SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): March 31, 2003
PACIFIC PREMIER BANCORP, INC.
(Exact Name of Registrant as Specified in its Charter)
0-22193
(Commission File No.)
DELAWARE 33-0743195
(State or Other Jurisdiction of Incorporation) (IRS Employer Identification No.)
1600 Sunflower Ave, Second Floor, Costa Mesa, CA 92626
(Address of Principal Executive Offices) (Zip Code)
(714) 431-4000
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, If Changed Since Last Report)
ITEM 5. OTHER EVENTS
Pacific Premier Bancorp, Inc., announced its unaudited results of operations for
the quarter ended March 31, 2003.
ITEM 7. EXHIBITS
1. Press Release dated April 28, 2003
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PACIFIC PREMIER BANCORP, INC.
Dated: April 28, 2003 By: /s/ STEVEN R. GARDNER
---------------------
Steven R. Gardner
President/CEO/COO
Exhibit
Pacific Premier Bancorp Inc. Announces First Quarter 2003 Results
COSTA MESA, Calif.--(BUSINESS WIRE)--April 28, 2003--Pacific
Premier Bancorp, Inc. (Nasdaq:PPBI) (the "Company") the holding
company of Pacific Premier Bank, F.S.B. (the "Bank"), announced its
results of operations for the quarter ended March 31, 2003.
The Company reported a first quarter net loss of $258 thousand, or
($0.19) per basic and diluted share, compared to earnings of $388
thousand, or $.29 per basic and $.17 per diluted share for the first
quarter of 2002. All diluted earnings per share amounts have been
adjusted to reflect stock option grants and warrants outstanding to
acquire shares of the Company.
Return on average assets (ROAA) for the quarter ended March 31,
2003 was (.43)% compared to .63% for the same quarter last year. The
Company's return on average equity (ROAE) for the quarter ended March
31, 2003 was (9.07)% compared to 18.76% for the quarter ended March
31, 2002.
Steven R. Gardner, President and Chief Executive Officer stated,
"The operating results for the past two quarters have been impacted by
a project initiated in the fourth quarter of 2002 by the Bank's newly
hired Internal Asset Review Manager, who has over 13 years of previous
examination experience with the Office of Thrift Supervision. The
project involved the re-evaluation of all loans 90 days or more past
due, which are concentrated in the Bank's residential loan portfolio,
and resulted in the Bank aggressively writing down or charging-off
various loans during the fourth quarter of 2002 and the first quarter
of 2003. This project was completed in April. We believe the Bank's
future level of charge-offs and corresponding loan loss provisions
will decrease significantly due to both the decreasing loan balances
within the residential portfolio and the overall reduction in
delinquent loans. Total delinquent loans have decreased from $12.3
million at September 31, 2002 to $5.6 million at March 31, 2003."
The Company's net interest income before provision for loan losses
decreased 26.5% to $2.1 million for the first quarter of 2003 as
compared to the same period in 2002. The decrease is due to the
combination of the decrease in average loan yield and average
investment yield of 107 basis points and 140 basis points,
respectively, partially offset by a reduction in the cost of funds by
46 basis points. The Participation Contract's discount accretion that
was included in interest income for the first quarter of 2003 was $731
thousand compared to $913 thousand for the same period a year ago. The
discount accretion and recognition of interest income was based on the
Company's projections of the expected performance of the residual
assets underlying the Participation Contract. However, the actual
performance of the residual assets and cash realized by the Company
could vary significantly from the Company's projections. The
assumptions utilized in the projections that could cause a substantial
change in the cash realized from the Participation Contract are the
estimated levels of future loan losses and the rate of prepayment
speeds estimated for the loans underlying the residual assets.
The provision for loan losses was $639 thousand for the quarter
ended March 31, 2003, compared to $334 thousand for the same period in
2002. The increase in provision is primarily due to charge-offs in the
amount $727 thousand of which $561 thousand related to the project to
re-evaluate all loans that are 90 days or more past due. The Bank's
Loss Mitigation Department continues collection efforts on loans
written-down and charged-off to maximize future potential recoveries.
Noninterest income was $639 thousand for the quarter ended March
31, 2003 compared to $640 thousand for the quarter ended March 31,
2002. Noninterest income for the quarter ended March 31, 2003 included
a gain on the sale of marketable securities of $143 thousand.
Noninterest expenses were $2.3 million for the quarter ended March
31, 2003, compared to $2.7 million in the quarter ended March 31,
2002. The $428 thousand decrease was primarily the result of certain
actions taken by management during 2002 to reduce operating expenses.
These actions included a reduction in staffing levels, the
consolidation and closure of two under-performing depository branches
and the relocation of the Company's corporate headquarters to Costa
Mesa, California.
At March 31, 2003, the Company had 59 full-time equivalent
employees, a reduction of 11 employees from the March 31, 2002 level
of 70 full-time equivalent employees.
