Third Quarter 2016 Summary
- Diluted earnings per share of $0.33
and net income of $9.2 million
- Total loan growth of $169 million,
or 23% annualized
- Non-performing assets to total
assets of 0.17%
- Non-maturity deposit growth of $176
million, or 30% annualized
- Non-interest bearing deposits
account for 37.9% of total deposits, highest in company
history
- Total revenues increase to $45
million, or 28% annualized
- Core net interest margin of
4.18%
- ROAA and ROATCE of 1.00% and 11.52%,
respectively
- Tangible book value per share
increased $0.35 to $12.22
- Efficiency ratio of 57%
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 2016 of $9.2 million, or $0.33
per diluted share, compared with net income of $10.4 million, or
$0.37 per diluted share, for the second quarter of 2016 and net
income of $7.8 million, or $0.36 per diluted share, for the third
quarter of 2015.
For the three months ended September 30, 2016, the
Company’s return on average assets was 1.00% and return on average
tangible common equity was 11.52%. For the three months ended
June 30, 2016, the Company's return on average assets was
1.17% and the return on average tangible common equity was 13.48%.
For the three months ended September 30, 2015, the Company's
return on average assets was 1.19% and its return on average
tangible common equity was 14.25%.
Steve R. Gardner, Chairman and Chief Executive Officer of the
Company, commented on the results, “We are disappointed with our
level of earnings this quarter, as higher credit costs and
non-recurring, non-interest expenses undermined the strong growth
we had in both loans and deposits.
“Following the Security Bank acquisition, we continue to see
improvement in our ability to attract new commercial customers. We
generated $322 million in new loan commitments in the third
quarter, a record level for the Bank. Our loan production is well
diversified with strong growth generated in all of our major
portfolios. The new client acquisition activity is also driving
strong inflows of core deposits, with the largest increases coming
in non-interest bearing deposits. We continue to execute very well
on our efforts to build a highly diversified loan portfolio and a
low cost deposit base.
“Our credit costs were elevated this quarter, which was
primarily driven by a specific reserve of $2.0 million established
for one commercial credit that deteriorated rapidly after several
years of good performance. Aside from this one issue, we continue
to see positive credit trends in the loan portfolio, as
nonperforming assets to total assets was 17 basis points and
delinquency as a percent of total loans was just 18 basis
points.
“We recorded an aggregate of approximately $1.4 million of
one-time costs to certain non-interest expense items in the third
quarter related primarily to compensation, data processing and
marketing expenses, which resulted in higher than expected
non-interest expense. Excluding these items, our non-interest
expense would have been in the $24 million to $25 million range,
which is in line with our expected quarterly non-interest expense
going forward for the foreseeable future. Our third quarter
non-interest expense, excluding these one-time costs, reflects the
full quarter impact of the additions we have made throughout the
organization in 2016 to strengthen our infrastructure and upgrade
personnel in key areas such as business development, finance and
compliance.
“Following the investments we have made in 2016, we believe that
we are well positioned to manage the continued growth of the Bank
and that our business development capabilities are strong. As we
continue to drive quality balance sheet growth, we believe we will
see improved efficiencies and stronger profitability,” said Mr.
Gardner.
FINANCIAL HIGHLIGHTS
Three Months Ended September 30,
June 30,
September 30, 2016 2016 2015
Financial Highlights (dollars in thousands, except per share
data) Net income $ 9,227 $ 10,369 $ 7,837 Diluted EPS $ 0.33 $ 0.37
$ 0.36 Return on average assets 1.00 % 1.17 % 1.19 % Adjusted
return on average assets (1)(2) 1.00 % 1.20 % 1.25 % Adjusted net
income (1)(2) $ 9,227 $ 10,676 $ 8,237 Return on average tangible
common equity (2) 11.52 % 13.48 % 14.25 % Adjusted return on
average tangible common equity (1)(2) 11.52 % 13.86 % 14.96 % Net
interest margin 4.41 % 4.48 % 4.22 % Cost of deposits 0.28 % 0.28 %
0.32 % Efficiency ratio (3) 57.0 % 54.4 % 53.6 %
(1) Adjusted to exclude merger related, net of tax.
(2) A reconciliation of the non-GAAP measures of average tangible
common equity to the GAAP measures of common stockholders' equity
is set forth at the end of this press release. (3) Represents the
ratio of non-interest expense less other real estate owned
operations, core deposit intangible amortization and non-recurring
merger related to the sum of net interest income before provision
for loan losses and total non-interest 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 $39.0 million in the third quarter
of 2016, an increase of $1.4 million or 3.9% from the second
quarter of 2016. The increase in net interest income reflected an
increase in average interest-earning assets of $147 million,
partially offset by a decrease in accretion income. The increase in
average interest-earning assets during the third quarter of 2016
was primarily related to record organic loan originations and the
purchase of $83 million of multi-family loans.
The decrease in the net interest margin from 4.48% to 4.41% was
primarily due to the decrease in accretion income. Excluding the
impact of accretion, the portfolio core net interest margin was
4.18% in the third quarter of 2016 compared to 4.19% in the second
quarter of 2016, with accretion contributing 23 basis points in the
third quarter of 2016 as compared to 29 basis points in the second
quarter of 2016.
