ) (0.8 ) (0.2 ) (0.8 ) (0.4 ) Net other 0.2 0.0 0.2 (0.0 ) 0.2 0.1 Net Flows 0.1 (0.1 ) (0.1 ) (0.0 ) 0.1 (0.1 ) Market appreciation 1.2 0.1 1.0 0.1 1.0 0.1 Ending AUM/AUA 11.9 1.3 10.6 1.3 9.7 1.3 56 The following table presents a breakdown of the Wealth Management Division's assets under management and/or administration by investment class for the years ended December 31, 2025, 2024 and 2023. 2025 2024 2023 Equities 70.8 % 70.3 % 68.3 % Fixed income 19.2 18.7 19.6 Cash/other 10.0 11.0 12.1 Total 100.0 % 100.0 % 100.0 % The following tables present a breakdown of the Wealth Management Division's fee income for the years ended December 31, 2025, 2024 and 2023. 2025 2024 2023 Recurring $ 60,382 $ 57,199 $ 51,853 Nonrecurring 2,478 3,613 3,110 Brokerage 380 646 784 Total fees $ 63,240 $ 61,458 $ 55,747 2025 2024 2023 Recurring 96 % 93 % 93 % Nonrecurring 4 7 7 Total fees 100 % 100 % 100 % 2025 2024 2023 Average bps managed 0.52 % 0.54 % 0.55 % Average bps unmanaged 0.10 % 0.10 % 0.08 % 2025 compared to 2024 The market value of assets under management and/or administration (“AUM”) at December 31, 2025 and 2024 was $13.1 billion and $11.9 billion, respectively, an increase of 10 percent, primarily due to an improved equity market and modest net client inflows.
Factors may include, among others, changes in lending policies and procedures, size and composition of the portfolio, experience and depth of Management and the effect of external factors such as competition and legal and regulatory requirements, among others. The allowance is available for any loan that, in Management’s judgment, should be charged off.
Factors may include, among others, changes in lending policies and procedures, size and composition of the portfolio, experience and depth of Management and the effect of external factors such as competition and legal and regulatory requirements. The allowance is available for any loan that, in Management’s judgment, should be charged off.
(B) Interest income is presented on a tax-equivalent basis using a 21 percent federal income tax rate. (C) Loans are stated net of unearned income and include nonaccrual loans.
(B) Interest income is presented on a tax-equivalent basis using a 21 percent federal income tax rate. (C) Loans are stated net of unearned income and include nonaccrual loans.
(B) Interest income is presented on a tax-equivalent basis using a 21 percent federal income tax rate. (C) Loans are stated net of unearned income and include nonaccrual loans.
(B) Interest income is presented on a tax-equivalent basis using a 21 percent federal income tax rate. (C) Loans are stated net of unearned income and include nonaccrual loans.
The capital conservation buffer is designed to absorb losses during periods of economic stress.
The capital conservation buffer is designed to absorb losses during periods of economic stress.
(D) Net interest income on an FTE basis as a percentage of total average interest-earning assets. 31 Year Ended December 31, 2023 Average Income/Expense Yield (Dollars in thousands) Balance (FTE) (FTE) Assets: Interest-earnings assets: Investments: Taxable (A) $ 800,811 $ 19,743 2.47 % Tax-exempt (A)(B) 1,251 50 4.00 Loans (B)(C): Mortgages 562,488 19,733 3.51 Commercial mortgages 2,494,427 108,819 4.36 Commercial 2,254,617 144,141 6.39 Commercial construction 10,115 918 9.08 Installment 51,929 3,454 6.65 Home Equity 34,332 2,624 7.64 Other 257 29 11.28 Total loans 5,408,165 279,718 5.17 Federal funds sold — — — Interest-earning deposits 146,977 6,075 4.13 Total interest-earning assets 6,357,204 305,586 4.81 % Noninterest-earning assets: Cash and due from banks 8,973 Allowance for loan losses (64,149 ) Premises and equipment 23,986 Other assets 79,192 Total noninterest-earning assets 48,002 Total assets $ 6,405,206 Liabilities and shareholders’ equity: Interest-bearing deposits: Checking $ 2,777,390 $ 88,829 3.20 % Money markets 862,686 18,432 2.14 Savings 124,538 229 0.18 Certificates of deposit - retail and listing service 400,155 11,736 2.93 Subtotal interest-bearing deposits 4,164,769 119,226 2.86 Interest-bearing demand - brokered 13,973 611 4.37 Certificates of deposit - brokered 67,998 3,038 4.47 Total interest-bearing deposits 4,246,740 122,875 2.89 Borrowed funds 337,777 18,204 5.39 Finance lease liability 4,018 191 4.75 Subordinated debt 133,127 6,651 5.00 Total interest-bearing liabilities 4,721,662 147,921 3.13 % Noninterest-bearing liabilities: Demand deposits 1,040,403 Accrued expenses and other liabilities 86,193 Total noninterest-bearing liabilities 1,126,596 Shareholders’ equity 556,948 Total liabilities and shareholders’ equity $ 6,405,206 Net interest income $ 157,665 Net interest spread 1.68 % Net interest margin (D) 2.48 % (A) Average balances for available for sale securities are based on amortized cost.
(D) Net interest income on an FTE basis as a percentage of total average interest-earning assets. 35 Year Ended December 31, 2023 Average Income/Expense Yield (Dollars in thousands) Balance (FTE) (FTE) Assets: Interest-earnings assets: Investments: Taxable (A) $ 800,811 $ 19,743 2.47 % Tax-exempt (A)(B) 1,251 50 4.00 Loans (B)(C): Mortgages 562,488 19,733 3.51 Commercial mortgages 2,494,427 108,819 4.36 Commercial 2,254,617 144,141 6.39 Commercial construction 10,115 918 9.08 Installment 51,929 3,454 6.65 Home Equity 34,332 2,624 7.64 Other 257 29 11.28 Total loans 5,408,165 279,718 5.17 Federal funds sold — — — Interest-earning deposits 146,977 6,075 4.13 Total interest-earning assets 6,357,204 305,586 4.81 % Noninterest-earning assets: Cash and due from banks 8,973 Allowance for loan losses (64,149 ) Premises and equipment 23,986 Other assets 79,192 Total noninterest-earning assets 48,002 Total assets $ 6,405,206 Liabilities and shareholders’ equity: Interest-bearing deposits: Checking $ 2,777,390 $ 88,829 3.20 % Money markets 862,686 18,432 2.14 Savings 124,538 229 0.18 Certificates of deposit - retail and listing service 400,155 11,736 2.93 Subtotal interest-bearing deposits 4,164,769 119,226 2.86 Interest-bearing demand – brokered 13,973 611 4.37 Certificates of deposit – brokered 67,998 3,038 4.47 Total interest-bearing deposits 4,246,740 122,875 2.89 Borrowed funds 337,777 18,204 5.39 Finance lease liability 4,018 191 4.75 Subordinated debt 133,127 6,651 5.00 Total interest-bearing liabilities 4,721,662 147,921 3.13 % Noninterest-bearing liabilities: Demand deposits 1,040,403 Accrued expenses and other liabilities 86,193 Total noninterest-bearing liabilities 1,126,596 Shareholders’ equity 556,948 Total liabilities and shareholders’ equity $ 6,405,206 Net interest income $ 157,665 Net interest spread 1.68 % Net interest margin (D) 2.48 % (A) Average balances for available for sale securities are based on amortized cost.
The Bank requires an independent appraisal, an assessment of the property’s condition, and appropriate environmental due diligence. With all commercial real estate loans, the Bank’s standard practice is to require a depository relationship. e) 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.
The Bank 46 requires an independent appraisal, an assessment of the property’s condition, and appropriate environmental due diligence. With all commercial real estate loans, the Bank’s standard practice is to require a depository relationship. e) 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.
Credit losses can impact multiple parts of the income statement including an increase in the provision for credit losses, loss of interest/lease/rental income and/or via higher costs and expenses related to the repossession, refurbishment, re-marketing and or re-leasing of assets. h ) Construction. The Bank selectively provides commercial construction loans for properties located in the Tri-state area.
Credit losses can impact multiple parts of the income statement including an increase in the provision for credit losses, loss of interest/lease/rental income and/or via higher costs and expenses related to the repossession, refurbishment, re-marketing and or re-leasing of assets. 47 h) Construction . The Bank selectively provides commercial construction loans for properties located in the Tri-state area.
LTVs and combined LTVs are capped at 70 percent for JLLs and 75 percent for home equity lines of credit if the property type is a primary residence. All applications for JLLs adhere to applicable underwriting standards and guidelines. Exceptions can be made to these guidelines with compensating factors that mitigate the risk associated with the exception.
LTVs and combined LTVs are capped at 75 percent for home equity lines of credit if the property type is a primary residence. All applications for JLLs adhere to applicable underwriting standards and guidelines. Exceptions can be made to these guidelines with compensating factors that mitigate the risk associated with the exception.
The Company’s liquidity risk management is intended to ensure the Company has adequate funding and liquidity to support its assets across a range of market environments and conditions, including stressed conditions. Principal sources of liquidity 52 include cash, temporary investments, securities available for sale, customer deposit inflows, loan repayments and secured borrowings.
The Company’s liquidity risk management is intended to ensure the Company has adequate funding and liquidity to support its assets across a range of market environments and conditions, including stressed conditions. Principal sources of liquidity include cash, temporary investments, securities available for sale, customer deposit inflows, loan repayments and secured borrowings.
PCC provides term loans and leases secured by assets financed for mid-size and large companies based in the U.S. Facilities tend to be fully drawn under fixed-rate terms. PCC serves a broad range of industries including transportation, manufacturing, heavy construction and utilities.
PCC provides term loans and leases secured by assets financed for small, mid-size and large companies based in the U.S. Facilities tend to be fully drawn under fixed-rate terms. PCC serves a broad range of industries including transportation, manufacturing, heavy construction and utilities.
Increases in vacancy rates, interest rates or other changes in general economic conditions can have an impact on the borrower and their ability to repay the loan. Certain markets, such as the Boroughs of New York City, are rent regulated, and as such, feature rents that are below market rates.
Increases in vacancy rates, interest rates or other changes in general economic and political conditions can have an impact on the borrower and their ability to repay the loan. Certain markets, such as the Boroughs of New York City, are rent regulated, and as such, feature rents that are below market rates.
Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance via a quantitative analysis, which considers available information from internal and external sources related to past loan loss and prepayment experience and current conditions, as well as the incorporation of reasonable and supportable forecasts.
Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance via a quantitative analysis, which considers available information from internal and external sources related to past loan loss and prepayment experience and current economic conditions, as well as the incorporation of reasonable and supportable economic forecasts.
Further, real estate values could drop significantly and cause the value of the property to fall below the loan amount, creating additional potential exposure for the Bank. b) Junior Lien Loan on Residence (which include home equity lines of credit) .
Further, real estate values could drop significantly and cause the value of the property to fall below the loan amount, creating additional potential exposure for the Bank. 45 b) Junior Lien Loan on Residence (which include home equity lines of credit) .
