PEAPACK GLADSTONE FINANCIAL CORP
For the period ended Dec 31, 2025. Filed Mar 11, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 11, 2026
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-K
Period ended 2024-12-31; filed 2025-03-12.
0000950170-25-037821
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-11.
0001193125-26-101763
Item 7. 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 225 previous paragraphs and 229 current paragraphs.
123 unchanged; 85 reworded; 21 added; 16 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 31 previous and 36 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 (21)
Current report
changes in the methodology and assumptions used to calculate the allowance for credit losses;
Current report
the impact of any federal government shutdown;
Current report
the failure to maintain current technologies and/or to successfully implement future information technology enhancements;
Current report
increased FDIC insurance premiums;
Current report
Total deposits increased by $460 million, or 8 percent, to $6.6 billion at December 31, 2025 compared to $6.1 billion at December 31, 2024.
Current report
Noninterest-bearing demand deposits increased by $316 million, or 28 percent, to $1.4 billion as of December 31, 2025.
Current report
Net interest income, on a fully tax-equivalent basis, increased $51.8 million, or 35 percent, in 2025 to $201.9 million compared to $150.1 million in 2024. The net interest margin ("NIM") was 2.84 percent and 2.32 percent for the years ended December 31, 2025 and 2024, respectively, an increase of 52 basis points year over year. Net interest income, on a fully tax-equivalent basis, and NIM improved primarily due to continued growth in lower-costing client deposit relationships, which were used to fund loan production and investment purchases and allowed less reliance on higher-costing deposit balances and borrowed funds. The Bank also benefited from the 175 basis-point reduction in the target federal funds rate by the Federal Reserve from the latter half of 2024 through 2025, which lowered deposit costs and supported margin expansion.
Current report
The average yields earned on interest-earning assets for 2025 remained stable when comparing to 2024. The yield on interest-earning assets increased four basis points to 5.11 percent for the year ended December 31, 2025, when compared to 2024.
Current report
The increase in the average yield on total investments for the year ended December 31, 2025 compared to 2024 reflected purchases of higher-yielding securities in 2024 and 2025. The average yield on investments increased by 41 basis points to 3.16 percent for the year ended December 31, 2025 as compared to 2.75 percent for 2024.
Current report
ALLOWANCE FOR CREDIT LOSSES AND RELATED PROVISION: The allowance for credit losses ("ACL") was $71.0 million at December 31, 2025 compared to $73.0 million at December 31, 2024. The decrease in the ACL was primarily due to charge-offs of $26.9 million and changes in the application of the methodology used to calculate the ACL, partially offset by a provision for credit losses of $23.6 million during 2025.
Current report
Charge-offs consisted of $13.9 million related to several C&I loans and $13.0 million related to five multifamily property credits that were resolved during 2025. A significant portion of the charge-offs were tied to previously established specific reserves. As those reserves were utilized, both the related loan balances and the previously allocated specific reserves declined, limiting their incremental impact on the overall ACL. The resolutions of these credits reduced portfolio uncertainty and concentration risk. The provision for credit losses of $23.6 million was driven by loan growth of $741.4 million and the establishment of $25.5 million in specific reserves on certain relationships.
Current report
At December 31, 2025, the ACL as a percentage of total loans outstanding was 1.14 percent compared to 1.32 percent at December 31, 2024. The decline in the ratio was driven by (i) the use of previously established specific reserves associated with the charge-offs noted above, (ii) strong loan growth during the year, which increased total loans outstanding, and (iii) the Company’s annual CECL model recalibration. The recalibration incorporated lower historical loss rates and reflected the current risk portfolio characteristics, resulting in a lower required general reserve.
Current report
Although charge-offs were higher in 2025, they were largely related to credits that had been previously identified and reserved and therefore did not represent a broad decline in overall portfolio credit quality. Credit metrics and risk rating trends across the remainder of the portfolio remained stable, and management's forward-looking economic assumptions at December 31, 2025 reflected a stable economic outlook.
Current report
Despite the lower ACL ratio, management believes the allowance for credit losses of $71.0 million, or 1.14 percent of total loans, appropriately reflects the current credit quality, portfolio composition, loan growth, and forward-looking economic conditions, and remains adequate to absorb expected credit losses as of December 31, 2025.
Current report
The provision for credit losses was $23.5 million for 2025, $7.5 million for 2024 and $14.1 million for 2023. Net charge-offs were significantly higher at $25.6 million, as compared to $392,000 for 2024, as the Company aggressively worked to reduce nonperforming asset balances in 2025. Net charge-offs for the year ended December 31, 2024 included $5.4 million in recoveries recorded on commercial loans in 2024.
Current report
Service charges and fee income decreased in 2025 reflecting our shift from a retail‑oriented deposit base to a more commercially focused client portfolio, which typically generates lower fee activity.
Current report
Included in other income was a gain of $875,000 related to the termination of a lease agreement for a branch location that was no longer in use in 2025. Other income also included $1.2 million of SBIC income for the year ended December 31, 2025.
Current report
The increases in capital were partially offset by share repurchases of $5.4 million and cash dividends of $3.5 million during the year ended December 31, 2025.