Net interest income for the third quarter of 2016 increased
$12.3 million or 46.1% compared to the third quarter of 2015. The
increase was related to an increase in average interest-earning
assets of $1.0 billion, which resulted primarily from our organic
loan growth since the end of the third quarter of 2015 and our
acquisition of Security during the first quarter of 2016. Our net
interest margin for the third quarter of 2016 increased 19 basis
points to 4.41% from the prior year. The expansion of the net
interest margin was driven by a 10 basis point increase in the
yield on earning assets, and a 10 basis point decrease in cost of
funds.
Net interest margin information is presented in the following
table for the periods indicated.
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA
Three Months Ended Three
Months Ended Three Months Ended
September 30, 2016 June 30, 2016 September 30,
2015
Average
Balance
Interest
Average
Yield/
Cost
Average
Balance
Interest
Average
Yield/
Cost
Average
Balance
Interest
Average
Yield/
Cost
Assets (dollars in thousands) Cash and cash
equivalents $ 201,140 $ 232 0.46 % $ 177,603 $ 189 0.43 % $ 124,182
$ 63 0.20 % Investment securities 316,253 1,710 2.16 299,049 1,650
2.21 306,623 1,749 2.28 Loans receivable, net (1) 2,998,153
40,487 5.37 2,892,236 39,035 5.43
2,080,281 27,935 5.33 Total
interest-earning assets $ 3,515,546 $ 42,429 4.80 % $
3,368,888 $ 40,874 4.88 % $ 2,511,086 $ 29,747
4.70 %
Liabilities Interest-bearing
deposits $ 1,921,741 $ 2,136 0.44 % $ 1,864,253 $ 2,010 0.43 % $
1,464,577 $ 1,719 0.47 % Borrowings 167,531 1,284
3.05 170,065 1,303 3.08 190,408
1,332 2.77 Total interest-bearing liabilities $
2,089,272 $ 3,420 0.65 % $ 2,034,318 $ 3,313
0.66 % $ 1,654,985 $ 3,051 0.73 % Non-interest
bearing deposits $ 1,134,318 $ 1,060,097 $ 674,795
Net interest income $ 39,009 $ 37,561 $ 26,696
Net interest margin (2) 4.41 % 4.48 % 4.22 % (1)
Average balance includes nonperforming loans and is net of deferred
loan origination fees, unamortized discounts and premiums. (2)
Represents net interest income divided by average interest-earning
assets.
Provision for Loan Losses
A provision for loan losses was recorded for the current quarter
in the amount of $4.0 million, compared with a provision for loan
losses of $1.6 million in the quarter ending June 30, 2016.
Specific reserves on two loans totaling $2.4 million were recorded
in the current quarter with the remaining $1.6 million in provision
primarily related to growth in the loan portfolio. Net loan
charge-offs were $1.1 million for the third quarter.
Non-interest income
Non-interest income for the third quarter of 2016 was $6.0
million, an increase of $1.5 million or 34.1% from the second
quarter of 2016. The increase from the second quarter of 2016 was
primarily related to a $1.0 million increase in net gain from the
sale of loans, as well as a $0.5 million increase in recoveries on
previously charged-off, acquired loans. During the current quarter,
$38.8 million in SBA loans and other loans were sold compared to
$22.7 million in the prior quarter.
Compared to the third quarter of 2015, non-interest income for
the third quarter of 2016 increased $1.6 million or 36.3%. The
increase includes an increase of $0.6 million in net gain from
sales of loans, a higher net gain from the sales of investment
securities of $0.5 million, a $0.3 million increase in other income
and a $0.2 million increase in deposit fees.
Three Months Ended September 30,
June 30,
September 30, 2016 2016 2015
NON-INTEREST INCOME (dollars in thousands) Loan servicing
fees $ 288 $ 257 $ 248 Deposit fees 829 817 629 Net gain from sales
of loans 3,122 2,124 2,544 Net gain from sales of investment
securities 512 532 38
Other-than-temporary impairment
recovery/(loss) on investment securities
2 — — Other income 1,215 720 919 Total non-interest
income $ 5,968 $ 4,450 $ 4,378
Non-interest Expense
Non-interest expense totaled $25.9 million for the third quarter
of 2016, an increase of $2.2 million or 9.1%, compared with the
second quarter of 2016. The increase was primarily driven by higher
compensation costs, specifically incentive compensation including
stock-based incentives, increased data processing costs, and higher
marketing costs.
In comparison to the third quarter of 2015, non-interest expense
grew by $8.5 million or 48.8%. The increase in expense was
primarily related to the additional costs from the personnel and
branches retained from the acquisition of Security, combined with
our continued investment in personnel to support our organic growth
in loans and deposits.
