PEAPACK GLADSTONE FINANCIAL CORP
For the period ended Jun 30, 2025. Filed Aug 8, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 8, 2025
PGC$45.90+0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0000950170-25-067615
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0000950170-25-105502
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 139 previous paragraphs and 148 current paragraphs.
86 unchanged; 45 reworded; 13 added; 6 removed; 2 previous and 4 current paragraphs rearranged.
Tables are not compared: 14 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
The increase in total revenue for the second quarter of 2025 was primarily due to higher net interest income due to improvements in the yield on the average balance of interest-earnings assets and cost on average interest-bearing liabilities. As a result, net interest margin increased to 2.77 percent for the second quarter of 2025 as compared to 2.25 percent for the same period in 2024. Wealth management fee income continues to be a consistent and steady revenue stream for the Company and represented 23 percent of total revenue for the second quarter of 2025.
Current report
Net income for the six months ended June 30, 2025 was impacted by increased operating expenses, principally attributable to the addition of new employees related to the Company's expansion into New York City and Long Island, increased health insurance costs and annual merit increases. An increase in the provision for credit losses of $6.5 million to $11.1 million also contributed to lower net income for the six months ended June 30, 2025.
Current report
Average Balance Sheet
Current report
Unaudited
Current report
Six Months Ended
Current report
(D)
Current report
The increase in the average yield on total investments for the three and six months ended June 30, 2025 compared to the same 2024 periods was primarily driven by the purchase of securities at higher yields than the yields in the existing portfolio. The yield on investments increased 65 basis points to 3.23 percent for the three months ended June 30, 2025, as compared to 2.58 percent for the same 2024 period. The average yield on investments increased by 62 basis points to 3.20 percent for the six months ended June 30, 2025 as compared to 2.58 percent for the same period in 2024.
Current report
For the three months ended June 30, 2025, the average balance of interest-bearing liabilities totaled $5.21 billion representing an increase of $446.5 million from $4.77 billion for the same 2024 period due to an increase in interest-bearing deposits of $465.1 million to $5.07 billion for the three months ended June 30, 2025. This increase was partially offset by a decrease in subordinated debt of $34.5 million to $98.9 million due to the redemption of $35.0 million of such debt in the first quarter of 2025. For the six months ended June 30, 2025, the average balance of interest-bearing liabilities totaled $5.18 billion representing an increase of $389.6 million from $4.79 billion for the same 2024 period due to an increase in interest-bearing deposits of $520.4 million to $5.04 billion for the six months ended June 30, 2025. This increase was partially offset by a decrease in brokered certificates of deposit of $113.5 million and a decrease in short term borrowings of $108.4 million for the six months ended June 30, 2025.
Current report
Company recorded unrealized gains of $42,000 and $237,000 for the three and six months ended June 30, 2025, respectively, as compared to unrealized losses of $84,000 and $195,000 for the three and six months ended June 30, 2024.
Current report
Operating expenses for the quarter ended June 30, 2025 and 2024 totaled $51.9 million and $43.1 million, respectively, reflecting an increase of $8.8 million, or 20 percent. Operating expenses for the six months ended June 30, 2025 increased $18.2 million or 22 percent, to $101.3 million from $83.2 million for the same 2024 period. Increased operating expenses for the three and six months ended June 30, 2025 were principally attributable to the Company's ongoing expansion into New York City, increased health insurance costs, and annual merit increases. The addition of production teams in Long Island during the second quarter of 2025 also contributed to the growth in operating expenses. The increase in loan expense for both the three- and six-month periods ended June 30, 2025 was primarily due to expenses of $441,000 and $506,000, respectively, related to the workout of several equipment finance problem loans.
Current report
(B)
Current report
(C)
Removed paragraphs (6)
Previous report
impact from a pandemic event on our business, operations, customers, allowance for credit losses and capital levels;
Previous report
higher than expected FDIC insurance premiums;
Previous report
The Company accounts for its debt securities in accordance with ASC 320, “Investments - Debt Securities” and its equity security in accordance with ASC 321, “Investments – Equity Securities.” All securities classified as available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income/(loss), net of tax. Securities classified as held to maturity are carried at amortized cost. The Company’s investment in a CRA investment fund is classified as an equity security. In accordance with ASU 2016-01, “Financial Instruments” unrealized holding gains and losses for equity securities are marked to market through the income statement.
Previous report
For the three months ended March 31, 2025, the average balance of interest-bearing liabilities totaled $5.14 billion representing an increase of $332.4 million from $4.81 billion for the same 2024 period due to an increase in interest-bearing deposits of $575.3 million to $5.01 billion for the three months ended March 31, 2025. This increase was partially offset by a decrease in overnight borrowings of $234.4 million to $1.0 million in overnight borrowings for the three months ended March 31, 2025.
Previous report
Operating expenses for the quarter ended March 31, 2025 and 2024 totaled $49.4 million and $40.0 million, respectively, reflecting an increase of $9.4 million, or 23 percent. Increased operating expenses in the first three months of 2025 were principally attributable to the Company's expansion into New York City, which included the hiring of multiple teams and expenses related to the opening of office and retail space in our Park Avenue location in New York City. There were also increased computer and software equipment costs. The first quarter of 2025 also included additional expense associated with annual merit increases and increased employee benefit costs.
Previous report
Brokered interest-bearing demand (“overnight”) deposits were $10.0 million at March 31, 2025. The interest rate paid on these deposits allows the Bank to fund operations at attractive rates and engage in interest rate swaps to hedge its asset-liability interest rate risk. The Company ensures ample available collateralized liquidity as a backup to these short-term brokered deposits. As of March 31, 2025, the Company had transacted pay fixed, receive floating interest rate swaps totaling $360.0 million in notional amount.
