Peapack-Gladstone Financial Corporation, the holding company for Peapack Private Bank & Trust, has announced a $50 million preferred stock commitment from affiliates of Strategic Value Bank Partners, a long-term investor focused on the banking sector. The commitment includes an initial $30 million private placement of non-cumulative perpetual convertible preferred stock, with the ability to issue up to an additional $20 million of preferred stock through the end of 2027.
The preferred stock carries a dividend rate of 6.00% per annum, is non-callable for the first five years, and thereafter may be redeemed subject to applicable terms. The preferred stock is convertible to common stock at the option of the holder after five years, subject to applicable terms. The issuance is not listed on any securities exchange and is expected to qualify as Tier 1 capital, subject to applicable regulatory requirements.
Proceeds will be used for general corporate purposes, which may include supporting organic growth, investments at the holding-company or bank level, acquisitions or other business combinations, and the reduction or refinancing of existing debt. This capital infusion provides the company with significant flexibility to execute its expansion strategy while maintaining capital levels consistent with its long-standing targets.
Douglas L. Kennedy, President and CEO, noted that the partnership with Strategic Value Bank Partners aligns well with the company's strategy, particularly following significant investments made over the past two years in expanding across the New York metropolitan market. Kennedy stated that the company is seeing strong results reflected in positive operating leverage and improving earnings momentum. The capital raise reflects the company's disciplined approach to capital management, including actions taken to improve the efficiency and quality of its capital structure.
Marty Adams, Co-Founder and Principal of Strategic Value Bank Partners, added that his firm has been a long-time investor in PGC common stock and is excited to support the company's continued growth. Adams expressed strong conviction in the management team and the progress made in building a premier private banking and wealth management franchise serving clients across the New York metropolitan market. The investment reflects confidence in the company's trajectory and interest in deepening the long-term partnership.
Additional details regarding the transaction, including the terms of the preferred stock and related agreements, are included in the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission, available at https://www.sec.gov/edgar.shtml. The company's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, provide further information about factors that may affect future results.
This capital commitment represents a significant vote of confidence in Peapack-Gladstone Financial Corporation's growth strategy and financial management. For investors and industry observers, the transaction demonstrates how regional banking institutions can secure strategic capital partnerships to fuel expansion while maintaining capital discipline. The preferred stock structure, with its conversion features and Tier 1 capital qualification, represents a sophisticated approach to capital raising that balances investor returns with regulatory requirements.
The banking sector continues to see consolidation and strategic positioning, particularly in competitive markets like the New York metropolitan area. This capital infusion positions Peapack-Gladstone to potentially accelerate its growth initiatives, whether through organic expansion or strategic acquisitions. The partnership with a specialized banking sector investor like Strategic Value Bank Partners suggests confidence in the company's management and business model at a time when regional banks face increasing competitive pressures.
