Fourth Quarter 2023 Summary
- Net loss of $135.4 million, or $1.44 per diluted share;
adjusted net income of $48.4 million, or $0.51 per diluted
share(1)
- Sold $1.26 billion of available-for-sale securities for a
net after-tax loss of $182.3 million, repositioning the balance
sheet
- Net interest margin expanded 16 basis points to
3.28%
- Cost of deposits of 1.56%, and cost of non-maturity
deposits(1) of 1.02%
- Non-maturity deposits increased to 84.7% of total
deposits
- Reduced $617.0 million in higher cost brokered certificates
of deposit and $200.0 million in FHLB borrowings during the
quarter
- Total delinquency of 0.08% of loans held for investment,
nonperforming assets to total assets of 0.13%, and net charge-offs
to average loans of 0.03%
- Common equity tier 1 capital ratio of 14.32%, and total
risk-based capital ratio of 17.29%
- Tangible book value per share(1) increased $0.33 to $20.22
compared to the prior quarter
- Tangible Common Equity (“TCE”) Ratio(1) increased to
10.72%
- Available liquidity of $9.91 billion; cash and cash
equivalents was $936.5 million
Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) (the “Company” or
“Pacific Premier”), the holding company of Pacific Premier Bank
(the “Bank”), reported net loss of $135.4 million, or $1.44 per
diluted share, for the fourth quarter of 2023, compared with net
income of $46.0 million, or $0.48 per diluted share, for the third
quarter of 2023, and net income of $73.7 million, or $0.77 per
diluted share, for the fourth quarter of 2022.
For the fourth quarter of 2023, the Company’s return on average
assets (“ROAA”) was (2.76)%, return on average equity (“ROAE”) was
(19.01)%, and return on average tangible common equity
(“ROATCE”)(1) was (28.01)%, compared to 0.88%, 6.43%, and 10.08%,
respectively, for the third quarter of 2023, and 1.36%, 10.71%, and
16.99%, respectively, for the fourth quarter of 2022.
Excluding net loss of $254.1 million from an investment
securities repositioning transaction and $2.1 million FDIC special
assessment expense(1), the Company’s adjusted net income was $48.4
million, or $0.51 per diluted share, ROAA was 0.99%, ROAE was
7.03%, and ROATCE was 11.19% for the fourth quarter of 2023.
Total assets as of December 31, 2023 were $19.03 billion,
compared to $20.28 billion at September 30, 2023, and $21.69
billion at December 31, 2022.
Steven R. Gardner, Chairman, Chief Executive Officer, and
President of the Company, commented, “Our team delivered another
solid quarter to close out 2023, an extraordinary year for the
banking industry. During the fourth quarter, we proactively
repositioned our securities portfolio to enhance our future
earnings profile and provide additional liquidity as we navigate a
challenging operating environment. The repositioning produced
immediate results, fueling a 16 basis point net interest margin
expansion in the fourth quarter while our capital ratios remain
among the strongest in the industry. We generated $0.51 per share
in operating earnings when excluding the impact from the securities
portfolio repositioning and the FDIC special assessment
expense.
“Our financial performance continues to demonstrate the strength
of our franchise and our disciplined commitment to prudent capital,
liquidity, and credit risk management. Throughout the year, we
leveraged our best-in-class service to deepen our relationships
with existing clients and attract new clients to the Bank,
generating meaningful growth in new deposit account openings while
maintaining pricing discipline. The new account opening activity,
coupled with our ability to opportunistically deploy liquidity
generated from the securities portfolio repositioning, allowed us
to reduce higher cost wholesale funding in the fourth quarter by
$817 million and to tightly manage our overall cost of funds, which
increased only two basis points to 1.69%.
“We enter 2024 on solid footing, with strong capital levels,
ready access to significant liquidity, and favorable asset quality
measures. Through our relationship-based business model, our
bankers consistently communicate with our clients and monitor key
trends within their individual businesses and industries. This
access provides our organization with valuable information relative
to market dynamics, including emerging trends in the commercial
real estate markets, which we are closely monitoring. We are
committed to responding quickly and proactively to any signs of
stress within the loan portfolio. In short, we believe we are
well-positioned heading into 2024 to continue to deliver value for
our shareholders, clients, employees, and the communities we
serve.”
FINANCIAL HIGHLIGHTS
Three Months Ended
December 31,
September 30,
December 31,
(Dollars in
thousands, except per share data)
2023
2023
2022
Financial Highlights
Net (loss) income
$
(135,376
)
$
46,030
$
73,673
Net interest income
146,789
149,548
181,396
Diluted earnings per share
(1.44
)
0.48
0.77
Common equity dividend per share paid
0.33
0.33
0.33
Return on average assets
(2.76
)%
0.88
%
1.36
%
Return on average equity
(19.01
)
6.43
10.71
Return on average tangible common equity
(1)
(28.01
)
10.08
16.99
Pre-provision net (loss) revenue on
average assets (1)
(3.88
)
1.27
1.89
Net interest margin
3.28
3.12
3.61
Cost of deposits
1.56
1.50
0.58
Cost of non-maturity deposits (1)
1.02
0.89
0.31
Efficiency ratio (1)
60.1
59.0
47.4
Noninterest expense as a percent of
average assets
2.09
1.96
1.83
Total assets
$
19,026,645
$
20,275,720
$
21,688,017
Total deposits
14,995,626
16,007,447
17,352,401
Non-maturity deposits as a percent of
total deposits
84.7
%
82.8
%
85.6
%
Noninterest-bearing deposits as a percent
of total deposits
32.9
36.1
36.3
Loans-to-deposit ratio
88.6
82.9
84.6
Book value per share
$
30.07
$
29.78
$
29.45
Tangible book value per share (1)
20.22
19.89
19.38
Tangible common equity ratio
10.72
%
9.87
%
8.88
%
Common equity tier 1 capital ratio
14.32
14.87
12.99
Total capital ratio
17.29
17.74
15.53
______________________________
(1)
Reconciliations of the non-GAAP measures
are set forth at the end of this press release.
INCOME STATEMENT HIGHLIGHTS
Net Interest Income and Net Interest
Margin
Net interest income totaled $146.8 million in the fourth quarter
of 2023, a decrease of $2.8 million, or 1.8%, from the third
quarter of 2023. The decrease in net interest income was primarily
attributable to lower average interest-earning asset balances,
partially offset by higher yields on interest-earning assets as
well as lower average wholesale/brokered CD balances and lower
average borrowings, both a direct result of our balance sheet
repositioning.
The net interest margin for the fourth quarter of 2023 increased
16 basis points to 3.28% from 3.12% in the third quarter of 2023.
The increase was primarily due to higher loan yields as well as
higher investment securities yields resulting from the sale of
lower-yielding available-for-sale ("AFS") securities of $1.26
billion at fair value at a weighted average yield of 1.34% and
redeploying part of the sale proceeds into higher-yielding AFS
securities at a weighted average yield of 5.28% during the fourth
quarter of 2023.
Net interest income for the fourth quarter of 2023 decreased
$34.6 million, or 19.1%, compared to the fourth quarter of 2022.
The decrease was primarily attributable to a higher cost of funds
as a result of the higher interest rate environment.
PACIFIC PREMIER BANCORP, INC.
AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES
AND YIELD DATA
(Unaudited)
Three Months Ended
December 31, 2023
September 30, 2023
December 31, 2022
(Dollars in
thousands)
Average Balance
Interest
Average
Yield/ Cost
Average Balance
Interest
Average
Yield/
Cost
Average Balance
Interest
Average Yield/
Cost
Assets
Cash and cash equivalents
$
1,281,793
$
15,744
4.87
%
$
1,695,508
$
21,196
4.96
%
$
1,015,197
$
8,636
3.37
%
Investment securities
3,203,608
24,675
3.08
3,828,766
25,834
2.70
4,130,042
24,688
2.39
Loans receivable, net (1) (2)
13,257,767
176,773
5.29
13,475,194
177,032
5.21
14,799,417
184,457
4.94
Total interest-earning assets
$
17,743,168
$
217,192
4.86
$
18,999,468
$
224,062
4.68
$
19,944,656
$
217,781
4.33
Liabilities
Interest-bearing deposits
$
10,395,116
$
60,915
2.32
%
$
10,542,884
$
62,718
2.36
%
$
11,021,383
$
25,865
0.93
%
Borrowings
942,689
9,488
4.01
1,131,656
11,796
4.15
1,157,258
10,520
3.62
Total interest-bearing liabilities
$
11,337,805
$
70,403
2.46
$
11,674,540
$
74,514
2.53
$
12,178,641
$
36,385
1.19
Noninterest-bearing deposits
$
5,141,585
$
6,001,033
$
6,587,400
Net interest income
$
146,789
$
149,548
$
181,396
Net interest margin (3)
3.28
%
3.12
%
3.61
%
Cost of deposits (4)
1.56
1.50
0.58
Cost of funds (5)
1.69
1.67
0.77
Cost of non-maturity deposits (6)
1.02
0.89
0.31
Ratio of interest-earning assets to
interest-bearing liabilities
156.50
162.74
163.77
______________________________
(1)
Average balance includes loans held for
sale and nonperforming loans and is net of deferred loan
origination fees/costs, discounts/premiums, and the basis
adjustment of certain loans included in fair value hedging
relationships.
(2)
Interest income includes net discount
accretion of $2.6 million, $2.2 million, and $3.5 million, for the
three months ended December 31, 2023, September 30, 2023, and
December 31, 2022, respectively.
(3)
Represents annualized net interest income
divided by average interest-earning assets.
(4)
Represents annualized interest expense on
deposits divided by the sum of average interest-bearing deposits
and noninterest-bearing deposits.
(5)
Represents annualized total interest
expense divided by the sum of average total interest-bearing
liabilities and noninterest-bearing deposits.
(6)
Reconciliations of the non-GAAP measures
are set forth at the end of this press release.
Provision for Credit Losses
For the fourth quarter of 2023, the Company recorded a $1.7
million provision expense, compared to a $3.9 million provision
expense for the third quarter of 2023, and a $2.8 million provision
expense for the fourth quarter of 2022. The provision for credit
losses was impacted by changes to the overall size, composition,
and asset quality trends of the loan portfolio, as well as changes
in the economic forecasts.
The provision expense for loan losses for the fourth quarter of
2023 was largely attributable to increases associated with economic
forecasts, partially offset by the changes in loan composition. The
provision recapture for unfunded commitments was attributable to
lower unfunded commitments as well as changes in economic forecasts
during the quarter.