Reworded paragraphs (45)
Previous wording
the imposition of tariffs or other domestic or international governmental policies;
Current wording
the imposition of tariffs or other domestic or international governmental policies and potential retaliatory responses;
Previous wording
our inability to successfully generate new business in new geographic markets, including our expansion into New York City;
Current wording
our inability to successfully generate new business in new geographic markets, including our expansion into New York City and Long Island;
Previous wording
changes in liquidity, including the size and composition of our deposit portfolio, including the percentage of uninsured deposits in the portfolio;
Current wording
changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio;
Previous wording
demand for loans and deposits in our market areas;
Current wording
a decrease in demand for loans and deposits in our market areas;
Previous wording
The Company’s determination of the allowance for credit losses involves a higher degree of complexity and requires Management to make difficult and subjective judgments, which often require assumptions or estimates about highly uncertain matters. Changes in the methodology for determining the allowance for credit losses or in these judgments, assumptions or estimates could materially impact results of operations. This critical policy and its application are periodically reviewed with the Audit Committee and the Board of Directors.
Current wording
The Company’s determination of the allowance for credit losses involves a higher degree of complexity and requires Management to make difficult and subjective judgments, which often require assumptions or estimates about highly uncertain matters. Changes in the methodology for determining the allowance for credit losses or in these judgments, assumptions or estimates could materially impact results of operations. This critical policy and its application are reviewed periodically with the Audit Committee and the Board of Directors.
Previous wording
On January 1, 2022, the Company adopted ASU 2016-13 (Topic 326), which replaced the incurred loss methodology with CECL for financial instruments measured at amortized cost and other commitments to extend credit. The allowance for credit losses is a valuation allowance of Management’s estimate of expected credit losses in the loan portfolio. The process to determine expected credit losses utilizes analytic tools and Management judgment and is reviewed on a quarterly basis. When Management is reasonably certain that a loan balance is not fully collectable, an analysis is completed whereby a specific reserve may be established or a full or partial charge off is recorded against the allowance. 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 forecasts. Management evaluates a variety of factors including available published economic information in arriving at its forecast. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. Also included in the allowance for credit losses are qualitative reserves that are expected, but, in the Management’s assessment, may not be adequately represented in the quantitative analysis or the forecasts described above. Factors may include 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, legal and regulatory requirements, among others. The allowance is available for any loan that, in Management’s judgment, should be charged off.
Current wording
The allowance for credit losses is a valuation allowance of Management’s estimate of expected credit losses in the loan portfolio calculated in accordance with ASC 326, "Credit Losses". The process to determine expected credit losses utilizes analytic tools and Management judgment and is reviewed on a quarterly basis. When Management is reasonably certain that a loan balance is not fully collectable, an analysis is completed whereby a specific reserve may be established or a full or partial charge off is recorded against the allowance. 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 forecasts. Management evaluates a variety of factors, including available published economic information, in arriving at its forecasts. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. Also included in the allowance for credit losses are qualitative reserves that are expected, but, in the Management’s assessment, may not be adequately represented in the quantitative analysis or the forecasts described above. 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.
Previous wording
EXECUTIVE SUMMARY: The following table presents certain key aspects of our performance for the three months ended March 31, 2025 and 2024.
Current wording
EXECUTIVE SUMMARY: The following table presents certain key aspects of our performance for the three and six months ended June 30, 2025 and 2024.
Previous wording
For the quarter ended March 31, 2025, the Company recorded total revenue of $64.4 million, pretax income of $10.4 million, net income of $7.6 million and diluted earnings per share of $0.43, compared to revenue of $53.1 million, pretax income of $12.4 million, net income of $8.6 million and diluted earnings per share of $0.48 for the same period last year.
Current wording
For the quarter ended June 30, 2025, the Company recorded total revenue of $69.7 million, pretax income of $11.3 million, net income of $7.9 million and diluted earnings per share of $0.45, compared to revenue of $56.6 million, pretax income of $9.6 million, net income of $7.5 million and diluted earnings per share of $0.42 for the same period last year.
Previous wording
The decrease in net income for 2025 when compared to the same 2024 period was principally driven by increased operating expenses, which was principally attributable to the addition of new employees related to the Company's expansion into New York City, increased health insurance costs and annual merit increases. The Company has seen positive momentum in net interest margin, which increased to 2.68 percent for the first quarter of 2025 as compared to 2.20 percent for the same period in 2024. The Company's single point of contact private banking strategy and New York City expansion continues to deliver lower-cost core deposit relationships resulting in consistent improvement in the net interest margin and net interest income. During the first quarter of 2025, deposits grew $157.5 million, which included $72.1 million in noninterest bearing demand deposits. Other income and wealth management fee income continue to be a consistent and steady revenue stream for the Company and represented 29 percent of total revenue for the first quarter of 2025.
Current wording
For the six months ended June 30, 2025, the Company recorded total revenue of $134.1 million, pretax income of $21.7 million, net income of $15.5 million and diluted earnings per share of $0.87, compared to revenue of $109.7 million, pretax income of $22.0 million, net income of $16.2 million and diluted earnings per share of $0.91 for the same period in 2024. Total revenue benefited from strong net interest income growth due to improvements in yield on average interest earning assets and cost on average interest-bearing liabilities. The Company has seen positive momentum in net interest margin, which increased to 2.73 percent for the first six months of 2025 as compared to 2.22 percent for the same period in 2024. The Company's single point of contact private banking strategy and New York City expansion continues to deliver lower-cost core deposit relationships resulting in consistent improvement in both net interest margin and net interest income. During the first six months of 2025, deposits grew $234.1 million, which included $125.1 million in noninterest-bearing demand deposits.
