Peapack Gladstone Financial (PGC) risk factors, 2025 10-K

Risks Related to Economic Matters

1. 01We are more sensitive to adverse changes in the local economy than our more geographically diversified competitors
2. 02Inflation can have an adverse impact on our business and on our customers
3. 03Interruption of our customer's supply chains and federal funding could negatively impact their business and operations and impact their ability to repay their loans

Risks Related to Lending Matters

1. 04Our exposure to credit risk could adversely affect our earnings and financial condition
2. 05Our concentrations of loans in certain industries could have adverse effects on credit quality
3. 06The performance of our New York multifamily real estate loans could be adversely impacted by regulation
4. 07If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings would decrease
5. 08Our commercial real estate loan and commercial C&I portfolios expose us to greater risks than other mortgage loans
6. 09The level of the commercial real estate loan portfolio may subject the Bank to additional regulatory scrutiny
7. 10We are subject to environmental liability risk associated with our lending activities

Risks Related to Interest Rates

1. 11Changes in interest rates may adversely affect our earnings and financial condition
2. 12Our net income depends primarily upon our net interest income, which is the difference between interest income earned on loans, investments and other interest-earning assets and the interest expense incurred on deposits and borrowed funds
3. 13Changes in the estimated fair value of debt securities may reduce stockholders’ equity and net income
4. 14We are exposed to the risks of public health issues, natural disasters, severe weather, acts of war or terrorism, government shutdowns, geopolitical events and other potential external events
5. 15The soundness of other financial institutions could adversely affect us

Risks Relating to Regulatory Matters

1. 16Government regulation significantly affects our business
2. 17The fiscal, monetary and regulatory policies of the federal government and its agencies could adversely affect the Company’s business, financial condition, and results of operations
3. 18Additionally, Congress and the administration through executive orders controls fiscal policy through decisions on taxation and expenditures. Depending on industries and markets involved, changes to tax law and increase or reduced public expenditures could affect us directly or the business operations of our customers

Risks Related to Capital

1. 19We may need to raise additional capital in the future, which may not be available when needed or available on acceptable terms
2. 20We are subject to certain capital requirements, which may adversely impact our return on equity, require us to raise additional capital, or constrain us from paying dividends or repurchasing shares
3. 21Potential acquisitions may disrupt our business and dilute shareholder value
4. 22Losing key employees and customers or a reduction in our stock price as a result of an acquisition that is poorly received
5. 23Our ability to pay dividends to our common shareholders is limited by law

Risks Related to Liquidity

1. 24We may lose lower-cost funding sources, which may affect our profitability
2. 25A lack of liquidity could adversely affect the Company’s financial condition and results of operations

Risks Related to Competition

1. 26Competition from other financial institutions in originating loans and attracting deposits may adversely affect our profitability

Risks Related to Operational Matters

1. 27Cyber-attacks and information security breaches could compromise our information or result in the data of our customers being improperly divulged, which could expose us to liability and losses
2. 28fines, penalties or intervention, reputational damage, reimbursement or other costs, and/or additional compliance costs, any of which could materially adversely affect our results of operations or financial condition
3. 29Our information technology systems and the systems of third parties upon which we rely may experience a failure, interruption or breach in security that could negatively affect our operations and reputation
4. 30Our failure to successfully keep pace with technological changes could have a material adverse impact on our business and, in turn, our financial condition and results of operations
5. 31Our board of directors relies on management and outside consultants in overseeing cybersecurity risk management
6. 32We are subject to operational risk
7. 33We are dependent on key personnel and the loss of one or more of those key personnel may materially and adversely affect our prospects

Risks Related to Our Wealth Management Business

1. 34Revenues and profitability from our wealth management business may be adversely affected by any reduction in assets under management, which could reduce fees earned
2. 35We may not be able to attract and retain wealth management clients
3. 36The wealth management industry is subject to extensive regulation, supervision and examination by regulators, and any enforcement action or adverse changes in the laws or regulations governing our business could decrease our revenues and profitability