PEAPACK GLADSTONE FINANCIAL CORP
For the period ended Jun 30, 2026. Filed Aug 7, 2026.
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, 2026 · Filed Aug 7, 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-Q
Period ended 2026-03-31; filed 2026-05-08.
0001193125-26-213949
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001193125-26-339645
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 141 previous paragraphs and 158 current paragraphs.
79 unchanged; 56 reworded; 17 added; 5 removed; 1 previous and 6 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 (17)
Current report
risks associated with cybersecurity threats, data breaches, ransomware attacks, or other failures in our operational or security systems and infrastructure, including the risks arising from our dependence on third-party service providers and vendors;
Current report
our inability to attract and retain key employees;
Current report
For the six months ended June 30, 2026, the Company recorded total revenue of $168.5 million, pretax income of $42.0 million, net income available to common shareholders of $29.9 million and diluted earnings per share of $1.65 compared to revenue of $134.1 million, pretax income of $21.7 million, net income available to common shareholders of $15.5 million and diluted earnings per share of $0.87 for the same period in 2025.
Current report
The increase in total revenue was primarily driven by strong net interest income growth due to improvements in yield on average interest earning assets (primarily due to growth in commercial and commercial mortgage loans) and cost on average interest-bearing liabilities. The Company has seen positive momentum in net interest margin, which increased to 3.29 percent for the first six months of 2026 as compared to 2.73 percent for the same period in 2025. Both wealth management fee income and other income also contributed to growth in revenue with increases of $2.3 million and $2.1 million for the six months ended June 30, 2026, respectively. Net income for the six months ended June 30, 2026 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 and the expansion of the equipment financing team, increased health insurance costs and annual merit increases.
Current report
Residential mortgage, commercial real estate, C&I and wealth lines of credit loan originations increased by $20.3 million, $112.0 million, $182.5 million, and $20.9 million, respectively, for the three months ended June 30, 2026, as compared to the same period in 2025. Residential mortgage, commercial real estate, C&I and wealth lines of credit loan originations increased by $25.2 million, $203.3 million, $199.4 million, and $16.2 million, respectively, for the six months ended June 30, 2026 as compared to the same period in 2025. Loan growth for both periods was driven primarily by strategic business development initiatives, including the hiring of a new head of commercial real estate and the Company's expansion into the New York City and Long Island markets, along with continued customer demand across key lending categories.
Current report
Average Balance Sheet
Current report
Unaudited
Current report
Six Months Ended
Current report
(D)
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(B)
Current report
(C)
Current report
Nonperforming assets increased by $4.0 million to $72.2 million at June 30, 2026, as compared to $68.2 million at December 31, 2025. The increase was driven by the classification of one $16.6 million multifamily relationship as nonaccrual and one $3.3 million multifamily loan as past due over 90 days or more and still accruing, partially offset by the liquidation of one commercial loan sale of $9.6 million and the sale of one multifamily loan of $7.2 million. During the second quarter of 2026, the Company recognized $4.8 million of charge-offs related to the sale of one multifamily loan with an outstanding balance of $7.2 million. A specific reserve of $2.4 million had been established on this loan in prior periods. Multifamily loans represented approximately 63 percent of nonperforming assets as of June 30, 2026.
Current report
The decrease in performing modifications was primarily related to ten multifamily loans totaling $54.9 million that are no longer classified as loan modifications because they have performed in accordance with their modified terms for at least twelve consecutive months and therefore no longer meet the reporting criteria for loan modifications. Additionally, $19.0 million in multifamily loans were moved to nonaccrual status.
Current report
The increase in special mention loans was primarily due to four multifamily loans totaling $23.8 million and $2.3 million in commercial loans. The increase was partially offset by multifamily loans totaling $12.8 million that are no longer classified as special mention. This increase was partially offset by the sale of one multifamily loan of $8.3 million, the payoff of one investment commercial real estate loan of $2.6 million and the upgrade of one multifamily loan of $4.5 million. The decrease in classified loans was primarily due to five multifamily loans totaling $29.9 million that are no longer classified as substandard as of June 30, 2026, as four such loans totaling $22.7 million were upgraded and one multifamily loan with a balance of $7.2 million was liquidated.
Current report
PROVISION FOR CREDIT LOSSES: The provision for credit losses was $8.1 million and $6.6 million for the second quarters of 2026 and 2025, respectively. The increase was primarily attributable to continued loan growth, changes in economic forecast assumptions incorporated into the Company's allowance methodology, and higher specific reserves established on certain individually evaluated loans. During the second quarter of 2026, approximately $4.2 million of the provision was attributable to loan growth and changes in economic data, while $3.9 million related to increases in specific reserves. For the six months ended June 30, 2026 and 2025, the provision for loan losses was $15.4 million and $11.1 million, respectively. Similar to the quarterly results, the year-over-year increase primarily reflected continued loan growth and higher specific reserves established on certain individually evaluated loans. In addition, the Company's ACL methodology incorporates forward-looking economic factors, and during the quarter, the quantitative reserve reflected weakened macroeconomic expectations coupled with loan growth, drove the higher provision level.
