Peapack-Gladstone Financial Q2 2026 Earnings Report

Peapack-Gladstone Financial EPS Results

• Actual EPS: $0.85
• Consensus EPS: $0.88
• Beat/Miss: Missed by -$0.03
• One Year Ago EPS: N/A

Peapack-Gladstone Financial Revenue Results

• Actual Revenue: $86.05 million
• Expected Revenue: $85.17 million
• Beat/Miss: Beat by +$886.00 thousand
• YoY Revenue Growth: N/A

Peapack-Gladstone Financial Announcement Details

• Quarter: Q2 2026
• Date: 7/26/2026
• Time: After Market Closes
• Conference Call Date: Tuesday, July 28, 2026
• Conference Call Time: 11:00AM ET

Peapack-Gladstone Financial (NASDAQ:PGC) is the parent company of Peapack-Gladstone Bank, a New Jersey-chartered commercial bank headquartered in Bedminster, New Jersey, that trades on the NASDAQ under the symbol PGC. Through Peapack-Gladstone Bank, the company offers a broad range of deposit and lending solutions, including checking and savings accounts, residential and commercial real estate loans, lines of credit and treasury management services. Clients benefit from both in-branch relationship banking and an expanding suite of digital banking tools designed to support personal and business financial needs.

Complementing its core banking operations, Peapack-Gladstone Financial provides wealth management, trust and financial planning services through its subsidiary, Peapack-Gladstone Wealth Management. Offerings include investment advisory, retirement and estate planning, fiduciary and trustee services, and insurance solutions. By integrating deposit, lending and investment services, the company delivers a cohesive advisory experience that seeks to address complex client objectives, leveraging a team of seasoned bankers, investment professionals and trust officers.

Founded as a holding company in 2007—with historical roots in the early Peapack Trust Company—the firm has grown its presence throughout the Mid-Atlantic, primarily serving clients in New Jersey, New York and eastern Pennsylvania. Under the leadership of President and CEO Douglass E. Taylor, Peapack-Gladstone Financial emphasizes community banking values, personalized service and prudent risk management. The company continues to pursue balanced growth strategies, focusing on capital strength and delivering tailored financial solutions to individuals, families and businesses.

Peapack-Gladstone Financial Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Second-quarter net income rose 11% sequentially to $15.8 million, while revenue increased 23% year over year to $86.1 million. Management highlighted the seventh consecutive quarter of improving efficiency and positive operating leverage.
• Positive Sentiment: Loans grew $236 million in the quarter and deposits increased $231 million, with 35% of new deposits non-interest-bearing. Management said both deposit and loan pipelines remain strong, targeting roughly $200 million of quarterly deposit growth and $300 million of loan growth ahead.
• Neutral Sentiment: Net interest margin expanded six basis points to 3.32%, supported by asset yields and disciplined loan pricing, but increased deposit competition and the timing of loan funding could create volatility. Management maintained its outlook for six to nine basis points of total margin improvement through year-end, while acknowledging some quarters may give back recent gains.
• Negative Sentiment: Credit metrics weakened as non-performing assets rose to $72.2 million, primarily because of a multifamily relationship, and net charge-offs reached $5.9 million. Executives said there is no broad-based deterioration, but elevated provisions of roughly $7.5 million per quarter could persist through year-end as multifamily loans are repriced and renegotiated.
• Positive Sentiment: Management drew the remaining $20 million of committed convertible preferred equity to support projected growth, while tangible book value per share increased 3% during the quarter to $36.26. The company remains on track to reach a 1% ROA and 10% ROE by the fourth quarter or possibly the first quarter of next year.

Presentation

[Operator]

Welcome to the Peapack-Gladstone Financial Corporation second quarter 2026 earnings call. Please be advised that today's conference is being recorded. I will now hand the conference over to Matthew Remo, Treasurer and Head of Corporate Finance. Please go ahead.

[Matthew Remo, Treasurer and Head of Corporate Finance at Peapack-Gladstone Financial Corporation]

Thank you. Good morning, everyone. I'm joined today by our President and CEO, Doug Kennedy, and our CFO, Frank Cavallaro, who will be providing an overview of our second quarter results. John Babcock, our President of Wealth Management, and Lisa Chalkan, our Chief Credit Officer, are also here to answer any questions. If you have not yet read the earnings release and investor presentation we issued yesterday afternoon, you may access them by going to the investor relations page on our company website at peapackprivate.com. You may also access the investor presentation directly within the webcast today. After the presentation, we will be happy to take questions. Our comments today may contain forward-looking statements, which are subject to risks and uncertainties that may cause our results to differ materially from expectations.