Previous wording
OFF-BALANCE SHEET ARRANGEMENTS: For a discussion of our off-balance sheet arrangements, see the information set forth in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024 under the heading “Management’s
Current wording
OFF-BALANCE SHEET ARRANGEMENTS: For a discussion of our off-balance sheet arrangements, see the information set forth in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024 under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Off-Balance Sheet Arrangements and Aggregate Contractual Obligations.”
Previous wording
Commercial real estate and C&I loan originations increased by $35.8 million and $111.5 million, respectively, as demand for these loan products grew given the lower rate environment during the three months ended March 31, 2025.
Current wording
Residential mortgage, commercial real estate, multifamily and C&I loan originations increased by $31.8 million, $57.3 million, $73.9 million and $209.1 million, respectively, for the six months ended June 30, 2025, as demand for these loan products grew given moderating inflation and lower rates, which have created a more favorable lending environment during the three and six months ended June 30, 2025.
Previous wording
The effect of volume and rate changes on net interest income (on a tax-equivalent basis) for the three month period ended March 31, 2025 compared to March 31, 2024 are shown below:
Current wording
The effect of volume and rate changes on net interest income (on a tax-equivalent basis) for the three and six month periods ended June 30, 2025 compared to June 30, 2024 are shown below:
Previous wording
Net interest income, on a fully tax-equivalent basis, increased $11.1 million, or 32 percent, for the first quarter of 2025 to $45.7 million from $34.6 million for the same 2024 period. The net interest margin ("NIM") was 2.68 percent and 2.20 percent for the three months ended March 31, 2025 and 2024, respectively, an increase of 48 basis points. Net interest income, on a fully tax- equivalent basis, and NIM expanded during the quarter ended March 31, 2025 due to the Bank's focus on growing client deposit relationships, which were used to purchase investments as well as fund loans. Additionally, the Federal Reserve decreased the target Federal Funds rate by 100 basis points during the latter half of 2024, which has helped to improve NIM, as the Bank effectively lowered deposit rates during the fourth quarter of 2024.
Current wording
Net interest income, on a fully tax-equivalent basis, increased $13.2 million, or 37 percent, for the second quarter of 2025 to $48.5 million from $35.3 million for the same 2024 period. The net interest margin ("NIM") was 2.77 percent and 2.25 percent for the three months ended June 30, 2025 and 2024, respectively, an increase of 52 basis points. For the six months ended June 30, 2025 the Company recorded net interest income, on a fully tax-equivalent basis of $94.3 million compared to $70.0 million for the same 2024 period. The NIM was 2.73 percent and 2.22 percent for the six months ended June 30, 2025 and 2024, respectively, an increase of 51 basis points. Net interest income, on a fully tax-equivalent basis, and NIM expanded during the three and six months ended June 30, 2025 due to the Bank's focus on growing client deposit relationships, which were used to fund loans, as well as purchase investment securities. Additionally, the Federal Reserve decreased the target Federal Funds rate by 100 basis points during the latter half of 2024, which has helped to improve NIM, primarily driven by lower deposit rates.
Previous wording
The average balance of interest-earning assets increased to $6.91 billion during the first quarter of 2025 from $6.33 billion for the same 2024 period, reflecting an increase of $578.5 million. The increase in average interest-earning assets included an increase in the average balance of interest-earning deposits of $150.6 million, an increase in average investments of $238.6 million, as well as an increase in average loans of $189.3 million for the three months ended March 31, 2025 as compared to the same 2024 period.
Current wording
The average balance of interest-earning assets increased to $7.02 billion during the second quarter of 2025 from $6.32 billion for the same 2024 period, reflecting an increase of $696.2 million. Average interest-earning assets were $6.97 billion for the six months ended June 30, 2025 compared to $6.33 billion in the same 2024 period, representing an increase of $637.6 million. The increase in average interest-earning assets during the second quarter of 2025 when compared to the same quarter of 2024 included an increase in the average loans of $484.0 million, as well as an increase in the average balance of investments of $235.9 million, which was partially offset by a decrease in interest-earning deposits of $23.7 million. The increase in average interest-earning assets during the six months ended June 30, 2025 when compared to the same period of 2024 included an increase in average loans of $337.2 million, as well as increases in the average balance of investments of $237.2 million and interest-earning deposits of $63.2 million.
Previous wording
The increase in the average balance of outstanding loans for the quarter ended March 31, 2025 was primarily driven by an increase in commercial loans, residential mortgages and installment loans, partially offset by a decline in commercial mortgages. The average balance of commercial loans increased by $192.7 million, or 9 percent, to $2.43 billion for the quarter ended March 31, 2025 when compared to $2.24 billion for the same 2024 period. The average balance of residential mortgages increased by $39.5 million, or 7 percent, to $617.2 million for the quarter ended March 31, 2025 while the average balance of installment loans increased by $42.2 million, or 65 percent, to $107.5 million for the same period. The average balance of commercial mortgages for the three months ended March 31, 2025 declined by $75.9 million, or 3 percent, to $2.38 billion when compared to the same 2024 period. The increase in the average balance of loans for the three-month period was mostly a result of strong loan demand during the second half of 2024 into the first quarter of 2025.
