UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q

(MARK ONE)

[X]      QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934 For the Quarter Ended June 30, 2007

                                       OR

[_]      TRANSITION  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934 For the transition period from       to

                          Commission File No. 001-16197



                     PEAPACK-GLADSTONE FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)




               New Jersey                                22-3537895
    (State or other jurisdiction of                   (I.R.S. Employer
     incorporation or organization)                  Identification No.)



                              158 Route 206 North,
                           Gladstone, New Jersey 07934
          (Address of principal executive offices, including zip code)


                                 (908) 234-0700
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
Yes [X]     No [_].

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer or a  non-accelerated  filer.  See definition of "accelerated
filer" and "large  accelerated  filer" in Rule 12b-2 of the  Exchange Act (Check
one):
Large accelerated filer [_]   Accelerated filer [X]   Non-accelerated filer [_]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [_] No [X].

       Number of shares of Common Stock outstanding as of August 1, 2007:
                                    8,322,056

                                       1



                     PEAPACK-GLADSTONE FINANCIAL CORPORATION
                          PART 1 FINANCIAL INFORMATION


Item 1  Financial Statements (Unaudited):
        Consolidated Statements of Condition June 30, 2007 and
        December 31, 2006                                                Page 3
        Consolidated Statements of Income for the three and six months
        ended June 30, 2007 and 2006                                     Page 4
        Consolidated Statements of Changes in Shareholders' Equity
        for the six months ended June 30, 2007 and 2006                  Page 5
        Consolidated Statements of Cash Flows for the six months
        ended June 30, 2007 and 2006                                     Page 6
        Notes to Consolidated Financial Statements                       Page 7
Item 2  Management's Discussion and Analysis of Financial Condition
        and Results of Operations                                        Page 11
Item 3  Quantitative and Qualitative Disclosures about Market Risk       Page 22
Item 4  Controls and Procedures                                          Page 22


         PART 2 OTHER INFORMATION


Item 1A Risk Factors                                                     Page 23
Item 2  Unregistered Sales of Equity Securities and Use of
        Proceeds                                                         Page 23
Item 4  Submission of Matters to a Vote of Security Holders              Page 24
Item 6  Exhibits                                                         Page 24



                                       2



Item 1.  Financial Statements (Unaudited)

                         PEAPACK-GLADSTONE FINANCIAL CORPORATION
                          CONSOLIDATED STATEMENTS OF CONDITION
                                 (Dollars in thousands)
                                       (Unaudited)



                                                                  June 30,      December 31,
                                                                    2007            2006
                                                                ------------    ------------
                                                                                   
ASSETS
Cash and due from banks                                         $     22,293    $     23,190
Federal funds sold                                                    23,665             103
Interest-earning deposits                                                801           6,965
                                                                ------------    ------------
   Total cash and cash equivalents                                    46,759          30,258

Investment securities held to maturity (approximate market
   value $48,899 in 2007 and $54,523 in 2006)                         49,732          55,165

Securities available for sale                                        267,486         286,186


Loans                                                                902,364         870,153
   Less:  Allowance for loan losses                                    6,994           6,768
                                                                ------------    ------------
   Net Loans                                                         895,370         863,385

Premises and equipment                                                25,263          24,059
Accrued interest receivable                                            5,040           5,181
Cash surrender value of life insurance                                19,070          18,689
Other assets                                                           5,604           5,453
                                                                ------------    ------------
     TOTAL ASSETS                                               $  1,314,324    $  1,288,376
                                                                ============    ============


LIABILITIES
Deposits:
   Noninterest-bearing demand deposits                          $    195,694    $    196,519
   Interest-bearing deposits:
     Checking                                                        134,789         142,676
     Savings                                                          70,249          73,998
     Money market accounts                                           368,137         366,874
     Certificates of deposit over $100,000                           148,307         126,014
     Certificates of deposit less than $100,000                      256,378         238,655
                                                                ------------    ------------
Total deposits                                                     1,173,554       1,144,736
Borrowings                                                            23,073          23,964
Accrued expenses and other liabilities                                11,549          15,913
                                                                ------------    ------------
     TOTAL LIABILITIES                                             1,208,176       1,184,613
                                                                ------------    ------------

SHAREHOLDERS' EQUITY
Common stock (no par value; $0.83 per share;
   authorized  20,000,000 shares; issued shares, 8,566,669 at
   June 30, 2007 and  8,497,463 at December 31, 2006;
   outstanding shares, 8,314,181 at June 30, 2007 and
   8,270,973 at December 31, 2006)                                     7,139           7,081
Surplus                                                               90,477          89,372
Treasury stock at cost, 252,488 shares at June 30, 2007
   and 226,490 shares at December 31, 2006                            (5,681)         (4,999)
Retained earnings                                                     18,054          15,038
Accumulated other comprehensive loss, net of income tax               (3,841)         (2,729)
                                                                ------------    ------------
     TOTAL SHAREHOLDERS' EQUITY                                      106,148         103,763
                                                                ------------    ------------
     TOTAL LIABILITIES & SHAREHOLDERS' EQUITY                   $  1,314,324    $  1,288,376
                                                                ============    ============

   See accompanying notes to consolidated financial statements.

                                              3





                                    PEAPACK-GLADSTONE FINANCIAL CORPORATION
                                       CONSOLIDATED STATEMENTS OF INCOME
                                   (Dollars in thousands, except share data)
                                                  (Unaudited)

                                                           Three Months Ended            Six Months Ended
                                                                June 30,                     June 30,
                                                          2007           2006           2007           2006
                                                      ------------   ------------   ------------   ------------
                                                                                                
INTEREST INCOME
Interest and fees on loans                            $     13,576   $     11,945   $     26,755   $     23,194
Interest on investment securities held to maturity:
   Taxable                                                     217            277            451            575
   Tax-exempt                                                  274            330            545            699
Interest on securities available for sale:
   Taxable                                                   3,218          3,874          6,493          7,641
   Tax-exempt                                                  243             87            488            174
Interest-earning deposits                                       10             12             21             21
Interest on federal funds sold                                 357             56            436             72
                                                      ------------   ------------   ------------   ------------
   Total interest income                                    17,895         16,581         35,189         32,376

INTEREST EXPENSE
Interest on savings and interest-bearing deposit
   accounts                                                  4,094          3,143          8,337          5,636
Interest on certificates of deposit over $100,000            1,810          1,261          3,416          2,275
Interest on other time deposits                              3,117          2,431          5,975          4,514
Interest on borrowed funds                                     204          1,570            467          3,198
                                                      ------------   ------------   ------------   ------------
   Total interest expense                                    9,225          8,405         18,195         15,623
                                                      ------------   ------------   ------------   ------------

   NET INTEREST INCOME BEFORE
   PROVISION FOR LOAN LOSSES                                 8,670          8,176         16,994         16,753

Provision for loan losses                                      100            100            225            139
                                                      ------------   ------------   ------------   ------------

   NET INTEREST INCOME AFTER
   PROVISION FOR LOAN LOSSES                                 8,570          8,076         16,769         16,614
                                                      ------------   ------------   ------------   ------------

OTHER INCOME
Trust department income                                      2,459          2,078          4,601          4,323
Service charges and fees                                       513            489          1,003            960
Bank owned life insurance                                      221            207            437            411
Securities gains                                               220              5            382             56
Other income                                                   147            212            325            427
                                                      ------------   ------------   ------------   ------------
   Total other income                                        3,560          2,991          6,748          6,177
                                                      ------------   ------------   ------------   ------------

OTHER EXPENSES
Salaries and employee benefits                               4,360          3,933          8,614          7,791
Premises and equipment                                       1,748          1,694          3,602          3,419
Other expenses                                               1,911          1,759          3,361          3,295
                                                      ------------   ------------   ------------   ------------
   Total other expenses                                      8,019          7,386         15,577         14,505
                                                      ------------   ------------   ------------   ------------

INCOME BEFORE INCOME TAX EXPENSE                             4,111          3,681          7,940          8,286
Income tax expense                                           1,298            986          2,435          2,345
                                                      ------------   ------------   ------------   ------------
   NET INCOME                                         $      2,813   $      2,695   $      5,505   $      5,941
                                                      ============   ============   ============   ============
EARNINGS PER SHARE
Basic                                                 $       0.34   $       0.33   $       0.67   $       0.72
Diluted                                               $       0.33   $       0.32   $       0.65   $       0.71

Average basic shares outstanding                         8,289,843      8,270,905      8,281,592      8,275,008
Average diluted shares outstanding                       8,400,401      8,373,884      8,384,148      8,385,690

See accompanying notes to consolidated financial statements.

                                                       4



                     PEAPACK-GLADSTONE FINANCIAL CORPORATION
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                             (Dollars in thousands)
                                   (Unaudited)


                                                       Six Months Ended
                                                           June 30,
                                                     2007            2006
                                                 ------------    ------------

Balance, beginning of period                     $    103,763    $     99,155

Comprehensive income:

   Net income                                           5,505           5,941

   Unrealized holding losses on securities
     arising during the period, net of tax               (864)         (2,651)
   Less: reclassification adjustment for gains
     included in net income, net of tax                   248              36
                                                 ------------    ------------
                                                       (1,112)         (2,687)
                                                 ------------    ------------

   Total comprehensive income                           4,393           3,254

Common stock options exercised                            953             172

Purchase of treasury stock                               (682)           (924)

Cash dividends declared                                (2,488)         (2,316)

Stock-based compensation expense                           98              29

Tax benefit on disqualifying and nonqualifying
   exercise of stock options                              111              29

                                                 ------------    ------------
Balance, June 30,                                $    106,148    $     99,399
                                                 ============    ============

See accompanying notes to consolidated financial statements.