[Matthew Remo, Treasurer and Head of Corporate Finance at Peapack-Gladstone Financial Corporation]

Cautionary statements about reliance on this information are included in the earnings release and investor presentation, as well as our SEC filings and other investor materials. The earnings release and presentation also include non-GAAP financial measures. It is important to review the appropriate reconciliations in the appendices to each document. With that, it is my pleasure to turn the call over to Doug.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

Thanks, Matt. Good morning, everybody. Thank you for joining us today. On behalf of the entire team at Peapack Private, I'm really pleased to report that our strategy continues to deliver solid results. We believe that we're building a durable and valuable franchise that has significant barriers to entry. Our people, our product offering, grounded in wealth, is very rare and extremely difficult to replicate. Revenue and profitability have been positive for seven consecutive quarters. We expect that trend to continue for the foreseeable future. We continue to be on track to deliver a 1% ROA and 10% ROE by the fourth quarter of this year, possibly slipping into the first quarter of next, which is what we communicated to all of you previously. We have entered the third quarter with a very strong new business pipeline. We feel very positive about the future.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

For this past quarter, we reported net income of $15.8 million, consistent with where we had guided. This was an increase of 11% on a linked-quarter basis and was 99% year-over-year. Our wealth management business grew 6% year to date and 13% year-over-year with positive flows. Our deposits grew $231 million in the quarter, 35% of which was non-interest bearing, and we continue to see relationships in that $2 million to $2.5 million average size. Also notable is the fact that 56% of our deposit growth over the last 12 months have been in the form of non-interest-bearing accounts. Our loans are up $236 million. Strong growth in C&I, equipment finance, and CRE. Multifamily was down an additional $21 million in the quarter and $58 million year to date. Where are we in terms of our strategy and where we've been and where we're going?

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

In 2023, as you know, we made some bold strategic moves. We invested heavily in building out our product offering. We lifted teams from First Republic and Signature. To date, we've hired a total of 20 teams and nearly 200 professionals to cover the Metro New York market, which includes Westchester and Long Island. Of course, all of this hiring temporarily impacted earnings, which bottomed out in the third quarter of 2024, but we expected that. As we modeled through where we are right now, we're a little ahead of where we thought we would be. Profits have rebounded quickly, and given the level of investment, and what's really incredible is that we essentially have built a de novo bank in New York and made it profitable in under two years. Where are we headed and where are we going?

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

The momentum that we built continues to grow. On page five of our investor deck, we shared the level of non-interest-bearing DDAs that have been opened in the quarter. When you compare that to what happened a year ago earlier, that activity is up over 20% year-over-year. As stated, our current pipeline remains strong, and the number of positive conversations we're having in the market leads me to believe that the strength that we're seeing will continue. I should also note that the competition for deposits in the market has increased markedly in the last quarter. Frank will touch on that a little bit more, but we do see a little bit of headwinds in terms of pricing. We're reiterating that the net interest margin, going back to the first quarter, will grow a total of six to nine basis points through the end of this year.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

Which basically says it's going to sort of bounce around where it is. It'll have some volatility to it, but we're still committed to what we had shared last quarter. From a strategic standpoint, we have everything that we need. It's really all now about dedicated and focused execution. Our brand, we've come a long way. We rebranded the company. I think about that a little bit as we go forward through the end of next year. I believe that by then we will have built a very credible private banking institution offering bespoke credit solutions that cater to affluent individuals and their families. At present, we're offering life insurance premium finance. We have jumbo mortgages and HELOCs. We have investment lines of credit. We have professional lines of credit. We've done some fine art, some collectibles, and we recently began to launch aviation and yacht finance.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

All of this is geared towards meeting the needs of our clientele. How we present our company externally will increasingly look and feel niche private bank with a focus on commercial and wealth management and the needs of high-net-worth individuals and their families. With that, let me just summarize in saying that it's been a great strategic journey over the last couple of years and a strong quarter for us at Peapack Private. We've had lots of momentum and a clear vision and path to execute that we remain confident that we will deliver strong, durable results leading to superior shareholder value. With that, I'll hand the call over to Frank, who will provide a detailed overview of the quarter's results. Frank?

