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Pacific Premier Bancorp, Inc. Announces First Quarter 2024 Financial Results and a Quarterly Cash Dividend of $0.33 Per Share

First Quarter 2024 Summary

  • Net income of $47.0 million, or $0.49 per diluted share
  • Return on average assets of 0.99%, return on average equity of 6.50%, and return on average tangible common equity(1) of 10.05%
  • Pre-provision net revenue (“PPNR”)(1) to average assets of 1.43%, annualized
  • Net interest margin expanded 11 basis points to 3.39%
  • Cost of deposits of 1.59%, and cost of non-maturity deposits(1) of 1.06%
  • Non-maturity deposits(1) to total deposits of 84.42%
  • Total delinquency of 0.09% of loans held for investment
  • Nonperforming assets to total assets of 0.34%
  • Tangible book value per share(1) increased $0.11 compared to the prior quarter to $20.33
  • Common equity tier 1 capital ratio of 15.02%, and total risk-based capital ratio of 18.23%
  • Tangible common equity ratio (“TCE”)(1) increased to 10.97%

Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) (the “Company” or “Pacific Premier”), the holding company of Pacific Premier Bank (the “Bank”), reported net income of $47.0 million, or $0.49 per diluted share, for the first quarter of 2024, compared with net loss of $135.4 million, or $1.44 per diluted share, for the fourth quarter of 2023, and net income of $62.6 million, or $0.66 per diluted share, for the first quarter of 2023.

For the first quarter of 2024, the Company’s return on average assets (“ROAA”) was 0.99%, return on average equity (“ROAE”) was 6.50%, and return on average tangible common equity (“ROATCE”)(1) was 10.05%, compared to (2.76)%, (19.01)%, and (28.01)%, respectively, for the fourth quarter of 2023, and 1.15%, 8.87%, and 13.89%, respectively, for the first quarter of 2023. Total assets were $18.81 billion at March 31, 2024, compared to $19.03 billion at December 31, 2023, and $21.36 billion at March 31, 2023.

Steven R. Gardner, Chairman, Chief Executive Officer, and President of the Company, commented, “Our team delivered solid first quarter financial performance with net income of $47.0 million, or $0.49 per share, reflecting a full quarter’s benefit from the securities portfolio repositioning as our net interest margin expanded 11 basis points to 3.39%. Our commitment to prudent and proactive risk, liquidity, and capital management in the current dynamic environment continues to drive strong capital levels that rank amongst the top of our peers, with our TCE(1) ratio increasing 25 basis points to 10.97%.

“On the business development front, our dedicated relationship managers, retail branch bankers, and treasury management teams continue to successfully collaborate to expand our client base and deepen existing client relationships. During the first quarter, total deposits increased by $192 million, driven by a $120 million increase in non-maturity deposits, enabling us to further reduce FHLB borrowings by $400 million. Some of the quarterly deposit inflows were seasonal in nature, which we expect to reverse as we move through the year.

“First quarter asset quality trends remained strong, although nonperforming loans increased to $63.8 million, primarily the result of a single, diversified, Pacific Northwest commercial banking relationship, wherein the borrower remains current on all payments. Our team is actively engaged with the client and continues to approach the relationship consistent with our longstanding proactive approach to credit risk management.

“With our strong capital levels combined with our significant loss absorbing capacity, we have strategically positioned the company to perform in a variety of economic and credit scenarios. There are a number of factors contributing to an uncertain outlook, including ongoing inflationary pressures, interest rate volatility, and domestic and international geopolitical risks. Our franchise has been built on a culture of risk management and a proactive approach to building sustainable franchise value. We will continue to manage the business proactively and prudently while leveraging the strength of our relationship banking teams to capitalize on compelling opportunities as they may arise. I would like to thank all Pacific Premier employees for their outstanding efforts during the quarter, as well as all of our stakeholders for continuing to support our organization.”

______________________________

(1)

Reconciliations of the non–U.S. generally accepted accounting principles (“GAAP”) measures are set forth at the end of this press release.

FINANCIAL HIGHLIGHTS

 

 

 

Three Months Ended

 

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands, except per share data)

 

2024

 

2023

 

2023

Financial highlights (unaudited)

 

 

 

 

 

 

Net income (loss)

 

$

47,025

 

 

$

(135,376

)

 

$

62,562

 

Net interest income

 

 

145,127

 

 

 

146,789

 

 

 

168,610

 

Diluted earnings (loss) per share

 

 

0.49

 

 

 

(1.44

)

 

 

0.66

 

Common equity dividend per share paid

 

 

0.33

 

 

 

0.33

 

 

 

0.33

 

ROAA

 

 

0.99

%

 

 

(2.76

)%

 

 

1.15

%

ROAE

 

 

6.50

 

 

 

(19.01

)

 

 

8.87

 

ROATCE (1)

 

 

10.05

 

 

 

(28.01

)

 

 

13.89

 

Pre-provision net revenue (loss) to average assets (1)

 

 

1.43

 

 

 

(3.88

)

 

 

1.63

 

Net interest margin

 

 

3.39

 

 

 

3.28

 

 

 

3.44

 

Cost of deposits

 

 

1.59

 

 

 

1.56

 

 

 

0.94

 

Cost of non-maturity deposits (1)

 

 

1.06

 

 

 

1.02

 

 

 

0.54

 

Efficiency ratio (1)

 

 

60.2

 

 

 

60.1

 

 

 

51.7

 

Noninterest expense as a percent of average assets

 

 

2.16

 

 

 

2.09

 

 

 

1.87

 

Total assets

 

$

18,813,181

 

 

$

19,026,645

 

 

$

21,361,564

 

Total deposits

 

 

15,187,828

 

 

 

14,995,626

 

 

 

17,207,810

 

Non-maturity deposits (1) as a percent of total deposits

 

 

84.4

%

 

 

84.7

%

 

 

82.6

%

Noninterest-bearing deposits as a percent of total deposits

 

 

32.9

 

 

 

32.9

 

 

 

36.1

 

Loan-to-deposit ratio

 

 

85.7

 

 

 

88.6

 

 

 

82.4

 

Nonperforming assets as a percent of total assets

 

 

0.34

 

 

 

0.13

 

 

 

0.14

 

Delinquency as a percentage of loans held for investment

 

 

0.09

 

 

 

0.08

 

 

 

0.15

 

Allowance for credit losses to loans held for investment (2)

 

 

1.48

 

 

 

1.45

 

 

 

1.38

 

Book value per share

 

$

30.09

 

 

$

30.07

 

 

$

29.58

 

Tangible book value per share (1)

 

 

20.33

 

 

 

20.22

 

 

 

19.61

 

Tangible common equity ratio (1)

 

 

10.97

%

 

 

10.72

%

 

 

9.20

%

Common equity tier 1 capital ratio

 

 

15.02

 

 

 

14.32

 

 

 

13.54

 

Total capital ratio

 

 

18.23

 

 

 

17.29

 

 

 

16.33

 

______________________________

(1)

Reconciliations of the non-GAAP measures are set forth at the end of this press release.

(2)

At March 31, 2024, 25% of loans held for investment include a fair value net discount of $41.2 million, or 0.32% of loans held for investment. At December 31, 2023, 24% of loans held for investment include a fair value net discount of $43.3 million, or 0.33% of loans held for investment. At March 31, 2023, 26% of loans held for investment include a fair value net discount of $52.2 million, or 0.37% of loans held for investment.

INCOME STATEMENT HIGHLIGHTS

Net Interest Income and Net Interest Margin

Net interest income totaled $145.1 million in the first quarter of 2024, a decrease of $1.7 million, or 1.1%, from the fourth quarter of 2023. The decrease in net interest income was primarily attributable to lower average interest-earning asset balances, a higher cost of funds, and one less day of interest, partially offset by higher yields on interest-earning assets, as well as lower average borrowings.

The net interest margin for the first quarter of 2024 increased 11 basis points to 3.39%, from 3.28% in the prior quarter. The increase was primarily due to higher yields on investment securities as a result of a full quarter's benefit from the securities repositioning to higher-yielding available-for-sale (“AFS”) Treasury securities, partially offset by a higher cost of funds.

Net interest income for the first quarter of 2024 decreased $23.5 million, or 13.9%, compared to the first quarter of 2023. The decrease was attributable to a higher cost of funds and lower average interest-earning asset balances, partially offset by lower average interest-bearing liabilities and higher yields on average interest-earning assets, all the result of the higher interest rate environment and the Company's balance sheet management strategies to prioritize capital accumulation.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED AVERAGE BALANCES AND YIELD DATA

(Unaudited)

 

 

Three Months Ended

 

 

March 31, 2024

 

December 31, 2023

 

March 31, 2023

(Dollars in thousands)

 

Average

Balance

 

Interest

Income/

Expense

 

Average

Yield/

Cost

 

Average

Balance

 

Interest

Income/

Expense

 

Average

Yield/

C
ost

 

Average

Balance

 

Interest

Income/

Expense

 

Average

Yield/

Cost

Assets

 

 

Cash and cash equivalents

 

$

1,140,909

 

$

13,638

 

4.81

%

 

$

1,281,793

 

$

15,744

 

4.87

%

 

$

1,335,611

 

$

13,594

 

4.13

%

Investment securities

 

 

2,948,170

 

 

 

26,818

 

 

3.64

 

 

 

3,203,608

 

 

 

24,675

 

 

3.08

 

 

 

4,165,681

 

 

 

26,791

 

 

2.57

 

Loans receivable, net (1) (2)

 

 

13,149,038

 

 

 

172,975

 

 

5.29

 

 

 

13,257,767

 

 

 

176,773

 

 

5.29

 

 

 

14,394,775

 

 

 

180,958

 

 

5.10

 

Total interest-earning assets

 

$

17,238,117

 

 

$

213,431

 

 

4.98

 

 

$

17,743,168

 

 

$

217,192

 

 

4.86

 

 

$

19,896,067

 

 

$

221,343

 

 

4.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

10,058,808

 

 

$

59,506

 

 

2.38

%

 

$

10,395,116

 

 

$

60,915

 

 

2.32

%

 

$

11,104,624

 

 

$

40,234

 

 

1.47

%

Borrowings

 

 

850,811

 

 

 

8,798

 

 

4.15

 

 

 

942,689

 

 

 

9,488

 

 

4.01

 

 

 

1,319,114

 

 

 

12,499

 

 

3.83

 

Total interest-bearing liabilities

 

$

10,909,619

 

 

$

68,304

 

 

2.52

 

 

$

11,337,805

 

 

$

70,403

 

 

2.46

 

 

$

12,423,738

 

 

$

52,733

 

 

1.72

 

Noninterest-bearing deposits

 

$

4,996,939

 

 

 

 

 

 

$

5,141,585

 

 

 

 

 

 

$

6,219,818

 

 

 

 

 

Net interest income

 

 

 

$

145,127

 

 

 

 

 

 

$

146,789

 

 

 

 

 

 

$

168,610

 

 

 

Net interest margin (3)

 

 

 

 

 

3.39

%

 

 

 

 

 

3.28

%

 

 

 

 

 

3.44

%

Cost of deposits (4)

 

 

 

 

 

1.59

 

 

 

 

 

 

1.56

 

 

 

 

 

 

0.94

 

Cost of funds (5)

 

 

 

 

 

1.73

 

 

 

 

 

 

1.69

 

 

 

 

 

 

1.15

 

Cost of non-maturity deposits (6)

 

 

 

 

 

1.06

 

 

 

 

 

 

1.02

 

 

 

 

 

 

0.54

 

Ratio of interest-earning assets to interest-bearing liabilities

 

158.01

 

 

 

 

 

 

156.50

 

 

 

 

 

 

160.15

 

______________________________

(1)

Average balance includes loans held for sale and nonperforming loans and is net of deferred loan origination fees/costs, discounts/premiums, and the basis adjustment of certain loans included in fair value hedging relationships.

(2)

Interest income includes net discount accretion of $2.1 million, $2.6 million, and $2.5 million for the three months ended March 31, 2024, December 31, 2023, and March 31, 2023, respectively.

(3)

Represents annualized net interest income divided by average interest-earning assets.

(4)

Represents annualized interest expense on deposits divided by the sum of average interest-bearing deposits and noninterest-bearing deposits.

(5)

Represents annualized total interest expense divided by the sum of average total interest-bearing liabilities and noninterest-bearing deposits.

(6)

Reconciliations of the non-GAAP measures are set forth at the end of this press release.

Provision for Credit Losses

For the first quarter of 2024, the Company recorded a $3.9 million provision expense, compared to $1.7 million for the fourth quarter of 2023, and $3.0 million for the first quarter of 2023. The provision for credit losses was largely attributable to increases associated with economic forecasts, partially offset by changes to the overall size and composition of the loan portfolio.