Three Months Ended
December 31,
September 30,
December 31,
(Dollars in
thousands)
2023
2023
2022
Provision for Credit Losses
Provision for loan losses
$
8,275
$
2,517
$
3,899
Provision for unfunded commitments
(6,577
)
1,386
(1,013
)
Provision for held-to-maturity
securities
(2
)
15
(48
)
Total provision for credit losses
$
1,696
$
3,918
$
2,838
Noninterest Income
Noninterest loss for the fourth quarter of 2023 was $234.2
million, compared to noninterest income of $18.6 million for the
third quarter of 2023. The decrease was related to the investment
securities portfolio repositioning during the fourth quarter of
2023 whereby the Bank sold $1.26 billion of its AFS securities
portfolio for a loss of $254.1 million. Excluding the loss from
sales of AFS securities, noninterest income was $19.9 million, an
increase of $1.3 million from the third quarter of 2023.
Noninterest income for the fourth quarter of 2023 decreased
$254.7 million, compared to the fourth quarter of 2022. The
decrease was primarily due to the $254.1 million net loss from
sales of investment securities during the fourth quarter of
2023.
Three Months Ended
December 31,
September 30,
December 31,
(Dollars in
thousands)
2023
2023
2022
Noninterest income
Loan servicing income
$
359
$
533
$
346
Service charges on deposit accounts
2,648
2,673
2,689
Other service fee income
322
280
295
Debit card interchange fee income
844
924
1,048
Earnings on bank owned life insurance
3,678
3,579
3,359
Net (loss) gain from sales of loans
(4
)
45
151
Net (loss) gain from sales of investment
securities
(254,065
)
—
—
Trust custodial account fees
9,388
9,356
9,722
Escrow and exchange fees
1,074
938
1,282
Other income
1,562
223
1,605
Total noninterest (loss) income
$
(234,194
)
$
18,551
$
20,497
Noninterest Expense
Noninterest expense totaled $102.8 million for the fourth
quarter of 2023, an increase of $585,000 compared to the third
quarter of 2023, primarily as a result of the $2.1 million FDIC
special assessment. Excluding the special assessment, noninterest
expense decreased $1.5 million from the prior quarter primarily due
to a $2.2 million decrease in compensation and benefits, partially
offset by a $341,000 increase in deposit expense.
Noninterest expense increased by $3.6 million compared to the
fourth quarter of 2022 primarily due to a $4.4 million increase in
deposit expense, driven by higher deposit earnings credit rates,
and a $2.8 million increase in FDIC insurance premiums, partially
offset by a $2.4 million decrease in compensation and benefits, a
$512,000 decrease in legal and professional services, and a
$458,000 decrease in premises and occupancy.
Three Months Ended
December 31,
September 30,
December 31,
(Dollars in
thousands)
2023
2023
2022
Noninterest expense
Compensation and benefits
$
51,907
$
54,068
$
54,347
Premises and occupancy
11,183
11,382
11,641
Data processing
7,409
7,517
6,991
Other real estate owned operations,
net
103
(4
)
—
FDIC insurance premiums
4,267
2,324
1,463
Legal and professional services
4,663
4,243
5,175
Marketing expense
1,728
1,635
1,985
Office expense
1,367
1,079
1,310
Loan expense
437
476
743
Deposit expense
11,152
10,811
6,770
Amortization of intangible assets
3,022
3,055
3,440
Other expense
5,532
5,599
5,317
Total noninterest expense
$
102,770
$
102,185
$
99,182
Income Tax
For the fourth quarter of 2023, our income tax benefit totaled
$56.5 million, resulting in an effective tax rate of 29.4%,
compared to income tax expense of $16.0 million and an effective
tax rate of 25.8% for the third quarter of 2023, and income tax
expense of $26.2 million and an effective tax rate of 26.2% for the
fourth quarter of 2022. The income tax benefit was primarily
attributable to the pretax loss recorded for the fourth quarter,
driven by the balance sheet repositioning related to the Bank’s
investment securities portfolio.
For the full year 2023, our income tax expense totaled $3.2
million, resulting in an effective tax rate of 9.4%, compared to
income tax expense of $100.6 million and an effective tax rate of
26.18% for the full year 2022. The decrease in effective tax rate
was primarily attributable to the decrease in pretax income.
BALANCE SHEET HIGHLIGHTS
Loans
Loans held for investment totaled $13.29 billion at December 31,
2023, an increase of $18.9 million, or 0.1%, from September 30,
2023, and a decrease of $1.39 billion, or (9.5)%, from December 31,
2022. The increase from September 30, 2023 was driven primarily by
increased net draws on existing lines of credits, partially offset
by higher loan prepayments and maturities.
During the fourth quarter of 2023, new loan commitments totaled
$128.1 million, and new loan fundings totaled $103.7 million,
compared with $67.8 million in loan commitments and $25.6 million
in new loan fundings for the third quarter of 2023, and $239.8
million in loan commitments and $149.1 million in new loan fundings
for the fourth quarter of 2022.
At December 31, 2023, the total loan-to-deposit ratio was 88.6%,
compared with 82.9% and 84.6% at September 30, 2023 and December
31, 2022, respectively.
The following table presents the primary loan roll-forward
activities for total gross loans, including both loans held for
investment and loans held for sale, during the quarters
indicated:
Three Months Ended
December 31,
September 30,
December 31,
(Dollars in
thousands)
2023
2023
2022
Beginning loan balance
$
13,319,591
$
13,665,596
$
14,979,098
New commitments
128,102
67,811
239,829
Unfunded new commitments
(24,429
)
(42,185
)
(90,758
)
Net new fundings
103,673
25,626
149,071
Amortization/maturities/payoffs
(422,607
)
(370,044
)
(481,120
)
Net draws on existing lines of credit
354,711
7,180
107,560
Loan sales
(32,464
)
(1,206
)
(9,471
)
Charge-offs
(4,138
)
(7,561
)
(4,271
)
Transferred to other real estate owned
(195
)
—
—
Net decrease
(1,020
)
(346,005
)
(238,231
)
Ending gross loan balance before basis
adjustment
13,318,571
13,319,591
14,740,867
Basis adjustment associated with fair
value hedge (1)
(29,551
)
(48,830
)
(61,926
)
Ending gross loan balance
$
13,289,020
$
13,270,761
$
14,678,941
______________________________
(1)
Represents the basis adjustment associated
with the application of hedge accounting on certain loans.
The following table presents the composition of the loans held
for investment as of the dates indicated:
December 31,
September 30,
December 31,
(Dollars in
thousands)
2023
2023
2022
Investor loans secured by real
estate
Commercial real estate (“CRE”)
non-owner-occupied
$
2,421,772
$
2,514,056
$
2,660,321
Multifamily
5,645,310
5,719,210
6,112,026
Construction and land
472,544
444,576
399,034
SBA secured by real estate (1)
36,400
37,754
42,135
Total investor loans secured by real
estate
8,576,026
8,715,596
9,213,516
Business loans secured by real estate
(2)
CRE owner-occupied
2,191,334
2,228,802
2,432,163
Franchise real estate secured
304,514
313,451
378,057
SBA secured by real estate (3)
50,741
53,668
61,368
Total business loans secured by real
estate
2,546,589
2,595,921
2,871,588
Commercial loans (4)
Commercial and industrial
1,790,608
1,588,771
2,160,948
Franchise non-real estate secured
319,721
335,053
404,791
SBA non-real estate secured
10,926
10,667
11,100
Total commercial loans
2,121,255
1,934,491
2,576,839
Retail loans
Single family residential (5)
72,752
70,984
72,997
Consumer
1,949
1,958
3,284
Total retail loans
74,701
72,942
76,281
Loans held for investment before basis
adjustment (6)
13,318,571
13,318,950
14,738,224
Basis adjustment associated with fair
value hedge (7)
(29,551
)
(48,830
)
(61,926
)
Loans held for investment
13,289,020
13,270,120
14,676,298
Allowance for credit losses for loans held
for investment
(192,471
)
(188,098
)
(195,651
)
Loans held for investment, net
$
13,096,549
$
13,082,022
$
14,480,647
Total unfunded loan commitments
$
1,703,470
$
2,110,565
$
2,489,203
Loans held for sale, at lower of cost or
fair value
$
—
$
641
$
2,643
______________________________
(1)
SBA loans that are collateralized by
hotel/motel real property.
(2)
Loans to businesses that are
collateralized by real estate where the operating cash flow of the
business is the primary source of repayment.
(3)
SBA loans that are collateralized by real
property other than hotel/motel real property.
(4)
Loans to businesses where the operating
cash flow of the business is the primary source of repayment.
(5)
Single family residential includes home
equity lines of credit, as well as second trust deeds.
(6)
Includes net deferred origination (fees)
costs of $(74,000), $451,000, and $(1.9) million, and unaccreted
fair value net purchase discounts of $43.3 million, $46.2 million,
and $54.8 million as of December 31, 2023, September 30, 2023, and
December 31, 2022, respectively.
(7)
Represents the basis adjustment associated
with the application of hedge accounting on certain loans.
The total end of period weighted average interest rate on loans,
excluding fees and discounts, at December 31, 2023 was 4.87%,
compared with 4.76% at September 30, 2023 and 4.61% at December 31,
2022. The quarter-over-quarter and year-over-year increases reflect
higher rates on new loan originations and the repricing of loans as
a result of the increases in benchmark interest rates.
The following table presents the composition of loan commitments
originated during the quarters indicated:
Three Months Ended
December 31,
September 30,
December 31,
(Dollars in
thousands)
2023
2023
2022
Investor loans secured by real
estate
CRE non-owner-occupied
$
1,450
$
2,900
$
34,258
Multifamily
94,462
3,687
28,285
Construction and land
—
17,400
31,175
Total investor loans secured by real
estate
95,912
23,987
93,718
Business loans secured by real estate
(1)
CRE owner-occupied
3,870
—
24,266
Franchise real estate secured
—
—
840
SBA secured by real estate (2)
—
—
4,198
Total business loans secured by real
estate
3,870
—
29,304
Commercial loans (3)
Commercial and industrial
24,766
40,399
96,566
Franchise non-real estate secured
—
—
14,130
SBA non-real estate secured
—
406
1,058
Total commercial loans
24,766
40,805
111,754
Retail loans
Single family residential (4)
3,554
3,019
5,053
Total retail loans
3,554
3,019
5,053
Total loan commitments
$
128,102
$
67,811
$
239,829
______________________________
(1)
Loans to businesses that are
collateralized by real estate where the operating cash flow of the
business is the primary source of repayment.
(2)
SBA loans that are collateralized by real
property other than hotel/motel real property.