[Frank Cavallaro, CFO at Peapack-Gladstone Financial Corporation]

Thanks, Doug, good morning, everyone. I'll review the quarter in more detail, beginning with earnings, then moving through the balance sheet, credit, and capital. Net income available to common shareholders for the quarter was $15.8 million, or $0.85 per diluted share, compared to $14.2 million or $0.80 a share in the first quarter. Core earnings, which is pre-tax income before the provision, increased to $30.4 million, up 12% sequentially and 70% from a year ago. Total revenue increased to $86.1 million, up 4% compared to the first quarter and 23% year-over-year. Net interest income was $63.9 million, an increase of $4 million from the first quarter and $15.6 million from a year ago. This marked another quarter of consistent net interest income growth supported by balance sheet expansion, disciplined pricing, and improved earning asset yields.

[Frank Cavallaro, CFO at Peapack-Gladstone Financial Corporation]

Net interest margin during Q2 increased by six basis points to 3.32%. The improvement this quarter was driven more by asset yields while we largely held our ground on funding costs. We're really pleased with this, considering what's happened to Fed futures over the last three months and the increasingly competitive deposit environment we are seeing every day. Average earningnasset yields increased for two primary reasons. First, we continue to hold our discipline on loan pricing with average yields on new originations in the quarter just north of 6%. Second, we're also seeing some impact from back book repricing. Our prior comments on average quarterly margin expansion of two to three basis points remains largely intact when reviewed over a longer period, but the progression will not necessarily be linear.

[Frank Cavallaro, CFO at Peapack-Gladstone Financial Corporation]

Following the six basis points increase in this quarter, we may give some back over the coming quarters, as Doug mentioned, report changes below the two to three basis point range in individual periods, but remaining consistent with the broader outlook. Non-interest income was $22.1 million, driven by wealth management fee income, which increased to $17.2 million, up 4% sequentially and 8% from a year-ago. Operating expenses were $55.7 million, which is up less than 1% from the first quarter. Revenue growth outpaced expense growth 10-1, producing another strong quarter of positive operating leverage. The reported efficiency ratio declined to 65%, marking the seventh consecutive quarter of improvement. We expect expense growth will continue to normalize as the investments made over the past several years become more productive. Turning to the balance sheet, growth remains strong across the company.

[Frank Cavallaro, CFO at Peapack-Gladstone Financial Corporation]

Total loans increased $236 million during the quarter to $6.7 billion, up 15% year-over-year. Growth remained concentrated in our core areas of strength, particularly C&I and commercial real estate. Deposits increased $231 million up to $7.1 billion, which is up 11% year-over-year, and non-interest-bearing deposits increased approximately $80 million in the quarter and have grown $386 million from a year ago. We opened and funded more than 650 new non-interest-bearing DDA accounts in the quarter, which is consistent with our average volumes over recent quarters. As Doug mentioned, this continued growth in operating accounts is an important indicator of relationship quality and supports a more durable funding profile over time. The loan-to-deposit ratio remained well managed at about 95%. We continue to maintain substantial on and off-balance-sheet liquidity, no broker deposits, and a diversified funding base.

[Frank Cavallaro, CFO at Peapack-Gladstone Financial Corporation]

Turning to credit, the provision for credit losses was $8.1 million. Net charge-offs were $5.9 million in the quarter and were concentrated in one multifamily loan and one commercial mortgage relationship. The allowance for credit losses remained stable at 1.04% of total loans. Non-performing assets increased to $72.2 million, or 91.91% of total assets, compared to 0.77% in the first quarter. The increase was primarily driven by the migration of a previously disclosed larger multifamily relationship. At the same time, special mention loans declined, performing modifications decreased materially, and early-stage delinquencies were relatively stable. We continue to see no evidence of broad-based deterioration across the portfolio. Capital remains solid and continue to benefit from earnings generation. Tangible book value per share increased 3% during the quarter to $36.26 and is up 9% from a year ago.

[Frank Cavallaro, CFO at Peapack-Gladstone Financial Corporation]

Holding company common equity Tier 1 capital was 10.38%, and Tier 1 capital was 1083. Based on this quarter's results and the continued momentum across the company, we elected to draw the remaining $20 million of available convertible preferred equity in July.

[Frank Cavallaro, CFO at Peapack-Gladstone Financial Corporation]

You may recall that in the first quarter of this year, we announced a $50 million commitment to issue convertible preferred equity with an initial draw of $30 million back in March. After assessing current results and projected growth rates going forward, we felt that this was the appropriate time to add the remaining $20 million in capital to our balance sheet. Overall, the quarter reflected continued progress across each of our key financial priorities: sustained revenue growth, positive operating leverage, margin expansion, disciplined balance sheet growth, and continued tangible book value creation. We remain upbeat on the earnings trajectory of the company and the durability of the underlying relationship activity. With that, we are happy to answer any questions.

