IRVINE, Calif.--(BUSINESS WIRE)--Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) (the “Company”), the holding company of Pacific Premier Bank (the “Bank”), reported net income for the third quarter of 2017 of $20.2 million, or $0.50 per diluted share, compared with net income of $14.2 million, or $0.35 per diluted share, for the second quarter of 2017 and net income of $9.2 million, or $0.33 per diluted share, for the third quarter of 2016. Net income for the third and second quarters of 2017 include $503,000 and $10.1 million of merger-related expense, respectively.
For the three months ended September 30, 2017, the Company’s return on average assets was 1.26% and return on average tangible common equity was 15.02%. For the three months ended June 30, 2017, the Company's return on average assets was 0.89% and the return on average tangible common equity was 11.33%. For the three months ended September 30, 2016, the Company's return on average assets was 1.00% and its return on average tangible common equity was 11.35%. Total assets as of September 30, 2017 were $6.5 billion compared with $6.4 billion at June 30, 2017 and $3.8 billion at September 30, 2016.
Steven R. Gardner, Chairman, President and Chief Executive Officer of the Company, commented on the results, “Consistent with the growth of our Company, we generated a solid level of net income and earnings per share in the third quarter. We continually strive to improve in all areas of operations and achieve what we believe are the standards of a high performing financial institution. As a result, we are generating attractive returns on assets and tangible common equity, while continuing to enhance and strengthen our risk management framework.
“We had a strong quarter of quality balance sheet growth. We generated $558 million in loan commitments, with balanced production across all of our major lending areas. We also had good inflows of core deposits, which is helping us to manage our deposit costs in a rising rate environment. The team we added in the Heritage Oaks Bancorp acquisition is performing well, and we are seeing good contributions to both loan and deposit growth coming from our Central Coast markets.
“We are efficiently moving forward with our acquisition of Plaza Bancorp, having received all regulatory and shareholder approvals, and expect to close the transaction on November 1, 2017. We are excited about the clients and bankers that we will be adding through this acquisition, as well as the improved opportunities for business development in the Los Angeles area. As with our previous acquisitions, we believe that Plaza Bancorp will have a positive impact on the value of our franchise and enhance our ability to continue delivering positive results for our shareholders in the future,” said Mr. Gardner.
FINANCIAL HIGHLIGHTS
| Three Months Ended | ||||||||||||
| September 30, | June 30, | September 30, | ||||||||||
| 2017 | 2017 | 2016 | ||||||||||
| Financial Highlights | (dollars in thousands, except per share data) | |||||||||||
| Net income | $ | 20,232 | $ | 14,176 | $ | 9,227 | ||||||
| Diluted earnings per share | $ | 0.50 | $ | 0.35 | $ | 0.33 | ||||||
| Return on average assets | 1.26 | % | 0.89 | % | 1.00 | % | ||||||
| Return on average tangible common equity (1) | 15.02 | % | 11.33 | % | 11.35 | % | ||||||
| Net interest margin | 4.34 | % | 4.40 | % | 4.41 | % | ||||||
| Cost of deposits | 0.28 | % | 0.25 | % | 0.28 | % | ||||||
| Efficiency ratio (2) | 52.1 | % | 52.3 | % | 57.0 | % | ||||||
| Total assets | $ | 6,532,334 | $ | 6,440,631 | $ | 3,754,831 | ||||||
| Tangible book value per share (1) | $ | 14.35 | $ | 13.83 | $ | 12.22 | ||||||
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(1) A reconciliation of the non-GAAP measures of average tangible common equity and tangible book value per share to the GAAP measures of common stockholders' equity and book value are set forth at the end of this press release. |
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(2) Represents the ratio of noninterest expense less other real estate owned operations, core deposit intangible amortization and merger-related expense to the sum of net interest income before provision for loan losses and total noninterest income, less gains/(loss) on sale of securities and other-than-temporary impairment recovery/(loss) on investment securities. |
INCOME STATEMENT HIGHLIGHTS
Net Interest Income and Net Interest Margin
Net interest income totaled $64.3 million in the third quarter of 2017, an increase of $953,000, or 1.5%, from the second quarter of 2017. The increase in net interest income was primarily due to an increase in average loan balances and the impact of higher loan yields, driven principally by the Federal Reserve's June rate hike, partially offset by lower accretion income and prepayment fees, as well as higher deposit costs.
Our net interest margin decreased to 4.34% from 4.40% in the prior quarter, entirely driven by lower accretion income of $2.9 million, compared to $4.2 million of accretion income in the second quarter of 2017. Excluding the impact of accretion, our net interest margin expanded 5 basis points to 4.14%, compared with 4.09% in the second quarter as portfolio loan yields expanded by 7 basis points overall. Partially offsetting these favorable increases were higher deposit interest costs of 3 basis points to 28 basis points from 25 basis points, as well as a decrease in prepayment fees of approximately $400,000.
Net interest income for the third quarter of 2017 increased $25.3 million, or 65%, compared to the third quarter of 2016. The increase was primarily related to an increase in average interest-earning assets of $2.4 billion, which resulted primarily from our organic loan growth since the end of the third quarter of 2016 and our acquisition of Heritage Oaks Bancorp ("Heritage Oaks") during the second quarter of 2017.
Provision for Loan Losses
A provision for loan losses of $2.0 million was recorded for the third quarter of 2017, compared with a provision for loan losses of $1.9 million for the quarter ending June 30, 2017. The small increase in our provision for loan losses was primarily due to organic loan growth.
| PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||
| CONSOLIDATED AVERAGE BALANCES AND YIELD DATA | |||||||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||
| September 30, 2017 | June 30, 2017 | September 30, 2016 | |||||||||||||||||||||||||||||||
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| Assets | (dollars in thousands) | ||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 167,745 | $ | 265 | 0.63 | % | $ | 133,127 | $ | 160 | 0.48 | % | $ | 201,140 | $ | 232 | 0.46 | % | |||||||||||||||
| Investment securities | 765,537 | 4,981 | 2.60 | 829,380 | 5,019 | 2.42 | 316,253 | 1,710 | 2.16 | ||||||||||||||||||||||||
| Loans receivable, net (1) | 4,937,979 | 64,915 | 5.22 | 4,815,612 | 63,554 | 5.29 | 2,998,153 | 40,487 | 5.37 | ||||||||||||||||||||||||
| Total interest-earning assets | $ | 5,871,261 | $ | 70,161 | 4.74 | % | $ | 5,778,119 | $ | 68,733 | 4.77 | % | $ | 3,515,546 | $ | 42,429 | 4.80 | % | |||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||
| Interest-bearing deposits | $ | 3,147,320 | $ | 3,557 | 0.45 | % | $ | 3,107,842 | $ | 3,081 | 0.40 | % | $ | 1,921,740 | $ | 2,136 | 0.44 | % | |||||||||||||||
| Borrowings | 399,206 | 2,313 | 2.30 | 464,845 | 2,314 | 2.00 | 166,881 | 1,284 | 3.06 | ||||||||||||||||||||||||
| Total interest-bearing liabilities | $ | 3,546,526 | $ | 5,870 | 0.66 | % | $ | 3,572,687 | $ | 5,395 | 0.61 | % | $ | 2,088,621 | $ | 3,420 | 0.65 | % | |||||||||||||||
| Noninterest-bearing deposits | $ | 1,860,177 | $ | 1,802,752 | $ | 1,134,318 | |||||||||||||||||||||||||||
| Net interest income | $ | 64,291 | $ | 63,338 | $ | 39,009 | |||||||||||||||||||||||||||
| Net interest margin (2) | 4.34 | % | 4.40 | % | 4.41 | % | |||||||||||||||||||||||||||
| (1) Average balance includes nonperforming loans and is net of deferred loan origination fees/costs and unamortized discounts/premiums. |
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(2) Represents net interest income divided by average interest-earning assets. |
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Noninterest Income
Noninterest income for the third quarter of 2017 was $8.2 million, a decrease of $538,000, or 6%, from the second quarter of 2017. The decrease from the second quarter of 2017 was primarily related to a $1.2 million decrease in net gain from the sale of investment securities, partially offset by a $552,000 increase in net gain from the sales of loans as well as increases in loan servicing and deposit fees.
During the quarter, the Bank sold $31.9 million of Small Business Administration ("SBA") loans for a gain of $3.1 million, compared with $29.2 million of SBA loans sold and a gain of $2.9 million in the prior quarter. Additionally, the Bank sold lower yielding one-to-four family loans during the quarter totaling $37.0 million for a gain of $386,000.
Noninterest income for the third quarter of 2017 increased $2.3 million, or 38%, compared to the third quarter of 2016. The increase from the third quarter of 2016 was primarily related to a $869,000 increase in other income, $695,000 increase in deposit fees, a $384,000 increase in net gain from the sale of investment securities, and a $317,000 increase in net gain from sales of loans.
| Three Months Ended | |||||||||||
| September 30, | June 30, | September 30, | |||||||||
| 2017 | 2017 | 2016 | |||||||||
| NONINTEREST INCOME | (dollars in thousands) | ||||||||||
| Loan servicing fees | $ | 276 | $ | 143 | $ | 288 | |||||
| Deposit fees | 1,117 | 986 | 422 | ||||||||
| Net gain from sales of loans | 3,439 | 2,887 | 3,122 | ||||||||
| Net gain from sales of investment securities | 896 | 2,093 | 512 | ||||||||
| Net gain from other real estate owned | — | 94 | — | ||||||||
| Other income | 2,493 | 2,556 | 1,624 | ||||||||
| Total noninterest income | $ | 8,221 | $ | 8,759 | $ | 5,968 | |||||
Noninterest Expense
Noninterest expense totaled $39.6 million for the third quarter of 2017, a decrease of $8.9 million, or 18%, compared with the second quarter of 2017. The decrease was primarily driven by merger-related expense of $503,000 in the third quarter of 2017 compared with $10.1 million for the second quarter of 2017. Excluding the merger-related expense, our noninterest expense increased to $39.1 million compared with $38.4 million for the second quarter of 2017. The increase was primarily driven by an increase in legal, audit and professional expenses of $697,000, a $409,000 increase in other expense, due primarily to CRA related charitable contributions, and a $283,000 increase in premises and occupancy expense, as we expand our facilities to accommodate our growth. These increases were partially offset by a decrease of $439,000 in FDIC insurance premiums, as we adjusted the accrual following the Heritage Oaks acquisition, and a $357,000 decrease in data processing expense, as the Company realized cost savings upon converting the Heritage Oaks systems early in the third quarter of 2017.
In comparison to the third quarter of 2016, noninterest expense grew by $13.8 million, or 53%. The increase in expense was primarily related to the additional costs from the operations, personnel and branches retained from the acquisition of Heritage Oaks, combined with our continued investment in personnel and systems to support our organic growth.
| Three Months Ended | |||||||||||
| September 30, | June 30, | September 30, | |||||||||
| 2017 | 2017 | 2016 | |||||||||
| NONINTEREST EXPENSE | (dollars in thousands) | ||||||||||
| Compensation and benefits | $ | 21,707 | $ | 21,625 | $ | 14,181 | |||||
| Premises and occupancy | 4,016 | 3,733 | 2,576 | ||||||||
| Data processing | 2,082 | 2,439 | 1,223 | ||||||||
| Other real estate owned operations, net | 3 | 44 | 5 | ||||||||
| FDIC insurance premiums | 379 | 818 | 442 | ||||||||
| Legal, audit and professional expense | 1,978 | 1,281 | 737 | ||||||||
| Marketing expense | 1,248 | 1,006 | 1,683 | ||||||||
| Office, telecommunications and postage expense | 835 | 922 | 612 | ||||||||
| Loan expense | 1,017 | 1,068 | 534 | ||||||||
| Deposit expense | 1,655 | 1,663 | 1,315 | ||||||||
| Merger-related expense | 503 | 10,117 | — | ||||||||
| CDI amortization | 1,761 | 1,761 | 525 | ||||||||
| Other expense | 2,428 | 2,019 | 2,027 | ||||||||
| Total noninterest expense | $ | 39,612 | $ | 48,496 | $ | 25,860 | |||||
Income Tax
For the third quarter of 2017, our effective tax rate was 34.4%, compared with 34.7% for the second quarter of 2017 and 38.9% for the third quarter of 2016. The quarter's rate was favorably impacted by a $1.1 million true-up with the filing of the 2016 tax return and, to a lesser extent, the tax rate deductibility of equity stock expense related to the adoption of ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Accounting.
BALANCE SHEET HIGHLIGHTS
Loans
Loans held for investment totaled $5.0 billion at September 30, 2017, an increase of $151 million, or 3%, from June 30, 2017, and an increase of $1.9 billion, or 62%, from September 30, 2016. The $151 million increase from the current quarter compared to the prior quarter was the result of business loans growing $159 million and real estate loans falling $8 million. The total end of period weighted average interest rate on loans, excluding fees and discounts, at September 30, 2017 was 4.81%, compared to 4.79% at June 30, 2017 and 4.80% at September 30, 2016.
