Peapack-Gladstone Financial Corporation reported substantial financial improvement for the third quarter of 2025, with net income reaching $9.6 million and diluted earnings per share of $0.54. This represents a 21% increase compared to the previous quarter's net income of $7.9 million and diluted EPS of $0.45. The company's performance reflects successful execution of its strategic initiatives, particularly in the Metro New York market expansion.
Deposit growth has been a key driver of the company's success, with deposits increasing $433 million, or 7%, to $6.6 billion as of September 30, 2025. Core relationship deposits grew by $708 million during the first nine months of 2025, with noninterest-bearing deposits increasing by $211 million, or 19%. This strong deposit performance funded $506 million of loan growth at a weighted average coupon of 6.75%, resulting in an incremental spread of more than 400 basis points through the first nine months of 2025.
Net interest income showed significant improvement, increasing $2.3 million, or 5%, on a linked quarter basis to $50.6 million for the third quarter of 2025 compared to $48.3 million for the second quarter. The net interest margin expanded to 2.81% for the quarter ended September 30, 2025, compared to 2.77% for the previous quarter and 2.34% for the same period last year. This improvement reflects the company's successful single point of contact private banking strategy and New York City expansion, which continues to deliver lower-cost core deposit relationships.
President and CEO Douglas L. Kennedy emphasized the company's progress, stating that over the past two years, newly hired teams have onboarded more than 850 new client relationships, adding over $1.75 billion in core relationship deposits and more than $900 million in new loans. This momentum has enabled the company to deliver a fourth consecutive quarter of positive operating leverage and grow core earnings by 54% over the last twelve months. Additional details are available in the Company's Q3 2025 Investor Update on their website at https://www.peapackprivate.com.
The Wealth Management division showed strong performance with assets under management and administration growing by $1.0 billion to $12.9 billion at September 30, 2025, compared to $11.9 billion at December 31, 2024. New business inflows for Q3 2025 totaled $214 million, and Wealth Management fee income reached $15.8 million, representing 22% of total revenue for the quarter. John Babcock, President of the Bank's Wealth Management Division, noted continued strong client inflows driven by new accounts and client additions.
Commercial banking activities remained robust with total loans increasing $506 million to $6.0 billion at September 30, 2025, from $5.5 billion at December 31, 2024. Commercial and industrial lending accounted for 69% of new business originations during the third quarter, with C&I balances representing 44% of the total loan portfolio. The company maintained strong capital positions, with tangible book value per share increasing 7% to $34.10 per share at September 30, 2025, compared to $31.89 at December 31, 2024. Regulatory filings containing comprehensive financial data can be accessed through the Securities and Exchange Commission website at https://www.sec.gov.
Asset quality showed improvement as nonperforming assets declined by $31 million in the quarter to $84.1 million, representing 1.13% of total assets. The company aggressively addressed problem credits while maintaining appropriate reserve coverage. Capital ratios remained strong, with the Tier 1 Leverage Ratio at 9.89% for Peapack Private Bank & Trust and 8.86% for the Company, both significantly above well capitalized standards. The company's strategic investments in Metro New York expansion, including the addition of an equipment finance team in Long Island and three New York-based wealth advisors, position the organization for continued growth and profitability in the competitive financial services landscape.
