For
the Fiscal Year Ended December 31, 2009
|
Commission
File No. 000-23537
|
New
Jersey
|
22-2491488
|
(State
or other jurisdiction of incorporation
or organization)
|
(I.R.S.
Employer Identification
No.)
|
158
Route 206
|
|
Gladstone,
New Jersey
|
07934
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Title of Each Class
|
Name of Exchange on which
Registered
|
Common
Stock, No par value
|
NASDAQ
Global Select Markets
|
Large
accelerated filer ¨
|
Accelerated
filer T
|
Non-accelerated
filer ¨
|
Smaller
reporting company ¨
|
PART
I
|
||
Item
1.
|
5
|
|
Item
1A.
|
12
|
|
Item
1B.
|
17
|
|
Item
2.
|
18
|
|
Item
3.
|
18
|
|
Item
4.
|
18
|
|
PART
II
|
||
Item
5.
|
18
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|
Item
6.
|
19
|
|
Item
7.
|
20
|
|
Item
7A.
|
20
|
|
Item
8.
|
20
|
|
Item
9.
|
20
|
|
Item
9A.
|
20
|
|
Item
9B.
|
21
|
|
PART
III
|
||
Item
10.
|
21
|
|
Item
11.
|
21
|
|
Item
12.
|
22
|
|
Item
13.
|
22
|
|
Item
14.
|
22
|
|
PART
IV
|
||
Item
15.
|
23
|
|
26
|
|
·
|
a
continued or unexpected decline in the economy, in particular in our New
Jersey market area;
|
|
·
|
declines
in value in our investment
portfolio;
|
|
·
|
increases
in our allowance for loan losses;
|
|
·
|
increases
in loan losses or in the level of nonperforming
loans;
|
|
·
|
unexpected
changes in interest rates;
|
|
·
|
we
may be unable to successfully grow our
business;
|
|
·
|
we
may be unable to manage our growth;
|
|
·
|
a
continued or unexpected decline in real estate values within our market
areas;
|
|
·
|
increased
or unexpected competition from our
competitors;
|
|
·
|
significant
regulatory oversight which may adversely affect our
business;
|
|
·
|
higher
than expected FDIC insurance
premiums;
|
|
·
|
market
conditions and other factors may adversely affect the market price of our
common stock;
|
|
·
|
lack
of liquidity to fund our various cash
obligations;
|
|
·
|
our
preferred shares issued under the Treasury’s Capital Purchase Program will
impact net income available to our common shareholders and our earnings
per share;
|
|
·
|
further
offerings of our equity securities may result in dilution of our common
stock and a reduction in the price of our common
stock;
|
|
·
|
reduction
in our lower-cost funding sources;
|
|
·
|
changes
in accounting policies or accounting
standards;
|
|
·
|
we
may be unable to adapt to technological
changes;
|
|
·
|
our
internal controls and procedures may not be
adequate;
|
|
·
|
claims
and litigation pertaining to fiduciary responsibility, environmental laws
and other matters;
|
|
·
|
future
earnings volatility caused by economic or other factors;
and
|
|
·
|
other
unexpected material adverse changes in our operations or
earnings.
|
Item
1.
|
BUSINESS
|
·
|
No golden parachute
payments. “Golden parachute payment” under the TARP
Capital Purchase Program means a severance payment resulting from
involuntary termination of employment, or from bankruptcy of the employer,
that exceeds three times the terminated employee’s average annual base
salary over the five years prior to termination. Our senior
executive officers have agreed to forego all golden parachute payments for
as long as two conditions remain true: They remain “senior executive
officers” (CEO, Chief Financial Officer and the next three highest-paid
executive officers), and the Treasury continues to hold our equity or debt
securities we issued to it under the TARP Capital Purchase Program (the
period during which the Treasury holds those securities is the “TARP
Capital Purchase Program Covered
Period.”).