Total assets of the Company were $232.4 million as of March 31,
2003 compared to $238.3 million as of December 31, 2002. Net loans
increased by $18.2 million in the quarter due primarily to increases
in originations of income property and residential construction loans
totaling $30.4 million. The proceeds from the sale of investment
securities were used to fund the originations as well as to repay $10
million of FHLB term borrowings that matured in the first quarter of
2003. Investment securities decreased by $27.8 million for the quarter
ended March 31, 2003.
The allowance for loan losses, including both general and specific
reserves, totaled $2.7 million as of March 31, 2003 and $2.8 million
as of December 31, 2002. The allowance for loan losses as a percent of
non-accrual loans was 56.2% and 54.5% as of March 31, 2003 and
December 31, 2002, respectively. Non-accrual loans totaled $4.9
million at March 31, 2003 and $5.2 million as of December 31, 2002.
Real estate owned was reduced to $1.3 million at March 31, 2003 from
$2.4 million at December 31, 2002.
Total deposits increased by $5.5 million to $196.7 million at
March 31, 2003, compared to $191.2 million of deposits at December 31,
2002. This is the first quarterly increase since the Bank began to
intentionally reduce its deposits in early 2001. In the first quarter
of 2003 the Bank began to realize improved core deposit growth due
primarily to its strategy emphasizing the development of relationships
with both small business owners and consumers to increase checking and
money market accounts. During the quarter, core deposits increased by
$2.2 million and cost of deposits decreased by 24 basis points to
2.63%.
"The Retail Branch Banking group remains focused on increasing
core deposits and management has taken steps to continue the expansion
of our product offerings, which will, in turn, increase the number of
customer relationships and increase fee income. Recently, the Bank
hired a new manager for our Seal Beach location, approved the
implementation of an Overdraft Privilege Program, partnered with
Merchant E-Solutions and Automatic Data Processing (ADP) to offer
their services to our depositors and installed a new data processing
platform within our three branches. In the coming quarters, we plan on
introducing additional products and services to attract and retain
core depositors." stated Mr. Gardner.
Other borrowings totaled $23.0 million as of March 31, 2003 with
an average cost of 8.37%. Other borrowings are comprised of the
Company's Senior Secured Note of $11.5 million net of original issue
discount, Subordinated Debt of $1.5 million and the Bank's $10.0
million FHLB Advances. There were $32.9 million of other borrowings as
of December 31, 2002.
The Company's total cost of funds for the quarter ended March 31,
2003 was 3.45% compared to 3.72% for the quarter ended December 31,
2002 and 3.91% for the quarter ended March 31, 2002.
The Bank's core and total risk-based capital ratios at March 31,
2003 were 6.98%, and 10.87%, respectively. The minimum ratios for
well-capitalized banks are 6% and 10% for core capital and risk-based
capital, respectively.
The Company is a savings and loan holding company that owns 100%
of the capital stock of the Bank, the Company's principal operating
subsidiary. The Bank is a federally chartered stock savings bank whose
primary business includes branch banking, income property and
construction lending. The Bank currently operates three full-service
branches located in Orange and San Bernardino Counties, in Southern
California.
Forward-Looking Comments
The statements contained in this release 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. There can be no assurance that
future developments affecting the Company will be the same as those
anticipated by management.
Actual results may differ from those projected in the
forward-looking statements. These forward-looking statements involve
risks and uncertainties. These include, but are not limited to, the
following risks:
Changes in the performance of the financial markets;
Changes in the demand for and market acceptance of the Company's
products and services;
Changes in general economic conditions including interest rates,
presence of competitors with greater financial resources, and the
impact of competitive products and pricing;
The effect of the Company's policies;
The continued availability of adequate funding sources;
Differences in actual prepayment rates and credit losses as
compared to prepayment rates and credit losses assumed by the Company
for purposes of its valuation of mortgage derivative securities (the
"Participation Contract");
The effect of changes in market interest rates on the spread
between the coupon rate and the pass through rate and on the discount
rate assumed by the Company in its valuation of its Participation
Contract;
And various legal, regulatory and litigation risks.
Annual Meeting
The Board of Directors has established April 1, 2003, as the
record date for determining Stockholders entitled to receive notice
of, to attend and to vote at, the Annual Meeting or any postponement
or adjournments thereof. Only record holders of Common Stock of the
Company at the close of business on such record date will be entitled
to vote at the Annual Meeting or any postponement or adjournment
thereof. The meeting will be held on Thursday May 29, 2003, at 10:00
a.m., Pacific Time, at the corporate headquarters of Pacific Premier
Bank, 1600 Sunflower Avenue, 2nd Floor, Costa Mesa, California, 92626.