Three Months Ended September 30,
June 30,
September 30, 2016 2016 2015
NON-INTEREST EXPENSE (dollars in thousands) Compensation and
benefits $ 14,179 $ 13,098 $ 9,066 Premises and occupancy 2,633
2,559 2,120 Data processing and communications 1,223 887 681 Other
real estate owned operations, net 5 (15 ) 9 FDIC insurance premiums
442 401 355 Legal, audit and professional expense 676 446 505
Marketing expense 1,591 775 567 Office and postage expense 612 573
525 Loan expense 534 540 370 Deposit expense 1,315 1,196 917 Merger
related expense — 497 400 CDI amortization 525 645 344 Other
expense 2,125 2,093 1,515 Total non-interest expense
$ 25,860 $ 23,695 $ 17,374
Three Months Ended September 30,
June 30, September 30,
2016 2016 2015 Operating Metrics
Efficiency ratio (1) 57.0 % 54.4 % 53.6 % Non-interest expense to
average total assets (2) 2.74 % 2.59 % 2.58 % Full-time equivalent
employees, at period end 448 438 332
(1) Represents the ratio of non-interest
expense less other real estate owned operations, core deposit
intangible amortization and non-recurring merger related to the sum
of net interest income before provision for loan losses and total
non-interest income less, gains/(loss) on sale of securities and
other-than-temporary-impairment recovery/(loss) on investment
securities.
(2) Adjusted to exclude CDI amortization.
Income Tax
For the third quarter of 2016, our effective tax rate was 38.9%,
compared with 38.0% for the second quarter of 2016 and 38.0% for
the third quarter of 2015. The increase from the second quarter
reflects a true-up to the Company's anticipated full year tax rate
of 39%.
BALANCE SHEET HIGHLIGHTS
Loans
Loans held for investment totaled $3.09 billion at
September 30, 2016, an increase of $170 million or 5.8% from
June 30, 2016, and an increase of $923 million or 42.6% from
September 30, 2015. The increase from June 30, 2016, was
primarily due to $322 million in organic loan originations and
$85.4 million in loan purchases, partially offset by $173 million
in principal payments and $38.8 million in loan sales. The total
end of period weighted average interest rate on loans, excluding
fees and discounts, at September 30, 2016 was 4.80%, compared
to 4.84% at June 30, 2016 and 4.90% at September 30,
2015.
Loan activity during the third quarter of 2016 included organic
loan originations of $322 million, including commercial real estate
loans of $65.1 million, commercial and industrial loan originations
of $64.1 million, construction loan originations of $52.9 million,
franchise loan originations of $48.4 million and SBA loan
originations of $43.2 million. At September 30, 2016, our loan
to deposit ratio was 101.0%, compared with 99.6% and 101.3% at
June 30, 2016 and September 30, 2015, respectively.
Three Months Ended September 30,
June 30,
September 30, 2016 2016 2015 LOAN
ACTIVITY (dollars in thousands) Loans originated $ 322,405 $
298,742 $ 248,815 Loans purchased 85,395 — — Repayments (172,815 )
(190,026 ) (127,475 ) Loans sold (38,847 ) (22,746 ) (28,039 )
Change in undisbursed (31,915 ) (17,208 ) (45,085 ) Other 4,890
3,260 1,080 Increase in total loans, gross
169,113 72,022 49,296 Change in allowance
(2,888 ) (500 ) (1,045 ) Increase in total loans, net $ 166,225
$ 71,522 $ 48,251
September 30,
June 30, September
30, 2016 2016 2015 Loan Portfolio
(dollars in thousands) Business loans: Commercial and industrial $
537,809 $ 508,141 $ 288,982 Franchise 431,618 403,855 295,965
Commercial owner occupied 460,068 443,060 302,556 SBA 92,195 86,076
70,191 Warehouse facilities — — 144,274 Real estate loans:
Commercial non-owner occupied 527,412 526,362 406,490 Multi-family
689,813 613,573 421,240 One-to-four family 101,377 106,538 78,781
Construction 231,098 215,786 141,293 Land 18,472 18,341 12,758
Other loans 5,678 5,822 5,017 Total Gross
Loans 3,095,540 2,927,554 2,167,547 Less Loans held for sale, net
9,009 10,116 — Total gross loans
held for investment 3,086,531 2,917,438 2,167,547 Less: Deferred
loan origination costs/(fees) and premiums/(discounts) 4,308 3,181
309 Allowance for loan losses (21,843 ) (18,955 ) (16,145 ) Loans
held for investment, net $ 3,068,996 $ 2,901,664 $
2,151,711
Asset Quality and Allowance for Loan Losses
Non-performing assets totaled $6.4 million or 0.17% of total
assets at September 30, 2016, an increase from $4.8 million or
0.13% of total assets at June 30, 2016. During the third
quarter of 2016, non-performing loans increased $1.7 million to
total $5.7 million primarily as a result of two loans, and other
real estate owned remained unchanged at $0.7 million.
At September 30, 2016, the allowance for loan losses was
$21.8 million, an increase of $2.9 million from June 30, 2016.
Loan loss provision for the quarter was $4.0 million while net
charge-offs were $1.1 million. The increase in the allowance for
loan losses at September 30, 2016 was mainly attributable to
$2.4 million of specific reserves for two credits and loan growth
in certain segments of the loan portfolio.