 

 

Three Months Ended

 

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands)

 

2024

 

2023

 

2023

Provision for credit losses

 

 

 

 

 

 

Provision for loan losses

 

$

6,288

 

 

$

8,275

 

 

$

3,021

 

Provision for unfunded commitments

 

 

(2,425

)

 

 

(6,577

)

 

 

(189

)

Provision for held-to-maturity securities

 

 

(11

)

 

 

(2

)

 

 

184

 

Total provision for credit losses

 

$

3,852

 

 

$

1,696

 

 

$

3,016

 

Noninterest Income

Noninterest income for the first quarter of 2024 was $25.8 million, an increase of $260.0 million from the fourth quarter of 2023. The increase was related to the investment securities portfolio repositioning which resulted in a loss of $254.1 million during the fourth quarter of 2023. Excluding the prior quarter's loss, noninterest income increased $5.9 million, primarily due to a $5.1 million gain on debt extinguishment resulting from an early redemption of a $200.0 million Federal Home Loan Bank of San Francisco (“FHLB”) term advance as well as a $1.3 million increase in trust custodial account fees driven by annual tax fees earned during the current quarter.

Noninterest income for the first quarter of 2024 increased $4.6 million compared to the first quarter of 2023. The increase was primarily due to a $5.1 million gain on debt extinguishment resulting from an early redemption of a $200.0 million FHLB term advance during the current quarter.

 

 

Three Months Ended

 

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands)

 

2024

 

2023

 

2023

Noninterest income

 

 

 

 

 

 

Loan servicing income

 

$

529

 

$

359

 

 

$

573

Service charges on deposit accounts

 

 

2,688

 

 

 

2,648

 

 

 

2,629

 

Other service fee income

 

 

336

 

 

 

322

 

 

 

296

 

Debit card interchange fee income

 

 

765

 

 

 

844

 

 

 

803

 

Earnings on bank owned life insurance

 

 

4,159

 

 

 

3,678

 

 

 

3,374

 

Net (loss) gain from sales of loans

 

 

 

 

 

(4

)

 

 

29

 

Net (loss) gain from sales of investment securities

 

 

 

 

 

(254,065

)

 

 

138

 

Trust custodial account fees

 

 

10,642

 

 

 

9,388

 

 

 

11,025

 

Escrow and exchange fees

 

 

696

 

 

 

1,074

 

 

 

1,058

 

Other income

 

 

5,959

 

 

 

1,562

 

 

 

1,261

 

Total noninterest income (loss)

 

$

25,774

 

 

$

(234,194

)

 

$

21,186

 

Noninterest Expense

Noninterest expense totaled $102.6 million for the first quarter of 2024, a decrease of $137,000 compared to the fourth quarter of 2023. The results were impacted by a $523,000 FDIC special assessment in the first quarter of 2024 and a $2.1 million FDIC special assessment during the fourth quarter of 2023. Excluding the special assessments, noninterest expense increased $1.4 million, primarily due to a $2.2 million increase in compensation and benefits related to higher payroll taxes and the annual equity-based compensation awards, as well as a $1.5 million increase in deposit expense due to higher deposit earnings credit rates, partially offset by a $1.1 million decrease in other expense.

Noninterest expense for the first quarter of 2024 increased by $1.3 million compared to the first quarter of 2023. The increase was primarily due to a $4.2 million increase in deposit expense, partially offset by a $1.4 million decrease in legal and professional services and a $935,000 decrease in premises and occupancy.

 

 

Three Months Ended

 

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands)

 

2024

 

2023

 

2023

Noninterest expense

 

 

 

 

 

 

Compensation and benefits

 

$

54,130

 

$

51,907

 

$

54,293

Premises and occupancy

 

 

10,807

 

 

 

11,183

 

 

 

11,742

 

Data processing

 

 

7,511

 

 

 

7,409

 

 

 

7,265

 

Other real estate owned operations, net

 

 

46

 

 

 

103

 

 

 

108

 

FDIC insurance premiums

 

 

2,629

 

 

 

4,267

 

 

 

2,425

 

Legal and professional services

 

 

4,143

 

 

 

4,663

 

 

 

5,501

 

Marketing expense

 

 

1,558

 

 

 

1,728

 

 

 

1,838

 

Office expense

 

 

1,093

 

 

 

1,367

 

 

 

1,232

 

Loan expense

 

 

770

 

 

 

437

 

 

 

646

 

Deposit expense

 

 

12,665

 

 

 

11,152

 

 

 

8,436

 

Amortization of intangible assets

 

 

2,836

 

 

 

3,022

 

 

 

3,171

 

Other expense

 

 

4,445

 

 

 

5,532

 

 

 

4,695

 

Total noninterest expense

 

$

102,633

 

 

$

102,770

 

 

$

101,352

 

Income Tax

For the first quarter of 2024, income tax expense totaled $17.4 million, resulting in an effective tax rate of 27.0%, compared with income tax benefit of $56.5 million and an effective tax rate of 29.4% for the fourth quarter of 2023, and income tax expense of $22.9 million and an effective tax rate of 26.8% for the first quarter of 2023. The income tax benefit in the prior quarter was primarily attributable to the pretax loss from sales of AFS securities recorded for the fourth quarter of 2023, driven by the Company's balance sheet repositioning.

BALANCE SHEET HIGHLIGHTS

Loans

Loans held for investment totaled $13.01 billion at March 31, 2024, a decrease of $276.9 million, or 2.1%, from December 31, 2023, and a decrease of $1.16 billion, or 8.2%, from March 31, 2023. The decrease from December 31, 2023 was primarily due to lower loan production and fundings, as well as a decrease in credit line draws, partially offset by slower loan prepayments and maturities.

During the first quarter of 2024, new loan commitments totaled $45.6 million, and new loan fundings totaled $14.0 million, compared with $128.1 million in loan commitments and $103.7 million in new loan fundings for the fourth quarter of 2023, and $116.8 million in loan commitments and $66.9 million in new loan fundings for the first quarter of 2023. During the first quarter of 2024, new origination activity remained muted given the uncertain economic and interest rate outlook as well as softer borrower demand.

At March 31, 2024, the total loan-to-deposit ratio was 85.7%, compared to 88.6% and 82.4% at December 31, 2023 and March 31, 2023, respectively.

The following table presents the primary loan roll-forward activities for total gross loans, including both loans held for investment and loans held for sale, during the quarters indicated:

 

Three Months Ended

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands)

2024

 

2023

 

2023

Beginning gross loan balance before basis adjustment

$

13,318,571

 

 

$

13,319,591

 

 

$

14,740,867

 

New commitments

 

45,563

 

 

 

128,102

 

 

 

116,835

 

Unfunded new commitments

 

(31,531

)

 

 

(24,429

)

 

 

(49,891

)

Net new fundings

 

14,032

 

 

 

103,673

 

 

 

66,944

 

Amortization/maturities/payoffs

 

(358,863

)

 

 

(422,607

)

 

 

(519,986

)

Net draws on existing lines of credit

 

109,860

 

 

 

354,711

 

 

 

(53,436

)

Loan sales

 

(32,676

)

 

 

(32,464

)

 

 

(803

)

Charge-offs

 

(6,529

)

 

 

(4,138

)

 

 

(3,664

)

Transferred to other real estate owned

 

 

 

 

(195

)

 

 

(6,886

)

Net decrease

 

(274,176

)

 

 

(1,020

)

 

 

(517,831

)

Ending gross loan balance before basis adjustment

$

13,044,395

 

 

$

13,318,571

 

 

$

14,223,036

 

Basis adjustment associated with fair value hedge (1)

 

(32,324

)

 

 

(29,551

)

 

 

(50,005

)

Ending gross loan balance

$

13,012,071

 

 

$

13,289,020

 

 

$

14,173,031

 

______________________________

(1)

Represents the basis adjustment associated with the application of hedge accounting on certain loans.

The following table presents the composition of the loans held for investment as of the dates indicated:

 

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands)

 

2024

 

2023

 

2023

Investor loans secured by real estate

 

 

 

 

 

 

Commercial real estate (“CRE”) non-owner-occupied

 

$

2,309,252

 

 

$

2,421,772

 

 

$

2,590,824

 

Multifamily

 

 

5,558,966

 

 

 

5,645,310

 

 

 

5,955,239

 

Construction and land

 

 

486,734

 

 

 

472,544

 

 

 

420,079

 

SBA secured by real estate (1)

 

 

35,206

 

 

 

36,400

 

 

 

40,669

 

Total investor loans secured by real estate

 

 

8,390,158

 

 

 

8,576,026

 

 

 

9,006,811

 

Business loans secured by real estate (2)

 

 

 

 

 

 

CRE owner-occupied

 

 

2,149,362

 

 

 

2,191,334

 

 

 

2,342,175

 

Franchise real estate secured

 

 

294,938

 

 

 

304,514

 

 

 

371,902

 

SBA secured by real estate (3)

 

 

48,426

 

 

 

50,741

 

 

 

60,527

 

Total business loans secured by real estate

 

 

2,492,726

 

 

 

2,546,589

 

 

 

2,774,604

 

Commercial loans (4)

 

 

 

 

 

 

Commercial and industrial (“C&I”)

 

 

1,774,487

 

 

 

1,790,608

 

 

 

1,967,128

 

Franchise non-real estate secured

 

 

301,895

 

 

 

319,721

 

 

 

388,722

 

SBA non-real estate secured

 

 

10,946

 

 

 

10,926

 

 

 

10,437

 

Total commercial loans

 

 

2,087,328

 

 

 

2,121,255

 

 

 

2,366,287

 

Retail loans

 

 

 

 

 

 

Single family residential (5)

 

 

72,353

 

 

 

72,752

 

 

 

70,913

 

Consumer

 

 

1,830

 

 

 

1,949

 

 

 

3,174

 

Total retail loans

 

 

74,183

 

 

 

74,701

 

 

 

74,087

 

Loans held for investment before basis adjustment (6)

 

 

13,044,395

 

 

 

13,318,571

 

 

 

14,221,789

 

Basis adjustment associated with fair value hedge (7)

 

 

(32,324

)

 

 

(29,551

)

 

 

(50,005

)

Loans held for investment

 

 

13,012,071

 

 

 

13,289,020

 

 

 

14,171,784

 

Allowance for credit losses for loans held for investment

 

 

(192,340

)

 

 

(192,471

)

 

 

(195,388

)

Loans held for investment, net

 

$

12,819,731

 

 

$

13,096,549

 

 

$

13,976,396

 

 

 

 

 

 

 

 

Total unfunded loan commitments

 

$

1,459,515

 

 

$

1,703,470

 

 

$

2,413,169

 

Loans held for sale, at lower of cost or fair value

 

$

 

 

$

 

 

$

1,247

 

______________________________

(1)

SBA loans that are collateralized by hotel/motel real property.

(2)

Loans to businesses that are collateralized by real estate where the operating cash flow of the business is the primary source of repayment.

(3)

SBA loans that are collateralized by real property other than hotel/motel real property.

(4)

Loans to businesses where the operating cash flow of the business is the primary source of repayment.

(5)

Single family residential includes home equity lines of credit, as well as second trust deeds.

(6)

Includes net deferred origination costs (fees) of $797,000, $(74,000), and $(745,000), and unaccreted fair value net purchase discounts of $41.2 million, $43.3 million, and $52.2 million as of March 31, 2024, December 31, 2023, and March 31, 2023, respectively.

(7)

Represents the basis adjustment associated with the application of hedge accounting on certain loans.

The total end-of-period weighted average interest rate on loans, excluding fees and discounts, at March 31, 2024 was 4.91%, compared to 4.87% at December 31, 2023, and 4.68% at March 31, 2023. The quarter-over-quarter and year-over-year increases reflect higher rates on new originations and the repricing of loans as a result of the increases in benchmark interest rates.