Loans held for sale increased $37 million from the prior quarter as a result of the inclusion of $32 million of low yielding one-to-four family loans earmarked for potential sale in fourth quarter.
Loan activity during the third quarter of 2017 included new organic loan commitments of $558 million, compared with $492 million in the second quarter of 2017 and $322 million in the third quarter of 2016. The $558 million of new organic loan commitments during the third quarter of 2017 included $107 million of commercial and industrial loans, $86.9 million of construction loans, $85.4 million of franchise loans, $83.9 million of commercial real estate owner occupied loans, $73.0 million of multifamily loans, $49.2 million of SBA loans and $47.4 million of commercial real estate non-owner occupied loans.
At September 30, 2017, our ratio of loans held for investment to total deposits was 99.8%, compared with 98.2% and 101.0% at June 30, 2017 and September 30, 2016, respectively.
| September 30, | June 30, | September 30, | ||||||||||
| 2017 | 2017 | 2016 | ||||||||||
| (dollars in thousands) | ||||||||||||
| Business loans: | ||||||||||||
| Commercial and industrial | $ | 763,091 | $ | 733,852 | $ | 537,809 | ||||||
| Franchise | 626,508 | 565,415 | 431,618 | |||||||||
| Commercial owner occupied | 805,137 | 729,476 | 460,068 | |||||||||
| SBA | 107,211 | 101,384 | 83,186 | |||||||||
| Agriculture | 86,466 | 98,842 | — | |||||||||
| Total business loans | 2,388,413 | 2,228,969 | 1,512,681 | |||||||||
| Real estate loans: | ||||||||||||
| Commercial non-owner occupied | 1,098,995 | 1,095,184 | 527,412 | |||||||||
| Multi-family | 797,370 | 746,547 | 689,813 | |||||||||
| One-to-four family | 246,248 | 322,048 | 101,377 | |||||||||
| Construction | 301,334 | 289,600 | 231,098 | |||||||||
| Farmland | 140,581 | 136,587 | — | |||||||||
| Land | 30,719 | 31,799 | 18,472 | |||||||||
| Other loans | 6,228 | 7,309 | 5,678 | |||||||||
| Total real estate loans | 2,621,475 | 2,629,074 | 1,573,850 | |||||||||
| Gross loans held for investment | 5,009,888 | 4,858,043 | 3,086,531 | |||||||||
| Plus: Deferred loan origination costs/(fees) and premiums/(discounts), net | (571 | ) | 568 | 4,308 | ||||||||
| Loans held for investment | 5,009,317 | 4,858,611 | 3,090,839 | |||||||||
| Allowance for loan losses | (27,143 | ) | (25,055 | ) | (21,843 | ) | ||||||
| Loans held for investment, net | $ | 4,982,174 | $ | 4,833,556 | $ | 3,068,996 | ||||||
| Loans held for sale, at lower of cost or fair value | $ | 44,343 | $ | 6,840 | $ | 9,009 | ||||||
Asset Quality and Allowance for Loan Losses
At September 30, 2017, our allowance for loan losses was $27.1 million, an increase of $2.1 million from June 30, 2017, driven principally by our organic loan growth. Loan loss provision for the quarter was $2.0 million, while net recoveries were $38,000.
The ratio of allowance for loan losses to loans held for investment at September 30, 2017 was 0.54%, compared to 0.52% and 0.71% at June 30, 2017 and September 30, 2016, respectively. Under the guidance of ASC 820: Fair Value Measurements and Disclosures, the fair value discount on loans acquired through total bank acquisitions was $21.6 million, or 0.43% of total loans held for investment, as of September 30, 2017, compared to $25.2 million, or 0.52% of total loans held for investment, as of June 30, 2017.
Nonperforming assets totaled $887,000, or 0.01% of total assets, at September 30, 2017, an increase from $767,000, or 0.01% of total assets, at June 30, 2017. During the third quarter of 2017, nonperforming loans increased $120,000 to $515,000, and other real estate owned remained unchanged at $372,000. Loan delinquencies increased to $3.6 million, or 0.07% of loans held for investment, compared to $3.0 million, or 0.06% of loans held for investment, at June 30, 2017.
| September 30, | June 30, | September 30, | ||||||||||
| 2017 | 2017 | 2016 | ||||||||||
| Asset Quality | (dollars in thousands) | |||||||||||
| Nonaccrual loans | $ | 515 | $ | 395 | $ | 5,734 | ||||||
| Other real estate owned | 372 | 372 | 711 | |||||||||
| Nonperforming assets | $ | 887 | $ | 767 | $ | 6,445 | ||||||
| Allowance for loan losses | $ | 27,143 | $ | 25,055 | $ | 21,843 | ||||||
| Allowance for loan losses as a percent of total nonperforming loans | 5,270 | % | 6,343 | % | 381 | % | ||||||
| Nonperforming loans as a percent of loans held for investment | 0.01 | % | 0.01 | % | 0.19 | % | ||||||
| Nonperforming assets as a percent of total assets | 0.01 | % | 0.01 | % | 0.17 | % | ||||||
| Net loan (recoveries) charge-offs for the quarter ended | $ | (38 | ) | $ | (76 | ) | $ | 1,125 | ||||
| Net loan (recoveries) charge-offs for quarter to average total loans | — | % | — | % | 0.04 | % | ||||||
| Allowance for loan losses to loans held for investment (1) | 0.54 | % | 0.52 | % | 0.71 | % | ||||||
| Delinquent Loans: | ||||||||||||
| 30 - 59 days | $ | 556 | $ | 600 | $ | 1,042 | ||||||
| 60 - 89 days | 1,423 | 1,965 | 1,990 | |||||||||
| 90+ days | 1,629 | 454 | 2,646 | |||||||||
| Total delinquency | $ | 3,608 | $ | 3,019 | $ | 5,678 | ||||||
| Delinquency as a % of loans held for investment | 0.07 | % | 0.06 | % | 0.18 | % | ||||||
| (1) 31% of loans held for investment include a fair value discount of $21.6 million. |
Investment Securities
Investment securities available for sale totaled $704 million at September 30, 2017, an increase of $861,000 from June 30, 2017, and $391 million from September 30, 2016. The increase in the third quarter of 2017 was primarily the result of $66.4 million in purchases, partially offset by $27.6 million in sales of securities resulting in a gain of $896,000, and approximately $27.1 million in principal payments/amortization/redemptions.