Current report
The following table presents a roll forward of the Wealth Management Division's assets under management and/or administration for the years ended December 31, 2025, 2024 and 2023.
Current report
The following table presents a breakdown of the Wealth Management Division's assets under management and/or administration by investment class for the years ended December 31, 2025, 2024 and 2023.
Current report
The following tables present a breakdown of the Wealth Management Division's fee income for the years ended December 31, 2025, 2024 and 2023.
Removed paragraphs (16)
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 equity securities 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
Noninterest-bearing demand deposits comprised increased by $155 million, or 16 percent, to $1.1 billion as of December 31, 2024.
Previous report
Net interest income, on a fully tax-equivalent basis, declined $7.6 million, or 5 percent, in 2024 to $150.1 million compared to $157.7 million in 2023. The net interest margin ("NIM") was 2.32 percent and 2.48 percent for the years ended December 31, 2024 and 2023, respectively, a decrease of 16 basis points year over year. The decrease in net interest income, on a fully tax-equivalent basis, and NIM for 2024 when compared to 2023 was predominately due to a rapid increase in interest expense mostly driven by higher deposit rates, partially offset by a decrease in the average balance of borrowed funds and an increase in loan yields and the average balance of interest-earning deposits. The Federal Reserve monetary policy intended to slow inflation led to a significant increase in interest rates, particularly rates impacting short term investments and deposits. This resulted in an inversion of the U.S. Treasury yield curve for an extended period of time, driving an increase in deposit and borrowing costs at a faster rate than the yields on interest-earning assets. The Federal Reserve decreased the target Federal Funds rate by 100 basis points during the latter half of 2024, though the impact of these rate cuts had minimal immediate impacts on financial results.
Previous report
2024 from $51.9 million for 2023. The decline in the average balance of loans for 2024 was mostly a result of the Company tightening underwriting guidelines, pay downs of higher rate lines of credit and lower originations due to the higher interest rate environment.
Previous report
For the 2024 and 2023 periods, the average yields earned on interest-earning assets were 5.07 percent and 4.81 percent, respectively, an increase year over year of 26 basis points. The increase in the yields on interest-earning assets was primarily due to the increase in target Federal Funds rate of 100 basis points during 2023 (525 basis points since the Federal Reserve commenced raising rates in March 2022). This resulted in an increased yield on loans of 30 basis points to 5.47 percent, 46 basis points on interest-bearing deposits to 4.59 percent and 28 basis points on investments to 2.75 percent for 2024 when compared to 2023.
Previous report
Interest-bearing checking included $1.6 billion at December 31, 2024 and $990.7 million at December 31, 2023 of reciprocal balances in the Reich & Tang or Promontory Demand Deposit Marketplace reciprocal deposit programs.
Previous report
ALLOWANCE FOR CREDIT LOSSES AND RELATED PROVISION: The allowance for credit losses ("ACL") was $73.0 million at December 31, 2024 compared to $65.9 million at December 31, 2023. The increase in the allowance for credit losses was primarily due to the recognition of a provision for credit losses of $7.5 million in 2024. The provision for credit losses was driven by specific reserves of $5.1 million associated with one freight-related credit totaling $20.3 million and specific reserves of $5.1 million recorded for seven multifamily property credits with outstanding balances totaling $37.8 million and certain qualitative adjustments in the CECL calculation made during the year ended December 31, 2024. At December 31, 2024, the allowance for credit losses as a percentage of total loans outstanding was 1.32 percent compared to 1.21 percent at December 31, 2023. The Company believes that the allowance for credit losses as of December 31, 2024 represents a reasonable estimate for probable incurred losses in the portfolio at that date.
Previous report
The provision for credit losses was $7.5 million for 2024, $14.1 million for 2023 and $6.4 million for 2022. The decrease in the provision for credit losses for 2024 was primarily due to decreased levels of net charge-offs of $392,000, as compared to
Previous report
$9.1 million for 2023. Net charge-offs were lower as a result of $5.4 million in recoveries recorded on commercial loans in 2024. Net charge-offs for the year ended December 31, 2023 included charge-offs of $2.2 million of a previously established reserve on one multifamily loan and $5.6 million on one equipment finance relationship.
Previous report
Multifamily Loans. Multifamily loans are commercial mortgages on residential apartment buildings. Within the multifamily sector, the Bank’s primary focus is to lend against larger non-luxury apartment buildings and rent regulated properties with at least 30 units that are owned and managed by experienced sponsors. As of December 31, 2024, the average property size in the portfolio was 46 units.
Previous report
The adoption of CECL on January 1, 2022 resulted in an initial day 1 reduction of $5.5 million to the allowance for credit losses. The lower allowance was in part attributed to historically low charge-offs combined with the shorter duration of the loan portfolio employed in our CECL analysis. Further, the incurred loss method required significant qualitative factors, including factors related to COVID-19, and the use of a multiplier for potential losses on criticized and classified loans, neither of which are included within the CECL methodology. The CECL methodology utilizes less qualitative factors as it uses economic factors and considers relevant available information from internal and external sources related to past events and calculates losses based on discounted cash flows on an individual loan basis. Accordingly, the CECL model quantitatively accounts for some of the qualitative factors utilized in the incurred loss methodology.