The following table presents the composition of loan commitments originated during the quarters indicated:

 

 

Three Months Ended

 

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands)

 

2024

 

2023

 

2023

Investor loans secured by real estate

 

 

 

 

 

 

CRE non-owner-occupied

 

$

850

 

$

1,450

 

$

1,200

Multifamily

 

 

480

 

 

 

94,462

 

 

 

4,464

 

Total investor loans secured by real estate

 

 

1,330

 

 

 

95,912

 

 

 

5,664

 

Business loans secured by real estate (1)

 

 

 

 

 

 

CRE owner-occupied

 

 

6,745

 

 

 

3,870

 

 

 

6,562

 

Franchise real estate secured

 

 

 

 

 

 

 

 

3,217

 

SBA secured by real estate (2)

 

 

 

 

 

 

 

 

497

 

Total business loans secured by real estate

 

 

6,745

 

 

 

3,870

 

 

 

10,276

 

Commercial loans (3)

 

 

 

 

 

 

Commercial and industrial

 

 

32,477

 

 

 

24,766

 

 

 

93,150

 

Franchise non-real estate secured

 

 

 

 

 

 

 

 

1,666

 

SBA non-real estate secured

 

 

 

 

 

 

 

 

720

 

Total commercial loans

 

 

32,477

 

 

 

24,766

 

 

 

95,536

 

Retail loans

 

 

 

 

 

 

Single family residential (4)

 

 

4,936

 

 

 

3,554

 

 

 

5,359

 

Consumer

 

 

75

 

 

 

 

 

 

 

Total retail loans

 

 

5,011

 

 

 

3,554

 

 

 

5,359

 

Total loan commitments

 

$

45,563

 

 

$

128,102

 

 

$

116,835

 

______________________________

(1)

Loans to businesses that are collateralized by real estate where the operating cash flow of the business is the primary source of repayment.

(2)

SBA loans that are collateralized by real property other than hotel/motel real property.

(3)

Loans to businesses where the operating cash flow of the business is the primary source of repayment.

(4)

Single family residential includes home equity lines of credit, as well as second trust deeds.

The weighted average interest rate on new loan commitments increased to 8.62% in the first quarter of 2024, compared to 6.34% in the fourth quarter of 2023, and 7.43% in the first quarter of 2023.

Asset Quality and Allowance for Credit Losses

At March 31, 2024, our allowance for credit losses (“ACL”) on loans held for investment was $192.3 million, a decrease of $131,000 from December 31, 2023, and a decrease of $3.0 million from March 31, 2023. The decrease in the ACL from December 31, 2023 and March 31, 2023 reflects the relative changes in size and composition in our loans held for investment, partially offset by changes in economic forecasts.

During the first quarter of 2024, the Company incurred $6.4 million of net charge-offs, primarily related to the sale of special mention and substandard CRE and franchise loans during the quarter, compared to $3.9 million during the fourth quarter of 2023, and $3.3 million during the first quarter of 2023.

The following table provides the allocation of the ACL for loans held for investment as well as the activity in the ACL attributed to various segments in the loan portfolio as of and for the period indicated:

 

Three Months Ended March 31, 2024

(Dollars in thousands)

Beginning

ACL Balance

 

Charge-offs

 

Recoveries

 

Provision for

Credit

Losses

 

Ending

ACL Balance

Investor loans secured by real estate

 

 

 

 

 

 

 

 

 

CRE non-owner-occupied

$

31,030

 

$

(927

)

 

$

 

$

678

 

 

$

30,781

Multifamily

 

56,312

 

 

 

 

 

 

5

 

 

 

2,094

 

 

 

58,411

 

Construction and land

 

9,314

 

 

 

 

 

 

 

 

 

(1,143

)

 

 

8,171

 

SBA secured by real estate (1)

 

2,182

 

 

 

(253

)

 

 

 

 

 

255

 

 

 

2,184

 

Business loans secured by real estate (2)

 

 

 

 

 

 

 

 

 

CRE owner-occupied

 

28,787

 

 

 

(4,452

)

 

 

63

 

 

 

4,362

 

 

 

28,760

 

Franchise real estate secured

 

7,499

 

 

 

(212

)

 

 

 

 

 

(29

)

 

 

7,258

 

SBA secured by real estate (3)

 

4,427

 

 

 

 

 

 

1

 

 

 

(140

)

 

 

4,288

 

Commercial loans (4)

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

36,692

 

 

 

(585

)

 

 

39

 

 

 

961

 

 

 

37,107

 

Franchise non-real estate secured

 

15,131

 

 

 

(100

)

 

 

 

 

 

(711

)

 

 

14,320

 

SBA non-real estate secured

 

458

 

 

 

 

 

 

2

 

 

 

35

 

 

 

495

 

Retail loans

 

 

 

 

 

 

 

 

 

Single family residential (5)

 

505

 

 

 

 

 

 

 

 

 

(63

)

 

 

442

 

Consumer loans

 

134

 

 

 

 

 

 

 

 

 

(11

)

 

 

123

 

Totals

$

192,471

 

 

$

(6,529

)

 

$

110

 

 

$

6,288

 

 

$

192,340

 

______________________________

(1)

SBA loans that are collateralized by hotel/motel real property.

(2)

Loans to businesses that are collateralized by real estate where the operating cash flow of the business is the primary source of repayment.

(3)

SBA loans that are collateralized by real property other than hotel/motel real property.

(4)

Loans to businesses where the operating cash flow of the business is the primary source of repayment.

(5)

Single family residential includes home equity lines of credit, as well as second trust deeds.

The ratio of ACL to loans held for investment at March 31, 2024 increased to 1.48%, compared to 1.45% at December 31, 2023, and 1.38% at March 31, 2023. The fair value net discount on loans acquired through acquisitions was $41.2 million, or 0.32% of total loans held for investment, as of March 31, 2024, compared to $43.3 million, or 0.33% of total loans held for investment, as of December 31, 2023, and $52.2 million, or 0.37% of total loans held for investment, as of March 31, 2023.

Nonperforming assets totaled $64.1 million, or 0.34% of total assets, at March 31, 2024, compared with $25.1 million, or 0.13% of total assets, at December 31, 2023, and $30.4 million, or 0.14% of total assets, at March 31, 2023. The increase in nonperforming assets at March 31, 2024, was primarily the result of loans to one borrower relationship totaling $37.6 million, all of which were current as of March 31, 2024. Loan delinquencies were $12.2 million, or 0.09% of loans held for investment, at March 31, 2024, compared to $10.1 million, or 0.08% of loans held for investment, at December 31, 2023, and $20.8 million, or 0.15% of loans held for investment, at March 31, 2023.

Classified loans totaled $204.7 million, or 1.57% of loans held for investment, at March 31, 2024, compared with $142.0 million, or 1.07% of loans held for investment, at December 31, 2023, and $161.1 million, or 1.14% of loans held for investment, at March 31, 2023. The increase in classified loans included the $37.6 million in loans related to one borrower relationship that were placed on nonaccrual during the first quarter of 2024 and remained current as of March 31, 2024.

The following table presents the asset quality metrics of the loan portfolio as of the dates indicated.

 

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands)

 

2024

 

2023

 

2023

Asset quality

 

 

 

 

 

 

Nonperforming loans

 

$

63,806

 

 

$

24,817

 

 

$

24,872

 

Other real estate owned

 

 

248

 

 

 

248

 

 

 

5,499

 

Nonperforming assets

 

$

64,054

 

 

$

25,065

 

 

$

30,371

 

 

 

 

 

 

 

 

Total classified assets (1)

 

$

204,937

 

 

$

142,210

 

 

$

166,576

 

Allowance for credit losses

 

 

192,340

 

 

 

192,471

 

 

 

195,388

 

Allowance for credit losses as a percent of total nonperforming loans

 

 

301

%

 

 

776

%

 

 

786

%

Nonperforming loans as a percent of loans held for investment

 

 

0.49

 

 

 

0.19

 

 

 

0.18

 

Nonperforming assets as a percent of total assets

 

 

0.34

 

 

 

0.13

 

 

 

0.14

 

Classified loans to total loans held for investment

 

 

1.57

 

 

 

1.07

 

 

 

1.14

 

Classified assets to total assets

 

 

1.09

 

 

 

0.75

 

 

 

0.78

 

Net loan charge-offs for the quarter ended

 

$

6,419

 

 

$

3,902

 

 

$

3,284

 

Net loan charge-offs for the quarter to average total loans

 

 

0.05

%

 

 

0.03

%

 

 

0.02

%

Allowance for credit losses to loans held for investment (2)

 

 

1.48

 

 

 

1.45

 

 

 

1.38

 

Delinquent loans (3)

 

 

 

 

 

 

30 - 59 days

 

$

1,983

 

 

$

2,484

 

 

$

761

 

60 - 89 days

 

 

974

 

 

 

1,294

 

 

 

1,198

 

90+ days

 

 

9,221

 

 

 

6,276

 

 

 

18,884

 

Total delinquency

 

$

12,178

 

 

$

10,054

 

 

$

20,843

 

Delinquency as a percentage of loans held for investment

 

 

0.09

%

 

 

0.08

%

 

 

0.15

%

______________________________

(1)

Includes substandard and doubtful loans, and other real estate owned.

(2)

At March 31, 2024, 25% of loans held for investment include a fair value net discount of $41.2 million, or 0.32% of loans held for investment. At December 31, 2023, 24% of loans held for investment include a fair value net discount of $43.3 million, or 0.33% of loans held for investment. At March 31, 2023, 26% of loans held for investment include a fair value net discount of $52.2 million, or 0.37% of loans held for investment.

(3)

Nonaccrual loans are included in this aging analysis based on the loan's past due status.

Investment Securities

At March 31, 2024, AFS and held-to-maturity (“HTM”) investment securities were $1.15 billion and $1.72 billion, respectively, compared to $1.14 billion and $1.73 billion, respectively, at December 31, 2023, and $2.11 billion and $1.75 billion, respectively, at March 31, 2023.

In total, investment securities were $2.87 billion at March 31, 2024, an increase of $4.9 million from December 31, 2023, and a decrease of $987.4 million from March 31, 2023. The increase in the first quarter of 2024 compared to the prior quarter was primarily the result of $170.2 million in purchases and a decrease of $1.9 million in AFS investment securities mark-to-market unrealized loss, partially offset by $167.3 million in principal payments, amortization and accretion, and redemptions.

The decrease in investment securities from March 31, 2023 was primarily the result of $1.52 billion in sales of AFS investment securities and $410.9 million in principal payments, discounts from the AFS securities transferred to HTM, partially offset by $722.7 million in purchases of AFS and HTM investment securities and a decrease of $219.0 million in AFS securities mark-to-market unrealized loss.

Deposits

At March 31, 2024, total deposits were $15.19 billion, an increase of $192.2 million, or 1.3%, from December 31, 2023, and a decrease of $2.02 billion, or 11.7%, from March 31, 2023. The increase from the prior quarter was largely driven by increases of $169.2 million in money market and savings, $110.3 million in retail certificates of deposit, and $64.8 million in noninterest-bearing checking, partially offset by reductions of $114.0 million in interest-bearing checking and $38.1 million in brokered certificates of deposit. The decrease from March 31, 2023 was attributable to the decreases of $1.21 billion in noninterest-bearing checking and $1.17 billion in brokered certificates of deposit.

At March 31, 2024, non-maturity deposits(1) totaled $12.82 billion, or 84.4% of total deposits, an increase of $120.0 million, or 0.9%, from December 31, 2023, and a decrease of $1.39 billion, or 9.8%, from March 31, 2023. The increase from prior quarter was largely driven by seasonal deposit growth within our HOA business. The decrease from the first quarter of 2023 was attributable to the continued effect of clients prepaying or paying down loans and redeploying funds into higher yielding alternatives.

At March 31, 2024, maturity deposits totaled $2.37 billion, an increase of $72.2 million, or 3.1%, from December 31, 2023, and a decrease of $631.1 million, or 21.1%, from March 31, 2023. The increase in the first quarter of 2024 compared to the prior quarter was primarily driven by an increase of $110.3 million in retail certificates of deposit, partially offset by the reduction of $38.1 million in brokered certificates of deposit. The decrease from March 31, 2023 was primarily driven by decreases in brokered certificates of deposit.

The weighted average cost of total deposits for the first quarter of 2024 was 1.59%, compared to 1.56% for the fourth quarter of 2023, and 0.94% for the first quarter of 2023. The increases in the weighted average cost of deposits for the first quarter of 2024, compared to the fourth quarter of 2023 and the first quarter of 2023, were principally driven by higher pricing across deposit categories. The weighted average cost of non-maturity deposits(1) for the first quarter of 2024 was 1.06%, compared to 1.02% for the fourth quarter of 2023, and 0.54% for the first quarter of 2023.

At March 31, 2024, the end-of-period weighted average rate of total deposits was 1.66%, compared to 1.55% at December 31, 2023, and 1.15% at March 31, 2023. At March 31, 2024, the end-of-period weighted average rate of non-maturity deposits was 1.12%, compared to 1.04% at December 31, 2023, and 0.61% at March 31, 2023.

At March 31, 2024, the Company’s FDIC-insured deposits as a percentage of total deposits was 60%. Insured and collateralized deposits comprised 66% of total deposits at March 31, 2024, which was the same level at December 31, 2023.