Loans are primarily originated in New Jersey and the boroughs of New York City and, to a lesser extent, Pennsylvania and Delaware. The Company also offers equipment financing loan and leases that are originated nationally.
Loans are primarily originated in New Jersey and the boroughs of New York City and, to a lesser extent, Pennsylvania. The Company also offers equipment financing loan and leases that are originated nationally.
Voluntary share purchases in the Reinvestment Plan can be filled from the Company’s authorized but unissued shares and/or in the open market, at the discretion of the Company. All shares purchased through the Plan in both 2024 and 2023 were purchased in the open market. Management believes the Company’s capital position and capital ratios are adequate at December 31, 2024.
Voluntary share purchases in the Reinvestment Plan can be filled from the Company’s authorized but unissued shares and/or in the open market, at the discretion of the Company. All shares purchased through the Plan in both 2025 and 2024 were purchased in the open market. Management believes the Company’s capital position and capital ratios are adequate at December 31, 2025.
The loans are generally secured by business assets such as accounts receivable, inventory, business vehicles and equipment as well as the stock of the company, if privately held. In addition, these loans often include commercial real estate as collateral to strengthen the Bank’s position and further mitigate risk.
The loans are generally secured by business assets such as accounts receivable, inventory, business vehicles and equipment as well as the stock of the company, if privately held. In addition, these loans may include commercial real estate as collateral to strengthen the Bank’s position and further mitigate risk.
Prior to January 1, 2022, the calculation was based on the incurred loss methodology. Provision to roll forward the ACL excludes a provision of $4,000, a credit of $65,000 and a provision of $450,000 at December 31, 2024, 2023 and 2022, respectively, related to off-balance sheet commitments.
Prior to January 1, 2022, the calculation was based on the incurred loss methodology. Provision to roll forward the ACL excludes a credit of $83,000, a provision of $4,000, a credit of $65,000 and a provision of $450,000 at December 31, 2025, 2024, 2023 and 2022, respectively, related to off-balance sheet commitments.
The Company provides loans that are partially guaranteed by the SBA, to provide working capital and/or finance the purchase of equipment, inventory or commercial real estate and that could be used for start-up business. All SBA loans are underwritten and documented as prescribed by the SBA.
The Company provides loans that are partially guaranteed by the SBA, to provide working capital and/or finance the purchase of equipment, inventory or commercial real estate and that could be used for start-up businesses. All SBA loans are underwritten and documented as prescribed by the SBA.
This amount was adjusted to exclude $339 million of public fund deposit balances, which are fully-collateralized by securities and an FHLBNY letter of credit. The Company continues to leverage interest rate swaps to extend the duration to the matched deposits.
This amount was adjusted to exclude $317 million of public fund deposit balances, which are fully-collateralized by securities and an FHLBNY letter of credit. The Company continues to leverage interest rate swaps to extend the duration to the matched deposits.
Additionally, the Company sold its Visa B shares, which resulted in a positive fair value adjustment to equity securities of $953,000 recognized in the Consolidated Statement of Income during the year ended December 31, 2024.
Additionally, the Company sold its Visa B shares, which resulted in a positive fair value adjustment to equity securities of $953,000 recognized in the Consolidated Statements of Income during the year ended December 31, 2024.
Includes $6.9 million for one equipment lease principally due to administrative issues with the servicer and at the lessee/borrower at December 31, 2021. (B) On January 1, 2023, the Company adopted Accounting Standards Update 2022-02, which replaced the accounting and recognition of TDRs.
Included $6.9 million for one equipment lease principally due to administrative issues with the servicer and at the lessee/borrower at December 31, 2021. 49 (B) On January 1, 2023, the Company adopted Accounting Standards Update 2022-02, which replaced the accounting and recognition of TDRs.
Officers from the wealth management division are available to provide wealth management, trust and investment services at the Bank’s headquarters in Bedminster, New Jersey at private 53 banking locations in Morristown, Princeton, Red Bank, Summit and Teaneck, New Jersey, in New York City and at the Bank’s subsidiary, PGB Trust & Investments of Delaware in Greenville, Delaware.
Officers from the wealth management division are available to provide wealth management, trust and investment services at the Bank’s headquarters in Bedminster, New Jersey at private banking locations in Morristown, Princeton, Red Bank, Summit and Teaneck, New Jersey, in New York City, in Long Island and at the Bank’s subsidiary, PGB Trust & Investments of Delaware in Greenville, Delaware.
Within the various economic scenarios considered for this hypothetical sensitivity analysis, as of December 31, 2024, the quantitative estimate of the allowance for credit loss for collectively evaluated loans would increase by approximately $23 million under sole consideration of an adverse Moody’s economic forecast, which when stressed, resulted in the national unemployment rate increasing to 8.2 percent and negative growth for national GDP of approximately 2.5 percent.
Within the various economic scenarios considered for this hypothetical sensitivity analysis, as of December 31, 2025, the quantitative estimate of the allowance for credit loss for collectively evaluated loans would increase by approximately $23 million under sole consideration of an adverse Moody’s economic forecast, which when stressed, resulted in the national unemployment rate increasing to 8.3 percent and negative growth for national GDP of approximately 2.6 percent.
Commercial mortgage loans are generally made with an initial fixed rate with periodic rate resets every five or seven years over an underlying market index. Resets may not be automatic and subject to re-approval. Commercial mortgage loan terms include prepayment penalties and generally require that the Bank escrow for real estate taxes.
Commercial mortgage loans are generally made with an initial fixed rate with periodic rate resets at five years over an underlying market index. Resets may not be automatic and are subject to re-approval. Commercial mortgage loan terms include prepayment penalties and generally require that the Bank escrow for real estate taxes.
Actual results may differ materially from such 25 forward-looking statements.
Actual results may differ materially from such forward-looking statements.
The following table presents certain key aspects of the Wealth Management Division's performance for the years ended December 31, 2024, 2023 and 2022.
The following table presents certain key aspects of the Wealth Management Division's performance for the years ended December 31, 2025, 2024 and 2023.
Accordingly, the collectability of a substantial portion of the carrying value of the Company’s loan portfolio is susceptible to changes in local market conditions and any adverse economic conditions. Future adjustments to the provision for credit losses and allowance for credit losses may be necessary due to economic, operating, regulatory and other conditions beyond the Company’s control.
Accordingly, the collectability of a substantial portion of the Company’s loan portfolio is susceptible to changes in local market conditions, rent control regulations and any adverse economic conditions. Future adjustments to the provision for credit losses and the allowance for credit losses may be necessary due to economic, operating, regulatory and other conditions beyond the Company’s control.
The Bank’s loan policy allows loan to appraised value ratios of up to 75 percent and the overall portfolio average loan to value ratio was approximately 62 percent at December 31, 2024 based on appraisals at the time of origination or at renewal or if any update is required per regulations.
The Bank’s loan policy allows loan to appraised value ratios of up to 75 percent and the overall portfolio average loan to value ratio was approximately 60 percent at December 31, 2025 based on appraisals at the time of origination or at renewal or if any update is required per regulations.
Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to: • our ability to successfully grow our business and implement our strategic plan, including our ability to generate revenues to offset the increased personnel and other costs related to the strategic plan; • the impact of anticipated higher operating expenses in 2025 and beyond; • our ability to successfully integrate wealth management firm and team acquisitions; • our ability to successfully integrate our expanded employee base; • an unexpected decline in the economy, in particular in our New Jersey and New York market areas, including potential recessionary conditions; • declines in our net interest margin caused by the interest rate environment and/or our highly competitive market; • declines in the value in our investment portfolio; • impact from a pandemic event on our business, operations, customers, allowance for credit losses and capital levels; • higher than expected increases in our allowance for credit losses; • higher than expected increases in credit losses or in the level of delinquent, nonperforming, classified and criticized loans; • inflation and changes in interest rates, which may adversely impact our margins and yields, reduce the fair value of our financial instruments, reduce our loan originations and lead to higher operating costs; • decline in real estate values within our market areas; • legislative and regulatory actions (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Basel III and related regulations) that may result in increased compliance costs; • the imposition of tariffs or other domestic or international governmental policies; • successful cyberattacks against our IT infrastructure and that of our IT and third-party providers; • higher than expected FDIC insurance premiums; • adverse weather conditions; • the current or anticipated impact of military conflict, terrorism or other geopolitical events; • our inability to successfully generate new business and brand recognition in new geographic markets, including our expansion into New York City; • a reduction in our lower-cost funding sources; • changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio; • our inability to adapt to technological changes; • claims and litigation pertaining to fiduciary responsibility, environmental laws and other matters; • our inability to retain key employees; • demand for loans and deposits in our market areas; • adverse changes in securities markets; • changes in new York City rent regulation law; • changes in governmental regulation, including, but not limited to, any increase in FDIC insurance premiums and changes in the monetary policies of the U.S.
Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to: • our ability to successfully grow our business and implement our strategic plan, including our ability to generate revenues to offset the increased personnel and other costs related to the strategic plan; • the impact of anticipated higher operating expenses in 2026 and beyond; • our ability to successfully integrate wealth management firm and team acquisitions; • our ability to successfully integrate our expanded employee base; 28 • a decline in the economy, in particular in our New Jersey and New York market areas, including potential recessionary conditions; • declines in our net interest margin caused by the interest rate environment and/or our highly competitive market; • declines in the value in our investment portfolio; • impact from a pandemic event on our business, operations, customers, allowance for credit losses and/or capital levels; • increases in our allowance for credit losses; • changes in the methodology and assumptions used to calculate the allowance for credit losses; • higher than expected increases in credit losses or in the level of delinquent, nonperforming, classified and criticized loans or charge-offs; • inflation and changes in interest rates, which may adversely impact our margins and yields, reduce the fair value of our financial instruments, reduce our loan originations and lead to higher operating costs; • decline in real estate values within our market areas; • legislative and regulatory actions (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Basel III and related regulations) that may result in increased compliance costs; • the imposition of tariffs or other domestic or international governmental policies and retaliatory responses; • the impact of any federal government shutdown; • the failure to maintain current technologies and/or to successfully implement future information technology enhancements; • successful cyberattacks against our IT infrastructure and that of our IT and third-party providers; • increased FDIC insurance premiums; • adverse weather conditions; • the current or anticipated impact of military conflict, terrorism or other geopolitical events; • our inability to successfully generate new business and brand recognition in new geographic markets, including our expansion into New York City and Long Island; • a reduction in our lower-cost funding sources; • changes in liquidity, including the size and composition of our deposit portfolio, including the percentage of uninsured deposits in the portfolio; • our inability to adapt to technological changes; • claims and litigation pertaining to fiduciary responsibility, environmental laws and other matters; • our inability to retain key employees; • demand for loans and deposits in our market areas; • adverse changes in securities markets; • changes in new York City rent regulation law; • changes in governmental regulation, including, but not limited to, changes in the monetary and fiscal policies of the U.S.
The Company had one equity security (a CRA investment security) with a fair value of $13.0 million and $13.2 million at December 31, 2024 and 2023, respectively, with changes in fair value recognized in the Consolidated Statements of Income.
The Company had one equity security (a CRA investment security) with a fair value of $13.5 million and $13.0 million at December 31, 2025 and 2024, respectively, with changes in fair value recognized in the Consolidated Statements of Income.