Deposits
At September 30, 2017, deposits totaled $5.0 billion, an increase of $71.7 million, or 1.4%, from June 30, 2017 and $2.0 billion, or 64%, from September 30, 2016. At September 30, 2017, non-maturity deposits totaled $4.2 billion, or 84% of total deposits, an increase of $64.3 million, or 1.6%, from June 30, 2017 and an increase of $1.7 billion, or 69%, from September 30, 2016. During the third quarter of 2017, deposit increases included $80.2 million in noninterest-bearing deposits, $6.3 million in wholesale/brokered certificates of deposits, $3.7 million in money market/savings deposits and $1.1 million in retail certificate deposits, partially offset by a $19.5 million decrease in interest checking.
The weighted average cost of deposits for the three month period ending September 30, 2017 was 0.28%, compared to 0.25% for the three month period ending June 30, 2017 and 0.28% for the three month period ending September 30, 2016.
| September 30, | June 30, | September 30, | ||||||||||
| 2017 | 2017 | 2016 | ||||||||||
| Deposit Accounts | (dollars in thousands) | |||||||||||
| Noninterest-bearing checking | $ | 1,890,241 | $ | 1,810,047 | $ | 1,160,394 | ||||||
| Interest-bearing: | ||||||||||||
| Checking | 304,295 | 323,818 | 181,534 | |||||||||
| Money market/savings | 2,009,781 | 2,006,131 | 1,145,609 | |||||||||
| Retail certificates of deposit | 573,652 | 572,523 | 384,083 | |||||||||
| Wholesale/brokered certificates of deposit | 240,184 | 233,912 | 188,132 | |||||||||
| Total interest-bearing | 3,127,912 | 3,136,384 | 1,899,358 | |||||||||
| Total deposits | $ | 5,018,153 | $ | 4,946,431 | $ | 3,059,752 | ||||||
| Cost of deposits | 0.28 | % | 0.25 | % | 0.28 | % | ||||||
| Noninterest-bearing deposits as a percent of total deposits | 38 | % | 37 | % | 38 | % | ||||||
| Non-maturity deposits as a percent of total deposits | 84 | % | 84 | % | 81 | % | ||||||
Borrowings
At September 30, 2017, total borrowings amounted to $462 million, a decrease of $15.0 million, or 3%, from June 30, 2017 and an increase of $256 million, or 125%, from September 30, 2016. Total borrowings for the quarter included $335 million of advances from the Federal Home Loan Bank of San Francisco and $79.9 million of subordinated debt. At September 30, 2017, total borrowings represented 7.1% of total assets, compared to 7.4% and 5.5%, as of June 30, 2017 and September 30, 2016, respectively.
Capital Ratios
At September 30, 2017, our ratio of tangible common equity to total assets was 9.41%, compared with 9.18% in the prior quarter, with book value per share of $24.44 and tangible book value per share of $14.35 per share, compared with a tangible book value per share of $13.83 at June 30, 2017 and tangible book value per share of $12.22 at September 30, 2016.
At September 30, 2017, the Company had a ratio for tier 1 leverage capital of 9.95%, common equity tier 1 risk-based capital of 10.55%, tier 1 risk-based capital of 10.72% and total risk-based capital of 12.28%.
At September 30, 2017, the Bank exceeded all regulatory capital requirements with a ratio for tier 1 leverage capital of 10.91%, common equity tier 1 risk-based capital of 11.76%, tier 1 risk-based capital of 11.76% and total risk-based capital of 12.26%. These capital ratios each exceeded the “well capitalized” standards defined by the federal banking regulators of 5.00% for tier 1 leverage capital, 6.5% for common equity tier 1 risk-based capital, 8.00% for tier 1 risk-based capital and 10.00% for total risk-based capital.
| September 30, | June 30, | September 30, | ||||||||||
| Capital Ratios | 2017 | 2017 | 2016 | |||||||||
| Pacific Premier Bancorp, Inc. Consolidated | ||||||||||||
| Tier 1 leverage ratio | 9.95 | % | 9.85 | % | 9.80 | % | ||||||
| Common equity tier 1 risk-based capital ratio | 10.55 | % | 10.71 | % | 10.36 | % | ||||||
| Tier 1 risk-based capital ratio | 10.72 | % | 11.08 | % | 10.66 | % | ||||||
| Total risk-based capital ratio | 12.28 | % | 12.69 | % | 13.14 | % | ||||||
| Tangible common equity ratio (1) | 9.41 | % | 9.18 | % | 9.28 | % | ||||||
| Pacific Premier Bank | ||||||||||||
| Tier 1 leverage ratio | 10.91 | % | 10.54 | % | 11.03 | % | ||||||
| Common equity tier 1 risk-based capital ratio | 11.76 | % | 11.85 | % | 12.01 | % | ||||||
| Tier 1 risk-based capital ratio | 11.76 | % | 11.85 | % | 12.01 | % | ||||||
| Total risk-based capital ratio | 12.26 | % | 12.35 | % | 12.70 | % | ||||||
| Share Data | ||||||||||||
| Book value per share | $ | 24.44 | $ | 23.96 | $ | 16.27 | ||||||
| Shares issued and outstanding | 40,162,026 | 40,048,758 | 27,656,533 | |||||||||
| Tangible book value per share (1) | $ | 14.35 | $ | 13.83 | $ | 12.22 | ||||||
| Closing stock price | $ | 37.75 | $ | 36.90 | $ | 26.46 | ||||||
| Market Capitalization (2) | $ | 1,516,116 | $ | 1,477,759 | $ | 731,792 | ||||||
| (1) A reconciliation of the non-GAAP measures of tangible common equity and tangible book value per share to the GAAP measures of common stockholders' equity and book value per share is set forth below. |
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(2) Dollars in thousands. |
Conference Call and Webcast
The Company will host a conference call at 9:00 a.m. PT / 12:00 p.m. ET on October 24, 2017 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 and asking to be joined to the Pacific Premier Bancorp conference call. Additionally, a telephone replay will be made available through October 31, 2017 at (877) 344-7529, conference ID 10112795.
About Pacific Premier Bancorp, Inc.
Pacific Premier Bancorp, Inc. is the holding company for Pacific Premier Bank, one of the largest banks headquartered in Southern California with approximately $6.5 billion in assets. Pacific Premier Bank is a business bank primarily focused on serving small and middle market businesses in the counties of Orange, Los Angeles, Riverside, San Bernardino, San Diego, San Luis Obispo and Santa Barbara, California. Through its 26 depository branches, Pacific Premier Bank offers a diverse range of lending products including commercial, commercial real estate, construction, and SBA loans, as well as specialty banking products for homeowners associations and franchise lending nationwide.