At September 30, 2016, our allowance for loan losses as a
percent of non-accrual loans was 381%, a decrease from 467% at
June 30, 2016. The ratio of allowance for loan losses to total
loans at September 30, 2016 was 0.70%, compared to 0.65% and
0.74% at June 30, 2016 and September 30, 2015. Including
the loan fair market value discounts recorded in connection with
our acquisitions, the allowance for loan losses to total gross
loans ratio was 0.89% at September 30, 2016, compared with
0.89% at June 30, 2016 and 0.93% at September 30,
2015.
September 30, June 30,
September 30, 2016 2016
2015 Asset Quality (dollars in thousands) Non-accrual
loans $ 5,734 $ 4,062 $ 4,095 Other real estate owned 711
711 711 Non-performing assets $ 6,445 $ 4,773
$ 4,806 Allowance for loan losses $ 21,843 $
18,955 $ 16,145 Allowance for loan losses as a percent of total
non-performing loans 381 % 467 % 394 % Non-performing loans as a
percent of gross loans 0.18 % 0.14 % 0.19 % Non-performing assets
as a percent of total assets 0.17 % 0.13 % 0.18 % Net loan
charge-offs (recoveries) for the quarter ended $ 1,125 $ 1,089 $ 17
Net loan charge-offs for quarter to average total loans, net 0.04 %
0.04 % — % Allowance for loan losses to gross loans 0.70 % 0.65 %
0.74 %
Delinquent Loans: 30 - 59 days $ 1,042 $ 1,144 $ 702
60 - 89 days 1,990 2,487 25 90+ days 2,646 1,797
2,214 Total delinquency $ 5,678 $ 5,428 $
2,941 Delinquency as a % of total gross loans 0.18 % 0.19 %
0.14 %
Investment Securities
Investment securities available for sale totaled $313 million at
September 30, 2016, an increase of $67.7 million from
June 30, 2016, and $22.1 million from September 30, 2015.
The increase in the third quarter was primarily the result of $96.9
million in securities purchased, partially offset by $16.1 million
in securities sold.
Estimated Fair Value September 30,
June 30, September 30,
2016 2016 2015 Investment securities
available for sale: (dollars in thousands) Corporate $ 23,330 $
— $ — Municipal bonds 116,838 118,799 130,004 Collateralized
mortgage obligation 33,866 22,844 — Mortgage-backed securities
139,166 103,828 161,143 Total securities available
for sale $ 313,200 $ 245,471 $ 291,147
Investments held to maturity $ 9,004 $ 9,390 $ —
Deposits
At September 30, 2016, deposits totaled $3.06 billion, an
increase of $129 million or 4.4% from June 30, 2016 and $921
million or 43.0% from September 30, 2015. At
September 30, 2016, non-maturity deposits totaled $2.49
billion, an increase of $176 million or 7.62% from June 30,
2016 and an increase of $853 million or 52.2% from
September 30, 2015. During the third quarter of 2016, deposit
increases included $117 million in non-interest bearing deposits
and $57.6 million in money market/savings deposits, partially
offset by decreases of $36.6 million in retail certificate deposits
and $10.7 million in wholesale/brokered certificates of deposits.
The increase in non-maturity deposits was primarily due to
commercial relationship deposit increases and, to a lesser extent,
higher homeowner's association ("HOA") deposits. Due to the
increase in lower cost non-maturity deposits, certain retail and
wholesale/brokered deposits were allowed to mature.
The weighted average cost of deposits for the three month
periods ending September 30, 2016 and June 30, 2016 was
0.28%, compared to 0.32% for the three month period ending
September 30, 2015.
September 30, June 30,
September 30, 2016 2016
2015 Deposit Accounts (dollars in thousands)
Non-interest bearing checking $ 1,160,394 $ 1,043,361 $ 680,937
Interest-bearing: Checking 170,057 168,669 130,671 Money
market/Savings 1,157,086 1,099,445 822,876 Retail certificates of
deposit 384,083 420,673 383,481 Wholesale/brokered certificates of
deposit 188,132 198,853 121,242 Total
interest-bearing 1,899,358 1,887,640 1,458,270
Total deposits
$ 3,059,752 $ 2,931,001 $ 2,139,207
Deposit Mix (% of total deposits) Non-interest bearing
deposits 37.9 % 35.6 % 31.8 % Non-maturity deposits 81.3 % 78.9 %
76.4 %
Borrowings
At September 30, 2016, total borrowings amounted to $206
million, an increase of $15.0 million or 7.9% from June 30,
2016 and a decrease of $56.2 million from September 30, 2015.
At September 30, 2016, total borrowings represented 5.48% of
total assets, compared to 5.30% and 9.60%, as of June 30, 2016
and September 30, 2015, respectively.
September 30, 2016
June 30, 2016 September 30, 2015
Balance Weighted
Average Rate
Balance Weighted
Average Rate
Balance Weighted
Average Rate
(dollars in thousands) FHLB advances $ 90,000 0.38 % $ 75,000 0.59
% $ 144,000 0.38 % Reverse repurchase agreements 46,247 2.01 %
45,252 2.07 % 47,483 1.97 % Subordinated debentures 69,353
5.35 % 70,310 5.35 % 70,310 5.35 % Total borrowings $
205,600 2.44 % $ 190,562 2.65 % $ 261,793 2.00
% Weighted average cost of
borrowings during the quarter
3.05 % 3.08 % 2.77 % Borrowings as a percent of total assets 5.48 %
5.30 % 9.60 %
Capital Ratios
At September 30, 2016, our ratio of tangible common equity
to total assets was 9.28%, with book value per share of $16.27 and
tangible book value of $12.22 per share.