Previous report
(A)
Previous report
The Company allowed $120.5 million of brokered certificates of deposits to mature during 2024. These deposits were replaced by lower cost core relationship deposits. Brokered interest-bearing demand (“overnight”) deposits were $10.0 million at December 31, 2024. The Company ensures ample available collateralized liquidity as a backup to these short-term brokered deposits. As of December 31, 2024, the Company has transacted pay fixed, receive floating interest rate swaps totaling $360.0 million in notional amount.
Previous report
Wealth management expenses increased to $41.4 million for the year ended December 31, 2024 from $41.3 million for 2023, an increase of $128,000, or less than 1 percent. Compensation and benefits expense totaled $29.9 million and $29.4 million for the years ended December 31, 2024 and 2023, respectively, increasing $434,000 or 1 percent.
Previous report
Compensation and benefits expense increased slightly due to overall growth in the business, new hires and increased healthcare costs. Remaining expenses are in line with the Company’s Strategic Plan, particularly the hiring of key management and revenue-producing personnel.
Reworded paragraphs (85)
Previous wording
an unexpected decline in the economy, in particular in our New Jersey and New York market areas, including potential recessionary conditions;
Current wording
a decline in the economy, in particular in our New Jersey and New York market areas, including potential recessionary conditions;
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impact from a pandemic event on our business, operations, customers, allowance for credit losses and capital levels;
Current wording
impact from a pandemic event on our business, operations, customers, allowance for credit losses and/or capital levels;
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higher than expected increases in our allowance for credit losses;
Current wording
increases in our allowance for credit losses;
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higher than expected increases in credit losses or in the level of delinquent, nonperforming, classified and criticized loans;
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higher than expected increases in credit losses or in the level of delinquent, nonperforming, classified and criticized loans or charge-offs;
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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 retaliatory responses;
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our inability to successfully generate new business and brand recognition in new geographic markets, including our expansion into New York City;
Current wording
our inability to successfully generate new business and brand recognition 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 and the percentage of uninsured deposits in the portfolio;
Current wording
changes in liquidity, including the size and composition of our deposit portfolio, including the percentage of uninsured deposits in the portfolio;
Previous wording
changes in governmental regulation, including, but not limited to, any increase in FDIC insurance premiums and changes in the monetary policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System;
Current wording
changes in governmental regulation, including, but not limited to, changes in the monetary and fiscal policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System;
Previous wording
On January 1, 2022, the Company adopted ASU 2016-13(Topic 326), which replaced the incurred loss methodology with current expected credit losses ("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.
Current wording
The allowance for credit losses is a valuation allowance, which represents 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 economic 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
Although Management uses the best information available, the level of the allowance for credit losses remains an estimate, which is subject to significant judgment and short-term change. Various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for credit losses. Such agencies may require the Company to make additional provisions for credit losses based upon information available to them at the time of their examination. Furthermore, the majority of the Company’s loans are secured by real estate in New Jersey and the boroughs of New York City. Accordingly, the collectability of a substantial portion of the carrying value of the Company’s loan portfolio is susceptible to changes in local market conditions and any adverse economic conditions. Future adjustments to the provision for credit losses and allowance for credit losses may be necessary due to economic, operating, regulatory and other conditions beyond the Company’s control.
Current wording
Although Management uses the best information available, the level of the allowance for credit losses remains an estimate, which is subject to significant judgment and short-term change. Various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for credit losses. Such agencies may require the Company to make additional provisions for credit losses based upon information available to them at the time of their examination. Furthermore, the majority of the Company’s loans are secured by real estate in New Jersey and the boroughs of New York City. Accordingly, the collectability of a substantial portion of the Company’s loan portfolio is susceptible to changes in local market conditions, rent control regulations and any adverse economic conditions. Future adjustments to the provision for credit losses and the allowance for credit losses may be necessary due to economic, operating, regulatory and other conditions beyond the Company’s control.
Previous wording
The Company’s quantitative component of its allowance for credit losses for collectively evaluated loans is calculated with an economic forecast sourced from Moody’s. Management performed a hypothetical sensitivity analysis to understand the impact of changes in the economic forecast as a key input in our calculation of the allowance for credit losses for collectively evaluated loans. Within the various economic scenarios considered for this hypothetical sensitivity analysis, as of December 31, 2024, the quantitative estimate of the allowance for credit loss for collectively evaluated loans would increase by approximately $23 million under sole consideration of an adverse Moody’s economic forecast, which when stressed, resulted in the national unemployment rate increasing to 8.2 percent and negative growth for national GDP of approximately 2.5 percent. The hypothetical sensitivity calculation reflects the sensitivity of the modeled allowance estimate to macroeconomic forecast data but lacks other qualitative overlays and other qualitative adjustments that are part of the quarterly allowance calculation process. As such, this does not necessarily reflect the nature and extent of future changes in the allowance for reasons including increases or decreases in qualitative adjustments, changes in the risk profile, size and composition of the loan portfolio, changes in the severity of the macroeconomic scenario and the range of scenarios under management consideration.