FORWARD-LOOKING COMMENTS
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, statements regarding the Company's growth, management of growth related expense and the impact of acquisitions. 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; 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; inflation, interest rate, market and monetary fluctuations; the timely development of competitive new products and services and the acceptance of these products and services by new and existing customers; the willingness of users to substitute competitors’ products and services for the Company’s products and services; the impact of changes in financial services policies, laws and regulations (including the Dodd-Frank Wall Street Reform and Consumer Protection Act) and of governmental efforts to restructure the U.S. financial regulatory system; technological changes; the effect of acquisitions that the Company may make, if any, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from its acquisitions; changes in the level of the Company’s nonperforming assets and charge-offs; any oversupply of inventory and deterioration in values of California real estate, both residential and commercial; the effect of changes in accounting policies and practices, as may be adopted from time-to-time by bank regulatory agencies, the Securities and Exchange Commission (“SEC”), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters; possible other-than-temporary impairment of securities held by us; changes in consumer spending, borrowing and savings habits; the effects of the Company’s lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; ability to attract deposits and other sources of liquidity; 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; unanticipated regulatory or judicial proceedings; and the Company’s 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 2016 Annual Report on Form 10-K of Pacific Premier Bancorp, Inc. filed with the SEC and available at the SEC’s Internet site (http://www.sec.gov).
The Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.
NOTICE TO PLAZA BANCORP STOCKHOLDERS
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the Company’s proposed acquisition of Plaza Bancorp (“Plaza”), the Company has filed a registration statement on Form S-4 (the “Registration Statement”) with the SEC. The Registration Statement was declared by the SEC to be effective on September 28, 2017, and a prospectus/consent solicitation statement was distributed to the stockholders of Plaza. STOCKHOLDERS OF PLAZA ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND THE PROSPECTUS/CONSENT SOLICITATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED ACQUISITION. Investors and security holders are be able to obtain the documents, including the prospectus/consent solicitation statement, free of charge at the SEC’s website, www.sec.gov. In addition, documents filed with the SEC by the Company are available free of charge by (1) accessing the Company’s website at www.ppbi.com under the “Investor Relations” link and then under the heading “SEC Filings,” (2) writing to Pacific Premier at 17901 Von Karman Avenue, Suite 1200, Irvine, CA 92614, Attention: Investor Relations or (3) writing to Plaza at 18200 Von Karman Avenue, Suite 500, Irvine, CA 92612, Attention: Corporate Secretary.
The directors, executive officers and certain other members of management and employees of Plaza may be deemed to be participants in the solicitation of consents in favor of the acquisition from the stockholders of Plaza. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the prospectus/consent solicitation statement regarding the proposed acquisition. Free copies of this document may be obtained as described in the preceding paragraph.
| PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | ||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| ASSETS | 2017 | 2017 | 2017 | 2016 | 2016 | |||||||||||||||
| Cash and due from banks | $ | 35,713 | $ | 35,686 | $ | 13,425 | $ | 14,706 | $ | 18,543 | ||||||||||
| Interest-bearing deposits with financial institutions | 85,649 | 193,595 | 87,088 | 142,151 | 85,361 | |||||||||||||||
| Cash and cash equivalents | 121,362 | 229,281 | 100,513 | 156,857 | 103,904 | |||||||||||||||
| Interest-bearing time deposits with financial institutions | 4,437 | 3,944 | 3,944 | 3,944 | 3,944 | |||||||||||||||
| Investments held-to-maturity, at amortized cost | 18,627 | 7,750 | 8,272 | 8,565 | 8,900 | |||||||||||||||
| Investment securities available-for-sale, at fair value | 703,944 | 703,083 | 435,408 | 380,963 | 313,200 | |||||||||||||||
| FHLB, FRB and other stock, at cost | 58,344 | 56,612 | 37,811 | 37,304 | 29,966 | |||||||||||||||
| Loans held for sale, at lower of cost or fair value | 44,343 | 6,840 | 11,090 | 7,711 | 9,009 | |||||||||||||||
| Loans held for investment | 5,009,317 | 4,858,611 | 3,385,697 | 3,241,613 | 3,090,839 | |||||||||||||||
| Allowance for loan losses | (27,143 | ) | (25,055 | ) | (23,075 | ) | (21,296 | ) | (21,843 | ) | ||||||||||
| Loans held for investment, net | 4,982,174 | 4,833,556 | 3,362,622 | 3,220,317 | 3,068,996 | |||||||||||||||
| Accrued interest receivable | 20,527 | 20,607 | 13,366 | 13,145 | 11,642 | |||||||||||||||
| Other real estate owned | 372 | 372 | 460 | 460 | 711 | |||||||||||||||
| Premises and equipment | 45,725 | 45,342 | 11,799 | 12,014 | 11,314 | |||||||||||||||
| Deferred income taxes, net | 22,023 | 22,201 | 12,744 | 16,807 | 20,001 | |||||||||||||||
| Bank owned life insurance | 75,482 | 74,982 | 40,696 | 40,409 | 40,116 | |||||||||||||||
| Intangible assets | 33,545 | 35,305 | 8,942 | 9,451 | 9,976 | |||||||||||||||
