Peapack-Gladstone Financial Corporation ($PGC)

Hello, and welcome to the Annual Meeting of Shareholders of Peapack-Gladstone Financial Corporation. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Duff Meyercord, Chairman of the Board. Mr. Meyercord, the floor is yours.

Good morning. I'm Duff Meyercord, Chairman of the Board of Peapack-Gladstone Financial Corporation. On behalf of the directors, the officers of Peapack-Gladstone Financial Corporation and Peapack Private Bank & Trust, let me welcome you and express my appreciation for participating in this online meeting today. If you need access to our proxy statement and annual report, links to these documents are available online. Also, we intend to follow the rules of conduct for this meeting, a copy of which is located on the annual meeting portal. You may submit written questions at any point today by clicking the Q&A tab, which is located in the upper right portion of the meeting screen. We will address questions related to the matters discussed in this meeting during the session, and we will reserve time at the end for general questions. The principal business of this annual meeting is to elect 13 directors to vote on the compensation of certain named executive officers and to ratify the appointment of independent auditors for 2026. At this time, I would like to introduce the Chief Legal Officer and General Counsel of Peapack-Gladstone Financial Corporation, Mark Zingale. Mr. Zingale, has notice of this meeting been sent to all shareholders entitled to vote at this meeting?

Yes. I have here an affidavit sworn to by myself and duly signed, stating that notice has been mailed to each shareholder as required under the bylaws. In addition, resolutions were adopted by the Board of Directors of Peapack-Gladstone Financial Corporation, providing for the meeting to be held at this time and by remote communication and directing that notice be given as provided in the bylaws. The Board also fixed March 5, 2026, as the record date for determining shareholders entitled to notice of and to vote at this annual meeting.

Thank you, Mr. Zingale. Please file a copy of the notice and the affidavit as to the mailing of notice with the minutes for this meeting. Alisa Zagare from Computershare, our transfer agent, will be serving as our Inspector of Elections. Ms. Zagare, will you please present your report of the attendance at this meeting so that we can determine whether a quorum is present?

There were 17,570,625 shares entitled to vote as of the March 15 -- sorry, March 5, 2026, record date. 87% of the shares of the common stock of the company are represented at this meeting.

Thank you, Ms. Zagare. Based on the reports of the General Counsel and the Inspector of Elections, I find that proper notice has been given and that a quorum is present. Accordingly, this meeting has been properly convened. I intend to present all matters to be voted on at this meeting separately and allow questions to be asked once all the matters have been presented. As mentioned earlier, you may submit questions online by clicking the Q&A tab, which is located in the upper right portion of the meeting screen. At the conclusion of the presentation of all items, I will allow time for shareholders to vote online before the voting is closed. Mr. Zingale, were there any shareholder nominations or proposals for business for this meeting properly filed with the Corporate Secretary?

No.

Since no shareholder nominations or proposals were properly filed with the Corporate Secretary in advance of this meeting as provided by the bylaws, the business of this meeting is limited to the 3 matters stated in the agenda. The first proposal is the election of 13 directors, each of whom will serve for a 1-year term. All of the nominees are presently directors of the company and the bank. Additional information concerning the principal occupations of the nominees, our service with Peapack Financial Corporation and the bank and other matters that may be of interest are contained in the proxy statement. The second proposal is a nonbinding advisory vote to approve the compensation of the company's named executive officers as disclosed in the proxy statement. And third, to be considered at this meeting is the ratification of the appointment of Crowe LLP as the independent auditors for the year ending December 31, 2026. A representative of Crowe is available to answer any questions related to their engagement. Are there any questions with respect to the 3 proposals being considered today?

Mr. Chairman, there are no questions.

With the shareholders who wish to vote at this time, please do so by clicking on the link provided online. If you have already voted, there is no need for you to recast your vote. However, if you have not yet voted and wish to change your vote, you may do so by clicking on the link provided online. We will pause 30 seconds to allow for voting. [Voting]

The online voting is now closed. Ms. Zagare, would you now present your report on the vote.

Each of the directors nominated by the Board have been duly elected. The nonbinding advisory vote on the compensation of the named executive officers have been approved and the appointment of Crowe as the independent auditor for the year ending December 31, 2026, has been ratified.

The report of the Inspector of Elections as presented is accepted. Mr. Zingale, please safeguard the votes and the oath and certificate and report of the Inspector of Elections and maintain them among the records of the company. I would like now to present our CEO, Chief Executive Officer, Doug Kennedy, who will make a brief presentation.