[Operator]

We will now begin the question and-

[Matthew Remo, Treasurer and Head of Corporate Finance at Peapack-Gladstone Financial Corporation]

Thank you, and good morning, everyone. I'm joined today by our-

[Operator]

We will now begin the question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. If you are muted, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Manuel Navas with Piper Sandler. Manuel, your line is now open. Please go ahead.

[Manuel Navas, Analyst at Piper Sandler]

Hey, good morning. Could we have an update on the deposit growth pipeline? You've had some commentary in the past about the mix, and just more color there to start with.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

Sure. Good morning, Manuel. How are you? I would say that the strength of the pipeline is very consistent with what we've seen so far to date. As you would imagine, money market accounts get funded right away. Non-interest-bearing actually take time to make the transfer over to us. The forward look for us is how many accounts are sitting there waiting to get funded. I will tell you that that inventory of pipeline is as robust as it's ever been. I think that in terms of guidance, we sort of have talked to $200 million each quarter. We still believe that about a third of that would be in non-interest-bearing. That could fluctuate from time to time or quarter-to-quarter.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

I would say that as we look through the end of this year, I would say that we feel very comfortable that that's the trajectory that we're on.

[Manuel Navas, Analyst at Piper Sandler]

I appreciate that. It also sounds like loan pipelines are pretty strong. Could you just comment on what you're seeing out there in the market? Is it going to be at a continued similar mix to this quarter's really impressive growth? Just any further color there.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

There was some volume actually kicked into this quarter. We actually came out of the gate pretty strong. The pipelines, Lisa Chalkan is here. Lisa, I think they're still very strong.

[Lisa Chalkan, Chief Credit Officer at Peapack-Gladstone Financial Corporation]

Yeah, I think we think that the growth number will be about $300 million, which means that we'll be closing $450 - $500 million in order to be able to do that.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

Stronger than the quarter we just had, Manuel.

[Manuel Navas, Analyst at Piper Sandler]

Is that maybe driving the potential variability in the NIM that you're just having such strong opportunities on the growth side?

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

The answer to that is yes, because we'll never get the timing right on four deposits hitting our balance sheet at the same time that we're funding the loan pipe. That's part of it. The other part of it is that just in general, there's been elevated competition and we're seeing rates with a forehand on it as being very common. The longer we sit in this, even if it's transitory, higher elevated rate environment, the more pressure we're seeing. Also, the economy's on fire. Other banks are growing their balance sheets, there is elevated competition for deposits. I don't know exactly where it lands. As Frank said, we still hold onto the original guidance that we gave in the first quarter in terms of where we'll land by the end of the year.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

We had a stronger performance this quarter, we may give some of that back this quarter that we're in. We'll land where we said that we were. We still see some improvement in NIM, we're definitely seeing some headwinds and the timing of the loan closings ahead of the deposits could potentially elevate costs as well.

[Manuel Navas, Analyst at Piper Sandler]

I appreciate that. I'll jump back into the queue.

[Operator]

Your next question comes from the line of Steve Moss with Raymond James. Steve, your line is now open. Please go ahead.

[Analyst at Raymond James]

Hey, guys. Good morning. This is Chase on for Steve.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

Hey, Chase.

[Lisa Chalkan, Chief Credit Officer at Peapack-Gladstone Financial Corporation]

Hey, Chase.

[Analyst at Raymond James]

I hear you on the elevated deposit competition in the market. I was just curious, what costs were deposits coming on at in the quarter?

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

Give the coupon. Do you have the coupon on deposits?

[Frank Cavallaro, CFO at Peapack-Gladstone Financial Corporation]

Yeah, during the quarter, what we added was about 2.5%.

[Analyst at Raymond James]

Got it. Appreciate that. On the multifamily NPA inflow, do you have any indication on resolution timing there?

[Lisa Chalkan, Chief Credit Officer at Peapack-Gladstone Financial Corporation]

This is Lisa Chalkan, Chief Credit Officer. It's hard to predict. The loans that just moved over, we're still negotiating with the client. We have started the foreclosure process. We are awaiting for a receiver to be appointed. In N.Y. City, the foreclosure process is incredibly protracted post-COVID, it's not gotten any better. In the event that we can come to some sort of an agreement that works for both the borrower and us, then maybe we'll be able to restructure and get them back paying. Otherwise, we're just going to continue to go through the foreclosure process, that can take some time. We could choose to sell the note at some point if that makes sense. I think the plan at the present time is to just move through the foreclosure process to get title.