                                       5




                              PEAPACK-GLADSTONE FINANCIAL CORPORATION
                               CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      (Dollars in thousands)
                                            (Unaudited)

                                                                           Six Months Ended
                                                                               June 30,
                                                                         2007            2006
                                                                     ------------    ------------
                                                                                        
OPERATING ACTIVITIES:
Net income:                                                          $      5,505    $      5,941
Adjustments to reconcile net income to net cash
   provided by operating activities:
Depreciation                                                                1,071           1,021
Amortization of premium and accretion of
   discount on securities, net                                                172             283
Provision for loan losses                                                     225             139
Tax benefit on stock option exercises                                        (111)            (29)
Gains on security sales                                                      (382)            (56)
Gain on loans sold                                                             --              (1)
Gain on disposal of fixed assets                                               (3)             --
Stock-based compensation                                                       98              29
Increase in cash surrender value of life insurance, net                      (381)           (360)
Decrease/(increase) in accrued interest receivable                            141            (112)
Decrease/(increase) in other assets                                           665          (2,802)
(Decrease)/increase in accrued expenses and other liabilities              (4,370)          6,251
                                                                     ------------    ------------
   NET CASH PROVIDED BY OPERATING ACTIVITIES                                2,630          10,304
                                                                     ------------    ------------

INVESTING ACTIVITIES:
Proceeds from maturities of investment securities held to maturity          5,799          13,017
Proceeds from maturities of securities available for sale                  27,650          30,192
Proceeds from calls of investment securities held to maturity                 150           3,000
Proceeds from sales of securities available for sale                        2,108             330
Purchase of investment securities held to maturity                           (568)         (1,964)
Purchase of securities available for sale                                 (12,613)        (35,089)
Proceeds from sales of loans                                                2,056             226
Purchase of loans                                                              --         (20,770)
Net increase in loans                                                     (34,266)        (49,860)
Purchases of premises and equipment                                        (2,302)         (2,983)
Disposal of premises and equipment                                             30              --
                                                                     ------------    ------------
   NET CASH USED IN INVESTING ACTIVITIES                                  (11,956)        (63,901)
                                                                     ------------    ------------

FINANCING ACTIVITIES:
Net increase in deposits                                                   28,818          43,799
Net increase in other borrowings                                               --          22,750
Repayments of Federal Home Loan Bank advances                                (891)           (863)
Cash dividends paid                                                        (2,482)         (2,318)
Tax benefit on stock option exercises                                         111              29
Exercise of stock options                                                     953             172
Purchase of treasury stock                                                   (682)           (924)
                                                                     ------------    ------------
   NET CASH PROVIDED BY FINANCING ACTIVITIES                               25,827          62,645
                                                                     ------------    ------------

Net increase in cash and cash equivalents                                  16,501           9,048
Cash and cash equivalents at beginning or period                           30,258          23,499
                                                                     ------------    ------------
Cash and cash equivalents at end of period                           $     46,759    $     32,547
                                                                     ============    ============

Supplemental disclosures of cash flow information:
Cash paid during the year for:
   Interest                                                          $     16,934    $     14,386
   Income taxes                                                             3,170           1,720

See accompanying notes to consolidated financial statements.

                                                6



                     PEAPACK-GLADSTONE FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Certain information and footnote  disclosures normally included in the unaudited
consolidated  financial  statements  prepared in accordance with U.S.  generally
accepted  accounting  principles have been condensed or omitted  pursuant to the
rules and regulations of the Securities and Exchange Commission. These unaudited
condensed  consolidated  financial statements should be read in conjunction with
the consolidated  financial  statements and notes thereto included in the Annual
Report on Form 10-K for the period ended December 31, 2006 for Peapack-Gladstone
Financial Corporation (the "Corporation").

Principles of Consolidation: The Corporation considers that all adjustments (all
of which are normal recurring accruals) necessary for a fair presentation of the
statement of financial  position and results of operations  in  accordance  with
U.S. generally accepted accounting  principles for these periods have been made.
Results for such interim periods are not necessarily indicative of results for a
full year.

The consolidated financial statements of Peapack-Gladstone Financial Corporation
are prepared on the accrual  basis and include the  accounts of the  Corporation
and  its  wholly  owned  subsidiary,  Peapack-Gladstone  Bank.  All  significant
intercompany   balances  and   transactions   have  been   eliminated  from  the
accompanying consolidated financial statements.

Allowance  for Loan Losses:  The  allowance  for loan losses is  maintained at a
level  considered  adequate to provide for probable  incurred loan losses in the
Corporation's loan portfolio.  The allowance is based on management's evaluation
of  the  loan  portfolio  considering,  among  other  things,  current  economic
conditions,  the volume and nature of the loan  portfolio,  historical loan loss
experience,  and  individual  credit  situations.  The allowance is increased by
provisions charged to expense and reduced by charge-offs net of recoveries.

Stock Option Plans: The Corporation has incentive and non-qualified stock option
plans that allow the  granting of shares of the  Corporation's  common  stock to
employees and non-employee directors.  The options granted under these plans are
exercisable  at a price  equal to the fair market  value of common  stock on the
date of grant and expire not more than ten years after the date of grant.  Stock
options may vest during a period of up to five years after the date of grant.

For the three  months  ended June 30, 2007 and 2006,  the  Corporation  recorded
total compensation  expense for share-based payment arrangements of $53 thousand
and $15 thousand, respectively, with a recognized tax benefit of $3 thousand for
the three months ended June 30, 2007.  There was no  recognized  tax benefit for
the three months ended June 30, 2006.

For the six months ended June 30, 2007 and 2006, the Corporation  recorded total
compensation  expense for share-based  payment  arrangements of $98 thousand and
$29 thousand, respectively, with a recognized tax benefit of $7 thousand for the
six months ended June 30, 2007,  while there was no  recognized  tax benefit for
the six months ended June 30, 2006.

As of June 30,  2007,  there was  approximately  $732  thousand of  unrecognized
compensation expense related to non-vested share-based compensation arrangements
granted under the Corporation's  stock incentive plans. This expense is expected
to be recognized over a weighted average period of 2.1 years.

                                       7


For the  Corporation's  stock  option  plans for  employees,  changes in options
outstanding during the six months ended June 30, 2007 were as follows:



                                            Number       Exercise         Weighted     Aggregate
                                              of           Price          Average      Intrinsic
(Dollars in thousands except share data)    Shares       Per Share     Exercise Price    Value
------------------------------------------------------------------------------------------------
                                                                           
Balance, December 31, 2006                  413,916    $11.85-$32.14       $22.79
Granted                                      47,245      26.30-31.01        28.18
Exercised                                  (48,611)      11.85-26.65        12.34
Forfeited                                   (2,961)      16.86-29.50        23.20
                                           -----------------------------------------------------
Balance, June 30, 2007                      409,589    $11.85-$32.14       $24.65        $1,440
                                           =====================================================
Options exercisable, June 30, 2007          344,315                                      $1,432
                                           =====================================================


The aggregate  intrinsic  value in the table above  represents the total pre-tax
intrinsic value (the difference between the Corporation's closing stock price on
the last  trading  day of the  second  quarter of 2007 and the  exercise  price,
multiplied by the number of in-the-money options).

The aggregate  intrinsic value of options  exercised during the six months ended
June 30, 2007 and 2006 was $774 thousand and $41 thousand, respectively.

The  Corporation  also has  non-qualified  stock option  plans for  non-employee
directors.  Changes in options  outstanding during the six months ended June 30,
2007 were as follows:



                                              Number       Exercise       Weighted      Aggregate
                                                Of           Price         Average      Intrinsic
(Dollars in thousands except share data)      Shares       Per Share    Exercise Price    Value
------------------------------------------------------------------------------------------------
                                                                           
Balance, December 31, 2006                    189,553    $15.68-$28.89      $23.16
Granted                                        17,600            28.10       28.10
Exercised                                    (20,595)      15.68-17.53       17.15
                                             ---------------------------------------------------
Balance, June 30, 2007                        186,558    $15.68-$28.89      $24.29        $718
                                             ===================================================
Options exercisable, June 30, 2007            168,958                                     $718
                                             ===================================================


The aggregate  intrinsic  value in the table above  represents the total pre-tax
intrinsic value (the difference between the Corporation's closing stock price on
the last  trading  day of the  second  quarter of 2007 and the  exercise  price,
multiplied by the number of in-the-money options).

The aggregate  intrinsic value of options  exercised during the six months ended
June 30, 2007 and 2006 was $242 thousand and $72 thousand, respectively.

The per share  weighted-average  fair value of stock options  granted during the
first  six  months  of 2007  and  2006  for all  plans  was  $10.36  and  $7.66,
respectively,  on the date of grant using the Black Scholes option-pricing model
with the following weighted average assumptions:

                                                     2007        2006
                                                    -------     -------
         Dividend yield                               2.00%       2.17%
         Expected volatility                            43%         28%
         Expected life                              5 years     5 years
         Risk-free interest rate                      4.57%       4.86%

                                       8


Earnings per Common Share - Basic and Diluted: The following is a reconciliation
of the calculation of basic and diluted earnings per share. Basic net income per
common share is calculated by dividing net income to common  shareholders by the
weighted average common shares outstanding during the reporting period.  Diluted
net income per common  share is computed  similarly  to that of basic net income
per common share, except that the denominator is increased to include the number
of additional  common shares that would have been outstanding if all potentially
dilutive  common  shares,  principally  stock  options,  were issued  during the
reporting period utilizing the Treasury stock method.