______________________________

(1)

Reconciliations of the non-GAAP measures are set forth at the end of this press release.

The following table presents the composition of deposits as of the dates indicated.

 

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands)

 

2024

 

2023

 

2023

Deposit accounts

 

 

 

 

 

 

Noninterest-bearing checking

 

$

4,997,636

 

 

$

4,932,817

 

 

$

6,209,104

 

Interest-bearing:

 

 

 

 

 

 

Checking

 

 

2,785,626

 

 

 

2,899,621

 

 

 

2,871,812

 

Money market/savings

 

 

5,037,636

 

 

 

4,868,442

 

 

 

5,128,857

 

Total non-maturity deposits (1)

 

 

12,820,898

 

 

 

12,700,880

 

 

 

14,209,773

 

Retail certificates of deposit

 

 

1,794,813

 

 

 

1,684,560

 

 

 

1,257,146

 

Wholesale/brokered certificates of deposit

 

 

572,117

 

 

 

610,186

 

 

 

1,740,891

 

Total maturity deposits

 

 

2,366,930

 

 

 

2,294,746

 

 

 

2,998,037

 

Total deposits

 

$

15,187,828

 

 

$

14,995,626

 

 

$

17,207,810

 

 

 

 

 

 

 

 

Cost of deposits

 

 

1.59

%

 

 

1.56

%

 

 

0.94

%

Cost of non-maturity deposits (1)

 

 

1.06

 

 

 

1.02

 

 

 

0.54

 

Noninterest-bearing deposits as a percent of total deposits

 

 

32.9

 

 

 

32.9

 

 

 

36.1

 

Non-maturity deposits (1) as a percent of total deposits

 

 

84.4

 

 

 

84.7

 

 

 

82.6

 

______________________________

(1)

Reconciliations of the non-GAAP measures are set forth at the end of this press release.

Borrowings

At March 31, 2024, total borrowings amounted to $532.0 million, a decrease of $399.8 million from December 31, 2023, and a decrease of $599.4 million from March 31, 2023. Total borrowings at March 31, 2024 were comprised of $200.0 million of FHLB term advances and $332.0 million of subordinated debt. The decrease in borrowings at March 31, 2024 as compared to December 31, 2023 was due to a decrease of $400.0 million in FHLB term advances. The decrease in borrowings at March 31, 2024 as compared to March 31, 2023 was due to a decrease of $600.0 million in FHLB term advances.

As of March 31, 2024, our unused borrowing capacity was $8.53 billion, which consists of available lines of credit with FHLB and other correspondent banks as well as access through the Federal Reserve Bank's discount window, which was not utilized during the first quarter of 2024.

Capital Ratios

At March 31, 2024, our common stockholders' equity was $2.90 billion, or 15.43% of total assets, compared with $2.88 billion, or 15.15%, at December 31, 2023, and $2.83 billion, or 13.25%, at March 31, 2023, with a book value per share of $30.09, compared with $30.07 at December 31, 2023, and $29.58 at March 31, 2023. At March 31, 2024, the ratio of tangible common equity to tangible assets(1) was 10.97%, compared with 10.72% at December 31, 2023, and 9.20% at March 31, 2023, and tangible book value per share(1) was $20.33, compared with $20.22 at December 31, 2023, and $19.61 at March 31, 2023.

______________________________

(1)

Reconciliations of the non-GAAP measures are set forth at the end of this press release.

The Company implemented the current expected credit losses (“CECL”) model on January 1, 2020 and elected to phase in the full effect of CECL on regulatory capital over the five-year transition period. In the first quarter of 2022, the Company began phasing into regulatory capital the cumulative adjustments at the end of the second year of the transition period at 25% per year. At March 31, 2024, the Company and Bank were in compliance with the capital conservation buffer requirement and exceeded the minimum Common Equity Tier 1, Tier 1, and total capital ratios, inclusive of the fully phased-in capital conservation buffer of 7.0%, 8.5%, and 10.5%, respectively, and the Bank qualified as “well capitalized” for purposes of the federal bank regulatory prompt corrective action regulations.

 

 

March 31,

 

December 31,

 

March 31,

Capital ratios

 

2024

 

2023

 

2023

Pacific Premier Bancorp, Inc. Consolidated

 

 

 

 

 

 

Tier 1 leverage ratio

 

 

11.48

%

 

 

11.03

%

 

 

10.41

%

Common equity tier 1 capital ratio

 

 

15.02

 

 

 

14.32

 

 

 

13.54

 

Tier 1 capital ratio

 

 

15.02

 

 

 

14.32

 

 

 

13.54

 

Total capital ratio

 

 

18.23

 

 

 

17.29

 

 

 

16.33

 

Tangible common equity ratio (1)

 

 

10.97

 

 

 

10.72

 

 

 

9.20

 

 

 

 

 

 

 

 

Pacific Premier Bank

 

 

 

 

 

 

Tier 1 leverage ratio

 

 

12.97

%

 

 

12.43

%

 

 

11.93

%

Common equity tier 1 capital ratio

 

 

16.96

 

 

 

16.13

 

 

 

15.52

 

Tier 1 capital ratio

 

 

16.96

 

 

 

16.13

 

 

 

15.52

 

Total capital ratio

 

 

18.21

 

 

 

17.23

 

 

 

16.55

 

 

 

 

 

 

 

 

Share data

 

 

 

 

 

 

Book value per share

 

$

30.09

 

 

$

30.07

 

 

$

29.58

 

Tangible book value per share (1)

 

 

20.33

 

 

 

20.22

 

 

 

19.61

 

Common equity dividends declared per share

 

 

0.33

 

 

 

0.33

 

 

 

0.33

 

Closing stock price (2)

 

 

24.00

 

 

 

29.11

 

 

 

24.02

 

Shares issued and outstanding

 

 

96,459,966

 

 

 

95,860,092

 

 

 

95,714,777

 

Market capitalization (2)(3)

 

$

2,315,039

 

 

$

2,790,487

 

 

$

2,299,069

 

______________________________

(1)

Reconciliations of the non-GAAP measures are set forth at the end of this press release.

(2)

As of the last trading day prior to period end.

(3)

Dollars in thousands.

Dividend and Stock Repurchase Program

On April 22, 2024, the Company's Board of Directors declared a $0.33 per share dividend, payable on May 13, 2024 to stockholders of record as of May 6, 2024. In January 2021, the Company’s Board of Directors approved a stock repurchase program, which authorized the repurchase of up to 4,725,000 shares of its common stock. During the first quarter of 2024, the Company did not repurchase any shares of common stock.

Conference Call and Webcast

The Company will host a conference call at 9:00 a.m. PT / 12:00 p.m. ET on April 24, 2024 to discuss its financial results. Analysts and investors may participate in the question-and-answer session. A live webcast will be available on the Webcasts page of the Company's investor relations website. An archived version of the webcast will be available in the same location shortly after the live call has ended. The conference call can be accessed by telephone at (866) 290-5977. Participants should ask to be joined to the Pacific Premier Bancorp, Inc. call. Additionally, a telephone replay will be made available through May 1, 2024, at (877) 344-7529, replay code 4066481.

About Pacific Premier Bancorp, Inc.

Pacific Premier Bancorp, Inc. (Nasdaq: PPBI) is the parent company of Pacific Premier Bank, a California-based commercial bank focused on serving small, middle-market, and corporate businesses throughout the western United States in major metropolitan markets in California, Washington, Oregon, Arizona, and Nevada. Founded in 1983, Pacific Premier Bank has grown to become one of the largest banks headquartered in the western region of the United States, with approximately $19 billion in total assets. Pacific Premier Bank provides banking products and services, including deposit accounts, digital banking, and treasury management services, to businesses, professionals, entrepreneurs, real estate investors, and nonprofit organizations. Pacific Premier Bank also offers a wide array of loan products, such as commercial business loans, lines of credit, SBA loans, commercial real estate loans, agribusiness loans, franchise lending, home equity lines of credit, and construction loans. Pacific Premier Bank offers commercial escrow services and facilitates 1031 Exchange transactions through its Commerce Escrow division. Pacific Premier Bank offers clients IRA custodial services through its Pacific Premier Trust division, which has approximately $17 billion of assets under custody and over 33,000 client accounts comprised of self-directed investors, financial institutions, capital syndicators, and financial advisors. Additionally, Pacific Premier Bank provides nationwide customized banking solutions to Homeowners’ Associations and Property Management companies. Pacific Premier Bank is an Equal Housing Lender and Member FDIC. For additional information about Pacific Premier Bancorp, Inc. and Pacific Premier Bank, visit our website: www.ppbi.com.

FORWARD-LOOKING STATEMENTS

The statements contained herein that are not historical facts are forward-looking statements based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company including, without limitation, plans, strategies and goals, and statements about the Company’s expectations regarding revenue and asset growth, financial performance and profitability, loan and deposit growth, yields and returns, loan diversification and credit management, stockholder value creation, tax rates, liquidity, and the impact of acquisitions we have made or may make.

Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. The Company cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. These risks and uncertainties include, but are not limited to, the following: the strength of the United States economy in general and the strength of the local economies in which we conduct operations; adverse developments in the banking industry highlighted by high-profile bank failures and the potential impact of such developments on customer confidence, liquidity, and regulatory responses to these developments; the effects of, and changes in, trade, monetary, and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; interest rate, liquidity, economic, market, credit, operational, and inflation risks associated with our business, including the speed and predictability of changes in these risks; our ability to attract and retain deposits and access to other sources of liquidity, particularly in a rising or high interest rate environment, and the quality and composition of our deposits; business and economic conditions generally and in the financial services industry, nationally and within our current and future geographic markets, including the tight labor market, ineffective management of the U.S. Federal budget or debt, or turbulence or uncertainty in domestic or foreign financial markets; the effect of acquisitions we have made or may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to effectively integrate an acquisition target into our operations; the timely development of competitive new products and services and the acceptance of these products and services by new and existing customers; possible impairment charges to goodwill, including any impairment that may result from increased volatility in our stock price; the impact of changes in financial services policies, laws, and regulations, including those concerning taxes, banking, securities, and insurance, and the application thereof by regulatory bodies; compliance risks, including the costs of monitoring, testing, and maintaining compliance with complex laws and regulations; the effectiveness of our risk management framework and quantitative models; the effect of changes in accounting policies and practices or accounting standards, as may be adopted from time-to-time by bank regulatory agencies, the U.S. Securities and Exchange Commission (“SEC”), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters; possible credit-related impairments of securities held by us; changes in the level of our nonperforming assets and charge-offs; the impact of governmental efforts to restructure the U.S. financial regulatory system; the impact of recent or future changes in the FDIC insurance assessment rate or the rules and regulations related to the calculation of the FDIC insurance assessment amount, including any special assessments; changes in consumer spending, borrowing, and savings habits; the effects of concentrations in our loan portfolio, including commercial real estate and the risks of geographic and industry concentrations; the possibility that we may reduce or discontinue the payments of dividends on our common stock; the possibility that we may discontinue, reduce or otherwise limit the level of repurchases of our common stock we may make from time to time pursuant to our stock repurchase program; changes in the financial performance and/or condition of our borrowers; changes in the competitive environment among financial and bank holding companies and other financial service providers; geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism, and/or military conflicts, including the war between Russia and Ukraine, Israel and Hamas and overall tension in the Middle East, and trade tensions, all of which could impact business and economic conditions in the United States and abroad; public health crises and pandemics and their effects on the economic and business environments in which we operate, including on our credit quality and business operations, as well as the impact on general economic and financial market conditions; cybersecurity threats and the cost of defending against them; climate change, including the enhanced regulatory, compliance, credit, and reputational risks and costs; natural disasters, earthquakes, fires, and severe weather; unanticipated regulatory or legal proceedings; and our ability to manage the risks involved in the foregoing. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company's 2023 Annual Report on Form 10-K filed with the SEC and available at the SEC’s Internet site (http://www.sec.gov).