As of December 31, 2024, the Company had approximately $3.2 billion of external borrowing capacity available on a same day basis (subject to any practical constraints affecting the FHLB or FRB), which when combined with balance sheet liquidity provided the Company with 282 percent coverage of our uninsured/unprotected deposits.
As of December 31, 2025, the Company had approximately $3.63 billion of external borrowing capacity available on a same day basis (subject to any practical constraints affecting the FHLB or FRB), which when combined with balance sheet liquidity provided the Company with 244 percent coverage of our uninsured/unprotected deposits.
The Company’s net interest income, spread and margin are affected by regulatory, economic and competitive factors that influence interest rates, loan demand and deposit flows and levels of nonperforming assets. 30 The following table compares the average balance sheets, interest rate spreads and net interest margins for the years ended December 31, 2024, 2023 and 2022 (on a fully tax-equivalent basis "FTE"): Year Ended December 31, 2024 Average Income/Expense Yield (Dollars in thousands) Balance (FTE) (FTE) Assets: Interest-earnings assets: Investments: Taxable (A) $ 849,933 $ 23,402 2.75 % Tax-exempt (A)(B) — — — Loans (B)(C): Mortgages 582,024 23,017 3.95 Commercial mortgages 2,406,726 107,659 4.47 Commercial 2,216,401 151,610 6.84 Commercial construction 18,647 1,570 8.42 Installment 70,852 4,814 6.79 Home Equity 38,321 3,113 8.12 Other 246 25 10.16 Total loans 5,333,217 291,808 5.47 Federal funds sold — — — Interest-earning deposits 297,448 13,644 4.59 Total interest-earning assets 6,480,598 328,854 5.07 % Noninterest-earning assets: Cash and due from banks 8,517 Allowance for loan losses (69,372 ) Premises and equipment 25,705 Other assets 110,938 Total noninterest-earning assets 75,788 Total assets $ 6,556,386 Liabilities and shareholders’ equity: Interest-bearing deposits: Checking $ 3,149,550 $ 118,497 3.76 % Money markets 842,606 24,851 2.95 Savings 105,351 410 0.39 Certificates of deposit - retail and listing service 500,842 20,984 4.19 Subtotal interest-bearing deposits 4,598,349 164,742 3.58 Interest-bearing demand - brokered 10,000 522 5.22 Certificates of deposit - brokered 58,425 2,950 5.05 Total interest-bearing deposits 4,666,774 168,214 3.60 Borrowed funds 65,299 3,848 5.89 Finance lease liability 2,207 89 4.03 Subordinated debt 133,413 6,644 4.98 Total interest-bearing liabilities 4,867,693 178,795 3.67 % Noninterest-bearing liabilities: Demand deposits 998,497 Accrued expenses and other liabilities 102,197 Total noninterest-bearing liabilities 1,100,694 Shareholders’ equity 587,999 Total liabilities and shareholders’ equity $ 6,556,386 Net interest income $ 150,059 Net interest spread 1.40 % Net interest margin (D) 2.32 % (A) Average balances for available for sale securities are based on amortized cost.
(D) Net interest income on an FTE basis as a percentage of total average interest-earning assets. 34 Year Ended December 31, 2024 Average Income/Expense Yield (Dollars in thousands) Balance (FTE) (FTE) Assets: Interest-earnings assets: Investments: Taxable (A) $ 849,933 $ 23,402 2.75 % Tax-exempt (A)(B) — — — Loans (B)(C): Mortgages 582,024 23,017 3.95 Commercial mortgages 2,406,726 107,659 4.47 Commercial 2,216,401 151,610 6.84 Commercial construction 18,647 1,570 8.42 Installment 70,852 4,814 6.79 Home Equity 38,321 3,113 8.12 Other 246 25 10.16 Total loans 5,333,217 291,808 5.47 Federal funds sold — — — Interest-earning deposits 297,448 13,644 4.59 Total interest-earning assets 6,480,598 328,854 5.07 % Noninterest-earning assets: Cash and due from banks 8,517 Allowance for loan losses (69,372 ) Premises and equipment 25,705 Other assets 110,938 Total noninterest-earning assets 75,788 Total assets $ 6,556,386 Liabilities and shareholders’ equity: Interest-bearing deposits: Checking $ 3,149,550 $ 118,497 3.76 % Money markets 842,606 24,851 2.95 Savings 105,351 410 0.39 Certificates of deposit - retail and listing service 500,842 20,984 4.19 Subtotal interest-bearing deposits 4,598,349 164,742 3.58 Interest-bearing demand - brokered 10,000 522 5.22 Certificates of deposit - brokered 58,425 2,950 5.05 Total interest-bearing deposits 4,666,774 168,214 3.60 Borrowed funds 65,299 3,848 5.89 Finance lease liability 2,207 89 4.03 Subordinated debt 133,413 6,644 4.98 Total interest-bearing liabilities 4,867,693 178,795 3.67 % Noninterest-bearing liabilities: Demand deposits 998,497 Accrued expenses and other liabilities 102,197 Total noninterest-bearing liabilities 1,100,694 Shareholders’ equity 587,999 Total liabilities and shareholders’ equity $ 6,556,386 Net interest income $ 150,059 Net interest spread 1.40 % Net interest margin (D) 2.32 % (A) Average balances for available for sale securities are based on amortized cost.
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 per year until December 22, 2025.
The 2020 Notes are non-callable for five years, have a stated maturity of December 22, 2030, and had a fixed rate of 3.50 percent per year until December 22, 2025.
The Company is a limited partner in a Small Business Investment Company (“SBIC”). As of December 31, 2024, the Company had unfunded commitments of $9.4 million for its investment in SBIC qualified funds. OFF-BALANCE SHEET ARRANGEMENTS : The following table shows the amounts and expected maturities of significant commitments, consisting primarily of letters of credit, as of December 31, 2024.
The Company is a limited partner in a Small Business Investment Company (“SBIC”). As of December 31, 2025, the Company had unfunded commitments of $6.7 million for its investment in SBIC qualified funds. OFF-BALANCE SHEET ARRANGEMENTS : The following table shows the amounts and expected maturities of significant commitments, consisting primarily of letters of credit, as of December 31, 2025.
Other liquidity sources include loan and security sales and loan participations. Management actively monitors and manages the Company’s liquidity position and believes it is sufficient to meet future needs. Cash and cash equivalents, including federal funds sold and interest-earning deposits, totaled $391.4 million at December 31, 2024.
Other liquidity sources include loan and security sales and loan participations. Management actively monitors and manages the Company’s liquidity position and believes it is sufficient to meet future needs. Cash and cash equivalents, including federal funds sold and interest-earning deposits, totaled $187.8 million at December 31, 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 SOFR plus 326 basis points, payable quarterly in arrears. Debt issuance costs incurred totaled $1.9 million and are being amortized to maturity.
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 SOFR plus 326 basis points, payable quarterly in arrears (which was 6.93 percent at December 31, 2025). Debt issuance costs incurred totaled $1.9 million and are being amortized to maturity.
(B) The December 31, 2024, 2023, 2022 and 2021 ACL coverage ratios include PPP loans of $297,000, $1.0 million, $1.7 million and $13.8 million, respectively. 45 The following table shows the allocation of the allowance for credit losses and the percentage of each loan category, by collateral type, to total loans as of December 31, of the years indicated: % of % of % of % of % of Loan Loan Loan Loan Loan Category Category Category Category Category To Total To Total To Total To Total To Total (Dollars in thousands) 2024 Loans 2023 Loans 2022 Loans 2021 Loans 2020 Loans Residential $ 4,578 11.9 $ 4,108 11.5 $ 3,048 10.7 $ 1,520 11.3 $ 3,138 13.0 Commercial and other 67,230 86.7 60,911 87.3 57,244 88.5 59,962 87.8 63,892 86.0 Consumer and other 1,184 1.4 869 1.2 537 0.8 215 0.9 279 1.0 Total $ 72,992 100.0 $ 65,888 100.0 $ 60,829 100.0 $ 61,697 100.0 $ 67,309 100.0 The portion of the allowance for credit losses allocated to loans collectively evaluated for impairment, commonly referred to as general reserves, was $60.3 million at December 31, 2024 and $61.3 million at December 31, 2023.
(B) The December 31, 2024, 2023, 2022 and 2021 ACL coverage ratios include PPP loans of $297,000, $1.0 million, $1.7 million and $13.8 million, respectively. 48 The following table shows the allocation of the allowance for credit losses and the percentage of each loan category, by collateral type, to total loans as of December 31, of the years indicated: % of % of % of % of % of Loan Loan Loan Loan Loan Category Category Category Category Category To Total To Total To Total To Total To Total (Dollars in thousands) 2025 Loans 2024 Loans 2023 Loans 2022 Loans 2021 Loans Residential $ 5,536 11.1 $ 4,578 11.9 $ 4,108 11.5 $ 3,048 10.7 $ 1,520 11.3 Commercial and other 62,311 85.9 67,230 86.7 60,911 87.3 57,244 88.5 59,962 87.8 Consumer and other 3,192 3.0 1,184 1.4 869 1.2 537 0.8 215 0.9 Total $ 71,039 100.0 $ 72,992 100.0 $ 65,888 100.0 $ 60,829 100.0 $ 61,697 100.0 The portion of the allowance for credit losses allocated to loans collectively evaluated for impairment, commonly referred to as general reserves, was $59.0 million at December 31, 2025 and $60.3 million at December 31, 2024.
The decrease in the average balance of borrowings from $337.8 million to $65.3 million for 2024 was driven by the growth in client deposits led by the Company's expansion into New York City, which were used to pay down borrowings.
The decrease in the average balance of borrowings from $65.3 million to $12.1 million for 2025 was driven by the growth in client deposits led by the Company's expansion into New York City, which were used to pay down borrowings.
The Company recorded an unrealized loss of $125,000 for the year ended December 31, 2024, as compared to a $181,000 unrealized gain for the year ended December 31, 2023.
The Company recorded an unrealized gain of $418,000 for the year ended December 31, 2025, as compared to a $125,000 unrealized loss for the year ended December 31, 2024.
At December 31, 2024, the Company had transacted pay fixed, receive floating interest rate swaps totaling $360.0 million in notional amount.
At December 31, 2025, the Company had transacted pay fixed, receive floating interest rate swaps totaling $305.0 million in notional amount.
Generally, rent regulated properties are characterized by relatively stable 42 occupancy levels and longer-term tenants. It is noted, however, that post Covid, New York City rent regulated buildings have had an increased level of non-paying tenants with a very protracted eviction process, which has negatively impacted rent collections.
Historically, rent regulated properties have been characterized by relatively stable occupancy levels and longer-term tenants. It is noted, however, New York City rent regulated buildings have had an increased level of non-paying tenants with a very protracted eviction process, which has negatively impacted rent collections.
In addition, the Company had $784.5 million in securities designated as available for sale at December 31, 2024. These securities can be sold, or used as collateral for borrowings, in response to liquidity concerns.
In addition, the Company had $774.2 million in securities designated as available for sale at December 31, 2025. These securities can be sold, or used as collateral for borrowings, in response to liquidity concerns.