|
·
|
Recovery of EIP Awards
and Incentive Compensation if Based on Certain Material
Inaccuracies. Our senior executive officers have also agreed to a
“clawback provision,” which means that we can recover incentive
compensation paid during the TARP Capital Purchase Program Covered Period
that is later found to have been based on materially inaccurate financial
statements or other materially inaccurate measurements of
performance.
|
·
|
No Compensation
Arrangements That Encourage Excessive Risks. During the
TARP Capital Purchase Program Covered Period, we are not allowed to enter
into compensation arrangements that encourage senior executive officers to
take “unnecessary and excessive risks that threaten the value” of our
company. To make sure this does not happen, the Corporation’s
Compensation Committee is required to meet at least once a year with our
senior risk officers to review our executive compensation arrangements in
the light of our risk management policies and practices. Our
senior executive officers’ written agreements include their obligation to
execute whatever documents we may require in order to make any changes in
compensation arrangements resulting from the Compensation Committee’s
review.
|
·
|
Limit on Federal
Income Tax Deductions. During the TARP Capital Purchase
Program Covered Period, we are not allowed to take federal income tax
deductions for compensation paid to senior executive officers in excess of
$500,000 per year, with certain exceptions that do not apply to our senior
executive officers. This represents a 50% reduction in the
income tax deductibility limit and the elimination of the exemption for
performance-based compensation.
|
·
|
No severance
payments. Under the Stimulus Act “golden parachutes”
were redefined as any severance payment resulting from involuntary
termination of employment, or from bankruptcy of the employer, except for
payments for services performed or benefits
accrued. Consequently under the Stimulus Act the Corporation is
prohibiting from making any severance payment to our “senior executive
officers” (defined in the Stimulus Act as the five highest paid senior
executive officers) and our next 5 most highly compensated employees
during the TARP Capital Purchase Program Covered
Period.
|
·
|
Recovery of Incentive
Compensation if Based on Certain Material Inaccuracies. The
Stimulus Act also contains the “clawback provision” discussed above but
extends its application to any bonus awards and other incentive
compensation paid to any of our 5 most highly compensated employees during
the TARP Capital Purchase Program Covered Period that is later found to
have been based on materially inaccurate financial statements or other
materially inaccurate measurements of
performance.
|
·
|
No Compensation
Arrangements That Encourage Earnings Manipulation. Under
the Stimulus Act, during the TARP Capital Purchase Program Covered Period,
we are not allowed to enter into compensation arrangements that encourage
manipulation of the reported earnings of the Corporation to enhance the
compensation of any of our
employees.
|
·
|
Limit on Incentive
Compensation. The Stimulus Act contains a provision that
prohibits the payment or accrual of any bonus, retention award or
incentive compensation to any of our 5 most highly compensated employees
during the TARP Capital Purchase Program Covered Period other than awards
of long-term restricted stock that (i) do not
fully
|
·
|
Compensation Committee
Functions. The Stimulus Act requires that our
Compensation Committee be comprised solely of independent directors and
that it meet at least semiannually to discuss and evaluate our employee
compensation plans in light of an assessment of any risk posed to us from
such compensation plans.
|
·
|
Compliance
Certifications. The Stimulus Act also requires a written
certification by our Chief Executive Officer and Chief Financial Officer
of our compliance with the provisions of the Stimulus
Act. These certifications must be contained in the
Corporation’s Annual Report on Form
10-K.
|
·
|
Treasury Review
Excessive Bonuses Previously Paid. The Stimulus Act
directs the Secretary of the Treasury to review all compensation paid to
our 5 most highly compensated employees to determine whether any such
payments were inconsistent with the purposes of the Stimulus Act or were
otherwise contrary to the public interest. If the Secretary of
the Treasury makes such a finding, the Secretary of the Treasury is
directed to negotiate with the TARP Capital Purchase Program recipient and
the subject employee for appropriate reimbursements to the federal
government with respect to the compensation and
bonuses.
|
·
|
Say on
Pay. Under the Stimulus Act the SEC is required to
promulgate rules requiring a non-binding say on pay vote by the
shareholders on executive compensation at the annual meeting during the
TARP Capital Purchase Program Covered
Period.