Current wording
The Company’s quantitative component of its allowance for credit losses for collectively evaluated loans is calculated with an economic forecast sourced from Moody’s. Management performed a hypothetical sensitivity analysis to understand the impact of changes in the economic forecast as a key input in our calculation of the allowance for credit losses for collectively evaluated loans. Within the various economic scenarios considered for this hypothetical sensitivity analysis, as of December 31, 2025, the quantitative estimate of the allowance for credit loss for collectively evaluated loans would increase by approximately $23 million under sole consideration of an adverse Moody’s economic forecast, which when stressed, resulted in the national unemployment rate increasing to 8.3 percent and negative growth for national GDP of approximately 2.6 percent. The hypothetical sensitivity calculation reflects the sensitivity of the modeled allowance estimate to macroeconomic forecast data but lacks other qualitative overlays and other qualitative adjustments that are part of the quarterly allowance calculation process. As such, this does not necessarily reflect the nature and extent of future changes in the allowance for reasons including increases or decreases in qualitative adjustments, changes in the risk profile, size and composition of the loan portfolio, changes in the severity of the macroeconomic scenario and the range of scenarios under management consideration.
Previous wording
For the year ended December 31, 2024, the Company recorded net income of $33.0 million, and diluted earnings per share of $1.85, compared to $48.9 million and $2.71, respectively, for 2023, reflecting decreases of $15.9 million, or 32 percent, and $0.86 per share, or 32 percent, respectively. During 2024, the Company continued to focus on executing its Strategic Plan, which included ongoing investment in our private banking model. During 2024, the Company hired a team of experienced professionals to gain entry into the New York City market. The Company's New York City initiative has resulted in approximately $950 million in new customer relationship deposits. The Strategic Plan calls for expansion of the Company’s wealth management business, organically and through acquisitions, and also expansion of the Company’s commercial and industrial (“C&I”) lending platform, through the use of private bankers, who lead with deposit gathering and wealth management discussions.
Current wording
For the year ended December 31, 2025, the Company recorded net income of $37.3 million, and diluted earnings per share of $2.10, compared to $33.0 million and $1.85, respectively, for 2024, reflecting increases of $4.3 million, or 13 percent, and $0.25 per share, or 14 percent, respectively. During 2025, the Company continued to focus on its expansion into the metro New York region. During 2025, the Company added six new production teams in Long Island. The Company's metro New York initiative has resulted in approximately $1.9 billion in new core relationship deposits, 31 percent of which is in noninterest-bearing accounts. The Company also grew the wealth management team through the addition of experienced advisers to help serve the expanded geography throughout the metro NY market.
Previous wording
At December 31, 2024, the market value of assets under management and/or administration, through the Peapack Private Wealth Management Team, was $11.9 billion, reflecting an increase of 9 percent from $10.9 billion at December 31, 2023.
Current wording
At December 31, 2025, the market value of assets under management in our Wealth Management Division grew by $1.2 billion to $13.1 billion, reflecting an increase of 10 percent from $11.9 billion at December 31, 2024.
Previous wording
Wealth Management fee income was $61.5 million in 2024, which comprised 27 percent of total revenue for the year.
Current wording
Wealth Management fee income was $63.2 million in 2025, which comprised 22 percent of the Company's total revenue for the year.
Previous wording
Total loans increased by $83 million, or 2 percent, to $5.5 billion at December 31, 2024 compared to $5.4 billion at December 31, 2023.
Current wording
Total loans increased by $741 million, or 13 percent, to $6.3 billion at December 31, 2025 compared to $5.5 billion at December 31, 2024.
Previous wording
At December 31, 2024, total C&I loans (including equipment finance loans) comprised 43 percent of the total loan portfolio. Total deposits increased by $855 million, or 16 percent, to $6.1 billion at December 31, 2024 compared to $5.3 billion at December 31, 2023. The Company allowed $365 million in high cost, non-core relationship deposits to roll off during 2024.
Current wording
At December 31, 2025, total C&I loans (including equipment finance loans) comprised 44 percent of the total loan portfolio.
Previous wording
Core deposits (which includes noninterest-bearing demand and interest-bearing demand, savings and money market accounts) totaled 92 percent of total deposits at December 31, 2024.
Current wording
Core deposits (which includes noninterest-bearing demand and interest-bearing demand, savings and money market accounts) represent 94 percent of total deposits at December 31, 2025.
Previous wording
Book value per share increased 5 percent to $34.45 at December 31, 2024 from $32.90 at December 31, 2023.
Current wording
Book value per share increased 9 percent to $37.49 at December 31, 2025 from $34.45 at December 31, 2024.
Previous wording
(B) Net interest income on a fully tax equivalent basis as a percentage of total average interest-earning assets.
Current wording
(B) Net interest income on a fully tax equivalent basis, using a 21 percent federal income tax rate, as a percentage of total average interest-earning assets.
Previous wording
The Company recorded net income of $33.0 million and diluted earnings per share of $1.85 for the year ended December 31, 2024, compared to net income of $48.9 million and diluted earnings per share of $2.71 for the year ended December 31, 2023. These results produced a return on average assets of 0.50 percent and 0.76 percent for 2024 and 2023, respectively, and a return on average shareholders’ equity of 5.61 percent and 8.77 percent for 2024 and 2023, respectively.