(3)
Loans to businesses where the operating
cash flow of the business is the primary source of repayment.
(4)
Single family residential includes home
equity lines of credit, as well as second trust deeds.
The weighted average interest rate on new loan commitments was
6.34% in the fourth quarter of 2023, compared to 8.01% in the third
quarter of 2023, and 6.34% in the fourth quarter of 2022.
Asset Quality and Allowance for Credit
Losses
At December 31, 2023, our allowance for credit losses (“ACL”) on
loans held for investment was $192.5 million, an increase of $4.4
million from September 30, 2023, and a decrease of $3.2 million
from December 31, 2022. The change in ACL from September 30, 2023
was largely impacted by changes in economic forecasts and, to a
lesser extent, loan composition.
During the fourth quarter of 2023, the Company incurred $3.9
million of net charge-offs, compared with $6.8 million of net
charge-offs during the third quarter of 2023, and $3.8 million of
net charge-offs during the fourth quarter of 2022,
respectively.
The following table provides the allocation of the ACL for loans
held for investment, as well as the activity in the ACL attributed
to various segments in the loan portfolio as of and for the period
indicated:
Three Months Ended December
31, 2023
(Dollars in
thousands)
Beginning ACL Balance
Charge-offs
Recoveries
Provision for Credit
Losses
Ending ACL
Balance
Investor loans secured by real
estate
CRE non-owner occupied
$
31,583
$
(815
)
$
93
$
169
$
31,030
Multifamily
55,221
(1,582
)
—
2,673
56,312
Construction and land
8,506
—
—
808
9,314
SBA secured by real estate (1)
2,199
—
—
(17
)
2,182
Business loans secured by real estate
(2)
CRE owner-occupied
29,086
—
4
(303
)
28,787
Franchise real estate secured
7,566
—
—
(67
)
7,499
SBA secured by real estate (3)
4,562
—
40
(175
)
4,427
Commercial loans (4)
Commercial and industrial
32,497
(1,740
)
96
5,839
36,692
Franchise non-real estate secured
15,779
—
—
(648
)
15,131
SBA non-real estate secured
472
—
3
(17
)
458
Retail loans
Single family residential (5)
491
—
—
14
505
Consumer loans
136
(1
)
—
(1
)
134
Totals
$
188,098
$
(4,138
)
$
236
$
8,275
$
192,471
______________________________
(1)
SBA loans that are collateralized by
hotel/motel real property.
(2)
Loans to businesses that are
collateralized by real estate where the operating cash flow of the
business is the primary source of repayment.
(3)
SBA loans that are collateralized by real
property other than hotel/motel real property.
(4)
Loans to businesses where the operating
cash flow of the business is the primary source of repayment.
(5)
Single family residential includes home
equity lines of credit, as well as second trust deeds.
The ratio of ACL to loans held for investment at December 31,
2023 increased to 1.45%, compared to 1.42% at September 30, 2023
and 1.33% at December 31, 2022. The fair value net discount on
loans acquired through bank acquisitions was $43.3 million, or
0.33% of total loans held for investment, as of December 31, 2023,
compared to $46.2 million, or 0.35% of total loans held for
investment, as of September 30, 2023, and $54.8 million, or 0.37%
of total loans held for investment, as of December 31, 2022.
Nonperforming assets declined slightly to $25.1 million, or
0.13% of total assets, at December 31, 2023, compared with $25.9
million, or 0.13% of total assets, at September 30, 2023 and $30.9
million, or 0.14% of total assets, at December 31, 2022. Loan
delinquencies were $10.1 million, or 0.08% of loans held for
investment, at December 31, 2023, compared to $10.9 million, or
0.08% of loans held for investment, at September 30, 2023, and
$43.3 million, or 0.30% of loans held for investment, at December
31, 2022.
Classified loans totaled $142.0 million, or 1.07% of loans held
for investment, at December 31, 2023, compared with $149.3 million,
or 1.12% of loans held for investment, at September 30, 2023, and
$149.3 million, or 1.02% of loans held for investment, at December
31, 2022.
The following table presents the asset quality metrics of the
loan portfolio as of the dates indicated:
December 31,
September 30,
December 31,
(Dollars in
thousands)
2023
2023
2022
Asset Quality
Nonperforming loans
$
24,817
$
25,458
$
30,905
Other real estate owned
248
450
—
Nonperforming assets
$
25,065
$
25,908
$
30,905
Total classified assets (1)
$
142,210
$
149,708
$
149,304
Allowance for credit losses
192,471
188,098
195,651
Allowance for credit losses as a percent
of total nonperforming loans
776
%
739
%
633
%
Nonperforming loans as a percent of loans
held for investment
0.19
0.19
0.21
Nonperforming assets as a percent of total
assets
0.13
0.13
0.14
Classified loans to total loans held for
investment
1.07
1.12
1.02
Classified assets to total assets
0.75
0.74
0.69
Net loan charge-offs (recoveries) for the
quarter ended
$
3,902
$
6,752
$
3,797
Net loan charge-offs (recoveries) for the
quarter to average total loans
0.03
%
0.05
%
0.03
%
Allowance for credit losses to loans held
for investment (2)
1.45
1.42
1.33
Delinquent Loans:
30 - 59 days
$
2,484
$
2,967
$
20,538
60 - 89 days
1,294
475
185
90+ days
6,276
7,484
22,625
Total delinquency
$
10,054
$
10,926
$
43,348
Delinquency as a percent of loans held for
investment
0.08
%
0.08
%
0.30
%
______________________________
(1)
Includes substandard and doubtful loans
and other real estate owned.
(2)
At December 31, 2023, 24% of loans held
for investment include a fair value net discount of $43.3 million,
or 0.33% of loans held for investment. At September 30, 2023, 24%
of loans held for investment include a fair value net discount of
$46.2 million, or 0.35% of loans held for investment. At December
31, 2022, 26% of loans held for investment include a fair value net
discount of $54.8 million, or 0.37% of loans held for
investment.
Investment Securities
At December 31, 2023, AFS and held-to-maturity ("HTM")
investment securities were $1.14 billion and $1.73 billion,
respectively, compared to $1.91 billion and $1.74 billion,
respectively, at September 30, 2023, and $2.60 billion and $1.39
billion, respectively, at December 31, 2022.
In total, investment securities were $2.87 billion at December
31, 2023, a decrease of $782.9 million from $3.65 billion at
September 30, 2023 and a decrease of $1.12 billion from $3.99
billion at December 31, 2022. The decrease in the fourth quarter of
2023 compared to the prior quarter was primarily attributable to
sales of $1.26 billion of AFS securities, as well as principal
payments, amortization, and redemptions of $64.3 million, partially
offset by purchases of $539.1 million, predominantly short-term
U.S. Treasury securities.
The decrease in investment securities from December 31, 2022 was
primarily attributable to sales of $1.57 billion of AFS securities,
as well as principal payments, amortization, and redemptions of
$349.5 million, partially offset by purchases of $784.9
million.
Deposits
At December 31, 2023, total deposits were $15.00 billion, a
decrease of $1.01 billion, or 6.3%, from September 30, 2023, and a
decrease of $2.36 billion, or 13.6%, from December 31, 2022. The
decrease from the prior quarter included the reduction of $617.0
million in brokered certificates of deposit. The remainder of the
deposit decrease from the prior quarter of $394.8 million was
driven by a decrease of $849.5 million in noninterest-bearing
deposits, partially offset by increases of $301.2 million in
interest-bearing checking and $158.6 million in retail certificates
of deposit.
At December 31, 2023, non-maturity deposits(1) totaled $12.70
billion, or 84.7% of total deposits, a decrease of $553.5 million,
or 4.2%, from September 30, 2023, and a decrease of $2.15 billion,
or 14.5%, from December 31, 2022. The decrease compared to the
prior quarter was partially attributable to seasonal outflows for
client tax payments. Additionally, the linked-quarter and year-ago
quarter decreases were impacted by clients redeploying funds into
higher yielding alternatives, prepaying or paying down loans, and
shifting depositor behavior following the industry-wide turmoil
experienced in the first half of 2023.
At December 31, 2023, maturity deposits totaled $2.29 billion, a
decrease of $458.4 million, or 16.6%, from September 30, 2023, and
a decrease of $208.4 million, or 8.3%, from December 31, 2022. The
decrease in the fourth quarter of 2023 compared to the prior
quarter was primarily due to the reduction of $617.0 million in
brokered certificates of deposit, partially offset by an increase
of $158.6 million in retail certificates of deposit.
The weighted average cost of total deposits for the fourth
quarter of 2023 was 1.56%, compared with 1.50% for the third
quarter of 2023 and 0.58% for the fourth quarter of 2022. The
increases in the weighted average cost of deposits for the fourth
quarter of 2023 compared to the third quarter of 2023 and fourth
quarter of 2022 were principally driven by higher pricing across
most deposit categories. The weighted average cost of non-maturity
deposits(1) for the fourth quarter of 2023 was 1.02%, compared to
0.89% for the third quarter of 2023, and 0.31% for the fourth
quarter of 2022.
At December 31, 2023, the end-of-period weighted average rate of
total deposits was 1.55%, compared to 1.52% at September 30, 2023
and 0.79% at December 31, 2022. At December 31, 2023, the
end-of-period weighted average rate of non-maturity deposits was
1.04%, compared to 0.96% at September 30, 2023 and 0.43% at
December 31, 2022.
At December 31, 2023, the Company’s FDIC-insured deposits as a
percentage of total deposits was 60%. Insured and collateralized
deposits comprised 66% of total deposits at December 31, 2023,
which includes federally-insured deposits, $732.6 million of
collateralized municipal and tribal deposits, and $70.0 million of
privately insured deposits.
______________________________
(1)
Reconciliations of the non-GAAP measures
are set forth at the end of this press release.
The following table presents the composition of deposits as of
the dates indicated.
December 31,
September 30,
December 31,
(Dollars in
thousands)
2023
2023
2022
Deposit Accounts
Noninterest-bearing checking
$
4,932,817
$
5,782,305
$
6,306,825
Interest-bearing:
Checking
2,899,621
2,598,449
3,119,850
Money market/savings
4,868,442
4,873,582
5,422,607
Total non-maturity deposits (1)
12,700,880
13,254,336
14,849,282
Retail certificates of deposit
1,684,560
1,525,919
1,086,423
Wholesale/brokered certificates of
deposit
610,186
1,227,192
1,416,696
Total non-core deposits
2,294,746
2,753,111
2,503,119
Total deposits
$
14,995,626
$
16,007,447
$
17,352,401
Cost of deposits
1.56
%
1.50
%
0.58
%
Cost of non-maturity deposits (1)
1.02
0.89
0.31
Noninterest-bearing deposits as a percent
of total deposits
32.9
36.1
36.3
Non-maturity deposits (1) as a percent of
total deposits
84.7
82.8
85.6
______________________________
(1)
Reconciliations of the non-GAAP measures
are set forth at the end of this press release.