Current wording
The increase in the average balance of outstanding loans for the three and six months ended June 30, 2025 was primarily driven by an increase in commercial loans, residential mortgages and installment loans, partially offset by a decline in commercial construction. The average balance of commercial loans increased by $348.6 million, or 16 percent, to $2.54 billion for the quarter ended June 30, 2025 when compared to $2.19 billion for the same 2024 period. The average balance of residential mortgages increased by $64.0 million, or 11 percent, to $641.0 million for the quarter ended June 30, 2025 while the average balance of installment loans increased by $73.1 million, or 109 percent, to $140.1 million for the same period. There was no average balance of commercial construction for the three months ended June 30, 2025 compared to $21.6 million for the same 2024 period. The average balance of commercial loans increased by $270.9 million, or 12 percent, to $2.49 billion for the six months ended June 30, 2025 when compared to $2.22 billion for the same period in 2024. The average balance of residential mortgages increased by $51.8 million, or 9 percent, to $629.1 million for the six months ended June 30, 2025 when compared to $577.3 million for the same period in 2024. The average balance of installment loans for the six months ended June 30, 2025 increased by $57.7 million, or 87 percent, when compared to the same period in 2024. The increase in the average balance of loans for the three- and six-month periods were mostly a result increasing loan demand from customers due to a lower interest rate environment and improving economic conditions.
Previous wording
The average yields earned on interest-earning assets were relatively flat when comparing the quarter ended March 31, 2025 to the same period in 2024. For the quarters ended March 31, 2025 and 2024, the average yields earned on interest-earning assets were 5.01 percent and 5.02 percent, respectively, a decline of 1 basis point.
Current wording
The average yields earned on interest-earning assets increased when comparing the three and six months ended June 30, 2025 to the same periods in 2024. For the quarters ended June 30, 2025 and 2024, the average yields earned on interest-earning assets were 5.12 percent and 5.03 percent, respectively, an increase of 9 basis points. For the six months ended June 30, 2025 and 2024, the average yields earned on interest-earning assets were 5.07 percent and 5.02 percent, respectively, an increase of 5 basis points.
Previous wording
The average yield on total loans for the three months ended March 31, 2025 compared to the same 2024 period was driven by an increase in the yield on residential mortgages offset by the decline in yields on commercial mortgages and commercial loans. The yield on residential mortgages increased 57 basis points to 4.32 percent for the three months ended March 31, 2025, as compared to 3.75 percent for the same 2024 period. The increase in the average yield for residential mortgages for the three-month period was driven by the origination of loans with higher yields than the yields on the existing portfolio. The average yield on commercial loans for the three months ended March 31, 2025 decreased 12 basis points to 6.59 percent from 6.71 percent at March 31, 2024. The average yield on commercial mortgages decreased 9 basis points to 4.39 percent from 4.48 percent for the same period in 2024. The average yield on commercial loans decreased for the three-month period due to a decrease in the target Federal Funds rate, which had a greater impact on these loans, that are typically floating rates with short repricing periods.
Current wording
The average yield on total loans for the three and six months ended June 30, 2025 compared to the same 2024 period was primarily driven by an increase in the average yields on residential mortgages and, for the three-month period commercial mortgages, partially offset by a decline in the average yield on commercial loans. The yield on residential mortgages increased 58 basis points to 4.45 percent for the three months ended June 30, 2025, as compared to 3.87 percent for the same 2024 period. The increase in the average yield for residential mortgages for the three-month period was driven by the origination of loans with higher yields than the yields on the existing portfolio. The average yield on commercial mortgages for the three months ended June 30, 2025, increased 8 basis points to 4.52 percent as compared to 4.44 percent for the same period in 2024. The average yield on commercial loans for the three months ended June 30, 2025 decreased 15 basis points to 6.62 percent from 6.77 percent at June 30, 2024. For the six months ended June 30, 2025, the average yield on residential mortgages increased 58 basis points to 4.39 percent from 3.81 percent for the same period in 2024. The average yield on commercial loans decreased by 14 basis points to 6.60 percent from 6.74 percent for the six months ended June 30, 2025. The average yield on commercial loans decreased for both the three and six-month periods due to a decrease in the target Federal Funds rate during the second half of 2024, which had a greater impact on these loans, that are typically floating rates with short repricing periods.
Previous wording
The increase in the average balance of interest-bearing deposits for the quarter ended March 31, 2025 compared to the 2024 comparable period was primarily due to an increase in the average balances of interest-bearing checking deposits of $491.2 million and money market accounts of $224.5 million, partially offset by a decline in the average balance of brokered certificates of deposit of $128.3 million. The increase in interest-bearing checking deposits for the three months ended March 31, 2025 was principally attributable to client demand for FDIC insured products, which we can offer through a reciprocal deposit program. The expansion into New York City was a significant driver of deposit growth and reduced the Company's reliance on overnight borrowings, brokered deposits and other high-cost funding sources while shifting funding into lower-cost, relationship deposits.
Current wording
The increase in the average balance of interest-bearing deposits for the three months ended June 30, 2025 compared to the 2024 comparable period was primarily due to an increase in the average balances of interest-bearing checking deposits of $463.7 million and money market accounts of $159.5 million, partially offset by a decline in the average balance of brokered certificates of deposit of $98.6 million and certificates of deposit of $56.9 million. For the six months ended June 30, 2025 when compared to the same period in 2024, the average balance of interest-bearing checking deposits increased by $477.8 million and money market accounts of $191.9 million, partially offset by a decrease in the average balance of brokered certificate of deposits by $113.5 and retail certificates of deposit of $33.3 million. The increase in interest-bearing checking deposits for the three and six months ended June 30, 2025 was principally attributable to our expansion into New York City and client demand for FDIC insured products, which we offer through a reciprocal deposit program. The expansion into New York City allowed us to grow lower cost, relationship deposits, while reducing the Company's reliance on overnight borrowings, brokered deposits and other high-cost funding sources.