Current wording
The Company recorded net income of $37.3 million and diluted earnings per share of $2.10 for the year ended December 31, 2025, compared to net income of $33.0 million and diluted earnings per share of $1.85 for the year ended December 31, 2024. These results produced a return on average assets of 0.52 percent and 0.50 percent for 2025 and 2024, respectively, and a return on average shareholders’ equity of 5.95 percent and 5.61 percent for 2025 and 2024, respectively.
Previous wording
The decrease in net income for 2024 was principally driven by increased operating expenses, which was principally attributable to the Company's expansion of our private banking model that offers a single point of contact for all banking services into New York City. The decrease in net income was also driven by a decline in net interest income due to net interest margin contraction as a result of higher deposit and borrowing rates experienced during 2024, partially offset by a decrease in provision for credit losses and an increase in wealth management fee income. The Company experienced positive momentum in net interest margin during the second half of 2024, as a result of paying down overnight borrowings with core deposit growth at a lower cost. During 2024, deposits grew $854.9 million, which included $155.0 million in noninterest-bearing demand deposits. Both market volatility and the higher interest rate environment resulted in a decline of $1.2 million in gain on sale of SBA loans to $1.2 million when compared to $2.4 million for 2023.
Current wording
The increase in net income for 2025 was principally driven by increased net interest income partially offset by increased provision for credit losses and increased operating expenses, which was principally attributable to the expansion of our private banking model that offers a single point of contact for all banking services into the metro New York City market. This strategy and metro New York City expansion continues to deliver lower-cost core deposit relationships resulting in consistent improvement in our cost of funds and net interest margin. During 2025, deposits grew $460.0 million, which included $316.0 million in noninterest-bearing demand deposits.
Previous wording
The average balance of interest-earning assets increased by $123.4 million to $6.5 billion at December 31, 2024 compared to $6.4 billion at 2023. The increase was predominately driven by growth in the average balance of investments of $47.9 million to $849.9 million and the growth in the average balance of interest-earning deposits of $150.5 million, which was offset by a decline in the average balance of loans of $75.0 million. The decline in the average balance of loans coupled with an increase of $378.1 million in the average balance of deposits contributed to growth in investments and interest-earning deposits in 2024.
Current wording
The average balance of interest-earning assets increased by $625.4 million to $7.11 billion at December 31, 2025 compared to $6.48 billion at 2024. The increase was predominately driven by growth in the average balance of loans of $512.1 million, and investments of $147.8 million, partially offset by a decline in the average balance of interest earnings deposits of $34.5 million.
Previous wording
The decline in average balance of loans was primarily driven by a decline in commercial mortgages and commercial loans, offset slightly by growth in residential mortgages and installment loans. The average balance of commercial mortgages declined by $87.7 million to $2.4 billion in 2024 compared to $2.5 billion in 2023. The average balance of commercial loans declined by $38.2 million to $2.2 billion in 2024 as compared to $2.3 billion in 2023. The average balance of residential mortgages grew $19.5 million to $582.0 million for the year ended December 31, 2024 from $562.5 million for 2023. Additionally, the average balance of installment loans grew $18.9 million to $70.9 million for the year ended December 31,
Current wording
The increase in average balance of loans was primarily driven by an increase in commercial loans, residential and commercial mortgages, and installment loans, offset slightly by a decline in commercial construction. The average balance of commercial loans increased by $342.9 million to $2.56 billion in 2025 compared to $2.22 billion in 2024. The average balances of residential mortgages grew $56.8 million to $638.9 million for the year ended December 31, 2025 from $582.0 million in 2024. The average balances of commercial mortgages grew $41.4 million to $2.45 billion in 2025 compared to $2.41 billion in 2024. Additionally, the average balance of installment loans increased by $75.7 million to $146.6 million in 2025 as compared to $70.9 million in 2024. The increase in the average balance of loans was primarily a result of increasing loan demand from customers due to a lower interest rate environment, our expansion into the metro New York region and improving economic conditions.
Previous wording
Interest-earning deposits are an additional part of the Company's liquidity and interest rate risk management strategies. The combined average balance of these investments during the year ended December 31, 2024 was $297.4 million with an average yield of 4.59 percent as compared to $147.0 million and an average yield of 4.13 percent for 2023. The increase in the average yield for 2024 was due to the increase in the Federal Funds rate.
Current wording
Interest-earning deposits are an additional part of the Company's liquidity and interest rate risk management strategies. The combined average balance of these investments during the year ended December 31, 2025 was $263.0 million with an average yield of 3.68 percent as compared to $297.4 million and an average yield of 4.59 percent for 2024. The decrease reflected cash used to fund loan originations and investment purchases. The decrease in the rate reflected the lower interest rate environment.
