Peapack-Gladstone Financial Corporation reported fourth-quarter net income of $12.2 million, a 26% increase from the previous quarter, with diluted earnings per share rising to $0.69. For the full year ended December 31, 2025, net income grew 13% to $37.3 million, or $2.10 per share, compared to $33.0 million, or $1.85 per share, in 2024. The company's performance demonstrates resilience in a competitive banking environment, with particular strength in deposit growth and net interest margin expansion.
Total deposits increased by $460 million, or 8%, over the past twelve months to $6.6 billion at year-end. Core relationship deposits grew by $828 million as the company replaced higher-cost deposit balances with new relationships at lower funding costs. Noninterest-bearing deposits showed particularly strong growth, increasing by $316 million, or 28%, during 2025. Total loans grew by $738 million, or 13%, to $6.3 billion during the same period, with loans originated at a weighted average coupon of 6.60%.
The net interest margin expanded significantly to 3.08% for the fourth quarter, up from 2.81% in the third quarter and 2.46% in the fourth quarter of 2024. Net interest income increased $6.0 million, or 12%, on a linked quarter basis to $56.5 million. This improvement was driven by better cost management on interest-bearing liabilities and continued enhancement of the net interest margin. According to President and CEO Douglas L. Kennedy, "Strong core deposit growth, disciplined pricing, and consistent execution have driven eight consecutive quarters of net interest income growth and continued expansion in our net interest margin."
The company's wealth management division showed substantial growth, with assets under management and administration increasing by $1.2 billion to $13.1 billion at December 31, 2025, compared to $11.9 billion a year earlier. New business inflows totaled $291 million in the fourth quarter and $1.0 billion for the full year. Wealth management fee income reached $16.1 million in the fourth quarter, representing 21% of total revenue for the period. John Babcock, President of the Bank's Wealth Management Division, noted that the business delivered another strong quarter "driven by continued client inflows and the depth of our advisory relationships."
Commercial and industrial lending accounted for 55% of new business originations during the fourth quarter, with C&I balances representing 44% of the total loan portfolio at year-end. The company's capital position remained strong, with tangible book value per share increasing 10% to $34.99 per share at December 31, 2025, compared to $31.89 at December 31, 2024. Regulatory capital ratios remained well above well-capitalized standards, with the Tier 1 Leverage Ratio at 9.89% for Peapack Private Bank & Trust and 8.87% for the Company.
Asset quality showed improvement, with nonperforming assets decreasing to $68.2 million, or 0.91% of total assets, at December 31, 2025, compared to $84.1 million, or 1.13% of total assets, at September 30, 2025. The allowance for credit losses was $71.0 million, representing 1.14% of total loans at year-end. Kennedy emphasized the company's proactive approach to asset quality, stating, "During the fourth quarter, we continued to proactively address problem credits, resulting in a meaningful reduction in nonperforming assets."
The company's expansion into New York City and Long Island contributed to higher operating expenses, which totaled $53.5 million for the fourth quarter, compared to $52.3 million for the third quarter. However, Kennedy noted that "the pace of operating expense growth [is] moderate as these initiatives mature." The company maintains substantial liquidity resources, with total on and off-balance sheet liquidity totaling $4.6 billion at year-end, representing 244% of total uninsured/uncollateralized deposits. Additional information is available in the company's Q4 2025 Investor Update at https://www.peapackprivate.com and via SEC filings at https://www.sec.gov.