Thank you, Mr. Chairman. Welcome all to Peapack Financial Corporation's 105th Annual Meeting. I'm happy to report that 2025 was a pivotal year for our company. And the investments that we've made over the last 2 years are clearly now translating into meaningful growth and improved earnings. At the core of this transformation is our funding, driven by growth in noninterest-bearing deposits as well as disciplined loan growth and attractive spreads and a steady and predictable growth in wealth management. As a result, core earnings were up 45% year-over-year. Net interest margin expanded over 50 basis points, driven principally by a 28% growth in noninterest-bearing checking. During the year, we continued to invest in both sides of our company, bank and wealth, and these investments now provide a solid foundation for future growth. Importantly, it's the combination of balance sheet mix, pricing discipline and client growth that is fueling gains and profitability. As mentioned in our Q1 earnings call, we believe that we now have visibility towards a 1% ROA and a 10% ROE towards the end of this year, turning into the beginning of 2027. In early 2024, we made the deliberate decision to expand into the New York market during a period of industry disruption. That decision allowed us to recruit high-quality talent at scale, something that's typically very difficult to do. To date, we've been pleased to welcome over 200 new teammates to our company, an increase of over 30% in our headcount. In 2024 was about building out deposits, infrastructure and brand. 2025 marked the shift to execution and profitability. We opened our flagship office on Park Avenue in New York in Q2. We continue to add talent in key lending verticals, and we entered into the Long Island market with an addition of 6 teams. We also began the process of transitioning from a traditional branches to a private banking financial centers where the emphasis is more placed on advice and not simply transactions. Also during the year, we continued to invest in technology and in AI to scale our high-touch service model. What you're seeing in our numbers now is the early financial impact of these investments. To date, New York has delivered 1,300 new banking relationships, $2.1 billion in deposit growth and $1.6 billion in new credit commitments. As you can see from this chart, investors have reacted very positively to the actions. As of last week, our shares were up 42% year-to-date. And as of the close of business yesterday, we were up 53% year-to-date, an all-time high for our company. Clearly, the market is recognizing the positive work that we've been doing over the past few years, which is delivering earnings momentum. Most importantly, we view this progress as the beginning of a more durable and consistent earnings trend that ultimately delivers best-in-class returns. The substantial investments we made in building out products, processes and rebranding has resulted in a differentiated franchise that is winning against large bank competitors throughout the New York region. Our wealth franchise and hospitality level white glove service model results in long-term deep relationships. Our New York City expansion is an extension of our wealth brand strategy that began when I arrived in 2012. The proof of the viability of our strategy lies in the fact that over the last 13 years, we've delivered a compounded annual growth in deposits, loans and wealth in the low teens, well above our regional peers. Double-digit growth to be real has to stand on a foundation of great service. Our single point of contact relationship-driven model only works if the client experience is truly differentiated, which is why we've created a feedback loop leveraging Net Promoter Score over the past several years. NPS validates our ongoing efforts to continually improve the client experience. The norm in our industry is a score of 40, a score of 65 is excellent, but we're focused on doing better. Three years ago, we scored a 41 about average for the industry. Today, we operate in the 60s. Happy clients tend to do more business with us, and they often refer friends and family and colleagues to the bank. This dynamic is the path to continuous and stable growth. I'm particularly proud of our wealth management team, who had yet another record year. The business anchors our private banking strategy, recording $13.1 billion in AUM/AUA at the end of the year. Our team delivers an exceptional client experience. And as you might expect, wealth management is an intensively personal business. The team delivered a very strong 41% operating margin, and the business uses virtually no capital and a holistic suite of services, including financial planning, investment management, trust and fiduciary services and estate and tax planning. The scarcity value of what we do is extremely high, and we expect that over time, this dimension of our business model, combined with robust profitable traditional banking will deliver premium valuation for our company's shares. Certainly, the increased valuation that we received year-to-date is a positive step in that direction. Our expansion into New York has grown our deposit base quite nicely and has transformed our company's liquidity profile. Over the past year, noninterest-bearing deposits grew 28%. Overall, client deposits grew $828 million or 16%. And over the past 2 years, we've grown core deposit -- customer deposits by $2.1 billion. The outcome of this growth is a much stronger, more durable funding profile that has eliminated the use of broker deposits and any meaningful use of borrowings. Our high-level service enabled us to achieve a 92% beta in Q4 following the most recent rate cut by the Federal Reserve. Loan growth has consistently grown at 14% a year since 2012. We have a long track record of strong expertise in C&I, and so we continue to lean into that asset class, which is very granular and diversified across industries and is largely backed by a diverse pool of collateral as well. The recent growth in CRE reflects our shift towards relationship-based banking, where borrowers are also meaningful depositors. We have -- we do emphasize that New York rent stabilized lending has hit a soft spot and that we continue to be very careful and cautious as we go forward in that space. Net interest income is where you can see the financial impact of our investments. Net interest income is the difference between what we receive in interest and what we pay for funding. To date, we're proud to have delivered 8 consecutive quarters of growth. Noninterest-bearing deposits has continued to drive our cost of funds lower and new business loan spreads have widened. The net result is that on the margin, net interest margin in 2025 averaged north of 4%. In closing, let me say that the strategy that we launched in 2023 is working and that we've built a platform that is durable and that can continue to scale. Our franchise is anchored by a scarce and valuable wealth management business that provides stability and long-term client satisfaction. Wealth management is a personal and intimate business. It's hard to do, and it's very hard to get into. Banking complements this capability and deepens those relationships, driving client satisfaction and incremental growth in earnings. We continue to invest in our capabilities across treasury, advisory, technology and AI to deliver the best experience that we can for our clients while making us much more productive and profitable. At the end of the day, it comes down to a culture of service being our key differentiator. And that journey has been independently validated through Net Promoter Score over the last 3 years. Our focus going forward into 2026 and beyond continues to be consistency in our execution and making sure that our clients' interests come before anything else. Finally, I'd like to thank all of you for joining us today. I'd like to extend my personal thanks to my teammates and to you, my fellow shareholders, and especially for the guidance and support provided by our Board of Directors. At this point, I'd like to open it up to questions. As Mr. Meyercord has said, you may submit questions by clicking on the Q&A tab, which is located in the upper right-hand portion of the meeting screen.

Mr. Kennedy, there are no questions.

I want to thank all of you participating in today's meeting for the interest you have shown in the affairs of your company. We would not be able to accomplish what we have if the Board would like you to know how excited we are about our management team and the employees who help produce these results for you. At this time, the meeting will be adjourned.

This concludes the meeting. You may now disconnect.