Peapack-Gladstone Financial Corporation reported substantial financial growth for the third quarter of 2025, with net income reaching $9.6 million and diluted earnings per share of $0.54, representing a 21% increase compared to the previous quarter. This performance underscores the company's successful strategic expansion into Metro New York markets and its transformation into Peapack Private Bank & Trust, positioning it as a significant player in the competitive financial services landscape.
The company's deposit base grew by $433 million, or 7%, reaching $6.6 billion as of September 30, 2025, with core relationship deposits increasing by $708 million during the first nine months of the year. This substantial deposit growth funded $506 million of loan growth at a weighted average coupon of 6.75%, resulting in an incremental spread of more than 400 basis points. The net interest margin expanded to 2.81% for the quarter, up from 2.77% in the previous quarter and 2.34% in the same period last year, indicating improved profitability in the company's core lending operations.
President and CEO Douglas L. Kennedy emphasized the success of the Metro New York expansion strategy, noting that newly hired teams have onboarded more than 850 new client relationships over the past two years, adding over $1.75 billion in core relationship deposits and more than $900 million in new loans. This expansion has delivered a fourth consecutive quarter of positive operating leverage and driven core earnings growth of 54% over the last twelve months. The company continued its expansion efforts in the third quarter by adding an experienced equipment finance team in Long Island and three New York-based wealth advisors.
The wealth management division showed strong performance, with assets under management and administration growing by $1.0 billion to $12.9 billion at September 30, 2025. Wealth management fee income reached $15.8 million in the third quarter, accounting for 22% of total revenue. New business inflows for the quarter totaled $214 million, reflecting continued client confidence in the company's wealth management services. John Babcock, President of the Wealth Management Division, noted the division's focus on delivering excellent service and advice to clients through its high-touch service model.
Commercial banking operations demonstrated robust growth, with total loans increasing $506 million to $6.0 billion. Commercial and industrial lending accounted for 69% of new business originations during the quarter, with C&I balances representing 44% of the total loan portfolio. The company's capital position strengthened during the quarter, with tangible book value per share increasing 7% to $34.10 and regulatory capital ratios remaining well above well-capitalized standards. Additional financial details are available in the Company's Q3 2025 Investor Update on their website at https://www.peapackprivate.com and via a Current Report on Form 8-K on the Securities and Exchange Commission website at https://www.sec.gov.
Asset quality showed improvement as nonperforming assets declined by $31 million during the quarter to $84.1 million, representing 1.13% of total assets. The company aggressively addressed problem credits while maintaining appropriate reserve coverage. The provision for credit losses was $4.8 million for the quarter, driven by specific reserves related to two multifamily loans and loan growth. The allowance for credit losses stood at $68.6 million, or 1.14% of total loans, at quarter end.
The company's strategic investments in Metro New York expansion, combined with disciplined capital management and strong earnings momentum, position Peapack-Gladstone Financial Corporation for continued growth in the competitive financial services market. The successful integration of new teams and expansion of service offerings demonstrates the company's ability to execute its transformation strategy while maintaining financial stability and shareholder value creation.