Borrowings
At December 31, 2023, total borrowings amounted to $931.8
million, a decrease of $199.8 million from September 30, 2023 and a
decrease of $399.4 million from December 31, 2022. Total borrowings
at December 31, 2023 included $600.0 million of FHLB term advances
and $331.8 million of subordinated debt. The decrease in borrowings
at December 31, 2023 as compared to September 30, 2023 was
primarily due to an early redemption of a $200.0 million in FHLB
term advance during the fourth quarter of 2023. The decrease in
borrowings at December 31, 2023 as compared to December 31, 2022
was primarily due to a decrease of $400.0 million in FHLB term
advances.
As of December 31, 2023, our unused borrowing capacity was $8.68
billion, which consists of available lines of credit with FHLB and
other correspondent banks as well as access through the Federal
Reserve Bank's discount window and the Bank Term Funding Program,
neither of which were utilized during the fourth quarter of
2023.
Capital Ratios
At December 31, 2023, our common stockholder's equity was $2.88
billion, or 15.15% of total assets, compared with $2.86 billion, or
14.08% of total assets, at September 30, 2023, and $2.80 billion,
or 12.90% of total assets, at December 31, 2022, with a book value
per share of $30.07, compared with $29.78 at September 30, 2023 and
$29.45 at December 31, 2022. At December 31, 2023, the ratio of
tangible common equity to total assets(1) was 10.72%, compared with
9.87% at September 30, 2023 and 8.88% at December 31, 2022, and
tangible book value per share(1) was $20.22, compared with $19.89
at September 30, 2023 and $19.38 at December 31, 2022. The increase
in tangible book value per share at December 31, 2023 from
September 30, 2023 was primarily driven by other comprehensive
income from the realized loss, net of tax, resulting from the sale
of AFS securities in the fourth quarter of 2023, partially offset
by the net loss and the dividends paid during the quarter. The
increase in tangible book value per share at December 31, 2023 from
December 31, 2022 was primarily driven by other comprehensive
income and, to the lesser extent, net income, partially offset by
the dividends paid in 2023.
The Company implemented the CECL model on January 1, 2020 and
elected to phase in the full effect of CECL on regulatory capital
over the five-year transition period. In the first quarter of 2022,
the Company began phasing into regulatory capital the cumulative
adjustments at the end of the second year of the transition period
at 25% per year. At December 31, 2023, the Company and Bank were in
compliance with the capital conservation buffer requirement and
exceeded the minimum Common Equity Tier 1, Tier 1, and total
capital ratios, inclusive of the fully phased-in capital
conservation buffer of 7.0%, 8.5% and 10.5%, respectively, and the
Bank qualified as “well-capitalized” for purposes of the federal
bank regulatory prompt corrective action regulations.
The following table presents capital ratios and share data as of
the dates indicated:
December 31,
September 30,
December 31,
Capital Ratios
2023
2023
2022
Pacific Premier Bancorp, Inc.
Consolidated
Tier 1 leverage ratio
11.03
%
11.13
%
10.29
%
Common equity tier 1 risk-based capital
ratio
14.32
14.87
12.99
Tier 1 risk-based capital ratio
14.32
14.87
12.99
Total risk-based capital ratio
17.29
17.74
15.53
Tangible common equity ratio (1)
10.72
9.87
8.88
Pacific Premier Bank
Tier 1 leverage ratio
12.43
%
12.42
%
11.80
%
Common equity tier 1 risk-based capital
ratio
16.13
16.59
14.89
Tier 1 risk-based capital ratio
16.13
16.59
14.89
Total risk-based capital ratio
17.23
17.66
15.74
Share Data
Book value per share
$
30.07
$
29.78
$
29.45
Tangible book value per share (1)
20.22
19.89
19.38
Common equity dividends declared per
share
0.33
0.33
0.33
Closing stock price (2)
29.11
21.76
31.56
Shares issued and outstanding
95,860,092
95,900,847
95,021,760
Market Capitalization (2)(3)
$
2,790,487
$
2,086,802
$
2,998,887
______________________________
(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 at the end of this press release.
(2)
As of the last trading day prior to period
end.
(3)
Dollars in thousands.
Dividend and Stock Repurchase Program
On January 27, 2024, the Company's Board of Directors declared a
$0.33 per share dividend, payable on February 16, 2024 to
stockholders of record on February 9, 2024. In January 2021, the
Company’s Board of Directors approved a stock repurchase program,
which authorized the repurchase up to 4,725,000 shares of its
common stock. During the fourth quarter of 2023, the Company did
not repurchase any shares of common stock.
Conference Call and Webcast
The Company will host a conference call at 9:00 a.m. PT / 12:00
p.m. ET on January 29, 2024 to discuss its financial results.
Analysts and investors may participate in the question-and-answer
session. A live webcast will be available on the Webcasts page of
the Company's investor relations website. An archived version of
the webcast will be available in the same location shortly after
the live call has ended. The conference call can be accessed by
telephone at (866) 290-5977. Participants should ask to be joined
into the Pacific Premier Bancorp, Inc. call. Additionally, a
telephone replay will be made available through February 5, 2024 at
(877) 344-7529, access code 7917033.
About Pacific Premier Bancorp, Inc.
Pacific Premier Bancorp, Inc. (Nasdaq: PPBI) is the parent
company of Pacific Premier Bank, a California-based commercial bank
focused on serving small, middle-market, and corporate businesses
throughout the western United States in major metropolitan markets
in California, Washington, Arizona, and Nevada. Founded in 1983,
Pacific Premier Bank has grown to become one of the largest banks
headquartered in the western region of the United States, with
approximately $19 billion in total assets. Pacific Premier Bank
provides banking products and services, including deposit accounts,
digital banking, and treasury management services, to businesses,
professionals, entrepreneurs, real estate investors, and nonprofit
organizations. Pacific Premier Bank also offers a wide array of
loan products, such as commercial business loans, lines of credit,
SBA loans, commercial real estate loans, agribusiness loans,
franchise lending, home equity lines of credit, and construction
loans. Pacific Premier Bank offers commercial escrow services and
facilitates 1031 Exchange transactions through its Commerce Escrow
division. Pacific Premier Bank offers clients IRA custodial
services through its Pacific Premier Trust division, which has
approximately $17 billion of assets under custody and close to
35,000 client accounts comprised of self-directed investors,
financial institutions, capital syndicators, and financial
advisors. Additionally, Pacific Premier Bank provides nationwide
customized banking solutions to Homeowners' Associations and
Property Management companies. Pacific Premier Bank is an Equal
Housing Lender and Member FDIC. For additional information about
Pacific Premier Bancorp, Inc. and Pacific Premier Bank, visit our
website: www.ppbi.com.
FORWARD-LOOKING STATEMENTS
The statements contained herein that are not historical facts
are forward-looking statements based on management’s current
expectations and beliefs concerning future developments and their
potential effects on the Company including, without limitation,
plans, strategies and goals, and statements about the Company’s
expectations regarding revenue and asset growth, financial
performance and profitability, loan and deposit growth, yields and
returns, loan diversification and credit management, stockholder
value creation, tax rates, liquidity, and the impact of
acquisitions we have made or may make.
Such statements involve inherent risks and uncertainties, many
of which are difficult to predict and are generally beyond the
control of the Company. There can be no assurance that future
developments affecting the Company will be the same as those
anticipated by management. The Company cautions readers that a
number of important factors could cause actual results to differ
materially from those expressed in, or implied or projected by,
such forward-looking statements. These risks and uncertainties
include, but are not limited to, the following: the strength of the
United States economy in general and the strength of the local
economies in which we conduct operations; adverse developments in
the banking industry highlighted by high-profile bank failures and
the potential impact of such developments on customer confidence,
liquidity, and regulatory responses to these developments; the
effects of, and changes in, trade, monetary, and fiscal policies
and laws, including interest rate policies of the Board of
Governors of the Federal Reserve System; interest rate, liquidity,
economic, market, credit, operational, and inflation risks
associated with our business, including the speed and
predictability of changes in these risks; our ability to attract
and retain deposits and access to other sources of liquidity,
particularly in a rising or high interest rate environment, and the
quality and composition of our deposits; business and economic
conditions generally and in the financial services industry,
nationally and within our current and future geographic markets,
including the tight labor market, ineffective management of the
U.S. Federal budget or debt, or turbulence or uncertainty in
domestic or foreign financial markets; the effect of acquisitions
we have made or may make, including, without limitation, the
failure to achieve the expected revenue growth and/or expense
savings from such acquisitions, and/or the failure to effectively
integrate an acquisition target into our operations; the timely
development of competitive new products and services and the
acceptance of these products and services by new and existing
customers; possible impairment charges to goodwill, including any
impairment that may result from increased volatility in our stock
price; the impact of changes in financial services policies, laws,
and regulations, including those concerning taxes, banking,
securities, and insurance, and the application thereof by
regulatory bodies; compliance risks, including the costs of
monitoring, testing, and maintaining compliance with complex laws
and regulations; the effectiveness of our risk management framework
and quantitative models; the transition away from USD LIBOR and
related uncertainty as well as the risk and costs related to our
adoption of Secured Overnight Financing Rate (“SOFR”); the effect
of changes in accounting policies and practices or accounting
standards, as may be adopted from time-to-time by bank regulatory
agencies, the U.S. Securities and Exchange Commission (“SEC”), the
Public Company Accounting Oversight Board, the Financial Accounting
Standards Board or other accounting standards setters; possible
credit-related impairments of securities held by us; changes in the
level of our nonperforming assets and charge-offs; the impact of
governmental efforts to restructure the U.S. financial regulatory
system; the impact of recent or future changes in the FDIC
insurance assessment rate or the rules and regulations related to
the calculation of the FDIC insurance assessment amount, including
any special assessments; changes in consumer spending, borrowing,
and savings habits; the effects of our lack of a diversified loan
portfolio, including the risks of geographic and industry
concentrations; the possibility that we may reduce or discontinue
the payments of dividends on our common stock; the possibility that
we may discontinue, reduce or otherwise limit the level of
repurchases of our common stock we may make from time to time
pursuant to our stock repurchase program; changes in the financial
performance and/or condition of our borrowers; changes in the
competitive environment among financial and bank holding companies
and other financial service providers; geopolitical conditions,
including acts or threats of terrorism, actions taken by the United
States or other governments in response to acts or threats of
terrorism, and/or military conflicts, including the war between
Russia and Ukraine and the war in the Middle East, which could
impact business and economic conditions in the United States and
abroad; public health crises and pandemics, including with respect
to COVID-19, and their effects on the economic and business
environments in which we operate, including on our credit quality
and business operations, as well as the impact on general economic
and financial market conditions; cybersecurity threats and
incidents, and related potential costs and risks, including
reputation, financial and litigation risks; climate change,
including the enhanced regulatory, compliance, credit, and
reputational risks and costs; natural disasters, earthquakes,
fires, and severe weather; unanticipated regulatory or legal
proceedings; and our ability to manage the risks involved in the
foregoing. Additional factors that could cause actual results to
differ materially from those expressed in the forward-looking
statements are discussed in the Company's 2022 Annual Report on
Form 10-K and subsequent Reports on Form 10-Q filed with the SEC
and available at the SEC’s Internet site (http://www.sec.gov).