PACIFIC PREMIER BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
UNAUDITED (In thousands)
March 31, Dec. 31,
ASSETS 2003 2002
Cash and due from banks $7,766 $3,590
Investment Securities Available for Sale 28,465 58,243
Investment Securities Held to Maturity 1,966 --
Loans held for sale 1,562 1,866
Loans held for investment, net of allowance for
loan losses of
$2,747 in 2003 and $2,835 in 2002, respectively 174,907 156,365
Accrued interest receivable 1,100 1,140
Foreclosed real estate 1,298 2,427
Premises and equipment 5,520 5,411
Deferred income taxes 2,350 2,350
Participation Contract 5,356 4,869
Other assets 2,146 2,017
TOTAL ASSETS $232,436 $238,278
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposit accounts $196,695 $191,170
Other borrowings 10,000 20,000
Notes Payable 11,475 11,440
Subordinated debentures 1,500 1,500
Accrued expenses and other liabilities 1,788 2,545
Total liabilities 221,458 226,655
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value 13 13
Additional paid-in capital 43,328 43,328
Retained earnings (32,344) (32,086)
Accumulated adjustments to stockholders' equity (19) 368
Total stockholders' equity 10,978 11,623
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $232,436 $238,278
PACIFIC PREMIER BANCORP AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
UNAUDITED (In thousands, except per share data)
Three Months Ended
March 31, March 31,
INTEREST INCOME: 2003 2002
Loans $2,892 $3,675
Other interest-earning assets 1,137 1,408
Total interest income 4,029 5,083
INTEREST EXPENSE:
Interest-bearing deposits 1,291 1,796
Other borrowings 154 36
Notes payable 476 400
Subordinated debentures 53 53
Total interest expense 1,974 2,285
NET INTEREST INCOME 2,055 2,798
PROVISION FOR LOAN LOSSES 639 334
NET INTEREST INCOME AFTER PROVISION FOR LOAN
LOSSES 1,416 2,464
NONINTEREST INCOME:
Loan servicing fee income 164 276
Bank and other fee income 101 144
Net gain (loss) on loan sales -- --
Net gain (loss) from investment securities 143 (9)
Other income 231 229
Total noninterest income 639 640
NONINTEREST EXPENSE:
Compensation and benefits 1,144 1,117
Premises and occupancy 347 525
Data processing 99 161
Net loss (gain) on foreclosed real estate 94 (73)
Other expense 629 1,011
Total noninterest expense 2,313 2,741
NET (LOSS) INCOME FROM OPERATIONS (258) 363
PROVISION (BENEFIT) FOR INCOME TAXES -- (25)
NET (LOSS) INCOME FROM OPERATIONS ($258) $388
Basic Average Shares Outstanding 1,333,572 1,333,572
Basic (Loss) Earnings per Share ($0.19) $0.29
Diluted Average Shares Outstanding 2,543,028 2,304,201
Diluted (Loss) Earnings per Share ($0.19) $0.17
PACIFIC PREMIER BANCORP AND SUBSIDIARIES
Statistical Information
UNAUDITED (In thousands)
As of As of As of
Mar 31, Mar 31, Dec. 31,
2003 2002 2002
Asset Quality:
Non-accrual loans $4,889 $13,678 $5,205
Real estate owned $1,298 $2,841 $2,427
Net Charge offs for the quarter ended $727 $590 $974
Allowance for loan losses $2,747 $4,108 $2,835
Charge offs to average loans, annualized 1.78% 1.31% 2.77%
Non-accrual loans to total loans 2.73% 7.89% 3.23%
Non-accrual loans to total assets 2.10% 5.31% 2.18%
Allowance for credit losses to total
loans 1.53% 2.37% 1.76%
Allowance for credit losses to non-
accrual loans 56.19% 30.03% 54.47%
Average Balance Sheet: for the Quarter
ended
Total assets $241,873 $245,169 $238,372
Loans $163,377 $180,395 $140,829
Deposits $196,242 $218,381 $191,469
Borrowings $19,631 $4,667 $20,044
Notes payable & Subordinated notes $12,957 $10,913 $12,922
Share Data:
Basic Book Value $8.23 $6.31 $8.72
Diluted Book Value $4.25 $3.36 $4.60
Closing Stock Price $6.00 $3.19 $5.31
3 month 3 month
ended ended
Mar 31, Mar 31,
2003 2002
Profitability and Productivity:
Return on average assets (0.43%) 0.63%
Return on average equity (9.07%) 18.76%
Net interest margin 3.67% 4.82%
Non-interest expense to total assets 3.98% 4.25%
Efficiency ratio 85.86% 79.73%
Pacific Premier Bank Capital Ratios:
Core Capital Ratio 6.98% 6.32%
Risk-based Capital Ratio 10.87% 13.06%
CONTACT: Pacific Premier Bancorp, Inc., Costa Mesa
Steven R. Gardner or John Shindler, 714/431-4000