At September 30, 2016, the Bank exceeded all regulatory
capital requirements with a ratio for tier 1 leverage capital of
11.03%, common equity tier 1 risk-based capital of 12.07%, tier 1
risk-based capital of 12.07% and total risk-based capital of
12.77%. These capital ratios 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. At September 30, 2016, the Company had a
ratio for tier 1 leverage capital of 9.80%, common equity tier 1
risk-based capital of 10.42%, tier 1 risk-based capital of 10.72%
and total risk-based capital of 13.21%.
September 30, June 30,
September 30, 2016 2016
2015 Capital Ratios Pacific Premier Bank Tier
1 leverage ratio 11.03 % 11.17 % 11.44 % Common equity tier 1
risk-based capital ratio 12.07 % 12.32 % 12.54 % Tier 1 risk-based
capital ratio 12.07 % 12.32 % 12.54 % Total risk-based capital
ratio 12.77 % 12.94 % 13.25 %
Pacific Premier Bancorp, Inc.
Tier 1 leverage ratio 9.80 % 9.88 % 9.50 % Common equity tier 1
risk-based capital ratio 10.42 % 10.58 % 10.02 % Tier 1 risk-based
capital ratio 10.72 % 10.90 % 10.40 % Total risk-based capital
ratio 13.21 % 13.45 % 13.65 % Tangible common equity ratio 9.28 %
9.41 % 8.75 %
Share Data Book value per share $ 16.27
$ 15.94 $ 13.52 Tangible book value per share $ 12.22 $ 11.87 $
10.80 Closing stock price $ 26.46 $ 24.00 $ 20.32 Outstanding
shares at period end 27,656,533 27,650,533 21,510,678
Conference Call and Webcast
The Company will host a conference call at 9:00 a.m. PT / 12:00
p.m. ET on October 19, 2016 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 26, 2016 at 877-344-7529,
conference ID 10094248.
About Pacific Premier Bancorp, Inc.
Pacific Premier Bancorp, Inc. is the holding company for Pacific
Premier Bank, one of the largest community banks headquartered in
Southern California. Pacific Premier Bank is a business bank
primarily focused on serving small and middle market businesses in
the counties of Los Angeles, Orange, Riverside, San Bernardino and
San Diego, California. 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.
Pacific Premier Bank serves its customers through its 16
full-service depository branches in Southern California located in
the cities of Corona, Encinitas, Huntington Beach, Irvine, Los
Alamitos, Murrieta, Newport Beach, Orange, Palm Desert, Palm
Springs, Redlands, Riverside, San Bernardino, and San Diego.
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. 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 2015 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.
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 2016 2016
2016 2015 2015 Cash and due from banks $
18,557 $ 15,444 $ 18,624 $ 14,935 $ 102,235 Interest-bearing
deposits with financial institutions 85,347 169,855
174,890 63,482 526 Cash and cash
equivalents 103,904 185,299 193,514 78,417 102,761 Interest-bearing
time deposits with financial institutions 3,944 3,944 3,944 1,972 —
Investments held to maturity, at amortized cost 8,900 9,292 9,590
9,642 — Investment securities available for sale, at fair value
313,200 245,471 269,711 280,273 291,147 FHLB, FRB and other stock,
at cost 29,966 26,984 27,103 22,292 22,490 Loans held for sale, at
lower of cost or fair value 9,009 10,116 7,281 8,565 — Loans held
for investment 3,090,839 2,920,619 2,851,432 2,254,315 2,167,856
Allowance for loan losses (21,843 ) (18,955 ) (18,455 )
(17,317 ) (16,145 ) Loans held for investment, net 3,068,996
2,901,664 2,832,977 2,236,998 2,151,711 Accrued interest receivable
11,642 12,143 11,862 9,315 9,083 Other real estate owned 711 711
1,161 1,161 711 Premises and equipment 11,314 11,014 11,963 9,248
9,044 Deferred income taxes, net 20,001 16,552 17,000 11,511 13,059
Bank owned life insurance 40,116 39,824 39,535 39,245 38,953
Intangible assets 9,976 10,500 11,145 7,170 7,514 Goodwill 101,939
101,939 101,939 50,832 50,832 Other assets 21,213 23,200
24,360 24,005 17,993 TOTAL
ASSETS $ 3,754,831 $ 3,598,653 $ 3,563,085 $
2,790,646 $ 2,715,298
LIABILITIES AND
STOCKHOLDERS’ EQUITY LIABILITIES: Deposit accounts:
Non-interest-bearing checking $ 1,160,394 $ 1,043,361 $ 1,064,457 $