| Goodwill | 371,677 | 370,564 | 102,490 | 102,490 | 101,939 | |||||||||||||||
| Other assets | 29,752 | 30,192 | 24,271 | 25,874 | 21,213 | |||||||||||||||
| Total Assets | $ | 6,532,334 | $ | 6,440,631 | $ | 4,174,428 | $ | 4,036,311 | $ | 3,754,831 | ||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
| LIABILITIES: | ||||||||||||||||||||
| Deposit accounts: | ||||||||||||||||||||
| Noninterest-bearing checking | $ | 1,890,241 | $ | 1,810,047 | $ | 1,232,578 | $ | 1,185,768 | $ | 1,160,394 | ||||||||||
| Interest-bearing: | ||||||||||||||||||||
| Checking | 304,295 | 323,818 | 191,399 | 182,893 | 181,534 | |||||||||||||||
| Money market/savings | 2,009,781 | 2,006,131 | 1,273,917 | 1,202,361 | 1,145,609 | |||||||||||||||
| Retail certificates of deposit | 573,652 | 572,523 | 381,738 | 375,203 | 384,083 | |||||||||||||||
| Wholesale/brokered certificates of deposit | 240,184 | 233,912 | 217,441 | 199,356 | 188,132 | |||||||||||||||
| Total interest-bearing | 3,127,912 | 3,136,384 | 2,064,495 | 1,959,813 | 1,899,358 | |||||||||||||||
| Total deposits | 5,018,153 | 4,946,431 | 3,297,073 | 3,145,581 | 3,059,752 | |||||||||||||||
| FHLB advances and other borrowings | 382,173 | 397,267 | 311,363 | 327,971 | 136,213 | |||||||||||||||
| Subordinated debentures | 79,871 | 79,800 | 69,413 | 69,383 | 69,353 | |||||||||||||||
| Accrued expenses and other liabilities | 70,477 | 57,402 | 25,554 | 33,636 | 39,548 | |||||||||||||||
| Total Liabilities | 5,550,674 | 5,480,900 | 3,703,403 | 3,576,571 | 3,304,866 | |||||||||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||||||||||||||
| Common stock | 397 | 396 | 275 | 274 | 273 | |||||||||||||||
| Additional paid-in capital | 817,809 | 815,329 | 345,888 | 345,138 | 343,231 | |||||||||||||||
| Retained earnings | 160,978 | 140,746 | 126,570 | 117,049 | 105,098 | |||||||||||||||
| Accumulated other comprehensive income (loss), net of tax (benefit) | 2,476 | 3,260 | (1,708 | ) | (2,721 | ) | 1,363 | |||||||||||||
| Total Stockholders' Equity | 981,660 | 959,731 | 471,025 | 459,740 | 449,965 | |||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 6,532,334 | $ | 6,440,631 | $ | 4,174,428 | $ | 4,036,311 | $ | 3,754,831 | ||||||||||
|
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES |
|||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||
| 2017 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||
| INTEREST INCOME | |||||||||||||||||||
| Loans | $ | 64,915 | $ | 63,554 | $ | 40,487 | $ | 170,905 | $ | 114,929 | |||||||||
| Investment securities and other interest-earning assets | 5,246 | 5,179 | 1,942 | 13,416 | 5,879 | ||||||||||||||
| Total interest income | 70,161 | 68,733 | 42,429 | 184,321 | 120,808 | ||||||||||||||
| INTEREST EXPENSE | |||||||||||||||||||
| Deposits | 3,557 | 3,081 | 2,136 | 8,774 | 6,215 | ||||||||||||||
| FHLB advances and other borrowings | 1,162 | 1,175 | 314 | 2,940 | 963 | ||||||||||||||
| Subordinated debentures | 1,151 | 1,139 | 970 | 3,275 | 2,859 | ||||||||||||||
| Total interest expense | 5,870 | 5,395 | 3,420 | 14,989 | 10,037 | ||||||||||||||
| Net interest income before provision for loan losses | 64,291 | 63,338 | 39,009 | 169,332 | 110,771 | ||||||||||||||
| Provision for loan losses | 2,049 | 1,904 | 4,013 | 6,455 | 6,722 | ||||||||||||||
| Net interest income after provision for loan losses | 62,242 | 61,434 | 34,996 | 162,877 | 104,049 | ||||||||||||||
| NONINTEREST INCOME | |||||||||||||||||||
| Loan servicing fees | 276 | 143 | 288 | 641 | 769 | ||||||||||||||
| Deposit fees | 1,117 | 986 | 422 | 2,521 | 1,267 | ||||||||||||||
| Net gain from sales of loans | 3,439 | 2,887 | 3,122 | 9,137 | 7,152 | ||||||||||||||
| Net gain from sales of investment securities | 896 | 2,093 | 512 | 2,989 | 1,797 | ||||||||||||||
| Net gain from other real estate owned | — | 94 | — | 94 | 18 | ||||||||||||||
| Other income | 2,493 | 2,556 | 1,624 | 6,281 | 4,282 | ||||||||||||||
| Total noninterest income | 8,221 | 8,759 | 5,968 | 21,663 | 15,285 | ||||||||||||||
| NONINTEREST EXPENSE | |||||||||||||||||||
| Compensation and benefits | 21,707 | 21,625 | 14,181 | 58,218 | 39,018 | ||||||||||||||
| Premises and occupancy | 4,016 | 3,733 | 2,576 | 10,202 | 7,306 | ||||||||||||||
| Data processing | 2,082 | 2,439 | 1,223 | 5,708 | 3,021 | ||||||||||||||
| Other real estate owned operations, net | 3 | 44 | 5 | 59 | 16 | ||||||||||||||
| FDIC insurance premiums | 379 | 818 | 442 | 1,652 | 1,225 | ||||||||||||||
| Legal, audit and professional expense | 1,978 | 1,281 | 737 | 4,177 | 2,149 | ||||||||||||||
| Marketing expense | 1,248 | 1,006 | 1,683 | 3,072 | 3,116 | ||||||||||||||
| Office, telecommunications and postage expense | 835 | 922 | 612 | 2,190 | 1,666 | ||||||||||||||
| Loan expense | 1,017 | 1,068 | 534 | 2,553 | 1,477 | ||||||||||||||
| Deposit expense | 1,655 | 1,663 | 1,315 | 4,762 | 3,516 | ||||||||||||||
| Merger-related expense | 503 | 10,117 | — | 15,566 | 3,616 | ||||||||||||||
| CDI amortization | 1,761 | 1,761 | 525 | 4,033 | 1,514 | ||||||||||||||
| Other expense | 2,428 | 2,019 | 2,027 | 5,663 | 5,565 | ||||||||||||||
| Total noninterest expense | 39,612 | 48,496 | 25,860 | 117,855 | 73,205 | ||||||||||||||
| Net income before income taxes | 30,851 | 21,697 | 15,104 | 66,685 | 46,129 | ||||||||||||||
| Income tax | 10,619 | 7,521 | 5,877 | 22,756 | 17,977 | ||||||||||||||
| Net income | $ | 20,232 | $ | 14,176 | $ | 9,227 | $ | 43,929 | $ | 28,152 | |||||||||
| EARNINGS PER SHARE | |||||||||||||||||||
| Basic | $ | 0.51 | $ | 0.36 | $ | 0.34 | $ | 1.23 | $ | 1.05 | |||||||||
| Diluted | $ | 0.50 | $ | 0.35 | $ | 0.33 | $ | 1.20 | $ | 1.03 | |||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING | |||||||||||||||||||