                                                        Three Months Ended        Six Months Ended
                                                             June 30,                 June 30,
(In Thousands, except per share data)                   2007         2006         2007         2006
                                                     ----------   ----------   ----------   ----------
                                                                                   

Net Income to Common Shareholders                    $    2,813   $    2,695   $    5,505   $    5,941

Basic Weighted-Average Common Shares Outstanding      8,289,843    8,270,905    8,281,592    8,275,008
Plus:  Common Stock Equivalents                         110,558      102,979      102,556      110,682
                                                     ----------   ----------   ----------   ----------
Diluted Weighted-Average Common Shares Outstanding    8,400,401    8,373,884    8,384,148    8,385,690
Net Income Per Common Share
Basic                                                $     0.34   $     0.33   $     0.67   $     0.72
Diluted                                                    0.33         0.32         0.65         0.71


Options to purchase 15,480 shares of common stock at a weighted average price of
$29.97 per share were  outstanding  and were not included in the  computation of
diluted  earnings  per share in the second  quarter of 2007  because  the option
price was greater than the average  market  price.  Options to purchase  325,454
shares of common  stock at a  weighted  average  price of $28.86  per share were
outstanding  and were not included in the  computation  of diluted  earnings per
share in the second  quarter of 2006  because the option  price was greater than
the average market price.

Options to purchase  308,161 shares of common stock at a weighted  average price
of $28.95 per share were outstanding and were not included in the computation of
diluted  earnings  per share in the first six months of 2007  because the option
price was greater than the average  market  price.  Options to purchase  321,113
shares of common  stock at a  weighted  average  price of $28.91  per share were
outstanding  and were not included in the  computation  of diluted  earnings per
share in the first six months of 2006  because the option price was greater than
the average market price.

Income Taxes:The  Company adopted  Financial  Accounting  Standards Board (FASB)
Interpretation  48,  "Accounting for Uncertainty in Income Taxes" (FIN 48) as of
January 1, 2007. A tax position is  recognized  as a benefit only if it is "more
likely than not" that the tax position would be sustained in a tax  examination,
with a tax  examination  being presumed to occur.  The amount  recognized is the
largest  amount of tax benefit that is greater  than 50 percent  likely of being
realized on  examination.  For tax  positions  not meeting the "more likely than
not"  test,  no tax  benefit  is  recorded.  The  adoption  had no affect on the
Corporation's financial statements nor has anything changed significantly in the
six months since adoption.

The Corporation and its  subsidiaries  are subject to U.S. federal income tax as
well as income  tax of the State of New  Jersey.  The  Corporation  is no longer
subject  to  examination  by taxing  authorities  for  years  before  2002.  The
Corporation  does not expect the total  amount of  unrecognized  tax benefits to
significantly increase in the next 12 months.

The Corporation  recognizes  interest  related to income tax matters as interest
expense  and  penalties  related to income tax  matters  as other  expense.  The
Corporation  did not have any amounts  accrued for  interest  and  penalties  at
January 1, 2007.

Comprehensive  Income:  The difference  between the Corporation's net income and
total comprehensive  income for the three and six months ended June 30, 2007 and
2006 relates to the change in the net unrealized  gains and losses on securities
available for sale during the  applicable  period of time less  adjustments  for
realized gains and losses.  Total comprehensive income for the second quarter of
2007 was $1.4  million  and $1.7  million  for the same  quarter in 2006.  Total
comprehensive  income for the six months  ended June 30,  2007 and 2006 was $4.4
million and $3.3 million, respectively.

                                       9


Reclassification: Certain reclassifications have been made in the prior periods'
financial statements in order to conform to the 2007 presentation.

2. LOANS

Loans outstanding as of June 30, consisted of the following:

(In thousands)                 2007           2006
                          ------------   ------------
Residential real estate   $    489,720   $    484,844
Commercial real estate         190,667        159,527
Commercial loans               117,220        104,371
Construction loans              48,559         39,191
Consumer loans                  36,885         31,055
Other loans                     19,313         19,887
                          ------------   ------------
   Total loans            $    902,364   $    838,875
                          ============   ============

Non-performing  assets, which include other real estate owned (OREO), loans past
due in excess of 90 days and still accruing and non-accrual loans,  totaled $5.9
million at June 30, 2007 and $3.9  million at June 30,  2006.  Loans past due in
excess of 90 days and still  accruing are in the process of  collection  and are
collateralized by real estate.

3. FEDERAL HOME LOAN BANK ADVANCES AND OTHER BORROWINGS

Advances  from the  Federal  Home Loan  Bank of New York  (FHLB)  totaled  $23.1
million  and  $30.8  million  at June 30,  2007 and 2006,  respectively,  with a
weighted average  interest rate of 3.49 percent and 3.58 percent,  respectively.
These advances are secured by blanket pledges of certain 1-4 family  residential
mortgages  totaling $256.5 million at June 30, 2007. At June 30, 2007,  advances
totaling $17.0 million have fixed maturity dates,  while advances  totaling $6.1
million  were  amortizing  advances  with  monthly  payments  of  principal  and
interest.

There were no  short-term  borrowings  from the FHLB at June 30, 2007;  however,
short-term borrowings totaled $90.0 million at June 30, 2006. For the six months
ended  June  30,  2007  there  were  no  average  short-term  borrowings,  while
short-term  borrowings  averaged $88.2 million with a weighted  average interest
rate of 4.83 percent for the same period in 2006.

There were no overnight  borrowings at June 30, 2007, while overnight borrowings
totaled $10.3  million at June 30, 2006.  For the six months ended June 30, 2007
and 2006,  overnight  borrowings  from the FHLB  averaged  $2.1  million  with a
weighted average interest rate of 5.40 percent and $22.1 million with a weighted
average interest rate of 4.63 percent, respectively.

The final maturity  dates of the advances and other  borrowings are scheduled as
follows:

(In thousands)
2007                                                          $    4,000
2008                                                                 527
2009                                                               2,000
2010                                                               9,986
2011                                                               3,000
Over 5 years                                                       3,560
                                                              ----------
   Total                                                      $   23,073
                                                              ==========

                                       10


4. BENEFIT PLANS

The Corporation has a defined benefit pension plan covering substantially all of
its salaried employees.

The net  periodic  expense  for the periods  indicated  included  the  following
components:

                                      Three Months Ended      Six Months Ended
                                            June 30,              June 30,
(In thousands)                          2007       2006       2007       2006
                                      --------   --------   --------   --------
Service cost                          $    439   $    418   $    877   $    835
Interest cost                              194        165        389        330
Expected return on plan assets            (252)      (225)      (504)      (449)
Amortization of:
  Net loss                                   8         18         17         37
  Unrecognized remaining net assets         (1)        (1)        (3)        (3)
                                      --------   --------   --------   --------
Net periodic benefit cost             $    388   $    375   $    776   $    750
                                      ========   ========   ========   ========

As previously  disclosed in the financial statements for the year ended December
31, 2006, the Corporation expects to contribute $1.0 million to its pension plan
in 2007. As of June 30, 2007,  contributions  of $540 thousand had been made for
the current year.

Item 2
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

GENERAL:  The  following   discussion  and  analysis  contains   forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Such  statements are not historical  facts and include  expressions  about
management's  view  of  future  interest  income  and  net  loans,  management's
confidence and strategies and management's  expectations  about new and existing
programs and products, relationships, opportunities and market conditions. These
statements  may be identified by such  forward-looking  terminology as "expect",
"look",  "believe",  "anticipate",  "may",  "will",  or  similar  statements  or
variations  of such  terms.  Actual  results  may  differ  materially  from such
forward-looking  statements.  Factors  that may cause  actual  results to differ
materially from those contemplated by such  forward-looking  statements include,
among others, the following possibilities:

      o  Unexpected decline in the direction of the economy in New Jersey.
      o  Unexpected changes in interest rates.
      o  Failure to grow commercial loans.
      o  Inability to manage growth in commercial loans.
      o  Unexpected loan prepayment volume.
      o  Unanticipated exposure to credit risks.
      o  Insufficient allowance for loan losses.
      o  Competition from other financial institutions.
      o  Adverse  effects  of  new  government   regulation  or  different  than
         anticipated effects from existing regulations.
      o  Decline in the levels of loan quality and origination volume.
      o  Decline in trust assets or deposits.

The  Corporation  assumes  no  responsibility  to  update  such  forward-looking
statements in the future.

                                       11


CRITICAL  ACCOUNTING  POLICIES  AND  ESTIMATES:   "Management's  Discussion  and
Analysis of Financial  Condition  and Results of  Operations"  is based upon the
Corporation's  consolidated  financial  statements,  which have been prepared in
accordance with U.S. generally accepted accounting  principles.  The preparation
of these  financial  statements  requires the  Corporation to make estimates and
judgments that affect the reported amounts of assets, liabilities,  revenues and
expenses.  Note 1 to the Corporation's Audited Consolidated Financial Statements
included in the December 31, 2006 Annual Report on Form 10-K, contains a summary
of the Corporation's  significant  accounting policies.  Management believes the
Corporation's  policy with respect to the methodology for the  determination  of
the  allowance  for loan  losses  involves  a higher  degree of  complexity  and
requires  management to make  difficult and  subjective  judgments,  which often
require  assumptions or estimates  about highly  uncertain  matters.  Changes in
these  judgments,  assumptions or estimates could  materially  impact results of
operations.  This critical policy and its application are periodically  reviewed
with the Audit Committee and the Board of Directors.