711,771 $ 680,937 Interest-bearing: Checking 170,057 168,669
160,707 134,999 130,671 Money market/savings 1,157,086 1,099,445
1,096,334 827,378 822,876 Retail certificates of deposit 384,083
420,673 455,637 365,911 383,481 Wholesale/brokered certificates of
deposit 188,132 198,853 129,129 155,064
121,242 Total interest-bearing 1,899,358 1,887,640
1,841,807 1,483,352 1,458,270 Total
deposits 3,059,752 2,931,001 2,906,264 2,195,123 2,139,207 FHLB
advances and other borrowings 136,213 120,252 124,956 196,125
191,483 Subordinated debentures 69,353 70,310 70,310 70,310 70,310
Accrued expenses and other liabilities 39,548 36,460
32,661 30,108 23,531 TOTAL LIABILITIES
3,304,866 3,158,023 3,134,191 2,491,666
2,424,531 STOCKHOLDERS’ EQUITY: Preferred stock — — — — —
Common stock 273 273 273 215 215 Additional paid-in capital 343,233
342,388 341,660 221,487 220,992 Retained earnings 105,096 95,869
85,500 76,946 68,881 Accumulated other comprehensive income, net of
tax 1,363 2,100 1,461 332 679
TOTAL STOCKHOLDERS’ EQUITY 449,965 440,630
428,894 298,980 290,767 TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY $ 3,754,831 $ 3,598,653
$ 3,563,085 $ 2,790,646 $ 2,715,298
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, 2016 2016 2015
2016 2015 INTEREST INCOME Loans $ 40,487 $
39,035 $ 27,935 $ 114,929 $ 80,917 Investment securities and other
interest-earning assets 1,942 1,839 1,812
5,879 5,527
Total interest income
42,429 40,874 29,747 120,808 86,444
INTEREST EXPENSE Deposits 2,136 2,010 1,719 6,215 4,914 FHLB
advances and other borrowings 314 324 339 963 1,121 Subordinated
debentures 970 979 993 2,859 2,946
Total interest expense 3,420 3,313 3,051
10,037 8,981 NET INTEREST INCOME BEFORE PROVISION FOR LOAN
LOSSES 39,009 37,561 26,696 110,771 77,463 PROVISION FOR LOAN
LOSSES 4,013 1,589 1,062 6,722 4,725
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 34,996
35,972 25,634 104,049 72,738
NON-INTEREST
INCOME Loan servicing fees 288 257 248 769 156 Deposit fees 829
817 629 2,488 1,845 Net gain from sales of loans 3,122 2,124 2,544
7,152 5,265 Net gain from sales of investment securities 512 532 38
1,797 293 Other-than-temporary-impairment recovery/(loss) on
investment securities 2 — — (205 ) — Other income 1,215 720
919 3,279 2,669 Total non-interest income
5,968 4,450 4,378 15,280 10,228
NON-INTEREST EXPENSE Compensation and benefits 14,179 13,098
9,066 39,017 27,439 Premises and occupancy 2,633 2,559 2,120 7,550
5,980 Data processing and communications 1,223 887 681 3,021 2,099
Other real estate owned operations, net 5 (15 ) 9 (2 ) 113 FDIC
insurance premiums 442 401 355 1,225 1,032 Legal, audit and
professional expense 676 446 505 1,987 1,687 Marketing expense
1,591 775 567 2,996 1,785 Office and postage expense 612 573 525
1,666 1,529 Loan expense 534 540 370 1,477 826 Deposit expense
1,315 1,196 917 3,530 2,704 Merger related expense — 497 400 3,616
4,392 CDI amortization 525 645 344 1,514 1,002 Other expense 2,125
2,093 1,515 5,603 4,469 Total
non-interest expense 25,860 23,695 17,374
73,200 55,057 NET INCOME BEFORE INCOME TAX 15,104 16,727
12,638 46,129 27,909 INCOME TAX 5,877 6,358 4,801
17,977 10,459 NET INCOME $ 9,227 $ 10,369
$ 7,837 $ 28,152 $ 17,450
EARNINGS PER
SHARE Basic $ 0.34 $ 0.38 $ 0.36 $ 1.05 $ 0.83 Diluted $ 0.33 $
0.37 $ 0.36 $ 1.03 $ 0.82
WEIGHTED AVERAGE SHARES
OUTSTANDING Basic 27,387,123 27,378,930 21,510,678 26,776,140
21,037,345 Diluted 27,925,351 27,845,490 21,866,840 27,245,108
21,342,204
SELECTED FINANCIAL DATA
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA
Three Months Ended Three
Months Ended Three Months Ended
September 30, 2016 June 30, 2016 September 30,
2015
Average
Balance
Interest
Average
Yield/Cost
Average
Balance
Interest
Average
Yield/Cost
Average
Balance
Interest
Average
Yield/Cost
Assets (dollars in thousands) Interest-earning assets: Cash
and cash equivalents $ 201,140 $ 232 0.46 % $ 177,603 $ 189 0.43 %
$ 124,182 $ 63 0.20 % Investment securities 316,253 1,710 2.16
299,049 1,650 2.21 306,623 1,749 2.28 Loans receivable, net (1)
2,998,153 40,487 5.37 2,892,236 39,035
5.43 2,080,281 27,935 5.33 Total