|
·
|
a
prohibition on personal loans made or arranged by the issuer to its
directors and executive officers (except for loans made by a bank subject
to Regulation O);
|
·
|
independence
requirements for audit committee
members;
|
·
|
independence
requirements for company auditors;
|
·
|
certification
of financial statements within the Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q by the chief executive officer and the
chief financial officer;
|
·
|
the
forfeiture by the chief executive officer and the chief financial officer
of bonuses or other incentive-based compensation and profits from the sale
of an issuer’s securities by such officers in the twelve month period
following initial publication of any financial statements that later
require restatement due to corporate
misconduct;
|
·
|
disclosure
of off-balance sheet transactions;
|
·
|
two-business
day filing requirements for insiders filing on Form
4;
|
·
|
disclosure
of a code of ethics for financial officers and filing a Current Report on
Form 8-K for a change in or waiver of such
code;
|
·
|
the
reporting of securities violations “up the ladder” by both in-house and
outside attorneys;
|
·
|
restrictions
on the use of non-GAAP financial measures in press releases and SEC
filings’
|
·
|
the
formation of a public accounting oversight
board;
|
·
|
various
increased criminal penalties for violations of securities
laws;
|
·
|
an
assertion by management with respect to the effectiveness of internal
control over financial reporting;
and
|
·
|
a
report by the company’s external auditor on management’s assertion and the
effectiveness of internal control over financial
reporting.
|
·
|
allows
bank holding companies meeting management, capital and Community
Reinvestment Act standards to engage in a substantially broader range of
non-banking activities than was previously permissible, including
insurance underwriting and making merchant banking investments in
commercial and financial companies;
|
·
|
allows
insurers and other financial services companies to acquire
banks;
|
·
|
removes
various restrictions that previously applied to bank holding company
ownership of securities firms and mutual fund advisory companies;
and
|
·
|
establishes
the overall regulatory structure applicable to bank holding companies that
also engage in insurance and securities
operations.
|
Item
1A.
|
RISK
FACTORS
|
·
|
quarterly
fluctuations in our operating and financial
results;
|
·
|
operating
results that vary from the expectations of management, securities analysts
and investors;
|
·
|
changes
in expectations as to our future financial performance, including
financial estimates by securities analysts and
investors;
|
·
|
events
negatively impacting the financial services industry which result in a
general decline in the market valuation of our common
stock;
|
·
|
announcements
of material developments affecting our operations or our dividend
policy;
|
·
|
future
sales of our equity securities;
|
·
|
new
laws or regulations or new interpretations of existing laws or regulations
applicable to our business;
|
·
|
changes
in accounting standards, policies, guidance, interpretations or
principles; and
|
·
|
general
domestic economic and market
conditions.
|
Item
1B.
|
UNRESOLVED
STAFF COMMENTS
|
Item
2.
|
PROPERTIES
|
Item
3.
|
LEGAL
PROCEEDINGS
|
Item
4.
|
RESERVED
|
Item
5.
|
MARKET
FOR REGISTRANT'S COMMON EQUITY RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY
SECURITIES
|
DIVIDEND
|
||||||||||||
2009
|
HIGH
|
LOW
|
PER SHARE
|
|||||||||
1st
QUARTER
|
$ | 27.68 | $ | 11.22 | $ | 0.16 | ||||||
2nd
QUARTER
|
22.00 | 15.38 | 0.05 | |||||||||
3rd
QUARTER
|
19.72 | 15.76 | - | * | ||||||||
4th
QUARTER
|
16.05 | 11.03 | 0.05 | * | ||||||||
DIVIDEND
|
||||||||||||
2008
|
HIGH
|
LOW
|
PER SHARE
|
|||||||||
1st
QUARTER
|
$ | 25.95 | $ | 19.98 | $ | 0.16 | ||||||
2nd
QUARTER
|
28.37 | 20.92 | 0.16 | |||||||||
3rd
QUARTER
|
36.12 | 20.15 | 0.16 | |||||||||
4th
QUARTER
|
32.38 | 21.76 | 0.16 |
Period Ending
|
||||||||||||||||||||||||
Index
|
12/31/04
|
12/31/05
|
12/31/06
|
12/31/07
|
12/31/08
|
12/31/09
|
||||||||||||||||||
Peapack-Gladstone
Financial Corporation
|
100.00 | 90.04 | 92.74 | 82.44 | 91.72 | 46.84 | ||||||||||||||||||
Russell
3000
|
100.00 | 106.12 | 122.80 | 129.11 | 80.94 | 103.88 | ||||||||||||||||||
KBW
50
|
100.00 | 99.70 | 116.67 | 91.22 | 47.85 | 47.00 |
Item
6.