Current report
Income tax expense for the six months ended June 30, 2026 was $11.9 million as compared to $6.2 million for the same period in 2025. The increase in income tax expense reflected higher pretax income of $42.0 million for the six months ended June 30, 2026 as compared to $21.7 million for the same period in 2025.
Removed paragraphs (5)
Previous report
our ability to successfully integrate wealth management firm and team acquisitions;
Previous report
successful cyberattacks against our IT infrastructure and that of our IT and third-party providers;
Previous report
our inability to retain key employees;
Previous report
Residential mortgage, commercial real estate, multifamily, C&I, and SBA loan originations increased by $4.8 million, $91.3 million, $25.0 million, $17.0 million, and $5.5 million, respectively, for the three months ended March 31, 2026 as compared to the same period in 2025. Loan growth has been fueled by lower market interest rates, the hiring of a new head of commercial real estate and the Company's expansion into the New York City and Long Island markets.
Previous report
The Wealth Management Division currently generates adequate revenue to support the salaries, benefits and other expenses of the wealth division and Management believes it will continue to do so as the Company grows organically and/or by acquisition. Management believes that the Bank generates adequate liquidity to support the expenses of the Wealth Management Division should it be necessary.
Reworded paragraphs (56)
Previous wording
an unexpected decline in the economy, in particular in our New Jersey and New York market areas, including potential recessionary conditions, which could affect the demand for loans and deposits or have an adverse effect on the ability of consumers and businesses to pay debts;
Current wording
an unexpected decline in the economy, in particular in our New Jersey and New York market areas, including potential recessionary conditions;
Previous wording
declines in the value in our investment portfolio;
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declines in the value of our investment portfolio;
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decline in real estate values within our market areas;
Current wording
declines in real estate values within our market areas;
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the imposition of tariffs or other domestic or international governmental policies and retaliatory responses;
Current wording
the imposition of tariffs or other domestic or international governmental policies, trade restrictions and retaliatory measures impacting our borrowers and the broader economy;
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the impact of any federal government shutdown;
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the impact of any federal government shutdown, debt ceiling impasses or fiscal uncertainty;
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the failure to maintain current technologies and/or to successfully implement future information technology enhancements;
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the failure to maintain current technologies and/or to successfully implement future information technology enhancements and the operational risks associated with the adoption of artificial intelligence and other emerging technologies;
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changes in New York City rent regulation law;
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changes in New York City rent regulation and real estate tax laws;
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EXECUTIVE SUMMARY: The following table presents certain key aspects of our performance for the three months ended March 31, 2026 and 2025.
Current wording
EXECUTIVE SUMMARY: The following tables present certain key aspects of our performance for the three and six months ended June 30, 2026 and 2025.
Previous wording
For the quarter ended March 31, 2026, the Company recorded total revenue of $82.5 million, pretax income of $19.7 million, net income of $14.2 million and diluted earnings per share of $0.80, compared to 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 for the same period last year.
Current wording
For the quarter ended June 30, 2026, the Company recorded total revenue of $86.1 million, pretax income of $22.3 million, net income available to common shareholders of $15.8 million and diluted earnings per share of $0.86, compared to revenue of $69.7 million, pretax income of $11.3 million, net income available to common shareholders of $7.9 million and diluted earnings per share of $0.45 for the same period last year.
Previous wording
The increase in total revenue for the first quarter of 2026 was primarily due to higher net interest income of $14.4 million offset by increases in operating expenses and provision for credit losses. The increase in operating expenses was principally attributable to the addition of new employees related to the Company's expansion into New York City and Long Island and the expansion of the equipment financing team, increased health insurance costs and annual merit increases. The implementation of the strategy, including our 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 the first quarter of 2026, deposits grew $237.8 million, which included $115.8 million in noninterest-bearing demand deposits. Net interest margin improved to 3.26 percent for the first quarter of 2026 as compared to 2.68 percent for the same period in 2025. Wealth management fee income continues to be a consistent and steady revenue stream for the Company and represented 20 percent of total revenue for the first quarter of 2026.
Current wording
The increase in net income for the second quarter of 2026 was primarily due to higher net interest income of $15.6 million partially offset by increases in operating expenses and provision for credit losses. The increase in operating expenses was principally attributable to the strategic addition of new employees related to the Company's expansion into New York City and Long Island and the expansion of the equipment financing team, increased health insurance costs and annual merit increases. The implementation of our strategy, including our 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 the second quarter of 2026, deposits grew $230.8 million, which included $79.7 million in noninterest-bearing demand deposits. Net interest margin improved to 3.32 percent for the second quarter of 2026 as compared to 2.77 percent for the same period in 2025. Wealth management fee income continues to be a consistent and steady revenue stream for the Company and represented 20 percent of total revenue for the second quarter of 2026.
