FINANCIALMARKET – Positives

• Global Interest Rate Levels – Although rates have risen since the lastpresidential election (10-yr Treasury was 1.6% in October 2016 andhas risen to 2.8% now), overall rates remain at historically lowlevels.

• Inflation Pressures Remain Modest – This allows a lot of latitude tothe Fed regarding the pace of normalization of its balance sheet andrate increases.

• Global Accommodation and Liquidity Remain High – Despite theFederal Reserve decreasing its balance sheet at an increasing rate,overall central bank balance sheets will continue to grow through2018.

• Regulation Burden – The Trump administration has loweredregulatory requirements across a number of industries which willlower corporate expenses and should encourage corporatespending.

• Pro-growth Fiscal Policies – Corporate tax reform has drivenearnings growth expectations for 2018 up roughly 18% for the S&P500 on 5.3% higher revenues. This is a significant acceleration rela-tive to last year. The incremental cash flow from the tax benefit willincrease corporate spending (supporting future productivity), andallow companies to increase share buybacks and raise dividends.

FINANCIALMARKET RISKS – Not in a Particular Order

• Elevated Policy Uncertainty – Global central banks over the next fewyears will need to begin to normalize balance sheets and baserates. The timing and pace remains an uncertainty that willoccasionally weigh on markets.

• Inflationary Pressure – Although inflation has remained surprisinglytame, inflation expectations have risen since the middle of 2017 andcould accelerate as labor market conditions tighten.

• Budget Deficits – One of the negative impacts of tax reform will behigher budget deficits. The federal budget deficit is expected to risedue to structural considerations (such as cost escalators) evenbefore the tax bill passed, but according to the CBO the deficitcould be over $1.2 trillion in 2019. That is a concern for bond

Peapack-Gladstone Bank, Private Wealth Management

For more information about our products: http://pgbank.com

The Weekly is a weekly market recap distributed to Private Wealth Management clients of Peapack-Gladstone Bank. Securities and mutual funds are not FDIC insured, are not obligations of or guaranteed by Peapack-Gladstone Bank, and mayinvolve investment risk, including possible loss of principal. Information provided for educational purposes only. This should not be relied upon as tax and/or investment advice. We encourage you to consult your personal legal, tax or financialadvisors for information specific to your situation. Peapack-Gladstone Bank and its logo are registered trademarks.

Strategy Meeting Recap – April 4, 2018

Our portfolio team had our monthly strategy meeting earlier this week to review the first quarter’s financial market conditions and macro events, and Iwanted to share some quick thoughts from the meeting. I have also included a few slides of interest regarding current financial conditions and risks.

FINANCIALMARKET RISKS (continued)

• investors, especially as the Fed reduces its demand for governmentbonds.

• Trade/Protectionism – The Trump administration is trying to forcea level setting regarding global trade policy, but the process has thepotential to produce a trade war.

OUR EXPECTATIONS

• Equity Markets – We expect equity markets to modestly movehigher due to solid earnings and the likelihood that economicgrowth accelerates toward 2.8% in 2018.

• Interest Rates - The short end of the yield curve will move higheras the Fed raises rates two more times in 2018. The intermediate-to-longer end of the yield curve moves modestly higher. The 10-year Treasury yield will lift towards a 3% to 3.25% range during the2nd half of 2018.

WHATWE AREWATCHING

• Trade Negotiations – NAFTA meetings are coming up nextweek. The outcome and tone of these meetings could be animportant gauge for markets toward assessing the success of theTrump administration’s trade policies.

• Fed Officials – We do not think the Fed will take action in the nextmeeting or two, but will be looking at future Fed speak to gleamany potential policy shifts.

• Employment Reports – If wage growth accelerates, as it did earlierthis year, the bond market could push rates higher. The 3% levelon the 10-year Treasury seemed to have an impact on equityvaluations.

• Corporate Earnings – First quarter earnings reports will begin in afew weeks. Total Q1 earnings for the S&P 500 are expected to beup 16% on an increase of 7.4% higher revenues. Solid earningsgrowth is needed to drive stock prices, especially in a rising rateenvironment.