|
SELECTED
FINANCIAL DATA
|
Item
7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
|
Item
7A.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK
|
Item
8.
|
FINANCIAL
STATEMENTS AND SUPPLEMENTARY
DATA
|
Item
9.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
|
Item
9A.
|
CONTROLS
AND PROCEDURES
|
Item
9B.
|
OTHER
INFORMATION
|
Item
10.
|
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
|
Executive Officer
|
Age
|
Date Became an Executive
Officer
|
Current Position and Business
Experience
|
Frank
A. Kissel
|
59
|
December
11, 1997
|
Chairman
and Chief Executive Officer
|
Arthur
F. Birmingham
|
58
|
December
11, 1997
|
Chief
Financial Officer
|
(retired
March 30, 2009)
|
|||
Jeffrey
J. Carfora
|
51
|
March
30, 2009
|
Chief
Financial Officer
|
Garrett
P. Bromley
|
65
|
December
11, 1997
|
Chief
Lending Officer
|
(retired
January 4, 2010)
|
|||
Vincent
A. Spero
|
44
|
November
19, 2009
|
Chief
Lending Officer
|
Robert
M. Rogers
|
51
|
December
11, 1997
|
President
and Chief Operating Officer
|
Finn
M.W. Caspersen, Jr.
|
40
|
January
1, 2008
|
General
Counsel
|
Craig
C. Spengeman
|
54
|
December
11, 1997
|
President
and Chief Investment Officer
|
Item
11.
|
EXECUTIVE
COMPENSATION
|
Item
12.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
|
NUMBER
OF SECURITIES
|
|||
REMAINING
AVAILABLE
|
|||
FOR
FUTURE ISSUANCE
|
|||
NUMBER
OF SECURITIES
|
UNDER
EQUITY
|
||
TO
BE ISSUED UPON
|
WEIGHTED-AVERAGE
|
COMPENSATION
PLANS
|
|
EXERCISE
OF
|
EXERCISE
PRICE OF
|
(EXCLUDING
SECURITIES
|
|
PLAN CATEGORY
|
OUTSTANDING OPTIONS (a)
|
OUTSTANDING OPTIONS (b)
|
REFLECTED IN COLUMN (a)
(c)
|
EQUITY
|
|||
COMPENSATION
|
|||
PLANS
APPROVED
|
|||
BY
SECURITY
|
|||
HOLDERS
|
557,882
|
$24.86
|
380,508
|
EQUITY
|
|||
COMPENSATION
|
|||
PLANS
NOT
|
|||
APPROVED
BY
|
|||
SECURITY
HOLDERS
|
N/A
|
N/A
|
N/A
|
TOTAL
|
557,882
|
$24.86
|
380,508
|
Item
13.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
|
Item
14.
|
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
|
Item
15.
|
EXHIBITS
AND FINANCIAL STATEMENT
SCHEDULES
|
(a)
|
Financial
Statements and Schedules:
|
(10)
|
Exhibits
|
|
(3)
|
Articles
of Incorporation and By-Laws:
|
|
A.
|
Certificate
of Incorporation as incorporated herein by reference to the Registrant’s
Form 10-Q Quarterly Report filed on November 9,
2009.
|
|
B.