Previous wording
NET INTEREST INCOME (“NII”) / NET INTEREST MARGIN (“NIM”) / AVERAGE BALANCE SHEET:
Current wording
NET INTEREST INCOME (“NII”) / NET INTEREST MARGIN (“NIM”) / AVERAGE BALANCE SHEETS:
Previous wording
Outstanding loan balances are the primary driver of the yields on interest-earning assets. The following table summarizes the loans that the Company closed during the periods indicated:
Current wording
Outstanding loan balances are the primary driver of the yields on interest-earning assets. The following tables summarize the loans that the Company closed during the periods indicated:
Previous wording
Total 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.
Current wording
Total CRE concentration increased to 403 percent of the Bank's total regulatory capital at June 30, 2026 from 367 percent at December 31, 2025. The increase was primarily attributable to growth in non-owner occupied commercial real estate lending, reflecting increased loan originations resulting from the Company's strategic business development initiatives, including the hiring of a new head of commercial real estate partially offset by growth in the Bank's regulatory capital. Total 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
The following table reflects the components of the average balance sheet and of net interest income for the periods indicated:
Current wording
The following tables reflect the components of the average balance sheet and of net interest income for the periods indicated:
Previous wording
The effect of volume and rate changes on net interest income (on a tax-equivalent basis) for the three month periods ended March 31, 2026 compared to March 31, 2025 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, 2026 compared to June 30, 2025 are shown below:
Previous wording
Net interest income, on a fully tax-equivalent basis, increased $14.4 million, or 31 percent, for the first quarter of 2026 to $60.1 million from $45.7 million in the first quarter of 2025. The net interest margin ("NIM") was 3.26 percent and 2.68 percent for the three months ended March 31, 2026 and 2025, respectively, an increase of 58 basis points year over year. Net interest income, on a fully tax-equivalent basis, and NIM improved primarily due to continued growth in lower-cost client deposit relationships, which were used to fund consistent loan production. 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 wording
Net interest income increased $15.6 million, or 32 percent, for the second quarter of 2026 to $63.9 million from $48.3 million in the second quarter of 2025. The net interest margin ("NIM") was 3.32 percent and 2.77 percent for the three months ended June 30, 2026 and 2025, respectively, an increase of 55 basis points year over year. For the six months ended June 30, 2026 the Company recorded net interest income of $123.8 million compared to $93.8 million for the same 2025 period. The NIM was 3.29 percent and 2.73 percent for the six months ended June 30, 2026 and 2025, respectively, an increase of 56 basis points. Net interest income, on a fully tax-equivalent basis, and NIM improved for the three and six months ended June 30, 2026 primarily due to growth in average loan balances, which increased interest income, coupled with continued growth in lower-cost client deposit relationships, which were used to fund consistent loan production. 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.
Previous wording
The average balance of interest-earning assets increased to $7.49 billion during the first quarter of 2026 from $6.91 billion in the first quarter of 2025, reflecting an increase of $575.9 million, or 8 percent. The increase in the average balance of interest-earning assets during the first quarter of 2026 when compared to the same quarter of 2025 was due to an increase in the average balance of loans of $776.4 million, which was partially offset by a decrease in the average balance of investments of $98.2 million and a decrease in interest-earning deposits of $102.3 million.
Current wording
The average balance of interest-earning assets increased to $7.76 billion during the second quarter of 2026 from $7.02 billion for the second quarter of 2025, reflecting an increase of $739.2 million, or 11 percent. Average interest-earning assets were $7.62 billion for the six months ended June 30, 2026 compared to $6.97 billion in the same 2025 period, reflecting an increase of $658.0 million, or 9 percent. The increase in the average balance of interest-earning assets during the second quarter of 2026 when compared to the same quarter of 2025 was due to an increase in the average balance of loans of $736.6 million and an increase in interest-earning deposits of $137.7 million, partially offset by a decrease in the average balance of investments of $135.2 million. The increase in the average balance of interest-earning assets during the six months ended June 30, 2026 when compared to the same period of 2025 was due to an increase in the average balance of loans of $756.4 million and an increase in interest-earning deposits of $18.4 million, partially offset by a decrease in the average balance of investments of $116.8 million.