Previous wording
The Company is a participant in the Reich & Tang Demand Deposit Marketplace program and the Promontory Program. The Company uses these deposit sweep services to place customer funds into interest-bearing demand (checking) accounts issued by other participating banks. Customer funds are placed at one or more participating banks to increase the level of FDIC insurance available to deposit customers. As a participant, the Company receives reciprocal amounts of deposits from other participating banks. Average reciprocal deposit balances for the quarters ended March 31, 2025 and 2024 were $1.37 billion and $792.0 million, respectively. The additional growth for the three months ended March 31, 2025 was directly related to clients' desire for the increased level of FDIC insurance offered by these programs.
Current wording
The Company is a participant in the Reich & Tang Demand Deposit Marketplace program and the Promontory Program. The Company uses these deposit sweep services to place customer funds into interest-bearing demand (checking) accounts issued by other participating banks. Customer funds are placed at one or more participating banks to increase the level of FDIC insurance available to deposit customers. As a participant, the Company receives reciprocal amounts of deposits from other participating banks. Average reciprocal deposit balances for the quarters ended June 30, 2025 and 2024 were $1.82 billion and $1.20 billion, respectively. Average reciprocal deposit balances for the six months ended June 30, 2025 and 2024 were $1.81 billion and $1.14 billion, respectively. The growth for the three and six months ended June 30, 2025 was due to clients' desire for the increased level of FDIC insurance offered by these programs.
Previous wording
At March 31, 2025, uninsured/unprotected deposits were approximately $1.6 billion, or 25 percent of total deposits. This amount was adjusted to exclude $325 million of public fund deposit balances, which are fully-collateralized and protected with securities and an FHLBNY letter of credit.
Current wording
At June 30, 2025, uninsured/unprotected deposits were approximately $1.7 billion, or 26 percent of total deposits. This amount was adjusted to exclude $311 million of public fund deposit balances, which are fully-collateralized and protected with securities and an FHLBNY letter of credit.
Previous wording
The Company had $1.0 million in average short-term borrowings during the first quarter of 2025 compared to $235.4 million for the same 2024 period. The decrease in borrowings 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.
Current wording
The Company had $44.7 million in average short-term borrowings during the second quarter of 2025 compared to $27.2 million for the same 2024 period. The Company had $22.9 million in average short-term borrowings during the six months ended June 30, 2025 compared to $131.3 million in the same 2024 period. The decrease in borrowings for the six-month period 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.
Previous wording
For the quarters ended March 31, 2025 and 2024, the cost of interest-bearing liabilities was 3.18 percent and 3.73 percent, respectively, reflecting a decrease of 55 basis points. The decrease for the three months ended March 31, 2025 was driven by a decrease in the average cost of interest-bearing deposits of 43 basis points to 3.14 percent for the first quarter of 2025. The Company benefited from lower short-term borrowing costs in the first quarter of 2025 of 4.54 percent compared to an average cost of 5.89 percent for the same 2024 period. The decrease in deposit and borrowing rates was due to the Federal Reserve lowering the target Federal Funds rate by 100 basis points during the latter half of 2024 and a change in the composition of the deposit portfolio with a greater concentration of lower-cost transaction deposits.
Current wording
For the quarters ended June 30, 2025 and 2024, the cost of interest-bearing liabilities was 3.17 percent and 3.71 percent, respectively, reflecting a decrease of 54 basis points. The cost of interest-bearing liabilities was 3.17 percent and 3.72 percent for the six months ended June 30, 2025 and 2024, respectively, reflecting a decrease of 55 basis points. The decreases for the three and six months ended June 30, 2025 was driven by a decrease in the average cost of interest-bearing deposits of 51 basis points to 3.15 percent for the second quarter of 2025 and 47 basis points to 3.15 for the six months ended June 30, 2025. The Company also benefited from lower short-term borrowing costs in the second quarter of 2025 of 4.52 percent compared to an average cost of 5.59 percent for the same 2024 period. The cost of short-term borrowing for the six months ended June 30, 2025 decreased by 136 basis points to 4.50 percent when compared to 5.86 for the same period in 2024. The decrease in deposit and borrowing rates was due to the Federal Reserve lowering the target Federal Funds rate by 100 basis points during the latter half of 2024 and a change in the composition of the deposit portfolio with a greater concentration of lower-cost core relationship deposits.
Previous wording
At March 31, 2025, the Company had investment securities available for sale with a fair value of $832.0 million compared with $784.5 million at December 31, 2024. The increase in investment securities available for sale was driven by the use of excess cash for security purchases (primarily mortgage-backed securities) during the first three months of 2025. A net unrealized loss (net of income tax) of $61.5 million and $72.1 million related to these securities were included in shareholders’ equity at March 31, 2025 and December 31, 2024, respectively.
Current wording
At June 30, 2025, the Company had investment securities available for sale with a fair value of $767.5 million compared with $784.5 million at December 31, 2024. A net unrealized loss (net of income tax) of $58.2 million and $72.1 million related to these securities were included in shareholders’ equity at June 30, 2025 and December 31, 2024, respectively.
Previous wording
At March 31, 2025, the Company had investment securities held to maturity with a carrying cost of $100.3 million and an estimated fair value of $88.7 million compared with a carrying cost of $101.6 million and an estimated fair value of $88.7 million at December 31, 2024.
Current wording
At June 30, 2025, the Company had investment securities held to maturity with a carrying cost of $98.6 million and an estimated fair value of $88.1 million compared with a carrying cost of $101.6 million and an estimated fair value of $88.7 million at December 31, 2024.