Previous wording
The average yield on loans for the year ended December 31, 2024 compared to 2023 was driven by an increase in the yield on commercial loans, commercial mortgages and residential mortgages. The yield on commercial loans for the year ended December 31, 2024 increased 45 basis points to 6.84 percent from 6.39 percent for the year ended December 31, 2023. The average yield on commercial loans increased for 2024 due to an increase in the target Federal Funds rate, which had a greater impact on these loans, that are typically floating rates with short repricing periods. The average yield on commercial mortgages increased 11 basis points to 4.47 percent for the year ended December 31, 2024, when compared to 2023. The average yield on residential mortgages increased 44 basis points to 3.95 percent for the year ended December 31, 2024, when compared to 3.51 percent for 2023. The increase for both commercial and residential mortgages for 2024 were driven by the originations of loans with higher yields in the current higher interest rate environment. As of December 31, 2024, 32 percent of all loans will reprice within one month, 37 percent within three months and 49 percent within one year.
Current wording
The average yield on total loans for 2025 remained stable up four basis points to 5.51 percent for 2025 when compared to 5.47 percent for 2024. The average yield on residential mortgages increased 53 basis points to 4.48 percent for the year ended December 31, 2025, when compared to 3.95 percent for 2024. The average yield on commercial mortgages increased nine basis points to 4.56 percent for the year ended December 31, 2025, when compared to 2024. Mortgage-related yields rose in 2025 despite Federal Funds rate cuts, as rates remained elevated at the longer end of the yield curve, along with more seasoned lower-coupon mortgages being replaced with higher-yielding originations. The yield on commercial loans for the year ended December 31, 2025 decreased 28 basis points to 6.56 percent from 6.84 percent for the year ended December 31, 2024. The average yield on commercial loans decreased for 2025 due to a decrease in the target Federal Funds rate of 175 basis points from the second half of 2024 through December 31, 2025, which had a greater impact on these loans, which are typically floating rates with short repricing periods. As of December 31, 2025, 30 percent of all loans will reprice within one month, 35 percent within three months and 51 percent within one year.
Previous wording
The average balance of interest-bearing liabilities totaled $4.9 billion for 2024 representing an increase of $146.0 million, or 3 percent, from $4.7 billion in 2023. The increase in interest-bearing liabilities was primarily due to an increase in the average balance of interest-bearing deposits of $420.0 million to $4.67 billion in 2024 from $4.23 billion in 2023. This increase was partially offset by a decrease in overnight borrowings of $272.5 million to $65.3 million in 2024 from $337.8 million in 2023.
Current wording
The average balance of interest-bearing liabilities totaled $5.24 billion for 2025 representing an increase of $368.1 million, or 8 percent, from $4.87 billion in 2024. The increase in interest-bearing liabilities was primarily due to an increase in the average balance of interest-bearing deposits of $449.9 million to $5.12 billion in 2025 from $4.67 billion in 2024. This increase was partially offset by a decrease in overnight borrowings of $53.2 million to $12.1 million in 2025 from $65.3 million in 2024 and a decrease in subordinated debt of $27.6 million to $105.8 million in 2025 from $133.4 million in 2024.
Previous wording
The increase in the average balance of interest-bearing deposits was primarily due to an increase of interest-bearing checking accounts of $372.2 million to $3.15 billion from $2.78 billion and an increase of certificates of deposits of $91.1 million to $559.3 million from $468.2 million, partially offset by decreases of money market and savings deposits of $39.3 million in 2024. The increase in interest-bearing checking deposits was principally attributable to client demand for FDIC insured products, which we can offer through a reciprocal deposit program. The Company added short-term customer CDs to provide additional liquidity and replace brokered deposit run-off. The decrease in savings and money market accounts included clients shifting balances into higher-yielding short-term Treasuries and interest-bearing checking accounts. 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 was primarily due to an increase in the average balance of interest-bearing checking accounts of $424.2 million to $3.57 billion and money markets of $157.3 million to $999.9 million, partially offset by a decrease in the average balance of certificates of deposit of $67.2 million in 2025. The increase in interest-bearing checking deposits was principally attributable to our continued expansion into the metro New York region and client demand for FDIC insured products, which we can offer through a reciprocal deposit program. Our expansion into the metro New York market has 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 decrease in the average balance of borrowings from $337.8 million to $65.3 million for 2024 was driven by the growth in client deposits led by the Company's expansion into New York City, which were used to pay down borrowings.
Current wording
The decrease in the average balance of borrowings from $65.3 million to $12.1 million for 2025 was driven by the growth in client deposits led by the Company's expansion into New York City, which were used to pay down borrowings.
Previous wording
For the years ended December 31, 2024 and 2023, the cost of interest-bearing liabilities was 3.67 percent and 3.13 percent, respectively, reflecting an increase of 54 basis points. The increase was driven by an increase in the average cost of interest-bearing deposits of 71 basis points to 3.60 percent for 2024. The increase in deposit and borrowing rates was due to the Federal Reserve raising the target Federal Funds rate by 525 basis points since March 2022 and a change in the composition of the deposit portfolio. The cost of borrowings increased by 50 basis points to 5.89 percent in 2024 from 5.39 percent for 2023.
Current wording
For the years ended December 31, 2025 and 2024, the cost of interest-bearing liabilities was 3.09 percent and 3.67 percent, respectively, reflecting a decrease of 58 basis points. The decrease was driven by a decrease in the average cost of interest-bearing deposits of 54 basis points to 3.06 percent for 2025 and a decrease in the average cost of certificates of deposit of 74 basis points to 3.45 percent for 2025. The Company also benefited from lower short-term borrowing costs for the year ended December 31, 2025, which decreased by 139 basis points to 4.50 percent when compared to 5.89 percent 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 175 basis points during the latter half of 2024 through the end of 2025, and a change in the composition of the deposit portfolio with a greater concentration of lower-cost core relationship deposits.