Previous wording
The increase in the average balance of outstanding loans for the three months ended March 31, 2026 was primarily driven by an increase in commercial loans, commercial mortgages, residential mortgages and installment loans. The average balance of commercial loans increased by $340.9 million, or 14 percent, to $2.77 billion for the quarter ended March 31, 2026 when compared to $2.43 billion for the quarter ended March 31, 2025. The average balance of commercial mortgages increased by $293.7 million, or 12 percent, to $2.68 billion for the quarter ended March 31, 2026 when compared to $2.38 billion during the quarter ended March 31, 2025. The increase in the average balance of loans for the three-month period was primarily a result of increasing loan demand from customers due to a lower interest rate environment and improving economic conditions. Growth was also driven by the addition of a new leader of the commercial real estate lending team, along with our continued expansion into New York City and Long Island.
Current wording
The increase in the average balance of outstanding loans for the three and six months ended June 30, 2026 was primarily driven by an increase in commercial loans, commercial mortgages, residential mortgages and installment loans. The average balance of commercial loans increased by $314.4 million, or 12 percent, to $2.85 billion for the quarter ended June 30, 2026 when compared to $2.54 billion for the quarter ended June 30, 2025. The average balance of commercial mortgages increased by $301.9 million, or 12 percent, to $2.73 billion for the quarter ended June 30, 2026 when compared to $2.43 billion during the quarter ended June 30, 2025. The average balance of installment loans increased by $79.2 million, or 57 percent, to $219.4 million for the quarter ended June 30, 2026 when compared to $140.1 million during the quarter ended June 30, 2025. The average balance of commercial loans increased by $327.5 million, or 13 percent, to $2.81 billion for the quarter ended June 30, 2026 when compared to $2.49 billion for the six months ended June 30, 2025. The average balance of commercial mortgages increased $297.8 million, or 12 percent, to $2.70 billion for the six months ended June 30, 2026 when compared to $2.41 billion for the same period in 2025. The average balance of installment loans increased by $85.4 million, or 69 percent, to $209.3 million when compared to $123.9 million for the six months ended June 30, 2025. The increase in the average balance of loans for the three and six month periods was primarily driven by the Company's strategic business development initiatives which included the addition of a new head of the commercial real estate lending team, along with our continued expansion into New York City and Long Island with continued customer demand across key lending categories.
Previous wording
The average yield on total loans for the three months ended March 31, 2026 increased slightly to 5.46 percent when compared to 5.41 percent for the three months ended March 31, 2025. The yield on residential mortgages increased 53 basis points to 4.85 percent for the three months ended March 31, 2026, as compared to 4.32 percent for the same 2025 period. The increase in the average yield for residential mortgages for the three-month period was driven by the origination of higher-yielding loans. The average yield on commercial mortgages for the three months ended March 31, 2026, increased 32 basis points to 4.71 percent as compared to 4.39 percent for the same period in 2025. The increase in the average yield on commercial mortgages for the three months ended March 31, 2026, compared to March 31, 2025, was primarily attributable to changes in portfolio mix and loan repricing characteristics. During the period, higher-yielding new originations and the runoff of lower-yielding legacy loans, more than offset the impact of Federal Reserve rate reductions. The average yield on commercial loans for the three months ended March 31, 2026 decreased 34 basis points to 6.25 percent from 6.59 percent at March 31, 2025. The average yield on commercial loans decreased 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 March 31, 2026, 29 percent of all loans will reprice within one month, 35 percent within three months and 51 percent within one year.
Current wording
The average yield on total loans for the three months ended June 30, 2026 increased to 5.58 percent when compared to 5.51 percent for the three months ended June 30, 2025. The yield on residential mortgages increased 37 basis points to 4.82 percent for the three months ended June 30, 2026, as compared to 4.45 percent for the same 2025 period. The yield on residential mortgages increased to 4.83 percent for the six months ended June 30, 2026, when compared to 4.39 percent for the same 2025 period. The increase in the average yield for residential mortgages for the three-month period was driven by the origination of loans at higher rates than the existing portfolio. The average yield on commercial mortgages for the three months ended June 30, 2026, increased 35 basis points to 4.87 percent as compared to 4.52 percent for the same period in 2025. The average yield on commercial mortgages for the six months ended June 30, 2026, increased to 4.82 percent when compared to 4.45 percent for the same 2025 period. The increase in the average yield on commercial mortgages for the three and six months ended June 30, 2026, compared to the same periods in 2025, was primarily attributable to changes in portfolio mix and loan repricing characteristics. During the period, higher-yielding new originations and the runoff of lower-yielding legacy loans, more than offset the impact of Federal Reserve rate reductions. The average yield on commercial loans for the three months ended June 30, 2026 decreased 28 basis points to 6.34 percent from 6.62 percent at June 30, 2025. The average yield on commercial loans for the six months ended June 30, 2026, decreased 30 basis points to 6.30 percent from 6.60 percent at June 30, 2025. The average yield on commercial loans decreased 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 rate loans with shorter repricing periods. As of June 30, 2026, 29 percent of loans will reprice within one month, 34 percent within three months and 51 percent within one year.