The following table presents the credit loss experience, by loan type, during the years ended December 31: (Dollars in thousands) 2024 2023 2022 2021 2020 Average loans outstanding $ 5,327,594 $ 5,396,212 $ 5,105,200 $ 4,494,473 $ 4,552,358 Allowance for credit losses at beginning of year (A) $ 65,888 $ 60,829 $ 61,697 $ 67,309 $ 43,676 Day one CECL adjustment — — (5,536 ) — — Loans charged-off during the period: Residential mortgage 43 — — 12 559 Commercial mortgage 5,379 3,422 1,450 7,137 1,485 Commercial 345 5,594 — 5,019 7,132 Home equity lines of credit — — 3 — — Consumer and other 39 139 53 80 27 Total loans charged-off 5,806 9,155 1,506 12,248 9,203 Recoveries during the period: Residential mortgage — 52 15 — 373 Commercial mortgage — — — — 31 Commercial 5,409 — 254 66 17 Home equity lines of credit — — — 85 11 Consumer and other 5 6 2 10 4 Total recoveries 5,414 58 271 161 436 Net charge-offs/(recoveries) 392 9,097 1,235 12,087 8,767 Provision charge to expense 7,496 14,156 5,903 6,475 32,400 Allowance for credit losses at end of year $ 72,992 $ 65,888 $ 60,829 $ 61,697 $ 67,309 Ratios: Allowance for credit losses/total loans (B) 1.32 % 1.21 % 1.15 % 1.28 % 1.54 % Allowance for loans collectively evaluated/total loans (B) 1.09 % 1.13 % 1.12 % 1.20 % 1.48 % Nonaccrual loans/total loans (B) 1.82 % 1.13 % 0.36 % 0.32 % 0.26 % Allowance for credit losses/ total nonperforming loans 72.87 % 107.44 % 320.59 % 396.18 % 589.91 % Net charge offs/average loans: Residential mortgage 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Commercial mortgage 0.10 % 0.06 % 0.03 % 0.16 % 0.03 % Commercial -0.10 % 0.10 % 0.00 % 0.11 % 0.16 % Home equity lines of credit 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Consumer and other 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Total net charge offs/average loans 0.01 % 0.17 % 0.02 % 0.27 % 0.19 % (A) Commencing on January 1, 2022, the allowance calculation is based on the CECL methodology.
The following table presents the credit loss experience, by loan type, during the years ended December 31: (Dollars in thousands) 2025 2024 2023 2022 2021 Average loans outstanding $ 5,837,009 $ 5,327,594 $ 5,396,212 $ 5,105,200 $ 4,494,473 Allowance for credit losses at beginning of year (A) $ 72,992 $ 65,888 $ 60,829 $ 61,697 $ 67,309 Day one CECL adjustment — — — (5,536 ) — Loans charged-off during the period: Residential mortgage — 43 — — 12 Commercial mortgage 12,991 5,379 3,422 1,450 7,137 Commercial 13,880 345 5,594 — 5,019 Home equity lines of credit — — — 3 — Consumer and other 37 39 139 53 80 Total loans charged-off 26,908 5,806 9,155 1,506 12,248 Recoveries during the period: Residential mortgage — — 52 15 — Commercial mortgage 24 — — — — Commercial 1,286 5,409 — 254 66 Home equity lines of credit — — — — 85 Consumer and other 44 5 6 2 10 Total recoveries 1,354 5,414 58 271 161 Net charge-offs/(recoveries) 25,554 392 9,097 1,235 12,087 Provision charge to expense 23,601 7,496 14,156 5,903 6,475 Allowance for credit losses at end of year $ 71,039 $ 72,992 $ 65,888 $ 60,829 $ 61,697 Ratios: Allowance for credit losses/total loans (B) 1.14 % 1.32 % 1.21 % 1.15 % 1.28 % Allowance for loans collectively evaluated/total loans (B) 0.94 % 1.09 % 1.13 % 1.12 % 1.20 % Nonaccrual loans/total loans (B) 1.09 % 1.82 % 1.13 % 0.36 % 0.32 % Allowance for credit losses/ total nonperforming loans 104.10 % 72.87 % 107.44 % 320.59 % 396.18 % Net charge offs/average loans: Residential mortgage 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Commercial mortgage 0.22 % 0.10 % 0.06 % 0.03 % 0.16 % Commercial 0.22 % -0.10 % 0.10 % 0.00 % 0.11 % Home equity lines of credit 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Consumer and other 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Total net charge offs/average loans 0.44 % 0.00 % 0.16 % 0.03 % 0.27 % (A) Commencing on January 1, 2022, the allowance calculation is based on the CECL methodology.
The Company generally sells the guaranteed portion of the SBA loans in the secondary market, with the non-guaranteed portion held in the loan portfolio. During 2024, the Bank sold $15.0 million of the guaranteed portion of SBA loans into the secondary market.
The Company generally sells the guaranteed portion of the SBA loans in the secondary market, with the non-guaranteed portion held in the loan portfolio. During 2025, the Bank sold $19.2 million of the guaranteed portion of SBA loans into the secondary market.
The following table presents the modified loans, by collateral type, at December 31, 2024: December 31, Number of (Dollars in thousands) 2024 Relationships Primary residential mortgage $ 648 2 Investment commercial real estate 17,838 2 Commercial and industrial 30,993 9 Total $ 49,479 13 The following table presents the modified loans, by collateral type, at December 31, 2023: December 31, Number of (Dollars in thousands) 2023 Relationships Commercial and industrial $ 3,254 2 Total $ 3,254 2 The increase in modified loans was primarily due to modifications related to investment commercial real estate and commercial and industrial credits during 2024.
The following table presents the modified loans, by collateral type, at December 31, 2025: December 31, Number of (Dollars in thousands) 2025 Relationships Primary residential mortgage $ 690 3 Multifamily property 102,374 21 Commercial and industrial 28,166 13 Total $ 131,230 37 The following table presents the modified loans, by collateral type, at December 31, 2024: December 31, Number of (Dollars in thousands) 2024 Relationships Primary residential mortgage $ 648 2 Investment commercial real estate 17,838 2 Commercial and industrial 30,993 9 Total $ 49,479 13 The increase in modified loans was primarily due to modifications related to multifamily property credits during 2025.
The Company generally sells the guaranteed portion of the SBA loans in the secondary market, with the non-guaranteed portion of SBA loans held in the loan portfolio. Gain on sale of SBA loans for 2024 decreased by $1.2 million to $1.2 million for 2024 compared to $2.4 million in 2023.
The Company generally sells the guaranteed portion of the SBA loans in the secondary market, with the non-guaranteed portion of SBA loans held in the loan portfolio. Gain on sale of SBA loans for 2025 increased by $370,000 to $1.6 million for 2025 compared to $1.2 million in 2024.
As a participant, the Company receives an equal amount of reciprocal deposits from other participating banks. Such average reciprocal deposit balances were $1.3 billion and $862.5 million for 2024 and 2023, respectively. At December 31, 2024, uninsured/unprotected deposits were approximately $1.6 billion, or 26 percent of total deposits.
As a participant, the Company receives an equal amount of reciprocal deposits from other participating banks. Such average reciprocal deposit balances were $1.92 billion and $1.31 billion for 2025 and 2024, respectively. At December 31, 2025, uninsured/unprotected deposits were approximately $1.90 billion, or 29 percent of total deposits.
Available for sale and held to maturity securities with a carrying value of $558.9 million and $99.6 million as of December 31, 2024, respectively, were pledged to secure public funds and for other purposes required or permitted by law. However, only $45.7 million of pledged securities are encumbered.
Available for sale and held to maturity securities with a carrying value of $553.2 million and $93.9 million as of December 31, 2025, respectively, were pledged to secure public funds and for other purposes required or permitted by law. However, only $46.6 55 million of pledged securities are encumbered.
Each of these loans was performing according to its modified terms as of December 31, 2024. At December 31, 2024, there were four modified loans totaling $3.6 million included in nonaccrual loans. At December 31, 2023, there was one modified loan of $3.0 million included in nonaccrual loans.
Each of these loans was performing according to its modified terms as of December 31, 2025. At December 31, 2025, there were fourteen modified loans totaling $37.2 million included in nonaccrual loans. At December 31, 2024, there were four modified loans of $3.6 million included in nonaccrual loans.
Risk characteristics associated with primary 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.
The Bank does not originate, purchase or carry any sub-prime mortgage loans. Risk characteristics associated with primary 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 catastrophic events; and divorce or death.
(B) Net interest income on a fully tax equivalent basis as a percentage of total average interest-earning assets. 2024 compared to 2023 The Company recorded net income of $33.0 million and diluted earnings per share of $1.85 for the year ended December 31, 2024, compared to net income of $48.9 million and diluted earnings per share of $2.71 for the year ended December 31, 2023.
(B) Net interest income on a fully tax equivalent basis, using a 21 percent federal income tax rate, as a percentage of total average interest-earning assets. 2025 compared to 2024 The Company recorded net income of $37.3 million and diluted earnings per share of $2.10 for the year ended December 31, 2025, compared to net income of $33.0 million and diluted earnings per share of $1.85 for the year ended December 31, 2024.
These results produced a return on average assets of 0.50 percent and 0.76 percent for 2024 and 2023, respectively, and a return on average shareholders’ equity of 5.61 percent and 8.77 percent for 2024 and 2023, respectively.
These results produced a return on average assets of 0.52 percent and 0.50 percent for 2025 and 2024, respectively, and a return on average shareholders’ equity of 5.95 percent and 5.61 percent for 2025 and 2024, respectively.
At December 31, 2024, the Company’s and the Bank’s regulatory capital ratios were all above the ratios to be considered well capitalized under regulatory guidance. 50 As a result of the enacted Economic Growth, Regulatory Relief, and Consumer Protection Act, the federal banking agencies were required to develop a “Community Bank Leverage Ratio” (the ratio of a bank’s tangible equity capital to average total consolidated assets) for financial institutions with assets of less than $10 billion.
As a result of the enacted Economic Growth, Regulatory Relief, and Consumer Protection Act, the federal banking agencies were required to develop a “Community Bank Leverage Ratio” (the ratio of a bank’s tangible equity capital to average total consolidated assets) for financial institutions with assets of less than $10 billion.
With all commercial real estate loans, the Bank’s standard practice is to require a depository relationship. f) Commercial and Industrial Loans . The Bank provides lines of credit and term loans to operating companies for business purposes.
The Bank requires an independent appraisal, an assessment of the property’s condition, and appropriate environmental due diligence. With all commercial real estate loans, the Bank’s standard practice is to require a depository relationship. f) Commercial and Industrial Loans . The Bank provides lines of credit and term loans to operating companies for business purposes.
Peapack-Gladstone Financial Corporation’s primary source of income is dividends received from the Bank. The Bank’s ability to pay dividends is governed by applicable law. At December 31, 2024, Peapack-Gladstone Financial Corporation (unconsolidated basis) had liquid assets of $20.1 million. Management believes the Company’s liquidity position and sources were adequate at December 31, 2024.