Previous wording
At December 31, 2024, the Company had investment securities held to maturity with a carrying cost of $101.6 million and an estimated fair value of $88.7 million compared with a carrying cost of $107.8 million and an estimated fair value of $94.4 million at December 31, 2023.
Current wording
At December 31, 2025, the Company had investment securities held to maturity with an amortized cost of $95.9 million and an estimated fair value of $87.5 million compared with an amortized cost of $101.6 million and an estimated fair value of $88.7 million at December 31, 2024.
Previous wording
At December 31, 2024, the Company had investment securities available for sale with an estimated fair value of $784.5 million compared with $550.6 million at December 31, 2023. The increase was due to the use of excess liquidity for purchases, primarily of residential mortgage-backed securities, as deposit growth outpaced loan growth during 2024. A net unrealized loss (net of income tax) of $72.1 million and a net unrealized loss (net of income tax) of $69.2 million were included in shareholders’ equity at December 31, 2024 and 2023, respectively.
Current wording
At December 31, 2025, the Company had investment securities available for sale with an estimated fair value of $774.2 million compared with $784.5 million at December 31, 2024. A net unrealized loss (net of income tax) of $49.3 million and $72.1 million related to these securities were included in shareholders’ equity at December 31, 2025 and 2024, respectively.
Previous wording
The Company had one equity security (a CRA investment security) with a fair value of $13.0 million and $13.2 million at December 31, 2024 and 2023, respectively, with changes in fair value recognized in the Consolidated Statements of Income. The Company recorded an unrealized loss of $125,000 for the year ended December 31, 2024, as compared to a $181,000 unrealized gain for the year ended December 31, 2023. Additionally, the Company sold its Visa B shares, which resulted in a positive fair value adjustment to equity securities of $953,000 recognized in the Consolidated Statement of Income during the year ended December 31, 2024.
Current wording
The Company had one equity security (a CRA investment security) with a fair value of $13.5 million and $13.0 million at December 31, 2025 and 2024, respectively, with changes in fair value recognized in the Consolidated Statements of Income. The Company recorded an unrealized gain of $418,000 for the year ended December 31, 2025, as compared to a $125,000 unrealized loss for the year ended December 31, 2024. Additionally, the Company sold its Visa B shares, which resulted in a positive fair value adjustment to equity securities of $953,000 recognized in the Consolidated Statements of Income during the year ended December 31, 2024.
Previous wording
LOANS: The loan portfolio represents the largest portion of the Company’s interest-earning assets and is the primary source of interest income. Loans are primarily originated in New Jersey and the boroughs of New York City and, to a lesser extent, Pennsylvania and Delaware. The Company also offers equipment financing loan and leases that are originated nationally. As of December 31, 2024, 43 percent of the total loan portfolio consisted of C&I loans (including equipment financing), 33 percent of multifamily loans, 11 percent of commercial mortgages and 11 percent of residential mortgages.
Current wording
LOANS: The loan portfolio represents the largest portion of the Company’s interest-earning assets and is the primary source of interest income. Loans are primarily originated in New Jersey and the boroughs of New York City and, to a lesser extent, Pennsylvania. The Company also offers equipment financing loan and leases that are originated nationally. As of December 31, 2025, 44 percent of the total loan portfolio consisted of C&I loans (including equipment financing), 30 percent of multifamily loans, 12 percent of commercial mortgages and 10 percent of residential mortgages.
Previous wording
Total loans were $5.5 billion and $5.4 billion at December 31, 2024 and 2023, respectively, an increase of $83.0 million, over the previous year. Residential loans increased $36.5 million to $614.8 million at December 31, 2024 from $578.3 million at December 31, 2023. Multifamily mortgage loans were $1.8 billion at December 31, 2024, a decrease of $36.6 million, or 2 percent, when compared to $1.8 billion at December 31, 2023. During 2024, commercial mortgages decreased $49.5 million to $588.1 million when compared to $637.6 million for 2023. Commercial loans, which includes equipment financing, totaled $2.4 billion at December 31, 2024. This was an increase of $128.6 million, or 6 percent, when compared to December 31, 2023.
Current wording
Total loans were $6.3 billion and $5.5 billion at December 31, 2025 and 2024, respectively, an increase of $741.4 million, over the previous year. Residential loans increased $32.9 million to $647.8 million at December 31, 2025 from $614.8 million at December 31, 2024. Multifamily mortgage loans were $1.9 billion at December 31, 2025, an increase of $62.8 million, or 3 percent, when compared to $1.8 billion at December 31, 2024. During 2025, commercial mortgages increased $186.3 million to $774.4 million when compared to $588.1 million at December 31, 2024. The increase in commercial mortgages was bolstered by our focus on attracting clients that bring a full relationship to the Bank coupled with improved lender liquidity. Commercial loans, which includes equipment financing, totaled $2.7 billion at December 31, 2025. This was an increase of $332.3 million, or 14 percent, when compared to December 31, 2024. Commercial loan growth was driven by business expansion and capital investment.