These are just some immediate points and considerations which our strategy team discussed. Please let us know if you would like more elaboration onany of these bullet points.

John E. Creamer, CFA, ChFC, CFP®Senior Managing Director and CIO, Private Wealth Management500 Hills Drive, Bedminster, NJ 07921creamer@pgbank.com

1

Overview MatrixPros Neutral Cons

ECONOMY

1. Money Supply2. Retail Sales3. Consumer Sentiment4. Fiscal Stimulus

1. Disposable Income

2. Employment Outlook

1. Excess Regulation

2. Low Productivity3. Government Debt

EQUITY MARKETS

1. Liquidity2. European and Japanese QE3. Stable Core Inflation4. Earnings

1. U.S. Debt Ceiling and Entitlement Reform

2. Valuations

FIXED INCOME /

INTEREST RATES

1. Systematic Risk/Fear2. Global Central Bank Purchasing3. Low default rates

1. Economic Recovery

2. Inflation Expectation

Core PCE 1.7% to 1.9%

1. Government Debt2. Credit Spreads Tighter Than

Long Term Medians

RISKS

1. Inflation increases faster than current projections

2. Reversal of QE and tightening of monetary policy too quickly

3. Chinese economic growth slows

4. Protectionism leads to inflation and slows global growth.

5. Exogenous geopolitical event

6. Earnings growth fails to materialize as expected.

KEY TAKEAWAYS

1. Economy – moderate growth environment.

2. Fed Policy – intends to raise rates at a faster pace, but it will still be a long and slow normalization.

3. Inflation is lower than the target but asset prices are escalating and the labor market is tightening

4. Trump administration to emphasize pro-growth policies that will boost GDP, but will exasperate the debt problem. Monetary policy is likely to be less accommodating.

JEC: 4-5-2018

Risk Monitor

Risk Trend Level

Non-Farm Payroll 200,727 313,000 239,000 175,000 216,000 271,000 14,000 221,000 190,000 239,000 155,000 175,000 Rising LowAverage Hourly Earnings Growth YOY 2.6% 2.6% 2.8% 2.7% 2.5% 2.3% 2.8% 2.6% 2.5% 2.5% 2.5% 2.5% Stable Low

Conference Board US leading Indicators 4.8% 6.5% 6.1% 5.8% 5.7% 5.5% 4.1% 4.3% 3.9% 4.0% 3.7% 3.1% Rising LowSpread Between the 10 year and 2 Year Treasury 0.75% 0.47% 0.61% 0.56% 0.52% 0.63% 0.78% 0.85% 0.79% 0.94% 0.92% 0.92% 1.02% Declining ModerateEconomy Weighted ISM 57.7 59.6 59.8 56.3 57.5 59.9 59.9 55.7 54.2 57.4 56.7 57.2 Rising LowISM Manufacturing Index 58.2 59.3 60.8 59.1 59.3 58.2 58.5 60.2 59.3 56.5 56.7 55.5 55.3 Rising LowUS Personal Income Growth Monthly SA 0.3% 0.4% 0.4% 0.4% 0.3% 0.4% 0.5% 0.3% 0.4% 0.0% 0.2% 0.1% Rising LowConsumer Confidence (Conference Board) 122.93 127.7 130.0 124.3 123.1 128.6 126.2 120.6 120.4 120.0 117.3 117.6 119.4 Rising LowRetail Sales less Autos YOY 4.4% 4.4% 4.3% 5.8% 6.1% 4.7% 4.9% 4.0% 3.6% 2.4% 3.8% 4.5% Falling LowS&P Case-Shiller 20 City Yearly Composite YOY 6.0% 6.4% 6.3% 6.4% 6.3% 6.1% 5.8% 5.8% 5.6% 5.7% 5.7% Rising LowCiti Economic Surprise United States 10.2 49.8 38.5 75.7 59.4 40.2 -7.9 -23.1 -43.1 -72.6 -38.2 -4.8 48.0 Rising LowBloomberg US Recession Probability 1.3% 1.7% 5.0% 0.8% 0.6% 0.5% 0.1% 0.2% 1.0% 1.3% 0.9% 2.1% Stable LowUnited States 1YR Probability of Recession 15.4% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 20.0% 15.0% 15.0% Stable Low