| Basic | 39,709,565 | 39,586,524 | 27,387,123 | 35,652,626 | 26,776,140 | ||||||||||||||
| Diluted | 40,486,114 | 40,394,236 | 27,925,351 | 36,455,945 | 27,245,108 | ||||||||||||||
SELECTED FINANCIAL DATA
| PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||
| CONSOLIDATED AVERAGE BALANCES AND YIELD DATA | |||||||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||
| September 30, 2017 | June 30, 2017 | September 30, 2016 | |||||||||||||||||||||||||||||||
|
Average |
Interest |
Average |
Average |
Interest |
Average |
Average |
Interest |
Average |
|||||||||||||||||||||||||
| Assets | (dollars in thousands) | ||||||||||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 167,745 | $ | 265 | 0.63 | % | $ | 133,127 | $ | 160 | 0.48 | % | $ | 201,140 | $ | 232 | 0.46 | % | |||||||||||||||
| Investment securities | 765,537 | 4,981 | 2.60 | 829,380 | 5,019 | 2.42 | 316,253 | 1,710 | 2.16 | ||||||||||||||||||||||||
| Loans receivable, net (1) | 4,937,979 | 64,915 | 5.22 | 4,815,612 | 63,554 | 5.29 | 2,998,153 | 40,487 | 5.37 | ||||||||||||||||||||||||
| Total interest-earning assets | 5,871,261 | 70,161 | 4.74 | 5,778,119 | 68,733 | 4.77 | 3,515,546 | 42,429 | 4.80 | ||||||||||||||||||||||||
| Noninterest-earning assets | 573,127 | 592,186 | 190,670 | ||||||||||||||||||||||||||||||
| Total assets | $ | 6,444,388 | $ | 6,370,305 | $ | 3,706,216 | |||||||||||||||||||||||||||
| Liabilities and Equity | |||||||||||||||||||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||||||||||||||||||
| Interest checking | $ | 318,412 | $ | 103 | 0.13 | $ | 329,450 | $ | 90 | 0.11 | $ | 185,344 | $ | 53 | 0.11 | ||||||||||||||||||
| Money market | 1,802,834 | 1,767 | 0.39 | 1,779,013 | 1,582 | 0.36 | 1,036,349 | 923 | 0.35 | ||||||||||||||||||||||||
| Savings | 211,404 | 68 | 0.13 | 218,888 | 68 | 0.12 | 98,496 | 38 | 0.15 | ||||||||||||||||||||||||
| Retail certificates of deposit | 571,663 | 1,052 | 0.73 | 568,367 | 911 | 0.64 | 402,371 | 745 | 0.74 | ||||||||||||||||||||||||
| Wholesale/brokered certificates of deposit | 243,007 | 567 | 0.93 | 212,124 | 430 | 0.81 | 199,180 | 377 | 0.75 | ||||||||||||||||||||||||
| Total interest-bearing deposits | 3,147,320 | 3,557 | 0.45 | 3,107,842 | 3,081 | 0.40 | 1,921,740 | 2,136 | 0.44 | ||||||||||||||||||||||||
| FHLB advances and other borrowings | 319,373 | 1,162 | 1.44 | 385,088 | 1,175 | 1.22 | 97,547 | 314 | 1.28 | ||||||||||||||||||||||||
| Subordinated debentures | 79,833 | 1,151 | 5.77 | 79,757 | 1,139 | 5.71 | 69,334 | 970 | 5.60 | ||||||||||||||||||||||||
| Total borrowings | 399,206 | 2,313 | 2.30 | 464,845 | 2,314 | 2.00 | 166,881 | 1,284 | 3.06 | ||||||||||||||||||||||||
| Total interest-bearing liabilities | 3,546,526 | 5,870 | 0.66 | 3,572,687 | 5,395 | 0.61 | 2,088,621 | 3,420 | 0.65 | ||||||||||||||||||||||||
| Noninterest-bearing deposits | 1,860,177 | 1,802,752 | 1,134,318 | ||||||||||||||||||||||||||||||
| Other liabilities | 61,604 | 46,666 | 34,500 | ||||||||||||||||||||||||||||||
| Total liabilities | 5,468,307 | 5,422,105 | 3,257,439 | ||||||||||||||||||||||||||||||
| Stockholders' equity | 976,081 | 948,200 | 448,777 | ||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 6,444,388 | $ | 6,370,305 | $ | 3,706,216 | |||||||||||||||||||||||||||
| Net interest income | $ | 64,291 | $ | 63,338 | $ | 39,009 | |||||||||||||||||||||||||||
| Net interest margin (2) | 4.34 | % | 4.40 | % | 4.41 | % | |||||||||||||||||||||||||||
| Ratio of interest-earning assets to interest-bearing liabilities | 165.55 | % | 161.73 | % | 168.32 | % | |||||||||||||||||||||||||||
| (1) Average balance includes nonperforming loans and is net of deferred loan origination fees/costs and unamortized discounts/premiums. |
| (2) Represents net interest income divided by average interest-earning assets. |
| PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||
| LOAN PORTFOLIO COMPOSITION | ||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | ||||||||||||||||
| Business loans: | ||||||||||||||||||||
| Commercial and industrial | $ | 763,091 | $ | 733,852 | $ | 593,457 | $ | 563,169 | $ | 537,809 | ||||||||||
| Franchise | 626,508 | 565,415 | 493,158 | 459,421 | 431,618 | |||||||||||||||
| Commercial owner occupied | 805,137 | 729,476 | 482,295 | 454,918 | 460,068 | |||||||||||||||
| SBA | 107,211 | 101,384 | 96,486 | 88,994 | 83,186 | |||||||||||||||
| Agriculture | 86,466 | 98,842 | — | — | — | |||||||||||||||
| Total business loans | 2,388,413 | 2,228,969 | 1,665,396 | 1,566,502 | 1,512,681 | |||||||||||||||
| Real estate loans: | ||||||||||||||||||||
| Commercial non-owner occupied | 1,098,995 | 1,095,184 | 612,444 | 586,975 | 527,412 | |||||||||||||||
| Multi-family | 797,370 | 746,547 | 682,237 | 690,955 | 689,813 | |||||||||||||||
| One-to-four family | 246,248 | 322,048 | 100,423 | 100,451 | 101,377 | |||||||||||||||
| Construction | 301,334 | 289,600 | 298,279 | 269,159 | 231,098 | |||||||||||||||
| Farmland | 140,581 | 136,587 | — | — | — | |||||||||||||||
| Land | 30,719 | 31,799 | 19,738 | 19,829 | 18,472 | |||||||||||||||
| Other loans | 6,228 | 7,309 | 3,930 | 4,112 | 5,678 | |||||||||||||||
| Total real estate loans | 2,621,475 | 2,629,074 | 1,717,051 | 1,671,481 | 1,573,850 | |||||||||||||||
| Gross loans held for investment | 5,009,888 | 4,858,043 | 3,382,447 | 3,237,983 | 3,086,531 | |||||||||||||||
| Plus: Deferred loan origination costs/(fees) and premiums/(discounts), net | (571 | ) | 568 | 3,250 | 3,630 | 4,308 | ||||||||||||||
| Loans held for investment | 5,009,317 | 4,858,611 | 3,385,697 | 3,241,613 | 3,090,839 | |||||||||||||||
| Allowance for loan losses | (27,143 | ) | (25,055 | ) | (23,075 | ) | (21,296 | ) | (21,843 | ) | ||||||||||