The Company undertakes no obligation to revise or publicly release any revision or update to these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(Dollars in thousands)

 

2024

 

2023

 

2023

 

2023

 

2023

ASSETS

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,028,818

 

 

$

936,473

 

 

$

1,400,276

 

 

$

1,463,677

 

 

$

1,424,896

 

Interest-bearing time deposits with financial institutions

 

 

995

 

 

 

995

 

 

 

1,242

 

 

 

1,487

 

 

 

1,734

 

Investment securities held-to-maturity, at amortized cost, net of allowance for credit losses

 

 

1,720,481

 

 

 

1,729,541

 

 

 

1,737,866

 

 

 

1,737,604

 

 

 

1,749,030

 

Investment securities available-for-sale, at fair value

 

 

1,154,021

 

 

 

1,140,071

 

 

 

1,914,599

 

 

 

2,011,791

 

 

 

2,112,852

 

FHLB, FRB, and other stock

 

 

97,063

 

 

 

99,225

 

 

 

105,505

 

 

 

105,369

 

 

 

105,479

 

Loans held for sale, at lower of amortized cost or fair value

 

 

 

 

 

 

 

 

641

 

 

 

2,184

 

 

 

1,247

 

Loans held for investment

 

 

13,012,071

 

 

 

13,289,020

 

 

 

13,270,120

 

 

 

13,610,282

 

 

 

14,171,784

 

Allowance for credit losses

 

 

(192,340

)

 

 

(192,471

)

 

 

(188,098

)

 

 

(192,333

)

 

 

(195,388

)

Loans held for investment, net

 

 

12,819,731

 

 

 

13,096,549

 

 

 

13,082,022

 

 

 

13,417,949

 

 

 

13,976,396

 

Accrued interest receivable

 

 

67,642

 

 

 

68,516

 

 

 

68,131

 

 

 

70,093

 

 

 

69,660

 

Other real estate owned

 

 

248

 

 

 

248

 

 

 

450

 

 

 

270

 

 

 

5,499

 

Premises and equipment, net

 

 

54,789

 

 

 

56,676

 

 

 

59,396

 

 

 

61,527

 

 

 

63,450

 

Deferred income taxes, net

 

 

111,390

 

 

 

113,580

 

 

 

192,208

 

 

 

184,857

 

 

 

177,778

 

Bank owned life insurance

 

 

474,404

 

 

 

471,178

 

 

 

468,191

 

 

 

465,288

 

 

 

462,732

 

Intangible assets

 

 

40,449

 

 

 

43,285

 

 

 

46,307

 

 

 

49,362

 

 

 

52,417

 

Goodwill

 

 

901,312

 

 

 

901,312

 

 

 

901,312

 

 

 

901,312

 

 

 

901,312

 

Other assets

 

 

341,838

 

 

 

368,996

 

 

 

297,574

 

 

 

275,113

 

 

 

257,082

 

Total assets

 

$

18,813,181

 

 

$

19,026,645

 

 

$

20,275,720

 

 

$

20,747,883

 

 

$

21,361,564

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

Deposit accounts:

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing checking

 

$

4,997,636

 

 

$

4,932,817

 

 

$

5,782,305

 

 

$

5,895,975

 

 

$

6,209,104

 

Interest-bearing:

 

 

 

 

 

 

 

 

 

 

Checking

 

 

2,785,626

 

 

 

2,899,621

 

 

 

2,598,449

 

 

 

2,759,855

 

 

 

2,871,812

 

Money market/savings

 

 

5,037,636

 

 

 

4,868,442

 

 

 

4,873,582

 

 

 

4,801,288

 

 

 

5,128,857

 

Retail certificates of deposit

 

 

1,794,813

 

 

 

1,684,560

 

 

 

1,525,919

 

 

 

1,366,071

 

 

 

1,257,146

 

Wholesale/brokered certificates of deposit

 

 

572,117

 

 

 

610,186

 

 

 

1,227,192

 

 

 

1,716,686

 

 

 

1,740,891

 

Total interest-bearing

 

 

10,190,192

 

 

 

10,062,809

 

 

 

10,225,142

 

 

 

10,643,900

 

 

 

10,998,706

 

Total deposits

 

 

15,187,828

 

 

 

14,995,626

 

 

 

16,007,447

 

 

 

16,539,875

 

 

 

17,207,810

 

FHLB advances and other borrowings

 

 

200,000

 

 

 

600,000

 

 

 

800,000

 

 

 

800,000

 

 

 

800,000

 

Subordinated debentures

 

 

332,001

 

 

 

331,842

 

 

 

331,682

 

 

 

331,523

 

 

 

331,364

 

Accrued expenses and other liabilities

 

 

190,551

 

 

 

216,596

 

 

 

281,057

 

 

 

227,351

 

 

 

191,229

 

Total liabilities

 

 

15,910,380

 

 

 

16,144,064

 

 

 

17,420,186

 

 

 

17,898,749

 

 

 

18,530,403

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

941

 

 

 

938

 

 

 

937

 

 

 

937

 

 

 

937

 

Additional paid-in capital

 

 

2,378,171

 

 

 

2,377,131

 

 

 

2,371,941

 

 

 

2,366,639

 

 

 

2,361,830

 

Retained earnings

 

 

619,405

 

 

 

604,137

 

 

 

771,285

 

 

 

757,025

 

 

 

731,123

 

Accumulated other comprehensive loss

 

 

(95,716

)

 

 

(99,625

)

 

 

(288,629

)

 

 

(275,467

)

 

 

(262,729

)

Total stockholders' equity

 

 

2,902,801

 

 

 

2,882,581

 

 

 

2,855,534

 

 

 

2,849,134

 

 

 

2,831,161

 

Total liabilities and stockholders' equity

 

$

18,813,181

 

 

$

19,026,645

 

 

$

20,275,720

 

 

$

20,747,883

 

 

$

21,361,564

 

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

Three Months Ended

 

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands, except per share data)

 

2024

 

2023

 

2023

INTEREST INCOME

 

 

 

 

 

 

Loans

 

$

172,975

 

$

176,773

 

 

$

180,958

Investment securities and other interest-earning assets

 

 

40,456

 

 

 

40,419

 

 

 

40,385

 

Total interest income

 

 

213,431

 

 

 

217,192

 

 

 

221,343

 

INTEREST EXPENSE

 

 

 

 

 

 

Deposits

 

 

59,506

 

 

 

60,915

 

 

 

40,234

 

FHLB advances and other borrowings

 

 

4,237

 

 

 

4,927

 

 

 

7,938

 

Subordinated debentures

 

 

4,561

 

 

 

4,561

 

 

 

4,561

 

Total interest expense

 

 

68,304

 

 

 

70,403

 

 

 

52,733

 

Net interest income before provision for credit losses

 

 

145,127

 

 

 

146,789

 

 

 

168,610

 

Provision for credit losses

 

 

3,852

 

 

 

1,696

 

 

 

3,016

 

Net interest income after provision for credit losses

 

 

141,275

 

 

 

145,093

 

 

 

165,594

 

NONINTEREST INCOME

 

 

 

 

 

 

Loan servicing income

 

 

529

 

 

 

359

 

 

 

573

 

Service charges on deposit accounts

 

 

2,688

 

 

 

2,648

 

 

 

2,629

 

Other service fee income

 

 

336

 

 

 

322

 

 

 

296

 

Debit card interchange fee income

 

 

765

 

 

 

844

 

 

 

803

 

Earnings on bank owned life insurance

 

 

4,159

 

 

 

3,678

 

 

 

3,374

 

Net (loss) gain from sales of loans

 

 

 

 

 

(4

)

 

 

29

 

Net (loss) gain from sales of investment securities

 

 

 

 

 

(254,065

)

 

 

138

 

Trust custodial account fees

 

 

10,642

 

 

 

9,388

 

 

 

11,025

 

Escrow and exchange fees

 

 

696

 

 

 

1,074

 

 

 

1,058

 

Other income

 

 

5,959

 

 

 

1,562

 

 

 

1,261

 

Total noninterest income (loss)

 

 

25,774

 

 

 

(234,194

)

 

 

21,186

 

NONINTEREST EXPENSE

 

 

 

 

 

 

Compensation and benefits

 

 

54,130

 

 

 

51,907

 

 

 

54,293

 

Premises and occupancy

 

 

10,807

 

 

 

11,183

 

 

 

11,742

 

Data processing

 

 

7,511

 

 

 

7,409

 

 

 

7,265

 

Other real estate owned operations, net

 

 

46

 

 

 

103

 

 

 

108

 

FDIC insurance premiums

 

 

2,629

 

 

 

4,267

 

 

 

2,425

 

Legal and professional services

 

 

4,143

 

 

 

4,663

 

 

 

5,501

 

Marketing expense

 

 

1,558

 

 

 

1,728

 

 

 

1,838

 

Office expense

 

 

1,093

 

 

 

1,367

 

 

 

1,232

 

Loan expense

 

 

770

 

 

 

437

 

 

 

646

 

Deposit expense

 

 

12,665

 

 

 

11,152

 

 

 

8,436

 

Amortization of intangible assets

 

 

2,836

 

 

 

3,022

 

 

 

3,171

 

Other expense

 

 

4,445

 

 

 

5,532

 

 

 

4,695

 

Total noninterest expense

 

 

102,633

 

 

 

102,770

 

 

 

101,352

 

Net income (loss) before income taxes

 

 

64,416

 

 

 

(191,871

)

 

 

85,428

 

Income tax expense (benefit)

 

 

17,391

 

 

 

(56,495

)

 

 

22,866

 

Net income (loss)

 

$

47,025

 

 

$

(135,376

)

 

$

62,562

 

EARNINGS (LOSS) PER SHARE

 

 

 

 

 

 

Basic

 

$

0.49

 

 

$

(1.44

)

 

$

0.66

 

Diluted

 

$

0.49

 

 

$

(1.44

)

 

$

0.66

 

WEIGHTED AVERAGE SHARES OUTSTANDING

 

 

 

 

 

 

Basic

 

 

94,350,259

 

 

 

94,233,813

 

 

 

93,857,812

 

Diluted

 

 

94,477,355

 

 

 

94,334,878

 

 

 

94,182,522

 

SELECTED FINANCIAL DATA

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED AVERAGE BALANCES AND YIELD DATA

(Unaudited)

 

 

 

 

 

Three Months Ended

 

 

March 31, 2024

 

December 31, 2023

 

March 31, 2023

(Dollars in thousands)

 

Average

Balance

 

Interest

Income/

Expense

 

Average

Yield/

Cost

 

Average

Balance

 

Interest

Income/

Expense

 

Average

Yield/

Cost

 

Average

Balance

 

Interest

Income/

Expense

 

Average

Yield/

Cost

Assets

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,140,909

 

$

13,638

 

4.81

%

 

$

1,281,793

 

$

15,744

 

4.87

%

 

$

1,335,611

 

$

13,594

 

4.13

%

Investment securities

 

 

2,948,170

 

 

 

26,818

 

 

3.64

 

 

 

3,203,608

 

 

 

24,675

 

 

3.08

 

 

 

4,165,681

 

 

 

26,791

 

 

2.57

 

Loans receivable, net (1)(2)

 

 

13,149,038

 

 

 

172,975

 

 

5.29

 

 

 

13,257,767

 

 

 

176,773

 

 

5.29

 

 

 

14,394,775

 

 

 

180,958

 

 

5.10

 

Total interest-earning assets

 

 

17,238,117

 

 

 

213,431

 

 

4.98

 

 

 

17,743,168

 

 

 

217,192

 

 

4.86

 

 

 

19,896,067

 

 

 

221,343

 

 

4.51

 

Noninterest-earning assets

 

 

1,796,279

 

 

 

 

 

 

 

1,881,777

 

 

 

 

 

 

 

1,788,806

 

 

 

 

 

Total assets

 

$

19,034,396

 

 

 

 

 

 

$

19,624,945

 

 

 

 

 

 

$

21,684,873

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest checking

 

$

2,838,332

 

 

$

9,903

 

 

1.40

%

 

$

3,037,642

 

 

$

11,170

 

 

1.46

%

 

$

3,008,712

 

 

$

5,842

 

 

0.79

%

Money market

 

 

4,636,141

 

 

 

23,632

 

 

2.05

 

 

 

4,525,403

 

 

 

22,038

 

 

1.93

 

 

 

4,992,084

 

 

 

13,053

 

 

1.06

 

Savings

 

 

287,735

 

 

 

227

 

 

0.32

 

 

 

308,968

 

 

 

190

 

 

0.24

 

 

 

453,079

 

 

 

508

 

 

0.45

 

Retail certificates of deposit

 

 

1,727,728

 

 

 

19,075

 

 

4.44

 

 

 

1,604,507

 

 

 

16,758

 

 

4.14

 

 

 

1,206,966

 

 

 

7,775

 

 

2.61

 

Wholesale/brokered certificates of deposit

 

 

568,872

 

 

 

6,669

 

 

4.72

 

 

 

918,596

 

 

 

10,759

 

 

4.65

 

 

 

1,443,783

 

 

 

13,056

 

 

3.67

 

Total interest-bearing deposits

 

 

10,058,808

 

 

 

59,506

 

 

2.38

 

 

 

10,395,116

 

 

 

60,915

 

 

2.32

 

 