Excess Depository Reserves FRB NSA ($MM) 2,136.1 2,075.8 2,108.6 2,179.5 2,117.5 2,161.8 2,212.4 2,101.0 2,076.9 2,099.2 2,157.2 2,207.5 Falling LowLoans and Leases in US Commercial Banks SA Annualized Growth Rate 3.7% 2.9% 2.4% 2.6% 3.7% 4.4% 3.5% 5.7% 2.8% 5.3% 6.9% 0.1% Falling LowConference Board US Leading Credit Index (LEI LCI) -0.8% -1.7% -1.5% -1.4% -0.7% -0.4% -0.2% -0.6% -0.9% -0.8% -0.5% -0.1% Falling LowMajor Central Banks Tightening (out of 5) 1 2 2 2 1 1 1 1 1 1 1 1 Rising Low

FRBNY Underlying Inflation Guage 2.8% 3.1% 3.0% 2.9% 2.9% 2.9% 2.8% 2.7% 2.6% 2.5% 2.5% 2.5% Rising High10 Yr Treasury less 10 Yr TIPs 1.91% 2.06% 2.12% 2.11% 1.98% 1.87% 1.88% 1.85% 1.77% 1.82% 1.74% 1.83% 1.92% Rising ModerateCore PCE YOY 1.5% 1.60% 1.53% 1.52% 1.51% 1.47% 1.35% 1.30% 1.41% 1.50% 1.48% 1.58% Rising LowUniversity of Michigan 1 Year Inflation Expectations 2.6% 2.80% 2.70% 2.70% 2.70% 2.50% 2.40% 2.70% 2.60% 2.60% 2.60% 2.60% 2.50% Rising Moderate

Bloomberg Corp Bankruptcy Index 67.0 51.8 61.2 67.5 75.1 60.3 70.3 55.5 62.5 71.6 81.2 79.8 Falling LowS&P/Experian Consumer Credit Default Index Bank Card 3.4 3.6 3.4 3.3 3.3 3.2 3.2 3.3 3.5 3.5 3.4 Rising LowLIBOR OIS Spread 21.7 59.1 40.4 25.1 26.3 11.5 10.8 14.0 15.8 15.0 13.7 11.1 17.9 Rising ModerateBBB Credit spread above 10 Year Treasury 1.38% 1.45% 1.30% 1.24% 1.30% 1.34% 1.29% 1.37% 1.44% 1.37% 1.44% 1.50% 1.54% Rising LowForward Blended 12 Month S&P EPS Change MOM 1.59% 0.62% 1.54% 7.41% 1.50% 0.96% 1.21% 0.68% 0.85% 0.72% 0.92% 1.11% Stable LowS&P 500 YOY Total Return (G 173) 16.9% 11.7% 14.8% 23.9% 21.6% 20.4% 21.1% 16.1% 13.9% 13.7% 15.5% 15.0% 15.8% Falling Moderate

May-17 Apr-17

Labor Market

State of the Economy

Current Data12 mth Ave Mar-18 Feb-18 Jan-18 Dec-17 Nov-17 Oct-17 Sep-17 Aug-17

Banking Sector

Inflation Indicators

Credit Market / Equity Market / Earnings

Jul-17 Jun-17

*Nondeposit investment products are not insured by the FDIC; are not deposits or other obligations of, orguaranteed by, Peapack-Gladstone Bank; and are subject to investment risks, including possible loss of theprincipal amount invested.