interest-earning assets 3,515,546 42,429 4.80 % 3,368,888 40,874
4.88 % 2,511,086 29,747 4.70 % Non-interest-earning assets 186,778
190,838 125,615 Total assets $ 3,702,324
$ 3,559,726 $ 2,636,701
Liabilities and
Equity Interest-bearing deposits: Interest checking $ 185,344 $
53 0.11 % $ 178,258 $ 50 0.11 % $ 141,747 $ 40 0.11 % Money market
1,036,350 923 0.35 980,806 896 0.37 708,365 616 0.35 Savings 98,496
38 0.15 98,419 38 0.16 91,455 37 0.16 Time 601,551 1,122
0.74 606,770 1,026 0.68 523,010
1,026 0.78 Total interest-bearing deposits
1,921,741 2,136 0.44 % 1,864,253 2,010 0.43 % 1,464,577 1,719 0.47
% FHLB advances and other borrowings 97,547 314 1.28 99,755 324
1.31 120,098 339 1.12 Subordinated debentures 69,984 970
5.54 70,310 979 5.57 70,310
993 5.65 Total borrowings 167,531 1,284
3.05 % 170,065 1,303 3.08 % 190,408
1,332 2.77 % Total interest-bearing liabilities 2,089,272
3,420 0.65 % 2,034,318 3,313 0.66 % 1,654,985 3,051 0.73 %
Non-interest-bearing deposits 1,134,318 1,060,097 674,795 Other
liabilities 35,019 32,969 22,435 Total
liabilities 3,258,609 3,127,384 2,352,215 Stockholders' equity
443,715 432,342 284,486 Total liabilities and
equity $ 3,702,324 $ 3,559,726 $
2,636,701 Net interest income $ 39,009 $
37,561 $ 26,696 Net interest margin (2) 4.41 % 4.48 %
4.22 % Ratio of interest-earning assets to interest-bearing
liabilities 168.27 % 165.60 % 151.73 % (1) Average balance
includes nonperforming loans and is net of deferred loan
origination fees, unamortized discounts and 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, 2016
2016 2016 2015 2015 Loan
Portfolio Business loans: Commercial and industrial $ 537,809 $
508,141 $ 491,112 $ 309,741 $ 288,982 Franchise 431,618 403,855
371,875 328,925 295,965 Commercial owner occupied 460,068 443,060
424,289 294,726 302,556 SBA 92,195 86,076 78,350 62,256 70,191
Warehouse facilities — — 1,394 143,200 144,274 Real estate loans:
Commercial non-owner occupied 527,412 526,362 522,080 421,583
406,490 Multi-family 689,813 613,573 619,485 429,003 421,240
One-to-four family 101,377 106,538 106,854 80,050 78,781
Construction 231,098 215,786 218,069 169,748 141,293 Land 18,472
18,341 18,222 18,340 12,758 Other loans 5,678 5,822
6,045 5,111 5,017 Total gross loans 3,095,540
2,927,554 2,857,775 2,262,683 2,167,547 Less loans held for sale,
net 9,009 10,116 7,281 8,565 —
Total gross loans held for investment 3,086,531 2,917,438 2,850,494
2,254,118 2,167,547 Plus (less): Deferred loan origination costs
and premiums, net 4,308 3,181 938 197 309 Allowance for loan losses
(21,843 ) (18,955 ) (18,455 ) (17,317 ) (16,145 ) Loans held for
investment, net $ 3,068,996 $ 2,901,664 $ 2,832,977
$ 2,236,998 $ 2,151,711
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES ASSET
QUALITY INFORMATION (dollars in thousands)
September 30, June 30, March 31, December
31, September 30, 2016 2016 2016
2015 2015 Asset Quality Nonaccrual loans $
5,734 $ 4,062 $ 4,823 $ 3,970 $ 4,095 Other real estate owned 711
711 1,161 1,161 711
Nonperforming assets $ 6,445 $ 4,773 $ 5,984 $
5,131 $ 4,806 Allowance for loan losses $
21,843 $ 18,955 $ 18,455 $ 17,317 $ 16,145 Allowance for loan
losses as a percent of total nonperforming loans 381 % 467 % 383 %
436 % 394 % Nonperforming loans as a percent of gross loans 0.18 %
0.14 % 0.17 % 0.18 % 0.19 % Nonperforming assets as a percent of
total assets 0.17 % 0.13 % 0.17 % 0.18 % 0.18 % Net loan
charge-offs for the quarter ended $ 1,125 $ 1,089 $ (18 ) $ 528 $
17 Net loan charge-offs for quarter to average total loans, net
0.04 % 0.04 % — % 0.02 % — % Allowance for loan losses to gross
loans 0.70 % 0.65 % 0.65 % 0.77 % 0.74 %
Delinquent Loans:
30 - 59 days $ 1,042 $ 1,144 $ 247 $ 323 $ 702 60 - 89 days 1,990
2,487 — 355 25 90+ days 2,646 1,797 3,199
1,954 2,214 Total delinquency $ 5,678 $ 5,428
$ 3,446 $ 2,632 $ 2,941 Delinquency as
a % of total gross loans 0.18 % 0.19 % 0.12 % 0.12 % 0.14 %
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
DEPOSIT COMPOSITION (dollars in thousands)
September 30, June 30, March 31, December
31, September 30, 2016 2016 2016
2015 2015 Deposit Accounts Non-interest