 

11,104,624

 

 

 

40,234

 

 

1.47

 

FHLB advances and other borrowings

 

 

518,879

 

 

 

4,237

 

 

3.28

 

 

 

610,913

 

 

 

4,927

 

 

3.20

 

 

 

987,817

 

 

 

7,938

 

 

3.26

 

Subordinated debentures

 

 

331,932

 

 

 

4,561

 

 

5.50

 

 

 

331,776

 

 

 

4,561

 

 

5.50

 

 

 

331,297

 

 

 

4,561

 

 

5.51

 

Total borrowings

 

 

850,811

 

 

 

8,798

 

 

4.15

 

 

 

942,689

 

 

 

9,488

 

 

4.01

 

 

 

1,319,114

 

 

 

12,499

 

 

3.83

 

Total interest-bearing liabilities

 

 

10,909,619

 

 

 

68,304

 

 

2.52

 

 

 

11,337,805

 

 

 

70,403

 

 

2.46

 

 

 

12,423,738

 

 

 

52,733

 

 

1.72

 

Noninterest-bearing deposits

 

 

4,996,939

 

 

 

 

 

 

 

5,141,585

 

 

 

 

 

 

 

6,219,818

 

 

 

 

 

Other liabilities

 

 

231,889

 

 

 

 

 

 

 

296,604

 

 

 

 

 

 

 

218,925

 

 

 

 

 

Total liabilities

 

 

16,138,447

 

 

 

 

 

 

 

16,775,994

 

 

 

 

 

 

 

18,862,481

 

 

 

 

 

Stockholders' equity

 

 

2,895,949

 

 

 

 

 

 

 

2,848,951

 

 

 

 

 

 

 

2,822,392

 

 

 

 

 

Total liabilities and equity

 

$

19,034,396

 

 

 

 

 

 

$

19,624,945

 

 

 

 

 

 

$

21,684,873

 

 

 

 

 

Net interest income

 

 

 

$

145,127

 

 

 

 

 

 

$

146,789

 

 

 

 

 

 

$

168,610

 

 

 

Net interest margin (3)

 

 

 

 

 

3.39

%

 

 

 

 

 

3.28

%

 

 

 

 

 

3.44

%

Cost of deposits (4)

 

 

 

 

 

1.59

 

 

 

 

 

 

1.56

 

 

 

 

 

 

0.94

 

Cost of funds (5)

 

 

 

 

 

1.73

 

 

 

 

 

 

1.69

 

 

 

 

 

 

1.15

 

Cost of non-maturity deposits (6)

 

 

 

 

 

1.06

 

 

 

 

 

 

1.02

 

 

 

 

 

 

0.54

 

Ratio of interest-earning assets to interest-bearing liabilities

 

158.01

 

 

 

 

 

 

156.50

 

 

 

 

 

 

160.15

 

______________________________

(1)

Average balance includes loans held for sale and nonperforming loans and is net of deferred loan origination fees/costs, discounts/premiums, and the basis adjustment of certain loans included in fair value hedging relationships.

(2)

Interest income includes net discount accretion of $2.1 million, $2.6 million, and $2.5 million for the three months ended March 31, 2024, December 31, 2023, and March 31, 2023, respectively.

(3)

Represents annualized net interest income divided by average interest-earning assets.

(4)

Represents annualized interest expense on deposits divided by the sum of average interest-bearing deposits and noninterest-bearing deposits.

(5)

Represents annualized total interest expense divided by the sum of average total interest-bearing liabilities and noninterest-bearing deposits.

(6)

Reconciliations of the non-GAAP measures are set forth at the end of this press release.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

LOAN PORTFOLIO COMPOSITION

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(Dollars in thousands)

 

2024

 

2023

 

2023

 

2023

 

2023

Investor loans secured by real estate

 

 

 

 

 

 

 

 

 

 

CRE non-owner-occupied

 

$

2,309,252

 

 

$

2,421,772

 

 

$

2,514,056

 

 

$

2,571,246

 

 

$

2,590,824

 

Multifamily

 

 

5,558,966

 

 

 

5,645,310

 

 

 

5,719,210

 

 

 

5,788,030

 

 

 

5,955,239

 

Construction and land

 

 

486,734

 

 

 

472,544

 

 

 

444,576

 

 

 

428,287

 

 

 

420,079

 

SBA secured by real estate (1)

 

 

35,206

 

 

 

36,400

 

 

 

37,754

 

 

 

38,876

 

 

 

40,669

 

Total investor loans secured by real estate

 

 

8,390,158

 

 

 

8,576,026

 

 

 

8,715,596

 

 

 

8,826,439

 

 

 

9,006,811

 

Business loans secured by real estate (2)

 

 

 

 

 

 

 

 

 

 

CRE owner-occupied

 

 

2,149,362

 

 

 

2,191,334

 

 

 

2,228,802

 

 

 

2,281,721

 

 

 

2,342,175

 

Franchise real estate secured

 

 

294,938

 

 

 

304,514

 

 

 

313,451

 

 

 

318,539

 

 

 

371,902

 

SBA secured by real estate (3)

 

 

48,426

 

 

 

50,741

 

 

 

53,668

 

 

 

57,084

 

 

 

60,527

 

Total business loans secured by real estate

 

 

2,492,726

 

 

 

2,546,589

 

 

 

2,595,921

 

 

 

2,657,344

 

 

 

2,774,604

 

Commercial loans (4)

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

1,774,487

 

 

 

1,790,608

 

 

 

1,588,771

 

 

 

1,744,763

 

 

 

1,967,128

 

Franchise non-real estate secured

 

 

301,895

 

 

 

319,721

 

 

 

335,053

 

 

 

351,944

 

 

 

388,722

 

SBA non-real estate secured

 

 

10,946

 

 

 

10,926

 

 

 

10,667

 

 

 

9,688

 

 

 

10,437

 

Total commercial loans

 

 

2,087,328

 

 

 

2,121,255

 

 

 

1,934,491

 

 

 

2,106,395

 

 

 

2,366,287

 

Retail loans

 

 

 

 

 

 

 

 

 

 

Single family residential (5)

 

 

72,353

 

 

 

72,752

 

 

 

70,984

 

 

 

70,993

 

 

 

70,913

 

Consumer

 

 

1,830

 

 

 

1,949

 

 

 

1,958

 

 

 

2,241

 

 

 

3,174

 

Total retail loans

 

 

74,183

 

 

 

74,701

 

 

 

72,942

 

 

 

73,234

 

 

 

74,087

 

Loans held for investment before basis adjustment (6)

 

 

13,044,395

 

 

 

13,318,571

 

 

 

13,318,950

 

 

 

13,663,412

 

 

 

14,221,789

 

Basis adjustment associated with fair value hedge (7)

 

 

(32,324

)

 

 

(29,551

)

 

 

(48,830

)

 

 

(53,130

)

 

 

(50,005

)

Loans held for investment

 

 

13,012,071

 

 

 

13,289,020

 

 

 

13,270,120

 

 

 

13,610,282

 

 

 

14,171,784

 

Allowance for credit losses for loans held for investment

 

 

(192,340

)

 

 

(192,471

)

 

 

(188,098

)

 

 

(192,333

)

 

 

(195,388

)

Loans held for investment, net

 

$

12,819,731

 

 

$

13,096,549

 

 

$

13,082,022

 

 

$

13,417,949

 

 

$

13,976,396

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for sale, at lower of cost or fair value

 

$

 

 

$

 

 

$

641

 

 

$

2,184

 

 

$

1,247

 

______________________________

(1)

SBA loans that are collateralized by hotel/motel real property.

(2)

Loans to businesses that are collateralized by real estate where the operating cash flow of the business is the primary source of repayment.

(3)

SBA loans that are collateralized by real property other than hotel/motel real property.

(4)

Loans to businesses where the operating cash flow of the business is the primary source of repayment.

(5)

Single family residential includes home equity lines of credit, as well as second trust deeds.

(6)

Includes net deferred origination costs (fees) of $797,000, $(74,000), $451,000, $142,000, and $(745,000), and unaccreted fair value net purchase discounts of $41.2 million, $43.3 million, $46.2 million, $48.4 million, and $52.2 million as of March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023, respectively.

(7)

Represents the basis adjustment associated with the application of hedge accounting on certain loans.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

ASSET QUALITY INFORMATION

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(Dollars in thousands)

 

2024

 

2023

 

2023

 

2023

 

2023

Asset quality

 

 

 

 

 

 

 

 

 

 

Nonperforming loans

 

$

63,806

 

 

$

24,817

 

 

$

25,458

 

 

$

17,151

 

 

$

24,872

 

Other real estate owned

 

 

248

 

 

 

248

 

 

 

450

 

 

 

270

 

 

 

5,499

 

Nonperforming assets

 

$

64,054

 

 

$

25,065

 

 

$

25,908

 

 

$

17,421

 

 

$

30,371

 

 

 

 

 

 

 

 

 

 

 

 

Total classified assets (1)

 

$

204,937

 

 

$

142,210

 

 

$

149,708

 

 

$

120,216

 

 

$

166,576

 

Allowance for credit losses

 

 

192,340

 

 

 

192,471

 

 

 

188,098

 

 

 

192,333

 

 

 

195,388

 

Allowance for credit losses as a percent of total nonperforming loans

 

 

301

%

 

 

776

%

 

 

739

%

 

 

1,121

%

 

 

786

%

Nonperforming loans as a percent of loans held for investment

 

 

0.49

 

 

 

0.19

 

 

 

0.19

 

 

 

0.13

 

 

 

0.18

 

Nonperforming assets as a percent of total assets

 

 

0.34

 

 

 

0.13

 

 

 

0.13

 

 

 

0.08

 

 

 

0.14

 

Classified loans to total loans held for investment

 

 

1.57

 

 

 

1.07

 

 

 

1.12

 

 

 

0.88

 

 

 

1.14

 

Classified assets to total assets

 

 

1.09

 

 

 

0.75

 

 

 

0.74

 

 

 

0.58

 

 

 

0.78

 

Net loan charge-offs for the quarter ended

 

$

6,419

 

 

$

3,902

 

 

$

6,752

 

 

$

3,665

 

 

$

3,284

 

Net loan charge-offs for the quarter to average total loans

 

 

0.05

%

 

 

0.03

%

 

 

0.05

%

 

 

0.03

%

 

 

0.02

%

Allowance for credit losses to loans held for investment (2)

 

 

1.48

 

 

 

1.45

 

 

 

1.42

 

 

 

1.41

 

 

 

1.38

 

Delinquent loans (3)

 

 

 

 

 

 

 

 

 

 

30 - 59 days

 

$

1,983

 

 

$

2,484

 

 

$

2,967

 

 

$

649

 

 

$

761

 

60 - 89 days

 

 

974

 

 

 

1,294

 

 

 

475

 

 

 

31

 

 

 

1,198

 

90+ days

 

 

9,221

 

 

 

6,276

 

 

 

7,484

 

 

 

30,271

 

 

 

18,884

 

Total delinquency

 

$

12,178

 

 

$

10,054

 

 

$

10,926

 

 

$

30,951

 

 

$

20,843

 

Delinquency as a percent of loans held for investment

 

 

0.09

%

 

 

0.08

%

 

 

0.08

%

 

 

0.23

%

 

 

0.15

%

______________________________

(1)

Includes substandard and doubtful loans, and other real estate owned.

(2)

At March 31, 2024, 25% of loans held for investment include a fair value net discount of $41.2 million, or 0.32% of loans held for investment. At December 31, 2023, 24% of loans held for investment include a fair value net discount of $43.3 million, or 0.33% of loans held for investment. At September 30, 2023, 24% of loans held for investment include a fair value net discount of $46.2 million, or 0.35% of loans held for investment. At June 30, 2023, 25% of loans held for investment include a fair value net discount of $48.4 million, or 0.35% of loans held for investment. At March 31, 2023, 26% of loans held for investment include a fair value net discount of $52.2 million, or 0.37% of loans held for investment.