[Analyst at Raymond James]

I appreciate all that color. Just one last one for me. Can you size up the back book repricing opportunity in the roll-off yields there?

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

Yeah, it's about a billion and a half dollars over the next six quarters. That's not all multi, it's sort of a mix. The coupon there is just a little bit north of four. Is that right? Four and change.

[Frank Cavallaro, CFO at Peapack-Gladstone Financial Corporation]

Four and change.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

Four and change. The current rate today is six and change. There'll be some of the multi, the rent-stabilized stuff. I'm certain that some of those have got contractual rates that are in the sevens, which we'll negotiate on a client-by-client basis. I think we have modeled in some assumptions that I think high fives is what we sort of conservatively took a look at.

[Lisa Chalkan, Chief Credit Officer at Peapack-Gladstone Financial Corporation]

We expect to get north of a 1%, maybe 1.25 pickup on the repricing for the $1 billion that's going to reprice over the next six quarters.

[Analyst at Raymond James]

Got it. Thank you for all the color, guys.

[Operator]

Your next question comes from the line of Christopher Marinac with Brean Capital, LLC. Christopher, your line is now open. Please go ahead.

[Christopher Marinac, Analyst at Brean Capital, LLC]

Hey, thanks. Good morning. Can you talk about the criticized loans in terms of what is past rated within some of the past dues? Just wanted to kind of get back to, I think it's slide 18 and the details you gave us there on the New York multifamily.

[Lisa Chalkan, Chief Credit Officer at Peapack-Gladstone Financial Corporation]

Just for multifamily, you want to know what is past rated within past due versus criticized or classified?

[Christopher Marinac, Analyst at Brean Capital, LLC]

Right. Just to get to a kind of a bottom number. Yeah. Just to get, Lisa.

[Lisa Chalkan, Chief Credit Officer at Peapack-Gladstone Financial Corporation]

Yeah

[Christopher Marinac, Analyst at Brean Capital, LLC]

to a bottom number in terms of what is criticized and what is past.

[Lisa Chalkan, Chief Credit Officer at Peapack-Gladstone Financial Corporation]

Yeah. I'm doing the math in my head. There is about $20 million is in special mention. The balance of the multifamily is in past. The past rated loans are in the 30-day bucket versus the ones that are special mention are 61 days at the end of the quarter.

[Christopher Marinac, Analyst at Brean Capital, LLC]

Okay, great. Thank you for that. Are you at a point now where the downgrades can slow or maybe even possibly switch, or what would be the timeline for that?

[Lisa Chalkan, Chief Credit Officer at Peapack-Gladstone Financial Corporation]

I guess if I had a crystal ball, it's hard to say. I do think that they have slowed. I do think that the downward migration in risk grading has slowed. I think this quarter we saw five of the loans that were in the relationship that we've been talking about for a while move to non-performing.There was nothing else that moved to non-performing. I think from a risk rating perspective, I think that we've seen improvement. Even on the past dues, if I look at the past dues, once I net out the three loans that are part of that relationship, the balance of the $10-ish million in multifamily that is past due, that's seven different relationships.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

Yet with the wave of repricings and maturities that are coming up, there could be downgrades.

[Lisa Chalkan, Chief Credit Officer at Peapack-Gladstone Financial Corporation]

There could be. I can't predict it.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

It's relationship by relationship, that's kind of how the conversations are going.

[Lisa Chalkan, Chief Credit Officer at Peapack-Gladstone Financial Corporation]

Correct. Every single loan we're dealing with individually. I'm not seeing a pervasive every quarter. The past dues in multifamily are down this quarter compared to last.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

I guess really we're not seeing anything systemic. There's nothing that's bothersome. There's this one relationship that skewed the numbers. We sort of disclose if you take that out, it's very sanguine. Having said that, as we go through repricing, part of the negotiation may be that a client that has been servicing, never been delinquent, could stop paying us in order to negotiate. There's going to be things that we think that we're going to have a rocky road as we go client by client, loan by loan, through this repricing cycle over the next 6 quarters, that ultimately could create some noise inside delinquencies, inside of non-performers, et cetera. In the end, there's nothing that we see systemic. If it does show up, it's a negotiation is really what's going on. Which is, by the way, is what's going on.

[Christopher Marinac, Analyst at Brean Capital, LLC]

Great. Thank you for that.