1

S&P 500 Valuation Measures

Asset Class 03/31/18 Sector - Large Cap

Last price on MTD QTD YTD

52 Wk

High

52 Wk

Low Div, Yld EPS TTM EPS FY1 EPS FY2 EPS FY3 Last MTD QTD YTD

52 Wk

High

52 Wk

Low

3/31/2018 Defensive

Large Cap Domestic TR.FwdPE(Period=NTM,Sdate=#1) TR.NetIncome(Period=LTM Methodology=InterimSum)TR.NetIncomeMean(period=FY1)TR.NetIncomeMean(period=FY2)TR.NetIncomeMean(period=FY3) Staples .SPLRCS 541.73 -1.3% -7.8% -7.8% 606.90 522.83

S&P 500 .SPX 2,640.87 -2.7% -1.2% -1.2% 2,873 2,329 2.37 121.18 167.78 182.80 197.59 Health Care .SPXHC 940.73 -3.2% -1.6% -1.6% 1061.82 845.41

Dow Jones .DJI 24,103 -3.7% -2.5% -2.5% 26,617 20,380 2.46 994.83 1,486.42 1,578.50 1,684.25 Telco .SPLRCL 151.65 -1.1% -8.7% -8.7% 169.66 140.82

NASDAQ 100 .NDX 6,581.13 -4.0% 2.9% 2.9% 7,186 5,354 1.98 249.20 367.06 411.61 456.49

Russell 1000 .RUI 1,464.87 -2.4% -1.1% -1.1% 1,589 1,291.27 2.38 67.68 93.44 101.69 109.76 Eco Sensitive

Russell 1000 G .RLG 1,367.05 -2.8% 1.1% 1.1% 1,469 1129.38 2.65 68.45 101.83 112.55 123.63 Consumer Disc .SPLRCD 806.97 -2.5% 2.8% 2.8% 870.21 689.30

Russell 1000 V .RLV 1,180.94 -2.0% -3.4% -3.4% 1,294 1103.22 2.65 80.75 107.42 115.02 121.58 Energy .SPNY 498.29 1.6% -6.6% -6.6% 579.19 453.20

Industrials .SPLRCI 624.95 -2.8% -2.0% -2.0% 680.89 550.91

International Info Tech .SPLRCT 1141.62 -3.9% 3.2% 3.2% 1244.67 888.18

EAFE .dMIEA00000PUS 2,005.67 -2.2% -2.2% -2.2% 2,187 1,774 3.32 122.35 138.76 147.10 157.53 Materials .SPLRCM 356.34 -4.4% -6.0% -6.0% 402.11 321.51

Emerging Market VWO 46.98 -0.4% 2.3% 2.3% 50.99 39.26 2.81 2.52 3.54 3.98 4.28

Interest Rate Sensitive

Financials .SPSY 457.53 -4.5% -1.4% -1.4% 503.42 380.09

Utilities .SPLRCU 256.14 3.4% -4.2% -4.2% 289.49 240.37

MidCap Domestic

Russell MidCap .RMCC 2,060.01 -0.2% -0.9% -0.9% 2,196 1,836.47 2.31 88.26 125.62 138.90 148.31

Russell MidCap G .RMCCG 988.77 -0.3% 1.9% 1.9% 1,045 818 1.77 47.98 74.62 82.10 90.02

Russell MidCap V .RMCCV 1,992.13 -0.1% -3.0% -3.0% 2,141 1,863 2.50 123.02 168.17 186.71 197.53 MTD Value Blend Growth YTD Value Blend Growth

Small Cap Domestic

Russell 2000 .RUT 1,529.43 1.1% -0.4% -0.4% 1,616 1,345.24 2.46 23.04 68.55 82.50 64.87

Russell 2000 G .RUO 966.69 1.3% 2.1% 2.1% 1,021 798 1.99 19.99 42.69 56.39 50.43

Russell 2000 V .RUJ 1,825.16 1.0% -3.1% -3.1% 1,967 1,675 2.77 42.96 125.95 144.71 98.60