(3)

Nonaccrual loans are included in this aging analysis based on the loan's past due status.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

NONACCRUAL LOANS (1)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

Collateral

Dependent

Loans

 

ACL

 

Non-

Collateral

Dependent

Loans

 

ACL

 

Total

Nonaccrual

Loans

 

Nonaccrual

Loans With

No ACL

March 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

Investor loans secured by real estate

 

 

 

 

 

 

 

 

 

 

 

 

CRE non-owner-occupied

 

$

24,008

 

$

2,657

 

$

 

$

 

$

24,008

 

$

17,499

SBA secured by real estate (2)

 

 

1,258

 

 

 

 

 

 

 

 

 

 

 

 

1,258

 

 

 

1,258

 

Total investor loans secured by real estate

 

 

25,266

 

 

 

2,657

 

 

 

 

 

 

 

 

 

25,266

 

 

 

18,757

 

Business loans secured by real estate (3)

 

 

 

 

 

 

 

 

 

 

 

 

CRE owner-occupied

 

 

12,602

 

 

 

 

 

 

 

 

 

 

 

 

12,602

 

 

 

12,602

 

Franchise real estate secured

 

 

 

 

 

 

 

 

292

 

 

 

43

 

 

 

292

 

 

 

 

Total business loans secured by real estate

 

 

12,602

 

 

 

 

 

 

292

 

 

 

43

 

 

 

12,894

 

 

 

12,602

 

Commercial loans (4)

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

1,380

 

 

 

 

 

 

22,161

 

 

 

1,521

 

 

 

23,541

 

 

 

13,541

 

Franchise non-real estate secured

 

 

 

 

 

 

 

 

1,559

 

 

 

231

 

 

 

1,559

 

 

 

 

SBA not secured by real estate

 

 

546

 

 

 

 

 

 

 

 

 

 

 

 

546

 

 

 

546

 

Total commercial loans

 

 

1,926

 

 

 

 

 

 

23,720

 

 

 

1,752

 

 

 

25,646

 

 

 

14,087

 

Total nonaccrual loans

 

$

39,794

 

 

$

2,657

 

 

$

24,012

 

 

$

1,795

 

 

$

63,806

 

 

$

45,446

 

______________________________

(1)

The ACL for nonaccrual loans is determined based on a discounted cash flow methodology unless the loan is considered collateral dependent. The ACL for collateral dependent loans is determined based on the estimated fair value of the underlying collateral.

(2)

SBA loans that are collateralized by hotel/motel real property.

(3)

Loans to businesses that are collateralized by real estate where the operating cash flow of the business is the primary source of repayment.

(4)

Loans to businesses where the operating cash flow of the business is the primary source of repayment.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

PAST DUE STATUS

(Unaudited)

 

 

 

 

 

Days Past Due (7)

 

 

(Dollars in thousands)

 

Current

 

30-59

 

60-89

 

90+

 

Total

March 31, 2024

 

 

 

 

 

 

 

 

 

 

Investor loans secured by real estate

 

 

 

 

 

 

 

 

 

 

CRE non-owner-occupied

 

$

2,308,852

 

$

 

$

 

$

400

 

$

2,309,252

Multifamily

 

 

5,558,966

 

 

 

 

 

 

 

 

 

 

 

 

5,558,966

 

Construction and land

 

 

486,734

 

 

 

 

 

 

 

 

 

 

 

 

486,734

 

SBA secured by real estate (1)

 

 

34,409

 

 

 

 

 

 

381

 

 

 

416

 

 

 

35,206

 

Total investor loans secured by real estate

 

 

8,388,961

 

 

 

 

 

 

381

 

 

 

816

 

 

 

8,390,158

 

Business loans secured by real estate (2)

 

 

 

 

 

 

 

 

 

 

CRE owner-occupied

 

 

2,144,734

 

 

 

 

 

 

 

 

 

4,628

 

 

 

2,149,362

 

Franchise real estate secured

 

 

294,646

 

 

 

 

 

 

 

 

 

292

 

 

 

294,938

 

SBA secured by real estate (3)

 

 

48,426

 

 

 

 

 

 

 

 

 

 

 

 

48,426

 

Total business loans secured by real estate

 

 

2,487,806

 

 

 

 

 

 

 

 

 

4,920

 

 

 

2,492,726

 

Commercial loans (4)

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

1,770,803

 

 

 

1,729

 

 

 

575

 

 

 

1,380

 

 

 

1,774,487

 

Franchise non-real estate secured

 

 

300,336

 

 

 

 

 

 

 

 

 

1,559

 

 

 

301,895

 

SBA not secured by real estate

 

 

10,146

 

 

 

254

 

 

 

 

 

 

546

 

 

 

10,946

 

Total commercial loans

 

 

2,081,285

 

 

 

1,983

 

 

 

575

 

 

 

3,485

 

 

 

2,087,328

 

Retail loans

 

 

 

 

 

 

 

 

 

 

Single family residential (5)

 

 

72,335

 

 

 

 

 

 

18

 

 

 

 

 

 

72,353

 

Consumer loans

 

 

1,830

 

 

 

 

 

 

 

 

 

 

 

 

1,830

 

Total retail loans

 

 

74,165

 

 

 

 

 

 

18

 

 

 

 

 

 

74,183

 

Loans held for investment before basis adjustment (6)

 

$

13,032,217

 

 

$

1,983

 

 

$

974

 

 

$

9,221

 

 

$

13,044,395

 

______________________________

(1)

SBA loans that are collateralized by hotel/motel real property.

(2)

Loans to businesses that are collateralized by real estate where the operating cash flow of the business is the primary source of repayment.

(3)

SBA loans that are collateralized by real property other than hotel/motel real property.

(4)

Loans to businesses where the operating cash flow of the business is the primary source of repayment.

(5)

Single family residential includes home equity lines of credit, as well as second trust deeds.

(6)

Excludes the basis adjustment of $32.3 million to the carrying amount of certain loans included in fair value hedging relationships.

(7)

Nonaccrual loans are included in this aging analysis based on the loan's past due status.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

CREDIT RISK GRADES

(Unaudited)

 

(Dollars in thousands)

 

Pass

 

Special

Mention

 

Substandard

 

Doubtful

 

Total Gross

Loans

March 31, 2024

 

 

 

 

 

 

 

 

 

 

Investor loans secured by real estate

 

 

 

 

 

 

 

 

 

 

CRE non-owner-occupied

 

$

2,271,367

 

$

6,699

 

$

31,186

 

$

 

$

2,309,252

Multifamily

 

 

5,511,977

 

 

 

29,879

 

 

 

17,110

 

 

 

 

 

 

5,558,966

 

Construction and land

 

 

486,303

 

 

 

431

 

 

 

 

 

 

 

 

 

486,734

 

SBA secured by real estate (1)

 

 

27,485

 

 

 

 

 

 

7,721

 

 

 

 

 

 

35,206

 

Total investor loans secured by real estate

 

 

8,297,132

 

 

 

37,009

 

 

 

56,017

 

 

 

 

 

 

8,390,158

 

Business loans secured by real estate (2)

 

 

 

 

 

 

 

 

 

 

CRE owner-occupied

 

 

2,056,124

 

 

 

49,227

 

 

 

44,011

 

 

 

 

 

 

2,149,362

 

Franchise real estate secured

 

 

287,593

 

 

 

1,597

 

 

 

5,748

 

 

 

 

 

 

294,938

 

SBA secured by real estate (3)

 

 

43,907

 

 

 

82

 

 

 

4,437

 

 

 

 

 

 

48,426

 

Total business loans secured by real estate

 

 

2,387,624

 

 

 

50,906

 

 

 

54,196

 

 

 

 

 

 

2,492,726

 

Commercial loans (4)

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

1,620,751

 

 

 

75,752

 

 

 

73,875

 

 

 

4,109

 

 

 

1,774,487

 

Franchise non-real estate secured

 

 

285,554

 

 

 

648

 

 

 

15,693

 

 

 

 

 

 

301,895

 

SBA not secured by real estate

 

 

10,147

 

 

 

 

 

 

799

 

 

 

 

 

 

10,946

 

Total commercial loans

 

 

1,916,452

 

 

 

76,400

 

 

 

90,367

 

 

 

4,109

 

 

 

2,087,328

 

Retail loans

 

 

 

 

 

 

 

 

 

 

Single family residential (5)

 

 

72,353

 

 

 

 

 

 

 

 

 

 

 

 

72,353

 

Consumer loans

 

 

1,830

 

 

 

 

 

 

 

 

 

 

 

 

1,830

 

Total retail loans

 

 

74,183

 

 

 

 

 

 

 

 

 

 

 

 

74,183

 

Loans held for investment before basis adjustment (6)

 

$

12,675,391

 

 

$

164,315

 

 

$

200,580

 

 

$

4,109

 

 

$

13,044,395

 

______________________________

(1)

SBA loans that are collateralized by hotel/motel real property.

(2)

Loans to businesses that are collateralized by real estate where the operating cash flow of the business is the primary source of repayment.

(3)

SBA loans that are collateralized by real property other than hotel/motel real property.

(4)

Loans to businesses where the operating cash flow of the business is the primary source of repayment.

(5)

Single family residential includes home equity lines of credit, as well as second trust deeds.

(6)

Excludes the basis adjustment of $32.3 million to the carrying amount of certain loans included in fair value hedging relationships.

GAAP TO NON-GAAP RECONCILIATIONS

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

(Unaudited)

 

The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these adjusted measures, this presentation may not be comparable to other similarly titled adjusted measures reported by other companies.

 

For periods presented below, return on average assets excluding net loss from investment securities repositioning and FDIC special assessment is a non-GAAP financial measure derived from GAAP based amounts. We calculate this figure by excluding the net loss from investment securities repositioning during the fourth quarter of 2023, the FDIC special assessment, and the related tax impact from net income. Management believes that the exclusion of such nonrecurring items from this financial measure provides useful information to gain an understanding of the operating results of our core business and a better comparison of financial performance.

 

 

 

Three Months Ended

 

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands)

 

2024

 

2023

 

2023

Net income (loss)

 

$

47,025

 

 

$

(135,376

)

 

$

62,562

 

Less: net loss from investment securities repositioning

 

 

 

 

 

(254,065

)

 

 

 

Add: FDIC special assessment

 

 

523

 

 

 

2,080

 

 

 

 

Less: tax adjustment (1)

 

 

148

 

 

 

72,387

 

 

 

 

Adjusted net income for average assets

 

$

47,400

 

 

$

48,382

 

 

$

62,562

 

 

 

 

 

 

 

 

Average assets

 

$

19,034,396

 

 

$

19,624,945

 

 

$

21,684,873

 

 

 

 

 

 

 

 

ROAA (annualized)

 

 

0.99

%

 

 

(2.76

)%

 

 

1.15

%

Adjusted ROAA (annualized)

 

 

1.00

%

 

 

0.99

%

 

 

1.15

%

______________________________

(1)

Adjusted by statutory tax rate

For periods presented below, return on average tangible common equity is a non-GAAP financial measure derived from GAAP-based amounts. We calculate this figure by excluding amortization of intangible assets expense from net income and excluding the average intangible assets and average goodwill from the average stockholders' equity during the periods indicated. Management believes that the exclusion of such items from this financial measure provides useful information to gain an understanding of the operating results of our core business. The adjusted net income, adjusted return on average equity, and adjusted return on average tangible common equity further exclude the nonrecurring items to provide a better comparison to the financial results of prior periods.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands)

 

2024

 

2023

 

2023

Net income (loss)

 

$

47,025

 

 

$

(135,376

)

 

$

62,562

 

Plus: amortization of intangible assets expense

 

 

2,836

 

 

 

3,022

 

 

 

3,171

 

Less: tax adjustment (1)

 

 

801

 

 

 

854

 

 

 

901

 

Net income (loss) for average tangible common equity

 

$

49,060

 

 

$

(133,208

)

 

$

64,832

 

Less: net loss from investment securities repositioning

 

 

 

 

 

(254,065

)

 

 

 

Add: FDIC special assessment

 

 

523

 

 

 

2,080

 

 

 

 

Less: tax adjustment (1)

 

 

148

 

 

 

72,387

 

 

 

 

Adjusted net income for average tangible common equity

 

$

49,435

 

 

$

50,550

 

 

$

64,832

 

 

 

 

 

 

 

 

Average stockholders' equity

 

$

2,895,949

 

 

$

2,848,951

 

 

$

2,822,392

 

Less: average intangible assets

 

 

42,134

 

 

 

45,050

 

 

 

54,310

 

Less: average goodwill

 

 

901,312

 

 

 

901,312

 

 

 

901,312

 

Average tangible common equity

 

 

1,952,503

 

 

 

1,902,589

 

 

 

1,866,770

 

Add: average after-tax realized loss from investment securities repositioning

 

 

 

 

 

(94,887

)

 

 

 

Adjusted average tangible common equity

 

$

1,952,503

 

 

$

1,807,702

 

 

$

1,866,770

 

 

 

 

 

 

 

 

ROAE (annualized)

 

 

6.50

%

 

 

(19.01

)%

 

 

8.87

%

Adjusted ROAE (annualized)

 

 

6.55

%

 

 

7.03

%

 

 

8.87

%

ROATCE (annualized)

 

 

10.05

%

 

 

(28.01

)%

 

 

13.89

%

Adjusted ROATCE (annualized)

 

 

10.13

%

 

 

11.19

%

 

 

13.89

%

_____________________________________

(1)

Adjusted by statutory tax rate.