The Bank’s ability to pay dividends is governed by applicable law. At December 31, 2025, Peapack-Gladstone Financial Corporation (unconsolidated basis) had liquid assets of $15.9 million. Management believes the Company’s liquidity position and sources were adequate at December 31, 2025.
At December 31, 2024, we had no deposits that were uninsured for any reason other than being in excess of the maximum amount for federal deposit insurance. 40 The following table shows the maturity for certificates of deposit of $250,000 or more as of December 31, 2024 (in thousands): Three months or less $ 41,728 Over three months through six months 16,583 Over six months through year 63,362 Over year 15,616 Total $ 137,289 FEDERAL HOME LOAN BANK ADVANCES AND OTHER BORROWINGS: As part of our overall funding and liquidity management program, from time to time we borrow from the Federal Home Loan Bank (the "FHLB").
At December 31, 2025, we had no deposits that were uninsured for any reason other than being in excess of the maximum amount for federal deposit insurance. 43 The following table shows the maturity for certificates of deposit of $250,000 or more as of December 31, 2025 (in thousands): Three months or less $ 35,814 Over three months through six months 67,666 Over six months through year 29,943 Over year 4,648 Total $ 138,071 FEDERAL HOME LOAN BANK ADVANCES AND OTHER BORROWINGS: As part of our overall funding and liquidity management program, from time to time we borrow from the Federal Home Loan Bank (the "FHLB").
Banking institutions with a ratio of (i) CET1 to risk-weighted assets, (ii) Tier 1 capital to risk-weighted assets or (iii) total capital to risk-weighted assets above the respective minimum but below the capital conservation buffer face constraints on dividends, stock repurchases and discretionary bonus payments to executive officers based on the amount of the shortfall. 51 The Company’s regulatory capital amounts and ratios are presented in the following table: To Be Well For Capital Capitalized Under For Capital Adequacy Purposes Prompt Corrective Adequacy Including Capital Actual Action Provisions Purposes Conservation Buffer (A) (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio As of December 31, 2024: Total capital (to risk-weighted assets) 806,404 14.84 % N/A N/A $ 434,830 8.00 % $ 570,715 10.50 % Tier I capital (to risk-weighted assets) 625,830 11.51 N/A N/A 326,123 6.00 462,007 8.50 Common equity tier I (to risk-weighted assets) 625,824 11.51 N/A N/A 244,592 4.50 380,477 7.00 Tier I capital (to average assets) 625,830 9.01 N/A N/A 277,710 4.00 277,710 4.00 As of December 31, 2023: Total capital (to risk-weighted assets) $ 785,413 14.95 % N/A N/A $ 420,377 8.00 % $ 551,745 10.50 % Tier I capital (to risk-weighted assets) 600,444 11.43 N/A N/A 315,283 6.00 446,651 8.50 Common equity tier I (to risk-weighted assets) 600,432 11.43 N/A N/A 236,462 4.50 367,830 7.00 Tier I capital (to average assets) 600,444 9.19 N/A N/A 261,358 4.00 261,358 4.00 (A) The Basel Rules require the Company and the Bank to maintain a 2.5 percent “capital conservation buffer” on top of the minimum risk-weighted asset ratios.
Banking institutions with a ratio of (i) CET1 to risk-weighted assets, (ii) Tier 1 capital to risk-weighted assets or (iii) total capital to risk-weighted assets above the respective minimum but below the capital conservation buffer face constraints on dividends, stock repurchases and discretionary bonus payments to executive officers based on the amount of the shortfall. 54 The Company’s regulatory capital amounts and ratios are presented in the following table: To Be Well For Capital Capitalized Under For Capital Adequacy Purposes Prompt Corrective Adequacy Including Capital Actual Action Provisions Purposes Conservation Buffer (A) (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio As of December 31, 2025: Total capital (to risk-weighted assets) 811,375 12.68 % N/A N/A $ 511,816 8.00 % $ 671,759 10.50 % Tier I capital (to risk-weighted assets) 660,696 10.33 N/A N/A 383,862 6.00 543,805 8.50 Common equity tier I (to risk-weighted assets) 660,637 10.33 N/A N/A 287,897 4.50 447,839 7.00 Tier I capital (to average assets) 660,696 8.87 N/A N/A 298,086 4.00 298,086 4.00 As of December 31, 2024: Total capital (to risk-weighted assets) $ 806,404 14.84 % N/A N/A $ 434,830 8.00 % $ 570,715 10.50 % Tier I capital (to risk-weighted assets) 625,830 11.51 N/A N/A 326,123 6.00 462,007 8.50 Common equity tier I (to risk-weighted assets) 625,824 11.51 N/A N/A 244,592 4.50 380,477 7.00 Tier I capital (to average assets) 625,830 9.01 N/A N/A 277,710 4.00 277,710 4.00 (A) The Basel Rules require the Company and the Bank to maintain a 2.5 percent “capital conservation buffer” on top of the minimum risk-weighted asset ratios.
The following table sets forth information concerning the composition of the Company’s average balance of deposits and average interest rates paid for the following years: (Dollars in thousands) 2024 2023 2022 Noninterest-bearing demand $ 998,497 — % $ 1,040,403 — % $ 1,107,943 — % Checking 3,149,550 3.76 2,777,390 3.20 2,363,412 0.76 Savings 105,351 0.39 124,538 0.18 162,396 0.02 Money markets 842,606 2.95 862,686 2.14 1,253,032 0.49 Certificates of deposit - retail and listing service 500,842 4.19 400,155 2.93 397,128 0.75 Interest-bearing Demand - brokered 10,000 5.22 13,973 4.37 84,178 1.88 Certificates of deposit - brokered 58,425 5.05 67,998 4.47 29,778 3.16 Total deposits $ 5,665,271 2.97 % $ 5,287,143 2.32 % $ 5,397,867 0.55 % At December 31, 2024, the Company carried deposits that exceed the FDIC insurance limit of $250,000.
The following table sets forth information concerning the composition of the Company’s average balance of deposits and average interest rates paid for the following years: (Dollars in thousands) 2025 2024 2023 Noninterest-bearing demand $ 1,229,755 — % $ 998,497 — % $ 1,040,403 — % Checking 3,573,710 3.18 3,149,550 3.76 2,777,390 3.20 Savings 104,744 0.59 105,351 0.39 124,538 0.18 Money markets 999,858 2.75 842,606 2.95 862,686 2.14 Certificates of deposit - retail and listing service 433,633 3.45 500,842 4.19 400,155 2.93 Interest-bearing demand - brokered 4,740 4.43 10,000 5.22 13,973 4.37 Certificates of deposit - brokered — — 58,425 5.05 67,998 4.47 Total deposits $ 6,346,440 2.47 % $ 5,665,271 2.97 % $ 5,287,143 2.32 % At December 31, 2025, the Company carried $ 1.90 billion in deposits that exceed the FDIC insurance limit of $250,000.
As of December 31, 2024, 43 percent of the total loan portfolio consisted of C&I loans (including equipment financing), 33 percent of multifamily loans, 11 percent of commercial mortgages and 11 percent of residential mortgages. Total loans were $5.5 billion and $5.4 billion at December 31, 2024 and 2023, respectively, an increase of $83.0 million, over the previous year.
As of December 31, 2025, 44 percent of the total loan portfolio consisted of C&I loans (including equipment financing), 30 percent of multifamily loans, 12 percent of commercial mortgages and 10 percent of residential mortgages. Total loans were $6.3 billion and $5.5 billion at December 31, 2025 and 2024, respectively, an increase of $741.4 million, over the previous year.
In underwriting an investment commercial real estate loan, the Bank evaluates the property’s historical operating income as well as its projected sustainable cash flows and generally requires a minimum debt service coverage ratio that provides for an adequate cushion for unexpected or uncertain events and changes in market conditions. 43 Commercial mortgage loans are generally made with an initial fixed rate with periodic rate resets every five or seven years over an underlying market index.
In underwriting an investment commercial real estate loan, the Bank evaluates the property’s historical operating income as well as its projected sustainable cash flows and generally requires a minimum debt service coverage ratio that provides for an adequate cushion for unexpected or uncertain events and changes in market conditions.
The decrease in net income for 2024 was principally driven by increased operating expenses, which was principally attributable to the Company's expansion of our private banking model that offers a single point of contact for all banking services into New York City.
The increase in net income for 2025 was principally driven by increased net interest income partially offset by increased provision for credit losses and increased operating expenses, which was principally attributable to the expansion of our private banking model that offers a single point of contact for all banking services into the metro New York City market.
December 31, (Dollars in thousands) 2024 2023 2022 2021 2020 Loans past due 30-89 days (A) $ 4,870 $ 34,589 $ 7,592 $ 8,606 $ 5,053 Modifications $ 49,479 $ 3,254 $ — $ — $ — Troubled debt restructured loans (B) $ — $ — $ 14,318 $ 3,575 $ 4,247 Loans past due 90 days or more and still accruing interest $ — $ — $ — $ — $ — Nonaccrual loans (C) 100,168 61,324 18,974 15,573 11,410 Total nonperforming loans 100,168 61,324 18,974 15,573 11,410 Other real estate owned — — 116 — 50 Total nonperforming assets $ 100,168 $ 61,324 $ 19,090 $ 15,573 $ 11,460 Ratios: Total nonperforming loans/total loans 1.82 % 1.13 % 0.36 % 0.32 % 0.26 % Total nonperforming loans/total assets 1.43 0.95 0.30 0.26 0.19 Total nonperforming assets/total assets 1.43 0.95 0.30 0.26 0.19 46 (A) Includes $16.5 million and $4.5 million outstanding to U.S. governmental entities at December 31, 2023 and December 31, 2022, respectively.
December 31, (Dollars in thousands) 2025 2024 2023 2022 2021 Loans past due 30-89 days (A) $ 26,555 $ 4,870 $ 34,589 $ 7,592 $ 8,606 Modifications $ 131,230 $ 49,479 $ 3,254 $ — $ — Troubled debt restructured loans (B) $ — $ — $ — $ 14,318 $ 3,575 Loans past due 90 days or more and still accruing interest $ — $ — $ — $ — $ — Nonaccrual loans (C) 68,243 100,168 61,324 18,974 15,573 Total nonperforming loans 68,243 100,168 61,324 18,974 15,573 Other real estate owned — — — 116 — Total nonperforming assets $ 68,243 $ 100,168 $ 61,324 $ 19,090 $ 15,573 Ratios: Total nonperforming loans/total loans 1.09 % 1.82 % 1.13 % 0.36 % 0.32 % Total nonperforming loans/total assets 0.91 1.43 0.95 0.30 0.26 Total nonperforming assets/total assets 0.91 1.43 0.95 0.30 0.26 (A) Included $14.2 million related to three multifamily loans and $4.2 million for one equipment lease at December 31, 2025.