S&P 500 Sector Return

Commodities MTD % Chg 31-Mar-18 28-Feb-18 31-Jan-18 31-Dec-17 30-Nov-17

Crude Oil CLc1 2.4% 64.94 61.64 64.73 60.42 57.40

Natural Gas NGc1 2.5% 273.3% 2.7 3.0 3.0 3.0

Gold GCc1 0.01 1,322.80 1,315.50 1,339.00 1,306.30 1,273.20

Copper HGc1 -3.3% 3.02 3.11 3.18 3.28 3.04

Lumber LBc1 1.7% 515.70 516.60 470.90 448.00 427.70

CRB Index .CRBQX -2.4% 2971.22 3032.27 3223.31 3078.65 2943.64

*Based on One Day Behind Prices

Currency

31-Mar-18 28-Feb-18 31-Jan-18 31-Dec-17 30-Nov-17

52 Wk

High

52 Wk

Low

Euro EUR= 1.23 1.22 1.24 1.20 1.19 1.26 1.19

Yen JPY= 105.88 106.67 109.17 112.64 112.52 113.38 104.57

British Pound GBP= 1.40 1.38 1.42 1.35 1.35 1.43 1.35

DXY Currency index .DXY 89.97 90.61 89.13 92.12 93.05 103.82 88.25

Interest Rates

31-Mar-18 28-Feb-18 31-Jan-18 31-Dec-17 30-Nov-17

52 Wk

High

52 Wk

Low

UST 30 Year US30YT=RR 2.97 3.13 2.94 2.74 2.83 3.22 2.68

UST 10 Year US10YT=RR 2.74 2.86 2.71 2.40 2.41 2.94 2.06

UST 5 Year US5YT=RR 2.56 2.64 2.52 2.21 2.14 2.70 1.64

UST 2 Year US2YT=RR 2.27 2.26 2.15 1.89 1.79 2.34 1.17

UST 1 Year US1YT=RR 2.09 2.06 1.89 1.73 1.61 2.11 0.98

Tbill 90 Day US3MT=RR 1.71 1.65 1.46 1.38 1.26 1.80 0.73

Corp IGUSD10Y= 4.48 4.42 4.16 3.97 4.00 4.58 3.82

Corp Spreads (vs. 10-Year) 1.74 1.56 1.45 1.57 1.58

Libor (3 month) USD3MFSR=X 2.31 2.02 1.78 1.69 1.49 2.31 1.11

Mortgage 30 yr fixed USAVMFM30Y0=BKRT 4.40 4.44 4.27 3.91 3.90 4.49 3.73

-2.8%

PGB - Investment Strategy Meeting Notes

3/31/2018

-0.1% -0.2% -0.3%

Large -3.4% -1.1% 1.1%

Medium

Large -2.0% -2.4%

RUSSELL Style Return

Medium -3.0% -0.9% 1.9%

-3.1% -0.4% 2.1%SmallSmall 1.0% 1.1% 1.3%

3.4%

1.6%

-1.1% -1.3%-2.5% -2.7% -2.8% -3.2%

-3.9%-4.4% -4.5%

-5.0%-4.0%-3.0%-2.0%-1.0%0.0%1.0%2.0%3.0%4.0%

Uti

litie

s

Ener

gy

Tele

com

Ser

vice

s

Co

nsu

me

r St

aple

s

Co

nsu

me

rD

iscr

eti

on

ary

Ind

ex

- C

BO

E

Ind

ust

rial

s

He

alth

Car

e

Info

rmat

ion

Tech

no

logy

Mat

eri

als

Fin

anci

al

MTD

MTD

3.20% 2.76%

-1.22% -1.38% -1.63% -2.02%

-4.20%

-5.96% -6.58%-7.77%

-8.68%-10.00%

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

Info

rmat

ion

Tech

no

logy

Co

nsu

me

rD

iscr

eti

on

ary

Ind

ex

- C

BO

E

Fin

anci

al

He

alth

Car

e

Ind

ust

rial

s

Uti

litie

s

Mat

eri

als

Ener

gy

Co

nsu

me

r St

aple

s

Tele

com

Ser

vice

s

YTD

YTD