The Company undertakes no obligation to revise or publicly
release any revision or update to these forward-looking statements
to reflect events or circumstances that occur after the date on
which such statements were made.
PACIFIC PREMIER BANCORP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
FINANCIAL CONDITION
(Unaudited)
December 31,
September 30,
June 30,
March 31,
December 31,
(Dollars in
thousands)
2023
2023
2023
2023
2022
ASSETS
Cash and cash equivalents
$
936,473
$
1,400,276
$
1,463,677
$
1,424,896
$
1,101,249
Interest-bearing time deposits with
financial institutions
995
1,242
1,487
1,734
1,734
Investments held-to-maturity, at amortized
cost, net of allowance for credit losses
1,729,541
1,737,866
1,737,604
1,749,030
1,388,103
Investment securities available for sale,
at fair value
1,140,071
1,914,599
2,011,791
2,112,852
2,601,013
FHLB, FRB, and other stock
99,225
105,505
105,369
105,479
119,918
Loans held for sale, at lower of amortized
cost or fair value
—
641
2,184
1,247
2,643
Loans held for investment
13,289,020
13,270,120
13,610,282
14,171,784
14,676,298
Allowance for credit losses
(192,471
)
(188,098
)
(192,333
)
(195,388
)
(195,651
)
Loans held for investment,
net
13,096,549
13,082,022
13,417,949
13,976,396
14,480,647
Accrued interest receivable
68,516
68,131
70,093
69,660
73,784
Other real estate owned
248
450
270
5,499
—
Premises and equipment, net
56,676
59,396
61,527
63,450
64,543
Deferred income taxes, net
113,580
192,208
184,857
177,778
183,602
Bank owned life insurance
471,178
468,191
465,288
462,732
460,010
Intangible assets
43,285
46,307
49,362
52,417
55,588
Goodwill
901,312
901,312
901,312
901,312
901,312
Other assets
368,996
297,574
275,113
257,082
253,871
Total assets
$
19,026,645
$
20,275,720
$
20,747,883
$
21,361,564
$
21,688,017
LIABILITIES
Deposit accounts:
Noninterest-bearing checking
$
4,932,817
$
5,782,305
$
5,895,975
$
6,209,104
$
6,306,825
Interest-bearing:
Checking
2,899,621
2,598,449
2,759,855
2,871,812
3,119,850
Money market/savings
4,868,442
4,873,582
4,801,288
5,128,857
5,422,607
Retail certificates of deposit
1,684,560
1,525,919
1,366,071
1,257,146
1,086,423
Wholesale/brokered certificates of
deposit
610,186
1,227,192
1,716,686
1,740,891
1,416,696
Total interest-bearing
10,062,809
10,225,142
10,643,900
10,998,706
11,045,576
Total deposits
14,995,626
16,007,447
16,539,875
17,207,810
17,352,401
FHLB advances and other borrowings
600,000
800,000
800,000
800,000
1,000,000
Subordinated debentures
331,842
331,682
331,523
331,364
331,204
Accrued expenses and other liabilities
216,596
281,057
227,351
191,229
206,023
Total liabilities
16,144,064
17,420,186
17,898,749
18,530,403
18,889,628
STOCKHOLDERS’ EQUITY
Common stock
938
937
937
937
933
Additional paid-in capital
2,377,131
2,371,941
2,366,639
2,361,830
2,362,663
Retained earnings
604,137
771,285
757,025
731,123
700,040
Accumulated other comprehensive loss
(99,625
)
(288,629
)
(275,467
)
(262,729
)
(265,247
)
Total stockholders' equity
2,882,581
2,855,534
2,849,134
2,831,161
2,798,389
Total liabilities and stockholders'
equity
$
19,026,645
$
20,275,720
$
20,747,883
$
21,361,564
$
21,688,017
PACIFIC PREMIER BANCORP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
(Dollars in
thousands, except per share data)
2023
2023
2022
2023
2022
INTEREST INCOME
Loans
$
176,773
$
177,032
$
184,457
$
717,615
$
673,720
Investment securities and other
interest-earning assets
40,419
47,030
33,324
170,370
94,858
Total interest income
217,192
224,062
217,781
887,985
768,578
INTEREST EXPENSE
Deposits
60,915
62,718
25,865
217,447
40,093
FHLB advances and other borrowings
4,927
7,235
5,960
27,255
13,131
Subordinated debentures
4,561
4,561
4,560
18,244
18,242
Total interest expense
70,403
74,514
36,385
262,946
71,466
Net interest income before provision for
credit losses
146,789
149,548
181,396
625,039
697,112
Provision for credit losses
1,696
3,918
2,838
10,129
4,832
Net interest income after provision for
credit losses
145,093
145,630
178,558
614,910
692,280
NONINTEREST INCOME
Loan servicing income
359
533
346
1,958
1,664
Service charges on deposit accounts
2,648
2,673
2,689
10,620
10,698
Other service fee income
322
280
295
1,213
1,351
Debit card interchange fee income
844
924
1,048
3,485
3,628
Earnings on bank owned life insurance
3,678
3,579
3,359
14,118
13,159
Net (loss) gain from sales of loans
(4
)
45
151
415
3,238
Net (loss) gain from sales of investment
securities
(254,065
)
—
—
(253,927
)
1,710
Trust custodial account fees
9,388
9,356
9,722
39,129
41,606
Escrow and exchange fees
1,074
938
1,282
3,994
6,325
Other income
1,562
223
1,605
5,077
5,369
Total noninterest (loss) income
(234,194
)
18,551
20,497
(173,918
)
88,748
NONINTEREST EXPENSE
Compensation and benefits
51,907
54,068
54,347
213,692
225,245
Premises and occupancy
11,183
11,382
11,641
45,922
47,433
Data processing
7,409
7,517
6,991
29,679
26,649
Other real estate owned operations,
net
103
(4
)
—
215
—
FDIC insurance premiums
4,267
2,324
1,463
11,373
5,772
Legal and professional services
4,663
4,243
5,175
19,123
17,947
Marketing expense
1,728
1,635
1,985
7,080
7,632
Office expense
1,367
1,079
1,310
4,958
5,103
Loan expense
437
476
743
2,126
3,810
Deposit expense
11,152
10,811
6,770
39,593
19,448
Amortization of intangible assets
3,022
3,055
3,440
12,303
13,983
Other expense
5,532
5,599
5,317
20,887
23,648
Total noninterest expense
102,770
102,185
99,182
406,951
396,670
Net (loss) income before income taxes
(191,871
)
61,996
99,873
34,041
384,358
Income tax (benefit) expense
(56,495
)
15,966
26,200
3,189
100,615
Net (loss) income
$
(135,376
)
$
46,030
$
73,673
$
30,852
$
283,743
(LOSS) EARNINGS PER SHARE
Basic
$
(1.44
)
$
0.48
$
0.78
$
0.31
$
2.99
Diluted
(1.44
)
0.48
0.77
0.31
2.98
WEIGHTED AVERAGE SHARES
OUTSTANDING
Basic
94,233,813
94,189,844
93,810,468
94,113,132
93,718,293
Diluted
94,233,813
94,283,008
94,176,633
94,236,875
94,091,461
SELECTED FINANCIAL DATA
PACIFIC PREMIER BANCORP, INC.
AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES
AND YIELD DATA
(Unaudited)
Three Months Ended
December 31, 2023
September 30, 2023
December 31, 2022
(Dollars in
thousands)
Average Balance
Interest
Average Yield/
Cost
Average Balance
Interest
Average Yield/
Cost
Average Balance
Interest
Average Yield/ Cost
Assets
Interest-earning assets:
Cash and cash equivalents
$
1,281,793
$
15,744
4.87
%
$
1,695,508
$
21,196
4.96
%
$
1,015,197
$
8,636
3.37
%
Investment securities
3,203,608
24,675
3.08
3,828,766
25,834
2.70
4,130,042
24,688
2.39
Loans receivable, net (1) (2)
13,257,767
176,773
5.29
13,475,194
177,032
5.21
14,799,417
184,457
4.94
Total interest-earning assets
17,743,168
217,192
4.86
18,999,468
224,062
4.68
19,944,656
217,781
4.33
Noninterest-earning assets
1,881,777
1,806,319
1,784,277
Total assets
$
19,624,945
$
20,805,787
$
21,728,933
Liabilities and Equity
Interest-bearing deposits:
Interest checking
$
3,037,642
$
11,170
1.46
%
$
2,649,203
$
10,849
1.62
%
$
3,320,146
$
3,752
0.45
%
Money market
4,525,403
22,038
1.93
4,512,740
19,182
1.69
4,998,726
7,897
0.63
Savings
308,968
190
0.24
329,684
115
0.14
443,016
310
0.28
Retail certificates of deposit
1,604,507
16,758
4.14
1,439,531
13,398
3.69
975,958
3,941
1.60
Wholesale/brokered certificates of
deposit
918,596
10,759
4.65
1,611,726
19,174
4.72
1,283,537
9,965
3.08
Total interest-bearing deposits
10,395,116
60,915
2.32
10,542,884
62,718
2.36
11,021,383
25,865
0.93
FHLB advances and other borrowings
610,913
4,927
3.20
800,049
7,235
3.59
826,125
5,960
2.86
Subordinated debentures
331,776
4,561
5.50
331,607
4,561
5.50
331,133
4,560
5.51
Total borrowings
942,689
9,488
4.01
1,131,656
11,796
4.15
1,157,258
10,520
3.62
Total interest-bearing liabilities
11,337,805
70,403
2.46
11,674,540
74,514
2.53
12,178,641
36,385
1.19
Noninterest-bearing deposits
5,141,585
6,001,033
6,587,400
Other liabilities
296,604
268,249
211,731
Total liabilities
16,775,994
17,943,822
18,977,772
Stockholders' equity
2,848,951
2,861,965
2,751,161
Total liabilities and equity
$
19,624,945
$
20,805,787
$
21,728,933
Net interest income
$
146,789
$
149,548
$
181,396
Net interest margin (3)
3.28
%
3.12
%
3.61
%
Cost of deposits (4)
1.56
1.50
0.58
Cost of funds (5)
1.69
1.67
0.77
Cost of non-maturity deposits (6)
1.02
0.89
0.31
Ratio of interest-earning assets to
interest-bearing liabilities
156.50
162.74
163.77
Year Ended December
31,
2023
2022
(Dollars in
thousands)
Average Balance
Interest
Average
Yield/Cost
Average Balance
Interest
Average
Yield/Cost
Assets
Interest-earning assets:
Cash and cash equivalents
$
1,437,074
$
67,134
4.67
%
$
678,270
$
12,691
1.87
%
Investment securities
3,778,650
103,236
2.73
4,301,005
82,167
1.91
Loans receivable, net (1)(2)
13,759,815
717,615
5.22
14,767,554
673,720
4.56
Total interest-earning assets
18,975,539
887,985
4.68
19,746,829
768,578
3.89
Noninterest-earning assets
1,812,254
1,766,599
Total assets
$
20,787,793
$
21,513,428
Liabilities and Equity
Interest-bearing deposits:
Interest checking
$
3,152,823
$
36,520
1.16
%
$
3,681,244
$
6,351
0.17
%
Money market
4,667,007
69,917
1.50
5,155,785
12,735
0.25
Savings
360,546
915
0.25
433,156
391
0.09
Retail certificates of deposit
1,385,531
48,237
3.48
944,963
6,498
0.69
Wholesale/brokered certificates of
deposit
1,434,563
61,858
4.31
520,652
14,118
2.71
Total interest-bearing deposits
11,000,470
217,447
1.98
10,735,800
40,093
0.37
FHLB advances and other borrowings
798,667
27,255
3.41
574,320
13,131
2.29
Subordinated debentures
331,534
18,244
5.50
330,885
18,242
5.51
Total borrowings
1,130,201
45,499
4.03
905,205
31,373
3.47
Total interest-bearing liabilities
12,130,671
262,946
2.17
11,641,005
71,466
0.61
Noninterest-bearing deposits
5,564,887
6,859,141
Other liabilities
247,946
224,739
Total liabilities
17,943,504
18,724,885
Stockholders’ equity
2,844,289
2,788,543
Total liabilities and equity
$
20,787,793
$
21,513,428
Net interest income
$
625,039
$
697,112
Net interest rate spread
2.51
%
3.28
%
Net interest margin (3)
3.29
3.53
Cost of deposits (4)
1.31
0.23
Cost of funds (5)
1.49
0.39
Cost of non-maturity deposits (6)
0.78
0.12
Ratio of interest-earning assets to
interest-bearing liabilities
156.43
169.63
______________________________
(1)
Average balance includes loans held for
sale and nonperforming loans and is net of deferred loan
origination fees/costs and discounts/premiums, and the basis
adjustments of certain loans included in fair value hedging
relationships.
(2)
Interest income includes net discount
accretion of $2.6 million, $2.2 million, and $3.5 million, for the
three months ended December 31, 2023, September 30, 2023, and
December 31, 2022, respectively, and $10.2 million and $21.7
million, respectively, for the years ended December 31, 2023 and
December 31, 2022, respectively.
(3)
Represents net interest income divided by
average interest-earning assets.
(4)
Represents annualized interest expense on
deposits divided by the sum of average interest-bearing deposits
and noninterest-bearing deposits.
(5)
Represents annualized total interest
expense divided by the sum of average total interest-bearing
liabilities and noninterest-bearing deposits.
(6)
Reconciliations of the non-GAAP measures
are set forth at the end of this press release.
PACIFIC PREMIER BANCORP, INC.
AND SUBSIDIARIES
LOAN PORTFOLIO
COMPOSITION
(Unaudited)
December 31,
September 30,
June 30,
March 31,
December 31,
(Dollars in
thousands)
2023
2023
2023
2023
2022
Investor loans secured by real
estate
CRE non-owner-occupied
$
2,421,772
$
2,514,056
$
2,571,246
$
2,590,824
$
2,660,321
Multifamily
5,645,310
5,719,210
5,788,030
5,955,239
6,112,026
Construction and land
472,544
444,576
428,287
420,079
399,034
SBA secured by real estate (1)
36,400
37,754
38,876
40,669
42,135
Total investor loans secured by real
estate
8,576,026
8,715,596
8,826,439
9,006,811
9,213,516
Business loans secured by real estate
(2)
CRE owner-occupied
2,191,334
2,228,802
2,281,721
2,342,175
2,432,163
Franchise real estate secured
304,514
313,451
318,539
371,902
378,057
SBA secured by real estate (3)
50,741
53,668
57,084
60,527
61,368
Total business loans secured by real
estate
2,546,589
2,595,921
2,657,344
2,774,604
2,871,588
Commercial loans (4)
Commercial and industrial
1,790,608
1,588,771
1,744,763
1,967,128
2,160,948
Franchise non-real estate secured
319,721
335,053
351,944
388,722
404,791
SBA non-real estate secured
10,926
10,667
9,688
10,437
11,100
Total commercial loans
2,121,255
1,934,491
2,106,395
2,366,287
2,576,839
Retail loans
Single family residential (5)
72,752
70,984
70,993
70,913
72,997
Consumer
1,949
1,958
2,241
3,174
3,284
Total retail loans
74,701
72,942
73,234
74,087
76,281
Loans held for investment before basis
adjustment (6)
13,318,571
13,318,950
13,663,412
14,221,789
14,738,224
Basis adjustment associated with fair
value hedge (7)
(29,551
)
(48,830
)
(53,130
)
(50,005
)
(61,926
)
Loans held for investment
13,289,020
13,270,120
13,610,282
14,171,784
14,676,298
Allowance for credit losses for loans held
for investment
(192,471
)
(188,098
)
(192,333
)
(195,388
)
(195,651
)
Loans held for investment, net
$
13,096,549
$
13,082,022
$
13,417,949
$
13,976,396
$
14,480,647
Loans held for sale, at lower of cost or
fair value
$
—
$
641
$
2,184
$
1,247
$
2,643
______________________________
(1)
SBA loans that are collateralized by
hotel/motel real property.
(2)
Loans to businesses that are
collateralized by real estate where the operating cash flow of the
business is the primary source of repayment.
(3)
SBA loans that are collateralized by real
property other than hotel/motel real property.
(4)
Loans to businesses where the operating
cash flow of the business is the primary source of repayment.
(5)
Single family residential includes home
equity lines of credit, as well as second trust deeds.
(6)
Includes net deferred origination costs
(fees) of $(74,000), $451,000, $142,000, $(745,000), and $(1.9)
million, and unaccreted fair value net purchase discounts of $43.3
million, $46.2 million, $48.4 million, $52.2 million, and $54.8
million as of December 31, 2023, September 30, 2023, June 30, 2023,
March 31, 2023, and December 31, 2022 respectively.
(7)
Represents the basis adjustment associated
with the application of hedge accounting on certain loans.
PACIFIC PREMIER BANCORP, INC.
AND SUBSIDIARIES
ASSET QUALITY
INFORMATION
(Unaudited)
December 31,
September 30,
June 30,
March 31,
December 31,
(Dollars in
thousands)
2023
2023
2023
2023
2022
Asset Quality
Nonperforming loans
$
24,817
$
25,458
$
17,151
$
24,872
$
30,905
Other real estate owned
248
450
270
5,499
—
Nonperforming assets
$
25,065
$
25,908
$
17,421
$
30,371
$
30,905
Total classified assets (1)
$
142,210
$
149,708
$
120,216
$
166,576
$
149,304
Allowance for credit losses
192,471
188,098
192,333
195,388
195,651
Allowance for credit losses as a percent
of total nonperforming loans
776
%
739
%
1,121
%
786
%
633
%
Nonperforming loans as a percent of loans
held for investment
0.19
0.19
0.13
0.18
0.21
Nonperforming assets as a percent of total
assets
0.13
0.13
0.08
0.14
0.14
Classified loans to total loans held for
investment
1.07
1.12
0.88
1.14
1.02
Classified assets to total assets
0.75
0.74
0.58
0.78
0.69
Net loan charge-offs (recoveries) for the
quarter ended
$
3,902
$
6,752
$
3,665
$
3,284
$
3,797
Net loan charge-offs (recoveries) for the
quarter to average total loans
0.03
%
0.05
%
0.03
%
0.02
%
0.03
%
Allowance for credit losses to loans held
for investment (2)
1.45
1.42
1.41
1.38
1.33
Delinquent Loans:
30 - 59 days
$
2,484
$
2,967
$
649
$
761
$
20,538
60 - 89 days
1,294
475
31
1,198
185
90+ days
6,276
7,484
30,271
18,884
22,625
Total delinquency
$
10,054
$
10,926
$
30,951
$
20,843
$
43,348
Delinquency as a percent of loans held for
investment
0.08
%
0.08
%
0.23
%
0.15
%
0.30
%
______________________________
(1)
Includes substandard loans and other real
estate owned.
(2)
At December 31, 2023, 24% of loans held
for investment include a fair value net discount of $43.3 million,
or 0.33% of loans held for investment. At September 30, 2023, 24%
of loans held for investment include a fair value net discount of
$46.2 million, or 0.35% of loans held for investment. At June 30,
2023, 25% of loans held for investment include a fair value net
discount of $48.4 million, or 0.35% of loans held for investment.
At March 31, 2023, 26% of loans held for investment include a fair
value net discount $52.2 million, or 0.37% of loans held for
investment. At December 31, 2022, 26% of loans held for investment
include a fair value net discount of $54.8 million, or 0.37% of
loans held for investment.
PACIFIC PREMIER BANCORP, INC.
