Peapack-Gladstone Financial Corporation (NASDAQ: PGC), the holding company for Peapack Private Bank & Trust, 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. Douglas L. Kennedy, President and CEO, noted, “We are pleased to partner with Strategic Value Bank Partners, whose long-term orientation aligns well with our strategy. Over the past two years, we have made significant investments in our expansion across the New York metropolitan market and are seeing strong results reflected in positive operating leverage and improving earnings momentum. This capital raise provides flexibility to continue executing on that growth while maintaining capital levels consistent with our long-standing targets. Importantly, it reflects our disciplined approach to capital management, including actions we have taken to improve the efficiency and quality of our capital structure.”
Marty Adams, Co-Founder and Principal of Strategic Value Bank Partners, added, “We have been a long-time investor in PGC common stock and are excited to support the Company’s continued growth. We have 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. This investment reflects our confidence in the Company’s trajectory and our interest in deepening our 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 today with the Securities and Exchange Commission. The full release is available at NewMediaWire.
This capital infusion is significant as it bolsters Peapack-Gladstone's Tier 1 capital, providing the company with enhanced financial flexibility to pursue its growth strategy in the competitive New York metropolitan market. The partnership with Strategic Value Bank Partners, a seasoned investor in the banking sector, signals confidence in the company's management and trajectory. The 6.00% dividend rate on the preferred stock reflects a cost of capital that is manageable given the company's improving earnings momentum, and the conversion feature offers upside potential for the investor while minimizing dilution for existing common shareholders in the near term.
The announcement underscores Peapack-Gladstone's disciplined capital management, as it has taken steps to improve the efficiency and quality of its capital structure. With $7.5 billion in total assets and $13.1 billion in assets under management and/or administration as of December 31, 2025, the company is well-positioned to leverage this capital raise for organic growth, potential acquisitions, or debt reduction. This move is likely to be viewed positively by the market as it strengthens the company's capital base without immediate dilution to common equity.