At or for the Years Ended December 31, Change (Dollars in thousands, except share and per share data) 2024 2023 2022 2024 vs 2023 2023 vs 2022 Results of Operations: Interest income $ 327,801 $ 304,010 $ 211,875 $ 23,791 $ 92,135 Interest expense 178,795 147,921 35,795 30,874 112,126 Net interest income 149,006 156,089 176,080 (7,083 ) (19,991 ) Provision for credit losses 7,500 14,091 6,353 (6,591 ) 7,738 Net interest income after provision for credit losses 141,506 141,998 169,727 (492 ) (27,729 ) Wealth management fee income 61,458 55,747 54,651 5,711 1,096 Other income 17,664 17,831 11,766 (167 ) 6,065 Total operating expense 175,676 148,295 133,800 27,381 14,495 Income before income tax expense 44,952 67,281 102,344 (22,329 ) (35,063 ) Income tax expense 11,964 18,427 28,098 (6,463 ) (9,671 ) Net income $ 32,988 $ 48,854 $ 74,246 $ (15,866 ) $ (25,392 ) Per Share Data: Basic earnings per common share $ 1.87 $ 2.74 $ 4.09 $ (0.87 ) $ (1.35 ) Diluted earnings per common share 1.85 2.71 4.00 (0.86 ) (1.29 ) Cash dividends declared 0.20 0.20 0.20 — — Book value end-of-period 34.45 32.90 29.92 1.55 2.98 Average common shares outstanding 17,664,640 17,849,558 18,161,605 (184,918 ) (312,047 ) Common stock equivalents (dilutive) 175,121 199,494 406,493 (24,373 ) (206,999 ) Diluted average common shares outstanding 17,839,761 18,049,052 18,568,098 (209,291 ) (519,046 ) Average equity to average assets 8.97 % 8.70 % 8.56 % 0.27 % 0.14 % Return on average assets 0.50 0.76 1.20 (0.26 ) (0.44 ) Return on average equity 5.61 8.77 14.02 (3.16 ) (5.25 ) Dividend payout ratio (A) 10.70 7.28 4.91 3.42 2.37 Net interest margin (B) 2.32 2.48 2.91 (0.16 ) (0.43 ) Noninterest expenses to average assets 2.68 2.32 2.16 0.36 0.16 Noninterest income to average assets 1.21 1.15 1.07 0.06 0.08 Balance sheet data (at period end): Total assets $ 7,011,238 $ 6,476,857 $ 6,353,593 $ 534,381 $ 123,264 Securities held to maturity 101,635 107,755 102,291 (6,120 ) 5,464 Securities available to sale 784,544 550,617 554,648 233,927 (4,031 ) Total loans 5,512,326 5,429,325 5,285,246 83,001 144,079 Allowance for credit losses 72,992 65,888 60,829 7,104 5,059 Total deposits 6,129,022 5,274,114 5,205,164 854,908 68,950 Total shareholders’ equity 605,849 583,681 532,980 22,168 50,701 Cash dividends: Common 3,530 3,558 3,645 (28 ) (87 ) Assets under management and/or administration (market value) $ 11.9 billion $ 10.9 billion $ 9.9 billion $ 1.0 billion $ 1.0 billion 29 At or for the Years Ended December 31, Change 2024 2023 2022 2024 vs 2023 2023 vs 2022 Asset quality ratios (at period end): Nonperforming loans to total loans 1.82 % 1.13 % 0.36 % 0.69 % 0.77 % Nonperforming assets to total assets 1.43 0.95 0.30 0.48 0.65 Allowance for credit losses to nonperforming loans 72.87 107.44 320.59 (34.57 ) (213.15 ) Allowance for credit losses to total loans 1.32 1.21 1.15 0.11 0.06 Net charge-offs to average loans plus other real estate owned 0.01 0.17 0.02 (0.16 ) 0.15 Liquidity and capital ratios: Average loans to average deposits 94.14 % 102.29 % 94.97 % (8.15 )% 7.32 % Total shareholders’ equity to total assets 8.64 9.01 8.39 (0.37 ) 0.62 Selected Balance Sheet Ratios of the Company: Regulatory total capital to risk-weighted assets 14.84 % 14.95 % 14.73 % (0.11 )% 0.22 % Regulatory leverage ratio 9.01 9.19 8.90 (0.18 ) 0.29 Noninterest bearing deposits to total deposits 18.16 18.16 23.94 (0.00 ) (5.78 ) Time deposits to total deposits 8.01 10.85 7.11 (2.84 ) 3.74 (A) Dividend payout ratio is calculated by dividing cash dividends by net income.
At or for the Years Ended December 31, Change (Dollars in thousands, except share and per share data) 2025 2024 2023 2025 vs 2024 2024 vs 2023 Results of Operations: Interest income $ 362,525 $ 327,801 $ 304,010 $ 34,724 $ 23,791 Interest expense 161,615 178,795 147,921 (17,180 ) 30,874 Net interest income 200,910 149,006 156,089 51,904 (7,083 ) Provision for credit losses 23,518 7,500 14,091 16,018 (6,591 ) Net interest income after provision for credit losses 177,392 141,506 141,998 35,886 (492 ) Wealth management fee income 63,240 61,458 55,747 1,782 5,711 Other income 18,845 17,664 17,831 1,181 (167 ) Total operating expense 207,168 175,676 148,295 31,492 27,381 Income before income tax expense 52,309 44,952 67,281 7,357 (22,329 ) Income tax expense 14,983 11,964 18,427 3,019 (6,463 ) Net income $ 37,326 $ 32,988 $ 48,854 $ 4,338 $ (15,866 ) Per Share Data: Basic earnings per common share $ 2.12 $ 1.87 $ 2.74 $ 0.25 $ (0.87 ) Diluted earnings per common share 2.10 1.85 2.71 0.25 (0.86 ) Cash dividends declared 0.20 0.20 0.20 — — Book value end-of-period 37.49 34.45 32.90 3.04 1.55 Average common shares outstanding 17,612,244 17,664,640 17,849,558 (52,396 ) (184,918 ) Common stock equivalents (dilutive) 137,635 175,121 199,494 (37,486 ) (24,373 ) Diluted average common shares outstanding 17,749,879 17,839,761 18,049,052 (89,882 ) (209,291 ) Average equity to average assets 8.70 % 8.97 % 8.70 % (0.27 )% 0.27 % Return on average assets 0.52 0.50 0.76 0.02 (0.26 ) Return on average equity 5.95 5.61 8.77 0.34 (3.16 ) Dividend payout ratio (A) 9.43 10.70 7.28 (1.27 ) 3.42 Net interest margin (B) 2.84 2.32 2.48 0.52 (0.16 ) Noninterest expenses to average assets 2.87 2.68 2.32 0.19 0.36 Noninterest income to average assets 1.14 1.21 1.15 (0.07 ) 0.06 Balance sheet data (at period end): Total assets $ 7,526,409 $ 7,011,238 $ 6,476,857 $ 515,171 $ 534,381 Securities held to maturity 95,862 101,635 107,755 (5,773 ) (6,120 ) Securities available to sale 774,203 784,544 550,617 (10,341 ) 233,927 Total loans 6,253,736 5,512,326 5,429,325 741,410 83,001 Allowance for credit losses 71,039 72,992 65,888 (1,953 ) 7,104 Total deposits 6,588,979 6,129,022 5,274,114 459,957 854,908 Total shareholders’ equity 658,206 605,849 583,681 52,357 22,168 Cash dividends: Common 3,521 3,530 3,558 (9 ) (28 ) Assets under management and/or administration (market value) $ 13.1 billion $ 11.9 billion $ 10.9 billion $ 1.2 billion $ 1.0 billion 32 At or for the Years Ended December 31, Change 2025 2024 2023 2025 vs 2024 2024 vs 2023 Asset quality ratios (at period end): Nonperforming loans to total loans 1.09 % 1.82 % 1.13 % (0.73 )% 0.69 % Nonperforming assets to total assets 0.91 1.43 0.95 (0.52 ) 0.48 Allowance for credit losses to nonperforming loans 104.10 72.87 107.44 31.23 (34.57 ) Allowance for credit losses to total loans 1.14 1.32 1.21 (0.18 ) 0.11 Net charge-offs to average loans plus other real estate owned 0.44 0.01 0.17 0.43 (0.16 ) Liquidity and capital ratios: Average loans to average deposits 92.10 % 94.14 % 102.29 % (2.04 )% (8.15 )% Total shareholders’ equity to total assets 8.75 8.64 9.01 0.11 (0.37 ) Selected Balance Sheet Ratios of the Company: Regulatory total capital to risk-weighted assets 12.68 % 14.84 % 14.95 % (2.16 )% (0.11 )% Regulatory leverage ratio 8.87 9.01 9.19 (0.14 ) (0.18 ) Noninterest-bearing deposits to total deposits 21.68 18.16 18.16 3.52 (0.00 ) Time deposits to total deposits 6.20 8.01 10.85 (1.81 ) (2.84 ) (A) Dividend payout ratio is calculated by dividing cash dividends by net income.
The Company continues to be impacted by the industry wide slowdown in refinancing and home purchase activity in the higher interest rate environment. Loan fee income included $3.3 million of unused commercial credit line fees in 2024 compared to $3.2 million for 2023.
The Company continues to be impacted by the industry wide slowdown in refinancing and home purchase activity due to inventory constraints and elevated mortgage rates. Loan fee income included $3.5 million of unused commercial credit line fees in 2025 compared to $3.3 million for 2024.
The net interest margin ("NIM") was 2.32 percent and 2.48 percent for the years ended December 31, 2024 and 2023, respectively, a decrease of 16 basis points year over year.
The net interest margin ("NIM") was 2.84 percent and 2.32 percent for the years ended December 31, 2025 and 2024, respectively, an increase of 52 basis points year over year.
Remaining expenses are in line with the Company’s Strategic Plan, particularly the hiring of key management and revenue-producing personnel. The Wealth Management Division currently generates adequate revenue to support the salaries, benefits and other expenses of the wealth division and Management believes it will continue to do so as the Company grows organically and/or by acquisition.
The Wealth Management Division currently generates adequate revenue to support the salaries, benefits and other expenses of the wealth division and Management believes it will continue to do so as the Company grows organically and/or by acquisition in future periods.
A net unrealized loss (net of income tax) of $72.1 million and a net unrealized loss (net of income tax) of $69.2 million were included in shareholders’ equity at December 31, 2024 and 2023, respectively.
A net unrealized loss (net of income tax) of $49.3 million and $72.1 million related to these securities were included in shareholders’ equity at December 31, 2025 and 2024, respectively.
The amortized cost and fair value of investment securities held to maturity and available for sale at December 31, 2024, 2023 and 2022 are shown below: 2024 2023 2022 (In thousands) Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Investment securities - held to maturity: U.S. government-sponsored agencies $ 40,000 $ 37,334 $ 40,000 $ 36,631 $ 40,000 $ 35,437 Mortgage-backed securities-residential (principally U.S. government-sponsored entities) 61,635 51,316 67,755 57,784 62,291 51,750 Total investment securities - held to maturity $ 101,635 $ 88,650 $ 107,755 $ 94,415 $ 102,291 $ 87,187 Investment securities - available for sale: U.S. government-sponsored agencies $ 244,813 $ 196,914 $ 244,794 $ 197,691 $ 244,774 $ 190,542 Mortgage-backed securities-residential (principally U.S. government-sponsored entities) 595,789 548,612 363,893 320,796 372,471 325,738 SBA pool securities 27,772 24,482 27,148 23,404 31,934 27,427 State and political subdivision — — — — 1,866 1,849 Corporate bond 15,500 14,536 10,000 8,726 10,000 9,092 Total investment securities - available for sale $ 883,874 $ 784,544 $ 645,835 $ 550,617 $ 661,045 $ 554,648 Total investment securities $ 985,509 $ 873,194 $ 753,590 $ 645,032 $ 763,336 $ 641,835 36 The following table presents the contractual maturities and yields of debt securities held to maturity and available for sale as of December 31, 2024.