|
By-Laws
of the Registrant as in effect on the date of this filing are incorporated
herein by reference to the Registrant’s Form 8-K Current Report filed on
April 23, 2007.
|
|
(4)
|
Warrant,
dated January 9, 2009, to purchase up to 150,295 shares, as adjusted by
the five percent stock dividend in 2009, of the Corporation’s Common
Stock, incorporated herein by reference to the Registrant’s Form 8-K
Current Report filed on January 12,
2009.
|
|
(10)
|
Material
Contracts:
|
|
A.
|
“Change
in Control Agreements” dated as of December 20, 2007 by and among the
Corporation, the Bank and Frank A. Kissel, Craig C. Spengeman, Robert M.
Rogers and Finn M. W. Caspersen, Jr. are incorporated by reference to
Exhibits 10(A)1, 10(A)2, 10(A)3 and 10(A)6 of the Registrant’s Form 10-K
Annual Report for the year ended December 31, 2007. +
|
|
B.
|
“Split
Dollar Plan for Senior Management” dated as of September 7, 2001 for Frank
A. Kissel, Robert M. Rogers and Craig C. Spengeman is incorporated by
reference to Exhibit 10 (I) of the Registrant’s Form 10-K Annual Report
for the year ended December 31, 2003. +
|
|
C.
|
“Directors’
Retirement Plan” dated as of March 31, 2001 is incorporated by reference
to Exhibit 10 (J) of the Registrant’s Form 10-K Annual Report for the year
ended December 31, 2003.
|
|
D.
|
“Directors’
Deferral Plan” dated as of March 31, 2001 is incorporated by reference to
Exhibit 10 (K) of the Registrant’s Form 10-K Annual Report for the year
ended December 31, 2003.
|
|
E.
|
“Employment
Agreements” dated as of January 1, 2008 by and among the Corporation, the
Bank and Frank A. Kissel, Craig C. Spengeman, Robert M. Rogers and Finn M.
W. Caspersen, Jr. are incorporated by reference to Exhibits 10(F)1,
10(F)2, 10(F)3 and 10(F)6 of the Registrant’s Form 10-K Annual Report for
the year ended December 31, 2007. +
|
|
F.
|
Peapack-Gladstone
Financial Corporation Amended and Restated 1998 Stock Option Plan and
Peapack-Gladstone Financial Corporation Amended and Restated 2002 Stock
Option Plan are incorporated by reference to Exhibit 10.1 and Exhibit 10.2
of the Registrant’s Form 8-K Current Report filed on January 13,
2006.
|
|
G.
|
Peapack-Gladstone
Financial Corporation 2006 Long-Term Stock Incentive Plan is incorporated
by reference to Exhibit 10 of the Registrant’s Form 10-Q Quarterly Report
filed on May 10, 2006.
|
|
H.
|
Letter
Agreement, dated January 9, 2009, including Securities Purchase Agreement
– Standard Terms incorporated by reference therein, between the
Corporation and the Treasury, incorporated herein by reference to the
Registrant’s Form 8-K Current Report filed on January 12,
2009.
|
|
I.
|
Form
of Waiver, executed by each of Messrs. Frank A. Kissel, Robert M. Rogers,
Finn M.W. Caspersen, Jr. and Craig C. Spengeman, incorporated herein by
reference to the Registrant’s Form 8-K Current Report filed on January 12,
2009.
|
|
J.
|
Form
of Senior Executive Officer Agreement, executed by each of Messrs. Frank
A. Kissel, Robert M. Rogers, Finn M.W. Caspersen, Jr. and Craig C.
Spengeman, incorporated herein by reference to the Registrant’s Form 8-K
Current Report filed on January 12,
2009.
|
|
“Change
in Control Agreement” dated as of September 28, 2009 by and among the
Corporation, the Bank and Vincent A. Spero.