The adjusted basic earnings per common share and adjusted diluted earnings per common share are non-GAAP financial measures derived from GAAP based amounts. We calculate the adjusted basic earnings per common share by dividing net income allocable to common shareholders, excluding the net loss from investment securities repositioning during the fourth quarter of 2023, the FDIC special assessment, and the related tax impact, by the weighted average number of common shares outstanding for the reporting period, excluding outstanding participating securities. The adjusted diluted earnings per common share is computed by dividing net income allocable to common shareholders, excluding the net loss from investment securities repositioning, FDIC special assessment, and the related tax impact, by the weighted average number of diluted common shares outstanding over the reporting period, adjusted to include the effect of potentially dilutive common shares based on adjusted net income, but excludes awards considered participating securities. The computation of diluted earnings per common share excludes the impact of the assumed exercise or issuance of securities that would have an anti-dilutive effect. Management believes that the exclusion of such items from this financial measure provides useful information to gain an understanding of the operating results of our core business and a better comparison of financial performance.

 

 

 

Three Months Ended

 

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands, except per share data)

 

2024

 

2023

 

2023

Basic

 

 

 

 

 

 

Net income (loss)

 

$

47,025

 

 

$

(135,376

)

 

$

62,562

 

Less: dividends and undistributed earnings allocated to participating securities

 

 

(779

)

 

 

(560

)

 

 

(823

)

Net income (loss) allocated to common stockholders

 

 

46,246

 

 

 

(135,936

)

 

 

61,739

 

Less: net loss from investment securities repositioning

 

 

 

 

 

(254,065

)

 

 

 

Add: FDIC special assessment

 

 

523

 

 

 

2,080

 

 

 

 

Less: tax adjustment (1)

 

 

148

 

 

 

72,387

 

 

 

 

Adjusted net income allocated to common stockholders

 

$

46,621

 

 

$

47,822

 

 

$

61,739

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

94,350,259

 

 

 

94,233,813

 

 

 

93,857,812

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share

 

$

0.49

 

 

$

(1.44

)

 

$

0.66

 

Adjusted basic earnings per common share

 

$

0.49

 

 

$

0.51

 

 

$

0.66

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

 

Net income (loss) allocated to common stockholders

 

$

46,246

 

 

$

(135,936

)

 

$

61,739

 

Less: net loss from investment securities repositioning

 

 

 

 

 

(254,065

)

 

 

 

Add: FDIC special assessment

 

 

523

 

 

 

2,080

 

 

 

 

Less: tax adjustment (1)

 

 

148

 

 

 

72,387

 

 

 

 

Adjusted net income allocated to common stockholders

 

$

46,621

 

 

$

47,822

 

 

$

61,739

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

94,350,259

 

 

 

94,233,813

 

 

 

93,857,812

 

Dilutive effect of share-based compensation

 

 

127,096

 

 

 

 

 

 

324,710

 

Weighted average diluted common shares

 

 

94,477,355

 

 

 

94,233,813

 

 

 

94,182,522

 

Dilutive effect of share-based compensation

 

 

 

 

 

101,065

 

 

 

 

Adjusted weighted average diluted common shares

 

 

94,477,355

 

 

 

94,334,878

 

 

 

94,182,522

 

 

 

 

 

 

 

 

Diluted earnings (loss) per common share

 

$

0.49

 

 

$

(1.44

)

 

$

0.66

 

Adjusted diluted earnings per common share

 

$

0.49

 

 

$

0.51

 

 

$

0.66

 

______________________________

(1)

Adjusted by statutory tax rate

Pre-provision net revenue is a non-GAAP financial measure derived from GAAP-based amounts. We calculate the pre-provision net revenue by excluding income tax and provision for credit losses from net income. The adjusted pre-provision net income further excludes the net loss from investment securities repositioning during the fourth quarter of 2023 and the FDIC special assessment to provide a better comparison of financial performance. Management believes that the exclusion of such items from this financial measure provides useful information to gain an understanding of the operating results of our core business and a better comparison to the financial results of prior periods.

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands)

 

2024

 

2023

 

2023

Interest income

 

$

213,431

 

 

$

217,192

 

 

$

221,343

 

Interest expense

 

 

68,304

 

 

 

70,403

 

 

 

52,733

 

Net interest income

 

 

145,127

 

 

 

146,789

 

 

 

168,610

 

Noninterest income (loss)

 

 

25,774

 

 

 

(234,194

)

 

 

21,186

 

Revenue (loss)

 

 

170,901

 

 

 

(87,405

)

 

 

189,796

 

Noninterest expense

 

 

102,633

 

 

 

102,770

 

 

 

101,352

 

Pre-provision net revenue (loss)

 

 

68,268

 

 

 

(190,175

)

 

 

88,444

 

Less: net loss from investment securities repositioning

 

 

 

 

 

(254,065

)

 

 

 

Add: FDIC special assessment

 

 

523

 

 

 

2,080

 

 

 

 

Adjusted pre-provision net revenue

 

$

68,791

 

 

$

65,970

 

 

$

88,444

 

 

 

 

 

 

 

 

Pre-provision net revenue (loss) (annualized)

 

$

273,072

 

 

$

(760,700

)

 

$

353,776

 

Adjusted pre-provision net revenue (annualized)

 

$

275,164

 

 

$

263,880

 

 

$

353,776

 

 

 

 

 

 

 

 

Average assets

 

$

19,034,396

 

 

$

19,624,945

 

 

$

21,684,873

 

 

 

 

 

 

 

 

Pre-provision net revenue (loss) to average assets

 

 

0.36

%

 

 

(0.97

)%

 

 

0.41

%

Pre-provision net revenue (loss) to average assets (annualized)

 

 

1.43

%

 

 

(3.88

)%

 

 

1.63

%

Adjusted pre-provision net revenue on average assets

 

 

0.36

%

 

 

0.34

%

 

 

0.41

%

Adjusted pre-provision net revenue on average assets (annualized)

 

 

1.45

%

 

 

1.34

%

 

 

1.63

%

Efficiency ratio is a non-GAAP financial measure derived from GAAP-based amounts. This figure represents the ratio of noninterest expense, less amortization of intangible assets and other real estate owned operations, where applicable, to the sum of net interest income before provision for credit losses and total noninterest income less (loss) gain from investment securities, (loss) gain from other real estate owned, and gain from debt extinguishment. The adjusted efficiency ratio further excludes the FDIC special assessment to provide a better comparison to the financial results of prior periods. Management believes that the exclusion of such items from this financial measure provides useful information to gain an understanding of the operating results of our core business.

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands)

 

2024

 

2023

 

2023

Total noninterest expense

 

$

102,633

 

$

102,770

 

$

101,352

Less: amortization of intangible assets

 

 

2,836

 

 

 

3,022

 

 

 

3,171

 

Less: other real estate owned operations, net

 

 

46

 

 

 

103

 

 

 

108

 

Adjusted noninterest expense

 

 

99,751

 

 

 

99,645

 

 

 

98,073

 

Less: FDIC special assessment

 

 

523

 

 

 

2,080

 

 

 

 

Adjusted noninterest expense excluding FDIC special assessment

 

$

99,228

 

 

$

97,565

 

 

$

98,073

 

 

 

 

 

 

 

 

Net interest income before provision for credit losses

 

$

145,127

 

 

$

146,789

 

 

$

168,610

 

Add: total noninterest income (loss)

 

 

25,774

 

 

 

(234,194

)

 

 

21,186

 

Less: net (loss) gain from sales of investment securities

 

 

 

 

 

(254,065

)

 

 

138

 

Less: net loss from other real estate owned

 

 

 

 

 

(24

)

 

 

 

Less: net gain from debt extinguishment

 

 

5,067

 

 

 

793

 

 

 

 

Adjusted revenue

 

$

165,834

 

 

$

165,891

 

 

$

189,658

 

 

 

 

 

 

 

 

Efficiency ratio

 

 

60.2

%

 

 

60.1

%

 

 

51.7

%

Adjusted efficiency ratio excluding FDIC special assessment

 

 

59.8

%

 

 

58.8

%

 

 

51.7

%

Tangible book value per share and tangible common equity to tangible assets (the “tangible common equity ratio”) are non-GAAP financial measures derived from GAAP-based amounts. We calculate tangible book value per share by dividing tangible common equity by common shares outstanding, as compared to book value per share, which we calculate by dividing common stockholders' equity by shares outstanding. We calculate the tangible common equity ratio by excluding the balance of intangible assets from common stockholders' equity and dividing by tangible assets. We believe that this information is consistent with the treatment by bank regulatory agencies, which excludes intangible assets from the calculation of risk-based capital ratios. Accordingly, we believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our capital position and ratios.

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(Dollars in thousands, except per share data)

 

2024

 

2023

 

2023

 

2023

 

2023

Total stockholders' equity

 

$

2,902,801

 

 

$

2,882,581

 

 

$

2,855,534

 

 

$

2,849,134

 

 

$

2,831,161

 

Less: intangible assets

 

 

941,761

 

 

 

944,597

 

 

 

947,619

 

 

 

950,674

 

 

 

953,729

 

Tangible common equity

 

$

1,961,040

 

 

$

1,937,984

 

 

$

1,907,915

 

 

$

1,898,460

 

 

$

1,877,432

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

18,813,181

 

 

$

19,026,645

 

 

$

20,275,720

 

 

$

20,747,883

 

 

$

21,361,564

 

Less: intangible assets

 

 

941,761

 

 

 

944,597

 

 

 

947,619

 

 

 

950,674

 

 

 

953,729

 

Tangible assets

 

$

17,871,420

 

 

$

18,082,048

 

 

$

19,328,101

 

 

$

19,797,209

 

 

$

20,407,835

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity ratio

 

 

10.97

%

 

 

10.72

%

 

 

9.87

%

 

 

9.59

%

 

 

9.20

%

 

 

 

 

 

 

 

 

 

 

 

Common shares issued and outstanding

 

 

96,459,966

 

 

 

95,860,092

 

 

 

95,900,847

 

 

 

95,906,217

 

 

 

95,714,777

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

30.09

 

 

$

30.07

 

 

$

29.78

 

 

$

29.71

 

 

$

29.58

 

Less: intangible book value per share

 

 

9.76

 

 

 

9.85

 

 

 

9.88

 

 

 

9.91

 

 

 

9.96

 

Tangible book value per share

 

$

20.33

 

 

$

20.22

 

 

$

19.89

 

 

$

19.79

 

 

$

19.61

 

Cost of non-maturity deposits is a non-GAAP financial measure derived from GAAP-based amounts. Cost of non-maturity deposits is calculated as the ratio of non-maturity deposit interest expense to average non-maturity deposits. We calculate non-maturity deposit interest expense by excluding interest expense for all certificates of deposit from total deposit expense, and we calculate average non-maturity deposits by excluding all certificates of deposit from total deposits. Management believes cost of non-maturity deposits is a useful measure to assess the Company's deposit base, including its potential volatility.

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands)

 

2024

 

2023

 

2023

Total deposits interest expense

 

$

59,506

 

 

$

60,915

 

 

$

40,234

 

Less: certificates of deposit interest expense

 

 

19,075

 

 

 

16,758

 

 

 

7,775

 

Less: brokered certificates of deposit interest expense

 

 

6,669

 

 

 

10,759

 

 

 

13,056

 

Non-maturity deposit expense

 

$

33,762

 

 

$

33,398

 

 

$

19,403

 

 

 

 

 

 

 

 

Total average deposits

 

$

15,055,747

 

 

$

15,536,701

 

 

$

17,324,442

 

Less: average certificates of deposit

 

 

1,727,728

 

 

 

1,604,507

 

 

 

1,206,966

 

Less: average brokered certificates of deposit

 

 

568,872

 

 

 

918,596

 

 

 

1,443,783

 

Average non-maturity deposits

 

$

12,759,147

 

 

$

13,013,598

 

 

$

14,673,693

 

 

 

 

 

 

 

 

Cost of non-maturity deposits

 

 

1.06

%

 

 

1.02

%

 

 

0.54

%

 

Contacts

Pacific Premier Bancorp, Inc.

Steven R. Gardner

Chairman, Chief Executive Officer, and President

(949) 864-8000

Ronald J. Nicolas, Jr.

Senior Executive Vice President and Chief Financial Officer

(949) 864-8000

Matthew J. Lazzaro

Senior Vice President and Director of Investor Relations

(949) 243-1082

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