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 for the three months ended March 31, 2026 was $188.4 million with an average yield of 2.81 percent as compared to $290.7 million and an average yield of 3.82 percent for the same period in 2025. The decrease reflected cash used to fund loan originations. The decrease in the rate was a result of the lower interest rate environment.
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 deposits for the three months ended June 30, 2026 was $321.3 million with an average yield of 3.18 percent as compared to $183.6 million and an average yield of 3.53 percent for the same period in 2025. The average balance of interest-earning deposits for the six months ended June 30, 2026 was $255.2 million with an average yield of 3.06 percent as compared to $236.8 million and an average yield of 3.71 percent for the same period in 2025. The increase in the average balance was due to an increase in deposits and from the receipt of proceeds from the sale of securities in the first quarter. The decrease in the rate was a result of the lower interest rate environment.
Previous wording
For the quarters ended March 31, 2026 and 2025, the average yields earned on interest-earning assets were 5.09 percent and 5.01 percent, respectively, an increase of 8 basis points year over year.
Current wording
For the quarters ended June 30, 2026 and 2025, the average yields earned on interest-earning assets were 5.19 percent and 5.12 percent, respectively, an increase of 7 basis points year over year. For the six months ended June 30, 2026 and 2025, the average yields earned on interest-earning assets were 5.18 percent and 5.07 percent, respectively, an increase of 11 basis points year over year.
Previous wording
The average balance of total investments declined by $98.2 million to $934.1 million for the three months ended March 31, 2026 as compared to $1.03 billion for the three months ended March 31, 2025. The yield on investments decreased by 13 basis points to
Current wording
The average balance of total investments declined by $135.2 million to $902.4 million for the three months ended June 30, 2026 as compared to $1.04 billion for the three months ended June 30, 2025. The yield on investments decreased by 15 basis points to 3.08 percent for the three months ended June 30, 2026, compared to 3.23 percent for the same period a year ago. The average balance on total investments declined by $116.8 million to $918.2 million for the six months ended June 30, 2026 as compared to $1.03 billion for the six months ended June 30, 2025. The yield on investments decreased by 13 basis points to 3.07 percent for the six months ended June 30, 2026, compared to 3.20 percent for the same period in 2025. The decreases in the average balance and average yield on total investments were a result of a security sale of $97.0 million of higher-yielding investments, as part of a portfolio repositioning completed during the first quarter of 2026.
Previous wording
For the three months ended March 31, 2026, the average balance of interest-bearing liabilities totaled $5.42 billion representing an increase of $279.0 million from $5.14 billion for the three month period ended March 31, 2025 primarily due to an increase in interest-bearing deposits of $295.6 million to $5.31 billion for the three months ended March 31, 2026. This increase was partially offset by a decrease in average outstanding subordinated debt of $60.6 million to $66.0 million due to the redemption of $100.0 million of such debt in March 2026.
Current wording
For the three months ended June 30, 2026, the average balance of interest-bearing liabilities totaled $5.53 billion representing an increase of $315.8 million from $5.21 billion for the three month period ended June 30, 2025 primarily due to an increase in interest-bearing deposits of $444.5 million to $5.51 billion for the three months ended June 30, 2026. This increase was partially offset by a decrease in average FHLB advances and borrowings of $29.6 million to $15.1 million from $44.7 million for the same 2025 period and in average outstanding subordinated debt of $98.9 million due to the redemption of $100.0 million of such debt in March 2026. For the six months ended June 30, 2026, the average balance of interest-bearing liabilities totaled $5.48 billion representing an increase of $297.5 million from $5.18 billion for the six-month period ended June 30, 2025 primarily due to an increase in interest-bearing deposits of $370.4 million to $5.41 billion for the six months ended June 30, 2026, partially offset by a decrease in the average balance of subordinated debt of $79.9 million to $32.8 million.
Previous wording
The increase in the average balance of interest-bearing deposits for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily due to an increase in the average balances of interest-bearing checking deposits of $268.0 million and money market accounts of $88.4 million, partially offset by a decline in the average balance of certificates of deposit of $56.5 million and interest-bearing brokered demand deposits of $10.0 million. The increase in interest-bearing checking deposits for the three months ended March 31, 2026 was due to our continued expansion into the New York City market and client demand for FDIC insured products, which we offer through a reciprocal deposit program. Our expansion into the New York City market has allowed us to grow lower cost, relationship-based deposits, while reducing the Company's reliance on overnight borrowings, brokered deposits and other high-cost funding sources.