+
|
|
“Employment
Agreement” dated as of June 2, 2008 by and among the Corporation, the Bank
and Vincent A. Spero. +
|
|
(12)
|
Consolidated
Ratios of Earnings to Combined Fixed Charges and Preferred Stock
Dividends
|
Years ended December 31,
|
||||||||||||||||||||
2009
|
2008
|
2007
|
2004
|
2005
|
||||||||||||||||
Excluding
interest on deposits
|
4.6 | x | -19.7x | 14.8 | x | 3.6 | x | 7.3 | x | |||||||||||
Including
interest on deposits
|
1.5 | x | -0.4x | 1.5 | x | 1.4 | x | 1.9 | x |
|
Annual
Report to Shareholders
|
|
+
|
Management contract and
compensatory plan or arrangement.
|
|
(21)
|
List
of Subsidiaries:
|
Name
|
Jurisdiction
of Incorporation
|
Percentage of Voting
Securities Owned by
the Parent
|
Peapack-Gladstone
Bank
|
New
Jersey
|
100%
|
Name
|
||
Peapack-Gladstone
Mortgage Group, Inc.
|
New
Jersey
|
100%
|
Peapack-Gladstone
Financial Services, Inc. (Inactive)
|
New
Jersey
|
100%
|
|
(23)
|
Consents
of Independent Registered Public Accounting
Firm:
|
|
Consent
of Crowe Horwath LLP
|
|
Power
of Attorney
|
|
Certification
of Frank A. Kissel, Chief Executive Officer of Peapack-Gladstone, pursuant
to Section 302 of the Sarbanes-Oxley Act of
2002.
|
|
Certification
of Jeffrey J. Carfora, Chief Financial Officer of Peapack-Gladstone,
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
|
Certification
of Frank A. Kissel, Chief Executive Officer of Peapack-Gladstone and
Jeffrey J. Carfora, Chief Financial Officer of Peapack-Gladstone pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
|
TARP
Principal Executive Officer and Principal Financial Officer First Fiscal
Year Certification
|
Peapack-Gladstone
Financial Corporation
|
|
By:
|
/s/ Frank A. Kissel
|
|
Frank
A. Kissel
Chairman
of the Board
|
|
and
Chief Executive Officer
|
By:
|
/s/ Jeffrey J. Carfora
|
|
Jeffrey
J. Carfora
|
|
Executive
Vice President
and
Chief Financial Officer
|
Signature
|
Title
|
Date
|
||
/s/ Frank A. Kissel
|
Chairman
of the Board, Chief Executive Officer and Director
|
March
15, 2010
|
||
Frank
A. Kissel
|
||||
/s/ Jeffrey J. Carfora
|
Executive
Vice President and Chief Financial Officer (Principal Financial Officer
and Principal Accounting Officer)
|
March
15, 2010
|
||
Jeffrey
J. Carfora
|
||||
/s/ Anthony J. Consi II
|
Director
|
March
15, 2010
|
||
Anthony
J. Consi II
|
||||
/s/ Pamela Hill
|
Director
|
March
15, 2010
|
||
Pamela
Hill
|
||||
/s/ John D. Kissel
|
Director
|
March
15, 2010
|
||
John
D. Kissel
|
||||
/s/ James R. Lamb
|
Director
|
March
15, 2010
|
||
James
R. Lamb
|
||||
/s/ Edward A. Merton
|
Director
|
March
15, 2010
|
||
Edward
A. Merton
|
||||
/s/ F. Duffield Meyercord
|
Director
|
March
15, 2010
|
||
F.
Duffield Meyercord
|
||||
/s/ John R. Mulcahy
|
Director
|
March
15, 2010
|
||
John
R. Mulcahy
|
||||
/s/ Robert M. Rogers
|
Director,
President and Chief Operating Officer
|
March
15, 2010
|
||
Robert
M. Rogers
|
||||
/s/ Philip W. Smith III
|
Director
|
March
15, 2010
|
||
Philip
W. Smith III
|
||||
/s/ Craig C. Spengeman
|
Director,
President of PGB Trust and Investments
|
March
15, 2010
|
||
Craig
C. Spengeman
|