AND SUBSIDIARIES
NONACCRUAL LOANS (1)
(Unaudited)
(Dollars in
thousands)
Collateral Dependent
Loans
ACL
Non- Collateral Dependent
Loans
ACL
Total Nonaccrual
Loans
Nonaccrual Loans
With No ACL
December 31, 2023
Investor loans secured by real
estate
CRE non-owner-occupied
$
412
$
—
$
—
$
—
$
412
$
412
SBA secured by real estate (2)
1,205
—
—
—
1,205
1,205
Total investor loans secured by real
estate
1,617
—
—
—
1,617
1,617
Business loans secured by real estate
(3)
CRE owner-occupied
8,666
—
—
—
8,666
8,666
Total business loans secured by real
estate
8,666
—
—
—
8,666
8,666
Commercial loans (4)
Commercial and industrial
1,381
—
12,595
—
13,976
13,976
SBA not secured by real estate
558
—
—
—
558
558
Total commercial loans
1,939
—
12,595
—
14,534
14,534
Totals nonaccrual loans
$
12,222
$
—
$
12,595
$
—
$
24,817
$
24,817
______________________________
(1)
The ACL for nonaccrual loans is determined
based on a discounted cash flow methodology unless the loan is
considered collateral dependent. The ACL for collateral dependent
loans is determined based on the estimated fair value of the
underlying collateral.
(2)
SBA loans that are collateralized by
hotel/motel real property.
(3)
Loans to businesses that are
collateralized by real estate where the operating cash flow of the
business is the primary source of repayment.
(4)
Loans to businesses where the operating
cash flow of the business is the primary source of repayment.
PACIFIC PREMIER BANCORP, INC.
AND SUBSIDIARIES
PAST DUE STATUS
(Unaudited)
Days Past Due
(Dollars in
thousands)
Current
30-59
60-89
90+
Total
December 31, 2023
Investor loans secured by real
estate
CRE non-owner-occupied
$
2,421,360
$
—
$
—
$
412
$
2,421,772
Multifamily
5,645,310
—
—
—
5,645,310
Construction and land
472,544
—
—
—
472,544
SBA secured by real estate (1)
35,980
—
—
420
36,400
Total investor loans secured by real
estate
8,575,194
—
—
832
8,576,026
Business loans secured by real
estate (2)
CRE owner-occupied
2,186,679
—
—
4,655
2,191,334
Franchise real estate secured
304,222
292
—
—
304,514
SBA secured by real estate (3)
50,604
137
—
—
50,741
Total business loans secured by real
estate
2,541,505
429
—
4,655
2,546,589
Commercial loans (4)
Commercial and industrial
1,788,855
228
1,294
231
1,790,608
Franchise non-real estate secured
318,162
1,559
—
—
319,721
SBA not secured by real estate
10,119
249
—
558
10,926
Total commercial loans
2,117,136
2,036
1,294
789
2,121,255
Retail loans
Single family residential (5)
72,733
19
—
—
72,752
Consumer loans
1,949
—
—
—
1,949
Total retail loans
74,682
19
—
—
74,701
Loans held for investment before basis
adjustment (6)
$
13,308,517
$
2,484
$
1,294
$
6,276
$
13,318,571
______________________________
(1)
SBA loans that are collateralized by
hotel/motel real property.
(2)
Loans to businesses that are
collateralized by real estate where the operating cash flow of the
business is the primary source of repayment.
(3)
SBA loans that are collateralized by real
property other than hotel/motel real property.
(4)
Loans to businesses where the operating
cash flow of the business is the primary source of repayment.
(5)
Single family residential includes home
equity lines of credit, as well as second trust deeds.
(6)
Excludes the basis adjustment of $29.6
million to the carrying amount of certain loans included in fair
value hedging relationships.
PACIFIC PREMIER BANCORP, INC.
AND SUBSIDIARIES
CREDIT RISK GRADES
(Unaudited)
(Dollars in
thousands)
Pass
Special Mention
Substandard
Doubtful
Total Gross
Loans
December 31, 2023
Investor loans secured by real
estate
CRE non-owner-occupied
$
2,406,719
$
6,966
$
8,087
$
—
$
2,421,772
Multifamily
5,633,682
11,628
—
—
5,645,310
Construction and land
472,544
—
—
—
472,544
SBA secured by real estate (1)
28,271
—
8,129
—
36,400
Total investor loans secured by real
estate
8,541,216
18,594
16,216
—
8,576,026
Business loans secured by real estate
(2)
CRE owner-occupied
2,117,985
34,480
38,869
—
2,191,334
Franchise real estate secured
288,013
9,674
6,827
—
304,514
SBA secured by real estate (3)
45,586
619
4,536
—
50,741
Total business loans secured by real
estate
2,451,584
44,773
50,232
—
2,546,589
Commercial loans (4)
Commercial and industrial
1,651,102
81,250
53,714
4,542
1,790,608
Franchise non-real estate secured
299,189
4,230
16,302
—
319,721
SBA not secured by real estate
9,970
—
956
—
10,926
Total commercial loans
1,960,261
85,480
70,972
4,542
2,121,255
Retail loans
Single family residential (5)
72,752
—
—
—
72,752
Consumer loans
1,949
—
—
—
1,949
Total retail loans
74,701
—
—
—
74,701
Loans held for investment before basis
adjustment (6)
$
13,027,762
$
148,847
$
137,420
$
4,542
$
13,318,571
______________________________
(1)
SBA loans that are collateralized by
hotel/motel real property.
(2)
Loans to businesses that are
collateralized by real estate where the operating cash flow of the
business is the primary source of repayment.
(3)
SBA loans that are collateralized by real
property other than hotel/motel real property.
(4)
Loans to businesses where the operating
cash flow of the business is the primary source of repayment.
(5)
Single family residential includes home
equity lines of credit, as well as second trust deeds.
(6)
Excludes the basis adjustment of $29.6
million to the carrying amount of certain loans included in fair
value hedging relationships.
PACIFIC PREMIER BANCORP, INC.
AND SUBSIDIARIES
GAAP to NON-GAAP
RECONCILIATIONS
(Unaudited)
The Company uses certain non-GAAP
financial measures to provide meaningful supplemental information
regarding the Company’s operational performance and to enhance
investors’ overall understanding of such financial performance.
However, these non-GAAP financial measures are supplemental and are
not a substitute for an analysis based on GAAP measures. As other
companies may use different calculations for these adjusted
measures, this presentation may not be comparable to other
similarly titled adjusted measures reported by other companies.
For periods presented below, return on
average assets excluding net loss from investment securities
repositioning and FDIC special assessment is a non-GAAP financial
measure derived from GAAP based amounts. We calculate this figure
by excluding the net loss from investment securities repositioning
during the fourth quarter of 2023, the FDIC special assessment, and
the related tax impact from net income. Management believes that
the exclusion of such nonrecurring items from this financial
measure provides useful information to gain an understanding of the
operating results of our core business and a better comparison of
financial performance.
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
(Dollars in
thousands)
2023
2023
2022
2023
2022
Net income
$
(135,376
)
$
46,030
$
73,673
$
30,852
$
283,743
Less: net loss from investment securities
repositioning
(254,065
)
—
—
(254,065
)
—
Add: FDIC special assessment
2,080
—
—
2,080
—
Less: tax adjustment (1)
72,387
—
—
72,387
—
Adjusted net income for average assets
$
48,382
$
46,030
$
73,673
$
214,610
$
283,743
Average assets
$
19,624,945
$
20,805,787
$
21,728,933
$
20,787,793
$
21,513,428
Return on average assets (annualized)
(2.76
)%
0.88
%
1.36
%
0.15
%
1.32
%
Adjusted return on average assets
(annualized)
0.99
%
0.88
%
1.36
%
1.03
%
1.32
%
______________________________
(1)
Adjusted by statutory tax rate
For periods presented below, return on average tangible common
equity is a non-GAAP financial measure derived from GAAP-based
amounts. We calculate this figure by excluding amortization of
intangible assets expense from net income and excluding the average
intangible assets and average goodwill from the average
stockholders' equity during the periods indicated. Management
believes that the exclusion of such items from this financial
measure provides useful information to gain an understanding of the
operating results of our core business. The adjusted net income,
adjusted return on average equity, and adjusted return on average
tangible common equity further exclude the nonrecurring items to
provide a better comparison to the financial results of prior
periods.
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
(Dollars in
thousands)
2023
2023
2022
2023
2022
Net (loss) income
$
(135,376
)
$
46,030
$
73,673
$
30,852
$
283,743
Plus: amortization of intangible assets
expense
3,022
3,055
3,440
12,303
13,983
Less: tax adjustment (1)
854
868
978
3,491
3,987
Net (loss) income for average tangible
common equity
$
(133,208
)
$
48,217
$
76,135
$
39,664
$
293,739
Less: net loss from investment securities
repositioning
(254,065
)
—
—
(254,065
)
—
Add: FDIC special assessment
2,080
—
—
2,080
—
Less: tax adjustment (1)
72,387
—
—
72,387
—
Adjusted net income for average tangible
common equity
$
50,550
$
48,217
$
76,135
$
223,422
$
293,739
Average stockholders' equity
$
2,848,951
$
2,861,965
$
2,751,161
$
2,844,289
$
2,788,543
Less: average intangible assets
45,050
48,150
57,624
49,643
62,833
Less: average goodwill
901,312
901,312
901,312
901,312
901,312
Average tangible common equity
1,902,589
1,912,503
1,792,225
1,893,334
1,824,398
Add: average after-tax realized loss from
investment securities repositioning
(94,887
)
—
—
(23,917
)
—
Adjusted average tangible common
equity
$
1,807,702
$
1,912,503
$
1,792,225
$
1,869,417
$
1,824,398
Return on average equity (annualized)
(19.01
)%
6.43
%
10.71
%
1.08
%
10.18
%
Adjusted return on average equity
(annualized)
7.03
%
6.43
%
10.71
%
7.61
%
10.18
%
Return on average tangible common equity
(annualized)
(28.01
)%
10.08
%
16.99
%
2.09
%
16.10
%
Adjusted return on average tangible common
equity (annualized)
11.19
%
10.08
%
16.99
%
11.95
%
16.10
%
______________________________
(1)
Adjusted by statutory tax rate
The adjusted basic earnings per common
share and adjusted diluted earnings per common share are non-GAAP
financial measures derived from GAAP based amounts. We calculate
the adjusted basic earnings per common share by dividing net income
allocable to common shareholders, excluding the net loss from
investment securities repositioning during the fourth quarter of
2023, the FDIC special assessment, and the related tax impact, by
the weighted average number of common shares outstanding for the
reporting period, excluding outstanding participating securities.
The adjusted diluted earnings per common share is computed by
dividing net income allocable to common shareholders, excluding the
net loss from investment securities repositioning, FDIC special
assessment, and the related tax impact, by the weighted average
number of diluted common shares outstanding over the reporting
period, adjusted to include the effect of potentially dilutive
common shares based on adjusted net income, but excludes awards
considered participating securities. The computation of diluted
earnings per common share excludes the impact of the assumed
exercise or issuance of securities that would have an anti-dilutive
effect. Management believes that the exclusion of such items from
this financial measure provides useful information to gain an
understanding of the operating results of our core business and a
better comparison of financial performance.