Previous wording
The Company originates loans that are partially guaranteed by the SBA, to provide working capital and/or, finance the purchase of equipment, inventory or commercial real estate and that could be used for start-up and smaller 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 held in the loan portfolio. During 2024, the Bank sold $15.0 million of the guaranteed portion of SBA loans into the secondary market. As of December 31, 2024, the balance of the non-guaranteed portion of SBA loans held on our balance sheet totaled $41.9 million and was included in commercial loans.
Current wording
The Company originates loans that are partially guaranteed by the SBA, to provide working capital and/or, finance the purchase of equipment, inventory or commercial real estate and that could be used for start-up and smaller 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 held in the loan portfolio. During 2025, the Bank sold $19.2 million of the guaranteed portion of SBA loans into the secondary market. As of December 31, 2025, the balance of the non-guaranteed portion of SBA loans held on our balance sheet totaled $36.7 million, which, and was included in commercial loans.
Previous wording
The Bank believes it addresses the key elements in the risk management framework laid out by its regulators for the effective management of CRE concentration risks.
Current wording
The CRE concentration as a percentage of regulatory capital is monitored by Management. Management believes it satisfactorily addresses the key elements in the risk management framework laid out by its regulators for the effective management of CRE concentration risks.
Previous wording
At December 31, 2024 and 2023, the Company reported total deposits of $6.1 billion and $5.3 billion, an increase of $854.9 million, or 16 percent. The Company’s strategy is to fund a majority of its loan growth with core deposits, which is an important factor in the generation of net interest income. The Company intentionally allowed $365 million in high cost, non-core relationship deposits to roll off during 2024. The increase in deposits was primarily due to increases of $155.0 million in noninterest-bearing demand deposits, $452.1 million in interest-bearing checking and $337.5 million in money market deposits. The growth in new client relationships was mainly driven by the expansion into New York City, an increase in retail deposits from our branch network; a focus on providing high-touch client service; and a full array of treasury management products that support core deposit growth. The Company has also successfully focused on:
Current wording
At December 31, 2025 and 2024, the Company reported total deposits of $6.6 billion and $6.1 billion, an increase of $460.0 million, or 8 percent. The Company’s strategy is to fund a majority of its loan growth with core deposits, which is an important factor in the generation of net interest income. The increase in deposits was primarily due to increases of $316.0 million in noninterest-bearing demand deposits, $114.2 million in interest-bearing checking and $120.0 million in money market deposits. The growth in new client relationships was due to our continued expansion into the metro New York City market; client demand for FDIC insured products offered through our reciprocal deposit program; a focus on providing high-touch client service; and a full array of treasury management products that support core deposit growth. The Company has also successfully focused on:
Previous wording
Business and personal core deposit generation, particularly checking accounts.
Current wording
Business and personal core deposit generation, particularly noninterest-bearing checking accounts.
Previous wording
The Company is a participant in the Reich & Tang demand Deposit Marketplace ("DDM") program and the Promontory Program. The Company uses these deposit sweep services to place customer funds into interest-bearing demand (checking) accounts at other participating banks. Customer funds are placed at one or more participating banks to ensure that each deposit customer is eligible for the full amount of FDIC insurance. As a participant, the Company receives an equal amount of reciprocal deposits from other participating banks. Such average reciprocal deposit balances were $1.3 billion and $862.5 million for 2024 and 2023, respectively.
Current wording
The Company is a participant in the Reich & Tang demand Deposit Marketplace ("DDM") program and the Promontory Program. The Company uses these deposit sweep services to place customer funds into interest-bearing demand (checking) accounts at other participating banks. Customer funds are placed at one or more participating banks to ensure that each deposit customer is eligible for the full amount of FDIC insurance. As a participant, the Company receives an equal amount of reciprocal deposits from other participating banks. Such average reciprocal deposit balances were $1.92 billion and $1.31 billion for 2025 and 2024, respectively.
Previous wording
At December 31, 2024, uninsured/unprotected deposits were approximately $1.57 billion, or 26 percent of total deposits. This amount was adjusted to exclude $339 million of public fund deposit balances, which are fully-collateralized by securities and an FHLBNY letter of credit. The Company continues to leverage interest rate swaps to extend the duration to the matched deposits. At December 31, 2024, the Company had transacted pay fixed, receive floating interest rate swaps totaling $360.0 million in notional amount.
Current wording
At December 31, 2025, uninsured/unprotected deposits were approximately $1.90 billion, or 29 percent of total deposits. This amount was adjusted to exclude $317 million of public fund deposit balances, which are fully-collateralized by securities and an FHLBNY letter of credit. The Company continues to leverage interest rate swaps to extend the duration to the matched deposits. At December 31, 2025, the Company had transacted pay fixed, receive floating interest rate swaps totaling $305.0 million in notional amount.
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Previous report — wording carried elsewhere
At December 31, 2024, uninsured/unprotected deposits were approximately $1.6 billion, or 26 percent of total deposits. This amount was adjusted to exclude $339 million of public fund deposit balances, which are fully-collateralized and protected with securities and an FHLBNY letter of credit.