Current wording
The increase in the average balance of interest-bearing deposits for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was primarily due to an increase in the average balances of interest-bearing checking deposits of $252.6 million and money market accounts of $244.0 million, partially offset by a decline in the average balance of certificates of deposit of $51.1 million and interest-bearing brokered demand deposits of $9.1 million. The increase in average balance of interest-bearing deposits for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily due to an increase in the average balances of interest-bearing checking deposits of $260.2 million and money market accounts of $166.6 million, partially offset by the decline in the average balance of certificates of deposit of $53.8 million and interest-bearing brokered deposits of $9.6 million. The increase in interest-bearing checking deposits for the three and six months ended June 30, 2026 was due to our continued expansion into the New York City and Long Island markets and client demand for FDIC insured products, which we offer through reciprocal deposit programs. Our expansion around metro NY has allowed us to grow lower cost, relationship-based 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, 2026 and 2025 were $2.25 billion and $1.37 billion, respectively.
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, 2026 and 2025 were $2.37 billion and $1.82 billion, respectively. Average reciprocal deposit balances for the six months ended June 30, 2026 and 2025 were $2.31 billion and $1.81 billion, respectively.
Previous wording
At March 31, 2026, uninsured/unprotected deposits were approximately $2.10 billion, or 31 percent of total deposits. This amount was adjusted to exclude $194 million of public fund deposit balances, which are fully-collateralized and protected with investment securities and an FHLBNY letter of credit.
Current wording
At June 30, 2026, uninsured/unprotected deposits were approximately $2.44 billion, or 35 percent of total deposits. This amount was adjusted to exclude $126 million of public fund deposit balances, which are fully-collateralized and protected with investment securities and an FHLB of New York letter of credit.
Previous wording
For the quarters ended March 31, 2026 and 2025, the cost of interest-bearing liabilities was 2.59 percent and 3.18 percent, respectively, reflecting a decrease of 59 basis points. The decrease for the three month period ended March 31, 2026 was driven by a decrease in the average cost of interest-bearing deposits of 62 basis points to 2.52 percent during the first quarter of 2026. The Company also benefited from lower short-term borrowing costs for the three months ended March 31, 2026, which decreased by 72 basis points to 3.82 percent when compared to 4.54 percent for the same period in 2025. 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.
Current wording
For the quarters ended June 30, 2026 and 2025, the cost of interest-bearing liabilities was 2.63 percent and 3.17 percent, respectively, reflecting a decrease of 54 basis points. For the six months ended June 30, 2026 and 2025, the cost of interest-bearing liabilities was 2.63 percent and 3.17 percent, respectively, reflecting a decrease of 54 basis points. The decrease for the three and six month periods ended June 30, 2026 was driven by a decrease in the average cost of interest-bearing deposits. The Company also benefited from lower short-term borrowing costs for the three and six months ended June 30, 2026 and 2025, which decreased by 43 basis points to 4.09 percent when compared to 4.52 percent and decreased by 57 basis points to 3.93 percent when compared to 4.50 percent, respectively. 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 March 31, 2026, the Company had investment securities available for sale with a fair value of $710.0 million compared with $774.2 million at December 31, 2025. A net unrealized loss (net of income tax) of $51.8 million and $49.3 million related to these securities were included in shareholders’ equity at March 31, 2026 and December 31, 2025, respectively.
Current wording
At June 30, 2026, the Company had investment securities available for sale with a fair value of $752.4 million compared with $774.2 million at December 31, 2025. The decline in investment securities was primarily due to the sale of $97.0 million of mostly mortgage-backed securities during the six months ended June 30, 2026. A net unrealized loss (net of income tax) of $52.3 million and $49.3 million related to these securities were included in shareholders’ equity at June 30, 2026 and December 31, 2025, respectively.
Previous wording
At March 31, 2026, the Company had investment securities held to maturity with a carrying cost of $79.5 million and an estimated fair value of $70.8 million compared with a carrying cost of $95.9 million and an estimated fair value of $87.5 million at December 31, 2025.
Current wording
At June 30, 2026, the Company had investment securities held to maturity with a carrying cost of $78.6 million and an estimated fair value of $69.9 million compared with a carrying cost of $95.9 million and an estimated fair value of $87.5 million at December 31, 2025.
Previous wording
The Company had one equity security (a CRA investment security) with a fair value of $13.4 million at March 31, 2026 compared to $13.5 million at December 31, 2025, with changes in fair value recognized in the Consolidated Statements of Income. The Company recorded an unrealized loss of $84,000 for the three months ended March 31, 2026 compared to an unrealized gain of $195,000 for the three months ended March 31, 2025.
Current wording
The Company had one equity security (a CRA investment security) with a fair value of $13.3 million at June 30, 2026 compared to $13.5 million at December 31, 2025, with changes in fair value recognized in the Consolidated Statements of Income. The Company recorded unrealized losses of $55,000 and $139,000 for the three and six months ended June 30, 2026, respectively, compared to unrealized gains of $42,000 and $237,000 for the three and six months ended June 30, 2025.