Previous wording
The Company had one equity security (a CRA investment security) with a fair value of $13.2 million and $13.0 million at March 31, 2025 and December 31, 2024, respectively, with changes in fair value recognized in the Consolidated Statements of Income. The Company recorded an unrealized gain of $195,000 for the three months ended March 31, 2025, respectively, as compared to an unrealized loss of $111,000 for the three months ended March 31, 2024.
Current wording
The Company had one equity security (a CRA investment security) with a fair value of $13.3 million and $13.0 million at June 30, 2025 and December 31, 2024, respectively, with changes in fair value recognized in the Consolidated Statements of Income. The
Previous wording
The Company recorded total other income, excluding wealth management fee income, of $3.4 million for the first quarter of 2025 compared to $4.3 million for the same 2024 period, reflecting a decrease of $875,000. The decrease was primarily due to lower corporate advisory fee income and service charges and fees, which was partially offset by an increase in the fair value adjustment for the CRA equity security.
Current wording
The Company recorded total other income, excluding wealth management fee income, of $5.5 million for the second quarter of 2025 compared to $5.1 million for the same 2024 period, reflecting an increase of $372,000. The increase was primarily due to income related to loan level, back-to-back swaps as well as an increase in the fair value adjustment for the CRA equity security. The Company recorded $8.9 million of total other income, excluding wealth management fee income, for the six months ended June 30, 2025 compared to $9.4 million for the same 2024 period, reflecting a decrease of $503,000. The decrease was primarily due to lower corporate advisory fee income and service charges and fees, which was partially offset by an increase in the fair value adjustment for the CRA equity security and increased income related to loan level, back-to-back swaps.
Previous wording
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 that could be used for start-up businesses. All SBA loans are underwritten and documented as prescribed by the SBA. 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. The Company recorded a gain on the sale of SBA loans of $302,000 and $400,000 for the quarters ended March 31, 2025 and 2024, respectively. The Company continues to see pressure from market volatility and the higher interest rate environment resulting in lower sale premiums and origination volumes.
Current wording
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 that could be used for start-up businesses. All SBA loans are underwritten and documented as prescribed by the SBA. 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. The Company recorded a gain on the sale of SBA loans of $521,000 and $449,000 for the quarters ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025 and 2024, the Company recorded a gain on the sale of SBA loans of $823,000 and $849,000, respectively. The Company continues to see pressure from market volatility resulting in lower sale premiums and origination volumes associated with SBA loans.
Previous wording
The Company recorded corporate advisory fee income for the first quarter of 2025 of $90,000 compared to $818,000 for the same period ended March 31, 2024. The higher amount for the three months ended March 31, 2024 was related to a lower corporate advisory/investment banking acquisition transaction completed in the first quarter of 2024.
Current wording
The Company recorded corporate advisory fee income for the second quarter of 2025 of $30,000 compared to $103,000 for the same period ended June 30, 2024. The six months ended June 30, 2025 included corporate advisory fee income of $120,000 compared to $921,000 for the same 2024 period. The higher amount for the six months ended June 30, 2024 was related to a corporate advisory/investment banking acquisition transaction completed in the first quarter of 2024.
Previous wording
For the quarter ended March 31, 2025, income from the sale of newly originated residential mortgage loans was $63,000 compared to $56,000 for the same period in 2024. The Company continues to be impacted by the industry wide slowdown in refinancing and home purchase activity in the higher interest rate environment.
Current wording
For the quarter ended June 30, 2025, income from the sale of newly originated residential mortgage loans was $27,000 compared to $34,000 for the same period in 2024. The Company recorded income of $90,000 from the sale of newly originated residential mortgage loans for both the six months ended June 30, 2025 and 2024, respectively.
Previous wording
Other income included a loss of $415,000 recorded by the Equipment Finance Division related to equipment transfers to lessees upon the termination of leases for the first quarter of 2025 compared to income of $141,000 for the same 2024 period. The loss on termination was due to the reduction in residual values of equipment realized upon disposition during the first quarter of 2025. The Company recorded $932,000 of unused commercial line fees for the quarter ended March 31, 2025 compared to $827,000 for the same 2024 period.
Current wording
Other income included a gain of $875,000 in the second quarter of 2025 for the termination of a lease agreement for a branch location that was no longer in use. Also included in other income were gains of $482,000 and $1.6 million recorded by the Equipment Finance Division related to equipment transfers to lessees upon the termination of leases for the second quarter of 2025 and 2024. The six months ended June 30, 2025 and 2024 included income of $67,000 and $1.7 million, respectively. Additionally, the Company recorded $869,000 of unused commercial line fees for the quarter ended June 30, 2025 compared to $786,000 for the same 2024 period. The six months ended June 30, 2025 included $1.8 million of unused commercial line fees compared to $1.6 million for the same 2024 period.
Previous wording
The Company recorded a $195,000 of positive fair value adjustment and $111,000 negative fair value adjustment for CRA equity securities in the first quarter of 2025 and 2024, respectively. The increase in 2025 was due to a decline in medium-term rates during the first quarter of 2025.
Current wording
The Company recorded a $42,000 positive fair value adjustment and an $84,000 negative fair value adjustment for CRA equity securities in the second quarters of 2025 and 2024, respectively. The Company recorded a $237,000 positive fair value adjustment and a $195,000 negative fair value adjustment for CRA equity securities for the six months ended June 30, 2025 and 2024, respectively. The increase in 2025 was due to a decline in medium-term rates during the six months of 2025.