The  provision  for loan  losses is based upon  management's  evaluation  of the
adequacy of the  allowance,  including an assessment of known and inherent risks
in the portfolio,  giving  consideration to the size and composition of the loan
portfolio,  actual  loan  loss  experience,  level  of  delinquencies,  detailed
analysis of individual loans for which full  collectibility  may not be assured,
the existence and estimated net realizable  value of any  underlying  collateral
and guarantees  securing the loans, and current economic and market  conditions.
Although  management  uses  the best  information  available,  the  level of the
allowance for loan 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 Corporation's  provision
for loan losses.  Such agencies may require the  Corporation to make  additional
provisions for loan losses based upon information  available to them at the time
of their examination.  Furthermore,  the majority of the Corporation's loans are
secured  by  real  estate  in  the  State  of  New  Jersey.   Accordingly,   the
collectibility   of  a  substantial   portion  of  the  carrying  value  of  the
Corporation's   loan  portfolio  is  susceptible  to  changes  in  local  market
conditions  and may be adversely  affected  should real estate values decline or
should New Jersey experience adverse economic conditions.  Future adjustments to
the  provision  for loan losses may be  necessary  due to  economic,  operating,
regulatory and other conditions beyond the Corporation's control.

EXECUTIVE  SUMMARY:  The Corporation's net income for the second quarter of 2007
was $2.8 million,  an increase of $118 thousand or 4.4 percent  compared to $2.7
million for the same period last year. This increase was primarily due to higher
net interest  income and other income  offset in part by higher other  expenses.
Diluted  earnings per share were $0.33 for the second  quarter of 2007 and $0.32
for the second quarter of 2006. The annualized return on average assets was 0.86
percent and the  annualized  return on average  equity was 10.57 percent for the
second quarter of 2007.

Net interest income,  on a fully  tax-equivalent  basis, was $8.9 million in the
second  quarter of 2007,  an increase of $448  thousand or 5.3 percent  from the
second  quarter last year and the net  interest  margin was 2.86 percent for the
second quarter as compared to 2.73 percent for the same quarter of 2006 and 2.82
percent in the first quarter of 2007.

Average loans for the second  quarter of 2007 increased  $81.8 million,  or 10.1
percent,  to $890.9  million from $809.2 million for the second quarter of 2006.
The Corporation's long-term plan calls for a substantial shift in the asset mix,
with more emphasis on higher yielding commercial loans and commercial  mortgages
and less emphasis on  residential  mortgages.  The average  commercial  loan and
commercial  mortgage  portfolios grew $51.4 million or 17.6 percent,  accounting
for almost 63  percent  of the total loan  growth.  The  average  mortgage  loan
portfolio grew by $23.7 million or 5.0 percent.  Loan rates rose 19 basis points
from the second quarter of 2006 to 6.10 percent for the same quarter of 2007.

For the second quarter of 2007,  average  deposits grew $114.3 million,  or 10.8
percent, to $1.17 billion from $1.06 billion for the same quarter of 2006. Rates
paid for  interest-bearing  deposits  in the  second  quarter  of 2007 were 3.67
percent as compared to 3.13 percent for the same period in 2006,  an increase of
54 basis  points.  The  continued  increase in funding costs was due to the very
competitive  market  for retail  deposits  and the  corresponding  change in the
funding mix into higher cost products.

                                       12


For the first six months of 2007,  net income was $5.5  million as  compared  to
$5.9  million  for the same  period in 2006,  a decline of $436  thousand or 7.3
percent.  This decline is primarily the result of increased  other  expenses and
provision for loan losses offset in part by higher net interest income and other
income.  Diluted  earnings  per share  were  $0.65  for the  first  half of 2007
compared to $0.71 for the same period in 2006.  The return on average assets was
0.85  percent and the return on average  equity was 10.43  percent for the first
six months of 2007.

On a fully  tax-equivalent  basis,  net interest income for the six months ended
June 30, 2007 was $17.5  million as  compared to $17.3  million for the same six
months of 2006, an increase of $123 thousand,  or 0.7 percent.  The net interest
margin was 2.84 percent for both periods.

Loans  averaged  $881.0 million for the first six months of 2007, an increase of
$88.8 million, or 11.2 percent, over the same period in 2006. For the six months
ended  June 30,  2007,  the  average  commercial  loan and  commercial  mortgage
portfolios  grew $48.7  million or 17.2 percent,  to $331.4  million from $282.7
million for the same period of 2006.  The average  mortgage  loan  portfolio was
$496.0  million and $463.7  million  for the six months  ended June 30, 2007 and
2006, respectively, a $32.4 million increase or 7.0 percent. The average rate on
the loan portfolio  rose 22 basis points from 5.86 percent for the  year-to-date
ended June 30, 2006 to 6.08 percent for the same six months in 2007.

Average  deposits  were $1.16  billion for the six months ended June 30, 2007, a
$119.8 million increase,  or 11.5 percent, over the average of $1.04 billion for
the same period in 2006.  Interest-bearing  deposits increased $116.0 million to
$971.6  million on average for the six months ended June 30, 2007 as compared to
the same period in 2006. Rates paid on  interest-bearing  deposits  increased 75
basis  points to 3.65  percent  for the six months  ended June 30, 2007 from the
same period last year.  Average  borrowings for the first half of 2007 decreased
$115.9  million  compared  to the  first  half  of  2006  to  $25.6  million  as
higher-cost borrowings were eliminated in the third quarter of 2006.

EARNINGS ANALYSIS

NET INTEREST INCOME:  Net interest income, on a tax-equivalent  basis and before
the provision for loan losses,  for the second  quarter of 2007 was $8.9 million
as compared to $8.5  million for the same  quarter of 2006,  an increase of $448
thousand or 5.3  percent.  On a fully  tax-equivalent  basis,  the net  interest
margin was 2.86 percent and 2.73 percent in the second quarter of 2007 and 2006,
respectively,  an increase of 13 basis points.  For the second  quarter of 2007,
net interest income was $345 thousand,  or 4.0 percent,  higher when compared to
the first quarter of 2007 on a tax-equivalent basis. The net interest margin, on
a fully tax-equivalent  basis,  increased from 2.82 percent in the first quarter
of 2007,  to 2.86  percent  in the  second  quarter  of 2007.  In the past year,
funding costs have  increased as strong  competition  for retail  deposits and a
changing deposit mix to more higher-paying deposits continued.

Average  loans for the second  quarter of 2007  increased  $81.8 million or 10.1
percent to $890.9  million from $809.2  million in the same period of 2006.  The
mortgage  loan  portfolio  grew,  on average,  by $23.7  million or 5.0 percent,
during this period,  while the average  commercial loan and commercial  mortgage
portfolios  grew $51.4 million or 17.6 percent.  In the second  quarter of 2007,
installment  loans  averaged a $7.1  million,  or 24.9  percent  increase,  when
compared  with the same  quarter  in 2006.  While  the  emphasis  is to grow the
commercial  loan  portfolios,  new  initiatives  have  also been  instituted  to
increase the installment loan portfolios.

Average deposits grew $114.3 million,  or 10.8 percent, in the second quarter of
2007,  to $1.17  billion from $1.06  billion for the same period in 2006.  Money
markets and  certificates  of deposit remain the  Corporation's  fastest growing
categories  of  deposits,  as well as being the  highest  cost,  averaging  3.95
percent and 4.89 percent,  respectively, for the second quarter of 2007. For the
second  quarter of 2007,  money market  accounts  averaged  $371.6  million,  an
increase of $70.2  million,  or 23.3  percent,  over the same period in 2006, in
large part due to the increase in the high yield money market  account.  Average
certificates  of  deposit  for the second  quarter of 2007 and 2006 were  $402.8
million and $345.0 million,

                                       13


respectively,  an increase of $57.8 million or 16.8 percent.  Higher promotional
rates were offered for  certificates  of deposit opened at the new Summit Branch
and other rates have remained competitive.

Average  short-term  borrowings  declined  $95.5  million to zero for the second
quarter  of 2007 from the same  period  last  year,  a result  of the  strategic
decision  to reduce  exposure to  high-cost,  short-term  borrowings  and reduce
interest  rate risk.  Overnight  funds have also declined to zero for the second
quarter of 2007 as compared to an average of $6.5  million for the same  quarter
of 2006.  Average demand  deposits  increased $3.7 million or 2.0 percent in the
second quarter of 2007 from the year ago period.

Average interest rates earned on  interest-earning  assets,  on a tax-equivalent
basis,  rose 37 basis points to 5.82 percent for the second quarter of 2007 from
5.45  percent for the same  quarter of 2006.  Average  interest  rates earned on
investment  securities  were 5.09  percent  for the  second  quarter  of 2007 as
compared to 4.58 percent in the second  quarter of 2006, an increase of 51 basis
points.  In the second quarter of 2007,  average  interest rates earned on loans
were 6.10 percent, rising 19 basis points over the prior year's second quarter.

The average  interest rate paid on  interest-bearing  liabilities  in the second
quarter of 2007 and 2006 was 3.67  percent and 3.34  percent,  an increase of 33
basis points.  While average rates paid on certificates of deposit  increased 61
basis points and money market accounts increased 29 basis points to 4.89 percent
and 3.95 percent,  respectively, for the second quarter of 2007 when compared to
the same quarter in 2006,  average rates paid on  borrowings  declined 121 basis
points to 3.51 percent.  On average,  the  High-Yield  Money Market  account has
grown by $202.9  million  since the  second  quarter of 2006 and paid on average
4.16  percent in the second  quarter of 2007.  This growth has been  offset,  in
part, by the $124.9  million  decline in the Fed Tracker  money market  product,
which was  discontinued  earlier this year,  and paid on average 4.33 percent in
the second quarter of 2006. The overall  borrowing rate decline is mostly due to
the repayment of short-term and overnight borrowings.