Previous wording
OTHER INCOME: The following table presents other income, excluding income from wealth management services, which is summarized and discussed subsequently:
Current wording
OTHER INCOME: The following tables present further detail on other income which is summarized and discussed subsequently:
Previous wording
The Company recorded total other income, excluding wealth management fee income, of $6.1 million for the first quarter of 2026 compared to $3.4 million for the same 2025 period, reflecting an increase of $2.7 million. The increase was primarily due to increases in loan fee income and service charges and fees.
Current wording
The Company recorded total other income of $22.1 million for the second quarter of 2026 compared to $21.5 million for the same 2025 period, reflecting an increase of $680,000. The increase was primarily due to increases in wealth management fee income and service charges and fees, partially offset by a decrease in the gain on sale of SBA loans and other income. The Company recorded total other income of $44.7 million for the six months ended June 30, 2026 compared to $40.3 million for the same 2025 period, reflecting an increase of $4.4 million. The increase was largely due to an increase in wealth management fee income and loan fee income, partially offset by a decrease in other income and a negative fair value adjustment of the CRA equity security during the six months ended June 30, 2026.
Previous wording
Service charges and fee income increased $247,000 to $1.4 million during the quarter ended March 31, 2026 from $1.1 million for the same period in 2025 reflecting an increase in our commercial client base, which generated higher fee activity.
Current wording
Service charges and fee income increased $196,000 to $1.4 million during the quarter ended June 30, 2026 from $1.2 million for the same period in 2025. For the six months ended June 30, 2026 and 2025, the Company recorded service charges and fee income of $2.7 million and $2.3 million, respectively. The increases for both periods reflected an increase in our commercial client base, which has generated higher fee activity during the first half of 2026.
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 and retains the non-guaranteed portion of SBA loans in the loan portfolio. The Company recorded a gain on the sale of SBA loans of $403,000 and $302,000 for the quarters ended March 31, 2026 and 2025, respectively. The Company continues to see pressure from market volatility resulting in lower sale premiums and origination volumes associated with SBA loans.
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 and retains the non-guaranteed portion of SBA loans in the loan portfolio. The Company recorded a gain on the sale of SBA loans of $444,000 for the quarter ended June 30, 2026, compared to $521,000 in gains during the quarter ended June 30, 2025. For the six months ended June 30, 2026 and 2025, the Company recorded gains on the sale of SBA loans of $847,000 and $823,000, 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 2026 of $69,000 compared to $90,000 for the same period ended March 31, 2025. Income from the SBA programs, and corporate advisory fee income are dependent on volume, and may vary from quarter to quarter.
Current wording
The Company recorded corporate advisory fee income for the second quarter of 2026 of $34,000 compared to $30,000 for the same period ended June 30, 2025. The six months ended June 30, 2026 included corporate advisory fee income of $103,000 compared to $120,000 for the same 2025 period. Income from the SBA programs, and corporate advisory fee income are dependent on volume, and may vary from quarter to quarter.
Previous wording
For the quarter ended March 31, 2026, income from the sale of newly originated residential mortgage loans was $72,000 compared to $63,000 for the same period in 2025. While the interest rate environment has improved following rate reductions by the Federal Reserve, residential mortgage activity continues to be constrained by limited housing inventory and affordability considerations, which have tempered both refinancing and home purchase volumes.
Current wording
For the quarter ended June 30, 2026, income from the sale of newly originated residential mortgage loans was $62,000 compared to $27,000 for the same period in 2025. While the interest rate environment has improved following rate reductions by the Federal Reserve, residential mortgage activity continues to be constrained by limited housing inventory and affordability considerations, which have tempered both refinancing and home purchase volumes.
Previous wording
Loan fee income increased to $3.8 million for the first quarter of 2026 as compared to $989,000 for the quarter ended March 31, 2025. Loan fee income included a gain of $2.6 million and 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 2026 and 2025, respectively. The period-over-period change was primarily driven by differences in the volume and timing of lease terminations and the underlying fair value of the equipment at the end of the lease term, which can vary based on market conditions and asset-specific factors. Additionally, the Company recorded $758,000 of unused commercial line fees for the quarter ended March 31, 2026 compared to $932,000 for the same 2025 period. Letter of credit fees totaled $342,000 for the quarter ended March 31, 2026 as compared to $123,000 for the same period in 2025. Letter of credit fee income increased as a result of the Company’s expansion into the metro New York area, which has driven higher utilization of trade finance products among a growing commercial client base.