Previous wording
The market value of the assets under management and/or administration (“AUM/AUA”) was $11.8 billion at March 31, 2025, reflecting a 1 percent decrease from $11.9 billion at December 31, 2024 and an increase of 3 percent from $11.5 billion at March 31, 2024 due primarily to market conditions offset by new client inflows.
Current wording
The market value of the assets under management and/or administration (“AUM/AUA”) was $12.3 billion at June 30, 2025, reflecting a 3 percent increase from $11.9 billion at December 31, 2024 and an increase of 7 percent from $11.5 billion at June 30, 2024 due primarily to improved market conditions and new client inflows.
Previous wording
In the March 2025 quarter, the Wealth Management Division generated $15.4 million in fee income compared to $14.4 million for the March 2024 quarter, reflecting a 7 percent increase. The increase in fee income for the three months ended March 31, 2025 was largely due to strong client inflows driven by new accounts and client additions.
Current wording
In the June 2025 quarter, the Wealth Management Division generated $15.9 million in fee income compared to $16.4 million for the June 2024 quarter, reflecting a 3 percent decrease. The decrease in fee income during the second quarter of 2025 was due to a large estate termination fee of $1.1 million, recognized in the second quarter of 2024. For the six months ended June 30, 2025, the Wealth Management Division generated $31.4 million in fee income compared to $30.8 million in fee income for the same period in 2024, reflecting a 2 percent increase. The increase in fee income for the six months ended June 30, 2025 was due to strong client inflows driven by new accounts and client additions and solid equity market performance.
Previous wording
Operating expenses relative to the Wealth Management Division, for the three months ended March 31, 2025, increased to $9.6 million as compared to $9.4 million for the first quarter of 2024. Expenses are in line with the Company’s Strategic Plan, particularly the hiring of key management and revenue-producing personnel.
Current wording
Operating expenses relative to the Wealth Management Division, for the three months ended June 30, 2025, decreased to $10.5 million as compared to $10.7 million for the second quarter of 2024. Operating expenses relative to the Wealth Management Division were relatively flat at $20.2 million and $20.1 million, for the six months ended June 30, 2025 and June 30, 2024. Expenses are in line with the Company’s Strategic Plan, particularly the hiring of key management and revenue-producing personnel.
Previous wording
Excludes modifications included in nonaccrual loans of $3.9 million at March 31, 2025, $3.6 million at December 31, 2024, $3.7 million at September 30, 2024, $3.2 million at June 30, 2024 and $3.2 million at March 31, 2024.
Current wording
Excludes modifications included in nonaccrual loans of $38.1 million at June 30, 2025, $3.9 million at March 31, 2025, $3.6 million at December 31, 2024, $3.7 million at September 30, 2024 and $3.2 million at June 30, 2024.
Previous wording
The Company had increases in performing modifications, loans past due 30 through 89 days and still accruing and loans subject to special mention at March 31, 2025 compared to December 31, 2024. The persistent nature of the elevated interest rate environment combined with inflationary pressures have presented challenges for certain borrowers, which is reflected in the trend of asset quality data in recent quarters. The increase in performing modifications was primarily due to loan modifications related to multifamily loans of $17.6 million and C&I loans of $11.1 million during the first quarter of 2025. This was partially offset by $12.1 million in C&I loans that are no longer classified as loan modifications. The increase in loans past due 30 through 89 days and still accruing was primarily due to $19.4 million of multifamily loans and $6.3 million of C&I loans that were past due as of March 31, 2025. The slight decrease in individually evaluated substandard loans was primarily due to a $1.9 million charge-off recorded on one commercial and industrial relationship during the first quarter of 2025. The increase in special mention loans was primarily due to increases of $9.0 million in multifamily, $22.5 million in investment commercial real estate and $5.4 million in C&I loans during the first three months of 2025.
Current wording
The Company had increases in nonperforming assets, performing modifications, loans past due 30 through 89 days and still accruing, loans subject to special mention and individually evaluated loans at June 30, 2025 compared to December 31, 2024. The persistent nature of the elevated interest rate environment combined with inflationary pressures have presented challenges for certain borrowers, which is reflected in the trend of asset quality data in recent quarters. The increase in nonperforming assets during the first six months of 2025 was driven by the addition of two commercial and industrial relationships totaling $14.5 million and one multifamily loan totaling $4.8 million. Multifamily loans represented approximately 49 percent of nonperforming assets as of June 30, 2025. The increase in performing modifications was primarily related to multifamily loans of $80.8 million and C&I loans of $3.0 million during the six month period ended June 30, 2025. This was partially offset by $12.1 million in C&I loans that are no longer classified as loan modifications. The increase in loans past due 30 through 89 days and still accruing compared to December 31, 2024 was primarily due to $11.9 million of multifamily loans that were past due as of June 30, 2025. The increase in special mention loans was primarily due to increases of $22.3 million in investment commercial real estate, $21.0 million in multifamily and $6.9 million in C&I loans during the six months ended June 30, 2025. The increase in individually evaluated substandard loans was primarily due to increases of $4.8 million consisting of one multifamily loan and increases of $14.5 million consisting of two C&I loans during the first six months of 2025, which resulted in an additional $1.1 million of specific reserves.