The cost of funds  increased to 3.08  percent for the second  quarter of 2007 as
compared to 2.82  percent for the same period in 2006.  Despite  strong loan and
deposit  growth,  the  continued  increase in funding  costs was due to the very
competitive  market  for retail  deposits  and the  corresponding  change in the
funding mix into higher cost products.

On a tax-equivalent basis, net interest income for the six months ended June 30,
2007, before the provision for loan losses,  was $17.5 million compared to $17.3
million  for the same  period  of 2006,  an  increase  of $123  thousand  or 0.7
percent.  The slight increase was primarily the result of higher loan volume and
higher  rates  earned on  investments  and loans  offset by higher rates paid on
liabilities and lower investment  volume.  As noted above,  rates on liabilities
continue  to  rise  and  the mix of  deposits  has  changed  to  include  higher
interest-bearing  balances,  which  negatively  affected  net  interest  income.
However,  for the six  months  ended  June 30,  2007,  the  change in the mix of
interest-earning  assets has increased the net interest income. The net interest
margin on a fully  tax-equivalent basis was 2.84 percent in the first six months
of 2007 and 2006.

Average interest-earning assets were $1.23 billion for the six months ended June
30, 2007 as compared to $1.22 billion for the same period in 2006,  and increase
of $8.4 million, or 0.7 percent.  For the first six months of 2007, average loan
balances were $881.0 million,  an increase of $88.8 million or 11.2 percent over
the  average  of  $792.2  million  for the same  six  months  in  2006.  Average
investment  securities  declined  $93.7  million,  or 21.9  percent,  to  $333.3
million,  which is due to the balance sheet  restructuring  that occurred in the
third quarter of 2006 and maturities. The average commercial loan and commercial
mortgage  portfolios  grew $48.7 million or 17.2 percent,  to $331.4 million for
the six months ended June 30, 2007,  from $282.7  million for the same period of
2006. The average  mortgage loan portfolio was $496.0 million and $463.7 million
for the six months ended June 30, 2007 and 2006, respectively,  a $32.4 million,
or 7.0 percent, Increase between such periods.

                                       14


Average interest-bearing liabilities remained flat at $997.0 million for the six
months  ended  June  30,  2007  and  2006,  while  the  rates  and the mix  were
responsible  for the  increase in interest  expense.  Average  balances of money
market  accounts were $374.8 million and $292.3 million for the six months ended
June 30,  2007 and 2006,  respectively,  an  increase  of $82.6  million or 28.3
percent.  The Fed Tracker Money Market was  discontinued  earlier in 2007, but a
High  Yield  Money  Market  product  has been well  received  by  customers  and
accounted for much of the growth in money market  products.  Average balances of
certificates  of  deposits  grew to $387.6  million  for the first six months of
2007, an increase of $53.8 million or 16.1 percent over the average  balances of
$333.9 million during the same period in 2006. Average savings deposits declined
$14.9  million or 17.2 percent and average  interest-bearing  checking  deposits
declined  $5.4  million  or 3.8  percent.  Average  non-interest-bearing  demand
deposits totaled $185.4 million and $181.6 million for the six months ended June
30, 2007 and 2006, respectively, an increase of $3.8 million or 2.1 percent.

For six months ended June 30, 2007,  short-term borrowings averaged $2.1 million
as compared to $110.3  million  for the same period of 2006.  This  decline is a
result of the strategic  decision to reduce  exposure to  high-cost,  short-term
borrowings and reduce interest rate risk.  Long-term  borrowings  averaged $23.4
million for the six months ended June 30, 2007 as compared to $31.2  million for
the same period in 2006,  a decline of $7.8 million or 24.9  percent,  which was
the result of maturities and repayments.

Average interest rates earned on  interest-earning  assets,  on a tax-equivalent
basis,  rose 40 basis  points to 5.79  percent  for the first six months of 2007
from 5.39  percent  for the first six  months of 2006.  Average  interest  rates
earned on loans  rose 22 basis  points  in the first six  months of 2007 to 6.08
percent from 5.86 percent for the same period in 2006, despite a flattened yield
curve and  competitive  pressure.  For the six months ended June 30,  2007,  the
average  interest  rates  earned  on  investment  securities  increased  to 5.05
percent, rising 53 basis points from 4.52 percent in the same period in 2006.

The average interest rate paid on interest-bearing  liabilities in the first six
months of 2007 and 2006 was 3.65 percent and 3.13  percent,  respectively,  a 52
basis point  increase.  The average rate paid on  certificates of deposit in the
first six  months of 2007 rose 78 basis  points to 4.85  percent  while  average
rates paid on money  market  accounts  increased 65 basis points to 4.01 percent
when compared to 3.36 percent for the same period in 2006. Average rates paid on
checking  deposits  increased  24 basis points to 0.85 percent for the first six
months of 2007 as compared to the same period of 2006 due to the increase in the
rates paid on the interest-bearing checking products.

For the six months ended June 30, 2007,  the average rate paid on borrowings was
3.65  percent as compared to 4.52 percent for the same period in 2006, a decline
of 87 basis  points,  due to the  reduction  in the  balances on the higher cost
short-term and overnight borrowings. Average overnight borrowing rates increased
77 basis  points  to 5.40  percent  in the six  months  ended  June 30,  2007 as
compared to 4.63 percent in the year ago period. The cost of funds for the first
six months of 2007 increased to 3.08 percent as compared to 2.65 percent for the
same period in 2006.

                                       15


The  following  tables  reflect the  components  of net interest  income for the
periods indicated:




                                                     Average Balance Sheet
                                                           Unaudited
                                                         Quarters Ended
                                          (Tax-Equivalent Basis, Dollars in Thousands)

                                                      June 30, 2007                               June 30, 2006
                                                      -------------                               -------------
                                          Average        Income/                       Average        Income/
                                          Balance        Expense         Yield         Balance        Expense         Yield
                                          -------        -------         -----         -------        -------         -----
                                                                                                        
ASSETS:
Interest-earnings assets:
   Investments:
     Taxable (1)                        $   271,494    $     3,435           5.06%   $   370,962    $     4,151           4.47%
     Tax-exempt (1) (2)                      56,597            740           5.23         51,478            688           5.35
   Loans (2) (3)                            890,939         13,590           6.10        809,161         11,957           5.91
   Federal funds sold                        26,935            357           5.30          4,684             56           4.80
   Interest-earning deposits                    718             10           5.77            949             12           4.91
                                        -----------    -----------    -----------    -----------    -----------    -----------
   Total interest-earning assets          1,246,683    $    18,132           5.82%     1,237,234    $    16,864           5.45%
                                        -----------    -----------    -----------    -----------    -----------    -----------
Noninterest -earning assets:
   Cash and due from banks                   22,727                                       22,514
   Allowance for loan losses                 (6,896)                                      (6,416)
   Premises and equipment                    25,121                                       23,232
   Other assets                              26,851                                       23,492
                                        -----------                                  -----------
   Total noninterest-earning assets          67,803                                       62,822
                                        -----------                                  -----------
Total assets                            $ 1,314,486                                  $ 1,300,056
                                        ===========                                  ===========

LIABILITIES:
Interest-bearing deposits:
   Checking                             $   138,530    $       303           0.87%   $   141,999    $       240           0.68%
   Money markets                            371,605          3,669           3.95        301,391          2,758           3.66
   Savings                                   70,232            122           0.69         84,177            145           0.69
   Certificates of deposit                  402,787          4,927           4.89        344,959          3,692           4.28
                                        -----------    -----------    -----------    -----------    -----------    -----------
     Total interest-bearing deposits        983,154          9,021           3.67        872,526          6,835           3.13
   Borrowings                                23,224            204           3.51        133,020          1,570           4.72
                                        -----------    -----------    -----------    -----------    -----------    -----------
   Total interest-bearing liabilities     1,006,378          9,225           3.67      1,005,546          8,405           3.34
                                        -----------    -----------    -----------    -----------    -----------    -----------
Noninterest bearing liabilities
   Demand deposits                          190,432                                      186,769
   Accrued expenses and
     other liabilities                       11,235                                        8,242
                                        -----------                                  -----------
   Total noninterest-bearing
     liabilities                            201,667                                      195,011
Shareholders' equity                        106,441                                       99,499
                                        -----------                                  -----------
   Total liabilities and
     shareholders' equity               $ 1,314,486                                  $ 1,300,056
                                        ===========                                  ===========
   Net Interest income
     (tax-equivalent basis)                                  8,907                                        8,459
     Net interest spread                                                     2.15%                                        2.11%
                                                                      ===========                                  ===========
     Net interest margin (4)                                                 2.86%                                        2.73%
                                                                      ===========                                  ===========
Tax equivalent adjustment                                     (237)                                        (283)
                                                       -----------                                  -----------
Net interest income                                    $     8,670                                  $     8,176
                                                       ===========                                  ===========

                                                              16





                                                     Average Balance Sheet
                                                           Unaudited
                                                         Year-To Date
                                         (Tax-Equivalent Basis, Dollars in Thousands)


                                                      June 30, 2007                               June 30, 2006
                                                      -------------                               -------------
                                          Average        Income/                       Average        Income/
                                          Balance        Expense         Yield         Balance        Expense         Yield
                                          -------        -------         -----         -------        -------         -----
                                                                                                        