bearing checking $ 1,160,394 $ 1,043,361 $ 1,064,457 $ 711,771 $
680,937 Interest-bearing: Checking 170,057 168,669 160,707 134,999
130,671 Money market/savings 1,157,086 1,099,445 1,096,334 827,378
822,876 Retail certificates of deposit 384,083 420,673 455,637
365,911 383,481 Wholesale/brokered certificates of deposit 188,132
198,853 129,129 155,064 121,242
Total interest-bearing 1,899,358 1,887,640 1,841,807
1,483,352 1,458,270 Total deposits $ 3,059,752
$ 2,931,001 $ 2,906,264 $ 2,195,123 $
2,139,207
Deposit Mix (% of total deposits)
Non-interest bearing deposits 37.9 % 35.6 % 36.6 % 32.4 % 31.8 %
Non-maturity deposits 81.3 % 78.9 % 79.9 % 76.3 % 76.4 %
GAAP RECONCILIATIONS
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES GAAP
RECONCILIATIONS (dollars in thousands, except per share data)
GAAP Reconciliations
For periods presented below,
adjusted net income, adjusted diluted earnings per share and
adjusted return on average assets are non-GAAP financial measures
derived from GAAP-based amounts. We calculate these figures by
excluding merger related expenses in the period results. 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.
Three
Months Ended September 30, June 30, September
30, 2016 2016 2015 Net income $ 9,227 $
10,369 $ 7,837 Plus merger related expenses, net of tax — 497 400
Less merger related expenses tax adjustment — (190 ) —
Adjusted net income $ 9,227 $ 10,676 $
8,237 Diluted earnings per share $ 0.33 $ 0.37 $ 0.36 Plus
merger related expenses, net of tax — 0.01 0.02
Adjusted diluted earnings per share $ 0.33 $
0.38 $ 0.38 Return on average assets 1.00 % 1.17 %
1.19 % Plus merger related expenses, net of tax — % 0.03 % 0.06 %
Adjusted return on average assets 1.00 % 1.20 % 1.25 %
For periods presented below, return on average tangible
common equity and adjusted return on average tangible common equity
are non-GAAP financial measures derived from GAAP-based amounts. We
calculate these figures by excluding merger related expenses and/or
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.
Three Months Ended September 30, June
30, September 30, 2016 2016 2015
Net income $ 9,227 $ 10,369 $ 7,837 Plus tax effected CDI
amortization 525 645 344 Less CDI amortization expense tax
adjustment (204 ) (245 ) (131 )
Net income for average tangible
common equity $ 9,548 $ 10,769 $ 8,050 Plus merger related
expenses, net of tax — 497 400 Less merger related expenses tax
adjustment — (190 ) —
Adjusted net income for
average tangible common equity $ 9,548 $ 11,076 $
8,450 Average stockholders' equity $ 443,715 $ 432,342 $
284,486 Less average CDI 10,318 10,876 7,686 Less average goodwill
101,939 101,923 50,832
Average tangible
common equity $ 331,458 $ 319,543 $ 225,968
Return on average tangible common equity 11.52 %
13.48 % 14.25 %
Adjusted return on average tangible common
equity 11.52 % 13.86 % 14.96 % 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.
September 30, June 30,
March 31, December 31,
September 30, 2016 2016 2016
2015 2015 Total stockholders' equity $ 449,965 $
440,630 $ 428,894 $ 298,980 $ 290,767 Less intangible assets
(111,915 ) (112,439 ) (113,230 ) (58,002 ) (58,346 )
Tangible
common equity $ 338,050 $ 328,191 $ 315,664
$ 240,978 $ 232,421 Book value per share $
16.27 $ 15.94 $ 15.58 $ 13.86 $ 13.52 Less intangible book value
per share (4.05 ) (4.07 ) (4.12 ) (2.69 ) (2.72 )
Tangible book
value per share $ 12.22 $ 11.87 $ 11.46 $
11.17 $ 10.80 Total assets $ 3,754,831 $ 3,598,653 $
3,563,085 $ 2,790,646 $ 2,715,298 Less intangible assets (111,915 )
(112,439 ) (113,230 ) (58,002 ) (58,346 )
Tangible assets $
3,642,916 $ 3,486,214 $ 3,449,855 $ 2,732,644
$ 2,656,952
Tangible common equity ratio 9.28
% 9.41 % 9.15 % 8.82 % 8.75 %
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161019005441/en/
Pacific Premier Bancorp, Inc.Steve R. GardnerChairman &
Chief Executive Officer949-864-8000orRonald J. Nicolas, Jr.Senior
Executive Vice President & CFO949-864-8000
Pacific Premier Bancorp (NASDAQ:PPBI)
Historical Stock Chart
From Mar 2024 to Apr 2024
Pacific Premier Bancorp (NASDAQ:PPBI)
Historical Stock Chart
From Apr 2023 to Apr 2024