Previous wording
PROVISION FOR CREDIT LOSSES: The provision for credit losses was $4.5 million and $627,000 for the first quarters of 2025 and 2024, respectively. The allowance for credit losses (“ACL”) was $75.2 million as of March 31, 2025, compared to $73.0 million at December 31, 2024. The increased provision for credit losses for the three months ended March 31, 2025 was driven by overall loan growth (particularly in the C&I portfolio) and increased charge-offs, in addition to deterioration of key economic data points used in the CECL model. Charge-offs totaled $2.4 million during the first quarter of 2025 of which $2.3 million was related to one transportation credit compared to charge-offs of $254,000 during the first quarter of 2024. The allowance for credit losses as a percentage of loans was 1.31 percent at March 31, 2025 compared to 1.32 percent at December 31, 2024. The ACL recorded on individually evaluated loans was $12.6 million at March 31, 2025 compared to $12.7 million as of December 31, 2024. Total individually evaluated loans were $97.2 million and $99.8 million as of March 31, 2025 and December 31, 2024, respectively. The general component of the allowance increased from $60.3 million at December 31, 2024 to $62.6 million at March 31, 2025. The increase in the general reserve was primarily due to growth in the C&I portfolio of $121.6 million, which typically carry a higher level of reserves.
Current wording
PROVISION FOR CREDIT LOSSES: The provision for credit losses was $6.6 million and $3.9 million for the second quarters of 2025 and 2024, respectively. For the six months ended June 30, 2025 and 2024, the provision for loan losses was $11.1 million and $4.5 million, respectively. The allowance for credit losses (“ACL”) was $81.8 million as of June 30, 2025, compared to $73.0 million at December 31, 2024. The increased provision for credit losses for the three and six months ended June 30, 2025 was driven by overall loan growth, in addition to deterioration of key economic data points used in the CECL model. The provision for the second quarter of 2025 also included a specific reserve related for one equipment financing relationship for $5.8 million. Charge-offs totaled $20,000 during the second quarter of 2025 compared to charge-offs of $5.4 million during the second quarter of 2024. The higher charge-off level in 2024 was due to the sale of two problem loans which were approaching foreclosure and transferred to other real estate owned. The allowance for credit losses as a percentage of loans was 1.41 percent at June 30, 2025 compared to 1.32 percent at December 31, 2024. The increase in the ratio was primarily due to increases in specific reserves of $5.2 million and $1.9 million related to C&I and multifamily loans as expected recoveries from operations and collateral values have worsened during the six months ended June 30, 2025. The ACL recorded on individually evaluated loans was $20.2 million at June 30, 2025 compared to $12.7 million as of December 31, 2024. Total individually evaluated loans were $115.0 million and $99.8 million as of June 30, 2025 and December 31, 2024, respectively. The general component of the allowance increased from $60.3 million at December 31, 2024 to $61.6 million at June 30, 2025. The increase in the general reserve was primarily due to growth in the consumer and lease financing portfolios of $62.6 million and $50.5 million, respectively.
Previous wording
Excludes a credit of $23,000 at March 31, 2025, a credit of $15,000 at December 31, 2024, a credit of $3,000 at September 30, 2024, a provision of $10,000 at June 30, 2024 and a provision of $12,000 at March 31, 2024 related to off-balance sheet commitments.
Current wording
Excludes a of provision of $9,000 at June 30, 2025, a credit of $23,000 at March 31, 2025, a credit of $15,000 at December 31, 2024, a credit of $3,000 at September 30, 2024 and a provision of $10,000 at June 30, 2024 related to off-balance sheet commitments.
Previous wording
The increase in the allowance for credit losses as a percentage of nonperforming loans was primarily due to the increase in the ACL to $75.2 million and a decline in nonperforming loans of $3.0 million to $97.2 million at March 31, 2025, as compared to an ACL of $73.0 million and nonperforming loans of $100.2 million at December 31, 2024.
Current wording
The decrease in the allowance for credit losses as a percentage of nonperforming loans was primarily due to an increase in nonperforming loans of $14.8 million to $115.0 million at June 30, 2025, as compared to nonperforming loans of $100.2 million at December 31, 2024. This was partially offset by an increase in the ACL to $81.8 million at June 30, 2025 as compared to $73.0 million at December 31, 2024.
Previous wording
INCOME TAXES: Income tax expense for the quarter ended March 31, 2025 was $2.9 million as compared to $3.8 million for the same period in 2024.
Current wording
INCOME TAXES: Income tax expense for the quarter ended June 30, 2025 was $3.3 million as compared to $2.0 million for the same period in 2024. Income tax expense for the six months ended June 30, 2025 was $6.2 million as compared to $5.8 million for the same period in 2024.
Showing the first 40 of 45 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Average balances for available for sale securities are based on amortized cost.
Current report — wording carried from elsewhere
Interest income is presented on a tax-equivalent basis using a 21 percent federal tax rate.
Current report — wording carried from elsewhere
Loans are stated net of unearned income and include nonaccrual loans.
Current report — wording carried from elsewhere
Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
On January 1, 2022, the Company adopted ASU 2016-13 (Topic 326), which replaced the incurred loss methodology with CECL for financial instruments measured at amortized cost and other commitments to extend credit. The allowance for credit losses is a valuation allowance of Management’s estimate of expected credit losses in the loan portfolio. The process to determine expected credit losses utilizes analytic tools and Management judgment and is reviewed on a quarterly basis. When Management is reasonably certain that a loan balance is not fully collectable, an analysis is completed whereby a specific reserve may be established or a full or partial charge off is recorded against the allowance. 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. Management evaluates a variety of factors, including available published economic information, in arriving at its forecasts. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. Also included in the allowance for credit losses are qualitative reserves that are expected, but, in the Management’s assessment, may not be adequately represented in the quantitative analysis or the forecasts described above. 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.
Previous report — wording carried elsewhere
Discussion and Analysis of Financial Condition and Results of Operations – Off-Balance Sheet Arrangements and Aggregate Contractual Obligations.”