ASSETS:
Interest-earnings assets:
   Investments:
     Taxable (1)                        $   276,786    $     6,944            5.02%  $   372,494    $     8,216            4.41%
     Tax-exempt (1) (2)                      56,549          1,479            5.23        54,540          1,440            5.28
   Loans (2) (3)                            880,978         26,783            6.08       792,182         23,219            5.86
   Federal funds sold                        16,468            436            5.30         3,090             72            4.67
   Interest-earning deposits                    807             21            5.36           927             21            4.48
                                        -----------    -----------     -----------   -----------    -----------     -----------
   Total interest-earning assets          1,231,588    $    35,663            5.79%    1,223,233    $    32,968            5.39%
                                        -----------    -----------     -----------   -----------    -----------     -----------
Noninterest -earning assets:
   Cash and due from banks                   22,926                                       22,205
   Allowance for loan losses                 (6,833)                                      (6,458)
   Premises and equipment                    24,765                                       22,478
   Other assets                              26,748                                       23,304
                                        -----------                                  -----------
   Total noninterest-earning assets          67,606                                       61,529
                                        -----------                                  -----------
Total assets                            $ 1,299,194                                  $ 1,284,762
                                        ===========                                  ===========

LIABILITIES:
Interest-bearing deposits:
   Checking                             $   137,740    $       585            0.85%  $   143,153    $       436            0.61%
   Money markets                            374,825          7,506            4.01       292,257          4,905            3.36
   Savings                                   71,397            246            0.69        86,274            295            0.68
   Certificates of deposit                  387,618          9,391            4.85       333,866          6,789            4.07
                                        -----------    -----------     -----------   -----------    -----------     -----------
     Total interest-bearing deposits        971,580         17,728            3.65       855,550         12,425            2.90
   Borrowings                                25,564            467            3.65       141,490          3,198            4.52
                                        -----------    -----------     -----------   -----------    -----------     -----------
   Total interest-bearing liabilities       997,144         18,195            3.65       997,040         15,623            3.13
                                        -----------    -----------     -----------   -----------    -----------     -----------
Noninterest bearing liabilities
   Demand deposits                          185,368                                      181,612
   Accrued expenses and
     other liabilities                       11,101                                        6,577
                                        -----------                                  -----------
   Total noninterest-bearing
     liabilities                            196,469                                      188,189
Shareholders' equity                        105,581                                       99,533
                                        -----------                                  -----------
   Total liabilities and
     shareholders' equity               $ 1,299,194                                  $ 1,284,762
                                        ===========                                  ===========
   Net Interest income
     (tax-equivalent basis)                                 17,468                                       17,345
     Net interest spread                                                      2.14%                                        2.26%
                                                                       ===========                                  ===========
     Net interest margin (4)                                                  2.84%                                        2.84%
                                                                       ===========                                  ===========
Tax equivalent adjustment                                     (474)                                        (592)
                                                       -----------                                  -----------
Net interest income                                    $    16,994                                  $    16,753
                                                       ===========                                  ===========


(1)      Average  balances  for  available-for  sale  securities  are  based  on
         amortized cost.
(2)      Interest  income is  presented  on a  tax-equivalent  basis  using a 35
         percent federal tax rate.
(3)      Loans are stated net of unearned income and include non-accrual loans.
(4)      Net interest income on a tax-equivalent  basis as a percentage of total
         average interest-earning assets.

                                       17



OTHER INCOME:  In the second  quarter of 2007,  other income was $3.6 million as
compared  to $3.0  million in the second  quarter of 2006,  an  increase of $569
thousand, or 19.0 percent. PGB Trust and Investments, the Bank's trust division,
generated  $2.5 million in fee income in the second quarter of 2007, an increase
of $381  thousand or 18.3  percent  over the same  quarter of 2006.  At June 30,
2007,  the market value of trust assets  under  administration  was in excess of
$2.0  billion,  an increase of $259.8  million or 14.7  percent  over the market
value at June 30, 2006.

The Corporation recorded $220 thousand of securities gains in the second quarter
of 2007 as compared to $5 thousand in the same  quarter of 2006.  Other  income,
excluding trust fee income and securities  gains,  totaled $881 thousand for the
second  quarter in 2007 as compared to $908  thousand for the same period a year
ago.

Other income for the first six months in 2007 and 2006 was $6.7 million and $6.2
million,  respectively,  a $571 thousand, or 9.2 percent,  increase between such
periods. PGB Trust and Investments  generated fee income of $4.6 million for the
first half of 2007 as compared to $4.3  million for the same period in 2006,  an
increase of 278 thousand or 6.4 percent.  While all other income  categories  in
2007  remained  flat to the  first  six  months  of 2006  at $1.8  million,  the
Corporation recorded $382 thousand of securities gains in the first half of 2007
as compared to $56 thousand in the same six months of 2006.

The following table presents the components of other income for the periods
indicated:

                               Three Months Ended        Six Months Ended
                                    June 30,                 June 30,
(In thousands)                 2007         2006         2007         2006
                            ----------   ----------   ----------   ----------
Trust department income     $    2,459   $    2,078   $    4,601   $    4,323
Service charges and fees           513          489        1,003          960
Bank owned life insurance          221          207          437          411
Other non-interest income           68          130          162          238
Safe deposit rental fees            56           55          121          118
Fees for other services             23           27           42           71
Securities gains                   220            5          382           56
                            ----------   ----------   ----------   ----------
     Total other income     $    3,560   $    2,991   $    6,748   $    6,177
                            ==========   ==========   ==========   ==========

OTHER  EXPENSES:  Other expenses  totaled $8.0 million for the second quarter of
2007,  as compared to $7.4  million  recorded  in the same  quarter of 2006,  an
increase  of  $633  thousand  or  8.6  percent.   Salaries  and  benefits,   the
Corporation's  largest  non-interest  expense,  was $4.4  million for the second
quarter of 2007 as  compared to $3.9  million  for the same  period of 2006,  an
increase of $427 thousand or 10.9 percent.  In the past year, the Bank has added
new  lenders  who  have   contributed  to  the  growth  in  the  commercial  and
construction  loan portfolios as well as new Trust officers who have contributed
to the  growth  in  PGB  Trust  and  Investments.  In  addition,  normal  salary
increases,  branch  expansion,  higher group health  insurance  and pension plan
costs contributed to the increase.

Premises and equipment expense increased $54 thousand,  or 3.2 percent, from the
second quarter of 2006 to $1.7 million in the second quarter in 2007.  Excluding
salaries and benefits and premises and  equipment  expenses,  all other  expense
categories in total rose to $1.9 million from $1.8 million,  an increase of $152
thousand, or 8.6 percent. For the three months ended June 30, 2007, professional
services increased $187 thousand,  more than doubling due to increased legal and
other  professional fees, as well as higher recruitment fees to fill new lending
positions.  Advertising  expense rose $174  thousand,  or 76.7 percent,  to $401
thousand  for the second  quarter of 2007 as  compared to the same period a year
ago due to the  additional  advertising  for the new  Summit  Branch  and  trust
advertising.  Expenses,  including stationery and supplies,  delivery,  postage,
telephone,  etc., declined $209 thousand or 15.3 percent to $1.2 million for the
first half of 2007 as compared to the same period in 2006.

                                       18


For the six months ended June 30, 2007, other expenses totaled $15.6 million, an
increase of $1.1 million or 7.4 percent  over the same period in 2006.  Salaries
and benefits  expense was $8.6 million for the first half of 2007 as compared to
$7.8  million for the same six months in 2006,  an increase of $823  thousand or
10.6  percent.  This  year-to-date  increase  continues  to  reflect  the Bank's
investment  in  additional  commercial  lenders  and  Trust  officers  who  have
contributed to the growth in their respective departments.

For the first half of 2007,  premises and equipment  expense was $3.6 million as
compared  to $3.4  million  for the same  period in 2006,  an  increase  of $184
thousand,  or  5.4  percent.  The  increase  is due in  part  to the  additional
expenses, such as depreciation,  utilities and various equipment associated with
a new branch and additional employees.

Excluding salaries and benefits and premises and equipment  expenses,  all other
expense  categories  totaled  $3.4  million and $3.3  million for the six months
ended June 30, 2007 and 2006, respectively,  an increase of $65 thousand, or 2.0
percent.  For this year-to-date  period,  professional  services  increased $264
thousand,  or 73.5 percent,  as compared to the first six months of 2006, due to
increased legal,  recruitment and other professional fees.  Advertising  expense
rose $104 thousand,  or 25.4 percent, to $514 thousand for the second quarter of
2007 as compared to the same period a year ago due to the additional advertising
for the new Summit Branch and trust advertising. These increases were offset, in
part,  by  decreases  in other  expense  categories,  stationery  and  supplies,
delivery, postage, telephone, etc. These other expenses totaled $2.2 million and
$2.5  million  for the six months  ended June 30,  2007 and 2006,  respectively.
Although  postage remained flat for the first half of the year, we anticipate it
increasing  comparatively,  in the coming  quarters due to the postage  increase
that took effect in May.

While the  Corporation  strives to control costs,  new branches are vital to our
future growth and profitability. Deposit and loan growth continues as we add new
markets and expand our staff to include  professional  commercial  lenders.  The
Corporation continues to strive to operate in an efficient manner.