| Loans held for investment, net | $ | 4,982,174 | $ | 4,833,556 | $ | 3,362,622 | $ | 3,220,317 | $ | 3,068,996 | ||||||||||
| Loans held for sale, at lower of cost or fair value | $ | 44,343 | $ | 6,840 | $ | 11,090 | $ | 7,711 | $ | 9,009 | ||||||||||
| PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||
| ASSET QUALITY INFORMATION | ||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | ||||||||||||||||
| Asset Quality | ||||||||||||||||||||
| Nonaccrual loans | $ | 515 | $ | 395 | $ | 513 | $ | 1,141 | $ | 5,734 | ||||||||||
| Other real estate owned | 372 | 372 | 460 | 460 | 711 | |||||||||||||||
| Nonperforming assets | $ | 887 | $ | 767 | $ | 973 | $ | 1,601 | $ | 6,445 | ||||||||||
| Allowance for loan losses | $ | 27,143 | $ | 25,055 | $ | 23,075 | $ | 21,296 | $ | 21,843 | ||||||||||
| Allowance for loan losses as a percent of total nonperforming loans | 5,270 | % | 6,343 | % | 4,498 | % | 1,866 | % | 381 | % | ||||||||||
| Nonperforming loans as a percent of loans held for investment | 0.01 | % | 0.01 | % | 0.02 | % | 0.04 | % | 0.19 | % | ||||||||||
| Nonperforming assets as a percent of total assets | 0.01 | % | 0.01 | % | 0.02 | % | 0.04 | % | 0.17 | % | ||||||||||
| Net loan (recoveries) charge-offs for the quarter ended | $ | (38 | ) | $ | (76 | ) | $ | 723 | $ | 2,601 | $ | 1,125 | ||||||||
| Net loan (recoveries) charge-offs for quarter to average total loans | — | % | — | % | 0.02 | % | 0.08 | % | 0.04 | % | ||||||||||
| Allowance for loan losses to loans held for investment (1) | 0.54 | % | 0.52 | % | 0.68 | % | 0.66 | % | 0.71 | % | ||||||||||
| Delinquent Loans: | ||||||||||||||||||||
| 30 - 59 days | $ | 556 | $ | 600 | $ | 117 | $ | 122 | $ | 1,042 | ||||||||||
| 60 - 89 days | 1,423 | 1,965 | — | 71 | 1,990 | |||||||||||||||
| 90+ days | 1,629 | 454 | 360 | 639 | 2,646 | |||||||||||||||
| Total delinquency | $ | 3,608 | $ | 3,019 | $ | 477 | $ | 832 | $ | 5,678 | ||||||||||
| Delinquency as a percent of loans held for investment | 0.07 | % | 0.06 | % | 0.01 | % | 0.03 | % | 0.18 | % | ||||||||||
| (1) 31% of loans held for investment include a fair value discount of $21.6 million. |
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
GAAP
RECONCILIATIONS
(dollars in thousands, except per share data)
For periods presented below, return on average tangible common equity is a non-GAAP financial measure derived from GAAP-based amounts. We calculate these figures by excluding CDI amortization expense and exclude the average CDI and average goodwill from the average stockholders' equity during the period. Management believes that the exclusion of such items from these financial measures provides useful information to an understanding of the operating results of our core business. 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.
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| Three Months Ended | ||||||||||||
| September 30, | June 30, | September 30, | ||||||||||
| 2017 | 2017 | 2016 | ||||||||||
| Net income | $ | 20,232 | $ | 14,176 | $ | 9,227 | ||||||
| Plus CDI amortization expense | 1,761 | 1,761 | 525 | |||||||||
| Less CDI amortization expense tax adjustment | (606 | ) | (610 | ) | (204 | ) | ||||||
| Net income for average tangible common equity | $ | 21,387 | $ | 15,327 | $ | 9,548 | ||||||
| Average stockholders' equity | $ | 976,081 | $ | 948,200 | $ | 448,777 | ||||||
| Less average CDI | 34,699 | 36,445 | 10,318 | |||||||||
| Less average goodwill | 371,651 | 370,564 | 101,939 | |||||||||
| Average tangible common equity | $ | 569,731 | $ | 541,191 | $ | 336,520 | ||||||
| Return on average equity | 8.29 | % | 5.98 | % | 8.22 | % | ||||||
| Return on average tangible common equity | 15.02 | % | 11.33 | % | 11.35 | % | ||||||
Tangible common equity to tangible assets (the "tangible common equity ratio") and tangible book value per share are non-GAAP financial measures derived from GAAP-based amounts. We calculate the tangible common equity ratio by excluding the balance of intangible assets from common stockholders' equity and dividing by tangible assets. 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 believe that this information is consistent with the treatment by bank regulatory agencies, which exclude 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. 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 measures, this presentation may not be comparable to other similarly titled measures reported by other companies.
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| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | ||||||||||||||||
| Total stockholders' equity | $ | 981,660 | $ | 959,731 | $ | 471,025 | $ | 459,740 | $ | 449,965 | ||||||||||
| Less intangible assets | (405,222 | ) | (405,869 | ) | (111,432 | ) | (111,941 | ) | (111,915 | ) | ||||||||||
| Tangible common equity | $ | 576,438 | $ | 553,862 | $ | 359,593 | $ | 347,799 | $ | 338,050 | ||||||||||
| Book value per share | $ | 24.44 | $ | 23.96 | $ | 16.88 | $ | 16.54 | $ | 16.27 | ||||||||||
| Less intangible book value per share | (10.09 | ) | (10.13 | ) | (4.00 | ) | (4.03 | ) | (4.05 | ) | ||||||||||
| Tangible book value per share | $ | 14.35 | $ | 13.83 | $ | 12.88 | $ | 12.51 | $ | 12.22 | ||||||||||
| Total assets | $ | 6,532,334 | $ | 6,440,631 | $ | 4,174,428 | $ | 4,036,311 | $ | 3,754,831 | ||||||||||
| Less intangible assets | (405,222 | ) | (405,869 | ) | (111,432 | ) | (111,941 | ) | (111,915 | ) | ||||||||||
| Tangible assets | $ | 6,127,112 | $ | 6,034,762 | $ | 4,062,996 | $ | 3,924,370 | $ | 3,642,916 | ||||||||||
| Tangible common equity ratio | 9.41 | % | 9.18 | % | 8.85 | % | 8.86 | % | 9.28 | % | ||||||||||