Current wording
Loan fee income increased to $2.1 million for the second quarter of 2026 as compared to $1.9 million for the quarter ended June 30, 2025. Loan fee income increased to $5.9 million for the six months ended June 30, 2026 compared to $2.9 million for the same period in 2025. Loan fee income included gains of $1.0 million and $3.7 million for the three and six months ended June 30, 2026, respectively, as compared to gains of $482,000 and $67,000 for the same periods in 2025 related to equipment transfers to lessees upon the termination of leases recorded by the Equipment Finance Division. The period-over-period change was primarily driven by differences in the volume and timing of lease terminations and the underlying fair value of the equipment at the end of the lease term, which can vary based on market conditions and asset-specific factors. Additionally, the Company recorded $730,000 of unused commercial line fees for the quarter ended June 30, 2026 compared to $869,000 for the same 2025 period. The six months ended June 30, 2026 included $1.5 million of unused commercial line fees compared to $1.8 million for the same 2025 period. The six months ended June 30, 2026 included $473,000 of letter of credit fee income compared to $290,000 for the same 2025 period.
Previous wording
The Company completed a security sale of $97.0 million resulting in a loss of $81,000 as part of a portfolio repositioning completed during the first three months of 2026.
Current wording
The Company completed a security sale of $97.0 million resulting in a loss of $81,000 during the first six months of 2026 and a $53.2 million sale with a gain of $7,000 during the same period in 2025. These sales were completed as part of a portfolio repositioning.
Previous wording
The Company recorded an $84,000 negative fair value adjustment and a $195,000 positive fair value adjustment for CRA equity securities in the first quarters of 2026 and 2025, respectively. The negative fair value adjustment during the first quarter of 2026 was due to an increase in medium-term rates during the first quarter of 2026.
Current wording
The Company recorded a $55,000 negative fair value adjustment and a $42,000 positive fair value adjustment for CRA equity securities in the second quarters of 2026 and 2025, respectively. The Company recorded a $139,000 negative fair value adjustment and a $237,000 positive fair value adjustment for CRA equity securities for the six months ended June 30, 2026 and 2025, respectively. The decrease in 2026 was due to an increase in medium-term rates during the first six months of 2026, which results in a reduction in the fair value of our CRA equity securities.
Previous wording
Operating expenses for the quarter ended March 31, 2026 and 2025 totaled $55.4 million and $49.4 million, respectively, reflecting an increase of $6.0 million, or 12 percent. Increased operating expenses for the three months ended March 31, 2026 were principally attributable to the Company's ongoing expansion into New York City and Long Island, in addition to annual merit increases. The addition of production teams in Long Island, including the opening of two new Long Island offices during the latter half of 2025, and the expansion of our equipment financing team, also contributed to the growth in premises and equipment and other operating expenses. FDIC assessment expense increased for the three months ended March 31, 2026 due primarily to higher assessment rates implemented by the FDIC and an increase in the Bank's average total assets subject to assessment. Our expansion into New York City and Long Island resulted in increased advertising fees for the three months March 31, 2026. The increase in professional and legal fees was partially due to expenses related to the subordinated debt redemption and the issuance of preferred stock during the first quarter of 2026. The increase in loan expense for the three-month period ended March 31, 2026 was primarily related to the workout of several problem loans.
Current wording
Operating expenses for the quarter ended June 30, 2026 and 2025 totaled $55.7 million and $51.9 million, respectively, reflecting an increase of $3.8 million, or 7 percent year over year. Operating expenses for the six months ended June 30, 2026 and 2025 totaled $111.1 million and $101.3 million, respectively, reflecting an increase of $9.8 million, or 10 percent. Increased operating expenses for the three and six months ended June 30, 2026 were principally attributable to the Company's ongoing expansion into New York City and Long Island, in addition to annual merit increases across the Company. The addition of production teams in Long Island, including the opening of two new Long Island offices during the latter half of 2025, and the expansion of our equipment financing team, also contributed to the growth in premises and equipment and other operating expenses. FDIC assessment expense increased for the three and six months ended June 30, 2026 due primarily to higher assessment rates implemented by the FDIC and an increase in the Bank's average total assets subject to assessment. The increase in professional and legal fees for the six months ended June 30, 2026 was primarily due to expenses related to the subordinated debt redemption and the issuance of preferred stock during the first quarter of 2026.
Showing the first 40 of 56 pairs. Open the source sections for the rest.
Rearranged current paragraphs (6)
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.
Current report — wording carried from elsewhere
Letter of credit fee income increased for the six-month period as a result of the Company’s expansion into the metro New York area, which has driven higher utilization of trade finance products among a growing commercial client base.
Current report — wording carried from elsewhere
The effective tax rate for the six months ended June 30, 2026 was 28.3 percent compared to 28.4 percent for the same period in 2025.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
3.05 percent for the three months ended March 31, 2026, compared to 3.18 percent for the same period a year ago. The decreases in the average balance and average yield on total investments were a result of a security sale of $97.0 million of higher-yielding investments as part of a portfolio repositioning completed during the first quarter of 2026.