The amortized cost and fair value of investment securities held to maturity and available for sale at December 31, 2025, 2024 and 2023 are shown below: 2025 2024 2023 (In thousands) Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Investment securities - held to maturity: U.S. government-sponsored agencies $ 40,000 $ 38,875 $ 40,000 $ 37,334 $ 40,000 $ 36,631 Mortgage-backed securities-residential (principally U.S. government-sponsored entities) 55,862 48,616 61,635 51,316 67,755 57,784 Total investment securities - held to maturity $ 95,862 $ 87,491 $ 101,635 $ 88,650 $ 107,755 $ 94,415 Investment securities - available for sale: U.S. government-sponsored agencies $ 244,833 $ 211,223 $ 244,813 $ 196,914 $ 244,794 $ 197,691 Mortgage-backed securities-residential (principally U.S. government-sponsored entities) 561,794 530,365 595,789 548,612 363,893 320,796 SBA pool securities 19,345 17,212 27,772 24,482 27,148 23,404 Corporate bond 15,500 15,403 15,500 14,536 10,000 8,726 Total investment securities - available for sale $ 841,472 $ 774,203 $ 883,874 $ 784,544 $ 645,835 $ 550,617 Total investment securities $ 937,334 $ 861,694 $ 985,509 $ 873,194 $ 753,590 $ 645,032 39 The following table presents the contractual maturities and yields of debt securities held to maturity and available for sale as of December 31, 2025.
As of December 31, (Dollars in thousands) 2024 2023 2022 Amount outstanding at end of the year $ — $ 403,814 $ 379,530 Weighted average interest rate end of the year — % 5.62 % 4.61 % Average daily balance during the year $ 65,299 $ 337,777 $ 26,631 Weighted average interest rate during the year 5.89 % 5.39 % 2.25 % Maximum month-end balance during the year $ 401,655 $ 541,796 $ 379,530 At December 31, 2024, the Company had no overnight borrowings.
As of December 31, (Dollars in thousands) 2025 2024 2023 Amount outstanding at end of the year $ 73,267 $ — $ 403,814 Weighted average interest rate end of the year 3.96 % — % 5.62 % Average daily balance during the year $ 12,067 $ 65,299 $ 337,777 Weighted average interest rate during the year 4.50 % 5.89 % 5.39 % Maximum month-end balance during the year $ 89,048 $ 401,655 $ 541,796 The Company had $73.3 million of overnight borrowings at the FHLB at a rate of 3.96 percent at December 31, 2025.
On primary residences and second home properties, LTVs range from a maximum of 80 percent for loan amounts to $2 million to 65 percent for loan amounts to $7.5 million. For investment properties, LTVs range from a maximum of 80 percent for loan amounts to $2 million to 70 percent for loan amounts to $5 million.
Maximum loan-to-value (“LTV”) is determined based on property type and loan amount. On primary residences and second home properties, LTVs range from a maximum of 80 percent for loan amounts to $2 million to 60 percent for loan amounts to $7.5 million.
Less Than More Than (In thousands) One Year 1-3 Years 3-5 Years 5 Years Total Financial letters of credit $ 16,845 $ 2,548 $ 2,992 $ — $ 22,385 Performance letters of credit 5,464 460 — — 5,924 Interest rate lock commitments-residential mortgages 18,299 — — — 18,299 Total letters of credit $ 40,608 $ 3,008 $ 2,992 $ — $ 46,608 Commitments under standby letters of credit, both financial and performance, do not necessarily represent future cash requirements, in that these commitments often expire without being drawn upon. 48 OTHER INCOME : The following table presents the major components of other income (excluding income from our wealth management operations, which is discussed separately): Years Ended December 31, Change (In thousands) 2024 2023 2022 2024 vs 2023 2023 vs 2022 Service charges and fees $ 5,317 $ 5,152 $ 4,225 $ 165 $ 927 Bank owned life insurance 1,556 1,269 1,243 287 26 Loan fee income 7,460 7,429 4,759 31 2,670 Gains on loans held for sale at fair value (mortgage banking) 163 91 483 72 (392 ) Loss on securities sale, net — — (6,609 ) — 6,609 Fair value adjustment for equity securities 828 181 (1,700 ) 647 1,881 Fee income related to loan level, back-to-back swaps — — 293 — (293 ) Gains on loans held for sale at lower of cost or fair value 23 — — 23 — Gain on sale of SBA loans 1,214 2,433 6,765 (1,219 ) (4,332 ) Corporate advisory fee income 1,032 219 1,704 813 (1,485 ) Other income 71 1,057 603 (986 ) 454 Total other income $ 17,664 $ 17,831 $ 11,766 $ (167 ) $ 6,065 2024 compared to 2023 The Company recorded total other income, excluding wealth management fee income, of $17.7 million in 2024, compared to $17.8 million for 2023, reflecting a decrease of $167,000.
Less Than More Than (In thousands) One Year 1-3 Years 3-5 Years 5 Years Total Financial letters of credit $ 49,620 $ 4,015 $ 2,518 $ — $ 56,153 Performance letters of credit 819 353 — — 1,172 Interest rate lock commitments-residential mortgages 10,635 — — — 10,635 Total letters of credit $ 61,074 $ 4,368 $ 2,518 $ — $ 67,960 Commitments under standby letters of credit, both financial and performance, do not necessarily represent future cash requirements, in that these commitments often expire without being drawn upon. 51 OTHER INCOME : The following table presents the major components of other income (excluding income from our wealth management operations, which is discussed separately): Years Ended December 31, Change (In thousands) 2025 2024 2023 2025 vs 2024 2024 vs 2023 Service charges and fees $ 4,807 $ 5,317 $ 5,152 $ (510 ) $ 165 Bank owned life insurance 1,675 1,556 1,269 119 287 Loan fee income 6,525 7,460 7,429 (935 ) 31 Gains on loans held for sale at fair value (mortgage banking) 132 163 91 (31 ) 72 Gain on securities sale, net 7 — — 7 — Fair value adjustment for equity securities 418 828 181 (410 ) 647 Fee income related to loan level, back-to-back swaps 492 — — 492 — (Loss)/gains on loans held for sale at lower of cost or fair value (364 ) 23 — (387 ) 23 Gain on sale of SBA loans 1,584 1,214 2,433 370 (1,219 ) Corporate advisory fee income 820 1,032 219 (212 ) 813 Other income 2,749 71 1,057 2,678 (986 ) Total other income $ 18,845 $ 17,664 $ 17,831 $ 1,181 $ (167 ) 2025 compared to 2024 The Company recorded total other income, excluding wealth management fee income, of $18.8 million in 2025, compared to $17.7 million for 2024, reflecting an increase of $1.2 million.
At December 31, 2024, four modified loans totaling $3.6 million was included in individually evaluated loans and had specific reserves of $86,000. At December 31, 2023, one modified loan of $3.0 million was included in individually evaluated loans and had a specific reserve of $185,000.
At December 31, 2025, fourteen modified loans totaling $37.2 million were included in individually evaluated loans and had specific reserves of $5.8 million. At December 31, 2024, four modified loans of $3.6 million were included in individually evaluated loans and had a specific reserve of $86,000.
At December 31, 2024, the Company’s GAAP capital as a percent of total assets was 8.64 percent. At December 31, 2024, the Company’s regulatory leverage, common equity tier 1, tier 1 and total risk-based capital ratios were 9.01 percent, 11.51 percent, 11.51 percent and 14.84 percent, respectively.
At December 31, 2025, the Company’s GAAP capital as a percent of total assets was 8.75 percent. At December 31, 2025, the Company’s regulatory leverage, common equity tier 1, tier 1 and total risk-based capital ratios were 8.87 percent, 10.33 percent, 10.33 percent and 12.68 percent, respectively.
As of December 31, 2024, 32 percent of all loans will reprice within one month, 37 percent within three months and 49 percent within one year. The average balance of interest-bearing liabilities totaled $4.9 billion for 2024 representing an increase of $146.0 million, or 3 percent, from $4.7 billion in 2023.
As of December 31, 2025, 30 percent of all loans will reprice within one month, 35 percent within three months and 51 percent within one year. The average balance of interest-bearing liabilities totaled $5.24 billion for 2025 representing an increase of $368.1 million, or 8 percent, from $4.87 billion in 2024.
The Bank’s regulatory capital amounts and ratios are presented in the following table: To Be Well For Capital Capitalized Under For Capital Adequacy Purposes Prompt Corrective Adequacy Including Capital Actual Action Provisions Purposes Conservation Buffer (A) (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio As of December 31, 2024: Total capital (to risk-weighted assets) 801,365 14.75 % $ 543,234 10.00 % $ 434,587 8.00 % $ 570,396 10.50 % Tier I capital (to risk-weighted assets) 733,389 13.50 434,587 8.00 325,940 6.00 461,749 8.50 Common equity tier I (to risk-weighted assets) 733,383 13.50 353,102 6.50 244,455 4.50 380,264 7.00 Tier I capital (to average assets) 733,389 10.57 347,006 5.00 277,605 4.00 277,605 4.00 As of December 31, 2023: Total capital (to risk-weighted assets) $ 773,083 14.73 % $ 525,001 10.00 % $ 420,001 8.00 % $ 551,251 10.50 % Tier I capital (to risk-weighted assets) 707,446 13.48 420,001 8.00 315,000 6.00 446,251 8.50 Common equity tier I (to risk-weighted assets) 707,434 13.47 341,250 6.50 236,250 4.50 367,500 7.00 Tier I capital (to average assets) 707,446 10.83 326,507 5.00 261,205 4.00 261,205 4.00 (A) The Basel Rules require the Company and the Bank to maintain a 2.5 percent “capital conservation buffer” on top of the minimum risk-weighted asset ratios.
The Bank’s regulatory capital amounts and ratios are presented in the following table: To Be Well For Capital Capitalized Under For Capital Adequacy Purposes Prompt Corrective Adequacy Including Capital Actual Action Provisions Purposes Conservation Buffer (A) (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio As of December 31, 2025: Total capital (to risk-weighted assets) 807,580 12.64 % $ 638,896 10.00 % $ 511,117 8.00 % $ 670,841 10.50 % Tier I capital (to risk-weighted assets) 735,931 11.52 511,117 8.00 383,338 6.00 543,062 8.50 Common equity tier I (to risk-weighted assets) 735,872 11.52 415,282 6.50 287,503 4.50 447,227 7.00 Tier I capital (to average assets) 735,931 9.89 372,195 5.00 297,756 4.00 297,756 4.00 As of December 31, 2024: Total capital (to risk-weighted assets) $ 801,365 14.75 % $ 543,234 10.00 % $ 434,587 8.00 % $ 570,396 10.50 % Tier I capital (to risk-weighted assets) 733,389 13.50 434,587 8.00 325,940 6.00 461,749 8.50 Common equity tier I (to risk-weighted assets) 733,383 13.50 353,102 6.50 244,455 4.50 380,264 7.00 Tier I capital (to average assets) 733,389 10.57 347,006 5.00 277,605 4.00 277,605 4.00 (A) The Basel Rules require the Company and the Bank to maintain a 2.5 percent “capital conservation buffer” on top of the minimum risk-weighted asset ratios.