The  following  table  presents the  components of other expense for the periods
indicated:

                                   Three Months Ended       Six Months Ended
                                        June 30,                June 30,
(In thousands)                      2007        2006        2007        2006
                                 ----------  ----------  ----------  ----------
Salaries and employee benefits   $    4,360  $    3,933  $    8,614  $    7,791
Premises and equipment                1,748       1,694       3,603       3,419
Professional fees                       350         163         623         359
Advertising                             401         227         514         410
Telephone                               105         105         211         197
Trust department expense                131         122         230         237
Postage                                  82          84         166         169
Stationery and supplies                 117         115         195         223
Other expense                           725         943       1,421       1,700
                                 ----------  ----------  ----------  ----------
     Total other expense         $    8,019  $    7,386  $   15,577  $   14,505
                                 ==========  ==========  ==========  ==========

NON-PERFORMING  ASSETS: Other real estate owned (OREO), loans past due in excess
of  90  days  and  still  accruing,   and   non-accrual   loans  are  considered
non-performing  assets.  These  assets  totaled $5.9 million and $3.9 million at
June 30,  2007 and 2006  respectively.  Loans  past due in excess of 90 days and
still  accruing  are in the  process  of  collection  and we  believe to be well
secured.  The balance of  non-performing  assets at June 30, 2007  includes  two
commercial loans totaling $5.3 million. These loans are both well collateralized
by   properties   with   appraised   values  in  excess  of  the  loan  amounts.
Peapack-Gladstone  Bank has no  sub-prime  loans or other  higher-interest  rate
loans to  consumers  with  impaired  or  non-existent  credit  histories  in its
mortgage loan portfolio.

                                       19


The following table sets forth non-performing assets on the dates indicated,  in
conjunction with asset quality ratios:

                                                                June 30,
(In thousands)                                              2007         2006
                                                         ---------    ---------
Loans past due in excess of 90 days and still accruing   $     237    $       2
Non-accrual loans                                            5,674        3,874
                                                         ---------    ---------
     Total non-performing assets                         $   5,911    $   3,876
                                                         =========    =========

Non-performing loans as a % of total loans                    0.66%        0.46%
Non-performing assets as a % of total loans plus
   other real estate owned                                    0.66%        0.46%
Allowance as a % of total loans                               0.78%        0.78%

PROVISION  FOR LOAN LOSSES:  The provision for loan losses was $100 thousand for
the second  quarters of 2007 and 2006,  while the  provision for loan losses for
the  first  six  months of 2007 and 2006 was $225  thousand  and $139  thousand,
respectively. In 2006, the provision for loan losses was offset by $61 thousand,
representing the provision for losses on letters of credit and unfunded lines of
credit, which was recorded in other expenses.

The amount of the loan loss  provision  and the level of the  allowance for loan
losses are based upon a number of factors including  management's  evaluation of
probable  losses  inherent in the portfolio,  after  consideration  of appraised
collateral values,  financial condition and past credit history of the borrowers
as well as prevailing economic conditions.

For the second quarter of 2007 and the second quarter of 2006, there were no net
charge-offs or recoveries. Net recoveries for the six months ended June 30, 2007
was $1 thousand as compared to net charge-offs of $3 thousand for the six months
ended June 30, 2006.

     A summary of the allowance for loan losses for the periods indicated:

         (In thousands)                              2007          2006
                                                 ----------    ----------
         Balance, January 1,                     $    6,768    $    6,378
         Provision charged to expense                   225           139
         Charge-offs                                     (2)           (4)
         Recoveries                                       3             1
                                                 ----------    ----------
         Balance, June 30,                       $    6,994    $    6,514
                                                 ==========    ==========

INCOME  TAXES:  Income tax expense as a  percentage  of pre-tax  income was 31.6
percent  and  26.8  percent  for the  quarters  ended  June 30,  2007 and  2006,
respectively. Pre-tax income increased to $4.1 million for the second quarter in
2007 from $3.7 million for the same period in of 2006.  For the first six months
in 2007 and 2006,  income tax expense as a percentage of pre-tax income was 30.7
percent and 28.3 percent,  respectively.  The higher  effective tax rate in both
periods in 2007 is primarily  due to a higher  effective  state tax rate paid by
the Real Estate Investment Trust subsidiary.

CAPITAL RESOURCES:  The Corporation is committed to maintaining a strong capital
position. At June 30, 2007, total shareholders' equity, including net unrealized
losses on securities  available for sale, was $106.1  million,  representing  an
increase in total  shareholders'  equity from what was  recorded at December 31,
2006,  of $2.4 million or 2.3  percent.  The Federal  Reserve  Board has adopted
risk-based  capital guidelines for banks. The minimum guideline for the ratio of
total capital to risk-weighted  assets is 8 percent.  Tier 1 Capital consists of
common stock,  retained  earnings,  minority interests in the equity accounts of
consolidated  subsidiaries and non-cumulative preferred stock, less goodwill and
certain other  intangibles.  The remainder may consist of other preferred stock,
certain other  instruments and a portion of the allowance for loan loss. At June
30, 2007, the  Corporation's  Tier 1 Capital and Total Capital ratios were 15.43
percent and 16.42 percent, respectively.

                                       20


In addition,  the Federal Reserve Board has established  minimum  leverage ratio
guidelines.  These  guidelines  provide for a minimum ratio of Tier 1 Capital to
average  total  assets  of 3  percent  for banks  that  meet  certain  specified
criteria,  including having the highest  regulatory  rating. All other banks are
generally  required to maintain a leverage  ratio of at least 3 percent  plus an
additional 100 to 200 basis points. The Corporation's leverage ratio at June 30,
2007, was 8.42 percent.

LIQUIDITY:  Liquidity  refers to an  institution's  ability  to meet  short-term
requirements  in the form of loan  requests,  deposit  withdrawals  and maturing
obligations.  Principal sources of liquidity include cash, temporary investments
and securities available for sale.

Management's opinion is that the Corporation's  liquidity position is sufficient
to meet future needs. Cash and cash  equivalents,  interest earning deposits and
federal  funds sold totaled  $46.8  million at June 30, 2007.  In addition,  the
Corporation  has $267.5 million in securities  designated as available for sale.
These  securities  can be sold in response to  liquidity  concerns or pledged as
collateral for borrowings as discussed below. Book value as of June 30, 2007, of
investment securities and securities available for sale maturing within one year
amounted to $10.8 million and $18.4 million, respectively.

The  primary  source  of  funds   available  to  meet  liquidity  needs  is  the
Corporation's core deposit base, which excludes  certificates of deposit greater
than $100  thousand.  As of June 30, 2007,  core deposits were in excess of $1.0
billion.

Another source of liquidity is borrowing capacity. The Corporation has a variety
of sources of short-term liquidity available,  including federal funds purchased
from correspondent  banks,  short-term and long-term borrowings from the Federal
Home Loan Bank of New York,  access to the Federal  Reserve Bank discount window
and loan  participations  of sales of  loans.  The  Corporation  also  generates
liquidity  from  the  regular  principal  payments  made on its  mortgage-backed
securities and loan portfolios.

RECENT  ACCOUNTING  PRONOUNCEMENTS:  In February 2007, the Financial  Accounting
Standards Board (FASB) issued FASB Statement No. 159, "The Fair Value Option for
Financial Assets and Financial  Liabilities."  Statement 159 provides  companies
with an option to report  selected  financial  assets  and  liabilities  at fair
value.  Statement 159's objective is to reduce both complexity in accounting for
financial instruments and the volatility in earnings caused by measuring related
assets  and  liabilities  differently.  Statement  159  is  effective  as of the
beginning of an entity's  first fiscal year  beginning  after November 15, 2007.
Early  adoption is  permitted as of the  beginning  of the previous  fiscal year
provided  that the entity makes that choice in the first 120 days of that fiscal
year and also elects to apply the provisions of Statement  157. The  Corporation
is still  evaluating  the impact the adoption of Statement  No. 159 will have on
its future consolidated financial statements.

In September 2006, the FASB issued Statement No. 157, "Fair Value Measurements."
Statement 157 defines fair value,  establishes  a framework  for measuring  fair
value and  expands  disclosures  about fair value  measurements.  Statement  157
establishes a fair value hierarchy  about the  assumptions  used to measure fair
value and clarifies  assumptions  about risk and the effect of a restriction  on
the  sale or use of an  asset.  The  standard  is  effective  for  fiscal  years
beginning  after  November 15, 2007.  The  Corporation  is still  evaluating the
impact the  adoption of Statement  No. 157 will have on its future  consolidated
financial statements.

In September  2006, the FASB Emerging  Issues Task Force (EITF)  finalized Issue
No. 06-4,  "Accounting  for Deferred  Compensation  and  Postretirement  Benefit
Aspects of  Endorsement  Split-Dollar  Life Insurance  Arrangements."  EITF 06-4
requires  that  a  liability  be  recorded  during  the  service  period  when a
split-dollar life insurance agreement  continues after participants'  employment
or  retirement.  The  required  accrued  liability  will be based on either  the
post-employment  benefit cost for the continuing  life insurance or based on the
future  death  benefit  depending  on the  contractual  terms of the  underlying
agreement.  EITF 06-4 is effective for fiscal years beginning after December 15,
2007.  The  Corporation  is still  evaluating the impact of the adoption of EITF
06-4.

