Peapack-Gladstone in N.J. announces PPP loan sale

Peapack-Gladstone Financial in Bedminster, N.J., has joined the ranks of banks opting to sell their Paycheck Protection Program loan portfolios.

The $6.3 billion-asset company announced Thursday that it had agreed to sell $355 million in PPP loans to The Loan Source, a nonbank small-business lender in New York that has purchased a number of PPP loans in recent weeks. Peapack will realize a $7.4 million pre-tax gain on sale in the third quarter.

President and CEO Douglas Kennedy said in a press release that the sale would help ease Peapack’s transition back to normal operations.

“We expect the sale of the PPP loans to allow a return to a more normal course of business, freeing up staff to focus on traditional lending efforts and providing excellent service to our clients,” Kennedy said.

Peapack is at least the fourth bank to publicly announce the sale of PPP loans to The Loan Source, joining the $1.3 billion-asset Northeast Bank in Portland, Maine; the $2.5 billion-asset Southern First Bancshares in Greenville, S.C.; and the $5.3 billion-asset Bryn Mawr Bank in Pennsylvania.

Peapack did not sell its entire PPP portfolio. The company said it held onto $204 million of loans, almost all of which exceed $2 million in original principal amount.