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
(Dollars in
thousands, except per share data)
2023
2023
2022
2023
2022
Basic
Net (loss) income
$
(135,376
)
$
46,030
$
73,673
$
30,852
$
283,743
Less: dividends and undistributed earnings
allocated to participating securities
(560
)
(823
)
(940
)
(2,061
)
(3,405
)
Net (loss) income allocated to common
stockholders
(135,936
)
45,207
72,733
28,791
280,338
Less: net loss from investment securities
repositioning
(254,065
)
—
—
(254,065
)
—
Add: FDIC special assessment
2,080
—
—
2,080
—
Less: tax adjustment (1)
72,387
—
—
72,387
—
Adjusted net income allocated to common
stockholders
$
47,822
$
45,207
$
72,733
$
212,549
$
280,338
Weighted average common shares
outstanding
94,233,813
94,189,844
93,810,468
94,113,132
93,718,293
Basic earnings per common share
$
(1.44
)
$
0.48
$
0.78
$
0.31
$
2.99
Adjusted basic earnings per common
share
$
0.51
$
0.48
$
0.78
$
2.26
$
2.99
Diluted
Net (loss) income allocated to common
stockholders
$
(135,936
)
$
45,207
$
72,733
$
28,791
$
280,338
Less: net loss from investment securities
repositioning
(254,065
)
—
—
(254,065
)
—
Add: FDIC special assessment
2,080
—
—
2,080
—
Less: tax adjustment (1)
72,387
—
—
72,387
—
Adjusted net income allocated to common
stockholders
$
47,822
$
45,207
$
72,733
$
212,549
$
280,338
Weighted average common shares
outstanding
94,233,813
94,189,844
93,810,468
94,113,132
93,718,293
Dilutive effect of share-based
compensation
—
93,164
366,165
123,743
373,168
Weighted average diluted common shares
94,233,813
94,283,008
94,176,633
94,236,875
94,091,461
Dilutive effect of share-based
compensation
101,065
—
—
—
—
Adjusted weighted average diluted common
shares
94,334,878
94,283,008
94,176,633
94,236,875
94,091,461
Diluted earnings per common share
$
(1.44
)
$
0.48
$
0.77
$
0.31
$
2.98
Adjusted diluted earnings per common
share
$
0.51
$
0.48
$
0.77
$
2.26
$
2.98
______________________________
(1)
Adjusted by statutory tax rate
Pre-provision net revenue is a non-GAAP
financial measure derived from GAAP-based amounts. We calculate the
pre-provision net revenue by excluding income tax and provision for
credit losses from net income. The adjusted pre-provision net
income further excludes the nonrecurring items to provide a better
comparison of financial performance. Management believes that the
exclusion of such items from this financial measure provides useful
information to gain an understanding of the operating results of
our core business and a better comparison to the financial results
of prior periods.
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
(Dollars in
thousands)
2023
2023
2022
2023
2022
Interest income
$
217,192
$
224,062
$
217,781
$
887,985
$
768,578
Interest expense
70,403
74,514
36,385
262,946
71,466
Net interest income
146,789
149,548
181,396
625,039
697,112
Noninterest (loss) income
(234,194
)
18,551
20,497
(173,918
)
88,748
(Loss) revenue
(87,405
)
168,099
201,893
451,121
785,860
Noninterest expense
102,770
102,185
99,182
406,951
396,670
Pre-provision net (loss) revenue
(190,175
)
65,914
102,711
44,170
389,190
Less: net loss from investment securities
repositioning
(254,065
)
—
—
(254,065
)
—
Add: FDIC special assessment
2,080
—
—
2,080
—
Adjusted pre-provision net revenue
$
65,970
$
65,914
$
102,711
$
300,315
$
389,190
Pre-provision net (loss) revenue
(annualized)
$
(760,700
)
$
263,656
$
410,844
$
44,170
$
389,190
Adjusted pre-provision net (loss) revenue
(annualized)
$
263,880
$
263,656
$
410,844
$
300,315
$
389,190
Average assets
$
19,624,945
$
20,805,787
$
21,728,933
$
20,787,793
$
21,513,428
Pre-provision net (loss) revenue on
average assets
(0.97
)%
0.32
%
0.47
%
0.21
%
1.81
%
Pre-provision net (loss) revenue on
average assets (annualized)
(3.88
)%
1.27
%
1.89
%
0.21
%
1.81
%
Adjusted pre-provision net revenue on
average assets
0.34
%
0.32
%
0.47
%
1.44
%
1.81
%
Adjusted pre-provision net revenue on
average assets (annualized)
1.34
%
1.27
%
1.89
%
1.44
%
1.81
%
Efficiency ratio is a non-GAAP financial
measure derived from GAAP-based amounts. This figure represents the
ratio of noninterest expense, less amortization of intangible
assets and other real estate owned operations, where applicable, to
the sum of net interest income before provision for credit losses
and total noninterest income less (loss) gain from investment
securities, (loss) gain from other real estate owned, and gain from
debt extinguishment. The adjusted efficiency ratio further excludes
the FDIC special assessment to provide a better comparison to the
financial results of prior periods. Management believes that the
exclusion of such items from this financial measure provides useful
information to gain an understanding of the operating results of
our core business.
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
(Dollars in
thousands)
2023
2023
2022
2023
2022
Total noninterest expense
$
102,770
$
102,185
$
99,182
$
406,951
$
396,670
Less: amortization of intangible
assets
3,022
3,055
3,440
12,303
13,983
Less: other real estate owned operations,
net
103
(4
)
—
215
—
Adjusted noninterest expense
99,645
99,134
95,742
394,433
382,687
Less: FDIC special assessment
2,080
—
—
2,080
—
Adjusted noninterest expense excluding
FDIC special assessment
$
97,565
$
99,134
$
95,742
$
392,353
$
382,687
Net interest income before provision for
credit losses
$
146,789
$
149,548
$
181,396
$
625,039
$
697,112
Add: total noninterest (loss) income
(234,194
)
18,551
20,497
(173,918
)
88,748
Less: net (loss) gain from sales of
investment securities
(254,065
)
—
—
(253,927
)
1,710
Less: net (loss) gain from sales of other
real estate owned
(24
)
—
—
82
—
Less: net gain from debt
extinguishment
793
—
—
793
—
Adjusted revenue
$
165,891
$
168,099
$
201,893
$
704,173
$
784,150
Efficiency ratio
60.1
%
59.0
%
47.4
%
56.0
%
48.8
%
Adjusted efficiency ratio excluding FDIC
special assessment
58.8
%
59.0
%
47.4
%
55.7
%
48.8
%
Tangible book value per share and tangible
common equity to tangible assets (the “tangible common equity
ratio”) are non-GAAP financial measures derived from GAAP-based
amounts. We calculate tangible book value per share by dividing
tangible common equity by common shares outstanding, as compared to
book value per share, which we calculate by dividing common
stockholders' equity by shares outstanding. We calculate the
tangible common equity ratio by excluding the balance of intangible
assets from common stockholders' equity and dividing by tangible
assets. We believe that this information is consistent with the
treatment by bank regulatory agencies, which excludes intangible
assets from the calculation of risk-based capital ratios.
Accordingly, we believe that these non-GAAP financial measures
provide information that is important to investors and that is
useful in understanding our capital position and ratios.
December 31,
September 30,
June 30,
March 31,
December 31,
(Dollars in
thousands, except per share data)
2023
2023
2023
2023
2022
Total stockholders' equity
$
2,882,581
$
2,855,534
$
2,849,134
$
2,831,161
$
2,798,389
Less: intangible assets
944,597
947,619
950,674
953,729
956,900
Tangible common equity
$
1,937,984
$
1,907,915
$
1,898,460
$
1,877,432
$
1,841,489
Total assets
$
19,026,645
$
20,275,720
$
20,747,883
$
21,361,564
$
21,688,017
Less: intangible assets
944,597
947,619
950,674
953,729
956,900
Tangible assets
$
18,082,048
$
19,328,101
$
19,797,209
$
20,407,835
$
20,731,117
Tangible common equity ratio
10.72
%
9.87
%
9.59
%
9.20
%
8.88
%
Common shares issued and outstanding
95,860,092
95,900,847
95,906,217
95,714,777
95,021,760
Book value per share
$
30.07
$
29.78
$
29.71
$
29.58
$
29.45
Less: intangible book value per share
9.85
9.88
9.91
9.96
10.07
Tangible book value per share
$
20.22
$
19.89
$
19.79
$
19.61
$
19.38
Cost of non-maturity deposits is a
non-GAAP financial measure derived from GAAP-based amounts. Cost of
non-maturity deposits is calculated as the ratio of non-maturity
deposit interest expense to average non-maturity deposits. We
calculate non-maturity deposit interest expense by excluding
interest expense for all certificates of deposit from total deposit
expense, and we calculate average non-maturity deposits by
excluding all certificates of deposit from total deposits.
Management believes cost of non-maturity deposits is a useful
measure to assess the Company's deposit base, including its
potential volatility.
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
(Dollars in
thousands)
2023
2023
2022
2023
2022
Total deposits interest expense
$
60,915
$
62,718
$
25,865
$
217,447
$
40,093
Less: certificates of deposit interest
expense
16,758
13,398
3,941
48,237
6,498
Less: brokered certificates of deposit
interest expense
10,759
19,174
9,965
61,858
14,118
Non-maturity deposit expense
$
33,398
$
30,146
$
11,959
$
107,352
$
19,477
Total average deposits
$
15,536,701
$
16,543,917
$
17,608,783
$
16,565,357
$
17,594,941
Less: average retail certificates of
deposit
1,604,507
1,439,531
975,958
1,385,531
944,963
Less: average brokered certificates of
deposit
918,596
1,611,726
1,283,537
1,434,563
520,652
Average non-maturity deposits
$
13,013,598
$
13,492,660
$
15,349,288
$
13,745,263
$
16,129,326
Cost of non-maturity deposits
1.02
%
0.89
%
0.31
%
0.78
%
0.12
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240129081191/en/
Pacific Premier Bancorp, Inc.
Steven R. Gardner Chairman, Chief Executive Officer, and
President (949) 864-8000
Ronald J. Nicolas, Jr. Senior Executive Vice President and Chief
Financial Officer (949) 864-8000
Matthew J. Lazzaro Senior Vice President, Director of Investor
Relations (949) 243-1082
Pacific Premier Bancorp (NASDAQ:PPBI)
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