For the year ended December 31, 2024, the Company recorded net income of $33.0 million, and diluted earnings per share of $1.85, compared to $48.9 million and $2.71, respectively, for 2023, reflecting decreases of $15.9 million, or 32 percent, and $0.86 per share, or 32 percent, respectively.
For the year ended December 31, 2025, the Company recorded net income of $37.3 million, and diluted earnings per share of $2.10, compared to $33.0 million and $1.85, respectively, for 2024, reflecting increases of $4.3 million, or 13 percent, and $0.25 per share, or 14 percent, respectively.
The 2017 Notes have a stated maturity of December 15, 2027, and an interest rate that resets quarterly to a level equal to the then current three-month LIBOR rate plus 254 basis points, payable quarterly in arrears (which was 7.75 percent at December 31, 2024). Debt issuance costs incurred totaled $875,000 and are being amortized to maturity.
The 2017 Notes had a stated maturity of December 15, 2027, and an interest rate reset quarterly to a level equal to the then current three-month LIBOR rate plus 254 basis points, payable quarterly in arrears (which was 7.75 percent at December 31, 2024). The Company fully redeemed these notes plus $627,000 in unpaid interest on March 15, 2025.
The Bank may consider an exception to any guideline if there are strong compensating factors that mitigate any risk. Generally, the Bank retains in its portfolio residential mortgage loans with fixed-rate maturities of no greater than ten years, which then convert to annually adjusted floating rates. Community Development loans granted under the Affordable Housing Program are offered with 30-year maturities.
Generally, the Bank retains in its portfolio residential mortgage loans with fixed-rate maturities of no greater than ten years, which then convert to annually adjusted floating rates. Community Development loans granted under the Affordable Housing Program are offered with 30-year maturities. Loans with longer maturities or lower credit scores are sold to secondary market investors.
The leases generally have escalation terms based upon certain defined indexes. Common area maintenance charges may also apply and are adjusted annually based on the terms of the lease agreements. The Company adopted the guidance in Topic 842 Leases effective January 1, 2019. See Note 1 to Notes to Consolidated Financial Statements for further discussion.
Common area maintenance charges may also apply and are adjusted annually based on the terms of the lease agreements. See Notes 1 and 15 in Notes in Consolidated Financial Statements for further discussion on leases.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest change(Dollars in thousands) Change In Estimated Increase/ EVPE as a Percentage of Interest Decrease in EVPE Present Value of Assets (B) Rates Estimated EVPE Increase/(Decrease) (Basis Points) EVPE (A) Amount Percent Ratio (C) (basis points) +200 $ 724,821 $ (43,201 ) (5.62 )% 11.10 % (20 ) +100 743,929 (24,093 ) (3.14 ) 11.17 (13 ) Flat interest rates 768,022 — — 11.30 — -100 802,569 34,547 4.50 11.54 24 -200 781,951 13,929 1.81 11.08 (22 ) (A) EVPE is the discounted present value of expected cash flows from assets and liabilities.
Biggest change(Dollars in thousands) Change In Estimated Increase/ EVPE as a Percentage of Interest Decrease in EVPE Present Value of Assets (B) Rates Estimated EVPE Increase/(Decrease) (Basis Points) EVPE (A) Amount Percent Ratio (C) (basis points) +200 $ 892,453 $ (31,678 ) (3.43 )% 12.53 % 5 +100 906,364 (17,767 ) (1.92 ) 12.49 1 Flat interest rates 924,131 — — 12.48 — -100 932,247 8,116 0.88 12.35 (13 ) -200 887,698 (36,433 ) (3.94 ) 11.60 (88 ) (A) EVPE is the discounted present value of expected cash flows from assets and liabilities.
Accordingly, although the information provides an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our net interest income and will differ from actual results. 56
Accordingly, although the information provides an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our net interest income and will differ from actual results. 59
The models are based on the actual maturity and repricing characteristics of rate sensitive assets and liabilities. The models incorporate certain prepayment and interest rate assumptions, which management believes to be reasonable as of December 31, 2024. The models assume changes in interest rates without any proactive change in the balance sheet by management.
The models are based on the actual maturity and repricing characteristics of rate sensitive assets and liabilities. The models incorporate certain prepayment and interest rate assumptions, which management believes to be reasonable as of December 31, 2025. The models assume changes in interest rates without any proactive change in the balance sheet by management.
ALCO engages in interest rate swaps as a means of extending the duration of shorter-term liabilities. 54 The following strategies are among those used to manage interest rate risk: • Actively market C&I loans, which tend to have adjustable-rate features, and which generate customer relationships that can result in higher core deposit accounts; • Actively market equipment finance leases and loans, which tend to have shorter terms and higher interest rates than real estate loans; • Limit residential mortgage portfolio originations to adjustable-rate and/or shorter-term and/or “relationship” loans that result in core deposit and/or wealth management relationships; • Actively market core deposit relationships, which are generally longer duration liabilities; • Utilize medium-to-longer term certificates of deposit and/or wholesale borrowings to extend liability duration; • Utilize interest rate swaps to extend liability duration; • Utilize a loan level / back-to-back interest rate swap program, which converts a borrower’s fixed rate loan to adjustable rate for the Company; • Closely monitor and actively manage the investment portfolio, including management of duration, prepayment and interest rate risk; • Maintain adequate levels of capital; and • Utilize loan sales.
The following strategies are among those used to manage interest rate risk: • Actively market C&I loans, which tend to have adjustable-rate features, and which generate customer relationships that can result in higher core deposit accounts; • Actively market equipment finance leases and loans, which tend to have shorter terms and higher interest rates than real estate loans; • Limit residential mortgage portfolio originations to adjustable-rate and/or shorter-term and/or “relationship” loans that result in core deposit and/or wealth management relationships; • Actively market core deposit relationships, which are generally longer duration liabilities; • Utilize medium-to-longer term certificates of deposit and/or wholesale borrowings to extend liability duration; • Utilize interest rate swaps to extend liability duration; • Utilize a loan level / back-to-back interest rate swap program, which converts a borrower’s fixed rate loan to adjustable rate for the Company; • Closely monitor and actively manage the investment portfolio, including management of duration, prepayment and interest rate risk; • Maintain adequate levels of capital; and • Utilize loan sales.
In the models, the forecasted shape of the yield curve remained static as of December 31, 2024. In an immediate and sustained 100 basis point increase in market rates at December 31, 2024, net interest income would decrease approximately 0.5 percent for year 1 and increase 1.6 percent for year 2, compared to a flat interest rate scenario.
In the models, the forecasted shape of the yield curve remained static as of December 31, 2025. In an immediate and sustained 100 basis point increase in market rates at December 31, 2025, net interest income would decrease approximately 1.6 percent for year 1 and increase 2.2 percent for year 2, compared to a flat interest rate scenario.
In these swaps, the Company is receiving floating and paying fixed interest rates with total notional value of $360.0 million as of December 31, 2024. In addition, the Company initiated a loan level / back-to-back swap program in support of its commercial lending business.
In these swaps, the Company is receiving floating and paying fixed interest rates with total notional value of $305.0 million as of December 31, 2025. In addition, the Company initiated a loan level / back-to-back swap program in support of its commercial lending business.
The Company's interest rate sensitivity models indicate the Company is asset sensitive as of December 31, 2024 and that net interest income would improve in a rising rate environment, but decline in a falling rate environment. 55 The table below shows the estimated changes in the Company’s economic value of portfolio equity (“EVPE”) that would result from an immediate parallel change in the market interest rates at December 31, 2024.
The Company's interest rate sensitivity models indicate the Company is liability sensitive as of December 31, 2025 and that net interest income would decline in a rising rate environment, but improve in a falling rate environment. 58 The table below shows the estimated changes in the Company’s economic value of portfolio equity (“EVPE”) that would result from an immediate parallel change in the market interest rates at December 31, 2025.
In an immediate and sustained 200 basis point decrease in market rates at December 31, 2023, net interest income for year 1 would decrease approximately 0.7 percent, when compared to a flat interest rate scenario. In year 2, net interest income would decrease 6.9 percent, when compared to a flat interest rate scenario.
In an immediate and sustained 200 basis point decrease in market rates at December 31, 2025, net interest income for year 1 would increase approximately 0.7 percent, when compared to a flat interest rate scenario. In year 2, net interest income would decrease 9.4 percent, when compared to a flat interest rate scenario.
As of December 31, 2024, $430.8 million of notional value in swaps were executed and outstanding with borrowers under this program. As noted above, ALCO uses simulation modeling to analyze the Company’s net interest income sensitivity, as well as the Company’s economic value of portfolio equity under various interest rate scenarios.
As of December 31, 2025, $429.3 million of notional value in swaps were executed and outstanding with borrowers under this program. As noted above, ALCO uses simulation modeling to analyze the Company’s net interest income sensitivity, as well as the Company’s economic value of portfolio equity under various interest rate scenarios.
In an immediate and sustained 100 basis point decrease in market rates at December 31, 2024, net interest income would increase approximately 0.1 percent for year 1 and decrease 2.9 percent for year 2, compared to a flat interest rate scenario.
In an immediate and sustained 100 basis point decrease in market rates at December 31, 2025, net interest income would increase approximately 0.4 percent for year 1 and decrease 4.5 percent for year 2, compared to a flat interest rate scenario.
In an immediate and sustained 200 basis point increase in market rates at December 31, 2024, net interest income would decrease approximately 0.6 percent for year 1 and increase 3.5 percent for year 2, compared to a flat interest rate scenario.
In an immediate and sustained 200 basis point increase in market rates at December 31, 2025, net interest income would decrease approximately 3.1 percent for year 1 and increase 4.3 percent for year 2, compared to a flat interest rate scenario.
ALCO generally manages interest rate risk through the management of capital, cash flows and the duration of assets and liabilities, including sales and purchases of assets, as well as additions of wholesale borrowings and other sources of medium/longer-term funding.
In addition, these models, as well as ALCO processes and reporting, are subject to annual independent third-party review. 57 ALCO generally manages interest rate risk through the management of capital, cash flows and the duration of assets and liabilities, including sales and purchases of assets, as well as additions of wholesale borrowings and other sources of medium/longer-term funding.
These models demonstrate balance sheet gaps and predict changes to net interest income and economic/market value of portfolio equity under various interest rate scenarios. In addition, these models, as well as ALCO processes and reporting, are subject to annual independent third-party review.
These models demonstrate balance sheet gaps and predict changes to net interest income and economic/market value of portfolio equity under various interest rate scenarios.

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