                                       21


In September  2006,  the FASB EITF  finalized  Issue No. 06-5,  "Accounting  for
Purchases of Life  Insurance - Determining  the Amount That Could Be Realized in
Accordance with FASB Technical  Bulletin No. 85-4"  (Accounting for Purchases of
Life  Insurance).  EITF 06-5 requires that a policyholder  consider  contractual
terms of a life  insurance  policy  in  determining  the  amount  that  could be
realized  under the  insurance  contract.  EITF 06-5 also  requires  that if the
contract provides for a greater surrender value if all individual  policies in a
group are  surrendered at the same time,  that the surrender value be determined
based on the  assumption  that  policies  will be  surrendered  on an individual
basis.  Lastly,  EITF 06-5 discusses  whether the cash surrender value should be
discounted  when the  policyholder  is  contractually  limited in its ability to
surrender a policy.  EITF 06-5 is  effective  for fiscal years  beginning  after
December 15, 2006.  The adoption of EITF 06-5 did not have a material  impact on
the financial statements.

In March 2006, the FASB issued  Statement No. 156,  "Accounting for Servicing of
Financial  Assets - an  amendment of FASB  Statement  No.  140."  Statement  156
provides  the  following:  1) revised  guidance  on when a  servicing  asset and
servicing liability should be recognized;  2) requires all separately recognized
servicing  assets and  servicing  liabilities  to be initially  measured at fair
value, if practicable; 3) permits an entity to elect to measure servicing assets
and servicing  liabilities  at fair value each reporting date and report changes
in fair value in  earnings  in the period in which the  changes  occur;  4) upon
initial  adoption,  permits a one-time  reclassification  of  available-for-sale
securities  to  trading  securities  for  securities  which  are  identified  as
offsetting  the  entity's  exposure  to changes  in the fair value of  servicing
assets or liabilities  that a servicer  elects to  subsequently  measure at fair
value; and 5) requires  separate  presentation of servicing assets and servicing
liabilities  subsequently  measured at fair value in the  statement of financial
position and additional footnote  disclosures.  Statement 156 is effective as of
the beginning of an entity's  first fiscal year that begins after  September 15,
2006 with the effects of initial adoption being reported as a  cumulative-effect
adjustment  to retained  earnings.  The adoption of Statement 156 did not have a
material impact on the Corporation's consolidated financial statements.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

There  have  been  no  material  changes  to  information   required   regarding
quantitative and qualitative  disclosures  about market risk from the end of the
preceding  fiscal  year  to  the  date  of the  most  recent  interim  financial
statements (June 30, 2007).

ITEM 4. Controls and Procedures

The Corporation's Chief Executive Officer and Chief Financial Officer,  with the
assistance of other members of the Corporation's management,  have evaluated the
effectiveness of the Corporation's  disclosure controls and procedures as of the
end of the period covered by this Quarterly  report on Form 10-Q.  Based on such
evaluation,  the  Corporation's  Chief  Executive  Officer  and Chief  Financial
Officer have concluded that the Corporation's disclosure controls and procedures
are effective.

The Corporation's  Chief Executive Officer and Chief Financial Officer have also
concluded  that there have not been any  changes in the  Corporation's  internal
control over financial reporting that have materially affected, or is reasonable
likely to materially affect,  the Corporation's  internal control over financial
reporting.

                                       22


The  Corporation's  management,  including the CEO and CFO, does not expect that
our disclosure controls and procedures of our internal controls will prevent all
errors  and all  fraud.  A control  system,  no matter  how well  conceived  and
operated,  provides reasonable,  not absolute,  assurance that the objectives of
the control  system are met. The design of a control  system  reflects  resource
constraints;  the  benefits of  controls  must be  considered  relative to their
costs.  Because  there are  inherent  limitations  in all  control  systems,  no
evaluation of controls can provide  absolute  assurance  that all control issues
and  instances of fraud,  if any,  within the  Corporation  have been or will be
detected.  These  inherent  limitations  include the realities that judgments in
decision-making  can be faulty that breakdowns  occur because of simple error or
mistake. Controls can be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management override of the controls.  The
design of any system of controls is based in part upon certain assumptions about
the likelihood of future events.  There can be no assurance that any design will
succeed in achieving  its stated goals under all future  conditions;  over time,
control may become inadequate  because of changes in conditions or deterioration
in the degree of  compliance  with the  policies or  procedures.  Because of the
inherent  limitations in a cost-effective  control system,  misstatements due to
error or fraud may occur and not be detected.

                           PART II. OTHER INFORMATION

ITEM 1A. Risk Factors

There were no material changes in the Corporation's  risk factors during the six
months ended June 30, 2007 from the risk factors disclosed in Part I, Item 1A of
the  Corporation's  Annual  Report on Form 10-K for the year ended  December 31,
2006.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds




                                  Issuer Purchases of Equity Securities

                                                               Total Number of
                                                                    Shares             Maximum Number
                                   Total                         Purchased as        Of Shares That May
                                 Number of       Average       Part of Publicly       Yet be Purchased
                                  Shares        Price Paid     Announced Plans       Under the Plans or
          Period                 Purchased      Per Share        Or Programs              Programs
----------------------------    ----------    ------------    ------------------     ------------------
                                                                         

April 1-30, 2007                    --        $     --                --                   89,100
May 1-31, 2007                      --              --                --                   89,100
June 1-30, 2007                     --              --                --                   89,100
                                ----------    ------------    ------------------
   Total                            --        $     --                --
                                ==========    ============    ==================


On April  15,  2005,  the  Board of  Directors  of  Peapack-Gladstone  Financial
Corporation  announced the  authorization  of a stock repurchase plan. The Board
authorized the purchase of up to 150,000 shares of outstanding  common stock, to
be made  from  time to  time,  in the open  market  or in  privately  negotiated
transactions,  at prices not exceeding  prevailing  market prices.  On April 19,
2007, the Board of Directors  authorized  another extension of the stock buyback
program for an additional twelve months to April 19, 2008.

                                       23



ITEM 4. Submission of Matters to a Vote of Security Holders

At the Annual Meeting of shareholders  held on April 24, 2007, in the Borough of
Peapack-Gladstone,  New Jersey,  the following persons were elected as directors
of Peapack-Gladstone Financial Corporation for a term of one year:

                DIRECTORS                  FOR               WITHHELD

         Anthony J. Consi II             6,704,850            105,101
         Pamela Hill                     6,715,301             94,650
         Frank A. Kissel                 6,744,031             65,920
         John D. Kissel                  6,741,309             68,642
         James R. Lamb                   6,539,713            270,238
         Edward A. Merton                6,712,284             97,667
         F. Duffield Meyercord           6,735,837             74,114
         John R. Mulcahy                 6,699,556            110,395
         Robert M. Rogers                6,744,373             65,578
         Philip W. Smith III             6,736,959             72,992
         Craig C. Spengeman              6,738,166             71,785

ITEM 6. Exhibits

         3        Articles of Incorporation and By-Laws:

                  A.       Restated Certificate of Incorporation as in effect on
                           the date of this  filing  is  incorporated  herein by
                           reference  to the  Registrant's  Quarterly  Report on
                           Form 10-Q for the quarter ended March 31, 2003.

                  B.       Amended By-Laws of the Registrant as in effect on the
                           date  of  this  filing  are  incorporated  herein  by
                           reference to the Registrant's  Current Report on Form
                           8-K filed on April 27, 2007.

         31.1     Certification of Frank A. Kissel,  Chief Executive  Officer of
                  the  Corporation,  pursuant to  Securities  Exchange  Act Rule
                  13a-14(a).

         31.2     Certification of Arthur F. Birmingham, Chief Financial Officer
                  of the Corporation,  pursuant to Securities  Exchange Act Rule
                  13a-14(a).

         32       Certification  Pursuant to 18 U.S.C.  Section 1350, as adopted
                  pursuant  to Section  906 of the  Sarbanes-Oxley  Act Of 2002,
                  signed by Frank A.  Kissel,  Chief  Executive  Officer  of the
                  Corporation, and Arthur F. Birmingham, Chief Financial Officer
                  of the Corporation.


                                       24


                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                           PEAPACK-GLADSTONE FINANCIAL CORPORATION
                           (Registrant)


DATE:  August 9, 2007      By: /s/ Frank A. Kissel
                           ----------------------------------------------------
                           Frank A. Kissel
                           Chairman of the Board and Chief Executive Officer


DATE:  August 9, 2007      By: /s/ Arthur F. Birmingham
                           ----------------------------------------------------
                           Arthur F. Birmingham
                           Executive Vice President and Chief Financial Officer


                                       25


                                  EXHIBIT INDEX


      Number      Description
      ------      -----------

         3        Articles of Incorporation and By-Laws:

                  A.       Restated Certificate of Incorporation as in effect on
                           the date of this  filing  is  incorporated  herein by
                           reference  to the  Registrant's  Quarterly  Report on
                           Form 10-Q for the quarter ended March 31, 2003.

                  B.       Amended By-Laws of the Registrant as in effect on the
                           date  of  this  filing  are  incorporated  herein  by
                           reference to the Registrant's  Current Report on Form
                           8-K filed on April 27, 2007.

         31.1     Certification of Frank A. Kissel,  Chief Executive  Officer of
                  the  Corporation,  pursuant to  Securities  Exchange  Act Rule
                  13a-14(a).

         31.2     Certification of Arthur F. Birmingham, Chief Financial Officer
                  of the Corporation,  pursuant to Securities  Exchange Act Rule
                  13a-14(a).

         32       Certification  Pursuant to 18 U.S.C.  Section 1350, as adopted
                  pursuant  to Section  906 of the  Sarbanes-Oxley  Act Of 2002,
                  signed by Frank A.  Kissel,  Chief  Executive  Officer  of the
                  Corporation, and Arthur F. Birmingham, Chief Financial Officer
                  of the Corporation.


                                       26