[Lisa Chalkan, Chief Credit Officer at Peapack-Gladstone Financial Corporation]

That's exactly what we're seeing.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

The craziest thing that's never happened in my career, I've only been doing this for a few decades. I've never had a loan that actually has the capacity to pay, has more than one-to-one debt coverage, has an appraisal that shows that there's equity in it, and the borrower says, "I'm not making any payments.

[Lisa Chalkan, Chief Credit Officer at Peapack-Gladstone Financial Corporation]

We've commenced foreclosure.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

We started foreclosure. I've never seen that in my entire career. It's negotiating is what they're doing.

[Christopher Marinac, Analyst at Brean Capital, LLC]

Understood. Thank you for sharing all that. Then just last related question. Does the reserve already anticipate some downgrades so that if some of those happen on a case-by-case basis, that the reserve may have already covered a portion of it?

[Lisa Chalkan, Chief Credit Officer at Peapack-Gladstone Financial Corporation]

I missed the beginning.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

Has the increase in the reserve already covered some of the potential downgrades? It's a mix. There's some yes and some no.

[Lisa Chalkan, Chief Credit Officer at Peapack-Gladstone Financial Corporation]

It's a mix. We would get an updated appraisal and sort out the specific reserve when something hits substandard. Of the ones that we just downgraded to non-performing, for them, the appraisals are pending at this point. One of the appraisals that we did get in, the reserve that we had to put against it was only like $80,000 or something. It was minimal. Every quarter, anything that's in non-performing, every single quarter, we're looking at the value of the collateral in order to make a determination, and the specific reserve is adjusted at that point in time.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

We had sort of communicated at the end of last year, third quarter, fourth quarter last year, that we thought we would have an elevated provision in the first half of this year. We've aggressively attacked a lot of the stuff that's there. Having said that, we believe that at least through the end of this year, that it's going to remain sort of at that $7.5 million level. It's a consequence of not something that we're seeing right now, but it's something that would arise because of what I just stated in a negotiation. There's some hard conversations that are going to take place that has the potential of keeping it sort of at that $7.5 million quarter, would be sort of our best guess.

[Lisa Chalkan, Chief Credit Officer at Peapack-Gladstone Financial Corporation]

Correct.

[Christopher Marinac, Analyst at Brean Capital, LLC]

Loan growth.

[Lisa Chalkan, Chief Credit Officer at Peapack-Gladstone Financial Corporation]

I was going to say loan growth.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

Loan growth. Oh, yeah

[Lisa Chalkan, Chief Credit Officer at Peapack-Gladstone Financial Corporation]

The economic conditions have had an impact. About half-ish of the reserve that we've put up this quarter is due either to the loan growth or because of weakening economic conditions, which the model factors in.

[Christopher Marinac, Analyst at Brean Capital, LLC]

Great. Thanks again very much for all the detail on this topic.

[Operator]

At this time, we would like to re-prompt. If you would like to ask a question, please press star one. Again, that is star one. We shall hold for any additional questions. There are no further questions at this time. I will now turn the call back to Doug for closing remarks.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

Well, thank you all for joining us today. Q2 was clearly a validation of the strategy that we laid out during the disruption in our industry in 2023. We've invested where a lot of the other institutions that we compete against in this market pulled back. Really the message to deliver this quarter is that that investment is clearly behind us. What you're seeing now is a platform that's producing the ninth consecutive quarter of revenue growth, our seventh consecutive quarter of efficiency improvement, and we've also got an accelerated earnings and profitability path. In some ways, a lot of the risk of us going into New York is behind us, and we do see a lot of momentum turning into the third quarter and continuing out right through the end of the year.

[Doug Kennedy, President and CEO at Peapack-Gladstone Financial Corporation]

With that, I want to thank you all, and we look forward to sharing our progress, continuing as we pull up in October. Of course, our door is open for anyone that wants to give us a shout. We're an open door here, and we'd love to be able to address any questions that you may have regarding our company. Thanks for your investment, and thank you for your loyalty, and a lot of great stuff happening at Peapack-Gladstone.

[Operator]

This concludes today's call. Thank you for attending. You may now disconnect.

Participants

Executives

• Matthew Remo, Treasurer and Head of Corporate Finance
• Doug Kennedy, President and CEO
• Frank Cavallaro, CFO
• Lisa Chalkan, Chief Credit Officer

Analysts

• Manuel Navas, Analyst at Piper Sandler
• Analyst at Raymond James
• Christopher Marinac, Analyst at Brean Capital, LLC